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 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. PLAINTIFF' RENEWED MOTION IN LIMINE NUMBER 6: S TO PRECLUDE EVIDENCE REGARDING A CONTRACT "ABANDONMENT" THEORY

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Plaintiff Leprino Foods Company ("LFC") moves the Court for an Order in limine to preclude the parties, their witnesses, and their attorneys from referring to, and/or attempting to assert or offer evidence, in the presence of the jury, that the contract between LFC and Big-D was abandoned. CERTIFICATE OF COMPLIANCE WITH D.C.COLO.LCivR 7.1A Pursuant to D.C.COLO.LCivR 7.1A., counsel for the parties participated in a conference call on February 28, 2006 wherein counsel for the Big-D Defendants and Third-Party Defendant Marelich Mechanical Co., Inc. objected to the relief requested herein. I INTRODUCTION This action arises from delays in the construction of a cheese manufacturing and dairy storage facility in Lemoore, California ("Project"). LFC, as owner, entered into a general contract on September 1, 2000, with Defendant Big-D Construction Corp.-California, a subsidiary/affiliate of other Big-D entities ("Big-D") to construct the Project ("Contract"). Third-Party Defendant Marelich Mechanical Co., Inc. d/b/a University Marelich Mechanical ("UMM") was a mechanical subcontractor to Big-D on the Project. The need for this motion originates from the abandonment arguments presented by Big-D in its opposition to LFC' motion for summary judgment. Although Big-D has no factual basis s with which to support the theory that the Contract was abandoned, LFC believes Big-D might attempt to make this assertion to avoid a jury' determination that Big-D should be held to its s bargain. However, the abandonment theory is precluded here as a matter of law, the Contract has already been enforced in Federal Court, and Big-D is judicially estopped from arguing

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abandonment.

The evidence of abandonment may involve otherwise inadmissible parol

evidence, and will confuse the jury regarding the parties obligations. The abandonment evidence will include evidence of compensation different than the contract. Arguments would be offered the contract can be ignored, and the jury will likely be hopelessly confused. 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 Prac. Guide: Federal Civil Trials & Evidence (TRG), § 4.322. A district court' grant of s a motion in limine is ordinarily reviewed for an abuse of discretion. U.S. v. Gutierrez-Gonzalez, 184 F.3d 1160, 1164 (10th Cir. 1999). The timing of motions in limine "should be left to the discretion of the trial court with a reminder that advance planning helps both parties and the court." U.S. v. Cook, 608 F.2d 1175, 1186 (9th Cir. 1979), overruled on other grounds, Luce v. U.S., 469 U.S. 38 (1984). B. As a matter of law, the contract was not "abandoned."

Where the Contract contemplated the matters now raised by Big-D, an implied contract theory (under any name, e.g., abandonment) cannot co-exist with the express contract claim as a matter of law. Big-D is not the first contractor to try to re-write its contract after the fact. The same "abandonment" theory was tried and failed as a matter of law by a subcontractor in Scott Co. v. MK-Ferguson Co., 832 P.2d 1000 (Colo. App. 1991). Like Big-D in the instant action, the Scott plaintiff claimed the scope of its undertaking had been materially changed because of frequent, significant changes to the design drawings, and

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because the final design drawings were of extremely poor quality and contained significant errors. Id. at 1002. The plaintiff argued that it fell substantially behind schedule in its work and incurred additional costs due to acceleration of its work and the addition of more employees, supervision, and equipment. Id. Plaintiff sought recovery on a quasi-contract theory claiming the written Contract was abandoned. Id. at 1003. The case went to trial to a jury and the jury rendered a verdict for the plaintiff subcontractor. The Colorado Court of Appeals reversed and granted defendant a new trial, holding as a matter of law, the claimed contingencies were anticipated by the express written agreement and therefore a quasi-contract recovery on the matters covered by the written agreement was in error. Id. at 1004-06. The Scott court began with the general rule "if an express contract exists and an asserted implied contract is alleged to co-exist and relate to the same subject matter, there can be no implied contract . . . ." Id. at 1002. The rule does not apply to a claim of implied contract

"based upon the conduct of the parties subsequent to, and not covered by, the terms of the express contract." Id.; citing Schuck Corp. v. Sorkowitz, 686 P.2d 1366, 1368 (Colo. App. 1984); In re Estate of Murphy, 110 Colo. 304, 308-09, 134 P.2d 199, 201 (1943). "Quantum Meruit is an appropriate basis for recovery when substantial changes occur which are not covered by the contract and are not within the contemplation of the parties... ." Id. at 1003 (emphasis added). The first step in the analysis is for the trial court to decide whether the contract contains any ambiguity from which a trier of fact could reasonably find that the damages or changed conditions were contingencies not contemplated by the parties. If, by looking within the four corners of the document, the court can determine that the written contract unambiguously contemplates the changes or disruptions experienced by the complaining party, no issue of fact exists and the claims, other then those based on the express contract, must be dismissed. If, on the other hand, the provisions are ambiguous, issues of fact would exist, and the resolution of the question would be for the trier of fact.

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The focus of the inquiry should be whether the types of changes were covered by the contract, not the degree of variation in job conditions from what was originally relied upon in the bid. Id. at 1003 (emphasis added). Big-D claims changes to the design and project cost were not contemplated by the Contract. This is refuted within the four corners of the Contract. Cost and Design was not established when the Contract was signed. The Project would be designed and costs developed with Big-D' assistance during construction. Four relevant provisions state: s 1.2) The Contractor recognizes that construction of the Project will commence and will proceed before Drawings, Specifications and other Contract Documents are completed . . . . Accordingly, the costs of many items shall be established first on the basis of the initial cost projections and Allowances and . . . development of actual costs for Allowance items will be an interactive process where the Contractor, based on Scope Documents provided by the Architect-Engineer, will solicit Subcontractors'price proposals . . . . 1.3) Recognizing the manner in which construction will proceed and final Construction Documents will be developed at any time during the performance of the Work, the Contractor agrees . . . to accomplish the Work in conformance with, and as contemplated by, the Contract Documents then available and developed. 5.4) The Contractor and the Owner agree that the cost of certain portions of the Work are incapable of exact determination at the time of the execution of this Agreement. The Contractor and the Owner have agreed upon reasonable estimates of such costs . . . . By inclusion of [such] items in the Schedule of Allowances and the Cost of the Work Budget, Contractor represents and warrants to Owner that each Allowance is a reasonable estimate . . . . Big-D claims LFC failed to provide a schedule causing delay (an omission). The

Contract provides Big-D a remedy of seeking an extension of time in the event its work is

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delayed by an "act or omission."1 Claims for additional compensation due to Owner "acts and omissions" were contemplated in Article 43.3. As stated in the Scott case: These provisions are unambiguous and cover the issues of errors in the drawings, acceleration of performance, and compensation of plaintiff for additional cost. Hence, these issues were contemplated by the parties, and therefore, the court erred in allowing plaintiff to proceed on theories of goods sold and delivered and services performed and promissory estoppel. Scott Co. of California v. MK-Ferguson Co., 832 P.2d at 1005. The provisions here are unambiguous and cover the issues now raised by Big-D, like delayed drawings, acceleration of performance, Owner and architect acts or omissions causing cost or delay and compensation for additional cost. As a matter of law, the parties' Contract was not abandoned by the occurrence of alleged conduct that was contemplated in the Contract. Big-D made a business decision to accept the risk of a project that was yet to be fully designed and budgeted. C. The parties' contract was enforced by the district court in California.

LFC removed the case to District Court (CA), and moved to dismiss on the grounds of the choice of law/forum selection clause of the Contract which requires application of Colorado law and trial in the state of Colorado. After extensive briefing and oral arguments, the District Court (CA) granted the motion and dismissed Big-D' California action. The dismissal order s stated in part "[t]he court concludes that this action must be dismissed against LFC pursuant to the forum selection clause in the Prime Contract... ." Thus, the Contract was confirmed and enforced. Big-D is collaterally estopped from re-litigating the enforceability of the Contract.

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Agreement, General conditions, Articles 43.3 and 45.2.

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Preclusive effect is given to a prior federal judgment. Dodge v. Cotter Corp., 203 F.3d 1190, 1197 (10th Cir. 2000). In Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979), the court held the defendant was foreclosed "from litigating an issue the defendant has previously litigated unsuccessfully in an action with another party." Parklane, 439 U.S. at 326 n. 4. D. Big-D is judicially estopped from raising abandonment.

The doctrine of judicial estoppel is applicable to bar Big-D from raising the issue of contract abandonment after failing to do so in proceedings before at least two other courts. Judge Miller recently applied the doctrine of judicial estoppel and stated the factors in determining whether to apply the doctrine of judicial estoppel are: 1. Does a party assert a position clearly inconsistent with its earlier position; 2. Will acceptance of an inconsistent position in the second proceeding create a perception that the first or second court was misled; and 3. Will the party taking an inconsistent position gain an unfair advantage over its opposing party if not estopped. United States of America v. Kinder Morgan CO2 Company (D.Colo. 2005) 2005 U.S. Dist. Lexis 31103, *8 (not selected for official publication); citing New Hampshire v. Maine, 532 U.S. 742, 750 (2001). The present case satisfies each of the three elements: 1. In the California proceeding, the court rejected Big-D' arguments against s

enforcing the Contract, and applied the Contract forum selection clause to dismiss the case. Big-D never asserted that the Contract was abandoned. Additionally, in a second California action, Big-D Construction Corp.-California, a Utah Corporation v. RSCO, INC, et al, Tulare County Superior Court Case Number 04-212120, Big-D brought an action to enforce the bond securing a judgment for breach of contract in the Colorado action. Big-D alleged at paragraph 9

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of the complaint that Big-D "performed all conditions, covenants and promises under the Prime Contract." The bond stated in part "... while providing security to Obligee (Big-D) in the event a final and non-appealable judgment, on the contract claim ... in the action entitled Leprino Foods Company v. Big-D Construction Corp.-California, United States District Court for the District of Colorado, Case No. 03MK2669 (PAC)." 2. Acceptance of this inconsistent position in this proceeding will create a perception

that the first court was misled. In the District Court (CA) action, LFC was dismissed on the condition LFC post a bond to protect a judgment on Big-D' contract claim in the Colorado s action. Thus, Big-D gained an advantage in this proceeding. 3. Big-D, by taking an inconsistent position with regard to the validity of the

Contract, will gain an unfair advantage because it obtained the benefit of a bond securing judgment on the Contract (that has come at great expense to LFC), and now, nearly two years after the posting of the bond, Big-D is seeking to avoid its own obligations under the Contract by arguing abandonment of the Contract. III CONCLUSION Big-D is precluded as a matter of law from arguing or trying to prove LFC "abandoned" the Contract. Evidence of the precluded theory and damages should not be allowed, pursuant to Fed. R. of Evid. 401, because it is irrelevant, and pursuant to Fed. R. of Evid. 403, because it is confusing and unfairly prejudicial. Accordingly, the parties and their attorneys and witnesses should be ordered to refrain from presenting any evidence or making any reference before the jury to the argument that LFC abandoned the Contract.

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Respectfully submitted this 1st 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]

CERTIFICATE OF SERVICE I hereby certify that on the 1st day of March 2006, I electronically filed the foregoing PLAINTIFF' RENEWED MOTION IN LIMINE NUMBER 6: TO PRECLUDE S EVIDENCE REGARDING A CONTRACT "ABANDONMENT" THEORY 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] C. Michael Montgomery of [email protected] Daniel James Nevis of [email protected] Laurence R. Phillips of [email protected] N. Kathleen Strickland of [email protected] /s/ Cori Atteberry Cori Atteberry, Legal Assistant

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