Free Motion in Limine - 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 Honorable Marcia S. Krieger Case No. 03-cv-02669-MSK-PAC LEPRINO FOODS COMPANY, Plaintiff, v. BIG-D CONSTRUCTION CORP.- CALIFORNIA, a Utah corporation; et al., 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, et al., Counterdefendant/Third Party Defendants. DEFENDANTS BIG-D CONSTRUCTION CORP.-CALIFORNIA, BIG-D CONSTRUCTION, BIG-D CORP., AND BIG-D CAPITAL CORP.'S MOTION IN LIMINE NO. 12 TO PRECLUDE REFERENCE TO UMM'S CLAIM FOR DAMAGES THAT DO NOT MEET THE REQUIREMENTS OF AMELCO -ANDCERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1A ______________________________________________________________________________

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Defendants Big-D Construction Corp­California, Big-D Construction, Big-D Corp., and Big-D Capital Corp. (collectively referred to herein as "Big-D") respectfully move the Court for an Order in limine to preclude Third-Party Defendant Marelich Mechanical Co., Inc. ("UMM"), its witnesses and its attorneys from referring to and/or presenting evidence of any part of its claim for damages set forth in the Request for Equitable Adjustment or in its court pleadings if it does not meet the requirements of Amelco Electric v. City of Thousand Oaks (2002) 27 Cal.4th 220. This motion is supported by the Declaration of Francis J. Hughes, attached hereto. CERTIFICATE OF COMPLIANCE WITH D.C.COLO.LCivR 7.1A Pursuant to D.C.COLO.LCivR 7.1A, the parties have met and conferred with respect to the contents of this Motion In Limine and, after having met and conferred, it is Big-D's understanding that Plaintiff Leprino Foods Company ("Leprino") and UMM object to the relief requested herein. I. INTRODUCTION This action arises from a series of disputes stemming from the construction of a cheese processing facility located in Lemoore, California (the "Project.") Leprino, as owner, entered into a general contract with Big-D to construct the Project. In turn, Big-D contracted with numerous subcontractors, including UMM, to perform various works on the Project. Leprino contends that Big-D and its subcontractors delayed completion of the Project and seeks damages which it claims to have suffered as a result of the Project delays. Big-D and UMM deny that they are responsible for causing the Project delays. In addition, Big-D seeks its remaining contract balance and its additional and extended general conditions, while UMM seeks additional compensation for its work on the Project.

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II.

ARGUMENT A. The Court Has the Authority to Issue Pre-Trial Orders Barring Evidence

Although not expressly authorized by the Federal Rules of Civil Procedure or the Federal Rules of Evidence, "motions in limine are well recognized in practice and by case law." Rutter Group Practice Guide: Federal Civil Trials & Evidence (TRG), section 4.322. As with all rulings on evidence, a ruling on a motion in limine is given wide deference and will typically only be reviewed for an abuse of discretion. Den Hartog v. Wasatch Academy (10th Cir. 1997) 129 F.3d 1076, 1092. B. Under California Law, Which Governs this Issue, UMM Cannot Recover Its Entire Claim for Damages Since the Damages Were Determined Using the Total Cost Method, Unless UMM Can Meet the Four Requirements of Amelco 1. California Law Applies to this Issue

Article 8.7 of the Terms and Conditions of the Subcontract Agreement between Big-D and UMM states: "The Subcontract shall be deemed to have been made in and shall be interpreted under the laws in the jurisdiction which the project is located." It is undisputed that the project was located in California. 2. UMM's Entire Claim for Damages Was Calculated Using the "Total Cost" Method and Thus UMM Must Meet the Four Requirements of Amelco

UMM has asserted a claim for substantial damages against Big-D. UMM's expert, Mark Berry, included a document in his expert report purporting to be a calculation of UMM's damages under a "modified total cost" method as opposed to a "total cost" method. Mr. Berry testified at his deposition in this case that "total cost" claims are arrived at by simply subtracting 2.

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what a contractor has been paid or compensated for on his contract from what the contractor's total costs were on the project. Mr. Berry also testified that a "modified total cost" claim is different from a "total cost" claim because a modified total cost analysis would actually attempt to allocate responsibility for the added costs that were incurred on the project. Mr. Berry acknowledged that what makes the difference between the two types of methods for computing delay damages is that in a modified approach, there is a valuation of any costs that the claimant has caused or is responsible for and an adjustment is then made in the claim. Mr. Berry, who acknowledged to relying upon, in drafting his expert report, the Cushman treatise regarding delay damages, also acknowledges generally what Cushman states in his treatise to be the four bullet points generally accepted in the scheduling industry as elements appropriate to a modified total cost method: (1) that the claimed losses are impossible or highly impracticable to determine with reasonable accuracy; (2) that the contractor's base line cost estimate was realistic; (3) that the contractor's actual costs were reasonable; and (4) that the contractor was not responsible for the increased costs. When Big-D's attorney cross-examined Mr. Berry, it became clear that UMM's damages were in fact really calculated using a "total cost" method, not a "modified total cost" method. Mr. Berry acknowledged that his "modified total cost" analysis did not adjust a single dollar for any errors in the UMM estimate or a single dollar of inefficiency or extra costs resulting from UMM's own action. There were, in fact, errors in UMM's bid and some of UMM's costs were as a result of the bid errors. He calculated UMM's entire affirmative claim for damages by simply taking the difference between the estimated costs and the actual costs ­ a total cost method analysis.

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3.

UMM Cannot Recover Its Entire Claim for Damages Unless It Can Meet the Four Requirements of Amelco

Since normally courts require that in any action for breach of contract, the plaintiff introduce evidence to prove the exact amount of damages caused by every breach, the "total cost" method of determining damages is "generally disfavored" in California. See, Amelco Electric v. City of Thousand Oaks (2002) 27 Cal.4th 228. (The actual cost method is preferred because it provides the court with documented underlying expenses, ensuring that the final amount of the equitable adjustment will actually be equitable and not a windfall for either the government or the contractor). Thus, in order to recover damages under a "total cost" theory under California law, the contractor must first establish to the trial court, prior to any evidence being presented to the jury, each element of a four-part test. Id. If, and only if, prima facie evidence under this test is established can the jury then apply the same test to determine the amount of total cost or modified total cost damages to which the plaintiff is entitled. The fourpart test includes: "(1) (2) (3) (3) // // That it was impractical to prove actual losses directly, That the plaintiff's bid was reasonable, That its actual costs were reasonable, and That it was not responsible for the added cost." Id.

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UMM Should be Precluded From Presenting Any Evidence of Its Claim for Damages to the Jury Until and Unless the Court Finds that UMM Can Meet the Four Requirements of Amelco

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Since UMM's entire claim for damages was calculated using the "total cost" method, UMM should not be allowed to present evidence to the jury regarding any of the damages it is seeking, without the Court first finding that UMM has established, by prima facie evidence, all four of the tests. If the Court does not make such a finding, then UMM, its witnesses and its attorneys, shall be precluded from referring to or presenting evidence of any part of its claim for damages as set forth in the Request for Equitable Adjustment or in its court pleadings. III. CONCLUSION UMM's affirmative claim for damages were all calculated using the disfavored "total cost" method. Thus, under California law, applicable to this issue, UMM is not entitled to the damages it is seeking unless first the trial court finds that UMM has established prima facie evidence of the four-part test. If prima facie evidence under this test is not established by UMM, then the Court should disallow UMM, its witnesses and its attorneys from referring to and/or presenting evidence of any part of its claim for damages as set forth in the Request for Equitable Adjustment or in its court pleadings. Evidence of UMM's affirmative claim for damages should therefore not be allowed if they have not met the Amelco test, pursuant to Federal Rule of Evidence 403, because such evidence would be irrelevant and pursuant to Federal Rule of Evidence 403, because it would be confusing and unfairly prejudicial to the jury. The prejudice // // to Big-D and confusion to the jury posed by the evidence of UMM's claim for damages could only thus be avoided by striking the claim or precluding evidence of their claim at the threshold. Respectfully submitted this 1st day of March, 2006.

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s/ Daniel J. Nevis Daniel J. Nevis Miller, Morton, Caillat & Nevis, LLP 25 Metro Drive, 7th Floor San Jose, California 95110 Telephone: (408) 292-1765 FAX: (408) 436-8272 E-mail: [email protected] Attorneys for Defendant Big-D Construction Corp.- California and Big-D Construction Corp.

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on March 1, 2006, I electronically filed the foregoing named document: DEFENDANTS BIG-D CONSTRUCTION CORP.-CALIFORNIA, BIG-D CONSTRUCTION, BIG-D CORP., AND BIG-D CAPITAL CORP.'S MOTION IN LIMINE NO. 12 TO PRECLUDE REFERENCE TO UMM'S CLAIM FOR DAMAGES THAT DO NOT MEET THE REQUIREMENTS OF AMELCO -ANDCERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1A with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Michael Gerard Bohn [email protected] [email protected] Bret Matthew Heidemann [email protected] [email protected] Francis (Frank) J. Hughes [email protected] [email protected] Patrick Quinn Hustead [email protected] Peter J. Ippolito [email protected] Richard Carl Kaufman [email protected] [email protected] Patrick T. Markham [email protected] [email protected] John David Mereness [email protected] C. Michael Montgomery [email protected] [email protected] [email protected] Daniel James Nevis [email protected] [email protected] N. Kathleen Strickland [email protected] [email protected] Laurence R. Phillips [email protected] [email protected]

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And, I hereby certify that I have mailed or served the document or paper to the following non CM/ECF participants in the manner (mail, hand-delivery, etc.) indicated by the non-participant's name: s/ Kathleen Marie Dolce Kathleen Marie Dolce
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