AECOM Technical Services, Inc. v. Flatiron AECOM, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 19-cv-2811-WJM-KAS
AECOM TECHNICAL SERVICES, INC.,
Plaintiff-Counterclaim Defendant,
v.
FLATIRON | AECOM, LLC,
Defendant-Counterclaim Plaintiff.
ORDER DENYING FLATIRON’S MOTION IN LIMINE
Before the Court is Defendant Flatiron AECOM, LLC’s (“Flatiron”) Motion in
Limine (“Flatiron MIL”) (ECF No. 301) and AECOM’s response (ECF No. 313). For the
following reasons, Flatiron’s MIL is denied.
I. LEGAL STANDARD
“The admission or exclusion of evidence lies within the sound discretion of the
trial court . . . .” Robinson v. Mo. Pac. R.R. Co., 16 F.3d 1083, 1086 (10th Cir. 1994);
see also United States v. Golden, 671 F.2d 369, 371 (10th Cir. 1982) (“Trial judges
have discretion to decide whether an adequate foundation has been laid for the
admission of evidence.”).
Under Federal Rule of Evidence 401, “[e]vidence is relevant if: (a) it has any
tendency to make a fact more or less probable than it would without the evidence; and
(b) the fact is of consequence in determining the action.” Relevant evidence is
generally admissible and should only be excluded “if its probative value is substantially
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outweighed by a danger of . . . unfair prejudice, confusing the issues, misleading the
jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed. R.
Evid. 403. “Irrelevant evidence is not admissible.” Fed. R. Evid. 402.
II. ANALYSIS
A. 	Special Request for Equitable Adjustment (“SREA”)
Flatiron requests that the Court exclude evidence of the SREA because it is: (1)
irrelevant; (2) a protected settlement communication; (3) improper propensity evidence;
and (4) unfairly prejudicial. (ECF No. 301 at 2–3.) According to Flatiron, it submitted
the SREA to the Colorado Department of Transportation (“CDOT”) during compromise
negotiations in September 2020, and AECOM intends to use the SREA to reveal
Flatiron’s scheme to “double-dip” damages from AECOM and CDOT and show
Flatiron’s propensity to blame others for its own Project shortcomings. (Id.) Flatiron
points out that it has withdrawn the SREA and replaced it with an “updated, more
accurate statement of Flatiron’s claims and positions called the ‘Close-Out REA.’” (Id.
at 4.)
The Court has already ruled in its Order Granting in Part and Denying in Part
Flatiron’s Federal Rule of Evidence 702 Motions (“Flatiron 702 Order”) that AECOM’s
expert witness Mark Buchanan may offer his opinions with respect to the SREA at trial.
(ECF No. 344 at 9.) In that Order, the Court addressed whether the SREA was relevant
and/or prejudicial but reserved its analysis of whether the SREA is a protected
settlement communication for this Order. (Id. at 8 n.2.) The Court also noted in that
Order that Flatiron failed to cite any case law supporting the application of Federal Rule
of Evidence 404(b) in this context and declined to analyze that issue any further. (Id. at
8.) For the following reasons, the Court denies this portion of Flatiron’s MIL.
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1. 	Relevance
First, the Court concludes that like Buchanan’s expert testimony with respect to
the SREA, the SREA itself is not irrelevant. The Court reiterates its statement from the
Flatiron 702 Order that “[i]n this case, where AECOM’s purported violation of the
standard of care provision in the contracts at issue is so critical, AECOM will be allowed
to present evidence from which the jury might conclude that, in whole or in part, it was
Flatiron’s breach of the standard of care and not AECOM’s, that led (or at least greatly
contributed) to the vast cost overruns.” (ECF No. 344 at 10.) The Court agrees with
AECOM that, while Flatiron has withdrawn the SREA and replaced it with the Close-Out
REA, the SREA remains relevant to AECOM’s argument that “Flatiron, almost one year
into litigating its $263.5 million claim with [AECOM], was still pursuing CDOT for almost
$92 million of Flatiron’s $265 million in total Project losses.” (ECF No. 313 at 2.)
Additionally, the Court finds that the SREA is relevant to AECOM’s arguments
concerning the credibility of Flatiron’s damages expert’s opinions attributing over 99% of
the cost overruns to AECOM. (Id.) Finally, the Court notes that earlier in this litigation,
retired United States Magistrate Judge Kristen L. Mix determined that the SREA was
discoverable because it was relevant, lending weight to AECOM’s position. (Id. (citing
ECF Nos. 172, 195).)
2. 	Settlement Communication
Next, the Court finds that the SREA is not a settlement communication protected
by Federal Rule of Evidence 408. The Tenth Circuit has found that “Rule 408 does not
require the exclusion of evidence regarding the settlement of a claim different from the
one litigated . . . though admission of such evidence may nonetheless implicate the
same concerns of prejudice and deterrence of settlements which underlie Rule 408
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. . . .” Towerridge, Inc. v. T.A.O., Inc., 111 F.3d 758, 770 (10th Cir. 1997) (internal
citations omitted). Moreover, the Tenth Circuit has concluded that “[i]n any event, Rule
408 only bars admission of evidence relating to settlement discussions if that evidence
is offered to prove liability for or invalidity of the claim or its amount.” Id. (internal
quotation marks omitted).
Earlier in this litigation, Judge Mix ruled that the SREA is not a mediation
communication and was thus not protected from disclosure by the Colorado Dispute
Resolution Act (“CDRA”), C.R.S. § 13-22-307, et seq. (ECF No. 195.) Although her
analysis addressed the CDRA, not Rule 408, the Court finds her analysis highly
persuasive for the purposes of this Order. Judge Mix points out in her Order that “there
was no ‘mediations services proceeding’ between [Flatiron] and CDOT,” “neither the
steps [to engage in mediation] nor the mediation process were completed,” and “no
actual mediation occurred.” (Id. at 4.) Ultimately, Judge Mix concluded:
Because the parties failed to progress beyond two of the
three steps outlined for mediation, failed to select a mutually
agreeable mediator, failed to engage in mediation, and
because there is no evidence that CDOT complied with a
condition to entry into mediation which was imposed by
Defendant, the Court cannot conclude that they entered into
the “agreement” required by CDRA. According to the plain
language of the Act, the lack of an agreement to mediate
means the parties’ communications are not protected.
(Id. at 5.) Prudently, Judge Mix denied Flatiron’s request that AECOM be forbidden
from using the SREA at trial without prejudice and deferred the final determination on
that request to the undersigned. (Id.) In sum, the Court finds Judge Mix’s Order well-
reasoned and her analysis of the SREA relevant here.
Of course, there are numerous other reasons militating in favor of the Court’s
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finding that the SREA is not protected by Rule 408. Although the Project at issue in the
SREA is the same one at issue in this case, the claim being litigated in connection with
the SREA was fundamentally different. The SREA concerns Flatiron’s pursuit of CDOT
for almost $92 million of Flatiron’s losses on the Project, whereas this case involves a
breach of contract claim against AECOM for breaching the applicable standard of care
with respect to its actions on the Project.
Additionally, the Court finds that AECOM’s explanation that the SREA “will not be
offered to prove or disprove the validity or amount of a disputed claim” takes the
evidence outside the parameters of Rule 408. Specifically, AECOM explains that “the
SREA is evidence supporting one of [its] key defenses in this case: that there are other
plausible theories of causation for Flatiron’s damages” and will “show Flatiron’s ‘double-
dipping’ attempt to recover damages from both CDOT and [AECOM] to attack the
credibility of Flatiron’s damages expert.” (ECF No. 313 at 3.) These are permissible
uses of such evidence, and Rule 408 does not bar the use of the SREA.
3. 	Propensity Evidence
Third, Flatiron argues that the SREA is barred by Rule 404(b) because AECOM
wishes to use it as improper propensity evidence. Yet again, Flatiron fails to cite any
case law applying Rule 404(b) in this context. (See ECF No. 344 at 8.) Regardless, as
the Court has found above and noted in the Flatiron 702 Order, AECOM does not intend
to use the SREA as character evidence, but to show that Flatiron has attempted to
recover damages from both CDOT and AECOM. Accordingly, the Court finds that the
SREA is not barred by Rule 404(b).
4. 	Unfair Prejudice
Finally, the Court finds Flatiron’s arguments that the SREA will cause unfair
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prejudice and jury confusion under Rule 403 are without merit. (ECF No. 301 at 7.)
Flatiron argues that AECOM wants to use the SREA to show Flatiron is a “dishonest
actor who never takes responsibility for anything and who is also seeking a windfall
through a ‘double-recovery.’” (Id. (citing ECF No. 297-2 at 11 (“Rather than own up
to its failure . . . [Flatiron] shifted blame”); ECF No. 296-2 at 7 (“Flatiron now seeks to
recover dollars from . . . the American taxpayer.”)).) Additionally, Flatiron argues that
the SREA will cause jury confusion, waste trial time, and force Flatiron to “conduct a
trial-within-a-trial regarding the SREA, its origins, its replacement, its accuracy, and the
status of any Flatiron dispute with CDOT.” (Id.)
The Court finds that Flatiron’s arguments do not constitute unfair prejudice within
the meaning of Rule 403. However, while the Court understands that both parties will
have to present the SREA in such a manner that the jury understands its relevance and
the arguments on both sides, the Court cautions both parties to refrain from making the
SREA and Flatiron’s dispute with CDOT a time-consuming sideshow. The Court will not
hesitate to move the testimony along if it determines that the parties needlessly linger
on this issue. Therefore, AECOM may introduce the SREA at trial, and the Court
denies this portion of Flatiron’s MIL.
B. 	Limitation of Liability (“LOL”) Clause
Flatiron seeks to exclude evidence regarding the LOL clause in the Subcontract.
(ECF No. 301 at 7.) Flatiron contends that the application of the LOL clause is a legal
issue for the Court and is thus irrelevant to the questions the jury must decide. (Id.)
Flatiron asserts that evidence about the LOL clause could cause jury confusion and
prejudice by suggesting to the jury that the LOL clause limits the amount of damages
that the jury can award, as opposed to the amount of damages Flatiron can recover.
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(Id. at 8.) Moreover, given the Court’s ruling that the LOL clause applies, Flatiron
argues that it is not a disputed issue at trial and is irrelevant on that basis as well. (Id. at
7.) Flatiron intends to present evidence of the full amount of its damages to the jury,
and if the jury returns a verdict in excess of the liability cap, Flatiron explains that the
Court will apply the cap post-verdict. (Id. at 8.)
AECOM responds that there is a “fundamental reason” to deny Flatiron’s request,
namely that “Colorado follows the general rule that allows the recovery of foreseeable
damages for breach of contract.” (ECF No. 313 at 5 (quoting SOLIDFX, LLC v.
Jeppesen Sanderson, Inc., 841 F.3d 827, 838 (10th Cir. 2016) (citing Vanderbeek v.
Vernon Corp., 50 P.3d 866, 871 (Colo. 2002) (grounding foreseeability requirement in
value of allowing parties to allocate risk through contract)).) AECOM argues that “the
parties allocated risk through the LOL clause, making the Subcontract’s liability cap an
essential part of their bargain and thereby limiting the range of foreseeable damages.”
(Id.)
The Court concludes that the LOL clause is relevant to AECOM’s presentation of
its case and will not exclude it at trial. Thus, this portion of Flatiron’s MIL is denied.
Nonetheless, the Court agrees that the jury must clearly understand that the LOL clause
does not limit the amount of damages it can award. Therefore, the parties are directed
to confer and make every reasonable effort to submit an agreed-upon limiting instruction
addressing the LOL clause by January 17, 2024. If the parties are unable to agree,
they may submit separate proposed limiting instructions by that date. The proposed
limiting instruction should describe, in as neutral terms as possible, why the Court is
allowing the jury to be made aware of the existence of the LOL clause, all the while
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stressing that the document does not limit the amount of damages, if any, the jury may
award to either party if it concludes that the facts and the law support such an award.
C. 	Disputes With Flatiron Subcontractors
Flatiron requests that the Court exclude evidence relating to separate disputes
between Flatiron and some of its subcontractors on the Project. (ECF No. 301 at 9.)
According to AECOM’s prior proposed witness list, it intended to call six representatives
from various subcontractors about so-called “disputes” with Flatiron.1 	(Id.) AECOM
also listed an additional fifteen subcontractors on its “may call” witness list.2 (Id.)
Flatiron argues that such evidence is irrelevant and prejudicial because it has no
tendency to make a fact in the case more or less probable and is of no consequence to
Flatiron’s dispute with AECOM; rather, Flatiron describes these disputes as “standard,
small-scale disagreements that routinely arise on large construction projects.” (Id. at 9–
10.) In fact, Flatiron states that “[n]early all of these ‘disagreements’ were resolved
directly at the project level with no court involvement.” (Id. at 10 n.6.) Flatiron further
explains that the “only exceptions were the disputes with CRCC, Geocal Inc., and
SEMA Precast—all of which have been settled and/or resolved.” (Id.)
Flatiron also points to case law from district courts in the Tenth Circuit which it
asserts stand for the proposition that evidence of prior lawsuits is generally inadmissible
against a defendant except for impeachment purposes. (Id. at 9 (citing, e.g., SEC v.
1 Flatiron states that the subcontractors are: Castle Rock Construction Company
(“CRCC”), Martin Marietta Materials, Dynalectric Colorado, Geocal Inc., American Sign and
Barricade Co., and P&H Equipment, Inc. (ECF No. 301 at 9 n.5.)
2 The Court notes that both parties have filed amended witness lists (ECF Nos. 351,
352) since the filing of Flatiron’s MIL and AECOM’s response. Therefore, these numbers will
likely change as the parties narrow their witness lists for trial, but for the purposes of this Order,
the Court recites the numbers from the briefs on Flatiron’s MIL.
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Goldstone, 2016 WL 3654279, at *9 (D.N.M. June 9, 2016)).)
Further, should the Court allow such evidence, Flatiron argues that it will “force
Flatiron to conduct ancillary ‘mini-trials’ with regard to each Subcontractor disagreement
to explain why it was minor, justified, and irrelevant.” (Id. at 10.) Flatiron also argues
Rule 404(b) precludes the use of such evidence because its purpose is to malign
Flatiron’s character as “generally quarrelsome and difficult.” (Id.)
In response, AECOM argues that the subcontractor evidence is “highly relevant”
and outweighs any potential unfair prejudice to Flatiron. (ECF No. 313 at 6.)
Specifically, AECOM explains that Torres has opined that Flatiron lost approximately
$265 million on the Project, with approximately $263.5 million attributable to AECOM’s
design errors. (Id.) Accordingly, the other subcontractors could be liable for at most
$1.5 million of Flatiron’s alleged cost overruns, but AECOM emphasizes that Flatiron
sued the other subcontractors for “far more than this.” (Id.) Further, AECOM argues
that the subcontractor evidence is relevant to its causation defense, as Flatiron sent
notice and default letters to its paving contractors that state they are a primary cause of
delays and failures on the Project. (Id.) AECOM contests Flatiron’s position that
introducing this evidence would lead to “mini-trials,” as the jury will not need to resolve
the disputes with the subcontractors “to appreciate the probative value of Flatiron’s
tactical decision to ascribe far more damages than it incurred to everyone else on the
Project, and blame them for the Project delays and failures.” (Id.)
Having considered both parties’ arguments, the Court denies this portion of the
Flatiron MIL. The prior lawsuits in Goldstone, which Flatiron relies on to argue that prior
lawsuits should be excluded as inadmissible evidence, concerned lawsuits against the
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defendant, whereas here, AECOM seeks to introduce evidence of lawsuits brought by
the defendant against its subcontracts. Goldstone, 2016 WL 3654279, at *9 (allowing
SEC to present evidence of claims brought against Defendants Goldstone or Simmons
in other litigation in order to impeach their testimony if they open the door). Therefore,
the value of Goldstone to the Court in reaching a decision—which is also not binding
authority—is minimal.
Instead, the Court finds other case law, such as Guidance Endodontics, LLC v.
Dentsply Int’l, Inc., 705 F. Supp. 2d 1265, 1271 (D.N.M. 2010), more persuasive. In
Guidance Endodontics, the court addressed whether the existence of prior similar
disputes in which the defendants potentially engaged in anti-competitive conduct was
admissible. Id. The court analyzed the prior similar disputes brought by the defendants
under Rule 404(b) and found that the evidence was admissible because it went to the
defendants’ collective state of mind and was offered for a proper, non-propensity
purpose. Id.
Here, the Court concludes that the evidence of Flatiron’s disputes with various
subcontractors is admissible because rather than constituting improper propensity
evidence, it is relevant to show that although Flatiron has alleged that AECOM is
responsible for nearly all of the Project’s cost overruns, Flatiron has also had disputes
with several subcontractors who worked on the Project. (ECF No. 313 at 6.) AECOM’s
argument that Flatiron sued the other subcontractors for far more than the $1.5 million
difference in overruns it otherwise wholly attributes to AECOM is persuasive; evidence
of the disputes with other subcontractors are relevant to AECOM’s defense that Flatiron
has “overreach[ed]” in its causation and subsequent damages analysis. (Id.)
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Additionally, the Court notes that it is Flatiron which points out that many of the disputes
were “disagreements” that were “resolved directly at the project level with no court
involvement,” thereby undermining any argument that they are inadmissible because
they are prior lawsuits. (Id. at 10 n.6.)
Moreover, although Flatiron argues that the evidence is prejudicial, it offers no
reasons for why the probative value of this evidence is outweighed by the unfair
prejudice to Flatiron under Rule 403. (ECF No. 301 at 9–10.) In fact, Flatiron points out
that the disputes with subcontractors were “standard, small-scale disagreements that
routinely arise on large construction projects,” undermining its argument that
introduction of such evidence is unfairly prejudicial in violation of Rule 403. (Id. at 10.)
Accordingly, the Court denies this portion of Flatiron’s MIL.
However, the Court will hold both parties to AECOM’s representation that the
introduction of evidence of Flatiron’s disputes with subcontractors will not result in
numerous mini-trials. (ECF No. 313 at 6.) The Court has already allocated a large
number of days from its trial calendar to this litigation and it will not permit the parties to
confuse the jury with immaterial and irrelevant side issues related to this type of
evidence. Both sides are directed to limit their witness examinations and introduction of
exhibits on topics which might reasonably be expected to lead to such satellite disputes
to an absolute minimum.
D. 	Duplicative and Cumulative Testimony of AECOM’s Expert Witnesses
Flatiron requests that the Court preclude AECOM from offering duplicative
testimony on at least 23 substantive issues. (ECF No. 301 at 11.) Flatiron states that it
has raised the issue of duplicative testimony with AECOM, but to date, AECOM has
“refused to eliminate this duplicative testimony[.]” (Id.) In its response, AECOM states
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that it does not intend to offer duplicative or cumulative expert testimony at trial. (ECF
No. 313 at 6.)
At trial the Court will aggressively police attempts by either party to introduce
duplicative, unnecessary, or cumulative testimony or exhibits. These efforts will include,
but by no means will be limited to, the Court holding AECOM to its representation that it
will not offer duplicative or cumulative expert testimony at trial. For these reasons this
portion of Flatiron’s MIL is denied as moot.
III. CONCLUSION
For the reasons explained above, the Court ORDERS that:
1. 	Flatiron’s MIL (ECF No. 301) is DENIED, as set forth above; and
2. 	The parties are DIRECTED to submit a joint proposed limiting instruction
concerning the LOL clause by January 17, 2024. If the parties are unable to agree,
they may submit separate proposed limiting instructions by that date.
Dated this 9th day of January, 2024.
BY THE COURT:
______________________
William J. Martínez
Senior United States District Judge
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