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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 Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 1 of 9 2 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 Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 2 of 9 3 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. Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 3 of 9 4 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. Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 4 of 9 5 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 6 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 Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 6 of 9 7 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). Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 7 of 9 8 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 9 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 Case No. 1:21-cv-02063-CNS-SBP Document 240 filed 09/08/23 USDC Colorado pg 9 of 9 Exhibit 1 Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 1 of 9 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. Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 2 of 9 2 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, Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 3 of 9 3 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. Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 4 of 9 4 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. Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 5 of 9 5 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. Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 6 of 9 6 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. Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 7 of 9 7 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. Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 8 of 9 8 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 Case No. 1:21-cv-02063-CNS-SBP Document 240-1 filed 09/08/23 USDC Colorado pg 9 of 9 Exhibit 2 Case No. 1:21-cv-02063-CNS-SBP Document 240-2 filed 09/08/23 USDC Colorado pg 1 of 4 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 Case No. 1:21-cv-02063-CNS-SBP Document 240-2 filed 09/08/23 USDC Colorado pg 2 of 4 2 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 of 4 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 of 5 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 of 5 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 of 3