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'S REPLY TO "DEFENDANTS BIG-D CONSTRUCTION CORPCALIFORNIA, BIG-D CONSTRUCTION, BIG-D CORP., AND BIG-D CAPITAL CORP.'S OPPOSITION TO LEPRINO FOOD (sic) COMPANY' MOTION IN LIMINE S NO. 4 TO PRECLUDE EVIDENCE RELATED TO SETTLEMENT NEGOTIATIONS" (DOCUMENT 283) Plaintiff Leprino Foods Company ("Leprino" or "Plaintiff"), through its counsel, submits the following as its Reply to "Defendants Big-D Construction Corp-California, Big-D Construction, BigD Corp., and Big-D Capital Corp.'s Opposition to Leprino Food (Sic) Company' Motion In Limine s No. 4 to Preclude Evidence Related to Settlement Negotiations" ("Response"): Leprino has moved the Court to preclude all evidence of settlement negotiations and conduct therein, pursuant to Fed. R. Evid. 408. The Big-D Defendants ("Big-D") essentially confess Leprino's motion except as to one letter from Leprino's Senior Vice-President Robert Delong dated August 15, 2003, to Big-D's President Robert Moore (the "August 15, 2003 letter"). However, Big-D' s arguments, which attempt to circumvent the preclusive requirements of Rule 408, are not persuasive and the Court should properly grant Leprino's Motion in Limine No. 4. Fed. R. Evid. 408 specifically provides that all evidence of offers of compromise and other conduct in settlement negotiations is inadmissible at trial: Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. Big-D's Response essentially admits that the August 15, 2003 letter contains "settlement communications"; however, Big-D claims it would not introduce that letter to prove Leprino's liability

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or invalidate Leprino's claim. Instead, Big-D claims the August 15, 2003 letter is admissible to prove essential elements in its affirmative case against UMM and in its defense against Leprino's claim. BigD's position requires an incredibly narrow reading of Rule 408 and its preclusive effect. Both Big-D's affirmative claim against UMM and its defense to Leprino's claim go directly to the issues of liability for, validity of, and amount of Leprino's claims in this case. In further support of its contention that the August 15, 2003 letter is admissible, Big-D has asserted four arguments, all of which are unpersuasive. The August 15, 2003 letter was written for the purpose of compromise and settlement and, regardless of what Big-D asserts now, the letter addresses issues of liability and the amount of damages sought. Thus, the Court must not allow admission of the August 15, 2003 letter or its contents into evidence. First, Big-D incorrectly argues that the August 15, 2003 letter is admissible for the purpose of establishing when Big-D's contractual indemnity rights against UMM were triggered. That very reason proffered by Big-D goes to the issues of liability for, validity of, and amount of Leprino's claims in this case, i.e., the very reasons that Rule 408 exists. Thus, the Court should exclude that evidence. However, if the Court deems Big-D's purported notice issue relevant and beyond the scope of Rule 408, a redacted form of the August 15, 2003 letter can be tendered to the jury. Second, Big-D incorrectly argues that the August 15, 2003 letter is admissible to prove estoppel. Through some mathematical evaluation, Big-D now asserts that it relied on that letter to conclude that the only subcontractor responsible for delays was UMM and, thus, erroneously released retained monies to all other subcontractors on the Project. Big-D cites specifically to Mountain America Tile and Rising Sun as subcontractors to which it would not have remitted significant monies. Big-D's contention is belied by the fact that, despite knowing that Leprino attributes the 3

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entire delay of the Project to Big-D, Big-D has failed to pursue claims against any other subcontractor but UMM. If Big-D truly believed those other subcontractors caused or contributed to the delay, Big-D would have pursued claims against them to recover the "substantial monies" erroneously paid to those subcontractors. Since Big-D has clearly not done so, it is proper for the Court to conclude that Big-D's unsupported assertion of estoppel does not allow for the admission of the August 15, 2003 letter into evidence. Third, Big-D incorrectly argues that the August 15, 2003 letter is admissible for impeachment or rebuttal. For this contention, Big-D cites to (a) an internal analysis of an estimate of delay damages referenced in the August 15, 2003 letter, and (b) a purported reference to extending the Project start-up date to September 2002. Big-D's contentions are wholly without merit. The internal analysis is merely an estimate and to the extent it is needed for impeachment, a redacted form of the August 15, 2003 letter that only shows the estimated damages is sufficient for such purpose. Big-D completely misunderstands the reference to start-up date in the August 15, 2003 letter, which is not the same as the date mandated for substantial completion of the Project. The contract required that the Project be substantially completed by February 1, 2002, and that date was never extended or modified. Fourth, Big-D again attempts to argue that the parties agreed to extend the completion date to September 2002. That assertion is utterly wrong. As noted above, the contractual requirement that Big-D substantially complete the Project by February 1, 2002, was never extended or altered. Allowing any reference at trial to settlement negotiations, or to offers, statements or conduct made in those settlement negotiations, including the August 15, 2003 letter from Robert Delong, would be improper. Accordingly, the parties and their attorneys and witnesses must be ordered to 4

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refrain from making any reference before the jury to communications, offers and conduct in settlement negotiations.

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'S REPLY TO "DEFENDANTS BIG-D CONSTRUCTION CORPCALIFORNIA, BIG-D CONSTRUCTION, BIG-D CORP., AND BIG-D CAPITAL CORP.'S OPPOSITION TO LEPRINO FOOD (sic) COMPANY' MOTION IN LIMINE NO. 4 TO S PRECLUDE EVIDENCE RELATED TO SETTLEMENT NEGOTIATIONS" (DOCUMENT 283) 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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