Free Motion in Limine - District Court of Colorado - Colorado

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

Document 248

Filed 03/01/2006

Page 1 of 9

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO 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 - 1 00, 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' MOTION IN LIMINE NO. 7 TO PRECLUDE TESTIMONY AND/OR ARGUMENT REGARDING PIERCING THE CORPORATE VEIL -ANDCERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1A

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

Document 248

Filed 03/01/2006

Page 2 of 9

Defendant Big-D Construction Corp ­ California ("Big-D") respectfully moves the Court for an Order in limine to preclude the parties, their witnesses and their attorneys from referring to and/or presenting evidence of insurance coverage for Big-D or any of its affiliates under Federal Rule of Evidence, Rule 411 and Colorado Rule of Evidence, Rule 411. 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 ThirdParty Defendant Marelich Mechanical Co. ("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.

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

Document 248

Filed 03/01/2006

Page 3 of 9

Big-D seeks an order in limine to preclude testimony and/or argument concerning Leprino's piercing the corporate veil allegation prior to a determination at trial that Leprino is the prevailing party with respect to its claims against Big-D. 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. Testimony, argument or other evidence related to Leprino's allegation of piercing the corporate veil should not be heard by the jury prior to a determination that Leprino is the prevailing party in its suit against Big-D Construction Corp ­ California.

On or about November 1, 2005 a hearing was held before this Court regarding Leprino's Second Motion to Compel Production of Documents against Big-D. Leprino's Second Motion to Compel was directed at numerous corporate and tax records of Big-D Construction Corp ­ California and Big-D Construction Corp. Leprino sought these documents in furtherance of its efforts to pierce Big-D Construction Corp ­ California's corporate veil to obtain monetary recovery against Big-D Construction Corp ­ California's parent company and related affiliates. At the hearing, it is Big-D's

understanding that this Court opined that arguments regarding Leprino's piercing the

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

Document 248

Filed 03/01/2006

Page 4 of 9

corporate veil issue were better left to be heard during the damages stage of trial and only after a jury had determined that Leprino was the prevailing party. Pursuant to Federal Rule of Civil Procedure 42(b), it remains within the Court's discretion to order a separate trial of any claim or issue "in furtherance of convenience, or to avoid prejudice, or when separate trials will be conducive to expedition and economy." Fed.R.Civ.Proc. 42(b). In the present case, allowing Leprino to prosecute its piercing the corporate veil claim prior to a decision on the underlying merits would, for the reasons explained below, prejudice Big-D and its affiliates and cause the jury to lose sight of the relevant issues. 1. Allowing testimony, argument or other evidence related to Leprino's allegation of piercing the corporate veil prior to a determination that Leprino is the prevailing party will mislead the jury, confuse the underlying issues at trial and cause prejudice to Big-D and its related companies.

Although the Court will most likely find that evidence regarding the corporate relationship between Big-D Construction Corp ­ California and its affiliates is relevant to the issue of piercing the corporate veil, the Court must also evaluate whether the probative value of the evidence is substantially outweighed by the danger of unfair prejudice, confusing the issues or misleading the jury under Feberal Rule of Evidence, R. 403: "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." Fed. R. Evid. 403 [Emphasis added] Without knowing what specific testimony, argument or other evidence Leprino intends to offer at trial and while specifically retaining its right to object to said evidence

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

Document 248

Filed 03/01/2006

Page 5 of 9

at an appropriate later time, for the purpose of this motion in limine and for the sake of argument Big-D assumes that the evidence Leprino intends to offer with regard to its piercing the corporate veil argument is relevant to that issue. However, even if relevant, the introduction of evidence regarding: (1) The relationships between Big-D Construction Corp ­ California, Big-D Capital Corp, Big-D Construction Corp. and Big-D Corp.; (2) The adherence to corporate formalities by each one of these companies; (3) The capitalization and cash flow for each of these companies; and (4) The various marketing practices of each of these companies, will cause the jury to lose sight of the pertinent issues surrounding the dispute between Leprino and Big-D. As described in this, and previous filings, the dispute between the parties centers upon the construction of a cheese processing facility located in Lemoore, California. Specifically, each of the parties, in some form, claim that they were damaged due to project overruns, changes in scope of work, delays, and on-site difficulties. The presentation of evidence regarding these claims will be extensive and highly technical. Indeed, as the Court will note from the parties' Pre-Trial Order, the combined number of projected witnesses and exhibits number in the thousands. The issue of whether Big-D Construction Corp ­ California has complied with corporate formalities is a wholly secondary issue to the construction of the Project and will undoubtedly divert the jury's attention away from considering issues pertaining to the underlying dispute. This may lead the tail to wag the dog, as ultimately the issue of whether Leprino is even entitled to pierce the corporate veil depends upon whether or not Big-D Construction Corp ­ California is found liable for its actions on the Project. But if the jury is forced to consider the corporate formality issue in connection with the issues

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

Document 248

Filed 03/01/2006

Page 6 of 9

surrounding construction, it may confuse the relative importance of, and relationship between, the two issues. Allowing Leprino to present evidence related to corporate formalities will also prejudice Big-D and its affiliates in that, prior to determining whether Leprino is even entitled to damages, the piercing the corporate veil issue is a red herring that will only serve to elicit an improper response from the jury. Evidence regarding Big-D Capital's, Big-D Corp.'s and Big-D Construction's financial records, profit and loss statements and articles of incorporation will only serve to imply that one or all of Big-D's affiliates are wealthy enough to cover any damages assessed. This would be as prejudicial to Big-D and its affiliates as repeated mentioning of Jim Leprino's considerable personal wealth would be to Leprino. Further, to imply that Big-D Construction Corp ­ California is guilty of some sort of wrongdoing, i.e. that it has intentionally failed to adhere to corporate formalities may influence the jury to conclude that it must have also committed some sort of wrongdoing during the Project or with respect to its agreement with Leprino. III CONCLUSION For the aforementioned reasons, Big-D respectfully requests an Order in limine precluding Leprino from presenting testimony, argument or other evidence related to its allegation of piercing the corporate veil until after a determination that Leprino is the // // //

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

Document 248

Filed 03/01/2006

Page 7 of 9

prevailing party with respect to its underlying dispute with Big-D Construction Corp ­ California. Respectfully submitted this 1st day of March, 2006

BIG-D CONSTRUCTION CORP ­ CALIFORNIA By: /s/Daniel J. Nevis Daniel J. Nevis Miller Morton Caillat & Nevis, LLP 25 Metro Drive, 7th Floor San Jose, CA 95110 Telephone: (408) 292-1765 Facsimile: (408) 436-8272 [email protected]

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

Document 248

Filed 03/01/2006

Page 8 of 9

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' MOTION IN LIMINE NO. 7 TO PRECLUDE TESTIMONY AND/OR ARGUMENT REGARDING PIERCING THE CORPORATE VEIL AND CERTIFICATE 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]

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

Document 248

Filed 03/01/2006

Page 9 of 9

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 nonparticipant's name: s/ Kathleen Marie Dolce Kathleen Marie Dolce
:.NewLitigationLibrary:8248.1