RCHFU, LLC et al v. Marriott Vacations Worldwide Corporation et al
ORDER by Chief Judge Philip A. Brimmer on 2/16/2021, re: 569 defendants Motion for Reconsideration of March 20, 2020 OrderWith Respect to Motion In Limine to Bifurcate Jury Trial into Liability and Punitive Damages Phases is DENIED.(sphil, )
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Philip A. Brimmer
Civil Action No. 16-cv-01301-PAB-GPG
RCHFU, LLC, a Colorado limited liability company, et al.,
MARRIOTT VACATIONS WORLDWIDE CORPORATION, et al.,
This matter is before the Court on defendants’ motion for reconsideration
[Docket No. 569]. Defendants request that the Court reconsider its order, Docket No.
564, granting in part and denying in part defendants’ motion in limine to bifurcate trial.
Docket No. 569 at 1.
The background facts are set forth in the Court’s previous orders, see, e.g.,
Docket No. 563, and will not be repeated here unless relevant to resolving the present
motion. This action arises out of a dispute regarding the management of the RitzCarlton Club, Aspen Highlands (“Aspen Highlands”), located in Aspen, Colorado, and
its affiliation with Marriott Vacation Club Destination (“MVC”). Plaintiffs claim that the
affiliation, resulting from defendants’ allegedly wrongful acts, decimated the value of
their fractional interests at Aspen Highlands and that plaintiffs were damaged thereby.
Docket No. 430 at 10, ¶ 1.
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Defendants moved to preclude plaintiffs from offering certain evidence at trial by
filing six motions in limine. Docket Nos. 466, 467, 468, 469, 470, and 475. T he Court
entered an order ruling on all six of these motions. Docket No. 564. Two of
defendants’ motions are relevant here. First, defendants sought to bifurcate the action
into two trials – a two-phase jury trial considering, first, liability and compensatory
damages and second, if necessary, punitive damages – and a bench trial on unjust
enrichment and disgorgement of profits. Docket No. 470 at 1. The Court determined
that defendants had not met their burden of demonstrating that bifurcation of the jury
trial was warranted. Docket No. 564 at 22. As to the request for a bench trial on
equitable issues, the Court held that it would consider plaintiffs’ claims for unjust
enrichment after the jury’s resolution of the legal issues. Id. at 24.
Second, defendants moved to preclude evidence of non-affiliation-related
damages and conduct. Docket No. 469. The Court granted defendants’ motion to the
extent it sought to exclude the use of this evidence in support of plaintiffs’ claims for
compensatory damages. Docket No. 564 at 15. The Court, however, denied
defendants’ motion to the extent it sought to prohibit plaintiffs from using this evidence
in support of their arguments that defendants acted heedlessly and recklessly, without
regard for the consequences; that is, in support of plaintiffs’ punitive damages claims.
Id. at 16, 17. The Court determined that a limiting instruction could cure any danger of
undue prejudice or confusion of the issues. Id. 17.
II. LEGAL STANDARD
The Federal Rules of Civil Procedure do not specifically provide for motions for
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reconsideration. See Hatfield v. Bd. of Cty. Comm’rs, 52 F.3d 858, 861 (10th Cir.
1995). Instead, motions for reconsideration fall within a court’s plenary power to revisit
and amend interlocutory orders as justice requires. See Paramount Pictures Corp. v.
Thompson Theatres, Inc., 621 F.2d 1088, 1090 (10th Cir. 1980) (citing Fed. R. Civ.
P.54(b)); see also Houston Fearless Corp. v. Teter 313 F.2d 91, 92 (10th Cir. 1962).
Regardless of the analysis applied, the basic assessment tends to be the same: courts
consider whether new evidence or legal authority has emerged or whether the prior
ruling was clearly in error. Motions to reconsider are generally an inappropriate vehicle
to advance “new arguments, or supporting facts which were available at the time of the
original motion.” Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir.
2000). Under the clearly erroneous standard, “the reviewing court [must] affirm unless
it ‘on the entire evidence is left with the definite and firm conviction that a mistake has
been committed.’” Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1464 (10th Cir.
1988) (citing United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).
Defendants seek reconsideration of the Court’s order denying bifurcation of the
jury trial. Docket No. 569 at 1. Defendants argue that reconsideration is appropriate
where, as here, “the court has misapprehended the facts, a party’s position, or the
controlling law.” Servants of the Paraclete, 104 F.3d at 1012. In support of their motion,
defendants raise three arguments. First, defendants assert that the Court
“misconstrued” their motion as seeking two separate juries, rather than one jury. Docket
No. 569 at 2. Second, defendants argue that the Court’s conclusion that the evidence of
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non-affiliation-related damages and conduct was “entirely irrelevant” and failed to satisfy
the “minimum requirements of relevance” because it has “no probative value” should
have led the Court to determine that bifurcation was proper and that a limiting instruction
was insufficient to cure the prejudice to defendants. Id. at 2–3. Third, defendants
explain that plaintiffs will suffer no prejudice as a result of bifurcation because
defendants will pay any costs necessary to produce any witnesses again. Id. at 8. In
their reply, defendants also argue that the Court’s rulings on the motions in limine were
inconsistent. Docket 575 at 3.
On their first point, defendants maintain that they “seek, and have always sought,
one jury, which, if necessary, would hear the punitive damages case immediately after
the presentation and decision regarding the liability/compensatory damages case.”
Docket No. 569 at 2. Plaintiffs disagree, explaining that defendants stated in their initial
motion that bifurcation is appropriate when “having the same jury charged with deciding
the issue of liability and compesatory damages also hear evidence offered in support of
a punitive recovery is likely to unduly prejudice the defendant.” Docket No. 573 at 2 n.1
(quoting Docket No. 470 at 8, ¶ 14). In that motion, defendants also argue, “presenting
all of this evidence together in a single jury trial would be overwhelming and confusing.”
Docket No. 470 at 12, ¶ 20. 1 The Court agrees with plaintiffs. Defendants have not
“always sought” one jury to hear both phases of the case. The Court has not
“misapprehended the facts, a party’s position, or the controlling law”; rather, defendants
attempt to advance a “new argument, . . . which [was] available at the time of the
Defendants abandon this issue in their reply brief. See Docket No. 575.
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original motion.” Servants of the Paraclete, 204 F.3d at 1012.
In support of their second argument, defendants insist that the Court’s ruling on
excluding non-affiliation-related damages and conduct evidence “eliminated Plaintiffs’
principal argument against bifurcation” that overlapping evidence in the two phases
would be a waste of resources – yet the Court’s bifurcation ruling “failed to give due
consideration” to the prejudice that could result f rom the jury’s exposure to non-affiliation
evidence during the liability and compensatory damages phase of the trial. Docket No.
569 at 2. Defendants contend that the Court’s ruling that “evidence of non-affiliation
conduct is irrelevant to plaintiffs’ case on liability and compensatory damages should
have changed the bifurcation analysis.” Id. In defendants’ view, since the Court held
that non-affiliation evidence is “entirely irrelevant” to the liability and compensatory
damages issue and “does not satisfy the minimum requirements of relevance” because it
has “no probative value” to those issues, id. at 3, the Court recognized the potential
prejudice, and therefore should have ordered a bifurcated trial instead of a limiting
instruction, id. at 6–7, which defendants believe would be insufficient to cure the
potential prejudice. Docket No. 575 at 2. Def endants ask the Court, therefore, to
bifurcate the trial such that “the very same jury that will hear all” affiliation-related
evidence “during the liability/compensatory damages phase will immediately thereafter
sit to hear the additional non-affiliation evidence that is relevant solely as to willfulness
and punitive damages.” Docket No. 569 at 7.
Plaintiffs argue that defendants point to “no change in the law, newly discovered
evidence, or clear error that would warrant reconsideration.” Docket No. 573 at 2 (citing
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Carbajal v. Lucio, No. 10-cv-02862-PAB-KLM, 2016 WL 7245798, at *1 (D. Colo. Dec.
14, 2016)). Instead, plaintiffs argue, defendants repeat the same arguments as in their
original motion, that, if the jury heard evidence on punitive damages as well as evidence
on liability and compensatory damages in the same trial, defendants would suffer undue
prejudice. Id. Plaintiffs maintain, however, that evidence supporting plaintiffs’ claim for
punitive damages is based on defendants’ decision to “affiliate [Aspen Highlands] with
the Marriott Vacation Club despite knowing that doing so would destroy Plaintiffs’
property value” and defendants’ “reneging on [their] promise that no affiliation would take
place without a majority vote in favor of it.” Id. at 3. This evidence would also support
plaintiffs’ liability and constructive fraud claims, and a limiting instruction would cure any
prejudice, plaintiffs insist. Id. Defendants accuse plaintiffs of “repeating and expanding
upon the Court’s misapprehension of a key element of Defendants’ position, namely, the
assumption that Defendants are seeking two separate juries,” and insist that a limiting
instruction would be insufficient. Docket No. 575 at 2. Defendants, however, failed to
make the first argument, for the same jury to hear both phases, when they should have,
and provide no support for the latter argument, besides enumerating cases where courts
have found limiting instructions insufficient.
Plaintiffs also explain that the Court’s motion in limine decisions are consistent
with each other because the “bulk of evidence on punitive damages . . . still substantially
overlaps with evidence that will support liability.” Docket No. 573 at 5. The Court’s
decision to allow plaintiffs to present non-affiliation evidence to support their punitive
damages arguments does not change the overlap. Id. This is consistent, plaintiffs
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argue, with the Court’s decision to prohibit plaintiffs from introducing such evidence in
support of their liability and compensatory damages claims. Furthermore, plaintiffs
argue that, contrary to defendants’ assertions, the Court did not rule that “evidence of
non-affiliation conduct does not satisfy the minimum requirements of relevance . . . in
that it has no probative value.” Id. (quoting Docket No. 569 at 3). Defendants do not
raise this argument in their reply, but repeat their earlier argument that, “[a]fter the Court
determined that non-affiliation conduct was not encompassed by Plaintiffs’ claims, it
then overlooked that determination by ruling that non-affiliation-related evidence
introduced solely to support punitive damages is admissible in the liability/compensatory
damages phase of the trial.” Docket No. 575 at 3. Defendants close their reply by
raising a new argument, that plaintiffs “do not even try to explain how they could possibly
be prejudiced by a bifurcation of the trial.” Id.
The Court begins by noting that defendants’ characterization of the Court’s order
is incorrect. The Court did not determine that plaintiffs’ non-affiliation evidence fails to
satisfy the minimum requirements of relevance and has no probative value. Rather, as
plaintiffs explain, the Court held that plaintiffs’ complaint failed to put defendants on
notice that plaintiffs seek damages related to pre-affiliation conduct, and, therefore, the
Court granted defendants’ motion to the extent plaintiffs sought to use the evidence in
support of their claims for compensatory damages. Docket No. 564 at 13, 15.
The Court next considers defendants’ second argument, that the Court “failed to
give due consideration” to defendants’ claims of the potential prejudice. Docket No. 569
at 2. The Court disagrees. Defendants raised the issue of prejudice in their original
motion. See, e.g., Docket No. 469 at 14. They also raised this issue in their reply brief,
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arguing that any marginal relevance of pre-affiliation conduct is substantially outweighed
by undue prejudice to the defendants. Docket No. 525 at 3 n.3. The Court considered
these arguments and found them without merit. Docket No. 564 at 16–17. Any potential
prejudice, the Court determined, could be corrected by a limiting instruction. Id. at 17.
While defendants may think this insufficient protection, courts routinely instruct juries
that evidence may be relevant to one claim and not to another. See, e.g., Leiserv, LLC
v. Summit Ent. Ctrs., LLC, No. 15-cv-01289-PAB-KLM, 2017 WL 491171, at *8 n.8 (D.
Colo. Feb. 6, 2017) (“A limiting instruction would be sufficient to address any resulting
prejudice to defendants.”); see also S.E.C. v. Peters, 978 F.2d 1162, 1172–73 (10th Cir.
1992) (discussing limiting instructions and Fed. R. Evid. 403). Further, defendants
provide no reason that a jury would be unable to heed the Court’s direction; they simply
assert that the Court’s instruction would “compound the prejudice.” Docket No. 569 at 6.
In their reply brief, defendants assert that the Court’s order was inconsistent
because the Court made a determination about the non-affiliation evidence, but then
overlooked that determination in its decision on bifurcation. Docket No. 575 at 3.
Defendants rely on United States v. Ibarra, 920 F.2d 702, 706 (10th Cir. 1990), for the
proposition that reconsideration is appropriate where the court “overlooked” a point in its
initial decision.2 The Court did not, however, overlook a point in its initial decision.
The question before the Ibarra court was “whether the filing of a motion for
reconsideration that raises only a previously conceded argument tolls the time for filing
a notice of appeal.” Ibarra, 920 F.2d at 705. In determining that it did not, the court
held, “motion for reconsideration of a previously considered issue . . . is analogous
to . . . successive motions for reconsideration of the same issue,” and that “such a
motion has very little likelihood of success and merely serves to prolong the process of
litigation.” Id. at 706. The Court “previously considered” defendants’ arguments in their
motions in limine. Docket Nos. 469, 470.
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Defendants argued, in separate motions in limine, that the Court should preclude nonaffiliation evidence, Docket No. 469, and should bifurcate trial and preclude reference to
defendants’ profits in an earlier phase of trial, Docket No. 470. The Court considered
these arguments and found some persuasive and some not. Defendants did not,
however, argue, as they appear to do now, that bifurcation, rather than a limiting
instruction, is the appropriate mechanism for preventing prejudice if the Court did not
wholly exclude non-affiliation evidence. Docket Nos. 469, 525. If defendants wanted
the Court either to exclude non-affiliation evidence, or bifurcate trial, rather than impose
a limiting instruction, they should have made such an argument in their motion in limine
instead of choosing to advance, in a motion for reconsideration, a “new argument . . .
which [was] available at the time of the original motion.” Servants of the Paraclete, 204
F.3d at 1012.
Defendants’ final argument is that plaintiffs “do not even try to explain how they
could possibly be prejudiced by a bifurcation of the trial.” Docket No. 575 at 3. Plaintiffs
do not have the burden of establishing that bifurcation is inappropriate. Rather, as the
Court explained in its order, “[d]efendant, as the moving party, bears the burden of
establishing that bifurcation is warranted.” Docket No. 564 at 19 (quoting Baker v.
Equifax Credit Info. Servs., Inc., 1998 WL 101829, at *1 (D. Kan. Feb. 6, 1998) (citing
Ake v. Gen Motors. Corp., 942 F. Supp. 869 (W.D.N.Y. 1996)).3 The Court finds no
Defendants further argue that, in granting defendants’ motion to exclude the
use of the non-affiliation evidence in support of plaintiffs’ claims for compensatory
damages, Docket No. 564 at 15, the Court “eliminated Plaintiffs’ principal argument
against bifurcation,” Docket No. 569 at 2. Again, it is defendants’ burden to establish
that bifurcation is appropriate, not plaintiffs’ burden to show that bifurcation would be
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“clear error” in its earlier analysis of the issues, and it is not “left with the definite and firm
conviction that a mistake has been committed.” U.S. Gypsum Co., 333 U.S. at 395.
For the foregoing reasons, it is
ORDERED that defendants Motion for Reconsideration of March 20, 2020 Order
With Respect to Motion In Limine to Bifurcate Jury Trial into Liability and Punitive
Damages Phases [Docket No. 569] is DENIED.
DATED February 16, 2021
BY THE COURT:
PHILIP A. BRIMMER
Chief United States District Judge
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