United States of America et al v. Slurry Systems, Inc. et al
Filing
244
MEMORANDUM Opinion and Order. Signed by the Honorable Arlander Keys on 5/3/2013. (ac, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES OF AMERICA,
for the use and benefit of
PILECO, INC.,
)
)
)
)
Plaintiff,
)
)
v.
)
)
SLURRY SYSTEMS, INC. and
)
FIDELITY AND DEPOSIT
)
INSURANCE COMPANY OF
)
MARYLAND,
)
)
Defendants.
)
------------------------------)
SLURRY SYSTEMS, INC.,
)
)
Third Party Plaintiff )
)
v.
)
)
BAUER MASCHINEN GMBH,
)
)
Third Party Defendant.)
Case No. 09 C 7459
Magistrate Judge Arlander Keys
MEMORANDUM OPINION AND ORDER
In this lawsuit, Pileco, Inc. has sued Slurry Systems, Inc.
(“SSI”) and its surety, Fidelity and Deposit Company of Maryland
(“F&D”), seeking to recover money allegedly owed on a contract
executed in connection with a reservoir project undertaken by the
Army Corps of Engineers in Willow Springs, Illinois.
In its
complaint, Pileco alleged two counts: count one, asserted under
the Miller Act, seeks payment on a payment bond, issued by F&D,
in connection with the project; and count two alleges breach of
contract and seeks monetary damages in excess of $4 million from
SSI.
SSI answered the complaint, and, along with its answer,
filed a counterclaim against Bauer Maschinen and Pileco, alleging
that, in connection with the reservoir project, it subcontracted
with Pileco and Bauer to provide certain equipment necessary to
the job, that the equipment never worked properly, that Pileco
and Bauer breached their agreement with SSI, and that SSI paid
Pileco all that it was due under the contract.
The case is set for trial on May 13, 2013, and, in
preparation for trial, both sides have filed motions in limine.
The purpose of this memorandum opinion and order is to rule on
those motions to the extent possible.
Discussion
“A motion in limine is a motion ‘at the outset’ or one made
‘preliminarily.’” Ellis v. Country Club Hills, No. 06 C 1895,
2011 WL 6001148, at *1 (N.D. Ill. Dec. 1, 2011)(quoting BLACK'S
LAW DICTIONARY 803 (8th ed. 2004).
“Motions in limine may be
used to eliminate evidence ‘that clearly ought not be presented
to the jury because [it] clearly would be inadmissible for any
purpose.’” Id. (quoting Jonasson v. Lutheran Child & Family
Svcs., 115 F.3d 436, 440 (7th Cir. 1997).
“The party seeking to
exclude evidence has the burden of demonstrating that the
evidence would be inadmissible for any purpose.” Id. (citing
Robenhorst v. Dematic Corp., No. 05 C 3192, 2008 WL 1766525, at
*2 (N.D. Ill. Apr. 14, 2008)).
2
Together, the parties have filed 13 motions in limine.
Pileco and Bauer jointly filed eight motions: motion number 1
seeks to preclude the introduction of evidence or testimony
relating to production estimates, budgets, schedules or other
recommendations suggested by Pileco and Bauer that are not part
of the contract between the parties; number 2 seeks to bar any
testimony or documents making any reference to any of SSI’s precontract complaints; number 3 seeks to bar evidence of problems
with other cutter operations; number 4 seeks to bar any reference
to SSI’s claim that the cutter experienced 120.85 days of
downtime; number 5 seeks to bifurcate the liability and damages
portions of SSI’s Second Amended Counterclaim and Third Party
Complaint; number 6 seeks to bar evidence of settlement
negotiations; number 7 seeks to compel SSI to elect its remedy;
and number 8 seeks to bar “new witnesses.”
SSI filed five motions: motion number 1 seeks to bar mention
of any other claims on the bond and other disputes involving SSI;
motion number 2 seeks to bar Pileco from seeking damages for the
off-hire report and Junker report; motion number 3 seeks to
exclude the testimony and opinions of Craig Clarke; motion number
4 seeks to bar portions of Johann Burger’s testimony; and motion
number 5 seeks to bar any testimony or evidence relating to any
evaluations of the project performed by the Army Corps of
Engineers. The Court considers each motion below.
3
A.
Pileco/Bauer’s Motions in Limine
(1) Motion No. 1:Production Estimates, Budgets and Schedules
In their first motion in limine, Pileco and Bauer argue
that, under the law of the case doctrine, SSI should be barred
from introducing any evidence concerning production estimates,
budgets, schedules or other recommendations provided by Pileco
and Bauer to SSI during the bidding phase of the McCook Reservoir
project, but not made part of the contract between the parties.
More specifically, Pileco and Bauer argue that this evidence
should be precluded consistent with Judge Guzman’s order
dismissing SSI’s negligent misrepresentation claim.
But this
evidence is also relevant to SSI’s breach of contract and breach
of warranty claims.
SSI alleges that it relied on this evidence
when submitting its bid on the project, and, in ruling on summary
judgment, this Court recognized the significant role Bauer played
in that whole process.
(2)
The motion is denied.
Motion No. 2: Pre-Contract Complaints
Next, Pileco and Bauer seek to bar any testimony or
documents referencing complaints or issues raised by SSI prior to
the execution of the contract.
According to SSI’s counterclaim,
SSI engaged in conversations with Pileco and Bauer prior to
submitting its bid; it arranged for the delivery of the cutter
and began a test section; and experienced problems with the
cutter from the very beginning.
The parties discussed and worked
4
out some of the issues, then executed a rental agreement that
reflected the changes made as a result of those discussions.
Pileco and Bauer seem to be arguing that the issues and
discussions that occurred prior to the execution of the rental
agreement are inadmissible and irrelevant.
Given the history of
the parties’ dealings, the relevance of these discussions can
hardly be questioned.
And there is no evidence to show that SSI
somehow waived its right to proceed on those earlier issues.
Accordingly, this motion is denied.
(3)
Motion No. 3: Complaints by Other Customers
Next, Pileco and Bauer seek to bar any evidence concerning
complaints made by other cutter owners or lessees.
This evidence
is relevant – indeed, crucial, to SSI’s Illinois Consumer Fraud
Act claim.
In that claim, SSI alleges that Pileco and Bauer knew
the cutter was experiencing problems in the field because of
reports coming from other customers; yet, they did not advise SSI
of those reports and instead opted to blame SSI and other issues
for the problems, even as they were working on redesigns to fix
the very problems SSI was experiencing.
Evidence of other
reports from other customers – if they are the same or similar to
those raised by SSI – are relevant to this claim, so long as they
were made during the relevant timeframe (roughly October 2006
through January 2009).
5
(4)
Motion No. 4: Cutter Downtime
Next, Pileco and Bauer seek to preclude any reference to the
fact that the cutter was “down” for 120.85 days or that SSI was
entitled to an equitable adjustment to the rent for the period of
down time.
During summary judgment, Pileco and Bauer conceded
that the cutter was “down” for 120.85 days.
But, for purposes of
trial, they intend to hold SSI to its burden of proving that all
of that down time is the fault of Pileco or Bauer.
It is Pileco
and Bauer’s prerogative to hold SSI to its burden of proving this
issue, and, indeed, SSI does not oppose the motion.
Accordingly,
the motion is granted.
(5)
Motion No. 5: Bifurcation
Next, Pileco and Bauer ask the Court to bifurcate the
liability and damages portions of SSI’s case.
denied.
The motion is
Pileco and Bauer argue that bifurcation would serve the
interests of judicial economy and avoid prejudice to the parties.
The Court disagrees.
Issues concerning damages and liability are
inextricably linked in this case, given the circumstances of the
parties’ contractual dealings and the evolution of their
contractual relationship.
It is true, as Pileco and Bauer
assert, that, if liability is not established, the jury need
never consider the question of damages.
cases.
But that is true in most
There is nothing unduly complicated about the damages
aspect of this case, and the Court sees no reason to separate the
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liability and damages issues.
(6)
Motion No. 6: Settlement Negotiations
In their sixth motion in limine, Pileco and Bauer seek to
exclude all evidence relating to the attempted settlement of
these disputes.
Federal Rule of Evidence 408 provides that
[e]vidence of the following is not admissible – on behalf of
any party – either to prove or disprove the validity or
amount of a disputed claim or to impeach by a prior
inconsistent statement or a contradiction:
(1) furnishing, promising, or offering – or accepting,
promising to accept, or offering to accept – a valuable
consideration in compromising or attempting to compromise
the claim; and
(2) conduct or a statement made during compromise
negotiations about the claim . . . .
The Rule does, however, allow the court to admit such evidence
for another purpose, such as proving a witness’ bias or
prejudice.
Id.
Pileco and Bauer seek to invoke the rule to prevent SSI from
offering evidence concerning additional negotiations that may or
may not have culminated in additional contract terms, and
contract terms that may or may not have been ultimately agreed to
by the parties.
SSI argues that this evidence is admissible to
prove SSI’s claims, that Pileco and Bauer are estopped from
denying the settlement terms they negotiated, and that it is
entitled to a declaratory judgment that the agreement reached by
the parties is binding and enforceable.
The record on summary judgment included evidence reflecting
post-contract discussions by the parties concerning settlement
7
and their attempts to revise the terms of their deal to bring the
matter to a close.
This evidence, the Court held, precluded
summary judgment in Pileco’s favor on its breach of contract
claim.
At the same time, the Court recognized that this evidence
would support some of SSI’s claims, though there too summary
judgment was inappropriate given the many issues of fact.
To be
sure, this evidence is relevant – not to prove or disprove the
validity or amount of SSI’s claims, but to establish the precise
terms of the contractual relationship in an effort to ascertain
whether either side, in fact, breached.
Rule 408 does not
preclude the admission of this evidence for this purpose, and
Pileco/Bauer’s motion in limine is denied.
(7) Motion No. 7: Election of Remedy
In their seventh motion in limine, Pileco and Bauer seek an
order requiring SSI to elect its remedy and barring any evidence
to the effect that Pileco/Bauer’s breaches of the subcontract
vitiated SSI’s obligation to perform under the rental agreement.
Based upon the evidence submitted on summary judgment, the Court
recognizes that the contractual relationship between these
parties is complicated.
Though the initial contract terms may
have seemed clear, additional terms were reached and concessions
were made to address equipment problems and other issues.
At
some point, it appears that SSI’s obligation to make payments
under the rental agreement was excused and the subject of an
8
equitable adjustment was introduced.
In response to the motion,
SSI has indicated that it agrees that its obligation to pay rent
was not vitiated because of any breach by Pileco or Bauer.
And,
to the extent Pileco/Bauer’s motion seeks to bar evidence showing
otherwise, the motion is granted.
But the Court will allow SSI
to offer evidence concerning the effect of the equitable
adjustment on its obligation to pay under the agreement.
(8)
Motion No. 8: Newly Disclosed Witnesses
Finally, Pileco and Bauer have moved in limine to bar any
witnesses disclosed by SSI for the first time in its Supplemental
Rule 26 disclosures, filed on March 22, 2013.
In particular,
Pileco and Bauer argue that Regina Blair, Michael Flecker and Jim
Pipkorn – all listed in the Final Pretrial Order as SSI’s “may
call” witnesses – should be precluded from testifying because SSI
never identified them in its Rule 26 disclosures.1
“Never” is
inaccurate – in fact, Pileco and Bauer concede that SSI disclosed
these witnesses on March 22, 2013, but only after the objections
were made; they argue that this was too late, however, and that
the late disclosure prejudices them.
SSI argues that, because these witnesses came to light
during discovery, it had no duty under the Rule to supplement its
1
Pileco and Bauer also moved to bar Dieter Stetter from
testifying. But, in the Final Pretrial Order submitted to the
Court, his name does not appear on the list of SSI’s witnesses
(neither may call, nor will call).
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disclosures to include them.
SSI argues that these witnesses
have been known to Pileco and Bauer for years, and that their
disclosure cannot have been surprising.
The Court agrees.
Under the circumstances, the inclusion of these witnesses on
SSI’s “may call” list cannot have unfairly surprised Pileco and
Bauer.
Regina Blair is the Contracting Branch Chief for the Army
Corps of Engineers; in fact, as SSI points out, in March of 2011,
Bauer identified her as someone who “may have knowledge of the
allegations contained within the pleadings in this Lawsuit.”
See
Bauer’s First Supplement to Answers to SSI’s First Set of
Interrogatories, p. 3 (attached as Exhibit B to SSI’s Response to
the Motion in Limine).
Michael Flecker, a mechanic with Liebherr
Nenzing Crane Co. (the owner of the crane used to hold the cutter
at the McCook reservoir jobsite) came to light at the deposition
of Bauer employee Robert Kaindl in March of 2011.
See Deposition
of Robert Kaindl, pp. 209-214, 227-228, 232 (attached as Exhibit
D to SSI’s Response to the Motion in Limine) In fact, SSI argues,
Pileco and Bauer have identified as a trial exhibit a report that
Flecker prepared regarding the pressures of the Liebherr crane
used at the McCook Reservoir jobsite. And Jim Pipkorn is a
mechanic for American States; he was responsible for
commissioning the Liebherr crane at the jobsite in October 2006.
He prepared a commissioning report that has been produced in
discovery and his name appears throughout the daily logs prepared
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by former SSI employee Mike Roberts (Pileco and Bauer have also
included the daily logs on their list of trial exhibits).
The Court is not persuaded that Pileco and Bauer are in any
way prejudiced or harmed by the inclusion of these witnesses on
SSI’s “may call” list.
If, at trial, it becomes apparent that
SSI intends to elicit from any of these witnesses lines of
testimony that go beyond what would be expected, given the
discovery, Pileco and Bauer may renew their motion and the Court
will revisit the issue.
For now, the motion to exclude Ms.
Blair, Mr. Flecker and Mr. Pipkorn is denied.
B.
SSI’s Motions in Limine
(1)
Motion No. 1: Other Claims/Disputes
On January 18, 2006, the United States Army Corps of
Engineers engaged SSI to build a “soil-bentonite cutoff wall” at
the McCook Reservoir in Willow Springs, Illinois.
in Limine No. 1., p. 1.
SSI’s Motion
As required under the contract and the
Miller Act, 40 U.S.C. §1331, SSI supplied a payment bond,
furnished by Fidelity and Deposit Company of Maryland, a
defendant in this case.
Id.
According to SSI, in addition to
the claims involved in this lawsuit, the McCook project gave rise
to three other claims on the Bond issued by FDCM (these other
claims were made by Great Lakes Soil and Environmental
Consultants, Inc., Chicago Machinery, and Thoesen Tractor) and
one other dispute (between SSI and Environmental Barrier
11
Company).
But none of these concern the rental agreement or the
cutter involved in this lawsuit.
Thus, in its first motion, SSI
seeks to bar Pileco and Bauer from “mentioning, inquiring about,
adducing or presenting evidence related to any other claim on the
bond” and from “mentioning, inquiring about, adducing or
presenting evidence related to any other disputes involving SSI .
. . .”
Id., pp. 1-2.
SSI argues that such evidence is not
relevant to the dispute between SSI and Pileco and that it would
impermissibly and unnecessarily broaden the scope of this trial,
because it would force SSI to re-litigate the allegations
asserted in those other claims and disputes.
Pileco and Bauer do not oppose the motion to bar evidence of
other claims on the bond, and that part of the motion is granted.
But they do oppose the motion to preclude evidence concerning
SSI’s dispute with EBC.
They argue that this evidence is
relevant because it affected SSI’s financial situation at the
time it was getting the McCook Reservoir project up and running.
The Court finds that this evidence is not relevant to the dispute
at issue in this lawsuit.
Evidence concerning how much money SSI
had to lay out to cover its litigation costs or appeal bond, by
itself, does not necessarily establish anything with respect to
its mindset on the McCook project.
And, to be sure, to the
extent the evidence has any probative value, it is vastly
outweighed by the prejudice it would cause. SSI’s motion in
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limine number 1 is granted; Pileco and Bauer are precluded from
offering any evidence concerning other claims or disputes.
(2)
Motion No. 2: Off-Hire & Junker Reports
In its second motion in limine, SSI seeks to preclude Pileco
from claiming damages for the “Off-Hire Report” or the “Junker
Report.”
By way of background, the rental agreement for the
cutter required SSI to pay Pileco “for cleaning and the final
repair of damages (if any), as specified in an off-hire report at
the end of the rental period.”
Rental Agreement, ¶9.
Bruce
Bradley went to the job site to prepare the off-hire report for
Pileco and was there, on and off, for a period of two weeks in
January 2009, after the cutting work had been completed and the
cutter had been decommissioned at the site.
Mr. Bradley
testified that he served more as a supervisor for the report and
that the actual inspection was done by SSI employees; he
testified that this slowed things down for him but did not limit
his ability to prepare his report.
Bradley Dep., pp. 80-81.
After receiving Mr. Bradley’s off-hire report, and getting the
cutter back to its yard in Houston, Pileco hired George Junker
Engineering, a German company, to prepare a report on the
condition of the cutter; this report (the “Junker report”) was
apparently wildly inconsistent with Mr. Bradley’s report, and
estimated that it would cost $603,027.58 to “refurbish” the
cutter.
The contract does not say anything about refurbishment;
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nor does it require SSI to pay for the preparation of the offhire report or a report such as the Junker Report.
According to its Damages Itemization in the Final Pretrial
Report, Pileco is claiming “unpaid invoices for Pileco repairs
and parts: $1,633,455.00"; SSI believes that these “unpaid
invoices” include those from Mr. Bradley (invoicing his services
in the preparation of the Off-Hire Report) and from Junker
Engineering (invoicing services relating to the preparation of
the Junker Report and the “refurbishment” work done pursuant to
that report).
As the Court noted in ruling on summary judgment, the
contract between SSI and Pileco does not require SSI to pay for
“refurbishment”; nor does it require SSI to pay for the
preparation of an off-hire report or any similar report.
Thus,
Pileco is precluded from seeking damages for those costs.
Additionally, Mr. Bradley testified that the situation at the job
site did not prevent him from preparing his report.
Pileco’s
suggestion that the Junker report was somehow necessary because
the Off-Hire Report was incomplete or deficient because of that
situation is simply not supported in the record.
the motion to exclude that evidence is granted.
Accordingly,
Having said
that, the contract clearly does require SSI to pay for final
repairs as indicated in the Off-Hire Report, and the Court will
allow Pileco to offer evidence on that issue.
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(3)
Motion No. 3: Craig Clarke
In its third motion in limine, SSI seeks to bar the
testimony and opinions of Craig Clarke, Pileco’s rebuttal expert
witness; SSI argues that Mr. Clarke’s testimony does not satisfy
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993).
The admissibility of expert testimony in federal court is
governed by Rule 702, and the principles announced in Daubert and
Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999).
Federal Rule
of Evidence 702 provides that, “a witness who is qualified as an
expert by knowledge, skill, experience, training, or education,
may testify in the form of an opinion or otherwise, if:
(a) the expert’s scientific, technical, or other
specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in
issue;
(b) the testimony is based on sufficient facts or
date;
(c) the testimony is the product of reliable
principles and methods; and
(d) the expert has reliably applied the principles
and methods to the facts of the case.
And Daubert and Kumho instruct that the Court is to act as a
“gatekeeper,” deciding whether to admit or exclude expert
evidence based upon a “flexible” test, looking to a variety of
factors intended to gauge the evidence’s reliability and
relevance.
As the party seeking to introduce the expert
testimony, Pileco and Bauer have the burden of establishing, by a
preponderance of the evidence, that it is admissible.
15
See, e.g.,
Autotech Technologies Limited Partnership v.
Automationdirect.com, Inc., No. 05 C 5488, 2005 WL 3180147, at *8
(N.D. Ill. Nov. 23, 2005).
Craig Clarke, a senior consultant at Diversified Business
Consulting, Inc., was retained by Pileco and Bauer as an expert
in this case, and he is listed as a “will call” witness in their
defense of SSI’s counterclaim and third party complaint.
At the
time of his report, he had been a certified public accountant for
30 years and a certified fraud examiner for 7 years; he indicates
in his report that, for the past 8 years, he had also “provided
consulting services and economic damage analysis in a broad range
of economic loss cases” and had been qualified to testify as an
expert witness on a number of occasions.
See Report of Alleged
Economic Loss, p. 1 (attached as Exhibit A to SSI’s Motion in
Limine).
Mr. Clarke prepared a report in connection with his
work for Pileco; it is dated December 14, 2012 and entitled
“Report of Alleged Economic Loss.”
In it, he indicates that
Pileco hired him “to evaluate the loss calculations claimed by
SSI and to review the accounting and financial documents provided
by it as well.”
Report, p. 1. More specifically, Mr. Clarke
states, he was “asked to examine the SSI loss calculations to
determine if they were prepared using sound economic and
accounting practices.
I was also asked to review the documents
provided by SSI to see if they were sufficient to support those
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loss calculations.”
Id.
Additionally, he states that he was
“asked to review paragraph 22 of the Addendum to the Rental
Agreements 03-6040 between Pileco and SSI and render an opinion
as to the proper methodology of calculating the daily rate for
the equitable adjustment to the rental price.”
Id.
In his report, Mr. Clarke details the many problems he found
in the way Dana Wesolek (SSI’s Vice President and later
President) calculated SSI’s expected profit from the McCook
project and SSI’s damages. Report, pp. 4-9.
He also details the
issues he perceives with the loss calculation prepared by Philip
Klein, who he characterizes as “a retired CPA hired by SSI to
prepare an analysis of the losses allegedly suffered by SSI due
to the actions of Pileco.”
Id., pp. 9-16.
Finally, Mr. Clarke concludes that Mr. Klein’s calculation
of alleged damages is flawed and that, under the rental
agreement, SSI would be entitled to an equitable adjustment to
the rental price equal to $2,960 for each day during which SSI
could not use the equipment.”
Id., p. 18.
SSI argues that Mr. Clarke’s calculations are based on
simple math, not on any specialized knowledge, and that he
should, therefore, not be permitted to testify as an expert.
Pileco and Bauer disagree, arguing that Mr. Clarke is competent
to testify concerning SSI’s claimed damages and concerning the
equitable adjustment provision in the parties’ contract.
17
At his deposition, Mr. Clarke clarified that, with respect
to the equitable adjustment referenced in the parties’ agreement,
he was not asked (nor presumably would he have been qualified) to
opine on whether SSI was entitled to an equitable adjustment; nor
was he asked to opine on the amount of the adjustment.
Clarke
Dep., pp. 54-57 (attached as Exhibit B to SSI’s Motion in
Limine).
On this issue, he simply opined on the methodology for
how that adjustment would be calculated – and even that was
limited to the math, not to any legal or accounting principles
that may be involved in making that determination.
Pileco and
Bauer argue that, although the calculation may appear simple,
paragraph 22 is confusing; they argue that Mr. Clarke’s testimony
can help resolve that confusion.
But, based on his report and
his deposition testimony, he can add nothing about the
contractual language.
Basically, he was asked to figure out an
appropriate way of calculating a daily rate for the equitable
adjustment and he did so; he did not interpret the contract
language – nor is he qualified to do so.
In short, the Court
finds that on the question of the equitable adjustment, Mr.
Clarke brings nothing to the table in the way of “expertise” and,
as such, he is precluded from testifying as an expert on this
issue.
It is not clear that SSI is seeking to preclude Mr. Clarke
from testifying concerning his opinions about the flaws in Ms.
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Wesolek’s damage/loss calculations or in Mr. Klein’s damage/loss
calculations.
is denied.
But, to the extent it is, that part of the motion
If SSI puts Mr. Klein on the stand to testify
concerning SSI’s damages, Pileco and Bauer should be able to
rebut that testimony, and, on this issue, Mr. Clarke’s expertise
may, in fact, assist the trier of fact.
(4)
Motion No. 4: Johann Burger
In its fourth motion in limine, SSI seeks to bar portions of
the testimony of Johann Burger, another of Pileco’s expert
witnesses; SSI seeks to bar those portions of his testimony that
are duplicative to the testimony of Franz-Werner Gerressen,
Pileco’s other expert witness.
According to Pileco’s
disclosures, Mr. Gerressen will offer 15 opinions, and Mr. Burger
will offer 10 opinions.
To be sure, the Court has no intention of allowing the
parties to offer evidence that is redundant or duplicative.
And
after reviewing Pileco’s Rule 26(2)(c) disclosures, the Court
agrees with SSI that the vast majority of the opinions disclosed
for Mr. Burger are also disclosed for Mr. Gerressen.
Of the 10
opinions disclosed for Mr. Burger, only two are novel (numbers 8
and 10).
But the Court will not dictate which witness Pileco
offers for these opinions; it may choose to call either Mr.
Burger or Mr. Gerressen to testify concerning the eight
overlapping opinions, but it may not call both witnesses to
19
testify concerning the same issues.
The motion in limine is
granted to the extent that it seeks to bar duplicative opinion
testimony; but, beyond that, the motion is denied. The Court will
allow Pileco to decide which one expert witness it wants to offer
on those overlapping opinions.
(5)
Motion No. 5: Evaulations
In its last motion in limine, SSI seeks to bar Pileco and
Bauer from “mentioning, inquiring about, adducing or presenting
evidence related to any evaluations of the project performed by
the Army Corps of Engineers.”
Motion No. 5, p. 1.
SSI argues
that the evaluations are hearsay and not subject to any exception
to the rule precluding such evidence; SSI also argues that, even
if the records were admissible under some exception to the
hearsay rule, they should still be barred under Rule 403.
Pileco
and Bauer disagree, arguing that the evaluations are relevant and
admissible under either the business records or public records
exceptions to the hearsay rule.
As the parties correctly note, as a general rule, evidence
that is hearsay is inadmissible unless it falls within a
delineated exception to the rule.
See Fed. R. Evid. 802, 803.
Most relevant for today’s purposes, the rules provide that
“records of a regularly conducted activity” and “public records”
are admissible under certain circumstances.
803(6), (8).
Fed. R. Evid.
Under Rule 803(6), “[a] record of an act, event,
20
condition, opinions, or diagnosis” is not excluded under the
hearsay rule if:
(A) the record was made at or near the time by –
or from information transmitted by – someone with
knowledge;
(B) the record was kept in the course of a
regularly conducted activity of a business,
organization, occupation, or calling, whether or not
for profit;
(C) making the record was a regular practice of
that activity;
(D) all these conditions are shown by the
testimony of the custodian or another qualified
witness, or by a certification that complies with Rule
902(11) or (12) or with a statute permitting
certification; and
(E) neither the source of information nor the
method or circumstances of preparation indicate a lack
of trustworthiness.
Fed. R. Evid. 803(6).
Under Rule 803(8), a record or statement
of a public office is not excluded under the hearsay rule if:
(A) it sets out:
(i) the office’s activities;
(ii) a matter observed while under a legal
duty to report . . . ; or
(iii) in a civil case or against the
government in a criminal case, factual findings from a
legally authorized investigation; and
(B) neither the source of the information nor
other circumstances indicate a lack of trustworthiness.
Fed. R. Evid. 803(8).
SSI seeks to exclude three evaluations.
The first, dated
September 16, 2008, indicates that it is an interim evaluation
created when the project was 50% complete; the second, which is
not dated, indicates that it is an interim evaluation created
when the project was 80% complete; and the third, dated June 3,
21
2010, indicates that it is a final evaluation.
See Exhibits 15,
16 and 17 of Pileco and Bauer’s Response to SSI’s Motions in
Limine.
Initially, the Court questions the relevance of the
evaluations to the claims at issue in this lawsuit.
Certainly,
the ACOE’s assessment of SSI’s performance would have nothing to
do with Pileco and Bauer’s breach of contract and Miller Act
claims.
Moreover, even if relevant, if the documents are offered to
show that SSI’s performance fell short in the ACOE’s view, they
are inadmissible hearsay.
And, at least at this point, the Court
is unable to say that the records satisfy the criteria spelled
out in the relevant exceptions to the hearsay rule.
For example,
with respect to the requirement that the records be created by
persons with knowledge, Pileco argues that Timothy Flaherty of
the ACOE attended every progress meeting from the start of the
project until its completion; yet, there is no indication that
Mr. Flaherty created or supplied information for the records.
And Pileco and Bauer have said nothing about the people whose
names appear on the records.
Additionally, although the work at
the site was completed in early 2009, the final evaluation was
not completed until May of 2010.
Under the circumstances, the
Court is not persuaded that this lag is insignificant for
purposes of Rule 803(6)(A).
And, although Pileco and Bauer have argued that concerns
22
regarding trustworthiness are not relevant under Rule 803(8), the
Court disagrees.
The rule plainly provides that, to be
admissible under the public records exception to the hearsay
rule, the records’ source and surrounding circumstances must not
indicate a lack of trustworthiness.
For the reasons already
discussed, the Court cannot say that is the case here.
Federal Rule of Evidence 403 allows the Court to exclude
relevant evidence if its probative value is substantially
outweighed by a danger that it will cause unfair prejudice or
confusion, or that it will mislead the jury.
As explained, the
Court questions the relevance of the ACOE’s assessment of SSI’s
performance on the claims at issue in this case.
The ACOE was
not a party to the contract and SSI’s performance evaluation had
no bearing on the contract between SSI and Pileco.
On the flip
side, the Court agrees that these evaluations may, in fact,
mislead or confuse the jury on the issue or even prejudice the
jury about SSI.
Accordingly, at least at this point, the Court
would also exclude the reports under Rule 403.
CONCLUSION
For the reasons set forth above, the Court grants motion in
limine number 4 and motion in limine number 7 filed by Pileco and
Bauer; the rest of Pileco and Bauer’s motions in limine are
denied.
Additionally, the Court grants motion in limine number
1, motion in limine number 2 and motion in limine number 5 filed
23
by SSI.
Additionally, motion in limine number 3 and motion in
limine number 4 filed by SSI are granted in part and denied in
part.
Date: May 3, 2013
E N T E R E D:
______________________________
MAGISTRATE JUDGE ARLANDER KEYS
UNITED STATES DISTRICT COURT
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