Midcities Metropolitan District No. 1 v. U.S. Bank National Association

Filing 26

SCHEDULING ORDER by Magistrate Judge Boyd N. Boland on 11/18/13: Discovery is due by 5/17/2014. Dispositive Motions are due by 6/17/2014. A Proposed Pretrial Order is due by 8/14/2014. The Final Pretrial Conference is set for 8/21/2014 09:30 AM before Magistrate Judge Boyd N. Boland. (dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 12-CV-03322-LTB-BNB
MIDCITIES METROPOLITAN DISTRICT NO. 1, a quasi-municipal corporation and political
subdivision of the State of Colorado
Plaintiff,
v.
U.S. BANK NATIONAL ASSOCIATION, a national banking association,
Defendant.
[PROPOSED] SCHEDULING ORDER

1. DATE OF CONFERENCE AND APPEARANCES OF COUNSEL
The Scheduling Conference was held on November 18, 2013, at 10:30 AM, before
Magistrate Judge Boyd N. Boland. The following counsel appeared:
Counsel for Plaintiff MidCities Metropolitan District No. 1
Laura J. Hazen
Matthew A. Court
717 17th Street, Suite 2800
Denver, Colorado 80202
Telephone: [phone]
Facsimile:
[phone]
[e-mail]
[e-mail]
Counsel for Defendant U.S. Bank National Association
Lindquist & Vennum LLP
Michael T. Gilbert, Esq.
Kirstin D. Kanski, Esq.
600 17th Street, Suite 1800 South
Denver, CO 80202
[e-mail]
[e-mail]

2. STATEMENT OF JURISDICTION
The Parties agree that jurisdiction is proper under 28 U.S.C. § 1332.
3. STATEMENT OF CLAIMS AND DEFENSES
a.

Plaintiff: MidCities Metropolitan District No. 1 ("MidCities") is a special district

regularly organized and existing under C.R.S. § 32-1-101, et seq. MidCities seeks to recover
certain funds that are owed it by U.S. Bank National Association ("U.S. Bank") by virtue of
U.S. Bank's ownership of certain real property (the "Property") located in the City and
County of Broomfield, State of Colorado and its assumption of a covenant. MidCities is a
third party beneficiary of a deed (the "Deed") that contains a covenant that specifically
requires U.S. Bank to pay MidCities the following: "[F]or every calendar year, commencing
with the calendar year 2003 . . . the remainder of (i) $350,000 minus (ii) one-half (1/2) of a
three and one-half percent (3.5%) sales tax collected by the City of Broomfield from the
Property for the year (the "Shortfall Amount" or the "Covenant")."
Initially, MidCities asserted claims for breach of contract, unjust enrichment,
declaratory judgment, and injunctive relief. U.S. Bank moved for dismissal of MidCities'
claims on the basis that MidCities' Complaint failed to allege a factual basis for finding that
real property covenants in the Deed are binding on U.S. Bank because they run with the land.
The Court dismissed MidCities' claims for breach of contract, declaratory judgment, and
injunctive relief on the basis that MidCities failed to state a claim upon which relief can be
granted pursuant to Fed. R. Civ. P. 12(b)(6), finding that the Covenant at issue did not run
with the land. MidCities is now proceeding against U.S. Bank on its claim for unjust
enrichment.
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Specifically, under its current unjust enrichment claim, MidCities claims U.S. Bank
received benefits as owner of the Property, for which it failed to compensate MidCities.
MidCities claims that U.S. Bank enjoyed certain benefits associated with property ownership
conferred by MidCities and MidCities has not been compensated accordingly. Though the
Shortfall Amount was paid to MidCities between 2004 and 2010, by other property owners,
U.S. Bank has not made similar payments.
Absent a requirement to pay the Shortfall Amount, U.S. Bank has the use and
enjoyment of the benefits of ownership of the property but makes no payments or other
contributions to MidCities. U.S. Bank's refusal to pay the Shortfall Amount is at MidCities'
direct expense.
MidCities also intends to seek leave to amend its Complaint to include a claim for
promissory estoppel and U.S. Bank's breach of the assumed Covenant to make annual
payments in lieu of taxes, which constituted a Related Liability under the Purchase and
Assumption Agreement between the FDIC and U.S. Bank, assumed by U.S. Bank.
MidCities denies that the amounts it seeks by this action from U.S. Bank constitute
a tax. Rather, as indicated above, the Shortfall Amount is a covenant payment in lieu of tax
covenant created contractually by the Deed. Thus, the restrictions on taxation cited by
Defendants (Article X, Section 20 of the Colorado Constitution (the "TABOR
Amendment"), Article X, Section 3 of the Colorado Constitution and Section 32-1-1201(1),
C.R.S.) are inapplicable.
b.

Defendant: U.S. Bank denies any and all liability for the payment obligations

agreed to by Heritage Bank pursuant to the Grantee's Covenant contained in Article II of the

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Deed. U.S. Bank acquired the Property from the FDIC, in its capacity as receiver of First
Community Bank, pursuant to a Purchase and Assumption Agreement dated January 28,
2011, between the FDIC, as Receiver of First Community Bank, Taos, New Mexico, and
U.S. Bank (the "PAA Agreement"). U.S. Bank is not a party to the Deed or the Covenant,
never contractually agreed to pay the Covenant, and did not assume the Grantee's Covenant
or any payment obligations that arise as a result of the Covenant pursuant to the terms of the
PAA Agreement, as a "Related Liability" or otherwise. MidCities has no standing to assert
any claims alleging a breach of the terms of the PAA Agreement and any attempt to do so
would be futile.
The Grantee's Covenant does not require U.S. Bank to make any payment to
MidCities. On June 24, 2013, the District Court held that the Grantee's Covenant is not a
real covenant that runs with the Property or binds U.S. Bank. [Dkt. #18.] U.S. Bank denies
that it was unjustly enriched. U.S. Bank paid a discounted book value of $3,553,343 for the
Property. Because the Grantee's Covenant is not a real covenant, its enforcement against
U.S. Bank or the Property would constitute an unlawful tax in violation of the Tabor
Amendment (Article X, Section 20 of the Colorado Constitution), Article X, Section 3 of the
Colorado Constitution, and the Special District Act, Colo. Rev. Stat. § 32-1-1201(1).
c.

Other Parties: MidCities knows of no other parties at the current time.
4. UNDISPUTED FACTS
The following facts are undisputed:

1.

Plaintiff MidCities is a special district regularly organized and existing under C.R.S.

§ 32-1-101, et seq.

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2.

Defendant U.S. Bank National Association is a national banking association

registered to do business in Colorado and has a place of business at 6363 West 120th Avenue,
Broomfield, Colorado 80020.
3.

Coalton Acres, LLC is the original developer of the Property that is the subject of this

litigation (the "Property").
4.

Coalton Acres conveyed title to the Property to Heritage Bank pursuant to a Special

Warranty Deed dated August 21, 2001 ("Deed"), which was recorded in the real property records
of Boulder County, Colorado.
5.

Article II of the Deed contains a Grantee's Covenant that provided that Heritage

Bank, as Grantee, agreed to pay to MidCities Metropolitan District No. 1 "for every calendar year,
commencing with the calendar year 2003 . . . the remainder of (i) $350,000 minus (ii) one-half (1/2)
of a three and one-half percent (3.5%) sales tax collected by the City of Broomfield from the
Property for the year." (Hereafter the "Shortfall Amount").
6.

U.S. Bank acquired the Property for value from the FDIC, in its capacity as receiver

of First Community Bank of Taos, New Mexico, pursuant to a Purchase and Assumption Agreement
dated January 28, 2011 (the "Purchase and Assumption Agreement").
7.

The Parties agree to the authenticity of the Deed, the Assignment, and the Purchase

and Assumption Agreement, which are attached to the Complaint as Exhibits A through C.
5. COMPUTATION OF DAMAGES
To be supplemented on or before December 6, 2013, with a good faith estimate of
the economic damages claimed.

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Under its current claim of unjust enrichment, MidCities seeks damages arising from the
uncompensated conferral of benefits upon U.S. Bank in the form of property ownership,
including without limitation, the services provided and infrastructure associated with such
property ownership, and further seeks all damages and other forms of relief resulting from
Defendant's unjust enrichment; pre-judgment and post-judgment interest; and attorney fees,
expenses and costs.
To prove damages in connection with its unjust enrichment claim, MidCities will
discover into the benefits, services provided and infrastructure associated with such property in
this matter, and quantify the value of the benefits allocated to U.S. Bank. U.S. Bank's continued
refusal to pay the Shortfall Amount could result in additional damages.
In addition, MidCities is preparing and has conferred with counsel for U.S. Bank,
concerning its intent to file a Motion to Amend its complaint to articulate a promissory estoppel
and breach of contract claims based upon MidCities' allegations that U.S. Bank breached its
assumption of the Covenant with MidCities to pay the Shortfall Amount as a Related Liability.
MidCities reserves the right to supplement its damages accordingly, with any amendments of
pleadings and/or as the discovery of relevant information becomes available.
U.S. Bank disputes that the foregoing constitutes a sufficient disclosure or computation
of all categories of damages sufficient to satisfy this Court's Scheduling Order requirements.

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6. REPORT OF PRECONFERENCE DISCOVERY AND
MEETING UNDER FED. R. CIV. P. 26(f)
a.

Date of Rule 26(f) meeting.
The Rule 26(f) meeting was held on Monday, September 9, 2013 and has continued.

b.

Names of each participant and party he/she represented.
On September 9, Laura J. Hazen, Esq. and Matthew A. Court, Esq. appeared on behalf of
Plaintiff MidCities. Michael T. Gilbert, Esq. and Kirstin D. Kanski, Esq. appeared on behalf of
Defendant U.S. Bank.

c.

Statement as to when Rule 26(a)(1) disclosures were made or will be made.
The Parties have exchanged initial Rule 26(a)(1) disclosures. The Parties do not propose any
additional changes in timing or requirements of disclosures under Fed.R.Civ.P.26(a)(1).

d.

Statement concerning any agreements to conduct informal discovery:
No such arrangements have been made to date.
e.

Statement concerning any other agreements or procedures to reduce discovery and
other litigation costs, including the use of a unified exhibit numbering system:
No such arrangements have been made to date. However, as appropriate, the parties agree

to cooperatively address any such issues as they may arise.
f.

Statement as to whether the parties anticipate that their claims or defenses will involve
extensive electronically stored information, or that a substantial amount of disclosure
or discovery will involve information or records maintained in electronic form.
At present, the parties do not anticipate that their claims or defenses will involve extensive

electronically stored information ("ESI") or that a substantial amount of disclosure or discovery will
involve information or records in electronic form. However, to the extent that electronically stored
information is produced, the Parties agree to produce such information in its native format or, if such

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production is prohibited by law or requires special software not freely available, in TIFF or PDF
formats, in searchable text format. The parties agree to discuss acceptable production deliverables
formatted to be compatible with the respective parties' database management systems. To the extent
that any of the parties seek extensive ESI, such ESI should be sought pursuant to an agreed upon ESI
protocol.
g.
Statement summarizing the parties' discussions regarding the possibilities for promptly
settling or resolving the case.

Initial settlement offers have been exchanged by the parties.
7. CONSENT
All Parties have not consented to the exercise of jurisdiction of a magistrate judge.
8. DISCOVERY LIMITATIONS
a.

Modifications which any party proposes to the presumptive numbers of depositions or
interrogatories contained in the Federal Rules.
Each side may take no more than ten depositions, plus the depositions of any

specially retained experts designated pursuant to this Scheduling Order. Each side may
serve no more than 25 interrogatories, including discrete subparts. The Parties do not
propose any modifications to the presumptive numbers of depositions and interrogatories
contained in the Federal Rules of Civil Procedure.
b.

Limitations which any party proposes on the length of depositions.
No deposition may exceed one day of seven hours. The Parties do not propose any

limitations to the length of depositions other than those imposed by the Federal Rules of Civil
Procedure.

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c.

Limitations which any party proposes on the number of requests for production
and/or requests for admission.
Each side may serve no more than 25 requests for production and 25 requests for

admissions. The Parties do not propose any modifications to the presumptive number of
requests for production and/or requests for admission.
d.

Other Planning or Discovery Orders
1.

Deadline for filing proposed protective order(s): November 30, 2013.

2.

No opposed discovery motions are to be filed with the Court until the parties
comply with D.C.COLO.LCivR 7.1A. If the parties are unable to reach
agreement on a discovery issue after conferring, they shall arrange a telephone
hearing with the Magistrate regarding the issue. Both of these steps must be
completed before any contested discovery motions are filed with the Court.

3.

Other issues: None.
9.CASE PLAN AND SCHEDULE

a.

Deadline for Joinder of Parties and Amendment of Pleadings: December 15, 2013.

b.

Fact Discovery Cut-Off Deadline: May 17, 2014 June 13, 2014.

c.

Dispositive Motions Deadline: June 17, 2014 August 2, 2014.

d.

Expert Witness Disclosure:
1.

The parties shall identify anticipated fields of expert testimony, if any.
The Parties have not yet identified any anticipated fields of expert testimony at this
time.

2.

Limitations which the parties propose on the use or number of expert
witnesses.
The Parties agree to a limit of two expert witnesses per side.

3.

The parties shall designate all affirmative experts and provide opposing
counsel with all information specified in Fed. R. Civ. P. 26(a)(2) on or before:
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March 18, 2014 Ninety (90) days before the date of trial.
4.

The parties shall designate all rebuttal experts and provide opposing counsel
with all information specified in Fed. R. Civ. P. 26(a)(2) on or before:
April 18, 2014 Thirty (30) days after the opposing party has submitted its
affirmative expert report.

e.

Identification of Persons to Be Deposed: The Parties have not yet identified persons to be

deposed. The Parties state that any individual identified in Rule 26 Disclosures may be deposed.
f.

Deadline for Interrogatories: All written discovery must be served so that responses

are due on or before the discovery cut-off. Service of interrogatories shall occur on or before
April 29, 2014 (45 days prior to the close of fact discovery).
g.

Deadline for Requests for Production of Documents and/or Admissions: All written

discovery must be served so that responses are due on or before the discovery cut-off.
Service of requests for production of document and/or admission shall occur on or before April
29, 2014 (45 days prior to the close of fact discovery).
h.

Deadline to Conduct Depositions of Expert Witnesses: Thirty-five (35) days after

disclosure of rebuttal experts
i.

Discovery Close: Forty-five (45) days after the designation of rebuttal experts identified

in 9(d)(4).
10. DATES FOR FURTHER CONFERENCES
a.

An early neutral evaluation will be held on __________, at __.m. It is hereby ordered that

all settlement conferences that take place before the magistrate judge shall be confidential.
()

Pro se parties and attorneys only need be present.

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(X)

Pro se parties, attorneys, and client representatives with authority to settle must be

present. (NOTE: This requirement is not fulfilled by the presence of counsel. If an insurance
company is involved, an adjustor authorized to enter into settlement must also be present.)
()

Each party shall submit a Confidential Statement to the magistrate judge on or before

________, outlining the facts and issues, as well as the strengths and weaknesses of their
case.
b.

Status conferences will be held in this case at the following dates and times

c.

A final pretrial conference will be held in this case on August 21, 2014, at 9:30 a.m. A

Final Pretrial Order shall be prepared by the parties and submitted to the court no later than
August 14, 2014 five (5) days before the final pretrial conference.
11. OTHER SCHEDULING MATTERS
a.

Identify those discovery or scheduling issues, if any, on which counsel after a good
faith effort, were unable to reach an agreement.
Discovery Issues: U.S. Bank disputes that section 5 above is a sufficient disclosure
or computation of all categories of damages by MidCities and requests that the Court order
MidCities to provide a complete and accurate computation of all damages it seeks in this
action and the basis and theory for calculating those damages.
Scheduling Issues: Deadline for amendment of pleadings.

b.

Anticipated length of trial and whether trial is to the court or jury.
The trial is anticipated to be four (4) days. MidCities has requested a jury trial. U.S. Bank
does not believe that MidCities has the right to a jury trial because the sole remaining claim
in this case is an equitable claim for unjust enrichment. U.S. Bank intends to file a pre-trial
motion to strike MidCities' jury demand.
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c.

Identify pretrial proceedings, if any, that the parties believe may be more efficiently
or economically conducted in the District Court's facility.
The Parties do not believe that any pretrial proceeding will be more efficiently or
economically conducted at locations other than the District Court.
12. NOTICE TO COUNSEL AND PRO SE PARTIES
Motions for extension of time or continuances must comply with D.C.COLO.LCivR
6.1D, by containing proof that a copy of the motion has been served upon the moving
attorney's client, all attorneys of record, and all pro se parties.
Counsel will be expected to be familiar and to comply with the Pretrial and Trial
Procedures or Practice Standards established by the judicial officer presiding over the trial
of this case.
With respect to discovery disputes, parties must comply with D.C.COLO.LCivR
7.1A.
In addition to filing an appropriate notice with the clerk's office, a pro se party must
file a copy of a notice of change of his or her address or telephone number with the clerk of
the magistrate judge assigned to this case.
In addition to filing an appropriate notice with the clerk's office, counsel must file
a copy of any motion for withdrawal, motion for substitution of counsel, or notice of change
of counsel's address or telephone number with the clerk of the magistrate judge assigned to
this case.

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13. AMENDMENTS TO SCHEDULING ORDER
This scheduling order may be altered or amended only upon a showing of good
cause.
Dated November 18, 2013.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge

APPROVED:
/s/Laura J. Hazen

/s/ Kirstin D. Kanski

Laura J. Hazen
Matthew A. Court
717 17th Street, Suite 2800
Denver, Colorado 80202
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
Attorneys for Plaintiff
MidCities Metropolitan District No. 1

Lindquist & Vennum LLP
Michael T. Gilbert, Esq.
Kirstin D. Kanski, Esq.
600 17th Street, Suite 1800 South
Denver, CO 80202
[e-mail]
[e-mail]
Attorneys for Defendant
U.S. Bank National Association

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