Closson et al v. Bank of America N.A. et al, No. 2:2011cv00275 - Document 76 (D. Nev. 2012)
Court Description: ORDER Denying 52 Motion in Limine; Granting 53 Motion in Limine; Granting 54 Motion in Limine; Granting 55 Motion in Limine; Denying 59 Motion in Limine; Denying 60 Motion in Limine; Denying 61 Motion in Limine. Signed by Judge James C. Mahan on 12/19/2012. (Copies have been distributed pursuant to the NEF - SLD)
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Closson et al v. Bank of America N.A. et al Doc. 76 1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 7 SUSAN CLOSSON and CHARLES R. CLOSSON, 8 2:11-CV-275 JCM (GWF) 9 Plaintiffs, 10 11 v. 12 BANK OF AMERICA, N.A., et al., 13 Defendants. 14 15 ORDER 16 Presently before the court are defendant Bank of America’s (“BANA”) four motions in 17 limine. (Docs. ## 52-55). Plaintiffs Susan and Charles Closson (“Closson”) have filed responses 18 to each motion in limine. (Docs. ## 63-66). Also before the court are the Clossons’ three motions in limine. (Docs. # 59-61). BANA has 19 20 filed a response to each motion in limine. (Docs. ## 71-73). 21 I. Background 22 BANA and the Clossons entered into a contract with certain terms and conditions. BANA 23 agreed to lend the Clossons money to fund the construction of a home. If the construction was 24 timely completed on an agreed upon date, BANA would roll over the loan into permanent financing. 25 If the Clossons did not timely complete construction by the agreed upon date, BANA, at its option, 26 could elect to extend the construction completion date and financing in the contract. The Clossons 27 could also elect, at the same time, to pay a fee to lock in the rate and loan terms. If the Clossons 28 James C. Mahan U.S. District Judge Dockets.Justia.com 1 elected not to lock in the rate and loan terms at that time, then the rates and terms would shift 2 according to market rates as provided in the contract. 3 The Clossons did not complete construction by the agreed upon deadline date. BANA 4 elected to extend the deadline and offered to roll over the rate and terms of the loan into permanent 5 financing. The Clossons elected not to pay the fee to lock in the rates and terms, and to take their 6 chances with market rates. The fluctuating market caused interest rates to increase. Sometime 7 thereafter the Clossons defaulted and BANA eventually foreclosed on the property. 8 The parties do not appear to agree on the facts or the terms of the contract following the 9 Clossons’ decision to decline to lock in rate and terms protection. The Clossons alleged that BANA 10 breached the terms of the contract with its conduct and computations of fees after the Clossons 11 declined to exercise rate and terms protection. The Clossons claim substantial damages. BANA 12 denies the allegations and alleges it fully complied with the terms of the contract. The court will address each motion in limine filed by each party in turn. 13 14 II. BANA Motion in Limine No. 1 (doc. # 52) 15 BANA “anticipates that [the Clossons] will attempt to introduce evidence or argument related 16 to other litigation, investigations, settlements and other unrelated matters involving [BANA], 17 including news reports.” (Doc. # 52, 2:17-19). BANA argues such evidence is irrelevant under Fed. 18 R. Evid. 402, unfairly prejudicial under Fed. R. Evid. 403, and improper character evidence under 19 Fed. R. Evid. 404. BANA argues that complaints by other consumers and news reports are 20 inadmissable hearsay. This is a very broad request by BANA. 21 Closson agrees not to attempt to offer evidence that is truly irrelevant. However, plaintiff 22 then qualifies that statement by stating BANA’s “behavior in analogous or near identical situations 23 is certainly related to the present case, and could provide valuable information.” (Doc. # 63, 1:27- 24 2:1). Closson argues that one specific case, Bobby Shomer v. Bank of America, is material because 25 it involves a nearly identical loan, the same defendant, the same attorneys, the same builder and the 26 same counsel on both sides. 27 ... 28 James C. Mahan U.S. District Judge -2- 1 A court’s holding and guidance in a motion in limine can only be as specific as the request 2 sought by the moving party. The court agrees with BANA that the majority of other litigation, 3 investigations, news reports, and settlements are either irrelevant or specifically excluded under one 4 of the federal evidentiary rules. However, trials are dynamic and the federal rules permit evidence 5 for certain purposes and exclude the exact same evidence offered for a different purpose depending 6 on the testimony elicited or arguments made during trial. 7 The court cannot hold that no other litigation, settlement, compromise or investigation could 8 ever be relevant or otherwise inadmissible during the trial. The court can only instruct the parties 9 that all the Federal Rules of Evidence will apply throughout the duration of trial. Both sets of 10 counsel can make specific objections as they feel are necessary during the course of the proceedings. 11 The motion is DENIED consistent with the foregoing. 12 III. BANA Motion in Limine No. 2 (doc. # 53) 13 This motion in limine moves the court for an order precluding the Clossons from making four 14 very specific types of statements to the jury. First, BANA moves the court to prohibit the Clossons 15 from “making statements regarding alleged misconduct by other banks and corporations, general 16 corporate greed, the need for corporate America and defendant to be sent a message. . . .” (Doc. # 17 53, 3:13-15). BANA refers to these statements as “send a message” arguments. 18 19 20 21 Second, BANA moves the court to “exclude any ‘Golden Rule arguments’ to the jury imploring the jury to put themselves in plaintiffs’ shoes.” (Doc. # 3:23-24). Third, BANA moves the court “for an order prohibiting any expression of counsel’s personal opinion regarding the credibility of any witness.” (Doc. # 4:2-3). 22 Fourth, BANA moves the court to preclude “reference to [the] attempt to argue or attempt 23 to introduce evidence of the relative size of BANA–in terms of assets, revenue or other measure–as 24 compared to plaintiffs, or any statements tending to suggest that the outcome should be based upon 25 the party who will be affected the least.” (Doc. # 53, 4:7-9). 26 All four arguments or statements are never proper and are prohibited in front of the jury. 27 E.g., Lioce v. Cohen, 174 P.3d 970, 984 (Nev. 2008) (“An attorney may not make a golden rule 28 James C. Mahan U.S. District Judge -3- 1 argument, which is an argument asking jurors to place themselves in the position of one of the 2 parties. Golden rule arguments are improper because they infect the jury’s objectivity.”); see also 3 DeJesus v. Flick, 7 P.3d 459 (Nev. 2000) (providing examples of attorney “arguments to the jury 4 [that] far exceeded the boundaries of professional conduct”), overruled on other grounds by Lioce 5 v. Cohen, 174 P.3d 970 (Nev. 2008). The motion is GRANTED. 6 IV. BANA Motion in Limine No. 3 (doc. # 54) 7 BANA moves the court “to exclude [the Clossons] and their counsel from proffering any 8 evidence, arguing, referring to or mentioning any information or documents related to alleged acts 9 or omissions of BANA that [the Clossons] claim fraudulently induced them into obtaining the 10 subject construction loan.” (Doc. # 54, 1:21-25). BANA argues that any evidence or testimony that 11 BANA made material misrepresentations and/or omissions at the time of contract formation are 12 irrelevant because Closson has not alleged fraudulent inducement. According to BANA, Closson 13 admits there was a valid contract so evidence regarding contract formation is irrelevant. 14 Closson filed a response arguing that the critical issue in the case is the interpretation of 15 certain clauses in the contract. Closson argues that to prove that the contract is ambiguous requires 16 extrinsic evidence of the circumstances and communications surrounding the contract formation. 17 Whether the meaning of a contract clause is ambiguous is a question of law. See Anvui, LLC 18 v. G.L. Dragon, LLC, 163 P.3d 405, 407-408 (Nev. 2007). In Anvui, the Nevada Supreme Court 19 stated: 20 21 22 23 “Construction of a contractual terms is a question of law. . . . In interpreting a contract, the court shall effectuate the intent of the parties, which may be determined in light of the surrounding circumstances if not clear from the contract itself. A contract is ambiguous when it is subject to more than one reasonable interpretation. Any ambiguity, moreover, should be construed against the drafter. The parties’ intentions regarding a contractual provision present a question of fact.” 24 25 Id. at 407 (internal quotations and citations omitted). Neither party has filed a motion to the court 26 arguing that any part of the contract is either ambiguous or unambiguous, so the court has never 27 decided the issue. The parties argue past each other in the motions and do not squarely address the 28 James C. Mahan U.S. District Judge -4- 1 issues presented by the other. 2 It is true that the Clossons cannot argue or attempt to admit evidence demonstrating 3 fraudulent inducement because the Clossons did not allege that cause of action. However, a valid 4 contract can be ambiguous. If a contract is ambiguous, the intentions and circumstances leading up 5 to contract formation become relevant. The intentions and circumstances leading up to contract 6 formation will necessarily require the parties to delve into facts and statements leading up to contract 7 formation.1 8 Even though both parties agree a valid contract exists, the facts, circumstances, and intentions 9 of the parties could all be relevant. The interpretation of terms of a contract and the intent of the 10 parties will necessarily determine whether a breach a occurred under the contract and if there are any 11 damages. The motion is GRANTED, consistent with the foregoing. 12 V. BANA Motion in Limine No. 4 (doc # 55) 13 BANA moves the court “to exclude [the Clossons] and their counsel from proffering any 14 evidence, arguing, referring to or mentioning any information or documents related to other 15 construction loans originated by BANA.” (Doc. # 55, 1:21-23). BANA argues that other 16 construction loans originated by BANA are irrelevant, prejudicial, and would confuse the jury. 17 BANA states that evidence of its other construction loans, and decisions whether to convert other 18 construction loans into permanent loans like in the instant dispute, would never be relevant, and 19 would never be permissible under any of the Federal Rules of Evidence (such as Rules 404 and 406, 20 among others). 21 The Clossons argue that at least one other case, Bobby Shomer v. Bank of America, is 22 probative because of all the similarities to the facts in the instant dispute. (Doc. # 52). A completely 23 different case cannot become relevant solely because it is similar to the instant case. The motion is 24 GRANTED. 25 ... 26 27 28 James C. Mahan U.S. District Judge 1 If BANA believes, after Closson has presented its case, that the contract is unambiguous then BANA may file a motion for judgment as a matter of law at the appropriate time. -5- 1 VI. Closson Motion in Limine No. 1 (doc. # 59) 2 The Clossons move the court “to prohibit [BANA] from offering and/or soliciting any direct 3 or indirect evidence or making any argument related to [the Closson’s] financial condition after 4 January 30, 2009.” (Doc. # 59, 1:26-28). The Clossons argue that January 30, 2009, is the last 5 possible date their financial position could be relevant because that was the last date of their payment 6 to BANA. 7 BANA opposes the motion and argues that the Clossons were not finished with the 8 construction on the property by January 30, 2009, therefore their financial condition after that date 9 remains relevant because it would effect the contract terms in rollover financing. BANA argues that 10 the ability to make payments on the loan is directly relevant to what interest rate and “points” would 11 apply in the new, rollover loan. Finally, BANA argues that the Clossons continued to make draws 12 on the contract until April 17, 2009, well after January 30, 2009, which was the cutoff date suggested 13 by plaintiffs. 14 This motion seeks an order too broad for the court prior to trial. The court cannot 15 contemplate all the different ways in which the relevance of evidence may manifest during trial. Fed. 16 R. Evid. 401 establishes a low bar of what evidence is potentially relevant–“any tendency to make 17 a fact more or less probable than it would be without the evidence.” The evidence is relevant to the 18 interest rates and “points” that would apply in the new loan, which is at the heart of the dispute. The 19 motion is DENIED, but the Clossons can make timely objections during trial if they believe 20 evidence, even if relevant, should be excluded under another rule. 21 VII. Closson Motion in Limine No. 2 (doc. # 60) 22 The Clossons move the court to “prohibit [BANA] from offering and/or soliciting any direct 23 or indirect evidence or making any argument related to changes in the value of the property during 24 or after its construction.” (Doc. # 60, 1:26-28). The Clossons argue that the issue to be decided in 25 the case is whether BANA breached the terms of the contract. The Clossons then argues that 26 damages are calculated at the time of the breach, and that fluctuations in value do not affect the 27 measure of damages. 28 James C. Mahan U.S. District Judge -6- 1 BANA opposes the motion and argues that the value of the property during and after 2 construction is relevant because those fluctuations would affect interest rates and “points” that the 3 Clossons would be required to pay in the rollover loan after the Clossons refused rate protection. 4 BANA argues that the property value and market rate of the property were a necessary factor. 5 The court agrees with defendant that the evidence is relevant under the lenient standards of 6 Fed. R. Evid. 401 and 402. The property value would seem to have a direct effect on the terms and 7 rates of the new loan. The motion is DENIED, but the Clossons may make timely objections during 8 the trial if they believe evidence, even if relevant, should be excluded under another rule. 9 VIII. Closson Motion in Limine No. 3 (doc. # 61) 10 The Clossons move the court “to prohibit [BANA] from offering and/or soliciting evidence 11 regarding changes in [the Closson’s] financial condition after entering into the subject contracts 12 and/or the payment history of the subject loan prior to laying the proper foundation.” (Doc. # 61, 13 1:28-2:3). 14 BANA opposes the motion and argues that the Clossons put their financial condition and 15 payment history at issue when they failed to complete construction on time and then refused rate 16 protection. 17 The court agrees with BANA that the evidence is relevant under the low bar established by 18 Rules 401 and 402. The motion is DENIED, though the Clossons can make timely objections during 19 trial if they believe evidence, even if relevant, should be excluded under a different rule. 20 IX. Conclusion 21 Relevancy is a very broad concept under the Federal Rules of Evidence. Much of what the 22 parties seek to exclude is relevant and probative of the issues to be decided by the jury. However, 23 even if evidence is relevant under Rules 401 and 402, a number of other rules could exclude the 24 evidence (such as 403, 404, etc). The parties must adjust to the dynamic nature of trials and make 25 objections as they become warranted during the trial. 26 27 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendant’s motion in limine (doc. # 52) be, and the same hereby, is DENIED consistent with the foregoing. 28 James C. Mahan U.S. District Judge -7- 1 2 3 4 5 6 7 8 9 10 11 12 13 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that defendant’s motion in limine (doc. # 53) be, and the same hereby, is GRANTED. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that defendant’s motion in limine (doc. # 54) be, and the same hereby, is GRANTED consistent with the foregoing. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that defendant’s motion in limine (doc. # 55) be, and the same hereby, is GRANTED consistent with the foregoing. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion in limine (doc. # 59) be, and the same hereby, is DENIED consistent with the foregoing. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion in limine (doc. # 60) be, and the same hereby, is DENIED consistent with the foregoing. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion in limine (doc. # 61) be, and the same hereby, is DENIED consistent with the foregoing. DATED December 19, 2012. 14 15 UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28 James C. Mahan U.S. District Judge -8-
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