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 - 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 BIG-D CONSTRUCTION CORP-CALIFORNIA, BIG-D CONSTRUCTION, BIG-D CORP., AND BIG-D CAPITAL CORP.'S MOTION IN LIMINE NO. 3 TO PRECLUDE REFERENCE TO DISCLOSURE OF TAX RECORDS -ANDCERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1A

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Defendants Big-D Construction Corp-California, Big-D Construction Corp, Big-D Capital Corp. and Big-D Corp. (collectively referred to herein as "Big-D") respectfully move the Court for an Order in limine to preclude the parties, their witnesses and their attorneys from referring to and/or presenting evidence of Big-D's and its affiliates' refusal to produce tax records during discovery. This motion is supported by the Declaration of __________, 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 Third-Party 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. //

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The basis for this motion in limine stems from a discovery dispute between Big-D and Leprino concerning Big-D Construction Corp-California's ("Big-D Cal") refusal to produce its and its affiliates', Defendants Big-D Construction, Big-D Corp., and Big-D Capital Corp. (hereinafter collectively referred to as the "Affiliates") tax records based on the privileged nature of those documents. Because the production of tax records is irrelevant to the issues concerning the construction of the Project and the parties' respective claims for damages and would only serve to confuse the jury, Leprino must not be allowed to present such evidence to the jury. 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. Evidence of the Discovery Dispute Between Leprino and Big-D Regarding the Production of Defendants' Tax Records Is Irrelevant

Pursuant to Federal Rule of Evidence, Rule 401, evidence is relevant only if it has a "tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." A trial court has broad discretion to determine whether evidence is relevant or not, and its decision will not be reversed absent a clear showing of abuse of that discretion. Marshall v. El Paso Natural Gas Co.

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(10th Cir 1989) 874 F.2d 1373, 1380. For purposes of this case, Leprino's request for Big-D's tax records, Big-D's refusal to produce its tax records, and the Court's decision that Big-D does not have to produce its tax records, are irrelevant with respect to the parties' dispute. As previously mentioned, the nature of the parties' dispute stems from the delayed completion of a construction project located in Lemoore, California. Leprino contends that Big-D and its subcontractors caused the delay while Big-D contends that Leprino and/or UMM caused the delay. Evidence concerning Big-D's tax records and its refusal to produce those records will not make other facts concerning the construction of the Project and/or Project delays more probable or less probable. Rather, introduction of evidence regarding Big-D's tax records and/or its refusal to produce those records will only serve to confuse the jury as to the relevant issues of the case. The only relevant issue regarding Big-D's tax records stems from Leprino's desire to pierce Big-D Construction Corp-California's corporate veil. However, as the Court determined at the hearing on Leprino's second motion to compel (corporate records), the corporate veil issue would best be considered during the damages stage of this litigation, in the event Leprino was determined the prevailing party on the substantive issues of the case. More importantly, at that same hearing the Court ruled that Big-D did not have to produce its tax records. Thus, despite Leprino's contention that Big-D's tax records were relevant with respect to the corporate veil issue, the Court determined that the privileged nature of the documents warranted their protection from discovery. // //

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C.

Big-D Construction and Big-D California Were Justified In Withholding Their Tax Returns As Privileged Financial Information.

Although a party's tax returns do not enjoy an unqualified privilege from being disclosed, federal courts have historically been cautious in ordering the disclosure of tax returns. Thus, courts will, before compelling the production of tax returns, first determine that the tax returns are relevant and material to the matters at issue. Shaver v. Yacht Outward Bound, 71 F.R.D. 561, 564 (1976). The party seeking compulsion of the tax returns has the burden of establishing that they are relevant to the matters at issue. Eastern Auto Distributors v. Peugeot Motors of America, 96 F.R.D. 147, 149 (1982). Further, even if the moving party meets its burden of establishing that the tax returns are relevant to the matters at issue, the strong public policy against the unnecessary disclosure of tax returns dictates that the court, before compelling their production, must then determine whether the information sought from the tax returns is readily obtainable by other means or from other sources. Biliske v. American Live Stock Insurance Company, 73 F.R.D. 124, 126 (1977). If the information sought from the tax returns is found from other sources, courts will typically deny the compulsion of a party's tax records. Id. As previously determined by the Court, although Big-D's tax information is perhaps relevant to the issue of piercing the corporate veil, the information was available from other sources that Big-D had previously disclosed. As such, the Court recognized the privileged nature of the tax returns and determined that Big-D was not obligated to produce them. D. The Prejudice of References to the Parties' Discovery Dispute Would Substantially Outweigh Any Probative Value

Even if this Court were to determine that evidence regarding Big-D's refusal to produce its tax records is somehow relevant to the issue of delay, it must also evaluate whether the

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probative value of the evidence is substantially outweighed by the danger of unfair prejudice to Big-D under Federal 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. "Unfair prejudice" within the context of Fed. R. Evid. 403 is defined as "an undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one." Fed. R. Evid. 403, Advisory Committee Notes, 1972 Proposed Rules. Exclusion of evidence based upon its prejudicial effect is a matter determined by the trial court and will only reversed upon a clear showing of abuse of discretion. Marshall v. El Paso Natural Gas Co. (10th Cir 1989) 874 F.2d 1373, 1380. In light of this Court's previous holding protecting Big-D's right to withhold its privileged tax documents, the only reason Leprino would want to offer evidence of Big-D's refusal to produce its tax records would be to insinuate that Big-D is concealing evidence or is otherwise attempting to mislead the jury. III. CONCLUSION Reference to Big-D's privileged tax records and/or its refusal to produce them is not only irrelevant to the parties' dispute, but would elicit an improper and unfounded emotional response // // //

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from the jury to the prejudice of Big-D. Accordingly the parties should be ordered to refrain from making any reference to Big-D's tax records or the parties' discovery dispute to the jury.

Respectfully submitted this 1st day of March, 2006 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. 3 TO PRECLUDE REFERENCE TO DISCLOSURE OF TAX RECORDS -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]

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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