HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 320 - City Response Mot Judgment And BriefIN 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.
CITY OF FORT COLLINS’ RESPONSE TO DEFENDANTS’ MOTION FOR JUDGMENT
UNDER RULE 52(c) AND BRIEF REGARDING REMEDY OF RESCISSION [DKT. 314]
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The Court should deny Open’s Motion in its entirety. First, Open’s argument that
the City waived its right to rescind the Agreements is procedurally improper and
meritless.1 Waiver of rescission was tried to the jury and Open waived any objection to
that approach. In any event, the City promptly rescinded. In other words, the jury found,
based on a myriad of evidence, that the City did not waive its right to rescind. Second,
Open’s new argument that Open Investments is precluded from liability was waived long
ago and the jury’s verdict found “Open”—defined as both Open entities—liable for fraud.
Open never raised this issue in pretrial filings or at trial and, most importantly, agreed to
jury instructions that assigned liability to both Open entities in a single instruction. Third,
the City is entitled to all the amounts it seeks for rescinding the Agreements because they
are the natural and proximate result of Open’s fraudulent conduct and are necessary to
restore the City to its position prior to Open’s fraud. Moreover, setoff is unavailable to
Open because Open cannot take advantage of its own fraud. Nevertheless, Open is not
entitled to setoff because it has no legitimate amount that qualifies as a setoff, and, in any
event, the City retained no benefit from Open’s product. Finally, the City is not seeking
attorney’s fees under the Agreements. As it disclosed at the November 17 hearing, the
City is entitled to recover its attorney’s fees under equitable principles to restore it to the
position it held before Open’s fraudulent conduct.
ARGUMENT
A. OPEN’S REQUESTS UNDER RULE 52(c) ARE IMPROPER, WERE ALREADY
DECIDED BY THE JURY, AND WERE OTHERWISE WAIVED.
1 Capitalized terms have the same meanings as in the City’s Closing Brief [Dkt. 315].
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Open’s “Rule 52(c)” motion, reserved for “nonjury” trials, is the improper procedural
vehicle for its first two requests. This case was tried to a jury, including the specific issues
Open raises, and Rule 50(a)—the equivalent of Rule 52(c) for jury trials—applies.
1. “Recession Waiver”: Open previously conceded that “rescission waiver”
was tried to the jury by arguing it in its oral Rule 50(a) motion during trial (which was
denied). Trial Tr. at 1227:22-1228:24, 1993:8-9. Open conceded the point again by filing
both a written Rule 50(a) and a Renewed Rule 50(b) Motion asserting the same waiver
arguments. See Dkt. 282 at 13; Dkt. 302 at 12, n.5 (asserting waiver of rescission). This
Court warned Open that the Rule 50(b) motion is “a one-shot deal, so I don’t expect to
see that in another motion later….” Ex. 1, 11/17/23 Hearing Tr. at 131:2-4. Open’s attempt
to get another shot via Rule 52(c) should be denied for this reason alone.
Open’s “rescission waiver” arguments were, in fact, tried to the jury. Verdict [Dkt.
296]. In denying Open’s oral Rule 50(a) motion, this Court made clear that waiver of
rescission was for the jury to decide:
The waiver claim…I find those to be questions of fact…. I find that to be
within the realm of the jury’s decision…. [T]here’s evidence from which they
could determine that the City should have moved for rescission or said they
were rescinding earlier and didn’t…. I find that to be a question for the jury.
Trial Tr. at 1236:14-22. As to what the Court would decide, the Court explained that it
would determine any rescission damages following the verdict and election. Id. at
1238:12-1239:4. The Court made clear that the issue of “waiver” would be included as
“part of the first set of instructions” to the jury prior to the City’s election of remedies and
clarified—upon Open’s counsel’s specific request—that the waiver instruction would be
the CJI instruction and would encompass waiver of rescission. Id. at 1239:8-1240:5.
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Despite knowing that the Court had determined all waiver defenses (whether of fraud or
rescission) went to the jury under a single waiver instruction, Open failed to timely object
to the waiver instruction—Instruction No. 23, [Dkt. 285] at 24—at the charging conference
and waived the issue.2 Trial Tr. at 1944:24-1945:8; see Farm Bureau Life Ins. Co. v. Am.
Nat’l Ins. Co., 408 F. App’x 162 (10th Cir. 2011) (“[A] party waives its right to present a
legal argument on appeal by failing to object to [the] jury instruction[s] which authorized
the verdict.”) (citations omitted). On November 3rd, the jury rejected any waiver defense.3
The waiver defense was appropriately sent to the jury because it is a fact issue
and appropriately handled with a single instruction. In fact, all of the purported facts relied
on in Open’s Motion to assert a waiver of rescission are the same facts that the jury
considered when denying Open’s affirmative defense of waiver. See Mot. [Dkt. 314] at 2-
4 (alleging what the City knew and when, despite purportedly continuing to use the
product). The same facts were also the basis of Open’s prior arguments to the Court
related to both waiver of rescission 4 and its equitable defenses precluding the City’s right
to rescission. See Trial Tr. at 1227:22-1228:24, 1989:17-22. Even if the Court were to
consider the waiver question (and it should not for the reasons herein), the Court should
2 Open never even proposed a separate “rescission waiver” instruction and did not submit
one in its “tendered and rejected” instructions. See Dkts. 284, 289, 290, 294.
3 Open attempts to make “rescission waiver” a Court issue by pointing to a statement
made by the Court during jury deliberation that generally refers to the Court’s
implementation of a rescission remedy and says nothing specific about “rescission
waiver.” Dkt. 314 at 1; Trial Tr. at 2080:15-21. By that point, all waiver questions had
already gone to the jury.
4 Open argued during its Rule 50 motion at the close of the City’s case: “That as soon as
a party has knowledge of facts sufficient to seek rescission, so knowledge of facts
sufficient to claim fraud in the inducement, that’s when they had to rescind.” Trial Tr.at
1228:12-16.
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find the City did not waive its right to rescission to be consistent with its prior rulings on
laches.5
Open apparently seeks to reframe “rescission” as a completely separate “claim”
and further requests this Court’s factual findings on Open Investments’ liability not for
fraudulent inducement but for a “judgment of rescission.” Mot. [Dkt. 314] at 1. Of course,
“rescission” is not a separate “claim” but merely the remedy the City elected after
prevailing on its fraudulent inducement claim and with the knowledge that the remedy
remained available.6 Under Colorado law, a party’s “right to rescind and sue [is] waived
[only if] the defrauded party with full knowledge, intentionally condoned the fraud,” and
that “whether fraud has been waived involves questions of fact, particularly the fact of
intent [] properly for the jury.” Bankers Trust Co. v. International Trust Co., 108 Colo. 15,
31 (1941). Open claims Gladden and Elk River apply two different waiver tests, then
seeks to argue that the Gladden test means the City’s duty to rescind is tied to a lower
5 Open asked, and the Court clarified, that the only defenses it would address—rather
than the jury—were laches and unclean hands. Id. at 1946:1-21. When denying those
equitable defenses the Court found that there was not sufficient evidence to justify
application of those defenses because “the City doesn’t have adequate knowledge to
decide what to do until there were further reviews of the product and its delivery.” Id. at
1992:6-22 (emphasis added). In other words, the Court’s finding is consistent with the
jury verdict. Since the City did not have “adequate knowledge” to trigger laches, Open’s
argument that the Court should now find that the City had “sufficient” knowledge to waive
rescission must be denied.
6 Open actually never pled waiver of a rescission remedy, another waiver fatal to its
argument. See Dkt. 194, Open’s February 14, 2023 Answer to the City’s Amended
Complaint, (“Seventh Affirmative Defense: The City’s claims are barred by the
doctrines of waiver and estoppel.”); See also Rudd v. Rogerson, 162 Colo. 103, 106-07,
424 P.2d 776, 778-79 (1967) (Defendant abandoned affirmative defense that the
plaintiff waived right to rescind because “the question of waiver of that right was not
placed in issue by the pleadings in the action.”).
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threshold (its discovery of problems with Open’s software) instead of its discovery of the
substantial and material facts constituting Open’s fraud. Mot. at 3. But Open cites no case
which recognizes the existence of two separate tests, and Gladden and Elk River are not
in conflict. See In re Mascio, 454 B.R. 146, 151 (D. Colo. March 30, 2011) (applying
Gladden and Elk River to the waiver of a fraud claim and explaining that, “[f]ull knowledge
[is] ‘knowledge of the substantial and material facts constituting the fraud’”).
Nor can Open argue that the City did not seek to rescind promptly. See, e.g.,
America’s Collectibles Network, Inc. v. Sterling Commerce (Am.), Inc., 2016 U.S. Dist.
LEXIS 195369 at *56, (E.D. Tenn., Sept. 7, 2016) (continued use of software did not waive
rescission because returning it would have damaged party’s business).7 In May 2021, the
City completed its functional matrix review. On May 28, 2021, the City notified Open that
it intended to rescind. T.E. 66. Any claimed ambiguity was eliminated by July 2, 2021,
when the City filed suit. Dkt. 6. Open’s conflation of the discovery of problems with its
software performance and the discovery that those problems were caused by its
misrepresentations should be rejected.8 Even if Open’s assertions of the City’s pre-suit
conduct had merit (they do not) the City did rescind as soon as possible with only partial
knowledge. Open actively sought to hide its misrepresentations, and the City only
obtained “full knowledge” of Open’s fraud during discovery, when it uncovered Open’s
internal grading system. T.E. 74. Moreover, neither party treated the contract as
7 See also Tigerdirect, Inc. v. Manhattan Assocs., 2006 U.S. Dist. LEXIS 114699, *10-11
(S.D. Fla. Nov 6, 2006) (failure to return software did not bar rescission).
8 United States Welding, Inc. v. Tecsys, Inc., 2016 U.S. Dist. LEXIS 193130 *10 (D. Colo.
Sept. 6, 2016) (party discovered software flaws and requested additional resources, but
did not discover the “misrepresentations tied to th[o]se events”).
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continuing—the City moved as quickly as possible to obtain a replacement, and Open
immediately stopped supporting its software and adding updates. Trial Tr. at 881:4-5. As
soon as a new software was available, the City ceased its use. Id. at 808:11-13. Finally,
the jury already considered Open’s argument that the City did not rescind promptly or
clearly, and it found that the City did not waive its claim. Verdict [Dkt. 296] at 2.
2. Liability of Open Investments: Open’s arguments concerning the liability
of Open Investments were waived long ago. Open never raised the issue at trial or in
Open’s Rule 50(a) motion (see generally Trial Tr. at 1225:24-1232:23, 1988:23-1990:19,
1993:8-1994:23 (lacking any such argument)). Even Open’s written Rule 50(a) motion
failed to raise any lack of liability for Open Investments and instead referred to defendants
“collectively” as “Open.” See Dkt. 282. Accordingly, that argument was already waived
when raised for the first time in Open’s “Renewed” Written Rule 50(b) motion. Dkt. 302
at 6-8 (asserting lack of liability of Open Investments). The Tenth Circuit is clear that
“issues not raised in an initial Rule 50(a) motion for judgment as a matter of law may not
be asserted in a post-judgment motion for judgment as a matter of law under Rule 50(b).”
Garcia v. Aerotherm Corp., 1999 U.S. App. LEXIS 33395, *10 (10th Cir. 1999); Fed. R.
Civ. P. 50(a) and (b); Brillhart v. Philips Elecs. N. Am. Corp., 179 F.3d 1271, 1275 (10th
Cir. 1999) (“Failure to so move precludes a post-trial motion . . . for judgment as a matter
of law....”). Open does not even argue why this jury issue is appropriate for a Rule 52
motion. For these reasons alone, the Court should deny Open’s motion.
Aside from having waived this issue, Open’s argument that this Court should make
factual findings that Open Investments is not liable fails for four reasons:
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First, Open’s liability for fraudulent inducement, resulting in harm to the City, was
determined by the jury. Verdict [Dkt. 296]. Open failed to separate liability for each entity
or object to references to a single “Open” entity at any point during the trial and has long
waived this issue (this waiver is separate from the failure to raise this on Rule 50).9 See
Knowlton v. Teltrust Phones, Inc., 189 F.3d 1177, 1183 (10th Cir. 1999) (holding that
issue not raised until post-verdict motion is waived).
Here, Open did not seek separate liability instructions for each defendant, nor did
it object to the Court’s proposed opening jury instructions provided prior to trial or to the
final opening instructions filed on October 23rd [Dkt. 275], which stated: “The defendants
are Open International LLC and Open Investments LLC, known as Open” and further
provided “Open submitted its response to the RFP.” (emphasis added). Open also failed
to object during the Court’s live opening instructions, stating: “The defendants are Open
International, LLC and Open Investments, LLC. We will now just refer to them as Open
or Open International.” Trial Tr. at 20:1-3. Open failed to object to the closing jury
instructions’ use of “Open”, as defined in the opening instructions, including in Instruction
No. 15 (Elements of Liability—Fraudulent Inducement). See Final Jury Instructions [Dkt.
285]; see also Trial Tr. at 1941:3-1970:20 (charging conference).10 Most importantly,
Open did not object to the verdict form, which applied liability jointly to the entities. Dkt.
9 Open failed to raise this issue in a Rule 12 motion, Rule 56 motion, motion in limine, trial
brief, any other pre-trial or trial related motions, in objections to jury instructions, or
objections to the verdict form. Indeed, Open actively and continuously referred to itself as
a single “Open.”
10 In fact, Open agreed to the City’s request that element 5 for Instruction No. 15 on
Fraudulent Inducement be clarified to state “Open’s representation” rather than just “the
representation.” Trial Tr. at 1943:4-10.
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296. There is a verdict against both Open entities and Open cannot “undo” the verdict
against one of them here. See Farm Bureau, 408 F. App’x at 172.
Second, Open’s focus on the contractual guarantee misses the point. The jury’s
finding of Open’s liability for fraud had nothing to do with any provision in the MPSA. See
Instruction No. 15 [Dkt. 285] at 16 (“Elements of Liability—Fraudulent Inducement”).
Rather, it required that “Open made a false representation of a past or present fact to the
City,” among other things. See id. (lacking any element about guarantee under a
contract). Simply, Open Investments’ liability is not absolved by rescission.
Third, Open repeatedly represented itself “collectively” or “together” as “Open” or
“Defendants” throughout the entirety of the case, including in the Notice of Removal [Dkt.
1], Answer 11 [Dkt. 13], Partial Motion for Summary Judgment [Dkt. 125], Amended
Answer [Dkt. 194], Final Pretrial Order [Dkt. 230], Motion in Limine [Dkt. 240], Trial Brief
[Dkt. 256], and written Rule 50(a) motion [Dkt. 282]. After spending the entire case and
trial treating both entities as “Open,” Open’s focus, for the first time, on parent
corporations and subsidiaries [Dkt. 314 at 6, n.3] does not impact the Verdict. Open
Investments and Open International were for all purposes acting as one “Open”
defendant, agents, and/or alter egos. Open’s counsel affirmed this treatment in both
Opening Statements and Closing Arguments, asking the jury to find for “Open” because
“Open” was honest. Trial Tr. at 117:13-119:2, 2029:21-2041:7.
Fourth, Open cannot ask this Court to reconsider the evidence and make a
11 Despite Open’s misrepresentation, the City’s Complaint (and Amended Complaint)
referred to the Open defendants “jointly” as “Open” and asserted the Fraudulent
Inducement claim against “Open.” See Compl. [Dkt. 6]; Am. Compl. [Dkt. 192].
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separate determination of Open Investments’ liability when it was not an issue at trial.
See Glass Containers Corp. v. Miller Brewing Co., 643 F.2d 308 (5th Cir. 1981) (finding
that “[a] litigant cannot strategically lie behind the log until after the trial and receipt of
evidence [and] argument … before raising an issue not found in the pleadings nor
included in the pretrial order and then raise it when it is too late for his opponent to do
anything about it. The manifest prejudice of such tactics would make a shambles of the
efficacy of pretrial orders and a fair trial."). Even so, the evidence at trial demonstrated
that the two Open entities acted as one. The fraudulent representations made about
Open’s capabilities, experience, and OSF product were made by “Open” as a whole.
Indeed, Open’s representations, including those in the RFP Response, asserted “30
years of experience developing and implementing customer information, billing and field
services solutions in worldwide recognized comparable utility & telecommunications
companies” with a “reputation for agility and innovation” (T.E. 5 at 8) along with decades
of OSF development and implementation. While Open now argues that any
representations only concerned “Open International,” William Corredor admitted that
Open International was founded only in 2015—just 3 years prior to the RFP Response in
2018 and was set up to pursue the U.S. market in which Open had no customers. Trial
Tr. at 1694:6-20. Open’s representations about its capabilities, its 30+ years of experience
in the industry, and the capabilities of OSF (in existence since 1988 or 1989) were being
made by and about “Open” as a whole, including Open Investments (which was in
existence since 1987, first as C-NIX and then as Open since 1997) and Open International
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(newly founded in 2015).12 Id. at 1685:12-1687:3; 1695:16-22. Open’s motion must be
denied.
B. The City is Entitled to the Full Amount it Seeks Without Any Setoff.
Contrary to Open’s argument, the City is entitled to recover more than the amounts
paid to Open for rescinding the Agreements due to Open’s fraud. As set forth in the City’s
Closing Brief [Dkt. 315], rescission is an equitable remedy meant to “restore the
conditions existing before the agreement was made”. See Trimble v. City & Cty. of
Denver, 697 P.2d 716, 723 (Colo. 1985).13 To be put back in the position the City was in
before Open’s fraud, the City is entitled to recover not only amounts paid to Open, but
also (1) amounts paid to third-party consultants, (2) the amount for the reasonable value
of services that it incurred during the Project because of Open’s fraud, and (3) its lost net
revenue.
First, Open cannot now disavow its prior concessions (via its expert), that in
addition to payments to Open, the City is entitled to amounts paid to third-party
consultants and the reasonable value of services that incurred during the Project. See
T.E. 744 at Fig. 7; Sines v. Darling Ingredients, Inc., 2022 U.S. Dist. LEXIS 88397, *53-
54 (D. N.M. May 17, 2022) (testifying expert "acts as an agent of a proponent, because
the proponent means the Court and the opposing party to rely on the expert’s [opinions]
12 Had Open timely raised this issue, even more evidence would have come in regarding
the fact that the entities are not actually separate for purposes of liability. Ex. 2, W.
Corredor Dep. Tr. at 12:13-18 (“it’s pretty much the same company”); Ex. 3, H. Parrott
Dep. Tr. at 47:5-11 (even before Open International was founded in 2015 it existed as a
“brand” and “[a]s a name.”).
13 For brevity and pursuant to Fed. R. Civ. P. 10(c), the City incorporates relevant
arguments from its Closing Brief herein.
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as the proponent’s own") (citation omitted). Second, when rescinding a contract, amounts
beyond just repaying contract payments are recoverable in Colorado and each of the
City’s requested categories align to categories previously awarded under Colorado law.
Dkt. 315 at 15 (referencing EarthInfo, Inc. v. Hydrosphere Resource Consultants, Inc.,
900 P.2d 113, 119 (Colo. 1995) (for amounts paid to Open); Rice v. Hilty, 38 Colo. App.
338, 340-41 (1976) (for amounts paid to third-party consultants, City’s labor costs, and
lost net revenue)). Finally, none of these are benefit-of-the-bargain damages. This is
evident by the City’s damages expert’s report which delineates rescission amounts and
contract amounts. See T.E. 743 at Sch. A. The Court should grant all four categories to
the City, with pre- and post-judgment interest, incurred costs and attorney’s fees.
Open is not entitled to any setoff for either the City’s temporary efforts to use
Open’s product or the purported value of Open’s services provided during the Project.14
As further addressed in the City’s Closing Brief, in light of the fraud finding, the Court need
not account for the 29 months the City limped along with Open’s system until it finally
terminated the contract and implemented a replacement (the City’s efforts likely mitigated
significant damage for lost revenue for which Open may have also been liable). A party
seeking setoff under circumstances involving fraud “is precluded by general equitable
principles from deriving any benefit from the fraud perpetrated by him.” Arguelles v.
Ridgeway, 827 P.2d 553, 557 (Colo. App. 1991) (emphasis added). Any deduction for the
14 Open’s reliance on Transamerica Mortg. Advisors v. Lewis, 444 U.S. 11 (1979) is
without merit. There, the parties rescinded an agreement based on a statute and thus,
the remedy was controlled by language in the statute. Here, there is no applicable statute
providing similar limitations as in Transamerica.
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City’s partial use of Open’s malfunctioning product would not accomplish complete equity
when Open fraudulently induced the City into the relationship to begin with. Dkt. 315 at 4
(citing cases).
Notwithstanding the preclusion, Open is not entitled to a setoff for the purported
value of services it provided in developing its product because it is irrelevant, conclusory,
and unsupported by evidence at trial.15 Importantly, Open does not have a claim based
on a liquidated amount. Instead, Open is attempting to make a fictional claim for quantum
meruit that it never pled (and thus long waived). Additionally, Open’s rebuttal expert did
no analysis of what Open’s purported setoff for $20,593,951 represents [id. at 14] and
Open failed to present any supporting evidence despite having the opportunity to try to
admit the underlying evidence with a fact witness. See Fox v. Taylor Diving & Salvage
Co., 694 F.2d 1349, 1356 (5th Cir. 1983) (while “[a]n expert is permitted to disclose
hearsay for the limited purpose of explaining the basis for his expert opinion,” he is not
allowed to offer it “as general proof of the truth of the underlying matter”)
Open caused its own purported uncompensated loss by fraudulently inducing the
City into the Agreements. Open’s work provided no benefit to the City, but allowed Open
to complete the development of its product and pursue future US projects like Tualatin.
Accordingly, the Court should deny Open’s request for any setoff because otherwise, it
will allow Open to take advantage of its fraud in violation of Colorado law. Arguelles, 827
15 In support, Open relies on Durango Transp., Inc., 807 P.2d 1152, 1154 n.3 (Colo.
1991), but, Durango is distinguishable. Most importantly, Durango did not involve fraud,
only anticipatory repudiation. Id. Open cites cases where a party may get some benefit of
the doubt; Open does not in light of its fraud.
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P.2d at 557.
C. The City is Entitled to its Attorney’s Fees Because of Open’s Conduct.
Despite the City disclosing during the post-trial hearing that it will seek fees as an
equitable remedy (Ex. 1, 11/17/23 Hearing Tr. at 132:6-14), Open argues that the City is
seeking its attorney’s fees under the Agreements. The City is not. Courts in equity have
the ability to grant attorney fees “for dominating reasons of justice.” See Sprague v.
Ticonic Nat’l Bank, 307 U.S. 161, 167 (1939). None of Open’s cited cases regarding the
American Rule are applicable because none involve equity. Equitable actions provide
an exception to the American Rule “where attorney fees are necessary to effect an
adequate remedy.” See, e.g. id. at 164 (holding that the District Court has the power “in
equity suits to allow counsel fees”); In re Appeal of Gadhue, 544 A.2d 1151, 1154 (Vt.
1987) (explaining the exceptions to the American Rule “are flexible [and] not absolute,”
concluding that “[t]o this end, we focus on the historic powers of equity courts to award
attorney’s fees as the needs of justice dictate.”). Here, dominating reasons of justice and
equity allow the Court to award the City’s its attorney’s fees because only by awarding
the City its attorney fees incurred in litigating this action would the City obtain complete
relief and restore it to its status before being fraudulently induced to enter the Agreements
with Open.16 Thus, the Court should deny Open’s relief and instead grant the City all its
reasonable attorney’s fees and costs.
16 While the fee-shifting clause in the parties’ Agreements is no longer enforceable, the
parties did at one point agree to an attorney’s fees clause and this is yet another reason
that granting the City’s fees after it prevails would not be inequitable.
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Respectfully submitted this 22nd day of December, 2023.
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 City of Fort Collins
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CERTIFICATE OF SERVICE
I hereby certify that on December 22, 2023 I caused the foregoing document to be electronically filed via CM/ECF system which will send notification of such filing to all counsel of record.
s/ Wynter Wells
DORSEY & WHITNEY LLP
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Proceedings reported by mechanical stenography ;
transcription produced via computer .
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 21-cv-02063-CNS-SBP
CITY OF FORT COLLINS,
Plaintiff,
vs.
OPEN INTERNATIONAL, LLC, and OPEN
INVESTMENTS, LLC,
Defendants.
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REPORTER'S TRANSCRIPT
Damages Hearing
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Proceedings before the HONORABLE CHARLOTTE N. SWEENEY, Judge,
United States District Court for the District of Colorado,
commencing on the 17th day of November, 2023, in Courtroom
A-702, United States Courthouse, Denver, Colorado.
APPEARANCES
For the Plaintiff:
CASE L. COLLARD and ANDREA A. WECHTER and MARAL SHOAEI, Dorsey
& Whitney LLP, 1400 Wewatta St., Ste. 400, Denver, CO 80202
JOHN R. DUVAL, Fort Collins City Attorney's Office, P.O. Box
580, Fort Collins, CO 80522
For the Defendants:
PAUL D. SWANSON and KEVIN MCADAM and ALEXANDRIA PIERCE,
Holland & Hart LLP, 555 17th St., Ste. 3200, Denver, CO 80201
Sarah K. Mitchell, RPR, CRR, 901 19th Street, Room A252,
Denver, CO 80294, 303-335-2108
Case No. 1:21-cv-02063-CNS-SBP Document 320-1 filed 12/22/23 USDC Colorado pg 2
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Damages Hearing21-cv-02063-CNS-SBP
Sarah K. Mitchell , RPR, CRR
11/17/2023 130
International and Open International in its performance of the
contract where benefits were conferred and exchanged. I
appreciate that that's a big issue, and so we are happy to
brief that, but we -- in light of the rescission election by
the City, we wanted to raise that at the first opportunity.
And then just a procedural note on Rule 50(b)
briefing, we had anticipated we would just file 28 days after
judgment, but because there are these contract issues that
could be submitted to a jury but on which there was no
verdict, looking at the rule and then at case law, we think
we're going to have to file within 28 days after discharge of
the jury. We just wanted to give you a heads-up so you're not
wondering why is Open filing a pre-judgment motion. We're --
just for purposes of preservation, we'll be doing that, and
then standard post-judgment briefing.
THE COURT: And either of these issues have you
talked about with plaintiff's counsel?
MR. SWANSON: We have not had a chance to discuss
these with them. We anticipated that there would be argument
today, and so that's where we were going to raise it, but in
light of the fact that we're not doing that, I wanted to at
least raise those two issues.
THE COURT: I'm not exactly sure -- with respect to
the -- you just say there's contract issues that would be
submitted to the jury. I don't know what those are. If you
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Damages Hearing21-cv-02063-CNS-SBP
Sarah K. Mitchell , RPR, CRR
11/17/2023 131
believe that needs to be done, I don't have any objection with
the Rule 50 motion. I would just note, you know, it's a
one-shot deal, so I don't expect to see that in another motion
later after judgment is entered.
MR. SWANSON: I think the only reason -- the only
thing we would do, Judge, is under Tenth Circuit law, if a
Rule 50(b) is filed before judgment and then the judgment is
entered, the Tenth Circuit has suggested you might need to
just renew that 50(b) so that it is resolved with all the
other post-trial briefing, but we would not be re-briefing the
same issues.
THE COURT: That's fine. I assume on the motion to
dismiss Open Investments, plaintiff, do you want to brief that
or think about it?
MR. COLLARD: I mean, I think you can just deny it,
because it's after a verdict, and there -- the jury
instructions were about Open, which was defined as Open
International and Open Investments, and there's already been a
verdict. You can't dismiss them post verdict. So I think you
can deny it, but if we need to brief it.
THE COURT: All right. I will let you file the
motion so we can get it in writing and do a written order on
it.
MR. SWANSON: And our plan would be to brief that as
part of Rule 50 briefing as to liability for Open Investments,
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Damages Hearing21-cv-02063-CNS-SBP
Sarah K. Mitchell , RPR, CRR
11/17/2023 132
and then as to the rescission remedy we would brief it as part
of this remedial briefing that Your Honor says you'll be
asking for.
THE COURT: All right. Well, you may rethink that in
a second when I tell you the page limits on the briefing.
MR. COLLARD: Your Honor, before you do that, I have
my own little issue that I was going to bring up in argument,
and that is that attorneys' fees are recoverable under
equitable remedies as an equitable remedy, and so the City is
going to be seeking its attorneys' fees as an equitable remedy
as a part of that. And so that's obviously not something that
Mr. Seigneur testified about, but we would -- we will include
that in our briefing. I wanted Open to know about that and
Your Honor to know.
THE COURT: You can have a seat, Mr. Swanson. Thank
you.
All right. The 50(b) issue, you can go ahead and do
that separately. With respect to briefing on rescission and
the damages flowing from that, the briefs will be limited to
15 pages. If I grant attorneys' fees -- I want the attorneys'
fees to come in two parts. One, are they available? If I
award them, then we will brief reasonableness. So don't feel
you need to include all that in the first round. Let's see if
they're available and I award them first. So 15 pages. That
should include your summary of what you think the amounts are.
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Sarah K. Mitchell , RPR, CRR
REPORTER'S CERTIFICATE
I, SARAH K. MITCHELL, Official Court Reporter for the
United States District Court for the District of Colorado, a
Registered Professional Reporter and Certified Realtime
Reporter, do hereby certify that I reported by machine
shorthand the proceedings contained herein at the time and
place aforementioned and that the foregoing pages constitute a
full, true and correct transcript.
Dated this 21st day of November, 2023.
/s/ Sarah K. Mitchell
SARAH K. MITCHELL
Official Court Reporter
Registered Professional Reporter
Certified Realtime Reporter
Case No. 1:21-cv-02063-CNS-SBP Document 320-1 filed 12/22/23 USDC Colorado pg 6
of 6
Exhibit 2
Case No. 1:21-cv-02063-CNS-SBP Document 320-2 filed 12/22/23 USDC Colorado pg 1
of 6
CONFIDENTIAL
1 IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
2
3 Civil Action No.: 21-cv-02063-CNS-MEH
4
CITY OF FORT COLLINS,
5
Plaintiff/counterclaim Defendant,
6
v.
7
OPEN INTERNATIONAL, LLC,
8
Defendant/counterclaim Plaintiff,
9
and
10
OPEN INVESTMENTS, LLC,
11
Defendant.
12
13 ________________________________________________
14
CONFIDENTIAL TRANSCRIPT
15
VOLUME I
16 VIDEOTAPED
DEPOSITION OF: WILLIAM CORREDOR
17
DATE: SEPTEMBER 21, 2022
18
TIME: 1:45 p.m. - 6:10 p.m.
19
TAKEN BY: PLAINTIFF/COUNTERCLAIM DEFENDANT
20
PLACE: BILZIN SUMBERG
21 1450 BRICKELL AVE 23rd FLOOR
MIAMI, FL 33131
22
REPORTED BY: CHELSEA HLAVACH, NOTARY PUBLIC, STATE
23 OF FLORIDA
24
25
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CONFIDENTIAL
Page 2
1 A P P E A R A N C E S:
2
CASE COLLARD, ESQUIRE
3 OF: DORSEY & WHITNEY LLP
1400 Wewatta Street, Suite 400
4 Denver, Colorado 80202-5549
E-mail: collard.case@dorsey.com
5 E-mail: wechter.andrea@dorsey.com
6 Attorneys for the Plaintiff/counterclaim Defendant
7
ANDREA WECHTER, ESQUIRE
8 OF: DORSEY & WHITNEY LLP
1400 Wewatta Street, Suite 400
9 Denver, Colorado 80202-5549
E-mail: collard.case@dorsey.com
10 E-mail: wechter.andrea@dorsey.com
11 Attorneys for the Plaintiff/counterclaim Defendant
12
JOHN DUVAL, ESQUIRE
13 OF: Deputy City Attorney City of Fort Collins, Colorado
Loveland, Colorado, United States
14 City Hall West, 300 LaPorte Avenue
fort Collins, CO 80521
15
Attorneys for the Plaintiff/counterclaim Defendant
16 appeared via Zoom
17
PAUL SWANSON, ESQUIRE
18 OF: HOLLAND & HART LLP
555 17th Street, Suite 3200
19 Denver, CO 80202
Telephone: (303) 295-8578
20 Adwhite@hollandhart.com
Pdswanson@hollandhart.com
21
Counsel for the Defendant/counterclaim Plaintiff
22
23 ALSO PRESENT
24 SARAH STOUT, Videographer
25
Page 3
1 I N D E X
2 * * * * *
3
4 TESTIMONY OF WILLIAM CORREDOR
5
Direct Examination by Ms. Wechter ................ 5
6
CERTIFICATE OF OATH ................................... 209
7 CERTIFICATE OF REPORTER ............................... 210
ERRATA SHEET .......................................... 211
8
9
E X H I B I T S
10
* * * * * *
11
12
Exhibit 398 ........................................... 15
13 (E-mail - May of 2018)
14 Exhibit 399 .......................................... 102
(E-mail)
15
Exhibit 400 .......................................... 125
16 (E-mail)
17 Exhibit 401 .......................................... 136
(E-mail)
18
Exhibit 402 .......................................... 142
19 (E-mail)
20 Exhibit 403 .......................................... 154
(E-mail)
21
Exhibit 404 .......................................... 160
22 (E-mail)
23 Exhibit 405 .......................................... 171
(Invoice)
24
Exhibit 406 .......................................... 184
25 (E-mail)
Page 4
1 Exhibit 407 .......................................... 204
(Letter)
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18 * * * * * *
19 S T I P U L A T I O N S
20 It is hereby stipulated and agreed by and between
21 counsel present for the respective parties, and the
22 deponent, that the reading and signing of the deposition
23 are hereby reserved.
24
25
Page 5
1 P R O C E E D I N G S
2 * * * * * *
3 THE VIDEOGRAPHER: Good afternoon. We are going
4 on the record at 1:45 p.m. on September 21st, 2022.
5 Please note that this deposition is being conducted
6 virtually; quality of recording depends on quality of
7 camera and Internet connection of participants. What
8 is seen from the witness and heard on the screen is
9 what will be recorded. Audio and video recording will
10 continue to take place unless all parties agree to go
11 off the record.
12 This is Media Unit Number 1 of the video recorded
13 deposition of William Corredor in the matter of City
14 of Fort Collins versus Open International, LLC, et al.
15 The location of this deposition is 1450 Brickell
16 Avenue, 23rd Floor, Miami, Florida, and remotely.
17 My name is Sarah Stout, and I am the
18 videographer. The court reporter is Chelsea Hlavach.
19 We are both representing Veritext.
20 Will counsel and all parties present please
21 present -- please introduce themselves and after
22 which, will the court reporter please swear in the
23 witness.
24 MS. WECHTER: Andrea Wechter and Case Collard of
25 Dorsey & Whitney on behalf of Plaintiff, the City of
2 (Pages 2 - 5)
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CONFIDENTIAL
Page 10
1 A. Just like a short executive program where they
2 summarize an MBA in a few weeks.
3 Q. You attended in person there?
4 A. Yes.
5 Q. Okay. Did you receive your master's from that?
6 A. No. It's not a master's. It's a diploma.
7 Q. Okay. Do you have any other degrees or
8 certificates?
9 A. No, not really.
10 Q. Okay. Do you have any licenses?
11 A. No.
12 Q. Okay. Any other educational background?
13 A. No.
14 Q. Okay. What did you do upon graduation from
15 Purdue in 1989?
16 A. 1984.
17 Q. Oh, I'm sorry. '84.
18 A. In 1984 I went back to Colombia and started
19 working for my family, and in 1987 I founded with a friend
20 Open.
21 Q. What did you do for your family?
22 A. Basically work in computers, programmed most of
23 the computers that they had at the time, which were very
24 limited, and did that for about three years.
25 Q. Did your family have a business?
Page 11
1 A. Oh, yeah.
2 Q. What was the business called?
3 A. Several businesses actually. We had a factory
4 that did shoe polish and soaps and shampoos and so on, we
5 had a -- a garments factory also, and we have -- still have
6 an oil plantations from palm oil.
7 Q. All in Cali, Colombia?
8 A. No. Different parts of the country.
9 Q. All in Colombia?
10 A. All in Colombia, yes.
11 Q. Okay. You said 1987 you and some friends
12 founded --
13 A. Just one friend.
14 Q. -- Open?
15 Okay. Who was your friend?
16 A. Orlando Rincon.
17 Q. How do you spell your -- the last name?
18 A. R-I-N-C-O-N.
19 Q. Okay. And how did you know Mr. Rincon?
20 A. I don't really recall. I probably found him at
21 some customer -- I mean, he was one of the -- one of the
22 only people that knew how to program computers at that time
23 and that was my case too. If you go back to 1984, very few
24 people knew anything about computers. So, yeah, chances
25 are we met somewhere and we found out that each other
Page 12
1 existed.
2 Q. You guys met in Colombia?
3 A. Yeah. We met in Colombia.
4 Q. Okay. Tell me about when you founded Open. What
5 was the company -- what was the purpose of the company
6 initially?
7 A. Well, initially it was just computer programming
8 in general, but eventually we got one telecommunications
9 company that asked us to develop the first BSS as they call
10 it in -- in telecommunications as opposed to CIS, which is
11 what they call it in utilities. So very early on we had
12 this customer that wanted a BSS.
13 Q. And I should clarify. Is -- are -- the Open that
14 you founded in 1987, is that Open Investments?
15 A. No. The name has changed over the years.
16 Q. Okay.
17 A. And the structure has also changed over the
18 years, but it's pretty much the same company.
19 Q. What was it founded as?
20 A. It was -- at that time Cnix.
21 Q. How do you spell that?
22 A. That's C-N-I-X. It's a combination of the
23 ceiling which -- on the Unix operating system.
24 Q. Okay. You said BSS. Is that like OSS now?
25 A. No.
Page 13
1 Q. Or --
2 A. No. BSS is -- BSS is business support programs.
3 So that's like the CIS today in the utility but it's called
4 BSS in a telecommunication company.
5 Q. Okay. Would that also have included billing
6 services?
7 A. It would be billing, customer service, and, you
8 know, all the such. And OSS is more like the background,
9 like the back office where you have the operation. So the
10 O is for operations.
11 Q. Okay. So you were doing computer programming in
12 general and then had a telecom company that had this need.
13 When was that?
14 A. '87.
15 Q. Okay. So how did Open progress since then, after
16 that time? Did it -- did it complete that project?
17 A. Yeah, we did, and we learned a lot about the --
18 about the telecommunication -- telecommunication industry,
19 and very soon afterwards there were seven companies that
20 were -- seven cities that were very similar to that one
21 that actually said we want the same software.
22 So that's how we -- and that first version that
23 we wrote that was called SAT ended up in eight different
24 cities.
25 Q. S-A-T?
4 (Pages 10 - 13)
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CONFIDENTIAL
Page 206
1 termination letter.
2 Q. This letter says Open will terminate the contract
3 if the City doesn't cure its breaches, right?
4 A. That is correct.
5 Q. Okay.
6 A. But that's not a termination letter. That's
7 actually Open asking the City for some things to do to be
8 able to continue the project.
9 Q. Well, if the City had not cured the breaches, as
10 you claim, within 30 days, Open would have terminated the
11 contract, right --
12 A. Well, that's --
13 Q. -- per this letter?
14 A. It says here that that would be our intention,
15 yes.
16 Q. That's how the -- this notice provision works,
17 right? That's how that provision in the contract works?
18 A. Yeah. Yeah. Yeah.
19 Q. If there's no cure, it terminates, right?
20 A. If there is no cure, Open has that possibility of
21 terminating the contract, yes.
22 Q. Okay. And you approved sending this letter,
23 right?
24 A. I did.
25 Q. Okay. And by this point you definitely had
Page 207
1 retained counsel?
2 A. Yes.
3 Q. Okay.
4 MS. WECHTER: We're at a good stopping point.
5 I'm not going to finish today.
6 MR. SWANSON: How much time do you think you
7 need?
8 MS. WECHTER: I don't know. I'm going to defer
9 to Case.
10 MR. COLLARD: I don't know.
11 MS. WECHTER: I'm not going to finish today --
12 MR. SWANSON: No. I was going to say though if
13 you --
14 MS. WECHTER: -- with the 4:15, it's five
15 minutes.
16 MR. SWANSON: If you want to talk about though
17 how -- how much time you need, I can just talk to
18 Mr. Corredor --
19 MS. WECHTER: Do you guys want to go off the
20 record?
21 THE VIDEOGRAPHER: Do you guys want to go off the
22 record?
23 MS. WECHTER: Yeah. Let's go off the record.
24 MR. SWANSON: -- and see if we can -- see what we
25 can do.
Page 208
1 THE VIDEOGRAPHER: All parties -- I'm sorry.
2 MR. SWANSON: Yeah. That's fine.
3 THE VIDEOGRAPHER: All parties agree. Okay.
4 6:09 p.m., and we're going off the record.
5 (The deposition adjourned at 6:09 p.m.)
6
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Page 209
1 CERTIFICATE OF OATH
2
STATE OF FLORIDA
3 COUNTY OF MIAMI-DADE
4
5
6 I, CHELSEA HLAVACH, shorthand reporter and Notary
7 Public, State of Florida, certify that WILLIAM CORREDOR,
8 appeared before me and was duly sworn/affirmed Witness my
9 hand and official seal this 21st day of September, 2022.
10
11 Witness my hand and official seal this 4th day of
12 October, 2022.
13
14
15
<%22695,Signature%>
16 Chelsea Hlavach, Notary Public
State of Florida, My Commission:
17 GG352672, Expires: August 11, 2023
18
19
20
21
22
23
24
25
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CONFIDENTIAL
Page 210
1 CERTIFICATE OF REPORTER
2
STATE OF FLORIDA
3 COUNTY OF MIAMI-DADE
4
5 I, CHELSEA HLAVACH, Shorthand Reporter and Notary
6 Public, State of Florida, HEREBY CERTIFY that I was
7 authorized to and did stenographically report the
8 deposition of WILLIAM CORREDOR; that a review of the
9 transcript was requested; and the foregoing transcript,
10 pages 5 through 208, inclusive, is a true and accurate
11 record of my stenographic notes.
12 I FURTHER CERTIFY that I am not a relative,
13 employee, attorney, or counsel to any of the parties, nor
14 am I a relative or employee of any of the parties' attorney
15 or counsel connected with the action, nor am I financially
16 interested in the action.
17 Dated this 21st day of September, 2022.
18
19
20
21
22 <%22695,Signature%>
Chelsea Hlavach, Notary Public,
23 State of Florida at Large
24
25
Page 211
1 I, WILLIAM CORREDOR, the deponent in the above
2 deposition, do hereby acknowledge that I have read the
3 foregoing transcript of my testimony, and state under oath
4 that it, together with any attached Amendment to
5 Deposition pages, constitutes my sworn testimony.
6
7 _____ I have made changes to my deposition
8 _____ I have NOT made any changes to my deposition
9
10 ___________________________________
WILLIAM CORREDOR
11
12
13 Subscribed and sworn to before me this ______ day of
14 _____________________, 20_____.
15 My commission expires: __________________________.
16
17 ___________________________________
NOTARY PUBLIC
18
19
20
21
22
23
24
25
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([KLELW
Case No. 1:21-cv-02063-CNS-SBP Document 320-3 filed 12/22/23 USDC Colorado pg 1
of 6
CONFIDENTIAL
1 IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
2
3 Civil Action No.: 21-cv-02063-CNS-MEH
4
CITY OF FORT COLLINS,
5
Plaintiff/counterclaim Defendant,
6
v.
7
OPEN INTERNATIONAL, LLC,
8
Defendant/counterclaim Plaintiff,
9
and
10
OPEN INVESTMENTS, LLC,
11
Defendant.
12
13
14 ________________________________________________
15 CONFIDENTIAL TRANSCRIPT
16
VIDEOTAPED
17 DEPOSITION OF: HERNANDO PARROTT
18 DATE: SEPTEMBER 20, 2022
19 TIME: 9:10 a.m. - 5:48 p.m.
20 TAKEN BY: PLAINTIFF/COUNTERCLAIM DEFENDANT
21 PLACE: BILZIN SUMBERG
1450 BRICKELL AVE 23rd FLOOR
22 MIAMI, FL 33131
23 REPORTED BY: CHELSEA HLAVACH, NOTARY PUBLIC, STATE
OF FLORIDA
24
25
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CONFIDENTIAL
Page 2
1 A P P E A R A N C E S:
2
CASE COLLARD, ESQUIRE
3 OF: DORSEY & WHITNEY LLP
1400 Wewatta Street, Suite 400
4 Denver, Colorado 80202-5549
E-mail: collard.case@dorsey.com
5 E-mail: wechter.andrea@dorsey.com
6 Attorneys for the Plaintiff/counterclaim Defendant
7
ANDREA WECHTER, ESQUIRE
8 OF: DORSEY & WHITNEY LLP
1400 Wewatta Street, Suite 400
9 Denver, Colorado 80202-5549
E-mail: collard.case@dorsey.com
10 E-mail: wechter.andrea@dorsey.com
11 Attorneys for the Plaintiff/counterclaim Defendant
12
JOHN DUVAL, ESQUIRE
13 OF: Deputy City Attorney City of Fort Collins, Colorado
Loveland, Colorado, United States
14 City Hall West, 300 LaPorte Avenue
fort Collins, CO 80521
15
Attorneys for the Plaintiff/counterclaim Defendant
16 appeared via Zoom
17
PAUL SWANSON, ESQUIRE
18 OF: HOLLAND & HART LLP
555 17th Street, Suite 3200
19 Denver, CO 80202
Telephone: (303) 295-8578
20 Adwhite@hollandhart.com
Pdswanson@hollandhart.com
21
Counsel for the Defendant/counterclaim Plaintiff
22
23
ALSO PRESENT
24
SARAH STOUT, Videographer
25
Page 3
1 I N D E X
2 * * * * *
3
4 TESTIMONY OF HERNANDO PARROTT
5
Direct Examination by Mr. Collard .............. 6
6
CERTIFICATE OF OATH ................................... 272
7 CERTIFICATE OF REPORTER ............................... 273
ERRATA SHEET .......................................... 274
8
9
E X H I B I T S
10
* * * * * *
11
12
Exhibit 374 .......................................... 26
13 (CFC 185076)
14 Exhibit 375 .......................................... 57
(Open International 84896)
15
Exhibit 376 .......................................... 65
16 (Open International 282368)
17 Exhibit 377 .......................................... 68
(Responses to Interrogatories)
18
Exhibit 378 .......................................... 73
19 (Something that Open Prepared And Provided)
20 Exhibit 379 .......................................... 96
(CFC 19378)
21
Exhibit 380 ......................................... 131
22 (Open International 91912)
23 Exhibit 381 ......................................... 138
(Open International 92991)
24
Exhibit 382 ......................................... 141
25 (Open International 170593)
Page 4
1 Exhibit 383 .......................................... 145
(E-mail)
2
Exhibit 384 .......................................... 155
3 (Open International 264064)
4 Exhibit 385 .......................................... 160
(Functional Matrix from the RFP)
5
Exhibit 386 .......................................... 183
6 (Open International 96175)
7 Exhibit 387 .......................................... 193
(Open International 98690)
8
Exhibit 388 .......................................... 199
9 (Open International 272138)
10 Exhibit 389 .......................................... 223
(Progress Report)
11
Exhibit 390 .......................................... 240
12 (E-mail dated October 2, 2018)
13
14
15
16
17
18
19 * * * * * *
20 S T I P U L A T I O N S
21 It is hereby stipulated and agreed by and between
22 counsel present for the respective parties, and the
23 deponent, that the reading and signing of the deposition
24 are hereby reserved.
25
Page 5
1 P R O C E E D I N G S
2 * * * * *
3 THE VIDEOGRAPHER: Good morning. We are going on
4 the record at 9:10 a.m. on September 20th, 2022.
5 Please note that this deposition is being conducted
6 virtually; quality of recording depends on quality of
7 camera and Internet connection of participants. What
8 is seen from the witness and heard on screen is what
9 will be recorded. Audio and video recording will
10 continue to take place unless all parties agree to go
11 off the record.
12 This is Media Unit Number 1 of the video recorded
13 deposition of Hernando Parrott in the matter of City
14 of Fort Collins versus Open International, LLC, et al.
15 The location of this deposition is 1450 Brickell Ave,
16 23rd Floor, Miami, Florida, and remotely using virtual
17 technology.
18 My name is Sarah Stout, and I am the
19 videographer. The court reporter is Chelsea Hlavach.
20 We are both representing Veritext.
21 Will counsel and all parties present please
22 introduce themselves, after which, will the court
23 reporter please swear in the witness.
24 MR. COLLARD: Case Collard and Andrea Wechter of
25 Dorsey & Whitney on behalf of Plaintiff, City of Fort
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1 Water Services?
2 A. Correct.
3 Q. Clean Water Services project, is the Fort Collins
4 project the only other project that Open International has
5 had in North America?
6 MR. SWANSON: Objection. Form.
7 A. We had a contract with the City of Fort Collins
8 as a customer. There are several other contracts,
9 partnerships, and so forth that -- that are not -- talking
10 about customers, it was the City of Fort Collins.
11 BY MR. COLLARD:
12 Q. My question actually was about projects. I'm --
13 rather than contracts.
14 A. Uh-huh.
15 Q. Is -- so is it fair to say that the only North
16 American projects that Open International has had ever are
17 the Tualatin Clean Water Services project and the City of
18 Fort Collins project?
19 MR. SWANSON: Objection. Form.
20 A. I think there is the need of a clarification
21 here.
22 BY MR. COLLARD:
23 Q. Sure.
24 A. When you're referring to Open International, are
25 you referring to Open International, LLC?
Page 47
1 Q. Why -- why is that clarification necessary?
2 A. Because Open International is the name for the
3 company.
4 Q. Uh-huh.
5 A. Disregarding the different entities, and Open
6 International, LLC, was formed in 2015.
7 Q. Uh-huh.
8 A. Before that, Open International exists as a
9 brand.
10 Q. Uh-huh.
11 A. As a name. And before that Open International
12 had executed contracts with other entities in North
13 America.
14 Q. Okay. Mr. Parrott, I'm kind of confused. One of
15 the key things I read in the response to the request for
16 proposal, et cetera, was saying this will be Open's first
17 North American project; we're excited to take this on for
18 the City of Fort Collins. I'm basically just trying to
19 confirm that. And then you're saying, well, Open -- other
20 Open International entities had North American contracts.
21 Can you just explain what you're referring to?
22 A. Yeah. Several years ago Open had a contract with
23 a company in Puerto Rico that is considered part of the
24 United States.
25 Q. Uh-huh.
Page 48
1 A. So we -- Open had a customer a long time ago in
2 Puerto Rico, and that -- that's why I just wanted to be
3 precise with the -- with the -- with my responses.
4 Q. Fine. When was this customer in Puerto Rico that
5 Open had?
6 A. Oh, I don't recall exactly, but it was 10/12
7 years ago. I don't -- I don't recall that precisely.
8 Maybe -- let me see if I can sharpen my -- that should --
9 that has to be in the -- in the -- in the documents, but
10 around 2010 probably or before that.
11 Q. That's fine.
12 A. Yeah.
13 Q. In your tenure as the president of North American
14 operations, or, I'm sorry, president of North America --
15 I'm sorry, which is it?
16 A. Yeah.
17 Q. President for North America; is that right?
18 A. (Indicating.)
19 Q. Has Open International, LLC, had any other North
20 American projects other than the Tualatin Clean Water
21 Services project and the City of Fort Collins project?
22 A. No.
23 Q. When did you start working at Open?
24 A. At Open?
25 Q. Uh-huh.
Page 49
1 A. I started working at Open, it was year 1997.
2 Q. All right. And what was your role?
3 A. I was the CTO -- well, I was I think the director
4 of development or manager of development. Don't recall the
5 name of the role, but I was in charge for all the software
6 development.
7 Q. How long were you in that role?
8 A. It -- it was -- I was in that role several years.
9 I was in that role to year 2000, 2001, if I recall that
10 correctly.
11 Q. Have you been at Open continuously for your
12 career since 1997?
13 A. No, I have not.
14 Q. When did you leave Open?
15 A. I left Open in year 2013.
16 Q. What was your role at Open when you left?
17 A. I was the business development vice president.
18 Q. Okay. And where did you go?
19 A. I went to -- to a company in San Francisco --
20 actually I went to -- I went -- I went to work for
21 Brightstar and Brightstar owned a company in San Francisco
22 that we acquired and I was the CTO for that company.
23 Q. What's the name of that company?
24 A. The company was -- name was Consensus.
25 Q. And what were your -- how long were you at
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1 online courses not completed on time. Do you see that?
2 A. I see it.
3 Q. So that's another delay in the availability
4 of -- of resources for training --
5 MR. SWANSON: Objection. Form.
6 BY MR. COLLARD:
7 Q. -- that might -- that caused a risk to the
8 project?
9 A. I agree that that -- that that was a risk. I
10 agree also what they say, that this is a moderate risk,
11 and, as I said, actions -- there were actions to mitigate
12 on our hands so that couldn't create a problem.
13 Q. Do you know if this risk register was updated
14 throughout the project?
15 A. I believe so.
16 Q. Okay. I'll just put on the record we haven't
17 found later versions of this one.
18 MR. COLLARD: Paul, so if that is the case, will
19 you agree to -- to check and see if there are other
20 versions of this risk register?
21 MR. SWANSON: If -- have risk registers been
22 requested? I just don't remember from the RFPs.
23 MR. COLLARD: I don't know if we used that word,
24 risk register, because I don't know if we knew that
25 word until it was produced on Open's document, but I
Page 271
1 would think that we have RFPs and would also think
2 that this is a document that Open is obligated to
3 produce under its Rule 26 disclosure obligations.
4 So will you agree to look for it and produce
5 other versions of this risk register?
6 MR. SWANSON: I disagree with the Rule 26
7 obligation. I think that's a different obligation in
8 federal court, so if you want to send us over an
9 e-mail that explains what request it falls under,
10 we'll take a look at it.
11 MR. COLLARD: Okay. I think I'm at a good
12 stopping spot for today. So I would suggest we stop
13 for today and then pick this up on Thursday --
14 MR. SWANSON: Sure.
15 MR. COLLARD: -- where we left off.
16 MR. SWANSON: Okay.
17 THE VIDEOGRAPHER: We are off the record at
18 5:48 p.m., and this concludes today's testimony given
19 by Hernando Parrott.
20 (The deposition was adjourned at 5:48 p.m.)
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1 CERTIFICATE OF OATH
2
STATE OF FLORIDA
3 COUNTY OF MIAMI-DADE
4
5
6 I, CHELSEA HLAVACH, shorthand reporter and Notary
7 Public, State of Florida, certify that HERNANDO PARROTT,
8 appeared before me and was duly sworn/affirmed Witness my
9 hand and official seal this 20th day of September, 2022.
10
11 Witness my hand and official seal this 4th day of
12 October, 2022.
13
14
15
<%22695,Signature%>
16 Chelsea Hlavach, Notary Public
State of Florida, My Commission:
17 GG352672, Expires: August 11, 2023
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Page 273
1 CERTIFICATE OF REPORTER
2
STATE OF FLORIDA
3 COUNTY OF MIAMI-DADE
4
5 I, CHELSEA HLAVACH, Shorthand Reporter and Notary
6 Public, State of Florida, HEREBY CERTIFY that I was
7 authorized to and did stenographically report the
8 deposition of HERNANDO PARROTT; that a review of the
9 transcript was requested; and the foregoing transcript,
10 pages 5 through 271, inclusive, is a true and accurate
11 record of my stenographic notes.
12 I FURTHER CERTIFY that I am not a relative,
13 employee, attorney, or counsel to any of the parties, nor
14 am I a relative or employee of any of the parties' attorney
15 or counsel connected with the action, nor am I financially
16 interested in the action.
17 Dated this 20th day of September, 2022.
18
19
20
21
22 <%22695,Signature%>
Chelsea Hlavach, Notary Public,
23 State of Florida at Large
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1 I, HERNANDO PARROTT, the deponent in the above
2 deposition, do hereby acknowledge that I have read the
3 foregoing transcript of my testimony, and state under oath
4 that it, together with any attached Amendment to
5 Deposition pages, constitutes my sworn testimony.
6
7 _____ I have made changes to my deposition
8 _____ I have NOT made any changes to my deposition
9
10 ___________________________________
HERNANDO PARROTT
11
12
13 Subscribed and sworn to before me this ______ day of
14 _____________________, 20_____.
15 My commission expires: __________________________.
16
17 ___________________________________
NOTARY PUBLIC
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