Lund-Ross Constructors, Inc. v. Vecino Nat. Bridge, LLC

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LUND-ROSS CONSTRUCTORS, INC., Plaintiff/Counter-Defendant, v. VECINO NATURAL BRIDGE, LLC, Defendant/Counter-Plaintiff.

No. 8:19CV550

United States District Court, D. Nebraska

August 30, 2023

MEMORANDUM AND ORDER

Robert F. Rossiter, Jr. Chief United States District Judge

This matter is before the Court on defendant/counter-plaintiff Vecino Natural Bridge, LLC's (“Vecino”) Second Motion for Partial Summary Judgment (Filing No. 76) Vecino's Motion in Limine (Filing No. 80), and plaintiff/counter-defendant Lund-Ross Constructors Inc.'s (“Lund-Ross”) combined Motion for Partial Summary Judgment and Motion in Limine (Filing No 84). For the reasons stated below, Vecino's motion in limine is granted; its motion for partial summary judgment is granted in part and denied in part. Lund-Ross's combined motion is denied in its entirety.

I. BACKGROUND

A. Facts

This construction-contract dispute is back before the Court after several months of discovery and a failed attempt at settlement. See Lund-Ross Constructors, Inc. v. Vecino Nat. Bridge, LLC, No. 8:19CV550, 2021 WL 6202667, at *7 (D. Neb. Nov. 3, 2021) (granting Vecino's motion for partial summary judgment in part). Both parties agree that trial will be necessary in this diversity case and that certain issues should be decided by the court as a matter of Nebraska law. See Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938); Crain v. Crain, 72 F.4th 269, 279 (8th Cir. 2023) (describing the agreed application of state substantive law in a diversity case under 28 U.S.C. § 1332(a)(1)). Unfortunately, they do not agree as to what those issues are. Still, many of the underlying facts are uncontested.

Lund-Ross is a general contractor that constructs projects across the Midwest. Vecino is a real-estate developer that owns real property near the campus of Creighton University in Omaha, Nebraska. On October 4, 2017, Lund-Ross and Vecino entered into a standard-form contract (the “contract”) for the construction of a two-building apartment complex for student housing on Vecino's property (the “project”) with a Guaranteed Maximum Price of $24,114,417.00 at execution. Section 11.5.2 of the contract included non-standard provisions regarding project timing and completion and liquidated damages for breach (the “liquidated-damages provision”). In particular, the contract provided Lund-Ross would incur liquidated damages if the project was not complete by May 31, 2019, for any reason. The contract identified three categories of liquidated damages: (1) daily/monthly damages, (2) hotel costs and per diem, and (3) lost leases.

About two years after the contract was executed, with construction ongoing, Vecino notified Lund-Ross it intended to terminate the contract for cause effective October 14, 2019. Vecino asserted Lund-Ross repeatedly failed to supply sufficient skilled labor for the project and failed to complete it on time. Vecino eventually hired a replacement contractor, Ideal Construction (“Ideal”), which completed a punch list on the project on October 16, 2020, though some minor work remains. Vecino seeks “at least” $1,100,878.58 in liquidated damages and other “mitigation” damages as a result of Lund-Ross's breach of contract.

Attributing some of the delay in completing the project to Vecino, Lund-Ross seeks to recover amounts it says it is owed for the work it did under the contract before termination. In Lund-Ross's view, even if the liquidated-damages provision is valid under Nebraska law, Vecino waived its rights to enforce it. Lund-Ross also disputes Vecino's damage calculations and questions whether the terms of Vecino's agreement with Ideal and their post-termination practices unfairly left Lund-Ross on the hook for additional liquidated and consequential damages.

B. Procedural History

On October 17, 2019, Lund-Ross sued Vecino and others in the District Court of Douglas County, Nebraska (Filing No. 1-2), seeking to enforce its construction lien on the project under Neb. Rev. Stat. § 52-155 and alleging breach of contract, quantum meruit, and unjust enrichment. On December 16, 2019, Vecino removed the case to this Court with the consent of Springfield First Community Bank (“Springfield”), the only other defendant remaining at that point (Filing No. 1).^[1]

Vecino then filed an answer and asserted counterclaims against Lund-Ross for breach of contract, wrongful recording of a lien pursuant to Neb. Rev. Stat. § 52-157, declaratory judgment, and unjust enrichment (Filing Nos. 8 and 24). Lund-Ross responded to the counterclaims (Filing No. 23) and later dismissed Springfield as a party (Filing Nos. 25 and 26).

As the case moved forward, the parties advised the magistrate judge assigned to the case that a motion for summary judgment on an issue of contract interpretation might allow them to streamline this case and avoid unnecessary discovery (Filing No. 37). On August 20, 2021, Vecino moved for partial summary judgment (Filing No. 38), asking the Court to find as a matter of law that (1) § 11.5.2 of the contract included a “Final Completion Date of May 31, 2019,” that “was not extendable under the [contract],” (2) the liquidated-damages provision in § 11.5.2 was enforceable, and (3) Vecino was entitled to recover liquidated damages from Lund-Ross.

The Court granted the motion in part and denied it in part. See Lund-Ross, 2021 WL 6202667, at *7. The Court found that § 11.5.2 set a fixed completion date of May 31, 2019, and that the liquidated-damages provision was not an unenforceable penalty under Nebraska law. See id. But the Court concluded “open questions regarding waiver and other damage issues preclude[d] any assessment of damages at [that] time.” See id.

Over the next several months, the parties conducted extensive discovery and participated in a settlement conference with the magistrate judge. When those efforts at settlement proved unsuccessful, the parties filed the pending cross-motions for partial summary judgment and cross-motions in limine. A bench trial is currently set for February 12, 2024.

II. DISCUSSION

A. Motions in Limine

1. Standard of Review

Lund-Ross and Vecino have each filed a motion in limine. Such motions generally allow a party to seek “to exclude evidence before it is offered” at trial or another proceeding. United States v. Roenigk, 810 F.2d 809, 815 (8th Cir. 1987); see also Luce v. United States, 469 U.S. 38, 40 n.4 (1984) (“Although the Federal Rules of Evidence do not explicitly authorize in limine rulings, the practice has developed pursuant to the district court's inherent authority to manage the course of trials.”). As with all evidentiary rulings, the Court has considerable discretion in deciding a motion in limine. See United States v. Daniels, 932 F.3d 1120, 1123 (8th Cir. 2019); Spencer v. Young, 495 F.3d 945, 949 (8th Cir. 2007).

2. Lund-Ross

Lund-Ross's motion in limine is inexorably tied to its motion for partial summary judgment as analyzed below. Its request to bar “the introduction of any testimony or evidence of liquidated damages” depends on persuading the Court that either the liquidated-damages provision is an unenforceable penalty or Vecino waived its right to liquidated damages under the contract. The same is true of its requests to preclude any evidence of (1) certain “consequential damages,” (2) “estimated costs” related to installing acoustical caulking, and (3) “excess” damages. As discussed below in relation to Lund-Ross's partial motion for summary judgment, some of Lund-Ross's evidentiary issues will be better resolved at trial.

3. Vecino

Vecino's motions, on the other hand, cut the other way. Its motion for partial summary judgment largely turns on prohibiting Lund-Ross's nonretained experts, Scott Thompson (“Thompson”), Tyler Adam (“Adam”), and Jason Hillmer (“Hillmer and collectively, the “delay experts”), from offering evidence regarding purported delays on the project, their impact on Lund-Ross's ability to complete the project, and any additional time Lund-Ross should have had to complete it. Though Vecino's motion in limine expressly mentions limiting evidence at trial, its statement of facts and arguments in support of partial summary judgment depend at least in part on Lund-Ross being unable to present admissible evidence related to its current position on waiver and on project delays it attributes to Vecino.

Vecino primarily seeks exclusion under Federal Rules of Evidence 401 (relevance), 402 (admissibility), and 403 (balancing). According to Vecino, potential evidence on those matters is “inadmissible because [the delay experts'] opinions regarding delay are unfounded in the critical path method of adjustment” and do not account for “concurrent delays” as required by the contract. Vecino contends the challenged evidence would unnecessarily confuse and mislead the jury as to the meaning of delay under the contract.

Vecino further argues Lund-Ross did not properly disclose the delay experts as required by Federal Rule of Civil Procedure 26(a)(2)(C) because it did not summarize their opinions or the facts on which they relied. Finally, Vecino broadly asserts the challenged “opinions are not founded in sufficient facts and data; not founded in reliable principles and methods; and not the result of reasonably applied principles and methods as required by Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals., Inc., 509 U.S. 579, 589-95 (1993).

After careful review of the record to this point, the Court finds the delay experts' challenged testimony should be excluded. Evidence is generally admissible if it is relevant see Fed.R.Evid. 402, and evidence is relevant if it has “any tendency” to make a consequential fact “more or less probable,” Fed.R.Evid. 401; see also...