United States District Court, Southern District of New York
April 28, 2000
PPX ENTERPRISES, INC. AND EDWARD CHALPIN, PLAINTIFFS,
BARRY I. FREDERICKS, DEFENDANT. BARRY I. FREDERICKS, COUNTERCLAIMANT, V. PPX ENTERPRISES, INC. AND EDWARD CHALPIN, COUNTERCLAIM RESPONDENTS.
The opinion of the court was delivered by: Motley, District Judge.
This action, a counterclaim in a legal malpractice matter, was
brought, pro se, by Barry I. Fredericks ("Fredericks") against
his former clients, PPX Enterprises, Inc. ("PPX") and the
president of PPX, Edward Chalpin ("Chalpin"), for unpaid legal
fees. PPX and Chalpin, plaintiffs in the underlying matter,
filed the complaint commencing the action on August 21, 1995 in
the New York Supreme Court against Fredericks, alleging legal
malpractice and breach of contract. Fredericks counterclaimed
for unpaid legal fees. Fredericks later removed the case to the
United States District Court for the Southern District of New
York on the basis of diversity of citizenship.
In an earlier opinion in this case, Judge Kimba Wood dismissed
plaintiffs' complaint and found that the only claim remaining
for trial was Fredericks' counterclaim for legal fees relating
to his work in the matter of PPX and Dimensional Sounds v.
Rutgers University ("the Rutgers case"). The case was
reassigned from Judge Wood to this court on August 26, 1999. The
matter was tried before this court in a bench trial from
November 29, 1999 to December 1, 1999.
Based on the stipulations of fact between the parties, the
trial testimony and the exhibits submitted at trial, this court
makes the following Findings of Fact and Conclusions of Law in
favor of respondents, PPX and Chalpin.
FINDINGS OF FACT
I. THE PARTIES
1. Counterclaimant, Barry I. Fredericks, was at all times
relevant to this dispute, a
citizen of the State of New Jersey residing in Woodcliff Lake,
New Jersey. (Notice of Removal ¶ 10). Fredericks is an attorney
with his own law firm, The Law Offices of Barry Fredericks,
which operates out of an office in Englewood Cliffs, New Jersey.
(Trial Transcript at 115) ("Tr. at . . .").
2. Counterclaim Respondents ("Respondents") are an entertainment
company, PPX Enterprises, Inc., and its president, Edward
Chalpin. Respondent Chalpin is the president and operating
officer of PPX, domiciled in the State of New York.*fn1 (Tr.
at 202). Respondent PPX is a corporation which manages and
represents entertainers, publishes music and produces records.
PPX is incorporated in the State of New York and maintains a
principal place of business in New York City. (Tr. at 342-43).
Also involved in these proceedings is Dimensional Sound
("Dimensional"), a corporation which runs a recording studio.
Dimensional is wholly owned by Respondent Edward Chalpin while
PPX is owned by his brother, Simon Chalpin. (Tr. at 202-208,
II. THE DISPUTE
A. Events Leading to the Rutgers Litigation
3. In June or July of 1986, Dimensional faced a rent increase as
its 20-year lease ended at its offices on 301 West 54th Street
in New York City. (Tr. at 345-46).
4. Instead of renewing the lease, in July of 1986, Chalpin
entered into an agreement with Rutgers University on behalf of
Dimensional and PPX for the use of office space on Rutgers'
campus. (Tr. at 34546). This agreement provided PPX and
Dimensional with rent-free office and storage space. (Tr. at
345-49). In accordance with the agreement, PPX and Dimensional
transferred their recording equipment from the West 54th Street
location to Rutgers University in exchange for allowing Rutgers
to use the equipment for teaching purposes. (Tr. at 345-49). The
agreement also called for PPX and Dimensional to eventually
donate the equipment to Rutgers and obtain a tax benefit from
the gift (Tr. at 26, 346; Ex. 1, ¶ 8).
5. In order to determine the amount of the donation to Rutgers,
Chalpin had the equipment appraised by two independent
appraisers. (Tr. at 349). In a June 2, 1986 letter, Charles
Leighton of JAC Recording determined the fair market value of
the equipment to be $850,000.00. (Trial Exhibit 4). In a June
12, 1986 appraisal, Bill Scranton of Boynton Studio assessed the
value of each piece of recording equipment in the studio,
calculating the equipment to be worth $815,759.00 altogether.
6. Chalpin eventually became dissatisfied with Rutgers' services
and, on or about June 29, 1988, sought to terminate the contract
with Rutgers. (Tr. at 350-351; Ex. 1 at ¶ 9). In terminating the
agreement, Chalpin made arrangements with Rutgers for the
removal of the recording equipment. (Tr. at 350-354). According
to these arrangements, Chalpin was to provide trucks and workers
to pick up the equipment and Rutgers was to deliver the
equipment to a loading dock to facilitate the equipment removal.
(Tr. at 351).
7. Chalpin scheduled multiple pickups under this arrangement
from the time of the termination of the original agreement until
1991. (Tr. at 351-353). In a January 25, 1991 letter to Chalpin,
Virgina Record, Associate Provost at Rutgers, acknowledged that
Chalpin had picked up "most of the workable equipment," and
requested that he promptly remove the remaining equipment. (Ex.
E). Between January and June of 1991, Chalpin continued to pick
up equipment from Rutgers, creating an inventory of items
removed for most of the pick-ups. (Ex. G, H, I, J, M, N, R). In
a handwritten note accompanying the March 31, 1991 inventory,
Chalpin commented that some of the equipment at Rutgers was
dirty, damaged and carelessly piled together. (Ex. N).
8. Chalpin did not remove all of the equipment from Rutgers
during the 1991 pickups. (Tr. at 362). Between January and July
of 1991, Rutgers sent Chalpin several letters complaining that a
significant amount of equipment had been left at Rutgers,
demanding that Chalpin remove the remaining equipment. (Ex. E,
K, L, P).
B. The Filing of Dimensional Sound, Inc., and PPX
Enterprises v. Rutgers University
9. In late 1991, Chalpin retained the firm of Rudd, Rosenberg,
Mitofsky & Hollender ("Rudd") to represent PPX and Dimensional
in an action against Rutgers for conversion and breach of
contract. (Ex. A, D).
10. In a October 10, 1996 deposition in the instant case,
Chalpin briefly described the relief he was seeking from the
Q. What were you seeking from Rutgers?
A. $850,000 worth of equipment and the equipment
back, whatever was left.
(Tr. at 228-229).
11. Mr. Lindsay Rosenberg was the partner from the Rudd firm
assigned to represent PPX and Dimensional in the Rutgers case.
(Tr. at 16-18). Mr. Rosenberg interviewed the client, supervised
the case and worked on the complaint. (Tr. at 18). During the
representation, Chalpin told Mr. Rosenberg that he was seeking
$850,000 in damages for the equipment that Rutgers was holding,
as Mr. Rosenberg testified at trial:
Q. (record read) Does that line refresh your
recollection as to whether you had any information
about whether or not Rutgers was pressing for the
removal of the equipment?
A. I believe it does. My recollection is that Mr.
Chalpin had told me that he was trying to get his
equipment and was being barred from doing so.
Q. By whom?
A. By Rutgers.
Q. Did Mr. Chalpin tell you that the equipment that
Rutgers was holding was worthless?
A. No, he did not.
Q. Did he ask you to commence an action to recover
the value of the equipment that Rutgers was
A. Yes, he did.
Q. What did he tell you he wished to seek as
compensation for the value of the equipment that
Rutgers was holding at that time?
A. He had stated that the equipment was worth
$850,000, and that's what I should seek to recover
for the inability to recover the equipment.
(Tr. at 21).
12. During the process of negotiating the terms of the retainer
agreement between Rudd and Chalpin, Mr. Rosenberg sent a
proposed retainer agreement to Chalpin dated November 22, 1991.
(Ex. A). Chalpin did not countersign the November 22, 1991
proposal. (Ex. A). He did, however, insert several handwritten
edits into the proposal, including changing a sentence which
In the event that we are successful, then upon the
resolution of your claims, whether by negotiation,
litigation or in a sum equal to 25% of any recovery
that we obtain, whether that recovery is in the form
of a cash payment, an offset to a liability which you
owe to Rutgers University or by receipt of an object
or right of monetary value.
In the event that we are successful, then upon the
resolution of your claims, whether by negotiation,
litigation or otherwise, you will pay to us the
contingency portion of the fee in a sum equal to 25%
of any cash recovery that we obtain.
(Ex. A.). The November 22, 1991 draft was not the final version
of the agreement between Chalpin and Rudd. (Tr. at 41-42). The
final retainer agreement was executed on December 4, 1991. (Ex.
agreement was not submitted into evidence at trial.*fn2
13. On April 3, 1992, Mr. Rosenberg filed a complaint on behalf
of PPX and Dimensional against Rutgers, seeking a total of
$2,000,000 for breach of contract and conversion. (Ex. 1). Mr.
Rosenberg prepared the complaint based solely on information
gained from conversations with Mr. Chalpin. (Tr. at 22). The
complaint alleges that the recording equipment "[h]ad an agreed
upon value of $850,000." (Ex. 1 ¶ 9).
14. With respect to the contract with Dimensional, the complaint
charges Rutgers with breaching the contract by: (1) failing to
remove equipment from the 301 W. 54th Street studio; (2) failing
to properly reinstall equipment; (3) failing to provide the
office space initially designated by the parties; (4) failing to
protect the equipment from damage; (5) failing to maintain the
equipment in good working order; (6) failing to establish a
fully functioning recording studio; (7) failing to provide
Dimensional with unrestricted access to the recording studio;
(8) failing to provide Dimensional and Chalpin with agreed upon
services and privileges; (9) failing to structure an agreement
which provided for the transfer of the recording equipment as a
donation and (10) continuing to interfere with the lawful
removal of the recording equipment. (Ex. 1 ¶¶ 6-10).
15. As to PPX, the complaint alleges that PPX was the intended
and disclosed third party beneficiary of the contract between
Rutgers and Dimensional, and that Rutgers breached its
contractual obligations to PPX by: (1) failing to promote the
use of PPX's library of sound recordings; (2) failing to pay PPX
half of the income derived from promoting the recordings; (3)
failing to provide PPX with an adequately decorated office
space; (4) failing to provide PPX with unrestricted access to
the recording studio; (5) failing to safeguard PPX's recording
tapes; (6) deliberately causing PPX a major loss of business and
(7) continuing to interfere with the lawful removal of the
recording equipment. (Ex. 1 ¶¶ 11-16).
16. Rutgers counterclaimed for the fair rental value for the
storage of the equipment after the termination of the contract.
(Tr. at 107).
17. Mr. Rosenberg made no arrangements to retrieve equipment
from Rutgers on behalf of PPX or Dimensional. (Tr. at 49).
18. In November of 1992, Chalpin became dissatisfied with Rudd's
legal services, complaining of "lack of diligence" and failure
to return Chalpin's phone calls. (Ex. C).*fn3 Subsequently,
on January 7, 1993, Chalpin discharged the firm, terminating
Rudd's representation of Dimensional and PPX in the Rutgers
litigation. (Ex. D).
C. Barry Fredericks' Representation in Dimensional Sound,
Inc., and PPX Enterprises v. Rutgers University
19. On January 14, 1993, Chalpin hired Barry Fredericks to
represent him in the matter of Dimensional Sound, Inc., and PPX
Enterprises v. Rutgers University. (Ex. 2). The retainer
agreement provides for an initial retainer of $5,000 and a
contingent fee "[e]qual to 25% of any monies recovered from any
source." (Ex. 2). The agreement does not specifically state
whether the contingency fee applies to
property recovered during the representation. (Ex. 2). Chalpin
signed the agreement as President of PPX Enterprises.*fn4
(Ex. 2). Throughout the representation, Fredericks was the only
attorney representing the plaintiffs in the Rutgers litigation.
(Tr. at 73,124, 146-147).
20. Chalpin told Fredericks that one of the claims he was
pursuing against Rutgers was a claim for conversion of the
equipment. (Tr. at 170). Chalpin indicated that he did not want
the equipment returned, rather, he wanted $850,000 in damages
for the conversion of the equipment. (Tr. at 170).
21. Rutgers was represented by the law firm of Dunn, Pashman,
Sponzilli & Finnerty ("Dunn Pashman"). Edward Sponzilli was the
partner from Dunn Pashman assigned to the Rutgers case. (Tr.
at 5758). Between April 1992 and November 1993, Fredericks made
arrangements with Sponzilli for the retrieval of the remaining
equipment. (Tr. at 69-70; Ex. 6). After Fredericks informed
Chalpin of the arrangements with Sponzilli, Chalpin agreed to
retrieve the equipment. (Tr. at 172). PPX elected to accept the
return of the equipment in settlement of its claim for $850,000
in damages for conversion. (Joint Pre-Trial Order at 4).
22. On May 29, 1992 Rutgers sent Fredericks an inventory of the
equipment that remained in the Rutgers offices. (Tr. at 132).
The inventory lists the description, manufacturer, model number
and serial number for each piece of equipment, but does not
include a statement of the present value of the equipment. (Ex.
23. As a result of the arrangements made by Fredericks and
Sponzilli, Chalpin went to Rutgers on at least two occasions to
retrieve equipment.*fn5 (Tr. at 69-70, 86-87, 97; Ex. 8).
Roland Belanger, an electronic technician who assisted Chalpin
in the pickups, described the remaining equipment as "[a] big
pile of junk." (Tr. at 323).
24. In a November 24, 1993 letter, Richard Jacobsen, an
associate from Dunn Pashman, informed Fredericks that Chalpin
had not yet removed all of the remaining equipment. (Ex. 8).
According to Jacobsen's letter, Chalpin was unable to remove all
of the remaining equipment during the two trips because he
arrived both times with inadequate moving vehicles. (Ex. 8).
25. Both Rutgers and Chalpin memorialized the removals with
inventories and receipts. An associate from Dunn Pashman oversaw
each pickup and obtained a signed receipt from Chalpin. (Tr. at
109). Chalpin was present at both of the pickups. Chalpin used
the May 29, 1992 inventory as a checklist, inserting his
initials next to each item of equipment retrieved. (Tr. at
422-423, 326-327). Fredericks did not accompany Chalpin on
either of these occasions. (Tr. at 378).
26. In an October 15, 1993 letter, Fredericks notified Chalpin
that he was indebted to Fredericks "[i]n an amount equal to
twenty-five per cent (25%) of the cash value of the property"
recovered in connection with the Rutgers action. (Ex. 7). In the
letter, Fredericks requested an accounting listing the cash
value of the property recovered.*fn6 (Ex. 8). Chalpin did not
produce any such accounting. (Tr. at 138) Chalpin did obtain an
oral appraisal of the equipment that was held at Rutgers as of
May 29, 1992, but he did not have the appraisal reduced to
writing.*fn7 (Tr. at 427429). According to Chalpin, the
equipment had no value. (Tr. at 250, 428). Fredericks did not,
at any time, personally inspect the equipment or obtain an
appraisal of the equipment retrieved.*fn8 (Tr. at 155).
27. After a dispute between Fredericks and Chalpin regarding the
removal of the equipment and coordination of discovery,
Fredericks made a motion to withdraw from the case. (Tr. at
139). The court granted Fredericks' request in May of 1994. (May
28, 1997 Report and Recommendation of Judge Eaton at 12).
D. The Resolution of Dimensional Sound, Inc., and PPX
Enterprises v. Rutgers University
28. Following `Fredericks' withdrawal, Chalpin retained Mr.
Taddeo to represent the plaintiffs in the Rutgers litigation.
(Tr. at 107).
29. During Taddeo's tenure, Rutgers obtained a court order
demanding that Chalpin remove the remainder of the equipment
from the Rutgers offices. (Tr. at 64,107-108). In compliance
with this order, the balance of equipment was thereafter
retrieved from Rutgers. (Tr. at 64, 107-108).
30. Taddeo was later substituted by another firm, Caro &
Graifman. (Tr. at 97). On May 7, 1996, the parties agreed to
settle the case. (Tr. at 97-98; May 28, 1997 Report and
Recommendation of Judge Eaton at 13). Pursuant to the settlement
agreement, Rutgers paid an undisclosed sum of money to PPX. (Tr.
at 98-100). At the time, PPX and Dimensional were both owned by
Simon Chalpin and were treated by Rutgers as one entity for the
purposes of the settlement payment. (Tr. at 100).
CONCLUSIONS OF LAW
31. This case is a simple breach of contract matter. As in most
civil cases, the burden in this case is on the party bringing
the claim to prove the claim by a fair preponderance of the
credible evidence. After analyzing the evidence presented in
this case, this court finds that counterclaimant has not
satisfied his burden.
32. In determining whether Fredericks is entitled to recover a
contingency fee for his work in the Rutgers litigation, the
court must address three issues: (1) what equipment was
recovered due to Fredericks' efforts; (2) what was the value of
that equipment and (3) whether the retainer agreement entitled
Fredericks to a percentage of the cash value of the equipment.
Upon evaluating the evidence and testimony presented at trial,
the court finds that Fredericks has failed to present any
credible evidence to support his claim for unpaid legal fees.
Fredericks has failed to identify which equipment was recovered
during his tenure or submit any credible evidence assessing the
value of that equipment. Without proof of the value of the
equipment, the court is left with no rational basis for
assessing the amount owed, the damages on this counterclaim.
the court finds Fredericks has not satisfactorily proved his
counterclaim for unpaid legal fees. Because the court finds that
Fredericks has failed to prove damages, the court will not reach
the issue of Fredericks' rights or respondents' liabilities
under the retainer agreement.
I. EVIDENCE IDENTIFYING THE EQUIPMENT RECOVERED
33. Fredericks has not presented any evidence that adequately
identifies which equipment was recovered during his tenure as
counsel to PPX. In identifying the equipment relevant to his
case, Fredericks submitted a May 1992 inventory provided to him
by Rutgers. (Tr. at 62-63, Ex. 6). The inventory lists, in
detail, the equipment that was being held by Rutgers as of May
29, 1992. (Ex. 6). During his tenure as respondent's counsel,
Fredericks and Rutgers' attorney, Edward Sponzilli, arranged for
two equipment pickups between April 1992 and November 1993. (Tr.
at 69-70, 86-87, 97; Ex. 8). Chalpin removed some equipment
pursuant to these arrangements but left a significant amount of
equipment in the Rutgers offices after the two pickups. (Ex. 8).
Hence, the May 1992 inventory alone is insufficient to show
which equipment Fredericks was instrumental in recovering.
34. In order to support a logical conclusion as to which
equipment was retrieved due to Fredericks' efforts, the evidence
must either specifically identify the items picked up from
Rutgers or compare the items being stored before the pickups
with the items left after the second pickup. Indeed, there is
trial testimony suggesting that such evidence exists. For
instance, Chalpin testified that he countersigned the May 1992
inventory to indicate which pieces of equipment were retrieved
during each of the pickups. (Tr. at 422-423, 326-327). Also,
Rutgers' attorneys kept records and receipts of the two pickups.
(Tr. at 109). None of these documents, however, have been
entered into evidence. Certainly, Fredericks, as counsel in the
matter, could have kept his own records of the removals, but he
failed to do so. Fredericks neither attended either of the
scheduled pickups, nor personally inspected the equipment at any
time. (Tr. at 155, 378). Fredericks neglected to obtain
documentation of the pickups or of the contents of the Rutgers
studios after the two removals. Thus, Fredericks has failed to
satisfy his evidentiary burden. Accordingly, the court finds
that Fredericks has presented no credible evidence that
identifies the equipment recovered during his tenure as counsel.
II. EVIDENCE ESTABLISHING THE VALUE OF THE RECLAIMED
35. The evidence which Fredericks presented at trial is also
insufficient to support a logical conclusion as to the value of
the recovered equipment. At trial, Fredericks relied upon the
following evidence in support of his claim for damages: (1) the
1986 appraisals; (2) the allegations in the Rutgers complaint;
(3) Chalpin's representations regarding the value of the
equipment and (4) a chart estimating the value of the equipment.
An analysis of this evidence reveals that Fredericks has not
presented any evidence accurately establishing the value of the
equipment recovered through Fredericks' efforts.
A. The 1986 Appraisals
36. The 1986 appraisals do not present a logical basis for
determining the value of the equipment retrieved in question. At
trial, Fredericks submitted two 1986 appraisals into evidence,
one from JAC Recording, the other from Boyton Studio. (Ex. 4,5).
The JAC Recording appraisal was simply a brief letter stating
that the present market value of the equipment was $850,000, and
that installation would add approximately 20% to the value. (Ex.
4). The Boyton Studio appraisal was more detailed, listing the
value of every individual piece of equipment, estimating the
total value of the equipment to be $815,759. (Ex. 5). Neither of
these appraisals are useful in determining the
value of the equipment retrieved in 1992 and 1993. With six to
seven years between the appraisals and the retrievals, the 1986
appraisals do not accurately assess the value of the equipment
37. As respondents correctly argue, the value of the equipment
certainly changed between 1986 and 1993 due to depreciation and
ordinary wear and tear. It is undisputed that the equipment was
used as a studio by both Chalpin and Rutgers during those years.
Everyday wear and tear undoubtedly decreases the value of
recording equipment. There is also evidence that the equipment
may have been misused or damaged during the time it was at
Rutgers. (Ex. N, Tr. at 323). Indeed, it is even possible that
some of the equipment may have increased in value. For example,
certain equipment may be considered rare or a collector's item,
thereby increasing in value over the years. There are countless
factors which contribute to the value of any item in the
marketplace. There is no doubt that at least some of these
factors affected the value of the recording equipment in
question over the course of six to seven years. Appraisals
performed seven years before the removals are simply not
evidence of the present fair market value of the equipment
recovered. Therefore, the 1986 appraisals are insufficient to
support a conclusion as to the value of the equipment retrieved
through Fredericks efforts because they do not account for
depreciation, everyday wear and tear, damage or appreciation.
B. The Rutgers Complaint
38. The complaint in the Rutgers action is also insufficient to
prove the value of the equipment. At trial, Fredericks
introduced the complaint from the Rutgers litigation as proof
that the value of the equipment at the time the complaint was
filed was $850,000. The complaint provides, in pertinent part:
9. As a result of Defendant Rutgers breach of
contract as aforesaid, Plaintiff Dimensional acted on
or about June 29, 1988 to terminate the said contract
and, thereafter, sought to remove the Equipment.
Defendant Rutgers has continued to interfere with the
lawful removal of the Equipment. The Equipment had an
agreed upon value of $850,000.00.
(Ex. 1). Fredericks argues that the inclusion of the $850,000
figure is proof that the equipment must have been worth $850,000
at the time of the complaint. The court finds that there is no
logical support for this argument. According to the Federal
Rules of Civil Procedure, when a party makes a pleading in a
case, the party is certifying that "[t]he allegations and other
factual contentions have evidentiary support or, if specifically
so identified, are likely to have evidentiary support after a
reasonable opportunity for further investigation or
discovery[.]" Fed.R.Civ.P. Rule 11(b)(3). Thus, any pleading in
a complaint is merely an estimation-an educated guess to be
substantiated after further investigation. Likewise, in the
Rutgers complaint, the reference to the agreed upon value of
the equipment represents plaintiffs estimation of the
equipment's value. Lindsay Rosenberg, the attorney who drafted
the complaint, testified that the figure was based solely upon
discussions with Chalpin. (Tr. at 22). Rosenberg did not
evaluate or appraise the equipment before inserting the figure
into the complaint. Thus, the statement in the Rutgers complaint
was based neither on precise figures nor concrete evidence-it
was simply an estimation that the attorney believed would be
substantiated after further pre-trial preparation. Accordingly,
the court finds that the complaint is not proof of the value of
C. Chalpin's Representations Regarding The Equipment's Value
39. Chalpin's statements regarding the value of the equipment
are not credible proof of the value of the equipment. Throughout
the trial, Fredericks introduced evidence of Chalpin's
representations suggesting that the equipment was worth
$850,000. According to Rosenberg, Chalpin told him that the
equipment was worth $850,000 when the Rudd firm was
retained, in 1991. (Tr. at 21). In a 1996 deposition, Chalpin
testified that he was seeking "$850,000 worth of equipment and
the equipment back, whatever was left" in the Rutgers
litigation. (Tr. at 228-229). Also, Fredericks submitted notes
from his meetings with Chalpin immediately prior to his
retention in which Fredericks noted that Chalpin sought
equipment worth $850,000. (Ex. 3). Fredericks testified that the
notes were based on Chalpin's representations as to value of the
equipment at the time Fredericks was retained. (Tr. at 120-121).
Even if the court believes these statements, they do not
constitute proof of the value of the equipment. There is no
proof that the statements were made after an evaluation or
appraisal. Fredericks has not submitted any corroborating
evidence to suggest that these statements were based on anything
more than Chalpin's speculation or conjecture. Furthermore,
Chalpin has contradicted these statements himself at trial, when
he suggested that the equipment was worthless in 1986:
Q. Mr. Chalpin, did you have expert witness reports
prepared in connection with these statements in these
letters? A. Not to the amount — I was going to have a
witness that was going to be prepared to say what
they were valued in 1986 versus what they were valued
in '92 or '93 or whatever and all of the damaged
equipment. In other words, it was my intention to
estimate the value later on, what it was worth. It
was garbage in 1986[.]
(Tr. at 410) (emphasis added). Hence, not only are Chalpin's
statements speculative in nature, but Chalpin's reflections are
also contradictory. Accordingly, the court finds that Chalpin's
representations are not a credible basis for assessing the value
of the equipment.
D. Chart Estimating The Equipment's Value
40. At trial, Fredericks submitted a chart comparing the 1986
Boyton Studio appraisals with the May 1992 inventory,
calculating the total value of the recovered equipment to be
$139,921. (Ex. 23). This chart, like the 1986 Boyton Studio
appraisal, is not probative of the value of the equipment for
time period relevant to this case. In preparing the chart,
Fredericks did nothing more than merge data from the Boyton
Studio appraisal and the May 1992 inventory. As discussed above,
those two documents are not proof of the value of the equipment
because they neither properly identify the equipment recovered
nor accurately assess the value of the equipment at the time of
recovery. The chart does not correct any of these deficiencies.
41. In his brief, Fredericks argues that the court should accept
his chart in lieu of more accurate evidence of the value of the
equipment because he faced an "intentional handicap" as a result
of respondents' failure to produce expert witness reports
establishing the value of the equipment. (Plaintiffs Findings of
Fact and Conclusions of Law at 29-30). The court rejects this
argument. The expert reports that Fredericks refers to were
mentioned in a January 6, 1996 opinion of Judge Cote in the
Rutgers case. (Dimensional Sound, Inc. and PPX Enterprises v.
Rutgers University, January 9, 1996 Opinion and Order)
("January 9, 1996 Opinion and Order"). Certainly, Fredericks had
access to this opinion prior to the commencement of this trial.
Fredericks did not ask the court to compel discovery or notify
the court of respondents' alleged delinquency during discovery.
Fredericks' failure to address respondents' alleged refusal to
produce the reports in a timely manner is an insufficient cause
for a grant of leniency with respect to a plaintiffs evidentiary
burden. Moreover, as stated in Judge Cote's January 6, 1996
opinion, the expert report only assessed the damage done to
certain large pieces of equipment:
This report is limited to what they describe as
damage to some of the larger items. The expert noted
that much of the equipment that he had viewed at
Rutgers had been cannibalized and
required testing and replacement parts. He also
asserted that he could do no more than estimate the
cost of repair . . . [f]or only 15 of the items did
the expert describe in any way the damage to the
particular piece of equipment.
(January 9, 1996 Opinion and Order at 6-7). An expert report
assessing the damage done to the equipment is not the equivalent
of a report appraising the present value of the same. Even if
this report had been produced by respondent, it would not have
provided credible evidence of the value of the equipment.
Fredericks' case has not been affected by the absence of this
expert report. Therefore, the court rejects plaintiffs arguments
and finds that Fredericks' chart comparing the Boyton appraisal
and the May 1992 inventory is an unreliable basis for
ascertaining the value of the equipment.
42. For the foregoing reasons, the court finds that
counterclaimant has failed to satisfy the burden of proof on his
counterclaim for unpaid legal fees. Accordingly, the court finds
in favor of respondents.