Free Response to Motion - District Court of Colorado - Colorado

Case 1:04-cv-01070-PSF-PAC

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Filed 07/18/2005

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No.: 04-cv-1070-PSF-PAC DANNIE W. JOHNSON and MARTHA D. JOHNSON Plaintiffs, v. OVERRIGHT TRUCKING, INC., a New Mexico corporation, and ROSS A. REED, Defendants. ______________________________________________________________________________ DEFENDANTS' RESPONSE TO PLAINTIFFS' MOTION IN LIMINE TO EXCLUDE FROM EVIDENCE THE MARKET VALUE OF PLAINTIFFS' HOME AND INSTEAD USE RESTORATION COSTS IN CALCULATING PLAINTIFFS' MEASURE OF DAMAGES INCURRED
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COME NOW the Defendants, Overright Trucking, Inc., a New Mexico corporation (hereinafter "Overright") and Ross A. Reed, by and through their attorneys of record, Wittman & McCord, and for their Response to Plaintiffs' Motion in Limine to Exclude From Evidence the Market Value of Plaintiffs' Home and Instead use Restoration Costs in Calculating Plaintiffs' Measure of Damages Incurred, state as follows: I. INTRODUCTION

As noted in Plaintiffs' Motion, their home was built over 60 years ago. According to Plaintiffs, it was not built according to currently required and applicable building construction codes for La Plata County. An appraisal as to the home indicates that it sat on 26 acres (see Exhibit B to Plaintiffs' Motion) and Plaintiff has described the acreage as consisting of 31 acres of land. See Deposition of

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Dannie W. Johnson, Exhibit 1 hereto, pp. 33. Mr. Johnson has testified that in 1996, he and his wife bought the 31 acres for $240,000.00 including the house which is the subject matter of the litigation herein. Id at p. 33. Mr. Johnson testified that the square footage of the home was approximately 1300 square feet. See Exhibit 1, p. 35. The La Plata County Assessor's Office had assessed the value of the residence at $86,860.00 in the year 2004. Please see Exhibit 2. As noted by Plaintiffs in their Motion, Mr. Farley had conducted an appraisal of the subject property in July 2003. See Exhibit 3 hereto. His appraisal of the dwelling, described as 1,221 square feet in area, was $109,890.00. The land upon which the home was located was valued at $200,000.00. The depreciated value of the home was determined by Mr. Farley to be $68,054.00. Also in July 1998, an appraisal of the property was conducted by Jesse Formwalt on behalf of the Colorado Department of Transportation. The 1,200 square foot home was valued at $89,184.00, before depreciation, and $52,021.00 after depreciation. Please see attached hereto page 50 of the Johnson appraisal estimate, Exhibit 4 hereto. Each of these matters constitutes an assessment of the market value of the particular home that was damaged in the accident. On the other hand, Plaintiff has endorsed 3 contractors who have submitted bids for complete replacement of the home ranging from $184,000.00 to $217,000.00, nearly double the market value of the subject home and quadruple its depreciated value. II. ARGUMENT

As Plaintiffs note, the Court in Zwick v. Simpson, 572 P.2d 133 (Colo. 1977), stated that in cases of real property, that the trial court must take as its principle guidance the goal of reimbursement of the plaintiff for losses actually suffered. However, the Supreme Court of 2

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Colorado in Board of County Commissioners v. Slovek, 723 P.2d 1309, 1316 (Colo. 1986), cautioned that the Court must also ". . . be vigilant not to award damages that exceed the goal of compensation and inflict punishment on the defendant or encourage economically wasteful remedial expenditures by the plaintiff." Id. at 1316. Rather, "[t]he selection of the proper measure of damages and tort for injury to real property requires the exercise of informed discretion by the trial court and that no single measure of damages and no arbitrary limit on the amount permissible can be applied to limit the exercise of that discretion." Id. at 1317. As noted above, the home at issue was over 60 years of age. Plaintiff originally purchased the home in 1996, together with approximately 26 to 31 acres of land, for a total purchase price of $260,000.00. This purchase price also included certain improvements to the land. The home had undergone numerous appraisals between 1998 and 2004, with an assessed value of the home prior to the depreciation ranging from between $86,000.00 to $115,000.00. After deduction for depreciation, the market values ranged anywhere from $52,000.00 to approximately $68,000.00. The proposed cost of replacement of the home, endorsed by Plaintiffs through their expert contractors, on the other hand, is approximately twice the value of the home and close to four times its depreciated value. Plaintiffs also seek cost of replacement of the home, resulting in a substantial future life expectancy for the structure, in replacement of a home that was in excess of 60 years in age. On the other hand, it is evident that Plaintiffs seek to pursue a means of compensation which if imposed, would be punitive in nature. Indeed, Plaintiffs devote a great deal of their brief to discussing potentially inflammatory matters, which are beyond the scope of the Complaint and which are irrelevant to the appropriate method for compensating Plaintiff for their actual damages in 3

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this action. However, setting these punitive remarks aside, it is submitted that the market value of the property at the time it was damaged is the appropriate measure of actual damages under the circumstances of this case. Such would more fully take into account factors consistent with the age and assessed value of the home at the time of the accident. Plaintiffs' proposed remedy of replacement cost, on the other hand, could potentially result in damages awarded to Plaintiffs which are near what Plaintiffs paid for the house and the 26 to 31 acres upon which it sat. III. CONCLUSION

Defendants respectfully request that the Court enter an order denying the Motion in Limine to preclude Mr. Farley's testimony and/or to establish the measure of damages herein as the replacement cost of the home. It is submitted that the reasonable market value at the time of the subject loss is the more accurate and just means of determining the Plaintiffs' damages under the circumstances of this case. WHEREFORE, the Defendants respectfully request that the Court deny the Plaintiffs' Motion in Limine herein, and for such other and further relief as the Court deems proper. Respectfully submitted this 18th day of July, 2005. WITTMAN & McCORD

s/ J. Bradley Hardman J. Bradley Hardman (#17122) 5825 Delmonico Drive, Suite 320 Colorado Springs, CO 80919 Telephone: (719) 590-9899 Fax: (719) 590-9984 Email: [email protected] Attorney for Defendants

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Case 1:04-cv-01070-PSF-PAC

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CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing DEFENDANTS' RESPONSE TO PALINTIFFS' MOTION IN LIMINE TO EXCLUDE FROM EVIDENCE MARKET VALUE OF PLAINTIFFS' HOME AND INSTEAD USE RESTORATION COSTS IN CALCULATING PLAINTIFFS' MEASURE OF DAMAGES INCURRED was electronically filed with the Clerk of the Court, this 18th day of July, 2005, using the CM/ECF system which will send notification of such filing to the following, via their respective email addresses: Michael W. Baty, Esq. 1040 Main Avenue P.O. Box 1157 Durango, CO 81301 Randolph H. Phillips, Esq. 609 Pine Avenue P.O. Box 2303 Albany, GA 31702 /s/ Regina Dineen

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