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DAGEN v. CFC GROUP HOLDINGS LTD.

United States District Court, S.D. New York


April 12, 2004.

DARRYL L. DAGEN, Plaintiff -against- CFC GROUP HOLDINGS LTD., ET AL., Defendants

The opinion of the court was delivered by: CONSTANCE MOTLEY, Senior District Judge

MEMORANDUM OPINION AND ORDER
BACKGROUND

This action arises out of the employment of plaintiff, Darryl L. Dagen, by defendants CFC Group Holdings and CFC Securities.

  In November of 1998, plaintiff and defendants entered into an agreement pursuant to which plaintiff agreed to serve as the President and Managing Director of CFC's new Hong Kong affiliate, CFC Securities Asia, until June of 2001. The contract provided that CFC would pay Dagen $300,000 per year, a bonus representing a percentage of CFC Asia's annual revenue earnings, $7,000 per month as an apartment allowance, relocation costs, travel costs to visit his family, in addition to providing him insurance and a pension. According to Dagen, during the tenure of his employ, Boris Merkenich, the principal owner of all CFC companies, "made unreasonable constraints on plaintiff's ability to build the business in Hong Kong," Pl.'s Complaint at 42, by, inter alia, canceling his lease and his cellular phone, removing his signatory status on CFC's. bank account, limiting his expenditures on client development, and allowing him to use only one recruiting firm. He maintains that Merkenich strategically pushed plaintiff out of the company, culminating in the constructive termination of his employment in July of 2000.

  In August of 2001, plaintiff commenced this action charging defendants with breach of contract, intentional interference with contractual relations, unjust enrichment and failure to pay wages pursuant to New York Labor Law Article § 190 et seq. He seeks financial compensation totaling the wages, bonuses, and benefits he claims he is entitled to under the contract had defendants not constructively discharged him.

  Defendants present a strikingly different version of the events motivating this lawsuit. They claim that Dagen fraudulently induced CFC into hiring him by misrepresenting his qualifications for the position, utterly failed to perform the job responsibilities contemplated by the contract, collected company funds for personal expenditures, stole a company check and overpaid himself for a full month's wages when he worked for only two weeks, and walked off the job nearly a year before having satisfied his two-year contractual obligation. Accordingly, defendants counterclaimed for breach of contract, fraudulent inducement to contract, negligent misrepresentation, conversion, and breach of fiduciary duty.

  The case was tried before a jury from November 10th through November 19th, 2003. The evidence offered by Dagen to substantiate his claims included his own testimony, the testimony of Steven Domney of CFC Securities, and a wide range of exhibits. Although the court permitted Dagen to play audio tapes to the jury, the contents of which were conversations between Dagen and Merkenich which Dagen recorded by wearing a concealed wire, the court barred Dagen from publishing uncertified transcripts Dagen created of the tape's conversations because doing so was inconsistent with the Best Evidence Rule, Fed.R.Evid. 1002. See Order, November 13, 2003. Further, while the court barred both parties from publishing exhibits to the jurors during the presentation of testimony, the court allowed them to publish exhibits during summation and further instructed the jurors that they were free to request and inspect all matters admitted into evidence during deliberations.

  Before the case went to the jury, plaintiff made a motion for a directed verdict on defendants' counterclaims. The court reserved decision on the motion. See Transcript at 9, lines 9-12 (Nov. 19, 2003).

  After an hour and a half of deliberating, the jury rendered a verdict for plaintiff on defendants' counterclaims and for defendants on plaintiff's claims. More specifically, the jury found that Dagen did not prove that 1) defendants constructively discharged him, 2) defendants breached the employment contract, 3) Merkenich and CFC Asia interfered with the contractual relationship between Dagen and CFC Group and CFC Securities, or 4) he sustained damages as a result of defendants' conduct. They also found that defendants did not prove that 1) Dagen breached the employment agreement or his fiduciary duties by walking off the job before he had fulfilled the contract's term or 2) Dagen breached the contract, unjustly enriched himself, or acted fraudulently or negligently by failing to close any sales, abusing the expense reimbursement policy, or cashing a company check.

  On December 18, 2003, plaintiff moved the court to set aside the verdict, Fed.R, Civ.P. 50(b)(1)(c), grant a new trial, Fed, R, Civ.P. 59(e), or grant relief from judgment, Fed.R.Civ.P. 60(b)(6), on the grounds that the court erred in limiting the publication of exhibits to closing arguments, the court erred in disallowing plaintiff the opportunity to publish his self-made transcripts of the tape-recorded conversations to the jury, defendants did not offer any witnesses, Merkenich made an admission in one of the tape-recorded conversations, and the jury's verdict was internally inconsistent.

 STANDARD OF REVIEW FOR JUDGMENT AS A MATTER OF LAW, NEW TRIAL, OR RELIEF FROM JUDGMENT

 A. Judgment As a Matter of Law

  Fed.R.Civ.P. 50(b)(1)(C) permits a court to enter judgment as a matter of law where a party renews its motion after a trial. Procedurally and technically, a motion under Rule 50(b) is a motion for a directed verdict which may not be granted on any ground not specifically raised in an earlier motion at the close of all the evidence. Doctor's Assocs., Inc. v. Weible, 92 F.3d 108, 112 (2dCir. 1996).

  Motions for judgment as a matter of law must be considered against the backdrop of the Seventh Amendment's command that "no fact tried by a jury, shall be otherwise reexamined in any Court of the U.S., than according to the rules of the common law." U.S. Const, amend. VII. Olin Corp. v. Insurance Co. of North America, 221 F.3d 307, 320 (2d Cir. 2000). Because fact issues are within the jury's province, the court "must give deference to all credibility determinations made by the jury and to all reasonable inferences from the evidence the jury might have drawn in favor of the nonmoving party." Vasbinder v. Ambach, 926 F.2d 1333, 1339 (2d Cir. 1991). In short, the court cannot "substitute its judgment for that of the jury." LeBlanc-Sternberg v. Fletcher, 67 F.3d 412,429 (2d Cir. 1995) (citations omitted). Accordingly, a court may not award judgment as a matter of law unless 1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise or conjecture, or 2) there is such an overwhelming amount of evidence in favor of the nonmovant that reasonable and fair minded persons could not arrive at a verdict against it. Galdieri-Amrbrosini v. Nat'l Realty & Dev. Corp., 136 F.3d 276, 289 (2d Cir. 1998) (quoting Cruz v. Local Union No. 3 of the Int'l Bhd of Elec. Workers, 34 F.3d 1148, 1154 (2d Cir. 1994) (internal quotation marks omitted). "[W]eakness in the evidence does not justify judgement as a matter of law; as with summary judgment, the evidence must be such that `a reasonable juror would have been compelled to accept the view of the moving party." This is Me, Inc., v. Taylor 157 F.3d 139, 142 (2d Cir. 1998) (quoting Piesco. v. Koch, 12 F.3d 332, 341, 343 (2d Cir. 1993)). These standards illustrate that "[a] party seeking to overturn a verdict based on the sufficiency of the evidence bears a very heavy burden." Norton v. Sam's Club, 145 F.3d 114, 118 (2dCir. 1998). See also Barbara Lavin McElenety, 239 F.3d 476,479 (2d Cir. 2001) (the moving party faces a "high bar.").

 B. New Trial

  A motion for a judgment as a matter of law under Rule 50(b) may be joined, as here, with a motion for a new trial after an earlier trial by jury under Fed.R.Civ.P. 59(e). The decision to grant a new trial under the Rule is "committed to the sound discretion of the trial judge." Metromedia Co. v. Fueazy, 983 F.2d 350, 263 (2d Cir. 1992), cert denied, 508 U.S. 952, 113 S.Ct. 2445, 124 L.Ed, 2d 662 (1993). The trial judge's discretion, however, is limited to extraordinary circumstances where, based on the weight of the evidence, the jury's verdict is seriously erroneous or a miscarriage of justice. U.S. v. Locasio, 6 F.3d 924,949 (2d Cir. 1993); Piesco. v. Koch, 12 F.3d at 344; Puniell v. Lord, 952 F.2d 769, 686 (2d Cir. 1992).

 C. Relief from Judgment

  Fed.R, Civ.P. 60(b)(6) provides that a court may relieve a party from a final judgment, order, or proceeding for any reason justifying relief from the operation of the judgment. The Rule was designed to strike a balance between the interest of fairness and finality of judgments. Williams v. New York City Dept. of Corrections, 219 F.R.D. 78, 84 (S.D.N.Y. 2003) (citations omitted). Rule 60 motions are addressed to the sound discretion of the trial court. Mendell In Behalf of Viacom. Inc. v. Gollust, 909 F.2d 724, 731 (2d Cir. 1990). However, in light of the fact that courts should not lightly reopen final judgments, Rule 60(b) motions are extraordinary relief that can be granted only upon a showing of exceptional circumstances, Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986). By definition, such circumstances are rare. Velez v. Vassallo, 203 F. Supp.2d 312, 333 (S.D.N.Y. 2002).

 DISCUSSION

  The court begins its analysis by noting that while Dagen made a motion at the close of all the evidence for a directed verdict on defendants' counterclaims, he did not make a parallel motion for directed verdict on his claims. Because Fed.R, Civ.P. 50(b) proscribes a court from entering judgment as a matter of law on any ground not specifically raised in an earlier motion for a directed verdict at the close of all the evidence, Doctor's Assocs. Inc., 92 F.3d at 112, Dagen is not entitled to judgment as a matter of law on his claims for breach of contract, constructive discharge, and damages. Nevertheless, the court addresses each of plaintiff's arguments as to why he is entitled to either judgment as a matter of law or a new trial in turn, concluding that his arguments are insufficient to warrant the court in awarding him relief under either Rule 50(b) or Rule 59(e).

  Dagen's first argument is that the court erred in prohibiting both parties from publishing exhibits to the jury until closing arguments and barred plaintiff from publishing uncertified transcripts of the tapes he created. District courts have wide latitude to determine whether evidence is admissible and in controlling the mode and order of its presentation to promote the effective ascertainment of the truth, Fed.R.Evid. 611(a). Manley v. Ambase Corp., 337 F.3d 237, 247 (2d Cir. 2003) (quoting Meloff v. New York Life Ins. Co., 240 F.3d 138, 148 (2d Cir. 2001) (citations omitted). Before a transcript can be introduced to aid jurors in following a recorded conversation, the original recording and transcript must be properly authenticated. Breezy Point Co-op., Inc. v. Cigna Property and Cas. Co., 868 F. Supp. 33 (E.D.N.Y. 1993). Thus, the court's refusal to allow the publication of exhibits during testimony and exclusion of uncertified transcripts is a far cry from the kind of extraordinary circumstances necessary to warrant judgment as a matter of law or a new trial.

  Dagen also seeks judgment as a matter of law, a new trial, or relief from judgment on the grounds that defendants did not present any testimony and the jurors allegedly heard defendant Merkenich make a statement to the effect that defendants had a continuing obligation to pay plaintiff. In effect, Dagen seeks relief on the grounds that the verdict is contrary to the evidence presented.

  During the trial, the jury heard evidence that Dagen spent ample business time locating his personal apartment; Merkenich encouraged plaintiff to improve his work performance and earn money for CFC the day before Dagen claims he was constructively discharged; Dagen did not close any sales during the tenure of his employ; he stole a company check and overpaid himself in July of 2000; the contract did not provide for CFC to secure Dagen's residential lease, pay for his cell phone, or maintain his licenses, all of which Dagen cites as evidence that defendants constructively discharged him; Dagen included personal items in expenses he submitted to CFC for reimbursement; and the employment contract in question does not entitle Dagen to many of the items he claims as damages, including, for example, an equity stake in CFC Securities Asia or reimbursement for unused vacation time. Judged in light of this evidence, it was not sheer conjecture for the jury to conclude that plaintiff was neither constructively discharged or entitled to damages. Also, the evidence presented was not so overwhelmingly in favor of Dagen that a reasonable and fair minded jury could not have reached a verdict against him. Because there was a legally sufficient basis for the jury's verdict, the court declines to set aside its verdict by entering judgment as a matter of law. Similarly, because the jury's conclusion was not seriously erroneous or a miscarriage of justice, the court declines to grant a new trial.

  Finally, Dagen seeks relief on the grounds that the jury's verdict was internally inconsistent. He argues that because the jury did not find that defendants proved that Dagen breached the contract or his fiduciary duties by walking off the job, then the jury should have found that Dagen was entitled to compensation as if he had worked for defendants for the full term of the contract.

  Plaintiff's argument is sheer sophistry. There is nothing inconsistent about the jury's conclusion. That defendants did not prove by a fair preponderance of the credible evidence that plaintiff Dagen breached the contract or his fiduciary duties does not necessarily mean that Dagen proved that defendants constructively discharged him, breached the contract, or owe him damages.

  Even if, however, the court could detect a kernel of inconsistency in the jury verdict in question, plaintiff would not be entitled to judgment as a matter of law or a new trial on this basis. "[I]n certain circumstances, a court retains authority, even in a civil case, to allow an apparently inconsistent verdict to stand." City of Los Angeles v. Heller, 475 U.S.796,806, 106 S.Ct. 1571, 1576 (Stevens, J. dissenting) citing U.S. v. Powell, 469 U.S.57,105 S.Ct. 471, 83 L.Ed. 461 (1984) (reaffirming general rule that inconsistent verdicts can stand), Harris v. Rivera, 454 U.S, 339,345, 102 S.Ct. 460,464, 70 L.Ed, 2d 530 (1981) ("Inconsistency in verdict is not a sufficient reason for setting it aside"). When confronted with a potentially inconsistent jury verdict, the court must adopt a view of the case that resolves any seeming inconsistency. Turley v. Police Dept. of City of New York, 167 F.3d 757, 760 (2d Cir. 1999). "Before a trial court may set aside a special verdict as inconsistent and remand the case for a new trial, it must make every attempt `to reconcile the jury's finding, by exegesis if necessary/" Id., citing Gallick v. Baltimore & Ohio R.R., 372 U.S. 108, 119, 83 S.Ct. 659,9 L.Ed.2d 618 (1963). — "This role stems from the Seventh Amendment's obligation on courts not to recast factual findings of the jury and is based on the notion that juries are not bound by what seems inescapable logic to judges." Indu Craft. Inc. v. Bank of Baroda, 47 F.3d 490,497 (2d Cir. 1995) (internal citations and quotations omitted).

  Moreover, the verdict sheet given to the jury in this case contained questions that were taken, almost verbatim, from plaintiff's and defendants' proposed jury charges. The court made very few changes to the questions the jurors were directed to answer, all of which were relatively minor and either requested or approved by the parties. Given the failure of plaintiff's to complain of a possible inconsistency before the jury was charged, plaintiff waived the argument. Laborde v. City of N.Y. No. 93, 1999 WL 38253 at 7 (S.D.N.Y. Jan. 27, 1999) ("An objection to inconsistent verdicts raised for the first time in a post-trial motion is untimely and procedurally barred"). See also Denny v. Ford Motor Co., 42 F.3d 106, 111 (2d Cir. 1994); Lavoie v. Pacific Press & Shear Co., 975 F.2d 48, 54 (2d Cir. 1992).

  Finally, the above discussion illustrates that the court would be remiss in exercising its "grand reservoir of equitable power" under Rule 60(b)(6) by granting Dagen relief from judgment. Nothing about the trial or the jury's verdict suggests that the requisite "extraordinary circumstances" are present to justify the extraordinary relief sought here.

 CONCLUSION

  Plaintiff's motion for judgment as a matter of law, a new trial, or relief from judgment is DENIED,

SO ORDERED.
20040412

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