United States District Court, E.D. New York
For the Plaintiff: Anthony C. Donofrio, Esq., Arnab Bhukta, Esq., Of Counsel, Law Offices of Anthony C. Donofrio, Massapequa, NY.
For the Defendant: Mark E. Goidell, Esq., Garden City, NY.
For the Defendant: John A. Servider, Esq., Middle Village, NY.
MEMORANDUM OF DECISION AND ORDER
ARTHUR D. SPATT, United States District Judge.
This case arises out of investments made by the Plaintiff Sean Legurnic (the " Plaintiff" ) in Agape World, Inc. (" Agape" ) from 2007 to 2008. Agape operated a " Ponzi Scheme," which was unknown to the Plaintiff at the time of his investments. As the evidence at the trial showed, the Plaintiff's investments were solicited by the Defendant Salvatore Ciccone (the " Defendant" ), a broker for Agape.
From April 1 through April 3, 2014, a jury trial was held on the Plaintiff's claims against the Defendant based on fraud and unjust enrichment. On April 4, 2014, in answer to questions on a verdict sheet provided by the court, the jury (1) found for the Defendant on the fraud cause of action; (2) found for the Plaintiff on the unjust enrichment cause of action; (3) declined to award " monetary damages" to the Plaintiff on either cause of action; (4) awarded " nominal damages" of $1.00 to the Plaintiff; and (5) awarded punitive damages in the amount of $166,025 to the
Plaintiff. (Dkt. No. 104, Ex. 1.) A judgment was entered on May 8, 2014. (Dkt. No. 109.)
Presently before the Court is the Defendant's motion pursuant to Federal Rule of Civil Procedure (" Fed. R. Civ. P." ) 59(e) to alter or amend the judgment by vacating the punitive and nominal damage awards on the unjust enrichment claim. In the alternative, the Defendant seeks judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b)(3) striking the punitive and nominal damage awards. For the reasons set forth below, the Court grants the Defendant's motion.
Although the parties' familiarity with the underlying facts and procedural history of the case is assumed, a brief review of the relevant procedural history is in order.
A. The Trial Proceedings
On April 1, 2014, a jury trial commenced as to the Plaintiff's claims against the Defendant based on fraud, breach of fiduciary duty, and unjust enrichment pursuant to which the Plaintiff sought compensatory and punitive damages. (Dkt. No. 97.)
In the Plaintiff's case, two witnesses were presented: the Plaintiff and the Defendant. The crux of the Plaintiff's theory with respect to unjust enrichment was that the Defendant received commissions as a result of the Plaintiff's investments in Agape, which he in equity and good conscience should not have kept because Agape participated in a Ponzi Scheme. (Tr. 38:1-39:5, 42:1-4.) For example, the Plaintiff testified that the Defendant told him that he made approximately a three percent commission on his deals with the Plaintiff. (Tr. 144:12(Tr. 38:11-17.) However, in response to a question from attorney Bhukta on direct examination, the Defendant testified that " I make money on whatever moneys. It wasn't [the Plaintiff's]. If I brought in a bunch of money, I would get commission. But I was an investor." (Tr. 171:1-4; 205:19-24.)
On the other hand, the Defendant sought to elicit testimony intended to show that there was no evidence that the Defendant received commissions as a result of the investments made by the Plaintiff. (Tr. 46:2-7.) For example, on cross-examination, the Plaintiff testified that he did not have any " proof" that the Defendant received a three percent commission from the Plaintiff's investments. (152:1-15.) Similarly on cross examination, the Defendant testified that he did not " specifically" receive a commission from the Plaintiff's investments. (Tr. 233:10-11.) Based on this testimony, the Defendant argued that the Plaintiff failed to prove that the Defendant was unjustly enriched as a result of the Plaintiff's loans. (Tr. 249:12-15.)
B. The Defendant's Pre-Verdict Motion for a Judgment as a Matter of Law
On April 2, 2014, at the close of the Plaintiff's case, John Servider, Esq. (" Servider" ), counsel for the Defendant, made a motion for a judgment as a matter of law with respect to the Plaintiff's fraud, breach of fiduciary duty, and unjust enrichment claims. (Tr. 249:7-9.) With respect to the Plaintiff's unjust enrichment claim, Servider stated, " [T]here was no testimony or proof or evidence -- let's talk about evidence -- that [the Defendant] received any of [the Plaintiff's] money. Therefore, there was no unjust enrichment." (Tr. 249:12-15.)
In response, Arnab Bhukta (" Bhukta" ), counsel for the Plaintiff, voluntarily withdrew his claim for breach of fiduciary duty because he had " not proven that." (Tr. 251:8-9.) With respect to unjust enrichment, Bhukta stated, " [t]here is plenty of
testimony that Sal earned 1 to 3 percent commission from [the Plaintiff]. He was able to pull money from Agape World up and until the very end. There's testimony now that he has bought houses, receiving 70 percent of his income as a broker. I believe that claim is strong and should stand." (Tr. 251:12-18.)
The Court granted the Plaintiff's request to withdraw his breach of fiduciary duty claim and reserved decision as to the unjust enrichment and fraud causes of action. (Tr. 256:13-18.) Thereafter, the Defendant indicated that he was not going to " put a case in" and rested his case. (Tr. 259:1-7.)
C. The Pre-Deliberations Charge Conference
After both sides rested, the Court held a charge conference during which it discussed with counsel for the parties the Court's intended charge to the jury and provided the proposed verdict sheet. With respect to unjust enrichment, the Court's proposed the following instruction, as to what the Plaintiff had to prove: " First, that the [D]efendant . . . was enriched; Second, that the [D]efendant . . . was enriched at the plaintiff's expense; Third, that equity and good conscience advised against permitting the defendant to retain what the [P]laintiff is seeking to recover. The essential [inquiry] on a claim of unjust enrichment is whether it is against equity and good conscience to permit the defendant to retain what the plaintiff seeks to recover." (Tr. 306:4-13.) Neither party objected to the instruction. (312:19-21.)
With respect to damages on the unjust enrichment claim, the Court provided the following instruction: " If you find that the [D]efendant did commit the acts of unjust enrichment, you must then decide whether that violation was a substantial factor in causing the [P]laintiff to sustain damages . . . . If you find that the [D]efendant's acts of unjust enrichment were a substantial factor in causing the [P]laintiff to sustain damages, you must then decide the amount of damages the plaintiff sustained as a result of the unjust enrichment by the defendant." (Tr. 315:6-18.)
With regard to nominal damages, the Court proposed the following instruction: " If you find that the plaintiff suffered no compensable monetary loss as a result of the Defendant's conduct, you may award nominal damages not to exceed one dollar." (See Tr. 315:19-23.)
Lastly, with regard to " punitive damages," the Court proposed: " If the [P]laintiff . . . proves by a preponderance of the evidence that he is entitled to a verdict for actual damages, and you further find that the conduct of the [D]efendant . . . which proximately caused damages to the [P]laintiff was gross, wanton or deliberate and demonstrates a high degree of moral culpability, then you may add to the award of actual damages ...