Closson et al v. Bank of America N.A. et al
Filing
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ORDER Denying 52 Motion in Limine; Granting 53 Motion in Limine; Granting 54 Motion in Limine; Granting 55 Motion in Limine; Denying 59 Motion in Limine; Denying 60 Motion in Limine; Denying 61 Motion in Limine. Signed by Judge James C. Mahan on 12/19/2012. (Copies have been distributed pursuant to the NEF - SLD)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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SUSAN CLOSSON and CHARLES R.
CLOSSON,
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2:11-CV-275 JCM (GWF)
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Plaintiffs,
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v.
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BANK OF AMERICA, N.A., et al.,
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Defendants.
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ORDER
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Presently before the court are defendant Bank of America’s (“BANA”) four motions in
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limine. (Docs. ## 52-55). Plaintiffs Susan and Charles Closson (“Closson”) have filed responses
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to each motion in limine. (Docs. ## 63-66).
Also before the court are the Clossons’ three motions in limine. (Docs. # 59-61). BANA has
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filed a response to each motion in limine. (Docs. ## 71-73).
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I.
Background
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BANA and the Clossons entered into a contract with certain terms and conditions. BANA
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agreed to lend the Clossons money to fund the construction of a home. If the construction was
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timely completed on an agreed upon date, BANA would roll over the loan into permanent financing.
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If the Clossons did not timely complete construction by the agreed upon date, BANA, at its option,
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could elect to extend the construction completion date and financing in the contract. The Clossons
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could also elect, at the same time, to pay a fee to lock in the rate and loan terms. If the Clossons
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James C. Mahan
U.S. District Judge
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elected not to lock in the rate and loan terms at that time, then the rates and terms would shift
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according to market rates as provided in the contract.
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The Clossons did not complete construction by the agreed upon deadline date. BANA
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elected to extend the deadline and offered to roll over the rate and terms of the loan into permanent
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financing. The Clossons elected not to pay the fee to lock in the rates and terms, and to take their
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chances with market rates. The fluctuating market caused interest rates to increase. Sometime
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thereafter the Clossons defaulted and BANA eventually foreclosed on the property.
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The parties do not appear to agree on the facts or the terms of the contract following the
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Clossons’ decision to decline to lock in rate and terms protection. The Clossons alleged that BANA
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breached the terms of the contract with its conduct and computations of fees after the Clossons
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declined to exercise rate and terms protection. The Clossons claim substantial damages. BANA
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denies the allegations and alleges it fully complied with the terms of the contract.
The court will address each motion in limine filed by each party in turn.
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II.
BANA Motion in Limine No. 1 (doc. # 52)
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BANA “anticipates that [the Clossons] will attempt to introduce evidence or argument related
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to other litigation, investigations, settlements and other unrelated matters involving [BANA],
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including news reports.” (Doc. # 52, 2:17-19). BANA argues such evidence is irrelevant under Fed.
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R. Evid. 402, unfairly prejudicial under Fed. R. Evid. 403, and improper character evidence under
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Fed. R. Evid. 404. BANA argues that complaints by other consumers and news reports are
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inadmissable hearsay. This is a very broad request by BANA.
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Closson agrees not to attempt to offer evidence that is truly irrelevant. However, plaintiff
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then qualifies that statement by stating BANA’s “behavior in analogous or near identical situations
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is certainly related to the present case, and could provide valuable information.” (Doc. # 63, 1:27-
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2:1). Closson argues that one specific case, Bobby Shomer v. Bank of America, is material because
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it involves a nearly identical loan, the same defendant, the same attorneys, the same builder and the
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same counsel on both sides.
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...
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James C. Mahan
U.S. District Judge
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A court’s holding and guidance in a motion in limine can only be as specific as the request
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sought by the moving party. The court agrees with BANA that the majority of other litigation,
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investigations, news reports, and settlements are either irrelevant or specifically excluded under one
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of the federal evidentiary rules. However, trials are dynamic and the federal rules permit evidence
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for certain purposes and exclude the exact same evidence offered for a different purpose depending
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on the testimony elicited or arguments made during trial.
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The court cannot hold that no other litigation, settlement, compromise or investigation could
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ever be relevant or otherwise inadmissible during the trial. The court can only instruct the parties
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that all the Federal Rules of Evidence will apply throughout the duration of trial. Both sets of
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counsel can make specific objections as they feel are necessary during the course of the proceedings.
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The motion is DENIED consistent with the foregoing.
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III.
BANA Motion in Limine No. 2 (doc. # 53)
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This motion in limine moves the court for an order precluding the Clossons from making four
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very specific types of statements to the jury. First, BANA moves the court to prohibit the Clossons
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from “making statements regarding alleged misconduct by other banks and corporations, general
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corporate greed, the need for corporate America and defendant to be sent a message. . . .” (Doc. #
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53, 3:13-15). BANA refers to these statements as “send a message” arguments.
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Second, BANA moves the court to “exclude any ‘Golden Rule arguments’ to the jury
imploring the jury to put themselves in plaintiffs’ shoes.” (Doc. # 3:23-24).
Third, BANA moves the court “for an order prohibiting any expression of counsel’s personal
opinion regarding the credibility of any witness.” (Doc. # 4:2-3).
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Fourth, BANA moves the court to preclude “reference to [the] attempt to argue or attempt
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to introduce evidence of the relative size of BANA–in terms of assets, revenue or other measure–as
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compared to plaintiffs, or any statements tending to suggest that the outcome should be based upon
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the party who will be affected the least.” (Doc. # 53, 4:7-9).
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All four arguments or statements are never proper and are prohibited in front of the jury.
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E.g., Lioce v. Cohen, 174 P.3d 970, 984 (Nev. 2008) (“An attorney may not make a golden rule
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U.S. District Judge
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argument, which is an argument asking jurors to place themselves in the position of one of the
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parties. Golden rule arguments are improper because they infect the jury’s objectivity.”); see also
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DeJesus v. Flick, 7 P.3d 459 (Nev. 2000) (providing examples of attorney “arguments to the jury
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[that] far exceeded the boundaries of professional conduct”), overruled on other grounds by Lioce
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v. Cohen, 174 P.3d 970 (Nev. 2008). The motion is GRANTED.
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IV.
BANA Motion in Limine No. 3 (doc. # 54)
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BANA moves the court “to exclude [the Clossons] and their counsel from proffering any
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evidence, arguing, referring to or mentioning any information or documents related to alleged acts
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or omissions of BANA that [the Clossons] claim fraudulently induced them into obtaining the
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subject construction loan.” (Doc. # 54, 1:21-25). BANA argues that any evidence or testimony that
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BANA made material misrepresentations and/or omissions at the time of contract formation are
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irrelevant because Closson has not alleged fraudulent inducement. According to BANA, Closson
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admits there was a valid contract so evidence regarding contract formation is irrelevant.
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Closson filed a response arguing that the critical issue in the case is the interpretation of
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certain clauses in the contract. Closson argues that to prove that the contract is ambiguous requires
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extrinsic evidence of the circumstances and communications surrounding the contract formation.
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Whether the meaning of a contract clause is ambiguous is a question of law. See Anvui, LLC
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v. G.L. Dragon, LLC, 163 P.3d 405, 407-408 (Nev. 2007). In Anvui, the Nevada Supreme Court
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stated:
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“Construction of a contractual terms is a question of law. . . . In interpreting a contract, the
court shall effectuate the intent of the parties, which may be determined in light of the
surrounding circumstances if not clear from the contract itself. A contract is ambiguous
when it is subject to more than one reasonable interpretation. Any ambiguity, moreover,
should be construed against the drafter. The parties’ intentions regarding a contractual
provision present a question of fact.”
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Id. at 407 (internal quotations and citations omitted). Neither party has filed a motion to the court
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arguing that any part of the contract is either ambiguous or unambiguous, so the court has never
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decided the issue. The parties argue past each other in the motions and do not squarely address the
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James C. Mahan
U.S. District Judge
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issues presented by the other.
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It is true that the Clossons cannot argue or attempt to admit evidence demonstrating
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fraudulent inducement because the Clossons did not allege that cause of action. However, a valid
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contract can be ambiguous. If a contract is ambiguous, the intentions and circumstances leading up
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to contract formation become relevant. The intentions and circumstances leading up to contract
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formation will necessarily require the parties to delve into facts and statements leading up to contract
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formation.1
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Even though both parties agree a valid contract exists, the facts, circumstances, and intentions
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of the parties could all be relevant. The interpretation of terms of a contract and the intent of the
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parties will necessarily determine whether a breach a occurred under the contract and if there are any
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damages. The motion is GRANTED, consistent with the foregoing.
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V.
BANA Motion in Limine No. 4 (doc # 55)
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BANA moves the court “to exclude [the Clossons] and their counsel from proffering any
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evidence, arguing, referring to or mentioning any information or documents related to other
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construction loans originated by BANA.” (Doc. # 55, 1:21-23). BANA argues that other
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construction loans originated by BANA are irrelevant, prejudicial, and would confuse the jury.
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BANA states that evidence of its other construction loans, and decisions whether to convert other
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construction loans into permanent loans like in the instant dispute, would never be relevant, and
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would never be permissible under any of the Federal Rules of Evidence (such as Rules 404 and 406,
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among others).
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The Clossons argue that at least one other case, Bobby Shomer v. Bank of America, is
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probative because of all the similarities to the facts in the instant dispute. (Doc. # 52). A completely
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different case cannot become relevant solely because it is similar to the instant case. The motion is
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GRANTED.
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James C. Mahan
U.S. District Judge
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If BANA believes, after Closson has presented its case, that the contract is unambiguous
then BANA may file a motion for judgment as a matter of law at the appropriate time.
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VI.
Closson Motion in Limine No. 1 (doc. # 59)
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The Clossons move the court “to prohibit [BANA] from offering and/or soliciting any direct
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or indirect evidence or making any argument related to [the Closson’s] financial condition after
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January 30, 2009.” (Doc. # 59, 1:26-28). The Clossons argue that January 30, 2009, is the last
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possible date their financial position could be relevant because that was the last date of their payment
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to BANA.
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BANA opposes the motion and argues that the Clossons were not finished with the
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construction on the property by January 30, 2009, therefore their financial condition after that date
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remains relevant because it would effect the contract terms in rollover financing. BANA argues that
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the ability to make payments on the loan is directly relevant to what interest rate and “points” would
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apply in the new, rollover loan. Finally, BANA argues that the Clossons continued to make draws
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on the contract until April 17, 2009, well after January 30, 2009, which was the cutoff date suggested
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by plaintiffs.
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This motion seeks an order too broad for the court prior to trial. The court cannot
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contemplate all the different ways in which the relevance of evidence may manifest during trial. Fed.
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R. Evid. 401 establishes a low bar of what evidence is potentially relevant–“any tendency to make
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a fact more or less probable than it would be without the evidence.” The evidence is relevant to the
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interest rates and “points” that would apply in the new loan, which is at the heart of the dispute. The
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motion is DENIED, but the Clossons can make timely objections during trial if they believe
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evidence, even if relevant, should be excluded under another rule.
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VII.
Closson Motion in Limine No. 2 (doc. # 60)
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The Clossons move the court to “prohibit [BANA] from offering and/or soliciting any direct
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or indirect evidence or making any argument related to changes in the value of the property during
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or after its construction.” (Doc. # 60, 1:26-28). The Clossons argue that the issue to be decided in
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the case is whether BANA breached the terms of the contract. The Clossons then argues that
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damages are calculated at the time of the breach, and that fluctuations in value do not affect the
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measure of damages.
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James C. Mahan
U.S. District Judge
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BANA opposes the motion and argues that the value of the property during and after
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construction is relevant because those fluctuations would affect interest rates and “points” that the
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Clossons would be required to pay in the rollover loan after the Clossons refused rate protection.
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BANA argues that the property value and market rate of the property were a necessary factor.
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The court agrees with defendant that the evidence is relevant under the lenient standards of
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Fed. R. Evid. 401 and 402. The property value would seem to have a direct effect on the terms and
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rates of the new loan. The motion is DENIED, but the Clossons may make timely objections during
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the trial if they believe evidence, even if relevant, should be excluded under another rule.
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VIII. Closson Motion in Limine No. 3 (doc. # 61)
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The Clossons move the court “to prohibit [BANA] from offering and/or soliciting evidence
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regarding changes in [the Closson’s] financial condition after entering into the subject contracts
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and/or the payment history of the subject loan prior to laying the proper foundation.” (Doc. # 61,
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1:28-2:3).
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BANA opposes the motion and argues that the Clossons put their financial condition and
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payment history at issue when they failed to complete construction on time and then refused rate
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protection.
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The court agrees with BANA that the evidence is relevant under the low bar established by
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Rules 401 and 402. The motion is DENIED, though the Clossons can make timely objections during
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trial if they believe evidence, even if relevant, should be excluded under a different rule.
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IX.
Conclusion
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Relevancy is a very broad concept under the Federal Rules of Evidence. Much of what the
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parties seek to exclude is relevant and probative of the issues to be decided by the jury. However,
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even if evidence is relevant under Rules 401 and 402, a number of other rules could exclude the
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evidence (such as 403, 404, etc). The parties must adjust to the dynamic nature of trials and make
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objections as they become warranted during the trial.
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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendant’s motion in
limine (doc. # 52) be, and the same hereby, is DENIED consistent with the foregoing.
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James C. Mahan
U.S. District Judge
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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that defendant’s motion in
limine (doc. # 53) be, and the same hereby, is GRANTED.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that defendant’s motion in
limine (doc. # 54) be, and the same hereby, is GRANTED consistent with the foregoing.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that defendant’s motion in
limine (doc. # 55) be, and the same hereby, is GRANTED consistent with the foregoing.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion in
limine (doc. # 59) be, and the same hereby, is DENIED consistent with the foregoing.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion in
limine (doc. # 60) be, and the same hereby, is DENIED consistent with the foregoing.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion in
limine (doc. # 61) be, and the same hereby, is DENIED consistent with the foregoing.
DATED December 19, 2012.
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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge
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