Donovan et al. v. Flamingo Palms Villas, LLC, et al.

Filing 1133

ORDER that the Motion to Dismiss #1019 is GRANTED. The Motion to Vacate Trial and Shorten Time #1078 #1079 and the Motion to Reconsider #1098 are DENIED. The Motion in Limine #1084 is GRANTED in part and DENIED in part. The Motion in Limine #1085 is DENIED. The Motion in Limine #1088 is GRANTED in part and DENIED in part. The Motion in Limine #1095 is GRANTED. The Motion to Remove Attorney #1091 is GRANTED. The Motion to Clarify #1096 is GRANTED. Order No. #1082 is AMENDED to read that the Motion No. #950 is not moot but is granted for failure to respond. Signed by Chief Judge Robert C. Jones on 7/30/12. (Copies have been distributed pursuant to the NEF - ECS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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FRAN DONOVAN,
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Plaintiff,
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vs.
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FLAMINGO PALMS VILLAS, LLC et al.,
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Defendants.
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2:08-cv-01675-RCJ-RJJ
ORDER

This case arises out of an alleged conspiracy to defraud investors in a condominium

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development in Las Vegas. Ten motions are pending before the Court.

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I.

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FACTS AND PROCEDURAL HISTORY
Plaintiffs are eighty-seven individuals who, from 2005 to 2007, purchased condominium

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units in a development called the Palm Villas, Las Vegas Cay Club Condominiums (the

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“Development”). Originally, there were 139 Defendants, 121 of whom remained in the Second

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Amended Complaint (“SAC”) (ECF No. 183). Defendants are individuals and entities who

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allegedly defrauded Plaintiffs, or assisted in defrauding Plaintiffs, into purchasing units in the

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Development. The Development consists of an approximately 12-acre plot of land on which sit

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sixteen three-story apartment buildings, containing a total of 360 rental units. The three

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apartment buildings occupy 2.64 acres. The remaining 9.44 acres consist of several hundred

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parking spaces, swimming pools, and other open land (the “Common Area”).

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Beginning in 2004, Defendants began promoting and selling the 360 units in the

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Development to buyers. Defendants promoted the Development as a “resort community” that

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would be developed into a hotel. Initially, and before assuming its current name, the

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Development was called the Las Vegas Cay Club Resort & Marina. Defendants allegedly

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represented that the Development already boasted numerous valuable amenities, such as large

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covered patios, weight rooms, and spas, and that Defendants planned to enhance the

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Development with many other amenities, such as a game room, a water park, a restaurant, and

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conference facilities. By paying a non-refundable $5,000 payment, Plaintiffs were allowed to

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enter into a Reservation Agreement, which required a $10,000 non-refundable payment per unit

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reserved for purchase. Plaintiffs were later provided with a price list for the units, ranging from

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$199,000 to $499,900. After Plaintiffs invested, Defendants circulated various brochures and

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letters to Plaintiffs, informing Plaintiffs of the status of the Development. These letters and

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brochures described or displayed images of the various improvements that were being done to

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the Development. Defendants also circulated a map of the Development.

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Plaintiffs allege that the deeds they received in the purchase of each unit represented that

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Plaintiffs had an interest not only in their purchased units, but also in the Common Area, which

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included parking spaces, swimming pools, and many other valuable amenities that Defendants

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promised to add to the Development. After the deeds were signed, Plaintiffs allege that

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Defendants circulated a fifty-seven page declaration stating that Plaintiffs’ interests in the

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Development did not in fact include the Common Area, but were limited to their individually

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purchased rental units and the area common to their particular buildings. As a result, Plaintiffs’

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purchased units did not even include any of the Development’s parking spaces. Plaintiffs

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contend that the representations made in the fifty-seven page declaration conflicted with the

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advertising and other promotional representations made by Defendants, the deeds, and the

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appraisals on the units upon which Plaintiffs relied in deciding to invest in the Development.
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Plaintiffs filed the Complaint on November 26, 2008. (Compl., ECF No. 1). The Court

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has ruled on dozens of dispositive motions. The operative version of the Complaint is the Third

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Amended Complaint (“TAC”) (ECF No. 335). Plaintiffs have categorized Defendants therein

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into several groups: (1) the Fraudulent Enterprise Defendants (“FEPD”); (2) the

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Promoter/Broker Defendants; (3) the Appraiser Defendants; (4) the Financial Institution

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Defendants; and (5) the Title Company Defendants. The Court has adjudicated over one-

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hundred (100) substantive motions in this case. Ten motions are pending before the Court.

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II.

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DISCUSSION
A.

Motion to Dismiss (ECF No. 1019)

Plaintiffs Daniel and Kelly Nell ask the Court to dismiss their claims with prejudice.

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Plaintiffs aver that in February 2009 they contacted Attorney Hyman to assist them with a

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foreclosure against their property at the Cay Club in Las Vegas, that despite repeated attempts

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between February 2009 and April 2009, Attorney Hyman never responded to their requests for

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information, that Attorney Hyman’s secretary, Christine, informed them in April 2009 that

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neither she nor Attorney Hyman would respond to their telephone calls anymore but would only

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accept email communications, that they engaged the law firm of Rosenfeld and Rinato in April

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2010 (presumably to assist with the foreclosure), and that they did not become aware until April

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2012 that Attorney Hyman had listed them as Plaintiffs in the present case. The Court will grant

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the motion.

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B.

Motion to Vacate Trial and Shorten Time (ECF Nos. 1078, 1079)

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Defendants Countrywide and Bank of America ask the Court to vacate the August 7,

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2012 trial date and reset the trial for a date. Movants note that the scheduling order does not

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even make the joint pretrial order due until thirty days after the Court ruled on the last summary

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judgment motions, i.e., August 9, 2012. Movants base the motion on the fact that the Court had

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yet to decide some summary judgment motions when they filed the present motion. The Court
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has now decided those motions, and Movants have been dismissed as Defendants. The Court

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will deny the present motions. Bank of America and Countrywide only remain in the case

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formally as Cross-plaintiffs for indemnity and contribution, and these crossclaims are now moot.

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The Court rescheduled the trial at oral argument for other reasons, in any case.

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C.

Motions in Limine

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A motion in limine is a procedural device to obtain an early and preliminary ruling on the

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admissibility of evidence. Black’s Law Dictionary defines it as “[a] pretrial request that certain

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inadmissible evidence not be referred to or offered at trial. Typically, a party makes this motion

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when it believes that mere mention of the evidence during trial would be highly prejudicial and

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could not be remedied by an instruction to disregard.” Black’s Law Dictionary 1109 (9th ed.

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2009). Although the Federal Rules of Evidence do not explicitly authorize a motion in limine,

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the Supreme Court has held that trial judges are authorized to rule on motions in limine pursuant

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to their authority to manage trials. See Luce v. United States, 469 U.S. 38, 41 n.4 (1984) (citing

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Fed. R. Evid. 103(c) (providing that trial should be conducted so as to “prevent inadmissible

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evidence from being suggested to the jury by any means”)).

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A motion in limine is a request for the court’s guidance concerning an evidentiary

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question. See Wilson v. Williams, 182 F.3d 562, 570 (7th Cir. 1999). Judges have broad

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discretion when ruling on motions in limine. See Jenkins v. Chrysler Motors Corp., 316 F.3d

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663, 664 (7th Cir. 2002). However, a motion in limine should not be used to resolve factual

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disputes or weigh evidence. See C&E Servs., Inc., v. Ashland, Inc., 539 F. Supp. 2d 316, 323

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(D.D.C. 2008). To exclude evidence on a motion in limine “the evidence must be inadmissible

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on all potential grounds.” E.g., Ind. Ins. Co. v. Gen. Elec. Co., 326 F. Supp. 2d 844, 846 (N.D.

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Ohio 2004). “Unless evidence meets this high standard, evidentiary rulings should be deferred

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until trial so that questions of foundation, relevancy and potential prejudice may be resolved in

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proper context.” Hawthorne Partners v. AT&T Tech., Inc., 831 F. Supp. 1398, 1400 (N.D. Ill.
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1993). This is because although rulings on motions in limine may save “time, costs, effort and

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preparation, a court is almost always better situated during the actual trial to assess the value and

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utility of evidence.” Wilkins v. Kmart Corp., 487 F. Supp. 2d 1216, 1219 (D. Kan. 2007).

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In limine rulings are provisional. Such “rulings are not binding on the trial judge [who]

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may always change his mind during the course of a trial.” Ohler v. United States, 529 U.S. 753,

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758 n.3 (2000); accord Luce, 469 U.S. at 41 (noting that in limine rulings are always subject to

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change, especially if the evidence unfolds in an unanticipated manner). “Denial of a motion in

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limine does not necessarily mean that all evidence contemplated by the motion will be admitted

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to trial. Denial merely means that without the context of trial, the court is unable to determine

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whether the evidence in question should be excluded.” Ind. Ins. Co., 326 F. Supp. 2d at 846.

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1.

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These are motions by Stump and Callahan. Because the Court will amend the previous

Motions Nos. 1084 and 1085

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Order (ECF No. 1082), see infra, to grant Movants’ second motion for summary judgment,

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which will result in that they are no longer parties to the case, the Court would normally deny the

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present motions for lack of standing. However, Defendant Commonwealth Title Land Insurance

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Co. (“Commonwealth”) has joined the motions.

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In Motion No. 1084, Commonwealth asks the Court to exclude certain evidence

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concerning the value of the units. Movants note that Plaintiffs have failed to disclose any expert

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testimony as to the values of the properties. The Court grants the motion in part. Plaintiffs may

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argue causation and damages to the jury, but, as discussed at the hearing, they may not adduce

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undisclosed experts, may not testify as to any figures not already disclosed during discovery, and

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may not argue that attorney’s fees are a measure of the damages for failure to defend (since

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counsel noted at oral argument that the present case is on a contingency basis).

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. In Motion No. 1085, Commonwealth asks the Court to exclude evidence of undisclosed

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damages. Commonwealth has joined the present motion but has filed its own motion to the same
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effect, see infra, Mot. No. 1088. The Court will therefore deny the present motion.

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2.

Motion No. 1088

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Commonwealth asks the Court to exclude evidence of damages not disclosed by

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Plaintiffs. Commonwealth argues that Plaintiffs have failed to adduce any evidence indicating

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their damages. The motion is in substance a motion under Rule 37 for discovery sanctions, not a

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common law motion in limine. Commonwealth argues that Plaintiffs have failed to comply with

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Rule 26(a)(1)(A)(iii), which requires disclosure of a calculation of each category of damages.

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“Under Rule 37, exclusion of evidence not disclosed is appropriate unless the failure to disclose

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was substantially justified or harmless.” Hoffman v. Constr. Protective Servs., Inc., 541 F.3d

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1175, 1179 (9th Cir. 2008) (citing Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101,

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1106 (9th Cir. 2001)). There is only a reasonable argument as to the requirement to disclose

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individualized damages calculations, such that the failure to disclose a damage calculation is

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justified, in class actions. See id. The present case includes dozens of Plaintiffs but is not a class

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action. Next, if late disclosure would require a new briefing schedule and a reopening of

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discovery, as opposed to merely setting a new trial date, the failure is harmless. See id. at 1080.

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Here, although the failure is not substantially justified, it is harmless. Movants have been aware

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of the nature and approximate amount of damages since the inception of the case. The Court

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need not reopen discovery or extend the briefing schedule. The Court rules as it rules on Motion

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No. 1084. Plaintiffs may introduce at trial no evidence of particular damage amounts not thus

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far disclosed, but they may argue that they have been damaged, and they may refer to any figures

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thus far disclosed.

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3.

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Commonwealth asks the Court to exclude evidence of certain communications between

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Commonwealth and Attorney Hyman. Commonwealth claims that in response to allegations in

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the TAC that Commonwealth had failed to assist Plaintiffs in clearing title to their properties

Motion No. 1095

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when requested to do so by letter, it asked Attorney Hyman to provide it with evidence of any

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such communication several times between July 2011 and February 7, 2012, because

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Commonwealth could not find evidence of any such letter in its own files. On March 1, 2012,

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nine days after the close of discovery, Attorney Hyman finally adduced such a letter from

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himself to Commonwealth, dated November 13, 2008, as an attachment to his affidavit in

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support of Plaintiffs’ response to Commonwealth’s motion for summary judgment, as well as

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FedEx shipping receipts relating to the letter, and a “November 20, 2012 [sic]” letter from

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Commonwealth to Attorney Hyman.

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Commonwealth argues that it has been unable to prepare its defense in the present case

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because Hyman failed to adduce these pieces of evidence before the discovery cut-off. The

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Court will treat the motion as a motion for discovery sanctions under Rule 37 and grant it.

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Evidence of the demand upon Commonwealth is excluded.

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D.

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The Law Firm of Black & LoBello asks the Court to remove Attorneys Tisha Black-

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Motion to Remove Attorney (ECF No. 1091)

Chernine and Andras F. Babero from the electronic service list. The Court grants the motion.

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E.

Motion to Clarify (ECF No. 1096)

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Defendant Stump, Story, Callahan & Dietrich, P.A. (“Stump”) and Scott Callahan ask the

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Court to clarify the effect of its two latest orders. In one such order, the Court granted Movants’

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motion for summary judgment. The Court therefore denied the other motion for summary

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judgment as moot, though Plaintiffs’ had failed to timely respond or request any extension.

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Movants note, however, that the first motion was directed against only forty-nine Plaintiffs, and

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that the denial of their second motion implies that they remain as Defendants as against the

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remaining Plaintiffs. Movants are correct. The Court treats the motion to clarify as a motion to

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amend judgment and grants it, amending the Order (ECF No. 1082) to read that the Motion for

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Summary Judgment (ECF No. 950) is not moot but is granted for failure to respond.
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F.

Motion to Reconsider (ECF No. 1098)

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Plaintiffs ask the Court to reconsider the grant of several motions for summary judgment

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based upon their failure to timely respond. Plaintiffs note the Court had in some such cases

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granted a motion to extend time, but Plaintiffs fail to note that they failed timely to lodge any

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proposed response within the additional time requested. The Court denies the motion.

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CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Dismiss (ECF No. 1019) is GRANTED.

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IT IS FURTHER ORDERED that the Motion to Vacate Trial and Shorten Time (ECF

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Nos. 1078, 1079) and the Motion to Reconsider (ECF No. 1098) are DENIED.
IT IS FURTHER ORDERED that the Motion in Limine (ECF No. 1084) is GRANTED
in part and DENIED in part.

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IT IS FURTHER ORDERED that the Motion in Limine (ECF No. 1085) is DENIED.

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IT IS FURTHER ORDERED that the Motion in Limine (ECF No. 1088) is GRANTED

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in part and DENIED in part.

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IT IS FURTHER ORDERED that the Motion in Limine (ECF No. 1095) is GRANTED.

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IT IS FURTHER ORDERED that the Motion to Remove Attorney (ECF No. 1091) is

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GRANTED.
IT IS FURTHER ORDERED that the Motion to Clarify (ECF No. 1096) is GRANTED.

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Order No. 1082 is AMENDED to read that the Motion No. 950 is not moot but is granted for

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failure to respond.

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IT IS SO ORDERED.
Dated this 30th day of July, 2012.
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ROBERT C. JONES
United States District Judge

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