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April 21, 2004.


The opinion of the court was delivered by: MORTON DENLOW, Magistrate Judge


The parties have completed discovery, filed their final pretrial order, and are preparing for trial. This matter comes before the Court on motions in limine filed by the parties in preparation for trial. These motions were referred by District Judge Ronald A. Guzman for resolution. This Court held oral arguments on the motions on April 12, 2004 and announced the rulings from the bench. This memorandum opinion provides additional explanations for the Court's rulings.


  On or about September 30, 1997, Mountain Funding, Inc. ("Plaintiff) provided $3.8 million in subordinated financing to United Round Lake Land Development, LLC ("United Round Lake") for the development of single and multi — family homes in Lake County, Illinois. This loan between United Round Lake and Plaintiff (the " 1997 United Round Lake Loan") was secured by a first mortgage lien on the property. United Round Lake purchased the land upon which the homes were to be developed and was to sell the individual lots to United Homes, Inc. ("United Homes"), the actual homebuilder, pursuant to a lot purchase agreement (the "1997 Lot Purchase Agreement"). Plaintiff agreed to subordinate its loan to Cole Taylor Bank, the site improvement lender.

  In February 1999, United Round Lake was in default of its obligation to Plaintiff. In lieu of foreclosing on the 1997 United Round Lake Loan, Plaintiff agreed to a restructuring of the loan agreement. In order to facilitate the restructuring, on February 9, 1999, a new lot purchase agreement (the " 1999 Lot Purchase Agreement") was entered into between United Homes and United Round Lake whereby United Homes agreed to purchase the lots specified therein on a certain timetable and at a certain price.

  Additionally, as part of the restructuring, United Homes was required to procure a land acquisition bond. United Homes procured the land acquisition bond (the "Bond") on May 4, 1999 through Frontier Insurance Company ("Defendant" or "Frontier"). Defendant was the surety for the Bond, United Homes was the principal for the Bond, and United Round Lake was the obligee. Later, Plaintiff was added as an additional obligee because it was the funding source and the Bond was intended to protect it in the event United Homes defaulted under its obligations. The Bond indicated that in the event United Homes failed to perform its obligations under the 1999 Lot Purchase Agreement, Defendant "guarantees performance by United Homes, Inc. pursuant to the Agreement until such time as all lots have been purchased, however, the Surety's liability under this bond shall in no event exceed $5,000,000." Under the 1999 Lot Purchase Agreement, expected payments by United Homes to United Round Lake would have been sufficient to pay off Plaintiff and the senior lender, Cole Taylor Bank, However, in September 1999, United Homes defaulted under the 1999 Lot Purchase Agreement. In September 1999, February 2000, March 2000, and July 2000, Mountain Funding notified Frontier of the default and made its claim under the Bond. Frontier has never paid Plaintiff any money under the Bond. On March 9, 2000, United Homes filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code.

  In July 2000, Plaintiff informed Defendant that it was attempting to mitigate its losses by allowing United Round Lake to negotiate agreements with other purchasers. In September, August, and December of 2000, United Round Lake was able to sell the remaining 454 bonded lots under the 1999 Lot Purchase Agreement to other parties in three separate transactions for a total of $13,648,510.00.

  Plaintiff is seeking $5,708,333.32 under the Bond plus interest pursuant to the failure of United Homes or Defendant to purchase the bonded lots under the 1999 Lot Purchase Agreement. Alternatively, Plaintiff is seeking $2,242,920.61 — the difference between the amount owed by United Homes under the bonded 1999 Lot Purchase Agreement and the actual amount received from third parties for the 414 bonded lots not sold to United Homes.


  A district court's authority to rule on motions in limine is pursuant to its inherent authority to manage trials, even though such rulings are not explicitly authorized by the Federal Rules of Evidence. Townsend v. Benya, 287 F. Supp.2d 868, 871 (N.D. Ill. 2003). District judges have broad discretion in ruling on motions in limine. Id. However, in order to exclude evidence on a motion in limine, the evidence must be inadmissible on all potential grounds. Id. Otherwise, rulings should be deferred to the time of trial to make possible the resolution of questions of relevancy, foundation, and potential prejudice. Id. A ruling on a motion in limine is not necessarily final. Trial judges are free to alter previous in limine rulings, within the bounds of sound judicial discretion. Id.


  Plaintiff has filed four motions in limine. Defendant has filed one motion in limine, For the following reasons, the Court grants in part and denies in part Plaintiff's motion number 1; denies Plaintiff's motion number 2 subject to the disclosures by Defendant as described below; grants Plaintiff's motions numbered 3 and 4; and denies Defendant's motion.


  1. Defendant's financial condition and its ...

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