HomeMy WebLinkAbout2021-cv-2063 - City of Fort Collins v. Open International, et al. - 357 - Dfs' Reply re Post-Trial Motions1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.: 21-cv-02063-CNS-SBP
CITY OF FORT COLLINS,
Plaintiff/Counterclaim Defendant,
v.
OPEN INTERNATIONAL, LLC,
Defendant/Counterclaim Plaintiff,
and
OPEN INVESTMENTS, LLC,
Defendant.
______________________________________________________________________
DEFENDANTS’ REPLY TO PLAINTIFF’S RESPONSES TO
DEFENDANTS’ POST-TRIAL MOTIONS
______________________________________________________________________
I. THE MOTION FOR JUDGMENT AS A MATTER OF LAW
A. The Court should enter judgment for Defendants on the City’s fraudulent
inducement claim and restitution remedy.
1. The fraudulent inducement verdict is not supported by sufficient evidence.
The City failed to make a prima facie case of fraudulent inducement as to either Open
International or Open Investments.
i. Open International and Open Investments.
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No false statement of fact, justifiable reliance, or intent to deceive.1
According to the City, “[t]he most striking example of Open’s false representation was its
fraudulent grading of its software” in its RFP Response that awarded an “A” grade to 89.7% of
those product functionalities that the City had placed on its wish list in the RFP. That RFP was
explicit: An “A” grade should be assigned to those functionalities that would be “provided as
part of the base system”—meaning that “no modification is required,” “desired functionality is
achieved through configuration and is part of the base code,” and “cost of configuration is part of
the solution implementation.” A lesser “B” grade was instead reserved for those functionalities
that were “in development”—meaning those “not currently in the system, but [which] will be
fully vetted, tested and present in the system prior to launch.” See Doc. 314 at 13; T.E. 5 at 508.
The entirety of the City’s fraud claim rests on its misconstruction of an Open
International document (T.E. 74) that the City tries to use as an overlay to the functional matrix
grading instructions in the RFP. That document, produced before Open submitted its RFP
Response, reflects that 59.4% of the City’s functionality requirements were “current
functionalities” of the Open software; 24.9% were “planned for 2018”; and the rest were to be
fulfilled either in “future developments” (6.1%), via client-specific customizations (“Person
P&T” – 0.5%; “Person SP/Integration/Configuration” – 5.7%), or not at all (3.4%). But these
“fulfillment” categories did not neatly align with the RFP grading rubric. For example, while all
“current functionalities” were also “provided as part of the base system” and therefore entitled to
an “A” grade in the RFP Response, so, too, were those “planned for 2018”—the year of the V.8
1 See Doc. 354 at 11-25.
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software release and the RFP Response submission. Those functionalities were already
developed, awaiting integration into the V.8 base system, and slated for completion alongside the
“current functionalities” in time for the V.8 release. And critically, they were part of the design
of the V.8 base system that City personnel understood would be released in 2018—after the RFP
was submitted. See Tr. Trans at 339-40 (City’s CFO testifying that he knew, before selecting
Open as the winner bidder, that the project would involve a new version of Open’s software).
This assessment is supported by the unrebutted testimony of Hernando Parrott, Open
International’s North America President, who explained that everything denoted as “current
functionalities” or “planned for 2018” was to be included in the V.8 base system, and at no extra
cost to the City:
Q. Current functionalities, what was the status of functionalities that fell within
that category?
A. Those were functionalities that were at the time part of the base system and
were fully integrated into the version.
Q. And then the next category, planned for 2018, what was the status of
functionalities that fell within that category? . . .
A. Those were functionalities that are part of the base system, were part of the
base system at the time and just hadn't been integrated into the Version 8.
Q. When were they going to be integrated into Version 8?
A. During 2018.
Q. Okay. So then in terms of grading, is there a grade that corresponds to the first
section, current functionalities?
A. Say it again, please.
Q. Is there -- do the current functionalities, the 59.4 percent, do those correspond
to a particular grade?
A. Yes, they did. They were A.
Q. Okay. All of them?
A. All of them.
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Q. And then planned for 2018, those 24.9 percent, did they correspond to a
particular grade?
A. Yes, they were.
Q. What was the grade?
A. They were A's as well.
Q. Okay. Now, those were still planned for integration in 2018, you said, correct?
A. That's correct.
Q. They were in the base system, but they were planned for integration?
A. They were part of the base system. They were already there. Just weren't in the
final stages to integrate into the Version 8 release.
Trial Tr. at 1274:4-10; 1275:3 -1276:3 (Testimony of Hernando Parrott).
Those functionalities denoted as “future developments” were not slated for development
and integration in time for the V.8 release and thus earned a “B” grade in Open’s RFP Response:
Q. Let's look at the next category, future developments, 6.1. What functionalities
would fall -- what was the status of functionalities in that category?
A. Those functionalities were not part of the base system. When we read the RFP,
we identified they're good functionalities, and we decided to add them at a later
time. So those were -- those were Bs in the functional matrix.
Q. Okay. For all 6.1 percent of those they were Bs?
A. Correct.
Id. at 1277:7-15. And functionalities that would require specific customizations for the City
(“Person P&T” and “Person SP/Integration/Configuration”) did not all share the same letter
grade, with some already developed and slated for integration into the V.8 base system (thus
earning an “A” grade) and others requiring additional work to meet the functionality required by
the City (thus earning a grade between “B” and “F,” depending on how much additional work
was needed). See id. at 1277:16 – 1278:14.
Add up the “current functionalities,” those “planned for 2018,” and a subset of those
requiring only integration or customer-specific configuration, and you’d reach the RFP
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Response’s total of 89.7% of the City’s required functionalities graded “A”—or “provided as
part of the base system” with “no modification required.”
To the extent there is any ambiguity as to what, in fact, was denoted by the term “base
system,” the City’s RFP did not define the term. But there was no objective reason to assume
that an “A” grade must be reserved only for those functionalities that had already been
incorporated into the software’s base code, and any subjective belief to the contrary simply is
insufficient as a matter of law to constitute fraud. See, e.g., MacDonald v. Thomas M. Cooley L.
Sch., 724 F.3d 654, 663 (6th Cir. 2013) (concluding that law school graduates could not prove
that their alma mater committed fraudulent misrepresentation based on its misleading marketing
of “percentage of graduates employed” where the statistic included part-time and non-legal
work; a “plaintiff's subjective misunderstanding of information that is not objectively false or
misleading cannot mean that a defendant has committed the tort of fraudulent
misrepresentation”); Bochenski v. M & T Bank, 2015 WL 1040281, at *21 (D. Md. Mar. 10,
2015) (concluding that, although complaint was “replete with allegations of misconduct,” fraud
claims failed as a matter of law because a “plaintiff's subjective misunderstanding of information
that is not objectively false or misleading” is insufficient to establish fraud, and plaintiff did not
“refer to facts that show . . . the requisite intent of malice or reckless indifference to the truth”);
The City’s expert did not analyze whether the items Open International included in its
“A”-grade assessment were or were not actually part of its base code; in fact, he made no
determination as to what Open’s base code even was. And when Open International responded to
the RFP, it had been working on V.8 for three years already; its response was not aspirational,
wishful thinking but an uncontradicted, sober analysis of its software’s capabilities.
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In lieu of evidence, the City relies on argument that the “A” grade required “current”
functionality—a presumption belied by the RFP itself, which contemplates further work even for
“A”-graded items in order to achieve functionality for this project. But the City saw an
opportunity to muddy the waters at trial and took it. The “planned for 2018” category—despite
earning its “A” grade for being “provided as part of the base system,” without modification, for
the 2018 V.8 release—was alleged to have been wrongly assigned when it should have been
given a “B” to denote its being “in development” instead. Never mind that the purpose of the
functional matrix was not to identify the development status of two thousand functionalities, but
to determine their functional compliance, and to identify those which would be provided at no
extra cost (i.e., as part of the base system) versus those which would demand client-specific
customizations that would result in additional a la carte costs; the City simply exploited the fact
that features “planned for 2018” sound (colloquially, at least) like they remain “in development.”
It’s a slight-of-hand that the City carries throughout its brief. For example, the City
contends that “Mr. Parrott admitted that the percentage of OSF’s then-current functionalities was
59.4% (should be graded A) and that the planned functionalities for OSF was another 24.9%
(should be graded B or lower) (with the two adding up to 84.3%).” Doc. 354 at 14 (citing Trial
Tr. at 1414:5-12). But the explanatory parentheticals are the handiwork of the City’s counsel and
not the testimony of Mr. Parrott. Again, there is no record evidence that those functionalities
“planned for 2018” meant anything other than what Parrott testified they meant—slated to be
“provided as part of the base system” later that year following integrations and the V.8 product
release. Nor was there evidence that Open personnel did not steadfastly believe that the base
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system would include these completed and integrated functionalities by the agreed-to “Go-Live”
date. Absent that evidence, there is no legally supportable showing of fraud.
Economic loss rule and integration clause.2
The City has no answer for Defendants’ argument that, because the RFP was
incorporated by reference into the Agreement, representations made therein were not truly
independent of those in the Agreement itself and therefore cannot escape the economic loss rule
and form the basis for a fraudulent inducement claim.
Where a claim asserting only economic loss stems from the breach of an “independent
duty of care under tort law,” it is not barred by Colorado's economic-loss rule. See Haynes Trane
Serv. Agency, Inc. v. Am. Standard, Inc., 573 F.3d 947, 962 (10th Cir. 2009) (citing Town of
Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000)). Two conditions must be met for
a duty to be deemed sufficiently independent: “First, the duty must arise from a source other than
the relevant contract.” Id. “Second, the duty must not be a duty also imposed by the contract”—
and “even if the duty would be imposed in the absence of a contract, it is not independent of a
contract that memorializes it.” Id.
The City’s fraud claim concerns representations made in the RFP before the Agreement
was executed which were later incorporated into that Agreement. Trial Tr. at 2008:20-23
(Plaintiff’s Closing Argument) (“These functional matrix responses and RFPs, they aren’t used
just for the RFP process. They’re used through the whole project. They become a part of the
contract.”). And Colorado case law supports the application of the economic loss rule in these
2 See Doc. 354 at 25-27.
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precise circumstances. For example, in RE/MAX, LLC v. Quicken Loans Inc., 295 F. Supp. 3d
1163 (D. Colo. 2018), the court applied the rule to bar a tort claim arising from fraudulent
misrepresentations that were later memorialized in the contract. See id. at 1169-70. Because “the
parties allocated risk with respect to those obligations by contract,” the economic-loss rule barred
even a fraud claim aiming “to hold [the counterclaim defendant] liable for being incapable of
providing services that [it] allegedly knew it could not provide when [that] representation was
made” prior to executing a contractual amendment that memorialized those obligations. Id. at
1170-71. See also, e.g., In re Allonhill, LLC, 2019 WL 1868610, at *37 (Bankr. D. Del. Apr. 25,
2019) (“[T]o the extent that [plaintiff] tries to recast its negligent misrepresentation claims based
upon pre-contractual promises as claims for actual fraud, those claims are barred to the extent
they are based upon promises that were subsequently incorporated into the parties' contracts.”)
(applying Colorado law).
Because the City’s cases involve pre-contractual misrepresentations that were not later
incorporated into the operative agreement, they persisted as independent tort claims arising
exclusively from separate, non-contractual sources of duty. Cf. Haynes Trane Serv. Agency, 573
F.3d at 962 (“[E]ven if the duty would be imposed in the absence of a contract, it is not
independent of a contract that memorializes it.”) (citing Town of Alma, 10 P.3d at 1264). Not so
here.
As for the application of the Agreement’s integration clause, the City contends that the
provision may preclude reliance on prior misrepresentations only when it contains “clear and
specific language” concerning the subject of the misrepresentation. See Doc. 364 at 26 (quoting
Pensford Fin. Grp., LLC v. 303 Software, Inc., 2019 WL 20765579, at *2 (D. Colo. May 10,
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2019)). And although the Court previously denied summary judgment after concluding that the
integration clause in this case lacked the requisite specificity, see Doc. 225 at 10, the “clear and
specific” threshold is met with less than what the Court demanded at summary judgment. For
example, the court in In re Allonhill, LLC found a nearly identical integration clause to be
sufficiently “clear and specific” to bar a misrepresentation claim under Colorado law. Compare
2019 WL 1868610, at *34 (“This Agreement (including the Schedules and Exhibits hereto) and
the Ancillary Agreements represent the entire understanding and agreement between the Parties
with respect to the Transactions and supersedes all prior agreements among the Parties
respecting the Transactions.”) with Doc. 302 (Ex. 1 at § 18.15) (“This Agreement, including all
Exhibits, constitutes the final, complete and exclusive agreement between the Parties with
respect to the subject matter of this Agreement, and supersedes any prior or contemporaneous
agreement, proposal, warranties and representations.”).
The City’s rights in this case were always in contract, not tort.
ii. Open Investments Alone.
Issue is not waived.3 Although it is true that sufficiency arguments presented for the first
time in a Rule 50(b) motion cannot be considered unless first asserted in a Rule 50(a) motion,
when it comes to matching those arguments across the Rule 50(a) and 50(b) papers, “technical
precision is unnecessary,” both in the Tenth Circuit and elsewhere.4 See Perez v. El Tequila,
3 See Doc. 354 at 3-9.
4 Nationwide, federal courts of appeal are interpreting the requirement flexibly. See, e.g., Liberty
Mut. Fire Ins. Co. v. JT Walker Indus., Inc., 554 F. App'x 176, 185 (4th Cir. 2014) (“In
considering a challenge based on a lack of specificity in the Rule 50(a) motion, we remain
mindful that the Federal Rules are to be construed liberally, and consider whether the motion
provides the court and the nonmoving party sufficient notice of any alleged deficiencies in
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LLC, 847 F.3d 1247, 1255–56 (10th Cir. 2017) (permitting Rule 50(b) arguments that appellant
argued were not raised with sufficient specificity in Rule 50(a) motion); see also Miller v. Eby
Realty Grp., LLC, 396 F.3d 1105, 1114 (10th Cir. 2005) (noting that the Rule 50(a) motion must
be specific enough “to alert the opposing party (and the court) of any deficiencies in the case,
thereby giving the party the opportunity to rectify any deficiencies prior to the case being
submitted to the jury”).
In its pre-verdict Rule 50(a) motion, Defendants argued that the City failed to present
evidence of (1) a misrepresentation of a past or present fact; (2) justifiable reliance on any such
misrepresentations; or (3) a knowing misrepresentation. See Doc. 282 at 5-8. Although those
arguments were sharpened in the post-verdict Rule 50(b) motion, the sufficiency challenges in
that latter motion were aimed at the same elements of the same claims. See Doc. 302 at 4-8. The
pre-verdict motion put the City on notice that its fraudulent inducement claim lacked a sufficient
factual basis as to key elements, and the renewed post-verdict motion provided additional color.
evidence. . . . We find that Liberty preserved its Rule 50(b) arguments.”); E.E.O.C. v. Go Daddy
Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009) (“Rule 50(b) may be satisfied by an ambiguous
or inartfully made motion under Rule 50(a). Absent such a liberal interpretation, the rule is a
harsh one.”) (internal quotation marks and citations omitted); G&G Closed Cir. Events, LLC v.
Castillo, 2019 WL 3554228, at *5 (N.D. Ill. Aug. 5, 2019) (“[T]he Seventh Circuit has drawn a
distinction between ‘grounds’ for relief—which must be first articulated in a Rule 50(a)
motion—and ‘arguments in support’ of those grounds—which can differ between the pre-verdict
and post-verdict motions.”) (citing Andy Mohr Truck Center, Inc. v. Volvo Trucks N. America,
869 F.3d 598, 604-05 (7th Cir. 2017)); Howard v. Walgreen Co., 605 F.3d 1239, 1243 (11th Cir.
2010) ("Strict identity of issues, however, is not required. So long as they are 'closely related,'
such that opposing counsel and the trial court may be deemed to have notice of the deficiencies
asserted by the moving party, the purposes of the rule will be satisfied.”).
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No evidence of Open Investments’ fraud.5 The City contends that representations in the
RFP were made by “Open” as a whole—not Open International alone. See Doc. 354 at 9. But
those representations that one might expect to require Open Investments’ input are not even
alleged to be false. See id. at 9-10 (citing “30 years of experience”; “worldwide recognized”;
“decades of” development and implementation). The remaining evidence of Open Investments’
supposed involvement in the RFP response process concerns little more than proposal review
and pre-contractual gladhanding by Open Investments’ CEO William Corredor, who testified
that he reviewed the RFP Response for “historical accuracy” and met with the City during the
response process. See id. at 10. But this role in the RFP selection process does not equate to
Open Investments’ owning the misstatements in an RFP that was signed and submitted by Open
International alone.
The City’s assertion that fraud was perpetrated by both Open entities also finds no
support in Plaintiffs’ complaint, which limits allegations against Open Investments to its
execution of a pledge in the Agreement to “unconditionally guarantee the performance of Open
International of all obligations set forth” in that document. Doc. 1-1 at ¶ 6. Open Investments is
not mentioned again in that pleading. Nor is the City’s theory of liability against Open
Investments expanded in the Court’s Pretrial Order. See Doc. 230. And it is entirely unclear why
Defendants should bear the duty of separating the entities and ensuring that the City adduced
sufficient evidence as to each. As Plaintiff, the City was the master of its own complaint, the
steward of its own case, and the party responsible for assuming that imposing a shorthand on a
5 See Doc. 354 at 9-11.
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group of Defendants would substitute for meeting its burden of proof with respect to each of
them.
2. The City waived the fraudulent inducement claim and, at minimum, the rescission
remedy
Waiver of the (fraudulent inducement) claim.6
None of the evidence supporting the City’s fraud claim was unknown to the City by the
Spring of 2020. And yet, the City executed the First Amendment to the Agreement in June 2020,
and later, the PCR 29—both of which extended the project and assigned additional costs to the
City. Even after terminating the Agreement, the City continued working with Open International
on the project for more than a month. And it continued using Open International’s software even
after suing for fraud.
The City claims it “only obtained ‘full knowledge’ of the false representations in
discovery during the litigation”—i.e., “when it received T.E. 74 in discovery and asked Open
about it in depositions.” Doc. 354 at 31, 33 (discussing Open International’s internal grading of
software functionalities). Of course, by that point, it had already sued the Defendants and stated
its claim for fraudulent inducement. It will always be the case that a party will uncover
something in discovery that was previously unknown and which bolsters its claim. But waiver is
not defeated by each and every such discovery. If “Gladden and Elk7 are not in conflict,” see
Doc. 28, and “full knowledge of the truth respecting the false representations” is indeed the same
6 See Doc. 354 at 31-35.
7 See Elk River Assocs. v. Huskin, 691 P.2d 1148, 1154 (Colo.App.1984); Gladden v. Guyer, 162
Colo. 451, 426 (1967).
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standard as “knowledge of the substantial and material facts constituting the fraud,” see id.
(citing In re Mascio, 454 B.R. 146, 151 (D. Colo. 2011)), then the only later-discovered evidence
that can excuse an earlier ratification is that which is both “substantial and material” in light of
what is already known. And the critical facts, both of the problems with its software and the
alleged falsity of certain representations in the RFP, were known to the City long before it
terminated the Agreement—even if those facts were shored up with additional evidence in the
months that followed. Even on the City’s account, “it was not until the parties’ functional matrix
assessment in May 2021 . . . that the City began realizing that Open defrauded it.” See Doc. 354
at 32. And yet, the City continued negotiating with Defendants for another month and change—
precisely the sort of “wait-and-see” approach that Colorado courts equate to waiver. In re
Mascio, 454 B.R. at 151 (“The defense of waiver prevents a party who learns of the fraud before
affirming the agreement from ‘speculat[ing] upon the advantages or disadvantages of an
agreement, receiv[ing] its benefits and thereafter repudiat [ing] all its obligations.’”) (quoting
Tisdel v. Cent. Sav. Bank & Trust Co., 90 Colo. 114 (1931)).
Waiver of the (rescission) remedy.8
Whereas waiver of the City’s claim was properly before the jury, waiver of its right to
pursue rescission as a remedy properly rested in the province of the Court—and the City’s
assertions to the contrary are cabined to a footnoted ipse dixit offered without support. See Doc.
354 at 30 n.25.
8 See Doc. 354 at 27-30; 35-37.
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It is true that factual issues common to damages and equitable claims must be tried to a
jury, whose resolution of factual matters will control. See Dairy Queen, Inc. v. Wood, 369 U.S.
469, 479 (1962); Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959). Thus, to the extent
that common factual questions were relevant to waiver of the claim and waiver of the remedy,
the jury’s determination of those facts must prevail. But the jury did not and could not address
the factual question unique to the City’s waiver of its equitable remedy of rescission. That is
because under Colorado law, “Plaintiffs may be entitled to rescission of a contract on the theory
of fraudulent inducement/concealment if . . . [inter alia] (5) the Plaintiffs have returned or
offered to return to the Defendants anything the retention of which would unjustly enrich the
Plaintiffs.” See Mosher v. Long Beach Mortg. Co., 2014 WL 287441, at *3 (D. Colo. Jan. 27,
2014), aff'd, 593 F. App'x 766 (10th Cir. 2014). This was an element of Plaintiff’s rescission
right that the jury never was called to decide because it was not also an aspect of the waiver
defense of the City’s fraudulent inducement claim. See Albarqawi v. 7-Eleven, Inc., 2014 WL
616975, at *2 (E.D. Pa. Feb. 18, 2014) (finding that plaintiff had waived rescission but not
damages on its claim). And as this element—steps to avoid unjust enrichment—did not bear on
any issue the jury was called to determine, Defendants did not waive anything by failing to
object to jury instructions that plainly did not and could not address waiver of this equitable
remedy. 9 But see Doc. 354 at 30, 35 (arguing that Open waived the issue by failing to object to
the waiver instruction at the charge conference).
9 The City suggests that “[t]o the extent that Open insists on arguing that ‘rescission waiver’ is a
separate affirmative defense, Open never actually pled waiver of a rescission remedy, another
waiver fatal to its argument.” Doc. 354 at 29 n.22. But this is no “separate” affirmative defense
at all, and the Iqbal and Twombly standards do not apply to responsive pleadings. See Holdbrook
v. SAIA Motor Freight Line, LLC, 2010 WL 865380, *2 (D. Colo. 2010) (“[I]t is reasonable to
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Nor can Defendants be accused of ignoring the Court’s instructions as to what,
specifically, its role would be with respect to restitution and its consideration of equitable
defenses that might bear on the City’s entitlement to same, as those instructions lacked the clarity
necessary to form the basis for a knowing waiver:
So they will enter a finding as to fraudulent inducement and negligent
misrepresentation so as to allow the City to elect a remedy. At that point the City
must elect a remedy, whether it wants rescission or enforcement of the contract. If
-- that is assuming the jury finds for the plaintiff. So if the jury finds in favor of
the City on one of those claims, there will be an election of remedies. If the
election is rescission, the jury is done. The Court will determine the damages that
accompany rescission, and there will be no need for -- the contract will not be in
effect then. It will be void, and there is no further claims for the jury to hear.
Doc. 269 4:10-21.
The City acknowledges that it “used the software during the transition to the new service
provider” and “promptly stopped using Open’s software after its implementation” with that new
provider some six months after terminating the Agreement. Doc. 354 at 36; Trial Tr. at 1855:13-
20. Whether or not the software was “fully functioning” does not answer whether the City was
“enriched” by its continued use; the very fact that the City did continue to use it long after
terminating the Agreement demonstrates that the software, perfect or not, provided some
utility—which the City’s own expert had quantified. See Seigneur’s “Report of Economic
Damages Analysis” at 13; see also id. at Schedule A (reflecting ~$1.375 million as “[a]mount
impose stricter pleading requirements on a plaintiff who has significantly more time to develop
factual support for his claims than a defendant who is only given 20 days to respond.”); Wright
& Miller, Fed. Prac. & Proc. Civ. § 1274 (4th ed.) (“[T]he majority of courts have rightly held
that Rule 8(c) does not warrant the extension of the Twombly and Iqbal standard to affirmative
defenses.”). Defendants argued both waiver of the (fraudulent inducement) claim and waiver of
the (rescission) remedy at the close of evidence and have preserved all there is to preserve of the
issue.
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that [the City] Benefitted from Software in Use”). Although its continued use and enrichment
does not deprive it of a right, Colorado law makes plain that must deprive the City of its chosen
remedy in this case.
II. IF THE COURT DENIES THE RULE 50 MOTIONS,
IT SHOULD GRANT A NEW TRIAL
A. The jury’s inconsistent findings on the City’s waiver require a new trial.
The City contends that Defendants’ argument is both waived and meritless. Neither is
true.
Issue is not Waived.10 With respect to general jury verdicts, unless the verdict is
“inconsistent on its face such that the entry of judgment upon the verdict is plain error,” a party
must object to any inconsistency before the jury is discharged to avoid waiving the issue. Bartee
v. Michelin N. Am., Inc., 374 F.3d 906, 911 (10th Cir. 2004). But special verdicts require no
contemporaneous objection. Johnson v. Ablt Trucking Co., 412 F.3d 1138, 1141 (10th Cir. 2005)
(“When the jury returns a special verdict, however, a party is not required to object to
inconsistencies in the verdict before the jury is discharged in order to preserve the issue.”); Heno
v. Sprint/United Mgmt. Co., 208 F.3d 847, 851 (10th Cir. 2000) (“Although a party waives a
claim of inconsistent verdicts based on a general jury verdict under Fed.R.Civ.P. 49(b), if not
timely raised, this rule does not apply to special verdicts under Fed.R.Civ.P. 49(a).”).
Thus here—as in Johnson v. Ablt Trucking Co.— whether Defendants’ failure to object
constitutes a waiver “hinges on the characterization of the verdict as either a special verdict or a
general verdict with answers to special interrogatories.” 412 F.3d at 1142. In a footnote, the City
10 See Doc. 353 at 6-8.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 16 of
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suggests that “[a]ny argument that the verdict was a special verdict because it required the jury to
opine on Open’s affirmative defenses and, thus, any inconsistency argument could not be
waived, is without merit.” Doc 353 at 7 n.1. But its citation to a single out-of-circuit case betrays
the dearth of support for its position.
Pursuant to Tenth Circuit precedent, the jury returned a special verdict for which
inconsistencies may be challenged for the first time even after the jury is discharged:
[T]he hallmark of a general verdict is that it requires the jury to announce the
ultimate legal result of each claim. Simply put, a general verdict permits the jury
to decide who wins. A special verdict, by contrast, presents the jury with specific
questions of fact. After the jury returns its verdict, the court applies the law to the
facts found by the jury and enters judgment accordingly. The verdict form in this
case required the jury to answer specific questions of fact regarding fault and
damages. The judgment itself required application of the law by the judge to the
facts found by the jury. It is therefore a special verdict.
Johnson, 412 F.3d at 1142 (quotation marks and citations omitted). This characterization of a
general verdict aligns with Black’s Law Dictionary’s, which defines “general verdict” as one
“whereby the jury find either for the plaintiff or for the defendant in general terms.” Black's Law
Dictionary 1560 (6th ed.).
In Johnson, “before the jury's allocation of fault between the parties . . . could be
translated into a judgment, the judge was required to apply the state’s law limiting liability in
cases of comparative negligence to those in which the defendant was more than 50% responsible,
and multiplying the jury's finding of percentage responsibility by the jury's finding of damages.”
412 F.3d at 1142–43 (10th Cir. 2005). “The verdict thus did not announce the ‘ultimate legal
result of each claim,’ and therefore was not a general verdict.” Id. at 1143.
Likewise here, before the jury’s finding on liability could be translated into a judgment,
the Court was required to apply the state’s law negating liability where an affirmative defense (in
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 17 of
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this case, of waiver or expiration of the statute of limitations) is proven by the Defendant. The
verdict did not announce the “ultimate legal result of each claim” and therefore was not a general
verdict. Moreover, the verdict did not announce the “ultimate legal result” of any claim because
it did not even include a damages finding. To complete the verdict and reduce it to judgment, the
Court was required to resolve additional questions of both law and fact without which the
judgment could impose no monetary exchange whatsoever.
As the jury returned a special rather than general verdict, Defendants did not waive the
right to challenge the inconsistencies therein by failing to object before the jury was dismissed
Verdict is inconsistent.11 If the jury's findings “are irreconcilably inconsistent, the court
cannot enter judgment without choosing between the conflicting findings of fact and thereby
overturning one of them.” Johnson, 412 F.3d at 1144. That inconsistency requires the jury's
answers to be “logically incompatible”—as when “the essential controlling findings are in
conflict [and] the jury has failed utterly to perform its function of determining the facts”—
making its verdict a “nullity.” Id. (finding an irreconcilable inconsistency where the jury found
both that a defendant committed no negligence and also that the defendant's negligence caused
the plaintiff's injuries).
The City attempts to reconcile the jury’s findings on waiver by suggesting that its
“fraudulent inducement claim was based on Open’s false statements that it intentionally made to
the City during the RFP process” (i.e., grades assigned to various software functionalities)
whereas its “negligent misrepresentation claim logically maps to Open’s misrepresentation of the
11 See Doc. 353 at 8-11.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 18 of
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version of its product” (i.e., the year of version 8’s release). Doc. 353 at 8-9. But for this
distinction to resolve the discrepancy, there must be evidence that the City both “relied on the
information supplied by Open” in its 2018 RFP response, see Doc. 285 at 22 (Jury Instruction
21), and then “came to learn of the actual version being implemented” sometime before
terminating the project, see Doc. 353 at 10.
The undisputed evidence simply does not support this interpretation. Instead, the City’s
CFO acknowledged that before selecting Open and executing the Agreement, he knew that V.8
was not yet operational and would be launched for the first time pursuant to that Agreement:
Q. Okay. When the City of Fort Collins picked Open for the implementation, you
knew that Fort Collins would be Open's first U.S. customer, correct?
A. Yes.
Q. And the City's selection team knew that Open would be launching the new
version of its software with the City, correct?
A. Yes.
Q. That was OSF Version 8, right?
A. If I recall right, yes.
Q. Okay. And that was going to be launched for the first time with the City of
Fort Collins, correct?
A. My understanding, yes.
Q. Okay. You knew that at the time?
A. Yes.
Q. And the City's negotiating team was aware of that at the time, correct?
A. Yes, we were.
Trial Tr. at 339-40. This is the only explanation the City offers to reconcile the discrepancy in the
waiver verdicts, and it falls apart upon the slightest scrutiny.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 19 of
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B. The Court’s failure to demand a pretrial election of remedies requires a new trial.12
The City does not address the ample authority suggesting the proper way to demand an
election of remedies and sequence a trial. See Doc. 347 at 15 (discussing Kline Hotel Partners,
Cross Country Land Servs., Inc., and Whatley). And rather than acknowledge the harm wrought
by Ronald Seigneur’s testimony—i.e., evidence of substantial contract damages that would
influence the jury’s tortious misrepresentation liability determinations—the City asserts instead
that Defendants wanted to expand the nature of that testimony to include discussion of restitution
alongside breach-of-contract damages. But the colloquy with the Court clearly revealed this
position as the regrettable consequence of the Court’s prior decision to permit the City to
proceed to trial without first having elected a remedy. It was a position taken, in other words, to
make the best of a bad situation that Defendants both predicted and worked to avoid:
• “MR. MCADAM: I think the problem that we have, or the position that I'm in, is I
understood from the last time that Your Honor spoke on this issue that the decision might
be put before you after the jury returns the verdict, in which case the evidence would
have to have been presented.” Trial Tr. 848:3-7.
• “MR. SWANSON: Your Honor, because of your ruling [declining to require a pretrial
election of remedies], we've been preparing to examine the witness on both points
[categories of damages], prepared our witness on both points, and we think at this point
that's the most efficient thing.” Id. at 849:9-12.
• “MR. SWANSON: We did think an election should happen pretrial, but at this point the
ruling was made, and so we've been ready to proceed on both.” Id. at 849:24–850:1.
• “MR. MCADAM: I think that was initially what was desired, and we understood your
ruling to be that all the evidence would come in, and if rescission had to be ruled on, that
Your Honor would do so after the verdict. So our preparation has just been based on what
we understood your ruling to be.” Id. at 851:11-16.
12 See Doc. 353 at 11-15.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 20 of
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The fact remains: The jury heard evidence of tens of millions of dollars of breach-of-
contract damages that proved legally irrelevant to its determination but likely influenced its
verdict—all because the City was permitted to proceed to trial on its two incompatible theories.
C. The Court’s handling of juror questions demands a new trial.13
The Court advised the jury:
It’s up to you to pinpoint if you see any statement that fits either one of those
definitions [of “knowledge”]. If you do, then you turn to the affirmative defenses,
and you need to pinpoint as outlined each of the affirmative defenses, if the
statute of limitations is not—has been not met, or the other—the waiver issue.
Trial Tr. at 2077:2-23 (emphasis added). But this plainly is not a true statement of the law
because it ignores the other elements of the misrepresentation claims that, along with the
knowledge requirement, must be proven for liability to lie. Nor is the above excerpt one that
makes any more sense in context, because there was no additional context; this marked the end
of the Court’s instruction until, after a brief bench conference, the Court clarified an earlier
misstatement by rereading the knowledge requirement and directing the jury “to continue [their]
journey through the jury instructions”—all of which did nothing to clean up the error (and some
to exacerbate it). See Doc. 353 at16 (quoting Trial Tr. at 2079:4-12.).
III. ALTERNATIVELY, THE COURT SHOULD AMEND THE JUDGMENT
PURSUANT TO RULES 52(b) AND 59(e)
A. The Court should remove Open Investments from the judgment.
13 See Doc. 353 at 15-16.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 21 of
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Issue is not waived.14 The City contends that “Open waived any affirmative defense that
Open Investments is not liable under the City’s fraudulent inducement claim.” Doc. 353 at 17.
The statement betrays the City’s confusion as to critical distinctions—one between prima facie
case and affirmative defense, and the other between jury-determined liability and Court-
determined restitution.
First, it is the plaintiff that bears the burden of proof with respect to the elements of its
claim—including the remedy it demands. The suggestion that insufficiency is instead an
affirmative defense wrongly foists the burden—of proof and preservation—onto Defendant Open
Investments.
Second, whether Open Investments waived its challenge to the City’s prima facie case
establishing the former’s liability is a matter addressed elsewhere. At issue here is a different
question: Whether Open Investments has waived its challenge to the Court-determined
restitution award owed by that Defendant. And that answer is clear: No such waiver occurred, as
Open Investments has asserted that it owes no restitution from the first moment the case reverted
to the Court following the jury’s verdict on liability only. Indeed, because Open Investments was
a guarantor of the contract and properly a party as long as the breach of contract claim remained
in play, its liability was coextensive with Open International’s as to the City’s contract-related
claims, and its grouping as to liability alongside Open International under the “Open” shorthand
was largely academic. Once the election was made, restitution became squarely a matter for the
Court to decide.
14 See Doc. 353 at 17-18.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 22 of
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Evidence does not support restitution judgment against Open Investments.15
There are two Defendants in this case, grouped together by a single shorthand for purposes of a
jury trial on liability only. Even if the Court were to determine that failing to object to that
shorthand resulted in waiver of Open Investments’ right to insist upon a Defendant-specific
liability finding, that waiver must not extend to the bench trial on the equitable matter of
restitution. On that question, the Court determines both the law and those facts that are necessary
to the restitution finding and which were not determined by the jury. Palace Expl. Co. v.
Petroleum Dev. Co., 316 F.3d 1110, 1119 (10th Cir. 2003) (“[T]he court is bound by the jury's
determination of factual issues common to both the legal and equitable claims.”). And when a
claim is split between legal and equitable aspects for which the Court reserves some role in the
factfinding, that authority comes by way of Rule 52, which requires findings of fact and
conclusions of law. Thus, in Allianz Life Ins. Co. of N. Am. v. Muse, the Court held that it would
“submit to the jury [plaintiff’s] fraud claims, and also an interrogatory as to whether [defendant]
misrepresented relevant facts relating to his health, but would reserve the question of whether the
Policy should be rescinded for determination by the Court as necessary.” 2020 WL 6298080, at
*8 (W.D. Okla. Oct. 26, 2020). Based on the jury’s determination against the plaintiff, the
“necessity of additional evaluation and determination of the equitable remedy of rescission”
under Rule 52 obviated by that verdict. Id. “No equitable issue remained to be considered, and,
therefore, no findings or conclusions were required other than to simply state the outcome.” Id.
Likewise, in Yaffa v. SunSouth Bank, when defendant argued that “the court has not provided
15 See Doc. 353 at 17-18.
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sufficient findings of fact and conclusions of law to support the equitable remedy of rescission
and requests that the court’s findings be amended,” the court pointed to the background section
of its order to supplement its earlier order granting equitable relief as necessary “[t]o the extent
the facts as found by the jury's verdict and adopted by the court in granting the requested
equitable relief were not set forth in sufficient detail for purposes of Fed. R. Civ. P. 52[.]” 2016
WL 10536038, at *1 n.5 (N.D. Fla. Sept. 15, 2016). And in Loselev v. Schilling, the court
recognized that, “[a]s the jury has now resolved the legal claims in this action, the Court must
make findings of fact and conclusions of law as to [plaintiff’s] equitable claims to the extent that
the Verdict did not resolve those claims.” 2014 WL 905521, at *4 (M.D. Fla. Mar. 7, 2014).
The Court must not evade its post-verdict factfinding role in this case regarding the
restitution owed by each defendant. But that journey through the trial and restitution hearing
record will be a swift read, as there is no evidence whatsoever to support a restitution award
against Open Investments.
B. The Court erred in deciding that the doctrine of laches does not apply.16
There is nothing “improper” about Defendants’ request for reconsideration of an
erroneous legal decision under Rule 59. But see Doc. 353 at 18. Indeed, this is one of the primary
functions of Rule 59—to cure in the trial court a clear error of law that otherwise would require
an appeal. See Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (noting
that relief under Rule 59(e) is appropriate where the movant demonstrates (1) an intervening
change in the controlling law, (2) new evidence previously unavailable, or (3) the need to correct
16 See Doc. 353 at 18-20.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 24 of
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clear error or prevent manifest injustice) (emphasis added). Nor are Defendants shooting from
the hip in suggesting that a successful laches defense “eliminates (or, at a minimum, diminishes)
the restitution award.” But see Doc. 353 at 20. A laches defense, when successful, works as a bar
to a plaintiff’s claim. See Johnson & Johnson, 380 P.3d 150, 154 (Colo. 2016) (“Courts have
interpreted the laches defense to signify so unreasonable a delay in the assertion of and attempt
to secure equitable rights as to constitute in equity and good conscience a bar to recovery.”);
Bristol Co., LP v. Osman, 190 P.3d 752, 755 (Colo. App. 2007) (“Laches is an equitable defense
that acts to bar an award of pre-suit damages.”). And the Tenth Circuit has inventoried the
numerous cases that have applied the laches doctrine to bar claims when, like here, “the
defendant has expended substantial time and effort during the delay that the defendant's claim
could defeat.” See Biodiversity Conservation All. v. Jiron, 762 F.3d 1036, 1091–92 (10th Cir.
2014).17
17 The Biodiversity Conservation Court cited the following cases as examples (all footnotes,
ellipses, and brackets omitted): “Jicarilla [Apache Tribe v. Andrus], 687 F.2d 1324, 1338-39
(10th Cir.1982) (noting that if the plaintiffs' delayed NEPA claim were successful and would
thereby cancel defendants' leases, defendants would be prejudiced because of expenditures to
improve the land and the “loss of future profits”); Southside Fair Hous. Comm. v. City of New
York, 928 F.2d 1336, 1355–56 (2d Cir.1991) (concluding if a claim seeking withdrawal of the
property sale were granted, defendants would suffer “significant financial loss” having spent
millions of dollars to develop land for a synagogue). For example, a defendant's substantial
completion of a challenged project during the delay period can constitute prejudice. See, e.g.,
Apache Survival Coal. v. United States, 21 F.3d 895, 913-14 (9th Cir.1994) (affirming a district
court's application of laches because plaintiffs brought a claim “only after substantial work on
the project had been completed,” resulting in “undue prejudice” to the Forest Service); Citizens
& Landowners Against the Miles City/New Underwood Powerline v. Sec'y, U.S. Dep't of Energy,
683 F.2d 1171, 1177 (8th Cir.1982) (concluding defendants suffered prejudice because a power
line was complete and operating, and a successful NEPA challenge would require significant
expenditure of time and resources to reroute the power line, and result in power shortages during
the rerouting); see also Park Cnty. Res. Council, Inc. v. USDA, 817 F.2d 609, 618 (10th
Cir.1987) (noting the alleged prejudice did not merit laches because the project was “not
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C. The Court should amend its judgment to discard restitution for the City’s labor
and third-party costs, and to reflect the benefit Defendants conferred upon the
City.
1. The City is not entitled to reimbursement of its out-of-pocket costs.
No binding admissions made.18 The City contends that, because Defendants’ damages
expert acknowledged that the City’s third-party consulting and labor costs were compensable
categories owed as restitution, it “cannot now claim error” or “disavow its prior concessions via
its experts.” Doc. 353 at 22-23. The only case cited for this proposition does not support it and
concerns instead the unrelated question whether an expert can be an agent of a party such that it
should not be subject to a nonparty subpoena under Federal Rule of Civil Procedure 45. See
Sines v. Darling Ingredients, Inc., 2022 WL 1554824, at *16 (D.N.M. May 17, 2022).
This dearth of authority is unsurprising, as there is a world of difference between a
(binding) judicial admission and a (non-binding) evidentiary admission. “Judicial admissions are
formal concessions in the pleadings, or stipulations by a party or its counsel, that are binding on
the part of the party making them.” Bianco v. Hultsteg AB, 2009 WL 347002, at *12 (N.D. Ill.
Feb. 5, 2009) (quoting Keller v. United States, 58 F.3d 1194, 1198 n. 8 (7th Cir. 1995)). Indeed,
“they are ‘not evidence at all but rather have the effect of withdrawing a fact from contention.’”
Id. (quoting Wright & Miller, Federal Practice and Procedure: Evidence § 6726). Portions of
testimony that may be adverse to a party’s position are instead evidentiary admissions; “[t]hey do
not remove a particular fact of contention, rather, those admissions constitute evidence that,
substantially completed”), overruled on other grounds by Vill. of Los Ranchos De Albuquerque
v. Marsh, 956 F.2d 970, 973 (10th Cir.1992) (en banc).”
18 See Doc. 353 at 22-23.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 26 of
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along with all the other evidence, may be considered in determining a fact in dispute.” Bianco,
2009 WL 347002, at *12. And federal courts around the country are clear that an expert’s
evidentiary admissions are not binding on the sponsoring party. See Sparling v. Doyle, 2016 WL
236266, at *5 (W.D. Tex. Jan. 20, 2016) (“[A]t most the statement by a defense expert is an
evidentiary admission, and not a judicial admission.”); Columbia Gas Transmission, LLC v. An
Easement to Construct, Operate & Maintain a 20-inch Gas Transmission Pipeline Across
Properties in Washington Cnty., Pennsylvania, 2017 WL 2985085, at *4 (W.D. Pa. Mar. 27,
2017) (holding that expert testimony was not a judicial admission binding on the party); Long v.
Fairbank Farms, Inc., 2011 WL 2516378, at *11 (D. Me. May 31, 2011) (same).
Finally, to the extent that the City suggests that the testimony of Open’s expert included
legal rather than factual admissions, that argument fails on its own terms. See Casas Off.
Machines, Inc. v. Mita Copystar Am., Inc., 961 F. Supp. 353, 360 (D.P.R. 1997) (denying
estoppel effect of expert testimony, as “the opinion of an expert witness regarding a matter of
law is not binding on the court”).
No answer for Defendants’ arguments.19 On the merits, the City has declined to engage
with Defendants’ arguments: (1) That Trimble itself framed the decision to pursue damages or
restitution as an either/or proposition, and (2) that the Court should have inventoried the City’s
substantial share of the fault en route to a finding about which of its labor costs were
unreasonable in light of its misallocation of resources.
19 See Doc. 353 at 21-23.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 27 of
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2. The City is not entitled to the one-sided restitution that provides an impermissible
windfall.20
Regarding the one-sided restitution award that provided an unearned windfall, the City
wants to have it both ways—by denying Defendants an offset to the restitution award reflecting
the benefit enjoyed by the City, and by cherry-picking among authorities to do so. On one hand,
the City relies on Rice v. Hilty, 38 Colo. App. 338 (1976)—a case applying the Restatement
(First) of Restitution that plainly demanded mutual restitution, even in cases of fraud. On the
other hand, it relies on the Restatement (Third) that ostensibly loosens this mutuality demand.
Basic principles of fairness and estoppel preclude a litigant from receiving the better end of two
incompatible doctrines—each of which provides the necessary glue for its own argument to hold
together.
Finally, it is no small irony that the City, having just argued that an expert may bind its
sponsor with its admissions, has failed to see the boomerang come back around. As Defendants
explained in their motion and the City now fails to see, the City’s own expert explained that:
since the City utilized the partially functional billing system for approximately 29
months, we considered the fact that it utilized the software for 12.08% of a 20-
year useful life (which we understand from Jon Brock is a reasonable life-span for
this type of billing system). We multiplied the implied utilization rate (12.08%) to
the total present value of the costs expended ($11,382,465) and subtracted the
product ($1,375,381) from the total present value to account for the amount of
time the City utilized OSF, albeit with limited functionality.
Seigneur’s “Report of Economic Damages Analysis” at 13; see also id. at Schedule A (reflecting
~$1.375 million as “[a]mount that [the City] Benefitted from Software in Use”).
20 See Doc. 353 at 24.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 28 of
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There is no dispute that, whatever the imperfect functionality of Defendants’ software at
the time the City terminated the agreement, it provided the City with some benefit. Now, that
benefit much be accounted for by way of an offset to the restitution award.
D. The Court should correct the prejudgment interest award.
1. Prejudgment interest (PJI) is authorized only from the rescission date.21
By insisting upon a right to prejudgment interest (PJI) dating back to the fraudulent
inducement, the City is trying to escape the consequences of its election of rescission (and
restitution) in lieu of contract affirmance (and damages). Each of the cases it cites for support
concerned PJI attached to an award for damages—not restitution.22 See Frontier Expl., Inc. v.
Am. Nat. Fire Ins. Co., 849 P.2d 887, 893 (Colo. App. 1992) (“We reiterate that the damages
award was based on a finding by the jury of fraudulent concealment and on a provision in the
insurance policy to which the parties bound themselves. That provision states that coverage as to
a particular claim is void in circumstances of Frontier's fraud.”); Arguelles v. Ridgeway, 827 P.2d
553, 557–58 (Colo. App. 1991) (“The courts have allowed prejudgment interest under § 5–12–
102(1) in breach of contract cases and actions for misrepresentation. Thus, the Arguelleses are
entitled to pre-judgment interest[.]”) (internal citation omitted); UET RR, LLC v. Comis, 739 F.
App'x 475, 476 (10th Cir. 2018) (“Defendants appeal the district court's award of damages in
favor of plaintiff . . . on its fraud claims about railcar leases.”).
21 See Doc. 353 at 25-26.
22 In fact, the City cut and pasted the same string cite and accompanying parenthetical
explanations as were provided in UET RR, LLC v. Comis, 739 F. App'x 475, 476 (10th Cir.
2018)—itself a case about PJI attached to damages.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 29 of
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It speaks volumes that the City did not even address Defendants’ many cited cases
clarifying, with no uncertainty, that claims seeking rescission and restitution permit of restitution
from the date the rescission was first demanded—that is, when funds were first “wrongfully
withheld.” See Doc. 347 at 28-29.
Finally, the City’s suggestion that Defendants may not challenge the PJI award because
of what it deems to be an admission of its expert borders on the ridiculous. For reasons discussed
supra, the argument ignores the distinction between judicial and evidentiary admissions, which
has added salience where, as here, the “admission” complained of is one of law, not fact.
Anyway, Defendants expert was opining on the integrity of the City’s expert’s method and
math—not his determinations as to when the City’s entitlement to PJI begins.
Using the City’s expert’s methodology with an interest accrual date of July 2, 2021, and
accounting for the “amount of time the City utilized OSF”, the final judgment calculations
should be as follows:
Category Amount
PJI from July 2,
2021 to Mar. 26,
2024
Amount Plus PJI
Through Mar. 26,
2024
Amount Paid to
Open $8,756,659 $2,050,890 $10,807,549
Amount Paid to
Third-Party
Consultants $456,024 $105,914 $561,938
City Labor Cost $ 4,376,969 $1,025,127 $5,402,096
Sub-Total $13,589,652 $3,181,931 $16,771,583
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 30 of
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Minus:
Amount of time
the City utilized
OSF -$1,375,381
Total $15,396,202
2. The City calculated prejudgment interest based, in part, on five months of labor
costs that the Court rejected.23
The City justifies trafficking nearly a million dollars into its labor cost calculations by
glibly asserting that the lesser sum that the Court actually awarded reflects “simply an oversight
by the Court” that the City then inexplicably aims to correct by making a Rule 59 motion of its
own in a footnote. See City Response at 23-24 & n. 8 (“The City respectfully requests that the
Court enter an amended judgment reflecting the amount of $6,568,998 in labor costs through
June 15, 2021 and in order to reconcile the total amount calculated by the City’s expert to
include pre-judgment interest through March 26, 2024.”). Local Rules forbid the practice, and
the time to bring such motion has expired. See Local Rule 7.1(d) (“A motion shall not be
included in a response or reply to the original motion. A motion shall be filed as a separate
document.”); see also Fed. R. Civ. P 59(e) (“A motion to alter or amend a judgment must be
filed no later than 28 days after the entry of the judgment.”).
Using the City’s expert’s calculations with the dates selected by the Court, and
accounting for the “amount of time the City utilized” Open International’s software, the final
judgment calculations should be as follows:
23 See Doc. 353 at 23-24.
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 31 of
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Category Amount
Amount Plus PJI
Through Apr. 14,
2023
Amount Plus PJI
Through Mar. 26,
2024
Amount Paid to
Open $8,756,659 $ 11,382,465 $12,245,881
Amount Paid to
Third-Party
Consultants $456,024 $537,508 $578,280
City Labor Cost $4,376,969 $5,718,383 $6,153,593
Sub-Total $13,589,652 $17,638,355 $18,977,753
Minus:
Amount of time
the City utilized
OSF -$1,375,381
Total $17,602,372
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 32 of
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CONCLUSION
For the foregoing reasons, Defendants respectfully request that the Court grant their
respective motions. See Docs. 302, 347.
Dated: May 28, 2024 Respectfully submitted,
/s/ Jeffrey Sandman
Laurie.Daniel@webbdaniel.law
Jeff.Sandman@webbdaniel.law
WEBB DANIEL FRIEDLANDER LLP
75 14th Street NE
Suite 2450
Atlanta, Georgia 30309
Attorneys for Open International, LLC
and Open Investments, LLC
CERTIFICATE OF SERVICE
I hereby certify that on this May 28, 2024, the foregoing was electronically filed with the
Clerk of Court using the Court’s electronic filing system and that a copy of the foregoing was
sent to all counsel of record via same in compliance with the Federal Rules of Civil Procedure
and the Local Rules of this Court.
/s/ Jeffrey Sandman
Jeffrey Sandman
Webb Daniel Friedlander LLP
Case No. 1:21-cv-02063-CNS-SBP Document 357 filed 05/28/24 USDC Colorado pg 33 of
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