Free Response to Motion - District Court of Colorado - Colorado



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eavell-McCombs asked Murfee Engineering to analyze ground survey data and project expenses for the northwest Snow Shed Road. (Aug. 17, 2004 Letter from Honts to Forest Service). Mr. Honts informed the Forest Service at the time that "utilization of [the Snow Shed Road] would require a substantial re-plat at Mineral County . . . resulting in unwanted del

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-CV-1099-JLK-DLW WOLF CREEK SKI CORPORATION, INC., Plaintiff, v. LEAVELL-McCOMBS JOINT VENTURE, d/b/a THE VILLAGE AT WOLF CREEK, Defendant.

WOLF CREEK SKI CORPORATION'S RESPONSE TO LEAVELL-McCOMBS JOINT VENTURE'S MOTION TO AMEND SCHEDULING ORDER ______________________________________________________________________________ Plaintiff Wolf Creek Ski Corporation ("Wolf Creek" or "Plaintiff"), by and through its undersigned counsel, responds to Defendant Leavell-McCombs Joint Venture's ("LeavellMcCombs," or "Joint Venture") Motion to Amend Scheduling Order , and states as follows: I. INTRODUCTION

The Joint Venture's most recent thirty-four page motion is nothing more than a motion for reconsideration. Immediately after changing counsel, the Joint Venture sought to add expert witnesses out of time to opine on, among other things, the cost of a replat. Applying the standard cited in Marcin, Magistrate Judge West denied that motion, and Judge Kane overruled the Joint Venture's objection. Later, the Joint Venture attempted to circumvent the expert disclosure deadlines and the limitation on the number of experts by identifying six professionals who could only testify as

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experts in a Rule 26 disclosure. This Court recently ruled that these six professionals hired by the Joint Venture could not testify as expert witnesses, as (1) none had previously been designated as experts, (2) the deadline for designation of experts passed nearly eighteen months ago, and (3) fact witnesses with specialized knowledge cannot testify as experts under the guise of Rule 701. Two of the six professionals at issue in that ruling are road construction engineers for Murfee Engineering the same organization that provided opinions to both the Forest Service and the Joint Venture's damages expert about the cost of a northwest Snow Shed Road. Now that these individuals have been precluded from testifying as experts, the Joint Venture seeks permission to designate a new road construction engineer as an expert. To justify its request, the Joint Venture bases its request on "changed circumstances"; however, there are none.1 The Joint Venture has known since at least October 1, 2004 that it would likely have to build the northwest Snow Shed Road ("Snow Shed Road"). Indeed, the Snow Shed Road identified as part of the preferred alternative in the draft environmental impact statement ("DEIS") issued by the Forest Service twenty-two months ago, is the same Snow Shed Road referenced in the final environmental impact statement ("FEIS") issued five months ago. The graphic and written descriptions of the Snow Shed Road are identical in both the DEIS and FEIS. Both documents describe the Snow Shed Road as crossing "750 feet of NFS land to the northwestern boundary of the private property" to begin "approximately 0.33 mile east of the

For some reason, the Joint Venture's motion devotes numerous pages to laying out purported "facts" about "secret" deals, various purported breaches (theories which continue to evolve), and raising other issues that are completely irrelevant to the relief requested and the legal standard. Wolf Creek does not address those various issues. However, Wolf Creek does not waive its right to contest various facts, theories, and legal claims, including, but not limited to, the Joint Venture's failure to plead special damages. Wolf Creek's decision to confine its briefing to the facts relevant to the requested relief should not be construed as express or implied consent of Wolf Creek to allow the Joint Venture to amend the pleadings under Rule 15(b). Wolf Creek will address many of these issues through various motions in limine.

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current entrance to the Ski Area and approximately 0.25 mile west of the Snow Shed." The Joint Venture is not simply attempting to ratchet up its damages number based on new estimates it is attempting to change the way it proves damages and remedy a deficiency in its damages case that has existed since the Joint Venture made its expert witness decisions eighteen months ago. Anticipating that the Court will not reverse its prior rulings, the Joint Venture attempts to dress Bob Honts up as an expert, suggesting that he can provide the same testimony that a specialized road engineer might provide. Again, this Court has previously and correctly ruled that Rule 701 cannot be used for expert testimony. Mr. Honts is no different than the Joint Venture's current economic damages expert he can testify to amounts paid, but he does not have the expertise to opine as to future costs or the reasonableness or causation of paid costs where specialized knowledge is required. Accordingly, Wolf Creek respectfully requests that this Court deny the Motion. II. A. TIMELINE2 Apr. 28, 2004 May 6, 2004 Aug. 17, 2004 Joint Venture sends default letter to Wolf Creek. In response, Wolf Creek files declaratory judgment action. Joint Venture informs Forest Service in writing that its professional road engineer (Murfee Engineering) believes a "northwest Snow Shed road" would be extremely difficult to build and therefore "is the least desirable alternative route . . . reviewed to date." Forest Service issues draft environmental impact statement with preferred Alternative IV identifying two routes as access, a combination of the Tranquility Road and northwest Snow Shed Road. BACKGROUND

Oct. 1, 2004

Citations have been omitted from this outline to enhance readability. However, an annotated version of the timeline is attached hereto as Appendix A.

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Feb. 28, 2005 Feb. 28, 2005

Deadline for exchange of expert reports (set after extensions granted). Joint Venture's damages expert, Ms. Lisa A. Meer, includes a damages figure for cost of northwest Snow Shed Road, based on estimate prepared by Joint Venture's road engineer (Murfee Engineering). Deadline for rebuttal expert reports (set after extensions granted). After numerous deadlines and certain discovery had been extended to accommodate settlement discussions, Joint Venture appears at settlement conference with two new law firms. Joint Venture informs Wolf Creek and Court that it has no interest in settling this case or amending its plans in any way. Joint Venture's former counsel (Holland & Hart) withdraws. Joint Venture, through its new counsel, asks permission to join additional parties, add counterclaim, and amend scheduling order to add expert witnesses and increase damages claimed. Magistrate Judge West issues findings and order denying Joint Venture's motions to join additional parties, add counterclaim, and amend scheduling order. Joint Venture failed to show good cause and did not demonstrate it could not meet the discovery deadlines exercising reasonable diligence. Joint Venture objects to findings and order re amending scheduling order. Court (Judge Kane) overrules Joint Venture's objection. Joint Venture's economic damages expert, Ms. Lisa A. Meer, is deposed. When asked specific questions regarding basis for road cost estimates, she responds "I'm not qualified in . . . engineering and road construction." She relied on professional road engineers retained by Joint Venture (Murfee Engineering). When asked what "experts" would deliver opinion on road costs, she said that she did not know.

April 15, 2005 Oct. 5, 2005

Oct. 7, 2005 Nov. 14, 2005

Dec. 1, 2005

Dec. 15, 2005

Jan. 6, 2006 March 7, 2006

March 15, 2006 Forest Service issues final environmental impact statement selecting Alternative IV (combining Tranquility Road and northwest Snow Shed Road access). April 3, 2006 Joint Venture issues first supplemental Rule 26(a) disclosure. Disclosure names six professionals working for Joint Venture, all of 4
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which provided estimates of costs to Ms. Meer, and all of which had expertise in areas Ms. Meer did not. Two such professionals are road engineers at Murfee Engineering (George Murphy and David Malish). May 22, 2006 Wolf Creek moves to exclude the six professionals (including Murfee Engineering road engineers) as experts. Joint Venture responds to motion, asserting the six professionals will testify as lay rather than expert witnesses. Village planner Sam Brown is deposed and states that a new road engineer has been retained to handle the Snow Shed Road planning because Murfee Engineering is too busy. Brown also testifies that internal route (i.e., route within Village property) connecting northwest Snow Shed Road to platted internal road system was chosen to direct people past a Welcome Center and to avoid a replat. Court (Magistrate Judge West) issues findings and order re six professionals, ordering that they were not previously designated and may not testify as experts. Court and permits discovery to determine nature and scope of potential witness testimony. Joint Venture files motion seeking to amend scheduling order to permit addition of road engineering expert to explain costs of northwest Snow Shed Road. Costs purportedly have increased to $15 million (of which approximately $13 million is for design within the Joint Venture's property). Joint Venture writes to Court objecting to Wolf Creek's request for information from six professionals and seeking clarification of Court ruling.

June 13, 2006

June 29, 2006

Aug. 11, 2006

Aug. 15, 2006

Aug. 21, 2006

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B.

THERE ARE NO CHANGED CIRCUMSTANCES 1. The Joint Venture Has Known Since at Least October 2004 that the Snow Shed Road Would Likely Be Mandated by the Forest Service.

Over two years ago, in August 2004,3 Leavell-McCombs asked Murfee Engineering to analyze ground survey data and project expenses for the northwest Snow Shed Road. (Aug. 17, 2004 Letter from Honts to Forest Service). Mr. Honts informed the Forest Service at the time that "utilization of [the Snow Shed Road] would require a substantial re-plat at Mineral County . . . resulting in unwanted delays. . . ." Id. Honts's letter also enclosed correspondence from Murfee Engineering stating: This route requires two bridges to cross identified wetlands. Other concerns include road grades exceeding six percent and the required fill to keep the road grades below seven percent. Due to these concerns this route is considered the least desirable alternative route we have reviewed to date. Letter from Bob Honts to Tom Malacek (August 17, 2004) (with enclosure), attached hereto as Ex. 1. In October 2004, the Forest Service issued the DEIS. The DEIS included four alternatives, one of which, Alternative IV, was identified as the preferred alternative. DEIS at 214. Alternative IV included the northwest Snow Shed Road. The DEIS also included a map of the northwest Snow Shed Road and described it as follows: Leavell-McCombs would "be authorized to construct and use a second access road to the private property beginning on the Highway 160 corridor at a point approximately 0.33 mile east of the current entrance to the Ski Area and approximately 0.25 mile west of the Snow Shed. The second access road would traverse
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As early as 2001, Mr. Honts began discussing with the Forest Service other potential access routes to the Village (other than the Tranquility Road), including routes approaching the Northwest corner of the Village in a manner similar to the FEIS ROD. Deposition of Sam Brown ("Brown Dep.") at 160:17-161:19, attached hereto as Ex. 2.

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approximately 750 feet of NFS land to the northwestern boundary of the private property. This alignment is displayed in Figure 2.5-1. The corridor associated with the access road would be approximately 60-feet wide with a minimum 24-foot wide running surface at an average grade of 6 percent." DEIS at 2-8 2.5.1, attached hereto as Ex. 3. Leavell-McCombs anticipated the selection of Alternative IV when it asked Murfee Engineering and traffic consultants at Kimley-Horn to provide estimates for Alternative IV to its damages economic expert, Lisa A. Meer. In her February 2005 report, Ms. Meer expressly assumed that the Forest Service would "follow the recommendation of Alternative 4" and, based on "third-party engineering estimates provided by Murfee and Kimley-Horn," provided a damages amount of $6,843,375 for the northwest Snow Shed Road. Feb. 28, 2005 report of Lisa A. Meer ("Meer Report") at 14, attached hereto as Ex. 4. Ms. Meer interviewed engineers from Murfee Engineering, and received written estimates of the proposed Snow Shed Road. Id.; see also Deposition of Lisa A. Meer ("Meer Dep.") at 115:16-25, attached hereto as Ex. 5. There is no indication in Ms. Meer's report or in the interviews that the Village was hamstrung or unable to survey or otherwise estimate the cost of the northwest Snow Shed Road. It also was clear that the Joint Venture had determined not to identify a road engineer as an expert to testify and explain the $6 million estimate. Ms. Meer's supplemental March 2006 report also included these same Snow Shed Road damages. March 2, 2006 Report of Lisa A. Meer ("Meer Supplemental Report") at 15, attached hereto as Ex. 6. When Ms. Meer was asked in her deposition if she had the expertise to validate the $6 million figure, she responded that she did not. Meer Dep., Ex. 5, at 158:25-159:25.

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In March 2006, the Forest Service issued the FEIS. As the Joint Venture anticipated, the FEIS selected Alternative IV, including the northwest Snow Shed Road. The FEIS included the very same map and graphic depiction of the "alignment" of Alternative IV that was included in the DEIS. FEIS, attached hereto as Ex. 7, at 2-12. The FEIS also included the same word-forword description of the Snow Shed Road as the DEIS. Id., Ex. 7, at 2-14. Five months after the FEIS, eighteen months after the affirmative expert disclosure deadline, twenty-three months after the DEIS, twenty-four months after Murfee Engineering first opined on the cost of the road to the Forest Service, and only days after the Court's Order of August 11, 2006 (in which it became apparent that the Murfee Engineering professionals could not testify as experts even under the guise of Rule 701), the Joint Venture raised the need for an engineering expert to prove its purported damages. 2. Leavell-McCombs Recently Hired a New Engineer for the Snow Shed Road Because Murfee Engineering Was Too Busy.

Leavell-McCombs recently retained Standish & Associates to estimate the cost of the Snow Shed Road because Murfee is purportedly too busy with other projects. Brown Dep., Ex. 2, at 238:7-240:8. Notably, Mr. Standish was able to provide an initial estimate without conducting any survey work. Brown Dep., Ex. 2, at 238:19-23. Mr. Standish's estimate for the northwest Snow Shed Road as described in both the DEIS and FEIS (i.e., measuring 750 feet from Highway 160 to the northwest corner of the Village property) was $1.3 million. Dep. Ex. 400 at 2, 13, attached hereto as Ex. 8. However, his estimate also includes an additional amount for extending the Snow Shed Road within the Village property, raising the cost of the road to either $11.3 million or $12.6 million, depending on whether a certain construction option is utilized. Id. at 2. 8
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Wolf Creek just recently received (after Mr. Brown's deposition) an updated estimate from the Joint Venture relating to work by Mr. Standish. That estimate now places the cost of the Snow Shed Road approved by the Forest Service (i.e., the 750 feet from Highway 160 to the northwest corner of the Village property) at $2.8 million. Letter from Myrna Flores to Andrew Shoemaker enclosing Revised Snow Shed Road Cost Estimate (August 23, 2006), attached hereto as Ex. 9, at S Brown 8838. An additional amount of $12.3 million (for a total of ($15.1 million) is included for extending the Snow Shed Road within the Village property. Id.4 III. A. LEGAL STANDARD A scheduling order shall not be modified "except upon a showing of good cause." Fed. R. Civ. P. 16(b). In the context of a motion to amend a scheduling order to add new experts and pursue related discovery, "good cause" requires a showing "that the party seeking the extension was diligent in its discovery efforts yet could not complete discovery by the court-ordered deadline." Marcin Eng', LLC v. Founders at Grizzly Ranch, LLC, 219 F.R.D. 516, 521 (D. Colo. 2003) (Kane, J.) (citing SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507, 1514 (10th Cir. 1990)).
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ARGUMENT

Of course, the real reason the Joint Venture wants expert testimony is so that it can more than double its damages number from $6 million to $15 million. However, the purported explosion in damages is the Joint Venture's own making. In August 2004, Leavell-McCombs contemplated reorganizing the plat to accommodate the Snow Shed Road. Letter from Bob Honts to Tom Malacek (August 17, 2004), Ex. 1. Nonetheless, Leavell-McCombs chose not to do so in front of Mineral County and proceeded months later with a plat proposal to Mineral County that did not incorporate the Snow Shed Road. Judge Kuenhold overturned the plat approval because the plat submitted was premature without Forest Service approval of access. Findings of Fact and Conclusions of Law Remanding the Matter to the Board of County Commissioners at 35-36, attached hereto as Ex. 10. Notably, after the settlement between the Forest Service and Colorado Wild in 1999, the Joint Venture had planned to obtain Forest Service approval of access prior to submitting a plat. See id., Ex. 10, at 31; Dep. Ex. 382, attached hereto as Ex. 11, at SB3407. After Judge Kuenhold's decision, the Joint Venture then sought permission from this Court to amend its complaint to seek damages for a replat. Defendants' Motion to Amend Scheduling Order (Docket # 108). The Court denied that motion. Findings and Order Re: Defendants' Motion to Amend Scheduling Order (Docket # 116). In response, Leavell-McCombs made the decision not to replat (notwithstanding that Judge Kuenhold vacated the earlier plat). Instead, to avoid a replat, the Joint Venture opted to build a highly impractical road with bridges and tunnels. Brown Dep., Ex. 2, at 166:3-167:5.

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The good cause standard allows courts some flexibility, but not so much that its deadlines can be willfully ignored. "[I]f changes could be secured too easily . . . [a scheduling order] would not provide the discipline and pressure to prepare that is deemed essential to timely case development and effective docket management." 3 MOORE'S FEDERAL PRACTICE, 16.14(1)(a). The Joint Venture continues to insist that this Court is not applying the correct standard to evaluate motions to amend the scheduling order and once again latches on to the test for amending pretrial orders cited in Smith v. Ford Motor Co., 626 F.2d 784 (10th Cir. 1980). This issue has been briefed by the parties in connection with the Joint Venture's previous attempts to amend the scheduling order, determined by this Court, and affirmed by Judge Kane. In its First Motion to Amend the Scheduling Order, the Joint Venture urged this Court to apply the Smith test. First Motion to Amend at 12. Rejecting the Joint Venture's argument, this Court applied the Marcin standard and concluded that the Joint Venture had not been diligent in its discovery efforts and therefore had not established good cause to amend. Findings and Order Re: Defendant's Motion to Amend Scheduling Order (docket # 116) at 3-4. The Joint Venture objected and argued once again that the Smith standard should be applied. Defendant's Objection to Magistrate Judge's Findings and Order re: Defendant's Motion to Amend Scheduling Order (Docket # 124-1) at 5-6. Yet Judge Kane affirmed this Court's ruling as, . . . was neither clearly erroneous nor contrary to law."5 Order (Docket # 142) at 1 (emphasis added). Here, in urging this Court yet again to apply the Smith test, the Joint Venture asks this Court to overrule both is prior ruling and Judge Kane's Order.
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Recently, this Court issued an order denying the Joint Venture's motion to amend the scheduling order to file dispositive motions in which the Court cites the Marcin standard to determine whether the Joint Venture established good cause under Rule 16(b).

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The Smith test addresses modification of a pretrial order under not Rule 16(b) but Rule 16(e), under which a court is permitted to modify a pretrial order "only to prevent manifest injustice."6 The Joint Venture urges this Court to apply the Smith standard to the modification of a scheduling order based on, Burkes v. Okla. Pub' Co., 81 F.3d 975, 978-79 (10th Cir. 1996), which employed the Smith test to analyze whether good cause existed to amend a scheduling order.7 What the Joint Venture fails to mention is that since Burkes, virtually every Colorado court (including this one) to consider the question has applied the "diligence" standard cited in the Marcin.8 See, e.g., Hannah v. Roadway Express, Inc., 200 F.R.D. 651, 653 (D. Colo. 2001) (applying diligence test in the context of motion to amend scheduling order to add new experts); Pumpco Inc., v . Schenker Int'l, Inc., 204 F.R.D. 667, 668-69 (diligence standard applied to motion to amend scheduling order to amend pleadings); Colo. Visionary Acad. v. Medtronic, Inc., 194 F.R.D. 684, 687 (D. Colo. 2000) (same); Lozayav. Garrou Constr. Co., No. 04-CV-02569, 2006 WL 1028869 (D. Colo. April 17, 2006) (motion to amend scheduling order to file
See 3 MOORE'S FEDERAL PRACTICE, 16.78[4][a] (explaining that most circuits, including the Tenth Circuit, employ the test cited in Smith to determine whether the "manifest injustice" standard imposed by Rule 16(e) is met).
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Importantly, the Burkes court recognized that "good cause," rather than "manifest injustice" is the proper standard under Rule 16(b). See id. at 978 ("Rule 16(b) . . . provides that [scheduling] orders shall not be modified `except upon a showing of good cause.'"). To the extent the Joint Venture argues that "manifest injustice" is the proper standard here, that contention is not supported by the text of Rule 16(b) or the case law interpreting it.

The Joint Venture notes that the Smith test was applied in Summers v. Mo. Pac. R.R. Sys., 132 F.3d 599 (10th Cir. 1997). That case followed Burkes and involved, as the court itself noted, very unique circumstances. In that case, plaintiff railroad workers were injured when they inhaled diesel fuel. Their employer, the defendant, referred them to a physician who diagnosed them with toxic exposure resulting in injury to the central nervous and respiratory systems. The defendant then referred plaintiffs to another physician, who confirmed the diagnosis of toxic exposure. The defendant then moved to exclude these very same physicians on a Daubert motion, and the experts were struck. Left without any experts, the Plaintiff moved to amend the scheduling order to add new experts. The district court denied the motion, but the Tenth Circuit reversed, noting "[t]his dispute presents unique facts that demand reversal." Summers, 132 F.3d at 605 (emphasis added). In particular, under any standard, it would have been unjust to leave the plaintiffs without any experts when the experts who were excluded had been recommended to them by the defendant. Id. In this case, no such unique circumstances exist. The Joint Venture finds itself without the expert it seeks because of its own tactical decisions, not because of any actions by Wolf Creek.

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dispositive motions); Strozier v. U.S. Postal Serv., No. 04-CV-0007, 2005 WL 2141709, at *2 (D. Colo. Aug. 19, 2005) (motion to amend scheduling order to add new experts). Indeed, the Burkes court itself recognized that "good cause," rather than "manifest injustice" is the proper standard under Rule 16(b). See Burkes, 81 F.3d at 978 ("Rule 16(b) . . . provides that [scheduling] orders shall not be modified `except upon a showing of good cause.'"). These courts applied the diligence standard because that standard is consistent not only with the language of the rule but also the policy underlying it as expressed in the advisory committee notes. The purpose of Rule 16 is to "offer a measure of certainty in pretrial proceedings, ensuring that at some point both the parties and the pleadings will be fixed." In re Wireless Tel. Services Antitrust Lit. No. 02 Civ. 2637, 2004 WL 2244502 *5 (S.D.N.Y. Oct. 6, 2004). The advisory committee has made plain that this policy is reflected in the good cause requirement of subsection (b) under which "the court may modify the schedule on a showing of good cause if it cannot reasonably be met despite the diligence of the party seeking the extension." (Emphasis added.)9 The rule, the advisory notes, and commentators recognize that in hindsight, parties will always want to add experts or pursue additional discovery to bolster a case, and a party can always claim prejudice if an untimely request to add an expert is denied.10 If the scheduling

deadlines could be ignored at will, trial would be delayed indefinitely while the parties put off

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See also 6A WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 1522.1 (Rule 16(b) requires the moving party to show "that the deadlines cannot reasonably be met despite the diligence of the party needing the extension.") (emphasis added); 3 MOORE'S FEDERAL PRACTICE, 16.14(1)(b) ("[I]t seems clear that the factor on which courts are most likely to focus when making this determination is the relative diligence of the lawyer or lawyers who seek the change.") (emphasis added).

See Advisory Committee's Note to 1983 amendment to Rule 16(b); 3 MOORE'S FEDERAL PRACTICE 16.14[1][a]; 6A WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 1522.1.

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discovery that should have been completed within the court-ordered deadlines. The diligence standard set forth in Marcin assures that litigants will honor court-imposed deadlines and diligently pursue those matters of known importance to their case. See also SIL-FLO, 917 F.2d at 1514 (factors relevant to decisions concerning reopening of discovery include, among other things, "whether the moving party was diligent in obtaining discovery within the guidelines established by the court," and "the foreseeability of the need for additional discovery in light of the time allowed for discovery in light of the time allowed . . . by the district court."). Regardless, no matter which test is applied to this motion, the Joint Venture cannot prevail. Indeed, the debate over the standards is based on a characterization of the "manifest injustice" test as more lenient. However, it is not manifestly unjust to apply the "good faith" and diligence test contained in Rule 16(b) and Marcin. The Joint Venture cannot establish any cause good or otherwise to amend the scheduling order when it has known of the circumstances it claims are "new" for nearly two years, and the prejudice to Wolf Creek should the Joint Venture be permitted to designate an expert at this late date cannot be justified. B. THE JOINT VENTURE HAS NOT ESTABLISHED GOOD CAUSE TO AMEND THE SCHEDULING ORDER UNDER EITHER MARCIN OR SMITH 1. The Joint Venture has known of the need for a road engineer since at least October 2004, yet it has chosen not to attempt to designate one until now.

The Joint Venture cannot establish that it has been diligent in its discovery efforts. The Joint Venture hired an engineering professional no later than August 2004 to opine to the Forest Service about the costs and challenges of the northwest Snow Shed Road. Yet the Joint Venture argues that it could not have foreseen the need for expert testimony regarding the Snow Shed Road because, although it "knew that the Snow Shed Road might ultimately be required, it could

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not predict [the road's] precise contours or the easement locations that the Forest Service might select for their placement." Motion to Amend at 17-18. This contention ignores that the specific placement of the road would require a road engineer regardless of alignment. Further, the Joint Venture's claims of unforseeability is contradicted by the evidence. The proposed placement of the Snow Shed Road has been well-known for nearly two years. Indeed, the DEIS and the FEIS contain identical descriptions of the Snow Shed Road. DEIS at 2.5.1 (p. 2-8); FEIS at 2.5.1 (p.2-14). This description details where the road will be located ("beginning on the Highway 160 corridor at a point approximately 0.33 mile east of the current entrance to the Ski Area and approximately 0.25 mile west of the Snow Shed") and includes an map depicting the road's "alignment." Id. The design criteria described by the Joint Venture are not new and are merely standards and guidelines from the Rio Grande National Forest Plan. See FEIS at 2-16, C-2; Motion to Amend at 12. Having known for nearly two years about the likely outcome of the Forest Service EIS11 and having previously hired experts for the purpose of evaluating the probable costs of building the Snow Shed Road, the Joint Venture cannot now claim to have been diligent in its discovery efforts when it failed, with no justification, to designate any of these experts to testify about these costs.12 The Joint Venture had ample opportunity to tinker with its expert designations as the

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The Joint Venture also argues that because the Snow Shed Road was not an absolute certainty and that damages were therefore speculative, it is excused from the requirements of Rule 16(b). The Court previously rejected this very same argument when the Joint Venture sought to add damages and an expert when there was no certainty of losing the Rule 106 action prior to Judge Kuenhold's ruling. Findings and Order Re: Defendant's Combined Motion for Leave to Join Additional Parties and to File Third Amended Counterclaim; Findings and Order Re: Defendant's Motion to Amend Scheduling Order (docket # 115, 116).

Attempting to shift the blame, the Joint Venture argues that they would not be in this predicament if Wolf Creek had not somehow delayed the FEIS, as the Joint Venture would have paid the costs of the Snow Shed Road before trial and could simply introduce the amount of bills paid. This argument rings hollow when it is the Joint Venture

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discovery deadlines in this case were extended multiple times. But it made the choice not to. Having failed to do so, the Joint Venture cannot cry surprise and expect, yet again, that the deadlines will be extended. The Joint Venture has not been diligent in its discovery efforts, and therefore it has not established good cause to amend the scheduling order. 2. The Joint Venture is not Entitled to an Amendment under Smith.

Under the manifest injustice standard, the Joint Venture cannot prevail. It is not manifestly unjust to require a party to exercise diligence. Even so, under Smith, the Joint Venture cannot establish that it is entitled to the relief it seeks. Under the Smith test, a court should consider the following four factors: (1) the prejudice or surprise in fact of the party against whom the excluded witnesses would have testified, (2) the ability of that party to cure the prejudice, (3) the extent to which waiver of the rule against calling unlisted witnesses would disrupt the orderly and efficient trial of the case or of other cases in court, and (4) bad faith or willfulness in failing to comply with the court's order. Smith, 626 F.2d at 797. The Joint Venture fares no better under these factors than it does under Marcin. i. Prejudice to Wolf Creek

There can be no doubt that Wolf Creek would be prejudiced by the addition of a new expert on a highly technical issue after more than two years of litigation. Courts recognize that "A party is not permitted to postpone identification of its own witnesses and the substance of their testimony until a critical point in the proceedings at which it will become extremely burdensome for his opponent to prepare effectively to meet them." Perkasie Indus. Corp. v.

that is slowing down the approval of the Snow Shed Road through its various appeals and attempts to avoid building the road. Motion to Amend at 13. Notably, Wolf Creek did not appeal the FEIS.

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Advance Transformer, Inc., 143 F.R.D. 73, 76-77 (E.D. Pa. 1992) (denying untimely designation of expert witness). If the Joint Venture is allowed to introduce a new expert, Wolf Creek will have to seek discovery relative to the new expert, get counsel up to speed, retain its own rebuttal expert, and adjust its case strategy accordingly. Perhaps a day of trial time would be consumed explaining complex engineering issues to a jury. To impose these costly burdens now would be highly prejudicial when Wolf Creek's resources could (and should) be devoted to preparing for trial. See id.; see also Bleek v. Supervalu, Inc., 95 F. Supp. 2d 1118 (D. Mont. 2000) (refusing to allow late-designated expert where non-moving party would be forced to pursue expensive and time-consuming discovery and need for such expert was previously known to the moving party). Wolf Creek also would be prejudiced because reopening discovery at this point would further delay setting trial.13 The Joint Venture consistently cites to the fact that there is no trial date to justify its delay tactics and argue that there is no prejudice to Wolf Creek. As the Joint Venture knows, Wolf Creek cannot obtain a trial date until discovery is closed. As discussed further below, Wolf Creek has experienced tremendous delay after being lulled into settlement delays when the Joint Venture had no interest in settlement, after a change in counsel by the Joint Venture, after numerous attempts to amend the scheduling order by the Joint Venture, and after delayed production and numerous objections by the Joint Venture to certain discovery. Yet the Joint Venture continues to cry "no trial date" to support its attempts to add unnecessary time and expense to the litigation. The Joint Venture's latest motion is just another example of this wellestablished pattern.

13

To avoid further delays, simultaneously with this response, Wolf Creek is filing a Motion to Schedule Pretrial Conference.

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ii.

Wolf Creek's Ability to Cure the Prejudice

The Joint Venture suggests that any prejudice to Wolf Creek can be cured by additional discovery. Motion to Amend at 16. In this case, however, such a remedy would be manifestly unfair. This case is already more than two years old. Discovery has been extended repeatedly, and it has taxed Wolf Creek's resources tremendously. If the possibility of pursuing additional discovery were enough to cure prejudice to a party caused by untimely designation of an expert, a party could prolong discovery and add witness indefinitely. Surely, at some point, enough is enough. Wolf Creek has been forced to bear the costs of extensive delay. Now, when the Joint Venture has failed to meet the court-ordered deadlines despite the fact that it had ample opportunity to do so (and even had the appropriate experts on its payroll), Wolf Creek cannot be expected to bear those costs again. iii. Bad Faith

The Joint Venture has been willful in its failure to comply with the court's scheduling deadlines. See Smith, 626 F.2d at 797 (citing a parties willfulness in failing to comply with a court's order as a factor to consider in determining whether to amend a pretrial order). The Joint Venture has engaged in pattern and practice of delaying discovery and maneuvering around this Court's deadlines. From its failure to provide complete privilege logs (Wolf Creek has yet to receive even one revised privilege log) which is holding up the deposition of Mr. Todd to its withholding thousands of relevant and responsive Bob Honts Properties documents until earlier this year, to its battles over bank records for nearly a year, to its recent attempts to backdoor expert testimony, this conduct reveals the Joint Venture's approach of wearing Wolf Creek down.

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This motion comes on the heels of the Joint Venture's unsuccessful attempt to circumvent the scheduling order by masking its experts on road engineering costs as fact witnesses. Obviously, when that attempt proved unsuccessful the Joint Venture changed its strategy and brought this motion, asking to designate a different expert. This motion fairs no better. The thin reed on which the Joint Venture bases its Motion changed circumstances is not supported by the extraneous facts cited in the Joint Venture's motion. The result of this conduct continues to impact Wolf Creek which must, yet again, incur substantial costs and devote considerable time responding to a request that can only be viewed as an attempt to delay already prolonged discovery. Had the Joint Venture exercised reasonable diligence and completed the necessary expert discovery within the court-ordered deadlines, or (more to the point) had the Joint Venture heeded this Court's previous rulings, Wolf Creek would not have been forced to incur those costs. The disparity between the resources of Wolf Creek and Leavell-McCombs is tremendous. After nearly two years of discovery, Wolf Creek deserves its day in Court. As such, the Joint Venture has not shown, under any standard, that it is entitled to an amendment to the scheduling order to designate a new expert, and its motion should be denied. VI. HONTS CANNOT TESTIFY AS TO ROAD ENGINEERING ISSUES

Should this Court deny its Motion to Amend, the Joint Venture argues that it will simply have Mr. Bob Honts testify about the Snow Shed Road. Recognizing this court has already ruled that the Joint Venture cannot designate any additional experts in this case,14 the Joint Venture suggests that Mr. Honts can testify about "all costs" incurred by the Village and presents a

14

Findings and Order Re: Plaintiff's Motion to Exclude Joint Venture's New Experts and Related Testimony at 2.

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parade of his credentials. Motion to Amend at 31-32. In stressing his credentials, the Joint Venture implies that Mr. Honts is qualified to testify about matters requiring specialized knowledge, such as the reasonableness of road engineering costs. But that claim yet another attempt to back-door improper testimony misses the mark. Any witness' testimony must be scrutinized under the rules governing expert testimony to determine whether the witness will testify based on "scientific, technical, or other specialized knowledge within the scope of Rule 702." Cook v. Rockwell Int'l Corp., 233 F.R.D. 958 (D. Colo. 1995) (citing Fed. R. Evid. 701 Adv. Committee's Note to 2000 Amendment). "The distinction between lay and expert witness testimony is that lay testimony results from a process of reasoning familiar in everyday life, while expert testimony results from a process of reasoning which can be mastered only by specialists in the field." Id. Testimony regarding the Snow Shed Road will necessarily be based on specialized, technical knowledge rather than "a process of reasoning familiar in everyday life." By his own admission, Mr. Honts is not an engineer and is not qualified to testify about the reasonableness of these types of costs. Deposition of Bob Honts, Vol. III at 735:19-738:9, attached hereto as Ex. 12. Thus, any testimony by Mr. Honts must be limited to matters "familiar in every day life." He cannot testify regarding matters, such as road and traffic engineering, that require specialized knowledge because he has not been and indeed cannot be qualified as an expert.15

15

The Joint Venture cites a number of cases for the proposition that a fact witness may, in some circumstances, testify regarding future damages. The Joint Venture takes great liberties, however, when it suggests those cases establish that Mr. Honts may testify regarding all manner of damages in this case. In any case involving a claim for future damages, a party must first establish the fact of damages, and then present substantial, admissible evidence that will allow the trier of fact to compute the amount of such damages. Pomerantz v. McDonald's Corp., 843 P.2d 1378, 1383 (Colo. 1993). Lay testimony is sufficient to provide such evidence only where it is rationally based on

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CONCLUSION For the reasons stated above, Wolf Creek requests that the Court deny the Joint Venture's motion to amend the scheduling order. Dated this 5th day of September, 2006. HOGAN & HARTSON L.L.P.

By:

s/Andrew R. Shoemaker Andrew R. Shoemaker Jacqueline S. Cooper 1470 Walnut Street, Suite 200 Boulder, Colorado 80302 [email protected] (720) 406-5300 telephone (720) 406-5301 facsimile Attorneys for Wolf Creek Ski Corporation, Inc.

the witness' perception. Id. A lay witness may not testify to matters requiring expertise or specialized knowledge. Id. at 1383-85 (lay witness with substantial management experience could testify regarding fact of payment of taxes but was not qualified to testify regarding inflation rates or maintenance costs because he did not have the requisite expertise or experience in those areas); see also Teronnes v. Tapia, 967 P.2d 216, 219 (Colo. Ct. App. 1998) (lay witness could not testify regarding lost profits where he could point to no established record of profits and could not provide any reasonable basis for his estimates). None of the cases cited by the Joint Venture disturb this basic principle--Mr. Honts will be limited to those areas that are based on his perception or a process of reasoning familiar in everyday life. He has not been qualified as an expert, and thus he may not testify to any matters requiring expert or specialized knowledge.

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PROCEDURAL TIMELINE April 28, 2004 May 6, 2004 Aug. 17, 2004 Joint Venture sends default letter to Wolf Creek. In response, Wolf Creek files declaratory judgment action. Joint Venture informs Forest Service in writing that its professional road engineer (Murfee Engineering) believes a "northwest Snow Shed Road" would be extremely difficult to build and therefore "is the least desirable alternative route . . . reviewed to date."16 Forest Service issues draft environmental impact statement with preferred Alternative IV identifying two routes as access, a combination of the Tranquility Road and northwest Snow Shed Road.17 Deadline for exchange of expert reports (set after extensions granted). Joint Venture's damages expert, Ms. Lisa A. Meer, includes a damages figure for cost of northwest Snow Shed Road, based on estimate prepared by Joint Venture's road engineer (Murfee Engineering).18 Deadline for rebuttal expert reports (set after extensions granted). After numerous deadlines and certain discovery had been extended to accommodate settlement discussions, Joint Venture appears at settlement conference with two new law firms. Joint Venture informs Wolf Creek and Court that it has no interest in settling this case or amending its plans in any way. Joint Venture's former counsel (Holland & Hart) withdraws.19 Joint Venture, through its new counsel, moves to join additional parties, add counterclaim, and amend scheduling order to add expert witnesses and increase damages claimed.20 Magistrate Judge West issues findings and order denying Joint Venture's motions to join additional parties, add counterclaim, and

Oct. 1, 2004

Feb. 28, 2005 Feb. 28, 2005

April 15, 2005 Oct. 5, 2005

Oct. 7, 2005 Nov. 14, 2005

Dec. 1, 2005

16 17

Letter from Bob Honts to Tom Malecek (August 17, 2004). DEIS, Ex. 3, at 1-1. 18 February 28, 2005 Report of Lisa A. Meer, Ex. 4, at 14. 19 Joint Venture's Unopposed Motion to Substitute Counsel (docket # 101). 20 Defendant's Motion to Amend Scheduling Order; Joint Venture's Combined Motion for Leave to Join Additional Parties and to File Third Amended Counterclaim (docket # 108, 109).

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amend scheduling order. Joint Venture failed to show good cause and did not demonstrate it could not meet the discovery deadlines exercising reasonable diligence.21 Dec. 15, 2005 Joint Venture objects to findings and order re amending scheduling order.22 Court (Judge Kane) overrules Joint Venture's objection.23 Joint Venture's economic damages expert, Ms. Lisa A. Meer, is deposed. When asked specific questions regarding basis for road cost estimates, she responds the she is not qualified to opine on engineering or road construction issues.24 She relied on professional road engineers retained by Joint Venture (Murfee Engineering). When asked what "experts" would deliver opinion on road costs, she said that she did not know.25

Jan. 6, 2006 March 7, 2006

March 15, 2006 Forest Service issues final environmental impact statement selecting Alternative IV (combining Tranquility Road and northwest Snow Shed Road access).26 April 3, 2006 Joint Venture issues first supplemental Rule 26(a) disclosure.27 Disclosure names six professionals working for Joint Venture, all of which provided estimates of costs to Ms. Meer, and all of which had expertise in areas Ms. Meer did not. Two such professionals are road engineers at Murfee Engineering, George Murphy and David Malish.28 Wolf Creek moves to exclude the six professionals (including Murfee Engineering road engineers) as experts.29 Joint Venture responds to motion, asserting the six professionals will testify as lay rather than expert witnesses.30

May 22, 2006

June 13, 2006

21

Findings and Order Re: Defendant's Combined Motion for Leave to Join Additional Parties and to File Third Amended Counterclaim; Findings and Order Re: Defendant's Motion to Amend Scheduling Order (docket # 115, 116). 22 Defendant's Objections to Magistrate Judge's Findings and Order Re: Defendant's Motion to Amend Scheduling Order (docket # 124). 23 Order (Kane, J.) (docket #124). 24 Meer Dep., Ex. 5, at 115:16-19;159:20-25. 25 Id. at 160:1-14. 26 FEIS, Ex. 7. 27 Defendant/Counterclaimant's Supplemental Disclosures, attached hereto as Ex. 13. 28 Id. at 2-3. 29 Wolf Creek's Motion to Exclude Joint Venture's New Experts and Related Testimony or, in the Alternative, for Allowing Wolf Creek Limited Discovery and Rebuttal Experts (docket # 184).

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June 29, 2006

Village planner Sam Brown is deposed and states that a new road engineer has been retained to handle the Snow Shed Road planning because Murfee Engineering is too busy.31 Brown also testifies that internal route (i.e., route within Village property) connecting northwest Snow Shed Road to platted internal road system was chosen to direct people past a Welcome Center and to avoid a replat.32 Court (Magistrate Judge West) issues findings and order re six professionals, ordering that they were not previously designated and may not testify as experts. Court permits discovery to determine nature and scope of potential witness testimony.33 Joint Venture files motion seeking to amend scheduling order to permit addition of road engineering expert to explain costs of northwest Snow Shed Road.34 Costs purportedly have increased to $15 million, of which approximately $13 million is for design within the Joint Venture's property. Joint Venture writes to Court objecting to Wolf Creeks request for information from six professionals and seeking clarification of Court ruling.35

Aug. 11, 2006

Aug. 15, 2006

Aug. 21, 2006

30

Defendant's Response to Wolf Creek's Motion to Exclude Joint Venture's New Experts and Related Testimony or, in the Alternative, for Allowing the Ski Corporation Limited Discovery and Rebuttal Experts (docket # 193). 31 Brown Dep., Ex. 2, at 239:22-240:8. 32 Id. at 166:3-24 33 Findings and Order Re: Plaintiff's Motion to Exclude Joint Venture's New Experts and Related Testimony or, in the Alternative, for Allowing Wolf Creek Limited Discovery and Rebuttal Experts (Docket # 199) at 3. 34 Leavell-McCombs Joint Venture's Motion to Amend Scheduling Order (docket #200). 35 Letter from George Berg to Magistrate Judge West (August 21, 2006), attached hereto as Ex. 14.

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CERTIFICATE OF SERVICE I hereby certify that on this 5th day of September, 2006, I electronically filed the foregoing WOLF CREEK SKI CORPORATION'S RESPONSE TO LEAVELLMcCOMBS JOINT VENTURE'S MOTION TO AMEND SCHEDULING ORDER with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: George V. Berg: Kimberly A. Tomey: Sally P. Berg: Roxanne J. Perruso: Amanda A. Rocque: [email protected] [email protected] [email protected] [email protected] [email protected]

s/Andrew R. Shoemaker

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File Size: 111.2 kB
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Date: September 5, 2006
File Format: PDF
State: Colorado
Category: District Court of Colorado
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