Opinion ID: 149112
Heading Depth: 2
Heading Rank: 4

Heading: BHIC Stipulation

Text: Prior to trial, the parties jointly stipulated that BHIC did not exist at the time Contracts 20A, 29, [or] 07 were bid or entered into. This stipulation simplified the more complex, but mostly irrelevant, circumstances surrounding the formation of BHIC. In 1986, an entity named BLH Enterprises, Inc. was formed but had no employees or operations for six years. In December 1991, BLH changed its name to Bill Harbert International Construction, Inc. Then, in 1992, more than a year after Harbert-Jones entered into the last contract, BHIC acquired employees and began operations. At that point, BHIC also became the majority owner of BIE and provided support services such as administrative accounting to that company. During trial, the Government introduced evidence that the defendants argue contradicted the joint stipulation of fact that BHIC did not exist at the time companies were bidding on and entering into the relevant contracts. The evidence introduced was a document submitted by BHIC in 1992 for prequalification to bid on another contract not at issue in this case. That document included the information about BLH's formation and its subsequent name change, indicating that BHIC had, in fact, existed when Harbert-Jones and other companies bid on and entered into Contracts 20A, 29, and 07. The Government emphasized this contradiction with the joint stipulation, asking Alf Hill, the project manager for Contract 20A, to read aloud the part of the document explaining BHIC's history. The Government then asked, So according to this document which was submitted to the Government, BHIC existed since 1986, right? The project manager replied, Yes. Over BHIC's objection that the witness had not seen the document before and that the document had not been authenticated, the district court allowed the document to be submitted into evidence and refused to strike the testimony relating to BHIC's date of incorporation. In closing arguments, the Government pointed back to that document, saying Why are we suing BHIC? ... Take a look at that document. The Government further clarified its point later in its closing argument, saying, BHIC was in existence at the time Bill Harbert, Roy Anderson, and Tommy Kitchens were doing what they were doing rigging the bids, dealing with the profits on Contract[s] 20A, 07 and 29. After trial, BHIC argued in support of a new trial that this evidence was contrary to the stipulation, prejudicial, and undermined the credibility of BHIC counsel, who relied in opening statements on the joint stipulation. The district court denied BHIC's motion for a new trial, and clarified its reasoning for allowing the Government to introduce the evidence that BHIC had incorporated in 1986: [P]laintiffs did not stipulate that neither BHIC nor any predecessor company existed `at the time Contracts 20A, 29, 07 were bid or entered into.' Plaintiffs did not seek to disprove the stipulated fact that BHIC did not exist prior to 1992. Rather, they sought to prove that BHIC, by its own admission, is a direct outgrowth of any entity that did exist when the bid-rigging occurred. Miller v. Holzmann, 563 F.Supp.2d 54, 104 n. 61 (D.D.C.2008). Even if the stipulation is read so narrowly, the Government violated it. The Government elicited testimony and claimed in closing argument that BHIC itself existed since 1986, not that a BHIC predecessor existed since then. Not only that, but the evidence establishes BLH was not in fact a predecessor to BHIC, but actually the same company. The only difference was a change in name. The document introduced by the Government included the articles of incorporation for BLH and the amendment to those articles that change its name to BHIC. The evidence did not seek to prove BHIC was an outgrowth of another entity. It established that BHIC existed at the time of the contract bidding. Stipulations of fact bind the court and parties. Gander v. Livoti, 250 F.3d 606, 609 (8th Cir.2001); see also Verkouteren v. District of Columbia, 346 F.2d 842, 844 n. 2 (D.C.Cir.1965). This is their very purpose, their vital feature. 9 Wigmore, Evidence § 2590 (Chadbourn rev. 1981). Once a stipulation of fact is made, the one party need offer no evidence to prove it and the other is not allowed to disprove it. Id. § 2588. When the Government claimed that BHIC existed since 1986, it directly contradicted the joint stipulation that BHIC did not exist until after the bidding for the three contracts. The contradictory statements constitute substantial prejudice to BHIC. In his opening argument, BHIC's counsel emphasized the stipulated fact, saying, [I]f you remember those key events, the last of those was in May 1991, more than a year before BHIC begins its operations in July of 1992. The plaintiffs do not and will not contest that BHIC did not even come into existence, it didn't even exist at the time that Contracts 20A, 29 and 07 were bid and entered into. We agree with BHIC that allowing the Government to contradict the stipulation called into question the credibility of BHIC's counsel, severely impeding counsel's ability to effectively advocate for his client. The district court recognized this problem, but stated that it had confidence that after hearing testimony concerning the complex corporate restructuring from which most of these defendants emerged, the jury was able to appreciate the distinction between plaintiffs' argument [that BLH ultimately became BHIC] and the stipulated fact. 563 F.Supp.2d at 104 n. 61. But we do not immediately see what distinction separates the Government's assertion that BHIC existed since 1986, and the stipulated fact that BHIC did not exist at the time Contracts 20A, 29, 07 were bid or entered into. We therefore cannot conclude that the jury made such a distinction. The district court abused its discretion when it allowed the Government to contradict the stipulation and thereby undermine BHIC's defense. We remand for a new trial for BHIC.