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RMS of Wisconsin, Inc. v. S-K JV

United States District Court, E.D. Wisconsin

June 9, 2016

S-K JV and J.F. SHEA CONSTRUCTION, INC., Defendants.


          NANCY JOSEPH United States Magistrate Judge

         In preparation for trial, the parties in the above-captioned case each filed numerous motions in limine. (Docket # 169, 176.) Several of the motions were decided at the pretrial conference. (Docket # 190.) There are nine outstanding motions in limine to be resolved: first, both RMS and the defendants have filed a motion in limine regarding the admissibility of a six-page document created by David Olson; second, both RMS and the defendants have filed a motion in limine regarding whether Tammy Miramontes and Rick Wilinski can offer testimony regarding RMS’ damages; third, RMS has moved to allow Michael Betters to testify as a fact witness; fourth, the defendants move that Stuart Lipofsky should be allowed to testify about practices in the construction industry regarding union labor; fifth, the defendants move to dismiss RMS’ claim for breach of the covenant of good faith and fair dealing; sixth, the defendants move to exclude evidence of breach of contract based on a March 16, 2012 settlement agreement signed by the parties; and seventh, the defendants move to exclude evidence of breach of contract based on Section 3 of the subcontract. I will address each of these motions in turn.

         The David Olson Document (RMS’ Motion # 2; Defendants’ Motion # 7)

         RMS filed a motion in limine seeking an order prohibiting the admission into evidence a six-page document created by David Olson of J.F. Shea shortly before the May 10, 2016 Daubert hearing. The defendants state that the six-page document summarizes information contained in a 108-page document. The 108-page document is S-K’s internal estimate for RMS’ scope of work on the project. The document takes line items of S-K’s estimate that appear on various pages relating to labor and summarizes them in an Excel spreadsheet to present the total number of hours that S-K estimated it would take to complete the scope of work called for by the subcontract with RMS. (Docket # 184 at 6.)

         RMS argues that the supporting documents Olson relied on were not produced in discovery and it has not had the opportunity to depose Olson on the meaning of the numbers and acronyms in his chart. At the hearing, RMS argued that the document should be excluded as a sanction for the defendants’ failure to produce it in discovery. Sanctions pursuant to Fed.R.Civ.P. 37 "may only be imposed where a party displays ‘wilfulness, bad faith, or fault.’" Langley by Langley v. Union Elec. Co., 107 F.3d 510, 514 (7th Cir. 1997) (quoting Philips Medical Systems Int’l, B.V. v. Bruetman, 982 F.2d 211, 214 (7th Cir. 1992)).

         To find that the sanction RMS requests is appropriate, I would need to make a preliminary finding that the defendants did not respond to the discovery request or responded to it in bad faith. RMS made a request in May 2014 for "all versions of the ‘Contract Items and Unit Prices’ relating to the Deep Tunnel Connector Project. Production should include, but is not limited to, documents corresponding to the attached Exhibit B." (Docket # 180-4.) The attached Exhibit B is a document entitled "Contract Items and Unit Prices." The defendants argue that they responded with a document entitled "Contract Items and Unit Prices, " which was another version of the document RMS referenced in its discovery request. It is clear what the defendants provided was responsive to RMS’ demand, but what remains unclear is whether the wording of the demand also called for the production of the information that is the subject of the 108 pages. The first sentence of the request supports the defendants’ reading of the demand. The second, more broader sentence could support RMS’ reading of the demand; however, even after reviewing the demand, the "Contract Items and Unit Prices" document, and the 108 pages, this remains unclear. Accordingly, I do not have the factual basis to exclude the summary as a sanction.

         The defendants argue that the six-page document is admissible as a summary to prove content under Fed.R.Evid. 1006 and that under that rule, the summarized documents need not be produced in discovery.

         Fed. R. Evid. 1006 provides as follows:

The proponent may use a summary, chart, or calculation to prove the content of voluminous writings . . . that cannot be conveniently examined in court. The proponent must make the originals or duplicates available for examination or copying, or both, by other parties at a reasonable time and place. And the court may order the proponent to produce them in court.

In Fid. Nat. Title Ins. Co. of New York v. Intercounty Nat. Title Ins. Co., 412 F.3d 745, 753 (7th Cir. 2005), the court stated that Rule 1006 requires only that the summarized documents be made available to the opposing party at a "reasonable time." The court stated that the rule does not say that the summary itself must be made available to the opposing party. Id. The court further stated, however, that "[n]o federal rule is needed" to "empower a district judge to prevent a party from springing summaries of thousands of documents on the opposing party so late in the day that the party can’t check their accuracy against the summarized documents before trial." Id. The court found that 30 days before trial was sufficient time for counsel to have "spot checked the summaries for accuracy" and if the "spot check" revealed inaccuracies, to move to exclude them from the trial unless the inaccuracies were promptly corrected. Id. Thus, the timing of the disclosure in itself does not provide grounds for exclusion in this case.

         RMS argues, however, that it does not understand the meaning of the numbers in the chart, "has no idea" what the acronyms in the chart stand for, and had the documents been turned over during discovery, it could have deposed Olson for clarification. (Docket # 169 at 11.) Given the circumstances of the disclosure of the 108 pages, I will allow RMS to depose Olson for the purpose of "spot checking" the summary for accuracy. I recognize that trial is a matter of days away and will not be adjourned. However, in the interest of avoiding trial by surprise, which is the purpose of discovery, I find this remedy appropriate.

         Testimony of Tammy Miramontes and Rick Wilinski Regarding RMS’ Damages (RMS’ Motion # 3; Defendants’ Motion # 6)

         RMS has moved to allow Miramontes and Wilinski to offer testimony as to RMS’ damages, including lost profits. The defendants conversely have moved to exclude Miramontes and Wilinski’s testimony regarding RMS’ lost profits. RMS argues that under Wisconsin law, the owners of a company may testify as to losses sustained by their business. The defendants argue that because Wilinski is not an owner of RMS, he cannot testify as a lay witness about lost profits. Additionally, the defendants argue that neither are qualified to offer testimony as to lost profits.

         "In the realm of lost profits, lay opinion testimony is allowed in limited circumstances where the witness bases his opinion on particularized knowledge he possesses due to his position within the company." Von der Ruhr v. Immtech Intern., Inc., 570 F.3d 858, 862 (7th Cir. 2009). For example, "the owner of an established business with a documented history of profits may testify to [her] expectation of continued or expanded profits when that opinion is based on [her] ‘knowledge and participation in the day-to-day affairs of [her] business.’" Id. (internal quotation and citation omitted). This is allowed because the testimony is tied to the witness’ personal knowledge. Id. A lay witness with "‘special knowledge of the business and its operations may also testify as to the facts of the business that underlie profit ...

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