HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 240 - Open's Motion In Limine
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 and OPEN INVESTMENTS, LLC
Defendants/Counterclaim Plaintiff.
OPEN’S MOTION IN LIMINE
Motions in limine “permit the Court to issue rulings in advance of trial regarding the
admissibility of certain pieces of evidence, thereby preventing the uncertainty and delay caused
by litigating such questions during trial.” Olsen v. Owners Ins. Co., 2022 U.S. Dist. LEXIS
97824, at *2 (D. Colo. 2022). Defendants and Counterclaimant Open International, LLC and
Open Investments, LLC (together, “Open”) respectfully move in limine to exclude from trial
arguments, testimony, and information that either (I) were not properly disclosed or (II) are
irrelevant in light of the Court’s other pretrial rulings; (III) to resolve an evidentiary matter under
Rule 801; and (IV) to exclude prejudicial evidence of pre-contractual misrepresentations if the
City elects to affirm the parties’ contract. Open conferred with the City about these requests by
phone on August 29, 2023 and by email thereafter. The City opposes the requested relief.
I. THE COURT SHOULD EXCLUDE FROM TRIAL UNDISCLOSED AND LATE-
DISCLOSED INFORMATION AND EXHIBITS.
The City seeks to present at trial two remedial theories that it never disclosed as well as
late-disclosed documents and tangible things about which Open did not have an opportunity to
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take discovery. “If a party fails to provide information . . . as required by Rule 26(a) or (e), the
party is not allowed to use that information . . . at a trial, unless the failure was substantially
justified or is harmless.” Fed. R. Civ. P. 37(c). For the reasons set forth below, the City’s
failures of disclosure were not justified or harmless, and the Court should exclude from trial
undisclosed and late-disclosed information and evidence.
First, the Court should exclude evidence and arguments of undisclosed remedial theories.
Throughout this case, the City has disclosed just two remedial theories. In a series of Rule 26
disclosures served over the course of more than a year, the City consistently sought rescission for
its breach of contract and tort claims—i.e., fraudulent inducement and, later, negligent
misrepresentation. See Sept. 9, 2021 Discl. (Ex. 1) at 7; Sept. 30, 2022 Discl. (Ex. 2); Nov. 14,
2022 Discl. (Ex. 3) at 2. In the alternative, the City sought “to recover its actual damages
suffered as a result of Open International’s breach.” The City reiterated the same two theories,
tied to the same claims, in the Final Pretrial Order, which “may not be amended.” Dkt. 230 at
ECF page 7, 40-41. The City has always and only sought rescission for fraudulent inducement
and negligent misrepresentation; it never sought or disclosed legal damages for those claims.
Two weeks after the final pretrial conference, however, the City asserted for the first time
in its election-of-remedies brief that it may seek legal “damages caused by Open’s
misrepresentations.” Dkt. 233 at ECF page 10. This out-of-the-blue assertion—inadequate and
prejudicially late as a Rule 26(e) supplemental disclosure—did not include a computation of the
measures of legal damages that the City imagines for its tort claims. And, unaware of these
theories, Open of course had no opportunity to take discovery on tort damages. “There would
clearly be prejudice” to Open if the City may “go forward with presenting damages in its case
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when it so clearly has not made even a rudimentary attempt at disclosing a damages theory and,
at the very least, disclosed a lump sum amount requested.” Nutritional Biomimetics, LLC v.
Empirical Labs Inc., 2018 U.S. Dist. LEXIS 217389, at *15 (D. Colo. 2018). Open “now has no
way of defending against the methodology or implementation of the unknown damages theory or
prepar[ing] to meet it, if required, with evidence of its own.” Id. at *15-16; see also Colo. Perf.
Corp. v. Mariposa Assocs., 754 P.2d 401, 408-09 (Colo. App. 1987) (noting that same measure
of damages is not applied to breach of contract and fraudulent inducement of contract1).
In shaping its discovery and litigation strategy, Open relied on the City’s disclosure of
two remedies—rescission or contract damages subject to contractual limitations. To permit the
City to spring all-new tort-damages theories so near to trial would be manifestly unjust, and any
effort to cure that harm, if it could be cured, would necessarily disrupt the October 23, 2023 trial
date. Id. Request 1—The Court should exclude undisclosed evidence and arguments about
damages for the City’s tort claims. Fed. R. Civ. P. 37(c).
Second, the Court should exclude a late-disclosed USB drive. Fact discovery closed
November 14, 2022, Dkt. 107, but on December 16, 2022, the City disclosed a USB drive that it
claims Open provided to the City, the contents of which the City made available to Open April 3,
2023. The City disclosed the USB drive and its contents after the close of discovery despite
questioning multiple Open witnesses about the drive during depositions months before discovery
ended. Open, in contrast, did not have access to the drive in order to propound discovery about it
or obtain deposition testimony to understand, e.g., how the City allegedly received the drive or
1 Likewise, the City proposes jury instructions for its undisclosed damage theories for fraud and negligent
misrepresentation that differ entirely from the instruction for its disclosed contract damages.
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whether and how the City used it. Request 2—The Court should exclude at trial the use of the
late-disclosed USB drive and its contents that the City knew about during discovery but didn’t
disclose until well after discovery ended. Fed. R. Civ. P. 37(c).
Third, the Court should exclude the use of dozens of Spanish-language exhibits the City
proffers but for which it has not disclosed certified translations. Because jurors may not read or
understand foreign languages, “[i]t is clear, to the point of perfect transparency, that federal court
proceedings must be conducted in English.” United States v. Abousleman, 2014 U.S. Dist.
LEXIS 204827 at *5-6 (D.N.M. 2014) (quotation omitted, collecting cases) (excluding from
evidence Spanish-language “documents without English translations”). “Clearly, the fact finder
must be able to read and comprehend the documents and exhibits tendered.” Id. Request 3—
The Court should not admit foreign-language exhibits at trial without a certified translation that
all jurors can read and understand, id.; Fed. R. Evid. 403, and because the City has not disclosed
certified translations that Open can review and assess for accuracy, the City’s proffered Spanish-
language exhibits should be excluded entirely at trial. Fed. R. Civ. P. 37(c).2
II. THE COURT SHOULD EXCLUDE EVIDENCE AND ARGUMENT BEARING
ON ISSUES THE CITY CANNOT PURSUE AND THE JURY CANNOT DECIDE.
The City’s evidence should be limited at trial to issues the jury may properly resolve
based on the Court’s prior rulings. Thus, the Court should exclude evidence or argument about
contract damages that fall outside the applicable contractual limitation of liability and about
equitable rescission as a remedial theory.
2 The objectionable documents include more than 50 documents with Spanish-language content—or, in a handful of
cases, what appear to be machine-translated versions of those documents—identified by the City as its trial exhibits
10, 14, 18, 26, 29, 43, 44, 46, 47, 50, 51, 52, 60, 77, 79, 80, 83, 89, 90, 92, 9 4, 97, 106, 109, 116, 119, 128, 133, 140,
145, 146, 148, 149, 160, 163, 164, 166, 186, 189, 203, 219, 226, 235, 251, 252, 257, 269, 290, 291 , 298, 326, 327,
337, 338, 341.
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The Court observed at summary judgment that there is no dispute that contract damages
in this case are governed by overlapping limitations of liability, including a bar on consequential
damages and a cap of the “amount paid to Open in the year preceding the ‘event giving rise to
liability.’” Dkt. 225 at 15-16. Nevertheless, the Court denied summary judgment because the
parties apply these limitations differently. Id. at 16.
Under its construction of the governing limitations, the City contends its contract
damages are limited to $4,645,921.35 it paid to Open and third parties in the 12 months
preceding May 19, 2021, plus the right to keep $1,086,033 earned by Open that the City retained
as security. See Dec. 7, 2022 Ltr. (Ex. 4) at 1-2. Open contends the City’s damages are capped
at $2,354,003.74 the City paid to Open in the 12 months preceding this litigation, offset by the
$1,086,033 in funds the City already holds. Evidence bearing on this dispute of fact is all that
will be relevant to the jury’s determination of contract damages if the City previals, yet the City
intends to offer expert testimony of nearly $28,000,000 in contract damages, including lost
profits, payments to third-parties, and overhead—all of which are doubly barred by the
consequential damages limitation. See Dkt. 150-4 (City damages expert report) at ECF page 19.
Evidence of unrecoverable damages is irrelevant and prejudicial. See Too Tall Inc. v.
Sara Lee Bakery Grp., Inc., 2009 U.S. Dist. LEXIS 140651, at *3, *6 (D.N.M. 2009) (granting
motion to exclude evidence of damages other than legally recoverable damages). While the City
claims tens of millions of dollars of loss and has caused tens of millions of dollars in losses to
Open’s reputation, operations, and bottom line, presumably neither party can offer evidence of
contractually unrecoverable damages to garner sympathy or seize some other rhetorical
advantage. Request 4—The Court should exclude evidence as to the City’s measure of damages
Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 5 of 9
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other than payments to Open “under the [MPSA] during the twelve (12) months prior to the
event giving rise to liability” because evidence of damages beyond that limitation is irrelevant
and would prejudice Open. Dkt. 6 (MPSA) at ECF page 34; see also Fed. R. Evid. 402 & 403.
The City also seeks to present evidence and argument to the jury regarding equitable
rescission even though a party has no “right to a jury trial [when] electing rescission.” McKinney
v. Gannett Co., 1987 U.S. App. LEXIS 7167, at *2-4 (10th Cir. 1987); Kline Hotel Partners v.
Aircoa Equity Interests, Inc., 729 F. Supp. 740, 744-45 (D. Colo. 1990) (“The federal rule has
historically been that rescission is equitable in nature and no right to a jury attaches”; if a party
seeks “rescission, equity cloaks the claims and they are triable to the court”); see also Dkt. 232 at
4-5 & Dkt. 236 at 6-7 (Open briefs regarding jury right and rescission). During conferral, the
City agreed that it will not offer evidence on the measure of rescission damages and
acknowledged the jury may not enter a rescission award. Yet the City intends to offer evidence
about rescission as a concept, despite the fact that the jury may not consider claims for, let alone
the remedy of, rescission. Request 5—The Court should exclude evidence or argument
regarding the remedy of rescission that is irrelevant to the issues properly before the jury and will
create confusion for the jury and prejudice to Open. Fed. R. Evid. 402 & 403.
III. THE COURT SHOULD DEEM STATEMENTS OF THE CITY’S TMG AND
VANIR AGENTS AS STATEMENTS OF THE CITY UNDER RULE 801.
The City should not be permitted to lodge hearsay objections to exclude statements of its
agents from the companies TMG and Vanir. In a sworn declaration to the Court, the Deputy
City Attorney stated, “In January 2021, the City retained TMG . . . . The City (including the
City’s executive team and the City’s counsel) and TMG individuals worked together closely and
continually like any other City employees.” Dkt. 58-1 ¶¶ 6-7. On this basis, the City argued
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repeatedly to the Court that, as a whole, “TMG was the functional equivalent of a City
employee.” Dkt. 58 at 2, 4, 10-11. Similarly, the City tendered a sworn statement of
Dr. Michelle Frey, formerly of Vanir Construction, stating that, while at Vanir, she served as
“the Project Manager for the City of Fort Collins” on the project at issue in this case. Dkt. 67-1
¶¶ 2-3. The City also represented to the Court that “Vanir Individuals were the Functional
Equivalents of City Employees,” identifying in particular Dr. Frey and her colleague Andrew
Amato, and explaining that “they worked intimately and continuously with the City to manage
the project,” “use[d] City email addresses,” and “communicated confidentially with City
employees, executives, and attorneys.” Dkt. 67 at 4-5. The City argued that “Dr. Frey was the
City’s project manager—a position previously and subsequently held by other City
employees”—she had “decision-making authority for the City,” and she “worked at the City
offices, in the same room with City employees, on a daily basis when on-site, and spent the
majority of her weekly hours as the Project Manager for the City.” Id. at 4 (emphases in
original).
Notwithstanding these sworn statements and signed briefs arguing that TMG and Vanir
personnel functioned as City employees, the City now declines to stipulate that TMG and Vanir
personnel were employees or agents of the City in its work with Open on the project.
Request 6—The Court should hold that statements of TMG and Vanir personnel in the course of
their work for the City on the project with Open, if offered by Open, fall within the hearsay
exclusion for statements of an opposing party. See Fed. R. Evid. 801(d)(2)(D).
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IV. MISREPRESENTATION EVIDENCE SHOULD BE EXCLUDED IF THE CITY
ELECTS TO AFFIRM THE CONTRACT AND SEEK CONTRACT DAMAGES.
In the Tenth Circuit, to avoid waste, confusion, and prejudice, courts require plaintiffs to
elect before trial between inconsistent claims for contract rescission and for contract damages.
Kline, 729 F. Supp. at 743. Open has moved to compel the City to elect between its claims for
contract damages and its claims for rescission. Dkt. 232 & Dkt. 236 (Open briefs on election of
remedies). If the City elects to forego rescission based on its claims for fraudulent inducement
and negligent misrepresentation and, instead, to pursue damages based on its contract claims,
then evidence of pre-contract misrepresentations by Open would be irrelevant to the contract
claims before the jury and prejudicial to Open. The only issues for the jury to determine would
be the obligations of the contract, the parties’ respective performance or non-performance of
those obligations, and damages flowing from a party’s failure to satisfy its obligations.
Request 7—If the City elects to pursue damages based on its contract claims, the Court should
exclude any evidence of pre-contract misrepresentations by Open. See Fed. R. Evid. 402 & 403.
Dated: September 8, 2023 Respectfully submitted,
s/ Paul D. Swanson
Paul D. Swanson, pdswanson@hollandhart.com
Kevin C. McAdam, kcmcadam@hollandhart.com
Alexander D. White, adwhite@hollandhart.com
Alexandria E. Pierce, aepierce@hollandhart.com
Holland & Hart LLP
555 17th Street, Suite 3200
Denver, Colorado 80202
Telephone: 303-295-8000
Attorneys for Open International, LLC and Open
Investments, LLC
Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 8 of 9
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CERTIFICATE OF SERVICE
I hereby certify that on the 8th day of September, 2023, 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/ Paul D. Swanson
30459864
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Exhibit 1
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.: 21-cv-02063-DDD
CITY OF FORT COLLINS,
Plaintiff/Counterclaim Defendant,
v.
OPEN INTERNATIONAL, LLC
Defendant/Counterclaim Plaintiff,
and
OPEN INVESTMENTS, LLC,
Defendant.
CITY OF FORT COLLINS’ INITIAL RULE 26(a)(1) DISCLOSURES
Plaintiff the City of Fort Collins (the “City”), by and through its undersigned attorneys,
submit its Initial Rule 26(a)(1) Disclosures as follows:
In making its initial disclosures, the City is disclosing the information presently known to
it. The City continues to investigate the issues raised in this case, and thus reserves the right to
add, modify, or in any other way amend the disclosures made herein, consistent with any
information obtained or otherwise discovered. By making these disclosures, the City does not
intend to waive and expressly reserves any and all privileges, objections, and defenses available
to it with respect to the matters herein. The City also expressly reserves its right to rely on
additional information or sources of information in support of its claims or defenses.
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A. INDIVIDUALS LIKELY TO HAVE DISCOVERABLE INFORMATION
1. Past and present employees, personnel, representatives, affiliates, and/or record
custodians of the City, including but not limited to the individuals listed below. These individuals
may be contacted through undersigned counsel. The City is the plaintiff/counterclaim defendant
in this action and these individuals are expected to have knowledge and information regarding the
allegations set forth in the Complaint and defenses to Open International, LLC’s (“Open
International”) Counterclaims, including without limitation communications with Open
International as well as the various agreements entered into in reliance of Open International’s
misrepresentations.
a. Darin Atteberry – former City Manager. Mr. Atteberry is expected to have
information relevant to oversight of the project and to the parties’ relationship in
his role as the former City Manager.
b. Coy Althoff – Program Lead/Utilities Asset Manager. Mr. Althoff is expected to
have information relevant to the Defendants’ role and representations, as well as
various change requests signed by the parties.
c. Lisa Rosintoski – former Deputy Director: Utilities Customer Connections. Ms.
Rosintoski is expected to have information relevant to communications with
Defendants regarding the project and other various aspects of the relationship
between the parties.
d. Gerry Paul – Purchasing Director. Mr. Paul is expected to have information relevant
to his duties as Purchasing Director as they relate to the parties’ relationship,
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including but not limited to the agreements between the parties, change requests,
purchase orders exchanged, and attempts to resolve their outstanding disputes.
e. Mike Beckstead – former Chief Financial Officer. Mr. Beckstead is expected to
have general knowledge regarding the project, payments to Open, and Defendants’
actions.
f. Colman Keane – former Broadband Executive Director. Mr. Keane is expected to
have knowledge regarding Connexion and Defendants’ failure to deliver promised
functionalities.
g. Dan Coldiron – former Chief Information Officer. Mr. Coldiron is expected to have
relevant information regarding his communications with Defendants regarding
their work, promises, and failure to provide as-promised functionalities.
h. Kevin Gertrig – former Utilities Executive Director. Mr. Gertrig is expected to
have relevant information regarding his communications with Defendants
regarding their work, promises, and failure to provide as-promised functionalities.
i. M. Travis Storin – Chief Financial Officer. Mr. Storin is expected to have relevant
information regarding his communications with Defendants regarding their work,
promises, failure to provide as-promised functionalities, and discussions with Open
to resolve disputes.
j. Theresa Connor – Interim Executive Director of Utilities; Deputy Director, Water
Engineering and Field Services Manager. Ms. Connor is expected to have relevant
information regarding communications with Defendants regarding their work,
promises, and failure to provide as-promised functionalities.
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k. Kevin Wilkins – Chief Information Officer. Mr. Wilkins is expected to have
relevant information regarding his communications with Defendants regarding
their work, promises, and failure to provide as-promised functionalities.
l. Andrew Amato – former Project Manager. Mr. Amato is expected to have relevant
information and knowledge regarding his communications with Defendants,
Defendants’ representations and failure to provide promised functionalities,
outstanding issues, troubleshooting, and City staffing.
m. Michelle Frey – former Project Manager. Ms. Frey is expected to have relevant
information and knowledge regarding his communications with Defendants,
Defendants’ representations and failure to provide promised functionalities,
outstanding issues, troubleshooting, and City staffing.
2. Past and present employees, personnel, representatives, affiliates, and/or record
custodians of Open International, including but not limited to the individuals listed below. These
individuals may be contacted through Defendants’ counsel. Open International is a
defendant/counterclaim plaintiff in this action and these individuals are expected to have
knowledge and information related to the City’s allegations raised in the Complaint and the
allegations raised by Open International in its Counterclaims.
a. Hernando Parrott – President. Mr. Parrott has knowledge and information
regarding Open International’s response to the City’s request for proposal, Open
International’s software and technological capabilities, the various agreements
entered into between the parties, and communications between the parties in
attempt to resolve their disputes.
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b. William Corredor – Chief Executive Officer. Mr. Corredor has knowledge and
information regarding Defendants’ technological capabilities and the parties’
relationship.
c. Dwayne Bishop - Director of Professional Services, Milestone Utility Services
d. Juan Pablo Nunez - Vice President of Professional Services. Mr. Nunez is expected
to have knowledge and information regarding communications between the parties.
e. Edith Mercado – Chief Financial Officer, Milestone Utility Services. Mr. Mercado
is expected to have relevant information regarding payments made by the City to
Defendants and the additional scope of payments requested by Defendants in order
to complete the promised functionalities.
f. Jeff Valadez - North America Head of Sales
g. Benito Pardini - Vice President of Product & Technology
h. Linda Lee Lukas - Account Manager, Milestone Utility Services
i. Diego F. Lopez - Project Manager/Project Management Office Director. Mr. Lopez
has knowledge and information related to the project, various Change Requests,
and Open International’s inability to provide the promised functionalities.
j. Jairo Contreras - PMO Leader
3. Past and present employees, personnel, representatives, affiliates, and/or record
custodians of Open Investments, LLC (“Open Investments”), including but not limited to William
Corredor. These individuals may be contacted through Defendants’ counsel. Open Investments
is a defendant in this action and these individuals are expected to have knowledge and information
related to the City’s allegations raised in the Complaint.
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4. Past and present employees, personnel, representatives, affiliates, and/or record
custodians of TMG Consulting, including but not limited to Greg Galluzzi and Aaron McClure,
9210 Honeycomb Dr., Austin, Texas 78737, (512) 757-1156. These individuals may be contacted
through undersigned counsel. Mr. Galluzzi and Mr. McClure are expected to have information
related to the City’s allegations raised in the Complaint, including without limitation Defendants’
misrepresentations and failure to provide the functionalities promised under the parties’
agreements.
5. Any witnesses listed by Defendants.
6. Any witness for purposes of impeachment, rebuttal, or authentication.
B. DOCUMENTS, ELECTRONICALLY STORED INFORMATION, AND
TANGIBLE THINGS
The following categories of documents are in the possession of the City and available for
inspection upon request and after entry of a Protective Order:
1. Documents related to the City’s Request for Proposal 8697 for “Vendor Selection
and Implementation of a Comprehensive Solution for Utilities/Broadband Billing (CIS/OSS)”
released on February 10, 2018 and subsequent diligence and engagement process.
2. Documents and communications related to the agreements entered into between the
parties.
3. Documents related to the notice of disputes and discussions between the parties to
resolve their disputes.
4. Internal, non-privileged City documents and communications regarding
implementation, issues with Open International’s performance, troubleshooting, and Open
International’s failure to provide promised functionalities.
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5. Communications with Open International.
6. Documentation regarding the software and services provided by Open
International.
7. Documents related to the efforts of the City to mitigate and repair damages caused
by the failure of Opens International’s software and services.
This list of categories does not include any documents to be disclosed by any other party,
and documents produced in response to discovery requests, any documents attached to a deposition
transcript as an exhibit, any document necessary for rebuttal or impeachment purposes, etc. The
City reserves its right to supplement this listing as discovery proceeds, and further reserves its right
to lodge appropriate objections as to the admissibility of any of the documents listed herein.
C. DAMAGES
The City seeks to rescind the Agreements and First Amendment between the City and
Defendants due to Open International’s breach of contract and fraudulent inducement. Rescission
would require Open International to return the amounts the City has previously paid,
approximately $8.6 million. The City alternatively seeks to recover its actual damages suffered as
a result of Open International’s breach of the parties’ agreements. The City further seeks to recover
its costs incurred in this action, including expert witness fees and attorney’s fees, pursuant to
applicable law and the parties’ agreements, together with pre-judgment and post-judgment interest.
D. INSURANCE AGREEMENTS
None.
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Dated this 9th day of September, 2021.
DORSEY & WHITNEY LLP
s/ Case Collard
Case Collard
Andrea Ahn Wechter
Maral J. Shoaei
1400 Wewatta Street, Suite 400
Denver, Colorado 80202-5549
Telephone: (303) 629-3400
Fax: (303) 629-3450
E-mail: collard.case@dorsey.com
E-mail: wechter.andrea@dorsey.com
E-mail: shoaei.maral@dorsey.com
Attorneys for Plaintiff
CERTIFICATE OF SERVICE
I hereby certify that on September 9, 2021, I caused the foregoing document to be served
as an attachment to email addressed to the following:
Paul D. Swanson
Chris D. Mack (admission pending)
Hannah E. Armentrout
HOLLAND & HART LLP
555 17th Street, Suite 3200
Denver, Colorado 80202
(303) 295-8578
(303) 416-8814
Email: pdswanson@hollandhart.com
cdmack@hollandhart.com
hearmentrout@hollandhart.com
Attorneys for Defendants
s/ Carmen Cisneros
Dorsey & Whitney LLP
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Exhibit 2
Case No. 1:21-cv-02063-CNS-SBP Document 240-2 filed 09/08/23 USDC Colorado pg 1
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.: 21-cv-02063-CNS-MEH
CITY OF FORT COLLINS,
Plaintiff/Counterclaim Defendant,
v.
OPEN INTERNATIONAL, LLC
Defendant/Counterclaim Plaintiff,
and
OPEN INVESTMENTS, LLC,
Defendant.
CITY OF FORT COLLINS’S SEVENTH SUPPLEMENTAL RULE 26(a)(1)
DISCLOSURES
Plaintiff the City of Fort Collins (the “City”), by and through its undersigne d attorneys,
submits its Seventh Supplemental Rule 26(a)(1) disclosures as follows. These disclosures are
made based on information presently known to it. The City continues to investigate the issues
raised in this case, and thus reserves the right to add, modify, or in any other way amend the
disclosures made herein, consistent with any information obtained or otherwise discovered. By
making these disclosures, the City does not intend to waive and expressly reserves any and all
privileges, objections, and defenses available to it with respect to the matters herein. The City also
expressly reserves its right to rely on additional information or sources of information in support
of its claims or defenses.
C. DAMAGES
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The City seeks to rescind the Agreements and First Amendment between the City and
Defendants due to Open International’s breac h of contract and fraudulent inducement. Rescission
would require Open International to return the amounts the City has previously paid, approximately
$8.7 million. The City alternatively seeks to recover its actual damages suffered as a result of Open
International’s breach of the parties’ agreements. These actual damages include (1) the costs,
encompassing labor and software, the City has incurred and will continue to incur to implement and
maintain a functional, replacement billing system for its telecommunications services, (2) the costs
encompassing labor and software, the City has incurred and will continue to incur to implement a
functional, replacement billing system for its other utilities, (3) additional labor costs and overhead
expenses that the City has incurred as a result of Open’s failure to implement a functional billing
system, and (4) lost efficiencies and profits as a result of Open’s failure to implement an integrated
billing system. The City further seeks to recover its costs incurred in this action, including expert
witness fees and attorney’s fees, pursuant to applicable law and the parties’ agreements, together with
pre-judgment and post-judgment interest.
Dated this 30th day of September, 2022.
DORSEY & WHITNEY LLP
s/ Maral J. Shoaei
Case Collard
Andrea Ahn Wechter
Maral J. Shoaei
1400 Wewatta Street, Suite 400
Denver, Colorado 80202-5549
Telephone: (303) 629-3400
Fax: (303) 629-3450
E-mail: collard.case@dorsey.com
E-mail: wechter.andrea@dorsey.com
E-mail: shoaei.maral@dorsey.com
Attorneys for Plaintiff
Case No. 1:21-cv-02063-CNS-SBP Document 240-2 filed 09/08/23 USDC Colorado pg 3
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3
CERTIFICATE OF SERVICE
I hereby certify that on September 30, 2022, I caused the foregoing document to be
served as an attachment to email addressed to the following:
Alexander D. White
Paul D. Swanson
Hannah E. Armentrout
Anna Matejcek
HOLLAND & HART LLP
555 17th Street, Suite 3200
Denver, CO 80202
Telephone: (303) 295-8578
adwhite@hollandhart.com
pdswanson@hollandhart.com
hearmentrout@hollandhart.com
amatejcek@hollandhart.com
Attorneys for Defendants
s/ Maral J. Shoaei
Dorsey & Whitney LLP
Case No. 1:21-cv-02063-CNS-SBP Document 240-2 filed 09/08/23 USDC Colorado pg 4
of 4
Exhibit 3
Case No. 1:21-cv-02063-CNS-SBP Document 240-3 filed 09/08/23 USDC Colorado pg 1
of 5
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.: 21-cv-02063-CNS-MEH
CITY OF FORT COLLINS,
Plaintiff/Counterclaim Defendant,
v.
OPEN INTERNATIONAL, LLC
Defendant/Counterclaim Plaintiff,
and
OPEN INVESTMENTS, LLC,
Defendant.
CITY OF FORT COLLINS’S EIGHTH SUPPLEMENTAL RULE 26(a)(1) DISCLOSURES
Plaintiff the City of Fort Collins (the “City”), by and through its undersigne d attorneys,
submits its Eighth Supplemental Rule 26(a)(1) disclosures as follows. These disclosures are made
based on information presently known to it. The City continues to investigate the issues raised in
this case, and thus reserves the right to add, modify, or in any other way amend the disclosures
made herein, consistent with any information obtained or otherwise discovered. By making these
disclosures, the City does not intend to waive and expressly reserves any and all privileges,
objections, and defenses available to it with respect to the matters herein. The City also expressly
reserves its right to rely on additional information or sources of information in support of its claims
or defenses.
Case No. 1:21-cv-02063-CNS-SBP Document 240-3 filed 09/08/23 USDC Colorado pg 2
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2
C. DAMAGES
The City seeks to rescind the Agreements and First Amendment between the City and
Defendants due to Open’s breach of contract, fraudulent inducement, and negligent
misrepresentation. Rescission would require Open International to return the amounts the City has
previously paid, approximately $8.7 million, as well as internal and external labor costs that the
City would not have incurred but-for Open’s actions, and its lost net revenue. These amounts are
further set forth in the expert report of Ron Seigneur.
The City alternatively seeks to recover its actual damages suffered as a result of Open’s
breach of the parties’ agreements. These actual damages include (1) payments made to Open for
services and product that the City did not receive1; (2) the costs the City has incurred and will
continue to incur to implement and maintain a functional, replacement billing system for its
telecommunications services, (3) the costs the City has incurred and will continue to incur to
implement a functional, replacement billing system for its other utilities, (4) overhead expenses
that the City has incurred as a result of Open’s failure to implement a functional billing system,
and (5) lost efficiencies and net revenue as a result of Open’s failure to implement an integrated
billing system. The specific amounts for categories 2-5 are further set forth in the expert report
of Ron Seigneur.
The City further seeks to recover its costs incurred in this action, including expert witness
fees and attorney’s fees, pursuant to applicable law and the parties’ agreements, together with pre-
judgment and post-judgment interest.
1 See CFC_217096.
Case No. 1:21-cv-02063-CNS-SBP Document 240-3 filed 09/08/23 USDC Colorado pg 3
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3
Dated this 14th day of November, 2022.
DORSEY & WHITNEY LLP
s/ Maral J. Shoaei
Case Collard
Andrea Ahn Wechter
Maral J. Shoaei
1400 Wewatta Street, Suite 400
Denver, Colorado 80202-5549
Telephone: (303) 629-3400
Fax: (303) 629-3450
E-mail: collard.case@dorsey.com
E-mail: wechter.andrea@dorsey.com
E-mail: shoaei.maral@dorsey.com
Attorneys for Plaintiff
CERTIFICATE OF SERVICE
I hereby certify that on November 14, 2022, I caused the foregoing document to be
served as an attachment to email addressed to the following:
Alexander D. White
Paul D. Swanson
Hannah E. Armentrout
Anna C. Van de Stouwe
Alexandria E. Pierce
HOLLAND & HART LLP
555 17th Street, Suite 3200
Denver, CO 80202
Telephone: (303) 295-8578
adwhite@hollandhart.com
pdswanson@hollandhart.com
hearmentrout@hollandhart.com
acvandestouwe@hollandhart.com
aepierce@hollandhart.com
Attorneys for Defendants
s/ Maral J. Shoaei
Dorsey & Whitney LLP
Case No. 1:21-cv-02063-CNS-SBP Document 240-3 filed 09/08/23 USDC Colorado pg 4
of 5
4
Case No. 1:21-cv-02063-CNS-SBP Document 240-3 filed 09/08/23 USDC Colorado pg 5
of 5
Exhibit 4
Case No. 1:21-cv-02063-CNS-SBP Document 240-4 filed 09/08/23 USDC Colorado pg 1
of 3
1400 Wewatta Street | Suite 400 | Denver, CO | 80202-5549 | T 303.629.3400 | F 303.629.3450 | dorsey.com
CASE L. COLLARD
(303) 352-1116
collard.case@dorsey.com
December 7, 2022
VIA E-MAIL
Paul D. Swanson
Holland & Hart
555 17th Street, Suite 3200
Denver, CO 80202
(303) 295-8578
Email: pdswanson@hollandhart.com
Re: City of Fort Collins v. Open International, et al.
Dear Paul,
I am writing in response to your November 28, 2022 letter regarding the City’s contractual
damages as set forth in its Eighth Supplemental Rule 26(a)(1) Disclosures.
As an initial matter, we disagree with your interpretation and application of Section 12.1 of
the MPSA to the City’s damages. For instance, we disagree that the “twelve (12) months prior to
the event giving rise to liability” is based on the City’s initiation of this lawsuit, as you have stated.
Rather, for the damages sought by the City this 12-month period should be based on Open’s May
19, 2021 Notice of Default which was the event which signaled the end of the parties’ discussions
of a negotiated resolution and gave rise to Open’s liability. In this 12-month period, the City paid
Open $3,385,483.35. Relatedly, the retainage amount withheld by the City totaling $1,086,033 is
not barred as a contractual damage by the City as it was neither paid nor payable in the 12-month
period since Open did not deliver a functional system. In other words, the City is able to retain
this amount outside of this contractual provision.
Moreover, we disagree that the following categories identified in Mr. Seigneur’s report and
the City’s Supplemental Disclosures are consequential damages:
(1) the costs the City has incurred and will continue to incur to implement and maintain a
functional, replacement billing system for its telecommunications services,
(2) the costs the City has incurred and will continue to incur to implement a functional,
replacement billing system for its other utilities, and
(3) overhead expenses that the City has incurred as a result of Open’s failure to implement
a functional billing system.
Rather, these are direct damages that the City incurred as a result of Open’s breach of the parties’
agreements. Additionally, contrary to Open’s interpretation of the MPSA, Section 12.1 does not
limit recovery of amounts paid or payable solely to Open. Rather, Section 12.1 just simply says
“paid or payable”. Accordingly, the City is entitled to recover amounts paid or payable to any third
party concerning the parties’ agreement for the 12-month period prior. Thus, in addition to the
above amounts, the City is entitled to recover an additional $1,260,438.
Case No. 1:21-cv-02063-CNS-SBP Document 240-4 filed 09/08/23 USDC Colorado pg 2
of 3
Paul Swanson
December 7, 2022
Page 2
Accordingly, to the extent the City intends to seek expectation and restitution damages
under its contractual claim, it is entitled to recover a minimum of $5,731,954.35, plus attorney’s
fees and costs. This, however, does not limit or impact the City’s damages sought under a
rescission theory.
Furthermore, Open’s demanded that the City identify the application of contractual
limitations in its disclosures, but Open has not done that. Please confirm that Open will similarly
update its disclosures to clarify how Open contends it is due $3,826,719.14 in spite of contending
that there is a contractual limitation of $2,354,003.74 as identified in your November 28 letter.
Sincerely,
Case L. Collard
Case No. 1:21-cv-02063-CNS-SBP Document 240-4 filed 09/08/23 USDC Colorado pg 3
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