United States District Court, E.D. New York
For Plaintiffs: Michael H. Schaalman, Quarles & Brady LLP, Milwaukee, WI; Scott A. Moss, Marianna Moss, Moss Law Practice, Denver, CO; Paul A. Brancato, Jamaica, NY.
For Defendants: Richard Dolan, Robert Begleiter, Andrew Harris, Schlam Stone & Dolan LLP, New York, NY; Bruce A. Barket, Donna Aldea, Barket Marion Epstein & Kearon, LLP, Garden City, NY.
MEMORANDUM AND ORDER
JOSEPH F. BIANCO, United States District Judge.
Plaintiffs Rocco Marini (" Marini" ) and Josephine Marini (" Mrs. Marini" ) (collectively, " plaintiffs" ) brought this action against Harold Adamo, Jr. (" Adamo" ), Lisa Adamo (" Mrs. Adamo" ), The Bolton Group, Inc. (" Bolton" ), and H. Edward Rare Coins & Collectibles, Inc. (" H. Edward" ) (collectively, " defendants" ), asserting claims under Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (the " Exchange Act" ), as well as claims of fraud, breach of fiduciary duty, unjust enrichment, and money had and received under New York common law. After a bench trial, this Court rendered a verdict in plaintiffs' favor on all claims against Adamo, Bolton, and H. Edward. See Marini v. Adamo, 995 F.Supp.2d 155, No. 08-CV-3995 (JFB)(ETB), 2014 WL 465036, at *1 (E.D.N.Y. Feb. 6, 2014) .
The Court concluded that plaintiffs are entitled to the following relief: (a) Adamo, H. Edward, and Bolton are liable for violations of the Exchange Act; (b) Adamo, H. Edward, and Bolton are liable for $11,304,079 in compensatory damages for committing common law fraud; (c) Adamo is liable for $11,304,079 in compensatory damages for violations of the breach of fiduciary duty; and (d) Adamo, H. Edward, Bolton, are liable for $11,304,079 in compensatory damages for unjust enrichment and money had and received.
In the same Memorandum and Order as the verdict, the Court ordered supplemental briefing on two issues. The primary issue concerned Mrs. Adamo's liability for unjust enrichment and money
had and received. Plaintiffs' theory at trial was based on the fact that Mrs. Adamo held joint bank accounts into which her husband deposited some fraud proceeds. Because holding a joint bank account is insufficient under New York law to give rise to liability for unjust enrichment, see Zell & Ettinger v. Berglas, 261 A.D.2d 613, 690 N.Y.S.2d 721 (N.Y.App.Div. 1999), the Court requested supplemental briefing " as to any evidence in the record that Mrs. Adamo personally benefited from money in the joint account that can be traced to fraudulent proceeds from the coin transactions at issue in this case." Marini, 2014 WL 465036 at *40. Ultimately, plaintiffs have not met their burden, and the Court finds that Mrs. Adamo is not liable on the unjust enrichment and money had and received claims.
The Court also requested supplemental briefing on the damages for the Exchange Act claims. Counsel for defendants have since concluded that " there are no grounds to contest Plaintiffs' suggested damages on their securities claims." (Dkt. No. 246 at 2.) Having considered the evidence and arguments, the Court agrees with plaintiffs' calculation and awards $6,243,270 on the Exchange Act claims, based on transactions occurring after September 30, 2003. In addition, the Court corrects its previous award of post-judgment interest, to reflect only the federal rate. Thus, the remainder of this Memorandum and Order addresses the claims against Mrs. Adamo.
The Court's previous opinion provides a full description of the background and procedural history of this case, as well as the Court's findings of fact and conclusions of law after the bench trial. See Marini v. Adamo, 995 F.Supp.2d 155, No. 08-CV-3995 (JFB)(ETB), 2014 WL 465036 (E.D.N.Y. Feb. 6, 2014).
For the purposes of this Memorandum and Order, it is sufficient to note the Court's earlier finding with respect to Mrs. Adamo:
[T]here is no evidence, or even an allegation, that Mrs. Adamo was aware of any wrongful conduct by her husband. Moreover, although she was an officer of H. Edward and Bolton, there is no evidence or allegation that she had any ...