Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:03-cv-02669-MSK-PAC

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 03-cv-2669-MSK-PAC LEPRINO FOODS COMPANY, Plaintiff, v. BIG-D CONSTRUCTION CORP. - CALIFORNIA, a Utah corporation; BIG-D CONSTRUCTION CORP., a Utah corporation; BIG-D CORPORATION, a Utah corporation; BIG-D CAPITAL CORP., a Wyoming corporation; and Does 1-100, inclusive, Defendants/Counterclaimants, BIG-D CONSTRUCTION CORP. - CALIFORNIA, a Utah corporation; BIG-D CONSTRUCTION CORP., a Utah corporation; and Does 1-100, inclusive, Third Party Plaintiffs, v. MARELICH MECHANICAL CO., INC. dba UNIVERSITY MARELICH MECHANICAL, a California corporation, Third Party Defendant. MARELICH MECHANICAL CO., INC. dba UNIVERSITY MARELICH MECHANICAL, a California corporation, Third Party Plaintiff/Counterclaimant, v. BIG-D CONSTRUCTION CORP. - CALIFORNIA, a Utah corporation; FEDERAL INSURANCE COMPANY, an Indiana corporation; and Roes 20 through 80, inclusive, Counterdefendant/Third Party Defendants.

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PLAINTIFF' REPLY TO "DEFENDANT BIG-D CONSTRUCTION CORPS CALIFORNIA, BIG-D CONSTRUCTION, BIG-D CORP., AND BIG-D CAPITAL CORP.' OPPOSITION TO LEPRINO FOOD (sic) COMPANY' MOTION IN LIMINE S S NO. 8 TO PRECLUDE DAMAGES FOR DELAY" (DOCUMENT 278) Plaintiff Leprino Foods Company ("LFC") states as follows for its reply in support of its Motion in Limine No. 8: to Preclude Damages for Delay ("Motion"): I Introduction Each argument Big-D presents in its Opposition to LFC' Motion in Limine No. 8 s ("Response") and to allow evidence of abandonment fails, as explained below. II Argument A. LFC' Motion is not premature or duplicative. s Big-D argues that LFC' Motion is premature and duplicative because the issue of Big-D' s s damages for delay claim has been addressed in the briefs submitted on LFC' pending Motion for s Summary Adjudication. The overlap in issues between the summary judgment motion and this Motion, however, does not render either premature or duplicative. The Court may dispose of Big-D' damages for delay claim pursuant to this Motion, the Motion for Summary Adjudication, or s both. B. Big-D misconstrues the Contract and the facts to avoid unfavorable provisions. In an ironic twist, Big-D misconstrues the Contract to avoid the "no damages for delay" provision while incorrectly accusing LFC of misconstruing UMM' claim. Big-D' tactic is s s transparent and does not withstand the clear Contract language.

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Big-D asserts that LFC misconstrues UMM' claim as attributable to delays but argues that s UMM' claim might be due to material changes in scope and sequencing of work at LFC' request, as s s opposed to damages for delay. However, as LFC explained in its opening Motion, the Motion addresses UMM' Change Estimate 319 ("CE 319"), which seeks a contract increase of over $3 s million for acceleration due to delay, i.e., damages for delay. Big-D, on the other hand, presents no evidence that CE 319 concerns anything other than damages for delay. Big-D then misconstrues the Contract by omission in order to conclude that UMM' cost s claims are allowed even if they are solely damages for delay. Big-D cites Article 8.1.6 as requiring reimbursement to Big-D for all payments for any and all work performed by subcontractors, period. Big-D ignores the language at the end of the clause, thereby changing the meaning in Big-D' favor. s The full text of Article 8.1.6 provides that reimbursable Costs of Work includes payments made by Big-D to subcontractors for Work performed "pursuant to Subcontracts executed by Contractor [Big-D] in accordance with this Agreement." The highlighted phrase is critical because it excludes, inter alia, payments for work pursuant to subcontracts that do not comply with the Contract. Here, one of Big-D' breaches of the Contract was its failure to conform the UMM subcontract to the s Contract, as required by Article 11.10. Specifically, Big-D failed to include in the UMM subcontract Articles 45.2 (time extensions only) and 45.5 (no damages for delay). Consequently, the UMM subcontract is not "in accordance with" the Contract, and, therefore, work performed pursuant to the UMM subcontract does not fall within the category of costs defined by Article 8.1.6. In sum, Article 11.10 required Big-D to incorporate the no damages for delay provisions into the UMM subcontract in order to avoid the claim for delay damages UMM now asserts, but Big-D failed to comply. Having breached the Contract by failing to comply with that requirement, Big-D cannot fairly impose upon 3

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LFC an obligation to pay UMM' costs that Big-D had an obligation to preclude by contract s language. Similarly, Big-D' argument that Article 5.1 entitles Big-D to actual and direct Costs of the s Work fails because Big-D omits the phrase "as defined in Article 8," which invokes the same Article 8.1.6 as above, limiting payments to subcontractors to work performed pursuant to a conforming subcontract. Obviously trying to create an ambiguity where none exists, and to enforce its tortured reading of Article 8.1.6 at the expense of the no damages for delay language, Big-D argues that Article 8.1.6 "does not include any exceptions for delay costs," and therefore, that 8.1.6 includes damages for delay in the definition of reimbursable Costs of Work. Response, at 5. Big-D also argues that Article 8.1.6 is some sort of alternate method of recovery clause for delay damages. Id. Both arguments fail as a matter of law. The Court must not disregard the no damages for delay language as requested by Big-D. "The meaning and effect of a contract [are] to be determined from a review of the entire instrument, not merely from isolated clauses or phrases. A contract should be interpreted to harmonize and, if possible, to give effect to all its provisions." First Christian Assembly of God v. City and County of Denver, 122 P.3d 1089, 1092 (Colo. App. 2005) (citations omitted). Nothing about the language of Article 8.1.6 suggests it is an alternate method of recovery clause. It does not address delays or damages at all. Taken together, Article 8.1.6 defines Costs of Work generally and Articles 45.2 and 45.5 preclude damages for delay. Accordingly, Big-D cannot pass-through UMM' s claim for delay damages to LFC.

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C.

Big-D cannot prove an exception to the no damages for delay clause because it never even requested the relief it claims LFC rejected. Big-D presents a lengthy argument for enforcing certain exceptions to the no damages for

delay clause of the Contract, but it fails to prove the applicability of any of the exceptions. First, BigD argues for an exception where the owner causes excessive and unreasonable delays beyond the scope contemplated by the parties. Response, at 6. However, as LFC established in its opening Motion, the parties did contemplate changes in scope and delays. Big-D has failed to present any evidence that the changes in scope and delays were beyond the range contemplated by the parties. Second, Big-D argues for an exception to the no damages for delay clause based upon LFC' s unreasonable denial of the time extensions that were provided for under the Contract as the sole remedy for delays. See Response, at 9. Big-D' argument fails, however, because, as LFC has s explained in its pending Motion for Summary Adjudication, Big-D never requested an extension of time as authorized under the Contract. Because it never even requested an extension, it also cannot show that its request was reasonable, or that its request was properly submitted under the procedures set forth in the Contract, or that LFC unreasonably denied the request. The only facts Big-D asserts pertain to LFC' actions and comments encouraging Big-D to maintain its schedule. Showing that s LFC, like any reasonable owner, wanted the contractor to stay on schedule, is irrelevant to Big-D' s argument for exceptions to the no damages for delay clause. D. Big-D fails to prove a waiver of the no damages for delay clause.

Big-D' final effort to avoid the Contract is a half-hearted argument that LFC "modified the s Contract" by agreeing to pay Bid-D and its subcontractors for acceleration costs (delay damages) in exchange for completing the Project. See Response, at 12. Big-D' argument fails because it ignores s

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the plain requirement of the Contract that any modifications or amendments to the Contract must be in writing. Article 15.4. III Conclusion For the reasons stated herein and in LFC' opening Motion, Big-D' delay damages claims s s should be precluded. Respectfully submitted this 30th day of March 2006.

LEPRINO FOODS COMPANY

By:

/s/ Michael G. Bohn Michael G. Bohn Bret M. Heidemann Campbell Bohn Killin Brittan & Ray, LLC 270 St. Paul Street, Suite 200 Denver, Colorado 80206 Telephone: (303) 322-3400 Facsimile: (303) 322-5800 [email protected] [email protected] Patrick T. Markham Jacobson & Markham 8880 Cal Center Drive, #100 Sacramento, California 95826 Telephone: (916) 854-5969 Facsimile: (916) 854-5965 [email protected]

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CERTIFICATE OF SERVICE I hereby certify that on the 30th day of March 2006, I electronically filed the foregoing PLAINTIFF' REPLY TO "DEFENDANT BIG-D CONSTRUCTION CORP-CALIFORNIA, S BIG-D CONSTRUCTION, BIG-D CORP., AND BIG-D CAPITAL CORP.' OPPOSITION S TO LEPRINO FOOD (sic) COMPANY' MOTION IN LIMINE NO. 8 TO PRECLUDE S DAMAGES FOR DELAY" (DOCUMENT 278) with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses: Christopher J. Hersey of [email protected] Francis (Frank) J. Hughes of [email protected] Patrick Quinn Hustead of [email protected] Peter J. Ippolito of [email protected] Richard Carl Kaufman of [email protected] John David Mereness of [email protected] Daniel James Nevis of [email protected] Laurence R. Phillips of [email protected] C. Michael Montgomery of [email protected] N. Kathleen Strickland of [email protected] /s/ Cori Atteberry Cori Atteberry, Legal Assistant

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