Free Brief in Support of Motion - District Court of Colorado - Colorado

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

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-F 1070 (PAC) DANNIE W. JOHNSON and MARTHA D. JOHNSON Plaintiffs, v. OVERRIGHT TRUCKING, INC., a New Mexico Corporation, and ROSS A. REED, Defendants. BRIEF IN SUPPORT OF PLAINTIFFS' S 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 Plaintiffs, by and through their undersigned Counsel, for their Brief in Support of Motion in Limine To Exclude Market Value And Instead use Restoration Costs in Calculating Plaintiffs' Measure of Damages Incurred, state Plaintiffs hereby incorporate the terms of their Motion In Limine to Prohibit and Exclude from Evidence herein any information about the market value of Plaintiffs' home and in support thereof hereby submit the following legal Brief: The "fundamental principle of damages is to restore the injured party, as nearly as possible, to the position he would have been in had it not been for the wrong of the other party." United States v. Hatahley, 257 F.2d 920 (10th Cir. 1958), cert. denied. 358 U.S. 899, 79 S. Ct. 222, 3 L.Ed. 148. United States v. Denver and Rio Grande Western Railroad Company 547 F.2d 1101 (10th Cir. 1977) at page 1105 A. Background Facts: 1. On January 1, 2004, the Plaintiffs' home was damaged beyond repair when Defendant Ross

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Reed, who had been out drinking and partying the night before and while under the influence of methamphetamines and amphetamines with three hours or less of sleep either passed out or fell asleep while driving a large water hauling truck for Defendant Overright Trucking, Inc as it crashed into the Plaintiffs' home. This occurred on New Years Day ab about 6:00 A.M.. The Plaintiffs were home, in bed asleep at the time. The impact force knocked their home four feet off its foundation and damaged the home beyond repair, ruptured a gas line, and wreaked havoc in their lives every day since.. The structural integrity of the home was compromised to the point of being uninhabitable and now must be torn down and rebuilt. 2. For the reasons set forth herein, to restore the Plaintiffs as nearly as possible to their prior

position, restoration/replacement cost, not estimates of market value, are the only proper measure of damages to rebuild their home. A. Background Facts 3. The Defendants willfully, intentionally, and deliberately withheld any and all information regarding the Defendant Reed being under the influence of drugs and refused to answer any question about how the accident occurred during the depositions, thereby obstructing discovery and forcing the depositions to be suspended and necessitating Magistrate Coan ordering the Defendants to answer those questions at a second deposition of each Defendant. 4. Plaintiff Danny Johnson's elderly father lives in another home on the property, approximately thirty (30) feet away from Plaintiffs' home. 5. The destroyed home and 18 acres was Plaintiff Dannie Johnson's boyhood residence which he and Martha had purchased only in 1997. There was no sentimental value placed upon the home which Dannie Johnson had occupied nearly his entire life, even though prior to the incident, Plaintiffs never intended to sell their land and home and also intended to allow Mr. Johnson

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(Dannie's father) to live next door for the foreseeable future. 6. Plaintiffs' home was built over sixty (60) years ago and not built according to currently required and applicable building construction codes for La Plata County, Colorado,1 and restoration of the home to its prior size and configuration will be subject to currently applicable building codes. 7. Defendants' Appraiser and Appraisals: During the discovery phase of this action the Defendants hired appraiser Martin L. Farley to prepare an appraisal of Plaintiff's home, the basic conclusions for which are filed separately as Exhibit A. 8. Mr. Farley, had previously appraised Plaintiffs home for a re-finance on July 31, 2003 but since then had not been in the home or examined it. A copy of that appraisal is filed separately as Exhibit B. 9. Both of Mr. Farley's appraisals analyzed the value of one residence upon the property. 10. Extra home not considered: Even though almost two (2) years have expired since 2003, Mr. Farley used the same re-construction costs and never considered the value of Dannie Johnson's father's residence in the values. 11. Undamaged garage included in costs: In both the July 2003 Appraisal, and the December 22, 2004 Appraisal Mr. Farley included a valuation for a $22,680 garage, but during the incident on January 1, 2004, the Plaintiffs' garage was undamaged. 12. Plaintiffs' home was not for sale at any time just prior to the incident or when the incident occurred and the comparable sales cannot be comparable because Defendants' appraiser never inspected the inside or outside of the Plaintiffs' home immediately before it was destroyed.

Defendants would not stipulate that new construction of the home must meet the currently applicable building code requirements.

1

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B. ARGUMENT AND AUTHORITIES 13. It is undisputed that prior to the incident the Plaintiffs had no intention of selling their home or concerning themselves in any manner (except for the purpose of purchasing homeowners' insurance) with the current market value of their home and never planned upon, through a move, asking Mr. Johnson's elderly father to vacate his home. 14. Appraisal: Each appraisal contained a COST APPROACH analysis that applied the same depreciation deduction of $58,448 to the home, even though the Appraisals were more than a year apart. 15. Each appraisal depreciated the value garage/carport value by $10,000, even though Plaintiffs never claimed this structure in their damages. 16. Each appraisal overlooked expense site restoration damages even though during restoration of Plaintiffs' home, the adjoining landscaping and approach road will be damaged. 17. Neither market value appraisal included the separate residence of Mr. Dannie Johnson's father. Therefore the Farley appraisals are inaccurate and misleading. 18. Neither appraisal analyzed the value of Plaintiffs' home structure absent also selling the adjoining land, which Plaintiffs never intended to do. 19. Any sale of the Plaintiffs' home and adjoining land would render Mr. Dannie Johnson's father homeless; a consequence not considered in the appraisal. 20. Without a complete inclusion of both residences, the market value of Plaintiffs' land is irrelevant and inadmissible with respect to Plaintiffs being made whole. Thus the Farley Appraisal should be excluded in their entirety. 21. The Court must fully compensate the Plaintiffs for their damages and only restoration values will accomplish that. That would be the fair result and would conform to the spirit and letter of

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applicable law. 22. Moreover, by allowing market value of the property to be introduced into evidence, it will reward the Defendants for operating the truck while under the influence of drugs after admittedly having been out partying and drinking until after midnight the night before. 23. It will also reward Defendant Reed who admitted he stayed out and partied all night when he also admitted he was used to getting 8 hours of sleep and that morning was operating the vehicle with only 3 ½ hours of sleep. 24. In addition, using estimates of market value rather than more appropriate restoration values, would reward counsel for using his dilatory tactic in refusing the Defendants to answer any discovery questions about the cause of the wreck until after a hearing on the Motion to Compel, and then his client is being excused by allowing the use of an incomplete, inaccurate and misleading appraisal as damages instead of being required to pay the actual value of restoration cost of the home, which is substantially higher. 25. According to the foregoing, restoration cost of Plaintiff's home is the only damage amount that appropriately compensates Plaintiffs their losses because the real property and the market value and cost value contained in Defendants' proposed Appraisals do not include sale of Dannie Johnsons' father's home in the analysis. Only the Plaintiffs' home is included in the consideration by Mr. Farley but he had not seen or been in the home for just prior to the wreck. 26. According to the holding in Board of County Commissioners v. Slovek 723 P.2d 1309 (1986), the trial court has the discretion of determinating the measure of damages to apply. The Appellate Court has directed at page 1314 , "the trial court must take as its principal guidance the goal of reimbursement of the plaintiff for losses actually suffered, ..." Zwick v. Simpson 193 Colo. At 38, 572 P.2d at 134 ...", but selection of the measure of damages is left to the Court's

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discretion. See Slovek at page 1317. 27. The Court in Slovek went on to say at page 1316 that "... It is precisely because the reduction in market value is not in many instances an adequate measure of the loss suffered ­ that is, it is not an amount that most closely approximates what is required to return the property owner to the pre-tort position ­ that courts allow plaintiffs to recover the costs of restoration in appropriate circumstances." 28. The Slovek court goes on to say at page 1317 that " ... If the damage is reparable, and the costs, although greater than the original value, are not wholly unreasonable in relation to that value, and if the evidence demonstrates that payment of market value likely will not adequately compensate the property owner for some personal or other special reason, we conclude that the selection of the cost of restoration as the proper measure of damages would be within the limits of a trial court's discretion." 29. Clearly the restoration of Plaintiffs' boyhood home is appropriate; the alternative would be to value the property on the basis of Farley's Appraisal and Farley did not include all the attributes of the property in the analysis. 30. Also see Restatement (Second) of Torts§ 929 comment b re: the factors appropriate for application of "cost of restoration" rather than "diminution of market value" as the measure of damages for tortious injury to land, however, the Colorado Supreme Court declined to determine that the checklist of factors determining what an "appropriate case" for departure from the market value standard should be strictly followed, but rather embraced the concept of flexibility to produce a fair result in all cases so as to avoid the rigid standards that have yielded fair in the original cases but lead to unjust consequences when applied to different facts.

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31. Also see Zwick v. Simpson 193 Colo. 36; 572 P.2d 133 (Colo. 1977) where the Supreme Court of Colorado stated at page 134 that "... Since the goal of compensatory damages is the reimbursement of the plaintiff for the actual loss suffered, there may be, of course, instances in which repair or restoration cost may be a more appropriate measure, such as (1) where the property has no market value, as in Big Five Mining Co. v. Left Hand Ditch Co. 73 Colo. 545, 216 P. 719 (1923) ... (3) where the property is a recently acquired residence and the plaintiff's interest is in having the property restored, repair costs will more effectively return him to the position he was in prior to the injury, as in Brobrick v. Taylor 171 Colo. 375, 467 P.2d 822 (1970). 32. The 10th Circuit Court of Appeals similarly stated in United States v. Denver and Rio Grande Western Railroad Company 547 F.2d 1101 (10th Cir. 1977) at page 1105 that the "fundamental principle of damages is to restore the injured party, as nearly as possible, to the position he would have been in had it not been for the wrong of the other party." citing United States v. Hatahley, 257 F.2d 920 (10th Cir. 1958), cert. denied. 358 U.S. 899, 79 S. Ct. 222, 3 L.Ed. 148. 33. Fed R. Evid. 401 limits relevancy to "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." 34. Given the foregoing, it is clear that the market value of Plaintiffs' home has no relevance to the damages that Plaintiffs have incurred and cannot be used to make the existence of any fact that is of consequence either more or less probable. C. Conclusion Based upon the foregoing facts and law, it is undisputable that the Plaintiffs' restoration damages for their home do not relate in any manner to the appraised market value of

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their property, AND the Defendants appraisal excludes significant facts (the value of the second residence) that, if presented, would mislead the jury regarding the restorative costs and actual value of the Plaintiffs' home. Moreover, the Defendants' appraisal also included value for a garage that was not damaged in this incident and if used could mislead the jury as to the actual value of Plaintiffs' land and home as of 1/1/04. Therefore, because of these issues, and the fact that the Plaintiffs only the restoration of the Plaintiffs' property can return them to the position they were in prior to the incident, Plaintiffs request the Court exclude the appraisal of Martin L. Farley from evidence to be considered by the jury herein. Respectfully submitted this 1st day of July, 2005 by: MCDANIEL BATY MILLER AGRO WALES & ROBBINS LLC \s\ original signature on file Michael W. Baty, Esq. #14804 (Colo.) 1040 Main Ave. P.O. Box 1157 Durango, CO 81301 (970) 247-1113 PHILLIPS & GRAHAM \s\ original signature on file Randolph H. Phillips, Esq. #576575 (GA) 609 Pine Ave P.O. Box 2303 Albany, Georgia 31702 (229) 435-4452

CERTIFICATE OF SERVICE The undersigned certifies that on the 6th day of July ,2005, a true and correct copy of the foregoing Omnibus Motion In Limine was electronically filed with the Clerk of the U.S. district Court of Colorado, using the CM/ECF system which will send notification of such filing to the following e-mail addresses and previously fax filed to opposing counsel on the 2nd day of July 2005 at approximately 2:30 A.M.. as follows: Mr. Brad Hardman, Esq. Mr. Ted Bills, Esq. Wittman & McCord fax#: 719/590-9899 UMB Bank Building 5825 Delmonico Drive, Suite 320 Colorado Springs, CO 80919 \s\ original signature on file Michael W. Baty