Underground Vaults & Storage, Inc. v. Cintas Corporation et al

Filing 134

MEMORANDUM AND ORDER denying 121 Motion in Limine. Signed by District Judge Monti L. Belot on 04/16/2014. (aa)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

UNDERGROUND VAULTS & STORAGE, INC.,

)
)
Plaintiff,
)
)
v.
)
)
CINTAS CORPORATION, et al.,
)
)
Defendants.
)
________________________________________)

CIVIL ACTION
No.

11-1067-MLB

MEMORANDUM AND ORDER
Before the court are the following:
1.

UVS’s motion in limine (Doc. 121);

2.

Cintas’ response (Doc. 124); and

3.

UVS’s reply (Doc. 132).

The pretrial order, signed by Judge John Lungstrum, was filed on
February 4, 2013 (Doc. 52).

Thereafter, by his memorandum and order

dated July 22, 2013 (Doc. 77), Judge Lungstrum concluded that a
question of fact remains for trial concerning the existence of a joint
venture between the parties.

He went on to deny Cintas’ motion for

summary judgment on UVS’s claim for breach of contract because the
jury will have to determine, in the first place, whether a joint
venture existed.

For essentially the same reasons, Judge Lungstrum

denied Cintas’ motion for summary judgment on UVS’s claim for breach
of fiduciary duty.

Obviously, if the jury determines there was no

joint venture, UVS’s claim for damages is no longer an issue.
case then was transferred to the undersigned.

The

UVS hired Richard West as its expert on lost profits.1

This

court held a so-called Daubert hearing on November 18, 2013 and
thereafter

issued

a

memorandum

and

order

(Doc.

118).

Cintas

challenged some of West’s opinions on the basis that they are
speculative.

The court both disagreed and agreed, as follows:

Cintas objects to West’s opinions on the basis that
Boeing could terminate the contract at any time and,
therefore, lost profits for the initial seven years is
speculative. The court disagrees. Under Kansas law, “loss
of profits resulting from a breach of contract may be
recovered as damages when such profits are proved with
reasonable certainty, and when they may reasonably be
considered to have been within the contemplation of the
parties.” CoreFirst Bank & Trust v. JHawker Capital, LLC,
282 P.3d 618, 631 (Kan. Ct. App. 2012).
The contract between Boeing and Cintas is currently
being performed with no suggestion that Boeing or Cintas
has given notice of a termination or are likely to do so
during the remainder of the seven-year term. Therefore, a
reasonable inference could be drawn by the trier of fact
that plaintiff would have provided the storage as set forth
in the proposed bid had Cintas not terminated its
relationship with plaintiff. Moreover, given the terms of
the contract and the proposed lease agreement, the profits
from the initial seven year terms were within the
contemplation of the parties.
Therefore, any argument
regarding the potential termination of the contract goes to
the weight of the evidence and not its admissibility.
Next, Cintas argues that the lost profits for years 8,
9, and 10 are speculative because several assumptions must
be made in order for those profits to occur. Essentially,
both Boeing and Cintas would have had to agree to the
option. Additionally, plaintiff would also have to execute
the option on the lease agreement. West testified that the
option years were highly likely to occur because of the
enormous cost in moving the documents. The initial move
1

West initially came up with a lost profit figure of $3,930,000,
but he may have reduced that figure by $70,000. Barberich, Cintas’
expert, does not appear to propose a dollar amount of damages – he
just attacks West’s opinions.
If UVS prevails, the absence of a
figure may present a problem for the jury (and Cintas, as well) but
Barberich’s failure to present an alternative dollar figure does not
make his testimony inadmissible.
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and preparation of the 2.5 million drawings spanned over
two years at a substantial cost to Boeing. West testified
that it would be highly likely that all parties involved
would continue their relationship through ten years due to
the significant cost and planning involved in obtaining a
different contractor to store the documents.
Moreover, the contract executed by Boeing and Cintas
contemplates the contractual relationship continuing for a
total of 10 years.
The unexecuted lease agreement also
tracks the term of the Boeing contract.
Additionally,
plaintiff has identified several exhibits which demonstrate
that all parties assumed that the contract would extend
through the full 10 year term. Therefore, the court finds
that the lost profits for years 8 through 10 were within
the contemplation of the parties at the time the agreements
were circulated. See CoreFirst Bank & Trust, 282 P.3d at
631.
West further opined that the contract would be
extended an additional 8 years, a time period that is not
contemplated in the contract or the lease agreement. West
calculated this time period by determining plaintiff’s
history of client retention. West opined that plaintiff’s
relationships with its customers averaged 18 years and,
therefore, it is reasonable to conclude that plaintiff
would continue its relationship with Cintas for 18 years.
West, however, admitted that he has never used this type of
methodology and that it is not used by others in his field.
This opinion is not scientific but pure unsupported
speculation, at best. “To be reliable under Daubert, an
expert's scientific testimony must be based on scientific
knowledge . . . and not mere subjective belief or
unsupported speculation.” Goebel v. Denver and Rio Grande
W. R. Co., 346 F.3d 987, 991 (10th Cir. 2003). Therefore,
West’s opinions as to plaintiff’s lost profits in years 11
through 18 are excluded.
(Doc. 118 at 3-5).
Cintas also hired an expert, G. Matt Barberich.

Barberich is a

CPA and UVS does not attack his credentials or his qualifications.
Barberich prepared a lengthy report (Doc. 124-1).
Barberich nor has it filed a Daubert motion.

UVS did not depose

Instead, UVS has filed

a motion in limine which attacks Barberich’s written report on a
number of grounds which UVS summarizes as follows:

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As an accountant and damages expert witness,
Barberich’s testimony is only admissible if it will assist
the jury in understanding how lost profits should be
calculated, should they find any liability on the part of
Cintas. He may not take over the role of Cintas’s lawyers
in challenging liability by arguing that there was no joint
venture between Cintas and UVS. Nor should he be able to
comment on the reliability or weight of the evidence, or
incorrectly instruct the jury concerning what assumptions
a damages expert can and cannot make. For these reasons,
UVS respectfully requests that the Court grant its Motion
in Limine.
(Doc. 122 at 9).
UVS objects to a number of Barberich’s opinions which appear at
various places in the first 17 pages of his report.

Barberich’s

methodology isolates portions of West’s report and then offers his
response (criticism, basically) of the isolated portions.

The court

has had some difficulty with the format of Barberich’s report which
has made it hard to make definitive rulings regarding what opinions
Barberich can, or cannot, testify about at trial.
states

“Barberich

repeatedly

opines

that

Mr.

For example, UVS
West’s

damage

calculations are too speculative because the Boeing/Cintas contract
allowed Boeing to terminate the contract at any time at Boeing’s
convenience.

Mr. Barberich has no specialized knowledge or training

in what might make damages too speculative to be awarded.

Indeed,

there is no such thing as an expert on whether damages are too
speculative – that is an issue for the jury . . . .”

However, as just

pointed out, Cintas made essentially the same objection to West’s
opinion and the court overruled Cintas’ objection.

Perhaps there’s

a subtle difference the court doesn’t appreciate but it seems like UVS
is asking the court to prevent Barberich from offering an opinion
based on the same facts relied on by West.

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Basically, the only definitive rulings the court can make at this
time are that whether it be West or Barberich, neither expert can
offer an opinion about whether a joint venture existed or whether
there

was,

or

was

not,

a

breach

of

determinations are reserved for the jury.

fiduciary

duty.

Those

If either witness attempts

to do so, the court will admonish him and will instruct the jury to
disregard the witness’s testimony.

This may have a negative effect

on the witness’s credibility before the jury so it is up to counsel
to make sure that he does not lead the witness into a forbidden area,
whether directly or indirectly.
UVS also wants the court to prohibit Barberich from commenting
on West’s credibility and the reliability of his opinion.

UVS notes

places in Barberich’s report where he describes West’s opinions as
“unreliable”

and

“highly

speculative”

and

“lacking

reasonable

certainty.” UVS seems to be objecting more to Barberich’s descriptive
words rather than the opinions themselves.
Barberich’s report will not go to the jury so it’s only his
testimony that counts. Every lawyer knows that it is improper for one
witness to comment on another witness’s credibility. The descriptive
words to which UVS objects must not be used by Barberich at trial.
But that does not mean that the he cannot properly criticize West’s
methodology and figures.

By way of example (which may or may not

apply in this case) the court has heard accountants testify about
General

Accounting

appropriate

for

an

Principles
accounting

or

GAP.

witness

It
to

would
comment

be
on

entirely
another

accountant’s failure to follow GAP, assuming GAP is applicable.

Then

it would be up to the jury to decide how much weight to give the
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testimony.
In summary, the parties are represented by experienced trial
counsel.

It is counsels’ job to present admissible testimony and to

warn witnesses not to get into areas, or use terminology, which will
draw legitimate objections.

The court doesn’t like it when this

happens and neither do jurors.
The court suggests that counsel make their witnesses aware of
judge Lungstrum’s and this court’s rulings.
UVS’s motion in limine is denied, without prejudice to renewal
at trial, if necessary.
IT IS SO ORDERED.
Dated this

16th

day of April 2014, at Wichita, Kansas.

s/Monti Belot
Monti L. Belot
UNITED STATES DISTRICT JUDGE

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