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

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

Document 318

Filed 03/30/2006

Page 1 of 6

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.

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

Document 318

Filed 03/30/2006

Page 2 of 6

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. 3 TO PRECLUDE EVIDENCE OF DAMAGES EXPRESSLY PRECLUDED BY CONTRACT" (DOCUMENT 273) Plaintiff Leprino Foods Company ("Leprino" or "Plaintiff"), through its counsel, submits the following as its Reply to "Defendant Big-D Construction Corp-California, Big-D Construction, Big-D Corp., and Big-D Capital Corp.' Opposition to Leprino Food (sic) Company' Motion in Limine No. s s 3 to Preclude Evidence of Damages Expressly Precluded by Contract" ("Response"): From its response, it appears that Big-D will attempt to introduce evidence of certain damages under the pretense that they are "pass-through" claims against Leprino even though those claims are explicitly precluded under the express terms of the Contract. Such irrelevant evidence would only confuse the jury and, as such, Big-D must not be allowed to present such claims to the jury. The four arguments asserted by Big-D for the admissibility of that evidence all fail for a variety of reasons, which will be discussed below. First, Big-D argues that Leprino's motion is premature, misleading and duplicative, because the issue of Big-D' assertion that it is entitled to "pass through" claims purportedly arising from s UMM's scope of work has been addressed in the briefs submitted on Leprino's pending Motion for 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' "pass through" claims pursuant to this Motion, the Motion for Summary Adjudication, or s both.

2

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

Document 318

Filed 03/30/2006

Page 3 of 6

Second, Big-D misinterprets and misunderstands the sections of the Contract that expressly limit what costs Big-D is permitted to recover from Leprino. Article 8 of the Contract describes the Costs of Work that Big-D can recover from Leprino. In Article 9 of the Contract, Big-D further agreed to specific categories of costs that it would not be entitled to recover. Big-D acknowledges that it may be liable for certain claims of UMM by virtue of the contract between Big-D and UMM; however, the Contract between Big-D and Leprino governs any alleged liability of Leprino. Thus, any purported pass through claims made by UMM are governed by Article 8 and Article 9 of the Contract between Big-D and Leprino. The contractual limitations on reimbursable Costs of Work must be enforced strictly in order to uphold the parties'right to contract. See Francam Bldg. Corp. v. Fail, 646 P.2d 345, 349 (Colo. 1982); see also, Fox v. I-10, Ltd., 957 P.2d 1018, 1021 (Colo. 1998) ("Our courts have repeatedly recognized the sanctity of contracts and the court's role in enforcing them."). All of Big-D' pass-through claims for damages of the types listed in Article 9 must be s stricken or the evidence of those claims precluded, because, if Big-D is not entitled to recover them, they are irrelevant. Fed. R. Evid. 401. Whether UMM is entitled to recover such costs from Big-D is irrelevant to Big-D' ability to recover the costs from Leprino under the Contract between Leprino s and Big-D. Contrary to the misapplication of the contractual provision Big-D argues in its Response, Big-D is precluded from recovering the following pass through claims from Leprino: (i) (ii) Unabsorbed home office overhead ($1,267,474), see, Article 9.1.2 and 9.1.5; Cost of money impacts ($1,266,638), see, Article 9.1.3 (capital expenses, including interest); Loss of productivity ($209,378), see, Article 9.1.10 (items not allowed in Article 8); and 3

(iii)

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

Document 318

Filed 03/30/2006

Page 4 of 6

(iv)

Labor rate escalation costs ($249,924), see, Article 45.1 and 45.5 (no damages for delay) and Article 9.1.10 (items not allowed in Article 8).

There could be other claims that Big-D may seek to pass-through from UMM to Leprino that are likewise expressly prohibited by the Contract. All such claims and references thereto must be precluded. Third, Big-D misunderstands the "No damage for delay" clause in the Contract between BigD and Leprino. Big-D essentially reasserts its arguments from Response to Leprino's Motion for Summary Adjudication on the issue of the "No damage for delay" clause. Big-D is wrong. Without restating all of its arguments on that issue herein, Leprino incorporates its Motion for Summary Adjudication herein, in which it clearly demonstrated that the "No damage for delay" clause precludes UMM's purported delay costs. Fourth, Big-D unpersuasively argues that even if UMM's alleged costs are not recoverable from Leprino, they demonstrate the impacts of the Project delays. If those costs are not recoverable, then they are not relevant to any issues in this case and, as such, that information must be precluded. See, Fed. R. Evid. 401 and Fed. R. Evid. 403. Any claims or pass-through claims that Big-D cannot establish are reimbursable under the Contract must be precluded or stricken in limine. Allowing Big-D to present to the jury evidence of damages that are contractually precluded would only confuse the jury with irrelevant evidence in this complex case, which would also be unfairly prejudicial to Leprino. See, Fed. R. Evid. 401 and Fed. R. Evid. 403. Therefore, Defendants and their attorneys and witnesses should be ordered to refrain from making any reference before the jury to claims by Big-D against Leprino for damages that Big-D

4

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

Document 318

Filed 03/30/2006

Page 5 of 6

is precluded by contract from recovering because they were beyond the definition of reimbursable costs, or, in the alternative, such claims by Big-D should be stricken. 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]

5

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

Document 318

Filed 03/30/2006

Page 6 of 6

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. 3 TO PRECLUDE S EVIDENCE OF DAMAGES EXPRESSLY PRECLUDED BY CONTRACT" (DOCUMENT 273) 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

6