United States District Court, S.D. New York
OPINION & ORDER
HONORABLE PAUL A. CROTTY, United States District Judge.
March 13, 2017, a jury trial began on Lisa Vioni's
quantum meruit claim against Russell Jeffrey and Providence
Investment Management, LLC ("PIM" and together with
Jeffrey, "Defendants"). Vioni had arranged an
introduction between Jeffrey and Robert Grunewald of American
Capital Strategies ("ACAS"). ACAS eventually hired
Jeffrey and eight PIM employees, and Vioni seeks compensation
from Defendants for her introduction of the two
groups. Following a four-day trial, the jury found
in Vioni's favor and awarded her $750, 000.
renew their motion pursuant to Fed.R.Civ.P. 50(b)(3) for
judgment as a matter of law ("JMOL"), and
alternatively move pursuant to Fed.R.Civ.P. 59 for a new
trial or remittitur. The Court grants Defendants' JMOL
motion because there was no evidence of the reasonable value
of Vioni's services; the jury's findings must have
been the result of sheer surmise or conjecture. The Court
also conditionally grants Defendants' alternative motion
for a new trial on damages because the jury's award of
$750, 000 was a seriously erroneous result and a miscarriage
of justice. If the Court's decision on Defendants'
JMOL motion is reversed or vacated, Vioni may choose between
a new trial on damages or remittitur reducing the award to
quantum meruit action, Vioni seeks compensation for
introducing Jeffrey and Robert Grunewald, leading to ACAS
hiring Jeffrey and eight PIM employees. On March 17, 2017,
after a four-day trial, a jury returned a verdict against
Defendants and in favor of Vioni in the amount of $750, 000,
Dkt. 199. The evidence at trial included e-mails, agreements,
a recording of a telephone call, and testimony from seven
witnesses, including Jill Niemczyk, an expert in the field of
executive search and recruitment.
evidence established that Vioni and Jeffrey first met when
Vioni started working in Jeffrey's division at Prudential
Securities in 1990. Tr. 78-80. Vioni came to see Jeffrey as a
mentor. Tr. 80, 82. Both moved on from Prudential, and were
in and out of touch over the years. Tr. 81-82, 230, 315. in
2006, Jeffrey and Vioni reconnected. Tr.315. Jeffrey owned
PIM, which was the general partner of a hedge fund; and Vioni
was the CEO of Hedge Connection, Inc. ("HO"), a
website that provided a way for hedge funds and investors to
meet. See Tr. 101, 233, 296, 427. They discussed the
looming subprime mortgage crisis and how Jeffrey wanted to
take advantage of what he saw as an opportunity to make
money. See Tr. 92-93. Jeffrey needed ready access to
large amounts of capital fast, and he was open to a number of
alternatives, including selling a part of PIM, merging with
another company, or obtaining investments. Tr. 93, 96;
see also Ex. 132. Vioni then started thinking about
people she could introduce to Jeffrey. Tr. 94.
contacted Jay Chapler, who represented a multibillion-dollar
family office in Canada. Tr. 95. Chapler was
interested in investing hundreds of millions of dollars into
hedge funds by buying a part of the hedge funds. Id.
On March 25, 2007, Vioni introduced Jeffrey to Chapler by
e-mail, and! on March 26, 2007, the three talked by phone.
Tr. 241-42. Also on March 26, 2007, after the call with
Chapler, Jeffrey sent Vioni an e-mail stating: "we
should also have a discussion about financial considerations.
I want you to have a comfort and confidence about this whole
process, so that if a deal is consummated, you are
compensated accordingly." Tr. 242-43; Ex.9. The Chapler
introduction did not lead to a deal. Tr. 97, 392.
was also in contact with Robert Grunewald of ACAS. Tr. 236.
Grunewald was looking to buy part of a general partner that
managed a hedge fund, or to make a substantial investment in
a hedge fund. Tr. 236-37. On approximately April 4, 2007,
Vioni introduced Jeffrey and Grunewald by phone. Tr. 129. On
April 18, 2007, Vioni, Grunewald, Jeffrey, two PIM employees,
and two ACAS employees met in a New York board room that
Vioni rented. Tr. 135, 330-31. The meeting appeared to go
well, and it seemed possible that a deal could be reached
where ACAS would purchase PIM and fold it into ACAS. Tr. 137.
April 19, 2007, Vioni sent Grunewald an e-mail stating:
"In formulating my payment from Russell for this
acquisition I need to understand how his group will be folded
into AC[AS]. For example, if the other group I introduced him
to ended up doing the deal we had proposed, I would have
gotten an upfront fee and then ownership in the entire
holding company." Ex. 15. Also on April 19, 2007, Vioni
wrote to Jeffrey: "I would like to get a little more
specific as soon as we can with how the deal between you and
me will work. I agree that there should be a significant
upfront payment for the introduction to AC[AS] and then that
I should be tied to the growth of the business going
forward." Ex.62. Jeffrey responded: "If I do go to
NYC tomorrow, let's meet again if your schedule permits
to iron out more specifics." Id.
between PIM and ACAS continued. On June 5, 2007, Jeffrey sent
Grunewald an e-mail with a proposed framework for a deal. Ex.
136. Attached to the e-mail was a document that noted:
"Lisa Vioni expects payments for the initial
introduction and for any capital that is managed for ACAS out
of its newly created PIM office." Id. While
negotiations were ongoing, Vioni continued her attempts to
secure compensation. For example,
• On May 14, 2007, Vioni e-mailed Jeffrey to outline
details of how she would be compensated for the ACAS deal.
Ex.21. She wrote: "I would be comfortable stating that
the details will be determined when you know how ACAS will
structure your deal but acknowledges that my compensation
will be similar to the normal pattern of compensation of
general industry practices for a person that raises money in
the hedge fund industry etc." Id.
• On June 4, 2007, Vioni wrote to Jeffrey: "I hope
to be compensated the way that any marketing person in our
industry would be compensated for this type of introduction.
A marketing person typically gets paid a percentage of fees
on the money they raise usually in perpetuity. I view this
deal as being no different and in fact more significant
because the access to capital will be almost unlimited some
ways. So in terms of how I should be compensated on this deal
should be a combination of things. As we discussed, I think I
should receive: an upfront fee for the deal and
then payment for the money that goes into the hedge fund from
ACAS. I don't know how you work that into your deal with
them... perhaps my fee would be part of your expenses? I am
sure we can get to a place where we all feel
comfortable." Ex. 22.
• On July 16, 2007, Vioni sent Jeffrey an e-mail
stating: "I am feeling like I need to close the loop on
the introduction I made between you and ACAS .... I really
need to know how your deal proposes that I get compensated.
It should be clearly written in your deal memo with
indemnifications etc. . . . For example, if I am going to get
paid according to industry standard on the introduction of
you to ACAS, I don't necessarily want or need to sell any
of [HCI] to ACAS." Ex. 24.
• On July 17, 2007, Vioni e-mailed Jeffrey: "Before
I speak to [Grunewald], can you tell me if there is a: reason
that you didn't include my marketing fee when you were
negotiating operating expenses, guaranteed salaries,
guaranteed bonuses, options and upside for your group? My
expectation was to be paid versus industry standard which
would be some percentage of the management fee for some
amount of years on all money that comes in from the investor
introduction. Since [Grunewald] has said that ACAS will not
pay for marketing according to industry standard, how will
you go back to him now and get me paid out of your P&L? I
really need you to clarify with me how I am included in your
deal with ACAS. Since I did not get an engagement letter
signed by you for the introduction and we only discussed it
and always referred to industry standard, I must now rely on
you to help negotiate marketing fees into your deal for
me." Ex. 25.
• On July 17, Vioni wrote to Grunewald, in an e-mail she
later forwarded to Jeffrey, that she saw her "payment as
two different things." Ex. 26. First was marketing fees,
and second was an "ACAS fee." Id. Vioni
stated as to the ACAS fee: "I have introduced a key team
of executives that are joining ACAS. A department is being
developed and ACAS will have access to: this group and all of
the opportunities including but not limited to their
expertise and potential investor introductions (like the
potential investment from the RI treasurer). The fee that you
pay for this service is one that you are probably more
familiar with. Whatever you traditionally pay for this type
of service is what I would accept." Id.
Grunewald responded "ACAS does not pay fees other than
those for a retained search for the introduction of
August 10, 2007, PIM and ACAS had reached a deal,
see Ex. 37-45, but not the one originally
envisioned. Instead of ACAS buying, or investing in PIM, or
its hedge funds, ACAS hired Jeffrey and eight PIM employees
and paid their salaries and bonuses to work for ACAS. See
id.; Tr. 168-69. However, Jeffrey and the PIM employees
were able to continue to run the PIM hedge funds.
See Tr. 168-69.
never paid Vioni for the introduction to ACAS.
Judgment as a Matter of Law
appropriate when "a reasonable jury would not have a
legally sufficient evidentiary basis to find for the
[opposing] party on that issue." Fed.R.Civ.P. 50(a)(1).
The Court "may set aside a jury's verdict where
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 there is such
an overwhelming amount of evidence in favor of the movant
that reasonable and fair minded persons could not arrive at a
verdict against him." Vangas v. Montefiore Med.
Ctr., 823 F.3d 174, 180 (2d Cir, 2016) (internal
quotation marks and alteration omitted). "In reviewing a
Rule 50 motion, all credibility determinations and reasonable
inferences of the jury are given deference and [the Court]
may not weigh the credibility of witnesses."
order to recover in quantum meruit under New York law, a
claimant must establish (1) the performance of services in
good faith, (2) the acceptance of the services by the person
to whom they are rendered, (3) an expectation of compensation
therefor, and (4) the reasonable value of the services."
Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine
Host Corp., 418 F.3d 168, 175 (2d Cir. 2005) (internal
quotation marks omitted). Defendants argue that they are
entitled to JMOL because Vioni failed to offer sufficient
evidence relating to her expectation of compensation and the
reasonable value of her services.