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Malmsteen v. Berdon

January 21, 2009

YNGWIE MALMSTEEN, PLAINTIFF,
v.
BERDON, LLP, ET AL. DEFENDANTS.



MEMORANDUM OPINION AND ORDER

In this action, plaintiff Yngwie Malmsteen ("plaintiff") has asserted claims against defendants Berdon, LLP ("Berdon"), Michael Mitnick, James Lewis and James Lewis Entertainment ("JLE") for, inter alia, breach of contract and breach of fiduciary duty. Plaintiff is a professional musician who employed defendant Lewis as his personal manager and defendant Mitnick as his business manager in the 1990s and until early 2000. Plaintiff claimed that Lewis embezzled millions of dollars from him between approximately 1995 and 2000 and that defendants Mitnick and Berdon (collectively, "defendants") enabled Lewis to do so. Plaintiff alleged that defendants acted with fraudulent intent or, alternately, in violation of their contractual and fiduciary duties.

Prior to trial, the Court held that the statute of limitations barred all of plaintiff's claims based on acts occurring prior to January 28, 1999.

A trial was held from May 27, 2008 to June 2, 2008 on plaintiff's claims of fraud, breach of contract, and breach of fiduciary duty against Mitnick and Berdon. Lewis and JLE have never appeared in this action and were not parties to the trial, though Lewis was deposed, and videotaped excerpts of his deposition were played to the jury at trial. At the close of plaintiff's case, defendants moved for judgment as a matter of law under Rule 50(a) on all of plaintiff's claims. (Trial Tr. 188--96.) The Court granted the motion with respect to the fraud claim but allowed the breach of contract and breach of fiduciary duty claims to go forward. (Id. at 207.) At the end of the trial, the jury returned a verdict for plaintiff on both of his claims. The special verdict form completed by the jury indicated that plaintiff was entitled to zero dollars on his breach of contract claim, $450,000 in damages on his breach of fiduciary duty claim, and zero dollars in punitive damages on the breach of fiduciary duty claim. (Larkin Decl. Ex. T, June 11, 2008.)

Defendants have filed the instant motion seeking (i) judgment as a matter of law pursuant to Fed. R. Civ. P. 50(b), (ii) a new trial pursuant to Fed. R. Civ. P. 59(a), or (iii) denial of the motion for a new trial conditional on plaintiff's acceptance of a remittur on damages.

I. Legal Standards

A. Rule 50

"Under Rule 50, judgment as matter of law is appropriate where 'there is no legally sufficient evidentiary basis for a reasonable jury to find for' a party." Merrill Lynch Interfunding v. Argenti, 155 F.3d 113, 120 (2d Cir. 1998) (quoting Fed. R. Civ. P. 50(a)(1)). In deciding a Rule 50 motion, the Court "cannot assess the weight of conflicting evidence, pass on the credibility of the witnesses, or substitute its judgment for that of the jury." Black v. Finantra Capital, Inc., 418 F.3d 203, 209 (2d Cir. 2005). A jury is "entitled to believe some parts and disbelieve other parts of the testimony of any given witness," Tolbert v. Queens College, 242 F.3d 58, 74 (2d Cir. 2001); see also Book v. Dettenrieder, 14 Fed. Appx. 40, 43 (2d Cir. 2001), and "need not accept a given witness's testimony even if it is uncontradicted." Book, 14 Fed. Appx. at 43.

"[A] court may properly grant judgment as a matter of law" when viewing the evidence "in the light most favorable to the nonmoving party" and "grant[ing] that party every reasonable inference that the jury might have drawn in its favor," "the evidence is such that, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, there can be but one conclusion as to the verdict that reasonable men could have reached." Merrill Lynch Interfunding, 155 F.3d at 120--21.

A post-trial motion for judgment as a matter of law under Rule 50(b) "is limited to those grounds that were specifically raised in [a] prior [Rule 50(a) motion]; the movant is not permitted to add new grounds after trial." Galdieri-Ambrosini v. Nat'l Realty & Dev. Corp., 136 F.3d 276, 286 (2d Cir. 1998) (internal quotation marks omitted). "Although Rule 50(a) does not define how specific the motion must be, the purpose of requiring the moving party to articulate the ground on which [judgment as a matter of law] is sought is to give the other party an opportunity to cure the defects in proof that might otherwise preclude him from taking the case to the jury." Id. at 287 (internal citations and quotation marks omitted). Therefore, "[t]he ultimate question is whether the [Rule 50(a)] motion, either of itself or in the context of the ensuing colloquy, was sufficiently specific to alert the opposing party to the supposed deficiencies in her proof. If specificity was lacking," the Rule 50(b) motion may not be granted "unless that result is required to prevent manifest injustice." Id.

B. Rule 59 and Remittur

Rule 59(a) . . . has a less stringent standard than Rule 50 in two significant respects: (1) a new trial under Rule 59(a) may be granted even if there is substantial evidence supporting the jury's verdict, and (2) a trial judge is free to weigh the evidence himself, and need not view it in the light most favorable to the verdict winner. That being said, for a district court to order a new trial under Rule 59(a), it must conclude that the jury has reached a seriously erroneous result or . . . the verdict is a miscarriage of justice, i.e., it must view the jury's verdict as against the weight of the evidence.

Manley v. AmBase Corp., 337 F.3d 237, 244--45 (2d Cir. 2003) (internal citations and quotation marks omitted). "Rulings on motions under . . . [Rule] 59(a) are committed to the sound discretion of the district court . . . ." Sequa Corp. v. Gbj Corp., 156 F.3d 136, 143 (2d Cir. 1998).

When a party moves for a new trial "on the ground that the amount of damages awarded is excessive, a court may require a plaintiff to elect between remitting a specified amount of the damage award, or submitting to a new trial." Rauson v. Conrail, No. 81 Civ. 5835 ...


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