[00:00:06] Speaker 02:
Our next case will be AECOM versus Flatiron 25-1140.

[00:00:55] Speaker 02:
Mr. Davis.

[00:00:57] Speaker 02:
Yes, Your Honor.

[00:01:16] Speaker 00:
May it please the Court, I would like to reserve three minutes for rebuttal.

[00:01:20] Speaker 00:
A new trial is warranted here for four reasons.

[00:01:24] Speaker 00:
But let me set the stage quickly by highlighting two points which are uncontested by ATS.

[00:01:32] Speaker 00:
First, the JV used ATS's pre-bid design to price and schedule its winning bid.

[00:01:39] Speaker 00:
That design was prepared solely and exclusively under a contract called the teaming agreement.

[00:01:46] Speaker 00:
The teaming agreement was the only contract that existed at that time.

[00:01:51] Speaker 00:
And that's a very important point to understand for reasons I'll get to in a second.

[00:01:55] Speaker 00:
Second, there's no dispute that ATS's pre-bid design was very different from the final design.

[00:02:03] Speaker 00:
There's no dispute it was missing literally miles of piping, drainage, and other components.

[00:02:10] Speaker 03:
The road design changed.

[00:02:11] Speaker 03:
That's why.

[00:02:12] Speaker 03:
Correct.

[00:02:14] Speaker 03:
The road design changed.

[00:02:16] Speaker 03:
And had the road design not changed and all of these piping and sheeting, drainage issues arisen, to your point, Mark, the road design changed.

[00:02:25] Speaker 00:
Yes, but it changed because the original design was deficient.

[00:02:29] Speaker 00:
The rules didn't change.

[00:02:31] Speaker 00:
The Colorado Department of Transportation requirements for the road didn't change.

[00:02:36] Speaker 00:
But the design changed materially.

[00:02:38] Speaker 00:
It virtually doubled the cost of building the road.

[00:02:41] Speaker 00:
And this road was built on a fixed price and fixed schedule contract with the state.

[00:02:47] Speaker 00:
The dispute was thus whether the missing components constituted a breach of the teaming agreement.

[00:02:55] Speaker 00:
Now, there are four reasons why there should be a new trial.

[00:02:58] Speaker 00:
First, ATS sought unpaid change orders in the approximate amount of $5 million.

[00:03:05] Speaker 00:
It opened, presented evidence for a week, and rebutted for three days, and closed as a plaintiff on its affirmative claim, even though the JV tried to concede that claim and, in fact, filed a motion against itself on that claim prior to trial.

[00:03:22] Speaker 00:
I'm sorry.

[00:03:22] Speaker 00:
The JV conceded in the full amount claimed with no conditions not imposed by law.

[00:03:28] Speaker 00:
Yes, there was one condition that the judge would not be enforced.

[00:03:32] Speaker 02:
If you were just going to list the four, I was going to let you give all four.

[00:03:34] Speaker 02:
But when you're going into the substance, I'm going to start asking questions.

[00:03:37] Speaker 00:
Yes, sir.

[00:03:39] Speaker 02:
How are you prejudiced?

[00:03:41] Speaker 02:
by the district court's refusal to accept your offer of judgment, essentially?

[00:03:48] Speaker 00:
The main way is that 98% of the opening case in the first week and 100% of the three days of rebuttal at the end were pre-budding and then re-budding the case in which we had the burden of proof.

[00:04:02] Speaker 00:
So what's wrong with that?

[00:04:04] Speaker 02:
That's the way it was going to be if you hadn't conceded.

[00:04:09] Speaker 02:
Well, except you had known for some time that they were going to go first.

[00:04:14] Speaker 02:
And that would be with respect to your claims when you call pre-budding.

[00:04:17] Speaker 02:
I like that term.

[00:04:18] Speaker 02:
I hadn't heard it before.

[00:04:21] Speaker 02:
So what's the difference?

[00:04:23] Speaker 02:
You were going to face exactly that.

[00:04:26] Speaker 00:
That's true, Your Honor, but what we didn't know is that 98% of their case was going to be pre-budding our claim.

[00:04:32] Speaker 00:
We thought they were going to prove their claim.

[00:04:35] Speaker 00:
We took them at their word that they had extensive evidence.

[00:04:38] Speaker 02:
Well, but I thought the reason that happened was the judge said, you're not going to be able to call a witness more than once.

[00:04:44] Speaker 02:
That's true, Your Honor.

[00:04:45] Speaker 02:
If you want to call a witness on your plaintiff's claim, you better call them to counter what's going to come up.

[00:04:53] Speaker 00:
That is 100% true, but there was only one witness in that category, Mindy Steckness.

[00:04:59] Speaker 04:
Well, the judge's internal case management.

[00:05:03] Speaker 04:
ruling doesn't really distinguish between how many witnesses you're going to have on your own case versus... Yes, Your Honor, that's true.

[00:05:11] Speaker 04:
There wasn't any specification by the judge was there about how much time they could spend on each case.

[00:05:17] Speaker 00:
No, but all the judge's rules required is if you have a witness that's both, i.e.

[00:05:22] Speaker 00:
talking about their affirmative claim and rebutting our claim, then you call them once.

[00:05:27] Speaker 00:
But the only witness that fell into that category, as a matter of fact, was Middi Stekmas,

[00:05:31] Speaker 00:
It was a very quick, I think, 39-minute or something in that range of witness.

[00:05:37] Speaker 02:
Part of it was your motion to enter judgment against you, essentially.

[00:05:42] Speaker 02:
It came just a couple weeks before trial.

[00:05:45] Speaker 02:
Things are planned.

[00:05:47] Speaker 02:
Is it clear that those witnesses were not going to be needed?

[00:05:53] Speaker 02:
The other witnesses called them their initial presentation, that those witnesses were not going to be needed.

[00:06:00] Speaker 02:
For the purpose of their claim?

[00:06:02] Speaker 02:
Because you or whoever was representing your client at the time of trial essentially conceded the issue to start with, so of course you're not going to present hours and hours of testimony when the other sides conceded it in an opening statement.

[00:06:20] Speaker 02:
So was it clear before you decided to

[00:06:28] Speaker 02:
Before you moved to have judgment against you, was it clear that none of these witnesses called at the outset by plaintiff were going to be needed for the case in chief?

[00:06:39] Speaker 00:
No, I don't think it was clear.

[00:06:40] Speaker 02:
And in fact, one of the arguments that counsel... So it wasn't clear that they weren't going to be needed.

[00:06:45] Speaker 02:
It was a double negative.

[00:06:46] Speaker 00:
Oh, sorry.

[00:06:47] Speaker 00:
It wasn't clear that they would only testify about the JV's claim.

[00:06:59] Speaker 02:
You say only one said anything about their claim against you.

[00:07:05] Speaker 00:
Two did, but one was what I call a crossover witness, meaning that person, Ms.

[00:07:10] Speaker 00:
Steck, was testified about their claim and the JV's claim.

[00:07:13] Speaker 00:
The other witness testified only about the affirmative.

[00:07:15] Speaker 02:
And there were eight other witnesses they called.

[00:07:17] Speaker 00:
Yes, sir.

[00:07:18] Speaker 02:
And none of those would have had anything to say about plaintiff's claim.

[00:07:23] Speaker 00:
They could have, but as a factual matter, they were not called to testify about any of that, which I think really stands the traditional plaintiff role on its head in a way that raises, I think, constitutional...

[00:07:40] Speaker 02:
If you had not conceded at the outset, they may well have called those other eight witnesses to testify in their case in chief.

[00:07:48] Speaker 02:
And giving them two weeks notice for a big trial is, you can see why the judge said, no, I'm not going to change the order of witnesses.

[00:07:57] Speaker 00:
Yes, sir.

[00:07:58] Speaker 00:
But it wasn't.

[00:07:58] Speaker 02:
So the fact that they ultimately didn't testify with respect to plaintiff's case in chief and just pre-rebutted,

[00:08:04] Speaker 02:
I'm not sure how forceful that argument is in that.

[00:08:07] Speaker 00:
Yes, sir.

[00:08:07] Speaker 00:
But it wasn't two weeks notice in November.

[00:08:10] Speaker 00:
The trial was in February.

[00:08:11] Speaker 00:
In November, we first raised it.

[00:08:12] Speaker 00:
And in fact, ATS concedes in its brief that ATS's counsel agreed.

[00:08:18] Speaker 00:
Now their client didn't.

[00:08:20] Speaker 00:
And so the agreement never came to fruition.

[00:08:22] Speaker 00:
But ATS's counsel agreed to this understanding.

[00:08:26] Speaker 00:
If their counsel agreed, then there can't have been any prejudice to them, or they wouldn't have agreed to it, meaning that they could have rejiggered their case so that we could have gone as plaintiff.

[00:08:38] Speaker 02:
Before there's an agreement, you say because their counsel was willing to do this, even though the client wasn't, that they should have changed their entire

[00:08:49] Speaker 02:
structure of how they're going to put on their case?

[00:08:51] Speaker 00:
Well, no, I'm just saying that if the counsel was comfortable with it, I think it shows that the district court jumping to the conclusion that there was prejudice was probably incorrect.

[00:09:00] Speaker 00:
He probably should have had more of an inquiry because- Their counsel agreed to- Subject to- No, ATSs, the other party- Agreed that they would not- The designer- That you would be able to go first.

[00:09:13] Speaker 00:
Correct, agreed to the stipulation that would essentially take care of their affirmative.

[00:09:17] Speaker 02:
Well, did they specifically agree, not just to the stipulated judgment, but did they agree that you would go first?

[00:09:25] Speaker 00:
Yes, that was one of the terms, because at that point they would have no affirmative case to put on.

[00:09:31] Speaker 02:
That was implicit or explicit?

[00:09:34] Speaker 00:
It was fairly implicit.

[00:09:35] Speaker 00:
I mean, I don't have their signature on a piece of paper, but they agreed subject.

[00:09:40] Speaker 00:
I'm sorry.

[00:09:41] Speaker 04:
Fairly implicit, that's a term I have there.

[00:09:43] Speaker 00:
Yeah.

[00:09:44] Speaker 00:
They agreed subject to their client's concurrence.

[00:09:47] Speaker 00:
And the only reason I'm pointing that out is not to say that I can enforce that.

[00:09:50] Speaker 00:
Their client didn't agree.

[00:09:51] Speaker 00:
I concede that.

[00:09:52] Speaker 03:
You had a settlement offer, and at least some people say there are conditions that could have affected their ability to defend against your claim.

[00:10:00] Speaker 03:
All you had to do is write a check.

[00:10:03] Speaker 03:
When you write a check.

[00:10:05] Speaker 00:
Yes, Your Honor, we could have written a check, but that's not required.

[00:10:07] Speaker 00:
There would have been no ability to enforce that judgment that we conceded in the full amount until the whole case was over.

[00:10:14] Speaker 00:
And in fact, here, as a practical matter, there was no ability to even enforce until all the attorney's fees issues were heard.

[00:10:20] Speaker 00:
So there was no reason for us to write a check.

[00:10:23] Speaker 00:
We conceded in the full amount.

[00:10:25] Speaker 04:
Your reason was because you didn't want to write the check because you wanted to be able to control the course of the trial.

[00:10:30] Speaker 00:
Correct, and it also wasn't required.

[00:10:32] Speaker 04:
Which means it was conditional.

[00:10:34] Speaker 04:
I mean, it was a conditional offer.

[00:10:36] Speaker 04:
Well, Your Honor, with all due respect, I don't think that's... We'll pay you, but we want to get through this trial first and do it the way we want to do it.

[00:10:42] Speaker 04:
And if we get through it that way, then we'll pay you.

[00:10:44] Speaker 04:
That's a conditional offer.

[00:10:46] Speaker 04:
Yeah, I don't think it's a... And the District Court treated exactly that as a settlement.

[00:10:50] Speaker 00:
Well, but we move for judgment against ourselves in the full amount.

[00:10:53] Speaker 00:
That's giving them exactly what they would have gotten.

[00:10:55] Speaker 04:
Are you talking about your Rule 54B motion?

[00:10:57] Speaker 00:
Yes, we did make a Rule 54B.

[00:10:58] Speaker 04:
Well, first of all, Rule 54B doesn't allow for independent motions for judgment.

[00:11:05] Speaker 04:
I'm not quite sure what you intended it as, but I mean generally you have a judgment and it's not final.

[00:11:12] Speaker 04:
And rule 54B allows the court to make that essentially a final judgment.

[00:11:20] Speaker 04:
I'm not sure, I don't understand how you could even use it to create a judgment.

[00:11:28] Speaker 04:
That's not what the rule is for.

[00:11:31] Speaker 04:
You know, that part of it, I guess I don't even understand the nature of your claim.

[00:11:36] Speaker 04:
Are you saying it was an abuse of discretion to deny the Rule 54B motion?

[00:11:41] Speaker 04:
Yes, Your Honor, an abuse of discretion because... Which is about finality of judgment?

[00:11:44] Speaker 00:
Yes, but it does permit the court... And allows an appeal?

[00:11:47] Speaker 00:
It does permit the court to enter judgment on some but not all of the claims.

[00:11:51] Speaker 00:
And since we were no longer planning to contest that claim, there was no reason to dispute it.

[00:11:56] Speaker 02:
But with the court's permission... And let's get to the other issues.

[00:11:59] Speaker 00:
Pardon?

[00:11:59] Speaker 00:
I think we... Yes, I'd like to move to the third issue given the time left, which is the jury should have been what was not instructed on the implied covenant of good faith and fair dealing implied at every contract under Colorado law.

[00:12:12] Speaker 00:
its absence allowed ATS to take the position that nothing in the contract's express language prevented it from hiding what it knew about the design from the JV.

[00:12:22] Speaker 03:
You said under Colorado law, was it a Colorado pattern instruction or was it a

[00:12:28] Speaker 03:
amalgamation of a concealment fraud claim inside of an implied covenant instruction?

[00:12:35] Speaker 00:
It wasn't the pattern instruction.

[00:12:37] Speaker 00:
It did have revisions.

[00:12:39] Speaker 00:
However, if the court wanted to give the pattern instruction, that would have been fine with us.

[00:12:48] Speaker 00:
ATS offered no instruction of their own.

[00:12:51] Speaker 00:
But I think the remedy, if there's a problem with the instruction, is not to not give the instruction at all.

[00:12:56] Speaker 00:
Because ATS admitted, and it admits in its brief hereon appeal, that before the subcontract was final, it knew that portions of the drainage plan needed more barriers, pipes, et cetera.

[00:13:11] Speaker 02:
But the judge rejected the instruction on good faith and fair dealing.

[00:13:18] Speaker 02:
because you had never raised it.

[00:13:20] Speaker 02:
It's not mentioned in the pretrial order, is that correct?

[00:13:22] Speaker 00:
Yes, and that's true.

[00:13:24] Speaker 00:
It's not mentioned in the pretrial order.

[00:13:25] Speaker 02:
So you say you think any challenge you had to the contract could be raised at trial with an instruction, even though you hadn't put the opposing party on notice that you were going to say, well, there wasn't consideration for this reason or whatever.

[00:13:41] Speaker 02:
You think you can raise that aspect of your contract claim?

[00:13:45] Speaker 00:
Yes, Your Honor, because it's implied in every contract.

[00:13:47] Speaker 02:
There's no... There are lots of things that are implied in contracts, and if you haven't argued them, if you're not saying that there's lack of consideration for whatever reason, and you don't mention that in the pretrial order and bring it up for the first time in the jury instructions, the judge isn't going to give you an instruction on that point because you didn't give the other party notice of it.

[00:14:11] Speaker 00:
Well, but there was no request at the pre-trial conference to give any details about any trial instructions.

[00:14:16] Speaker 00:
The judge basically said this term that's baked into every contract needs to be specifically called out.

[00:14:24] Speaker 00:
But there's no case law that stands for that.

[00:14:26] Speaker 00:
And of course, ATS was on notice that we felt that we were tricked.

[00:14:31] Speaker 02:
So if you have a contract and you're claiming a breach of contract and there are 10 terms in the contract,

[00:14:37] Speaker 02:
And you haven't put the opposing party on notice that you're claiming there was a breach of Term 2, that you can then raise that in the jury instructions?

[00:14:47] Speaker 00:
Yes, Your Honor, because that's an issue for discovery.

[00:14:49] Speaker 00:
And in fact, ATS here knew our theory that we had been tricked into entering into subcontract because we had a negligent misrepresentation claim that got tossed out.

[00:15:00] Speaker 00:
But it's not like this was a surprise.

[00:15:02] Speaker 00:
They knew what our argument was.

[00:15:05] Speaker 00:
Well, is it the substitute for that claim?

[00:15:07] Speaker 00:
I'm sorry.

[00:15:08] Speaker 03:
Is there a substitute for that claim?

[00:15:10] Speaker 03:
Is that what you're telling us?

[00:15:11] Speaker 03:
You wanted to bring the implied covenant instruction to make up for getting your concealment claim tossed?

[00:15:18] Speaker 00:
No, no, I'm mentioning the consumer claim because I'm saying that ATS was certainly on notice that it was our position that they tricked us into entering into the subcontract by not disclosing what they knew about the cost growth and the drainage design that they had left out of their pre-bid original design.

[00:15:39] Speaker 04:
You're suggesting that that's the same negligent concealment is the same claim as... No, I'm not suggesting it's the same.

[00:15:45] Speaker 00:
I'm just saying it's related.

[00:15:46] Speaker 04:
I'm not sure how they were on notice then.

[00:15:47] Speaker 04:
If it wasn't in the pretrial order, I'm not sure how they were on notice.

[00:15:50] Speaker 00:
Well, the pretrial order just listed the claims.

[00:15:52] Speaker 04:
I mean, there were years of... Right, that's what a pretrial order does, and it controls the remainder of the litigation.

[00:15:57] Speaker 04:
And if claims not in there, as the court said here, I'm not sure how they're on notice of it.

[00:16:04] Speaker 04:
That's what would put them on notice of it at that point.

[00:16:07] Speaker 00:
Well, but Your Honor, there were years of discovery where issues came up about what were we claiming, and our claim was very clear that they knew about and did not tell us about the cost growth.

[00:16:19] Speaker 00:
That is the only reason that we wanted the instruction.

[00:16:22] Speaker 00:
And I don't think even ATS's counsel is going to come up and tell you that they were not aware of that aspect of the claim.

[00:16:29] Speaker 00:
Thank you.

[00:16:29] Speaker 00:
I see my time is just about out.

[00:16:30] Speaker 00:
I'd like to reserve whatever I have left for rebuttal.

[00:16:33] Speaker 02:
It's on orange or red, so that's how much you've gone over.

[00:16:36] Speaker 00:
Oh, I apologize.

[00:16:38] Speaker 02:
Mr. Cohen?

[00:16:55] Speaker 02:
Let me ask you a question to start off on the prejudice from

[00:17:01] Speaker 02:
If there's any prejudice from the district courts, refusal to grant the motion to enter judgment against the plaintiff with certain exceptions.

[00:17:12] Speaker 01:
Your Honor.

[00:17:13] Speaker 02:
Certain conditions.

[00:17:17] Speaker 02:
Was your opposing counsel, I'm sorry, were you on notice

[00:17:29] Speaker 02:
weeks before the actual trial, that it may be that you'd have to reorganize which witnesses were called at what time.

[00:17:39] Speaker 01:
Your Honor, thank you.

[00:17:40] Speaker 01:
May it please the Court.

[00:17:42] Speaker 01:
Let me explain the precise sequence of events regarding Flatiron's motion to have judgment entered against itself.

[00:17:53] Speaker 01:
Flatiron could have paid any time and extinguished ATS's affirmative claim, but it didn't.

[00:17:59] Speaker 01:
Flatiron might have also tried to timely confess judgment.

[00:18:02] Speaker 01:
And the time to do that would have been before the entry of the pretrial order.

[00:18:07] Speaker 01:
A judgment of confession, which means unconditional confession of judgment, might have done the trick.

[00:18:14] Speaker 01:
But Flatiron didn't do that.

[00:18:15] Speaker 01:
Flatiron also did not ask the trial court to make any exceptions or adjustments to its one witness only, or each witness appears only protocol.

[00:18:27] Speaker 01:
So in November,

[00:18:29] Speaker 01:
for a trial that was scheduled to start in January.

[00:18:33] Speaker 01:
So about roughly two months before the beginning of trial Flatiron suggested.

[00:18:40] Speaker 01:
We have a suggestion we're not going to oppose the claim so we will accept judgment and acknowledge our obligation to pay on condition that ATS agree that it will not enter any evidence regarding its affirmative claim.

[00:18:54] Speaker 01:
Evidence which by the way was equally defensive in nature.

[00:18:57] Speaker 01:
ATS needed to explain

[00:19:00] Speaker 01:
all of the additional design work that it had to do, not because of any problems with the original pre-bid design, but because of mistakes and mismanagement by Flatiron.

[00:19:11] Speaker 01:
That's what the potential change orders were all about.

[00:19:14] Speaker 01:
Flatiron directing ATS to do additional design work because, for instance, it did not discover, like it was obligated to do, that there were all kinds of pipes and utility lines buried at certain intersections.

[00:19:28] Speaker 01:
We can't build the road the way that ATS had designed because of all the stuff that... I'm sorry, I'm not answering your question.

[00:19:36] Speaker 01:
I'm just... You're right.

[00:19:37] Speaker 01:
So let me go back to the schedule.

[00:19:39] Speaker 01:
So Flatiron raises this issue in November.

[00:19:43] Speaker 01:
the proposal to accept judgment conditionally.

[00:19:49] Speaker 01:
ATS has not agreed to that condition.

[00:19:52] Speaker 01:
The condition was a non-starter.

[00:19:54] Speaker 01:
But there was this looming problem.

[00:19:55] Speaker 02:
It seemed pretty reasonable actually.

[00:19:57] Speaker 02:
All it was saying is we shouldn't have to pay you until our claim against you is resolved because there may be offset.

[00:20:04] Speaker 01:
It wasn't the payment delay that was the problem.

[00:20:07] Speaker 01:
It was the evidentiary restriction that would have prevented ATS from trying the case the way that it had planned, improving its own performance, which was absolutely necessary to defend against Flatiron's quarter billion dollar claim.

[00:20:21] Speaker 02:
What term of their motion?

[00:20:25] Speaker 01:
It is on page one, I think, of both motions.

[00:20:27] Speaker 01:
The November motion for teleconference lists five conditions, and one of those conditions is

[00:20:34] Speaker 01:
that we will accept judgment, says Flatiron, in exchange for which ATS will agree or will not be allowed to present any evidence of its affirmative claim.

[00:20:44] Speaker 01:
That's what made it a settlement offer.

[00:20:46] Speaker 01:
But the problem was that Flatiron might have simply cut the check at any time and thereby extinguished ATS's claim.

[00:20:55] Speaker 01:
So we agreed, we negotiated in good faith with Flatiron to try and make the best stipulation we could, subject to the understanding that we didn't have our client approval yet.

[00:21:11] Speaker 01:
This was all subject to client approval.

[00:21:13] Speaker 01:
And in fact, I've brought the email, Jim.

[00:21:15] Speaker 02:
The problem is you're not putting on any evidence in support of the claim that they're willing to make a confessed judgment on.

[00:21:23] Speaker 02:
Why was that a problem for you?

[00:21:25] Speaker 01:
Because, Your Honor, the evidence of our affirmative claim, as I tried to explain, was both affirmative and also defensive in nature.

[00:21:33] Speaker 02:
So anything, anyway, any evidence you want to put on to defend against their claim might have been excluded because they would argue that's really evidence in support of their counterclaim.

[00:21:46] Speaker 01:
Exactly.

[00:21:47] Speaker 01:
Especially in a four-week jury trial where we were pressed to make sure that we ended things on time.

[00:21:52] Speaker 01:
You could imagine, we're trying to present our defense against Flatiron's quarter billion case, and we present our defense of evidence from Flatiron objects.

[00:22:01] Speaker 01:
This is covered by the stipulation, Your Honor, running out of time.

[00:22:05] Speaker 01:
Objection sustained.

[00:22:08] Speaker 01:
Our hands could have been tied.

[00:22:10] Speaker 01:
There was no way of knowing how Flatiron's proposed stipulation would have played out over the course of trial.

[00:22:18] Speaker 02:
So you were negotiating on health?

[00:22:20] Speaker 01:
We were negotiating to get the best arrangement we could as a written stipulation, subject to client approval.

[00:22:28] Speaker 01:
And at the end of the day, after we thought we had reached a, well, this is the best stipulation we can get, we took it to the client, the client did not approve.

[00:22:36] Speaker 01:
But the email exchanges always say, subject to client approval, we're willing to negotiate the terms of what a stipulation might be.

[00:22:45] Speaker 02:
of the witnesses you called at the outset of the trial?

[00:22:49] Speaker 02:
10, is that correct?

[00:22:51] Speaker 02:
I think you said there were 10 and 2.

[00:22:53] Speaker 01:
That may have been.

[00:22:54] Speaker 01:
I don't know the number.

[00:22:55] Speaker 02:
Would all of them have been relevant to defending against the claims made?

[00:23:04] Speaker 01:
Yes, Your Honor.

[00:23:05] Speaker 01:
I believe that every single witness that ATS called did put on evidence to prove that ATS

[00:23:12] Speaker 01:
performed its contract and performed it well, which isn't essentially defensive evidence.

[00:23:19] Speaker 01:
We had to prove our performance in order to properly defend against Flatirons' claim.

[00:23:24] Speaker 01:
Their expert claimed that every single quantity that changed between the little 7% pre-bid design and the final as-built design, every single quantity change was a breach of the standard of care.

[00:23:36] Speaker 03:
Are you saying all the witnesses testified about the proposed change orders?

[00:23:40] Speaker 03:
No.

[00:23:41] Speaker 01:
Two witnesses did.

[00:23:43] Speaker 01:
Mindy Steckmist, she explained that we had a rule 1006 evidentiary summary of the 18 change orders.

[00:23:50] Speaker 01:
She explained all of the change orders grouping.

[00:23:53] Speaker 01:
These are the sound walls, these are the utilities.

[00:23:55] Speaker 01:
She explained what additional design work ATS had to do and why ATS was entitled to be paid for it, which negated, that testimony negated Flatiron's standard of care expert, that any time there was a change, it was because we breached the professional standard of care.

[00:24:15] Speaker 01:
No, these changes were because

[00:24:17] Speaker 01:
Flatiron made mistakes and mismanaged the project.

[00:24:22] Speaker 01:
That's why it was so important that we get that testimony in.

[00:24:24] Speaker 01:
We also presented, I think it was 38 minutes of video deposition from Flatiron's 30b6 witness on this topic, Jason Breda, because we wanted to establish that all of these potential change orders were outside the scope of the subcontract.

[00:24:42] Speaker 01:
which Flatiron was arguing that we hadn't proven that, but the mere fact that they are presented as potential change orders and Flatiron never objected and said, wait a minute, we don't have to pay extra for that as part of the subcontract.

[00:24:55] Speaker 01:
Flatiron has, I believe, abandoned that in its reply brief.

[00:24:59] Speaker 01:
It's focused entirely for its Rule 50 argument.

[00:25:05] Speaker 01:
Flatiron is focused entirely on the condition precedent that ATS was required to present these change orders to a design change control board.

[00:25:14] Speaker 03:
So just following up on Judge Hartz's question, I think, you're saying eight witnesses, it wouldn't have mattered if you would have settled if you had taken the money or the confession.

[00:25:25] Speaker 01:
Oh, no.

[00:25:26] Speaker 01:
Certainly.

[00:25:28] Speaker 01:
The order of proof would have been changed completely to ATS's profound detriment.

[00:25:34] Speaker 01:
I mean, remember, we were scheduled to be in the driver's seat for days one to five, then flat iron for nine, then the end.

[00:25:40] Speaker 01:
If we had switched the order of proof, we would have had to reschedule all of our witnesses, basically.

[00:25:46] Speaker 01:
They would have, instead of testifying at the beginning and end of the trial, they would have all had to testify in the middle.

[00:25:51] Speaker 01:
Many were coming from out of state.

[00:25:53] Speaker 03:
The point that there was defensive testimony, they were also

[00:25:57] Speaker 03:
testifying against the $200 million claim.

[00:26:01] Speaker 03:
Was that true for those eight witnesses even if you had accepted the confession of judgment?

[00:26:06] Speaker 01:
Oh, I think absolutely.

[00:26:08] Speaker 01:
The bulk of our case was naturally, it didn't take long to present our affirmative case.

[00:26:15] Speaker 01:
We even warned Flatiron in the briefing on this motion that if Flatiron doesn't defend against it, ATS's affirmative case will probably go quite quickly.

[00:26:26] Speaker 01:
I can give you the site for that if you need it.

[00:26:28] Speaker 02:
As it turned out, the case was simply essentially this exhibit that went through the change orders and how much was owed for what work?

[00:26:38] Speaker 01:
That was ATS's affirmative claim for $5.3 million.

[00:26:43] Speaker 02:
Is there anything else you needed beyond that?

[00:26:45] Speaker 01:
Yes.

[00:26:45] Speaker 01:
Well, Flatiron argues that we needed to negate its affirmative defense.

[00:26:51] Speaker 01:
Remember, Flatiron was raising as an affirmative defense failure to satisfy condition precedent, namely submission to the Design Change Control Board.

[00:27:00] Speaker 01:
But Flatiron had the burden of proof.

[00:27:03] Speaker 01:
It was an affirmative defense.

[00:27:04] Speaker 01:
It was Flatiron that needed to put in evidence that there were potential change orders that could have been submitted.

[00:27:12] Speaker 01:
Namely, what Flatiron should have done is establish, put on evidence to establish the date that the DCCB was formed,

[00:27:21] Speaker 01:
and then established when it began, Flat Eye made the decision to shelve that process.

[00:27:27] Speaker 02:
That's an affirmative defense.

[00:27:29] Speaker 02:
I thought to get paid on the change order, it had to be approved by this body.

[00:27:33] Speaker 01:
No, it had to be submitted to the body.

[00:27:35] Speaker 01:
The DCCB... But most of them weren't even submitted.

[00:27:39] Speaker 01:
That's right, because the DCCB did not get underway, neither party.

[00:27:43] Speaker 02:
So why is that issue an affirmative defense rather than

[00:27:47] Speaker 02:
requirement for you to show that you rode the money because it wasn't.

[00:27:51] Speaker 02:
You have to do certain things before you get paid.

[00:27:53] Speaker 01:
That's right.

[00:27:54] Speaker 01:
It is a submission to the DCCB was a condition precedent.

[00:28:02] Speaker 02:
And you're the president for your getting paid.

[00:28:04] Speaker 01:
That's right.

[00:28:05] Speaker 02:
But you have to prove that that was satisfied, that condition was satisfied.

[00:28:11] Speaker 02:
Well, we did prove it as a matter of- Okay, but you're saying you didn't have to, that was their affirmative defense.

[00:28:15] Speaker 01:
Because it was an affirmative defense, the proponent of the affirmative defense has the burden.

[00:28:22] Speaker 01:
This is a point that we did not develop as well as we might have in our answer brief.

[00:28:25] Speaker 02:
I must be asking this quarterly.

[00:28:28] Speaker 02:
Why is it an affirmative defense to say they didn't go through the steps they needed to go through to get paid?

[00:28:36] Speaker 02:
Why isn't that their burden to prove that?

[00:28:40] Speaker 01:
Because it is a failure to satisfy a condition precedent.

[00:28:45] Speaker 01:
The case law defines failure to satisfy a condition precedent as an affirmative defense to a claim for breach of contract.

[00:28:53] Speaker 03:
What were the mechanics of the DCCB?

[00:28:56] Speaker 03:
Who is the one that was supposed to submit?

[00:28:59] Speaker 01:
ATS was required to submit to the DCCBA once it was constituted, and we could.

[00:29:05] Speaker 01:
But the idea is that the DCCB acts as a type of mediation panel.

[00:29:10] Speaker 01:
The idea is that instead of allowing disputes, which often arise in these projects, to fester and turn into litigation, you appoint two panel members.

[00:29:21] Speaker 01:
They elect the umpire.

[00:29:22] Speaker 01:
You take the problems to the DCCBA.

[00:29:25] Speaker 01:
The DCCB gives you a ruling in real time.

[00:29:28] Speaker 01:
It's not binding.

[00:29:29] Speaker 01:
It's like mediation.

[00:29:31] Speaker 01:
But it's a requirement that you submit, the idea being that it keeps the design process moving instead of allowing disputes to fester.

[00:29:40] Speaker 01:
How does waiver fit into this, then?

[00:29:42] Speaker 01:
It fits in quite nicely.

[00:29:44] Speaker 01:
Nicely, as Judge Martinez ruled correctly in his Rule 50,

[00:29:50] Speaker 01:
order rejecting Flatiron's claim that failure to establish the DCCB was a waiver and so none of the potential change orders that were submitted before the DCCB was constituted could have gone because Flatiron did not do its part in constituting it.

[00:30:11] Speaker 01:
But also I was at shelving

[00:30:13] Speaker 01:
the DCCB process.

[00:30:15] Speaker 03:
Is the DCCB, is that once it's selected, those members remain the same for every proposed change order dispute?

[00:30:22] Speaker 01:
Yes, it's just a single board.

[00:30:25] Speaker 01:
And it would have remained through the entire process except for the fact that there's waiver on the backside as well.

[00:30:32] Speaker 01:
Flatirons witness testified that once it became clear that this matter would go to litigation,

[00:30:39] Speaker 01:
it decided to shelve the process, because we're going to try it anyway.

[00:30:43] Speaker 01:
And Flatiron anticipated that its much larger claim would act as a set-off.

[00:30:48] Speaker 04:
I'm wondering about the district court, you said, found there was a waiver.

[00:30:56] Speaker 04:
But I wonder, the subcontract that looked like prohibited generalized waivers would have had to show an unequivocal act showing waiver.

[00:31:07] Speaker 01:
Well, in that case, you could... Is that an error?

[00:31:09] Speaker 04:
No, that is not an error.

[00:31:10] Speaker 04:
What was the unequivocal act showing the waiver?

[00:31:13] Speaker 01:
Well, the unequivocal act... Well, the PCO submission that the district court focused on had to do with the I-25 interchange.

[00:31:21] Speaker 01:
That's one... You're familiar where we did the work, submitted, and the Flatiron got ATS's money and kept it in its own pocket.

[00:31:29] Speaker 01:
I understand.

[00:31:30] Speaker 01:
Yeah, that was the waiver.

[00:31:31] Speaker 04:
What was the unequivocal act that was the waiver of that process?

[00:31:36] Speaker 01:
The trial court found that that could be applied to other PCOs.

[00:31:46] Speaker 01:
Plus, if it's not waivered, then it's prevention.

[00:31:48] Speaker 01:
If Flatiron does not do it.

[00:31:50] Speaker 04:
There was no unequivocal act, is what you're saying.

[00:31:53] Speaker 01:
It doesn't sound like it.

[00:31:53] Speaker 01:
No, it is an unequivocal act, Judge Martz.

[00:31:57] Speaker 01:
To fail to constitute the board that you claim ATS was required to submit PCOs to, that's unequivocal.

[00:32:07] Speaker 01:
It was a prevention, and that's absolutely unequivocal.

[00:32:11] Speaker 03:
What does that mean, Phil, prevent it?

[00:32:13] Speaker 01:
How did it prevent it?

[00:32:14] Speaker 01:
The DCCB has to exist.

[00:32:17] Speaker 01:
It has to be constituted in order for ATS.

[00:32:19] Speaker 01:
In order for that to happen, both sides have to nominate their representative on the DCCB.

[00:32:25] Speaker 01:
And did ATS nominate?

[00:32:28] Speaker 01:
No.

[00:32:28] Speaker 01:
Both sides were at fault here.

[00:32:29] Speaker 01:
Jason Braida's deposition testimony acknowledged that Flatiron did not nominate its

[00:32:35] Speaker 01:
DCC be representative either until very late in the process.

[00:32:40] Speaker 01:
That's why the board never got off the ground until very late and was then shelved right after.

[00:32:45] Speaker 01:
Your Honor, I'm out of time.

[00:32:48] Speaker 01:
We ask that the court affirm this matter and ATS will present its motion for attorney fees afterwards per rule 39.2.

[00:33:08] Speaker 00:
Thank you.

[00:33:08] Speaker 00:
Just two or three quick points.

[00:33:10] Speaker 00:
Point one, the DCCB was set up.

[00:33:13] Speaker 00:
In fact, it denied at least one of the change orders.

[00:33:16] Speaker 00:
So it's not true that it was never set up.

[00:33:20] Speaker 00:
Point two, ATS complains of the condition about introducing evidence.

[00:33:26] Speaker 00:
But as pointed out in our brief, that condition was withdrawn when we made our rule 54 motion to the court and we raised it as a separate evidentiary motion for the court.

[00:33:37] Speaker 00:
Point three,

[00:33:39] Speaker 00:
Section 1.6 of the teaming agreement was construed in opening and closing by ATS that they could withhold information.

[00:33:47] Speaker 00:
We were unable to rebut that without an instruction to the jury telling them about good faith and fair dealing, which even if not raised in a timely way in the early order in the court, leave should have been granted liberally.

[00:34:02] Speaker 02:
Thank you.

[00:34:04] Speaker 02:
Thank you, Council.

[00:34:05] Speaker 02:
The case is submitted.

[00:34:06] Speaker 02:
Council are excused.

[00:34:15] Speaker 02:
Thank you.