New Orleans City v. AMBAC Assurance Corporation et al

Filing 372

ORDER and REASONS granting in part and denying in part 345 Motion in Limine Binding the City to Its Prior Sworn Interrogatory Answers and Precluding the City from Now Changing Its Position on Damages, as stated within document. Signed by Judge Kurt D. Engelhardt on 2/25/2015. (cbs) Modified on 2/25/2015 to edit document type (cbs).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
THE CITY OF NEW ORLEANS

CIVIL ACTION

VERSUS

NO. 08-3949

AMBAC ASSURANCE CORPORATION, ET AL

SECTION “N” (1)

ORDER AND REASONS
Before the Court is Defendant's "Motion in Limine Binding the City to Its Prior Sworn
Interrogatory Answers and Precluding the City from Now Changing Its Position on Damages."
(Rec. Doc. 345). The City filed its opposition. (Rec. Doc. 357). For the reasons stated herein, the
Motion is hereby GRANTED IN PART and DENIED IN PART.
In its Motion in Limine, Defendant, PaineWebber Capital Services, Inc. ("PWCSI") requests
that the Court preclude admission of certain evidence pertaining to Plaintiff's, the City of New
Orleans ("the City"), damage calculations. Specifically, PWCSI asks the Court to disallow the City
from: (1) presenting evidence of damages, through their expert, that are based on a calculation of
the proceeds from the Swap Agreement between PWCSI and the City ("the Swap") had the
Reciprocal Swap Agreement between PWCSI and Ambac Financial Serivces, LLC, ("the Reciprocal
Swap") never taken place; (2) presenting evidence that PWCSI would not have declared a Rate
Change Event in the Spring of 2008 if the Reciprocal Swap had not existed; (3) disputing that had
1

the City known of the Reciprocal Swap it could have entered into a swap agreement directly with
Ambac; and (4) relying on any damage model other than one that would remedy the alleged breach
at the lowest cost to PWCSI. (Rec. Doc. 345-1 at p. 5). PWCSI bases its Motion on the argument
that the City should be bound by its interrogatory answers and its Rule 30(b)(6) testimony.
Pursuant to Rule 11 of the Federal Rules of Civil Procedure, this Court finds that
interrogatories and their answers are meaningful representations, and a party will be held
accountable for the information contained therein. Here, the parties were afforded numerous
opportunities to amend and supplement their answers. (See Rec. Doc. 345-2, Exh. A, B, and C).
Accordingly, the City will be bound by the contents of its answers to Defendant's interrogatories.
The Court finds that the following:
IT IS ORDERED that the Motion is GRANTED to the extent that the City will not be
permitted to introduce evidence of damages, through their expert, that are based on a calculation of
the proceeds from the Swap had the Reciprocal Swap never taken place. The City clearly renounced
this previously stated theory in Answers to Third Set of Interrogatories. (Id. at Exh. B).
IT IS FURTHER ORDERED that the Motion is GRANTED to the extent that the City
may not offer evidence that PWCSI would not have declared a Rate Change Event in the Spring of
2008 if the Reciprocal Swap had not existed. See above.
IT IS FURTHER ORDERED that the Motion is GRANTED to the extent that the City
may not dispute that had the City known of the Reciprocal Swap it could have entered into a swap
agreement directly with Ambac Financial Serivces, LLC. Although, this calculation model is but
2

one alternative of three separate models contained in the City's answers. (See id. at Exh. C
(declaring, "[i]f the City had known of the Reciprocal Swap, the City would have considered several
beneficial alternatives, including (1) entering into a swap directly with Ambac Financial Serivces,
LLC; (2) issuing bonds at a fixed rate with a call; and (3) not issuing the bonds and continuing to
make pay-as-you-go payments on the Firefighters' Pension System.")).

To the extent that

PWCSI's Motion attempts to preclude evidence relating to any of the City's three damage
calculation models at this time, the Motion is DENIED. However, to be clear, this is singularly a
breach of contract case. The Court will not entertain models that ignore the existence of the
contract, are based on the supposition that no contract would have been entered into, or that rely on
previously dismissed tort claims.

The City will be bound by its three (3) damage models

described in the answers to interrogatories to the extent that they are in conformity with this
ruling. IT IS FURTHER ORDERED that the Motion is DEFERRED to trial regarding whether
the City may rely on any damage model other than one that would remedy the alleged breach at the
lowest cost to PWCSI.
New Orleans, Louisiana, this 25th day of February 2015.

________________________________________
KURT D. ENGELHARDT
United States District Judge

3