Free Bill of Costs - Response to Objection - District Court of Arizona - Arizona

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FENNEMORE CRAIG , P.C.
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FENNEMORE CRAIG, P.C. William L. Thorpe (No. 005641) Sal J. Rivera (No. 016728) 3003 North Central Avenue Suite 2600 Phoenix, Arizona 85012-2913 Telephone: (602) 916-5000 [email protected] [email protected] Attorneys for BNSF

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Steven Schrum, Plaintiff, v. The Burlington Northern Santa Fe Railway Company, Defendant. The Burlington Northern Santa Fe Railway Company, a corporation, Third Party Plaintiff v. Chemical Lime Company of Arizona, a corporation; ABC Corporations I-IV, fictitious corporations, Third Party Defendants No. CIV04-619-PHX-RCB BNSF'S REPLY IN SUPPORT OF ITS AMENDED STATEMENT OF COSTS

Chemical Lime claims that BNSF cannot recover all the costs set forth in BNSF's Amended Statement of Costs. Chemical Lime is wrong. Because the Court has ruled that the Industry Track Agreement required Chemical Lime to defend BNSF from plaintiff's claims, Chemical Lime must pay all the costs BNSF incurred defending itself from

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plaintiff's claims. Indeed, all these costs should have been paid by Chemical Lime, rather than BNSF, from the beginning of this litigation. Chemical Lime's objection is nothing more than a further attempt by Chemical Lime and its insurer to avoid paying a debt that they should have paid long ago. The Court should reject Chemical Lime's further dilatory tactics and order Chemical Lime to pay all the costs set forth in BNSF's Amended Statement of Costs. I. BNSF is clearly entitled to the costs set forth in Rule 54.1. As a preliminary matter, Chemical Lime concedes that BNSF is entitled to recover the costs specifically set forth in Local Rule 54.1. Chemical Lime simply argues that BNSF has not provided "proper documentation" of these costs. In doing so, Chemical Lime ignores the detailed itemization of costs BNSF provided to the Court with the statement of costs. This itemization and BNSF's application are also supported by the Declaration of Sal Rivera, which is counsel's affirmation to the Court that the costs were "correct," "necessarily incurred" and "actually and necessarily performed." Thus, BNSF has adequately supported its application for costs. To the extent that further support is desired by the Court, BNSF has attached such documentation as Exhibit A.1 The Court should order Chemical Lime to pay these costs forthwith. II. The Court should also order Chemical Lime to pay the remaining costs requested in BNSF's statement of costs. Chemical Lime next argues that BNSF cannot recover costs not specifically set forth in Local Rule 54.1 and that the Court does not have authority to order Chemical Lime to pay BNSF's costs on appeal. Again, both of these arguments miss the mark. As a preliminary matter, BNSF is not only entitled to recover those costs set forth in Local Rule 54.1. Instead, the Court decisively ruled that the Track Agreement required Chemical Lime to defend BNSF from plaintiff's claims. This obviously means that
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To the extent that the Court would like such information for all of BNSF's costs, BNSF would be happy to provide it.
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Chemical Lime was required to pay and assume all costs incurred defending this lawsuit. Thus, from the beginning of this litigation, Chemical Lime should have been paying the costs associated with defending this lawsuit. Chemical Lime and its insurer repeatedly refused to do so, however, so BNSF was required to defend itself and, in doing so, it incurred the costs it now seeks to recover from Chemical Lime. Had Chemical Lime complied with its duty to defend BNSF earlier, Chemical Lime would have paid these same costs. The Court's Order makes it clear that Chemical Lime must now reimburse BNSF for all the costs BNSF incurred defending this lawsuit because these costs should have been paid in the first instance by Chemical Lime.2 Similarly, the Court has the authority to require Chemical Lime to reimburse BNSF's costs on appeal. Even now, after the Court ruled that Chemical Lime was required to defend BNSF, Chemical Lime has refused to defend BNSF and required BNSF to incur costs associated with plaintiff's appeal. Again, the costs on appeal were incurred solely because BNSF was required to defend itself and because Chemical Lime continues to shirk its responsibility to do so. Chemical Lime is absolutely wrong that this Court does not have the authority to award BNSF these costs. In fact, this Court has concluded that Chemical Lime has a duty to defend BNSF. Again, BNSF was required to incur the costs associated with plaintiff's appeal because Chemical Lime refused to accept its responsibility to defend BNSF in the Ninth Circuit. Again, these are costs that should have been paid by Chemical Lime rather than BNSF. Consequently, these costs are covered by the Court's Order and included in the costs that Chemical Lime must reimburse to BNSF. Limiting the amount of costs Chemical Lime is required to reimburse BNSF would
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Chemical Lime's purported reliance on A.R.S. § 12-332 and Ahwatukee Cust. Est. Mgmt Assoc., Inc. v. Bach, 193 401, 402, 973 P.2d 106, 107 (1999) fails for the same reason, namely that BNSF's right to recover all its fees arises not solely from statute, but also from the fact that Chemical Lime is required to pay all the costs associated with defending this lawsuit.
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reward Chemical Lime for its breach of the Agreement. If the Court only requires Chemical Lime to pay for a small portion of the costs BNSF incurred in defending itself, Chemical Lime will essentially have avoided a significant portion of its duty to defend BNSF. Indeed, the Court would essentially be requiring BNSF to subsidize the defense of this litigation when paying the costs of the defense was Chemical Lime's duty all along. Obviously, this is an inappropriate and impermissible outcome that would render the Court's Order meaningless. III. Conclusion Pursuant to Court Order and the parties' Industry Track Agreement, the Court should reject Chemical Lime's objections to BNSF's statement of costs and award BNSF all the costs it incurred successfully defending itself from plaintiff's claims and successfully prosecuting its third party claims against Chemical Lime. DATED this ___ day of July, 2007. FENNEMORE CRAIG, P.C.

By s/Sal J. Rivera Sal J. Rivera William L. Thorpe Attorneys for BNSF

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CERTIFICATE OF SERVICE I hereby certify that on July 16, 2007, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: George T. Brugess Hoey & Farina, P.C. 542 S. Dearborn, Suite 200 Chicago, IL 60605 Attorneys for Plaintiff Charles D. Onofry ReNae A. Nachman Schneider & Onofry, P.C. 3101 N. Central Ave., Ste. 600 Phoenix, AZ 85012 Attorneys for Third-Party Defendant Chemical Lime I hereby certify that on July 16, 2007, I served the attached document by facsimile and U.S. mail on the following, who are not registered participants of the CM/ECF System: William D. Black One East Camelback Road Suite 630 Phoenix, Arizona 85012-1658

s/Mary Boston

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