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
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
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
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.
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).
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
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
Plaintiff's motion for judgment as a matter of law, a new trial, or
relief from judgment is DENIED,
© 1992-2004 VersusLaw Inc.