United States District Court, E.D. New York
SPEEDFIT LLC and AUREL A. ASTILEAN, Plaintiffs,
WOODWAY USA, INC., Defendant.
MEMORANDUM & ORDER
A. MATSUMOTO UNITED STATES DISTRICT JUDGE
Speedfit LLC (“Speedfit”) and Aurel A. Astilean
“plaintiffs”) commenced th instant action against
Woodway USA, Inc. (“Woodway” or
“defendant”), alleging that Woodway wrongfully
infringed upon United States Patent No. 8, 308, 619 (the
“‘619 Patent”) and United States Patent No.
8, 343, 016 (the “‘016 Patent” and together
with the ‘619 Patent, the
“Patents-in-suit”), both of which are owned by
Speedfit and relate to a curved, non-motorized treadmill
involving a closed-loop treadmill belt designed to maintain a
concave running surface and taut lower portion. (ECF No. 150,
Supplemental Complaint (“Supp. Compl.”)
the court are defendant's motions in limine, served
October 4, 2019, to preclude fifteen categories of evidence
from the parties' impending trial. (ECF No. 290,
Def.'s Memorandum of Law in Support of its Motions in
Limine, (“Mot.”).) Plaintiffs served their
opposition on October 18, 2019, contesting the majority of
defendant's motions in limine, (ECF No. 293, Memorandum
of Law in Opposition to Defendant's Motion in Limine
(“Opp.”)), and defendant served its reply on
November 1, 2019. (ECF No. 297, Defendant's Reply
Memorandum of Law (“Reply”).
earlier order, the court issued a Memorandum and Order
granting in part, and denying in part, the parties'
cross-motions for summary judgment. (ECF No. 314, Memorandum
& Order Granting in Part and Denying in Part
Defendant's Motion for Summary Judgment and Denying
Plaintiffs' Motion for Summary Judgment in its Entirety
(“Sum. J. Order”).) In pertinent part, the
Summary Judgment Order granted defendant's motion for
summary judgment as to the Supplemental Complaint's
claims for patent infringement, breach of contract, and
constructive trust, and dismissed those causes of action
accordingly. (Id.) The court, however, determined
that genuine disputes of material fact existed with respect
to plaintiffs' unjust enrichment claim, and denied both
parties' motions for summary judgment on unjust
enrichment. (Id. 65-72.) Thus, the court will deem
moot any motions in limine that seek to preclude evidence
that is relevant solely with respect to dismissed claims,
i.e. patent infringement, breach of contract, and
constructive trust. Consequently, the court will consider
each motion in limine in turn, and clarify whether the motion
is granted, denied, or considered moot.
Speedfit, founded by plaintiff Astilean and co-inventor Dan
Bostan, who is not joined in this action, is a New York-based
company that develops fitness programs and equipment. (Supp.
Compl. ¶¶ 8-9.) Defendant Woodway is a
Wisconsin-based corporation that designs, manufactures, and
sells fitness and exercise products, including non-motorized
treadmills with a curved running surface. (Id.
with the factual and procedural history of this matter is
assumed, as set forth comprehensively in this court's
prior orders concerning this litigation. See Speedfit
LLC, et. al. v. Woodway USA, Inc., 53 F.Supp.3d 561
(E.D.N.Y. 2014) (denying Woodway's motion to dismiss and
motion to transfer); Speedfit LLC, et. al. v. Woodway
USA, Inc., No. 13-CV-1276, 2015 WL 6143697 (E.D.N.Y.
Oct. 19, 2015) (granting leave to file a Third Amended
Complaint); Speedfit LLC, et. al. v. Woodway USA,
Inc., 226 F.Supp.3d 149 (E.D.N.Y. 2016) (granting in
part and denying in part Woodway's motion to dismiss
Third Amended Complaint); Speedfit LLC, et. al. v.
Woodway USA, Inc., No. 13-CV-1276, 2017 WL 5633113
(E.D.N.Y. Nov. 20, 2017) (construing claim term “means
for slackening”); Speedfit LLC, et. al. v. Woodway
USA, Inc., No. 13-CV-1276, ECF No. 314 (E.D.N.Y. Jan. 9,
2020) (granting and denying in part defendant's motion
for summary judgment and denying plaintiffs' cross-motion
for summary judgment in its entirety).
noted above, the Summary Judgment Order dismissed
plaintiffs' claims, with the exception of plaintiffs'
claim for unjust enrichment arising under New York State law.
The court determined that the Patents-in-suit were rendered
invalid by prior art, vitiating plaintiffs' claim for
patent infringement. (Sum. J. Order 27-41.) Consequently, the
court granted defendant's motion for summary judgment
with respect to plaintiffs' patent infringement claim,
which, naturally, also mandated a denial of plaintiffs'
motion seeking summary judgment as to patent infringement.
court also granted defendant's motion for summary
judgment on two of plaintiffs' state law claims.
Plaintiffs' breach of contract claim was deemed waived
and abandoned based on plaintiffs' admission that the
purportedly written confidentiality agreements did not exist,
and the court further found that any asserted oral agreement
necessarily failed for indefiniteness. (Id. 59-65.)
Defendant's motion was granted on plaintiffs' claim
for constructive trust under New York state law, based on the
lack of evidence of the requisite relationship between
plaintiffs and defendant that could have sustained the
constructive trust claim and remedy. (Id. 72-77.)
court denied both parties' motions for summary judgment
with respect to the Supplemental Complaint's unjust
enrichment claim. The court first rejected defendant's
contention that the Statute of Frauds' one year rule, see
N.Y. Gen. Oblig. Law § 5-701(a)(1), mandated dismissal
of plaintiffs' unjust enrichment claim. (Id.
65-69.) The court found that plaintiffs' unjust
enrichment claim did not circumvent the Statute of Frauds
because plaintiffs never had an oral or written contract with
defendant in the first place, and therefore, the Statute of
Frauds was inapplicable ab initio. (Id.) The court
denied plaintiffs' motion for summary judgment as to
unjust enrichment liability because the record raised genuine
issues of triable fact and a jury could reasonably find that
Woodway was able to develop and market the accused curved,
non-motorized treadmills without plaintiffs'
contribution. (Id. 69-72.) Plaintiffs' motion
for unjust enrichment damages was consequently denied without
prejudice as premature. (Id. 72.)
court has construed plaintiffs' theory of unjust
enrichment as follows: Astilean and Speedfit disclosed a
wooden prototype of a curved, non-motorized treadmill
(“Wooden Prototype”) to Woodway's CEO Doug
Bayerlein in 2008; Bayerlein and his team at Woodway then
relied on Astilean's input and know-how to develop the
Speedboard 2; the Speedboard 2 ultimately became the Curve,
part of the Woodway Legacy Treadmill product line; the Curve
and other Woodway Legacy Treadmills, which were developed, at
least in part, using Astilean's contribution of time,
technical knowledge, and effort, were sold in the market and
resulted in profits for Woodway; Astilean and Speedfit,
however, did not receive any portion of these profits.
what remains of the case boils down to whether Woodway was
enriched at plaintiffs' expense, a question of fact that
turns principally on how much weight a jury assigns to
Astilean and Speedfit's contribution, if any, to the
Speedboard 2/Curve model that was introduced at the IHRSA
trade show in 2009; whether that contribution, if any,
benefitted plaintiffs; and whether, and to what extent, it
would be unjust for defendant to retain any benefit conferred
by plaintiffs' contribution. A jury may determine that
Astilean made a substantial contribution to defendant's
development of the Woodway Legacy Treadmills, and that equity
entitles plaintiffs to some share of those profits. On the
other hand, a jury could reasonably infer that Astilean's
contribution to the Speedboard 2/Curve was negligible or
non-existent, and that Woodway's engineers overcame the
critical design hurdle, thus giving the treadmill its value
as a marketable product. Under the latter view, equity would
not require divesting Woodway of any portion of its profits
for the Legacy Treadmills.
this framework for the parties' anticipated trial in
place, the court proceeds to consider defendant's motions
Standard on a Motion in Limine
purpose of an in limine motion is to aid the trial process by
enabling the Court to rule in advance of trial on the
relevance of certain forecasted evidence, as to issues that
are definitely set for trial, without lengthy argument at, or
interruption of, the trial.” EEOC v. United Health
Programs of Am., Inc., No. 14-CV-3673 (KAM)(JO), 2017 WL
10088567, at *1 (E.D.N.Y. Sept. 4, 2017) (quoting
Palmieri v. Defaria, 88 F.3d 136, 141 (2d Cir.
1996)). “Evidence should be excluded on a motion in
limine only when the evidence is clearly inadmissible on all
potential grounds.” United States v. Paredes,
176 F.Supp.2d 179, 181 (S.D.N.Y. 2001). Further, a district
court's ruling on a motion in limine is preliminary and
“subject to change when the case unfolds.”
Luce v. United States, 469 U.S. 38, 41 (1984).
Rule of Evidence 402 provides that all relevant evidence is
admissible except as otherwise provided by the Constitution,
by Act of Congress, or by applicable rule. Fed.R.Evid. 402.
Federal Rule of Evidence 401 defines relevant evidence as
that which “has any tendency to make a fact more or
less probable than it would be without the evidence, ”
so long as “the fact is of consequence in determining
the action.” Fed.R.Evid. 401. The Second Circuit has
characterized the relevance threshold as “very
low.” See United States v. White, 692 F.3d
235, 246 (2d Cir. 2012)(quoting United States v.
Al-Moayad, 545 F.3d 139, 176 (2d Cir. 2008)). To be
relevant, evidence need not prove a fact in issue by itself,
but need only have “‘any tendency to make the
existence of any fact that is of consequence to the
determination of the action more probable or less probable
than it would be without the evidence.'” McKoy
v. North Carolina, 494 U.S. 433, 440 (1990)(quoting
New Jersey v. T.L.O., 469 U.S. 325, 345 (1985)).
Federal Rule of Evidence 403
Federal Rule of Evidence 403, the court “may exclude
relevant evidence if its probative value is substantially
outweighed by a danger of one or more of the following:
unfair prejudice, confusing the issues, misleading the jury,
undue delay, wasting time, or needlessly presenting
cumulative evidence.” Fed.R.Evid. 403. “District
courts have broad discretion to balance probative value
against possible prejudice.” United States v.
Bermudez, 529 F.3d 158, 161 (2d Cir. 2008).
“Evidence cannot be excluded under Fed.R.Evid. 403 on
the basis that, due to its relevance, such evidence has a
negative impact on a party's litigation position.”
MBIA Ins. Corp. v. Patriarch Partners VIII, LLC, No.
09-cv-3255, 2012 WL 2568972, at *11 (S.D.N.Y. July 3,
2012)(citing George v. Celotex Corp., 914 F.2d 26,
31 (2d Cir. 1990)).
Defendant's Motions in Limine
Motion in Limine 1
moves to preclude evidence of Speedfit's sales and profit
margins to support their unjust enrichment claim. (Mot. 1.)
Plaintiffs ask the court to permit them to present evidence
of Speedfit's margins, presumably in aid of their unjust
enrichment claim. (Opp. 7.)
initial matter, Defendant notes the paucity of Speedfit's
sales information in the record. (Mot. 1.) During discovery,
defendant sought records concerning Speedfit's alleged
sales, cost, or profit information relating to the
Speedboard. (See, e.g., ECF No. 291-4, Declaration of Kadie
M. Jelenchick (“Jelenchick Decl.”), Ex. D
(Woodway's First Requests for Production).) Defendant
claims that plaintiffs produced no responsive records before
the close of fact discovery. (Mot. 1.) Further, Astilean
testified in his March 2015 deposition that Speedfit was not
selling the Speedboard or any curved, non-motorized
treadmills, (ECF No. 291-1, Jelenchick Decl., Ex. A (Astilean
Tr.), 84:10-85:8), and plaintiffs indicated in discovery
responses throughout 2015 that they had yet to manufacture
for sale any curved, non-motorized treadmills. (See ECF No.
291-2, 291-3, Jelenchick Decl., Exs. B (Pls.' Answers to
Def.'s First Set of Int.), C (Pls.' Supp. Answers to
Def.'s First Set of Int.).)
do not dispute their failure to produce evidence of
Speedfit's sales during fact discovery, but refer the
court to the Supplemental Report of their damages expert,
David Wanetick, dated July 13, 2018. (ECF No. 203-1, Wanetick
Supp.) The Wanetick Supplement explains that in
Wanetick's prior report, which did not present a theory
of unjust enrichment damages based on Speedfit's lost
profits and margins, (see generally ECF No. 218-1,
Wanetick Rept.), he had not received sales or cost summaries
from Speedfit. (Wanetick Supp. 1.) Wanetick stated that he
had “now received and reviewed production and sales
figures of Speedfit which are derived from the purchase and
sales of Speedfit during the pendency of the lawsuit . . .
.” (Id.) This information, Wanetick explained,
“provide[d] a much more vivid picture of the damages
Speedfit incurred as a result of Woodway's breach of
contract, unjust enrichment, conversion and constructive
trust” claims. (Id.) Schedule 2 of the
Wanetick Supplement purported to be a chart of
“Speedfit's Sales of the Speedfit Curve (2015 -
April 30, 2018).” (Id. 5-8.)
Decision and Order, dated March 28, 2019, Magistrate Judge
Tomlinson precluded plaintiffs' use of and reliance on
the Wanetick Supplement insofar as it concerned “new
theories of damages concerning the Plaintiffs' state law
claims.” (ECF No. 239, Wanetick Supp. Order,
In Judge Tomlinson's thorough review of the case's
procedural history, she noted that expert and fact discovery
had closed in April 2015, that plaintiffs had acknowledged
the end date for discovery, and that plaintiffs had limited
their request for additional discovery to seeking
Woodway's additional sales information since the time
that fact and expert discovery had closed. (Id.
9-14.) Judge Tomlinson's examination of the docket led
her to conclude that even though updates to the expert
reports on damages issues were permissible “solely for
the purpose of reflecting sales of products sold since the
original expert reports were served, ” it was also
“made plain to Plaintiffs by the Court . . . that this
was not an opportunity to amend or add any new theory of
damages with respect to the state law claims.”
(Id. 14-15.) To the extent plaintiffs ask the court
to ignore, modify, or alter Judge Tomlinson's order, that
request is untimely and, in any event, is denied on the
addition, plaintiffs' revised initial disclosures, served
October 3, 2019,  have identified Mark Verstegen as having
“Speedfit financial information relating to
Speedfit's sales.” (ECF No. 291-5, Jelenchick
Decl., Ex. E, 10.) This disclosure, however, was made over
four years after the close of fact discovery in April 2015.
Pursuant to Rule 26(e), a party is obligated to timely
supplement or correct its initial Rule 26 disclosures, and
its responses to interrogatories and document demands,
“if the additional or corrective information has not
otherwise been made known to the other parties during the
discovery process or in writing.” Fed.R.Civ.P.
tardy disclosure of Verstegen warrants preclusion of his
testimony at trial under Rule 37 of the Federal Rules of
Civil Procedure. Rule 37(c) states that “[i]f a party
fails to provide information or identify a witness as
required by Rule 26(a) or (e), the party is not allowed to
use that information or witness to supply evidence on a
motion, at a hearing or at trial, unless the failure was
substantially justified or is harmless.” Fed.R.Civ.P.
37(c)(1). “Substantial justification may be
demonstrated where there is justification to a degree that
could satisfy a reasonable person that parties could differ
as to whether the party was required to comply with the
disclosure request or if there exists a genuine dispute
concerning compliance.” Lujan v. Cabana Mgmt.,
Inc., 284 F.R.D. 50, 68 (E.D.N.Y. 2012) (quoting
Ritchie Risk-Linked Strategies Trading (Ireland), Ltd. v.
Coventry First LLC, 280 F.R.D. 147, 159 (S.D.N.Y. Feb.
omission or delay in disclosure is harmless where there is
“an absence of prejudice” to the offended party.
Id. “In determining whether to exercise its
discretion to preclude evidence under Rule 37, courts examine
(1) the party's explanation for the failure to comply
with the discovery rules; (2) the importance of the precluded
evidence; (3) the prejudice suffered by the opposing party as
a result of having to prepare to address the new evidence;
and (4) the possibility of a continuance.”
Id.; see also Patterson v. Balsamico, 440
F.3d 104, 117 (2d Cir. 2006) (citing Softel, Inc. v.
Dragon Med. & Scientific Comm'ns, Inc., 118 F.3d
955, 961 (2d Cir.1997)); Gotlin v. Lederman, No.
04-CV-3736 (ILG)(RLM), 2009 WL 2843380, at *3 (E.D.N.Y. Sept.
1, 2009). Here, plaintiff has provided absolutely no
explanation for its delinquent disclosure of Verstegen as a
potential witness, and allowing Verstegen to testify at
trial, without an opportunity for defendant to depose him,
would be highly prejudicial.
fundamentally, information concerning Speedfit's sales
and profit margin, whether based on the testimony of
Wanetick, Verstegen, or Astilean himself, is irrelevant to
plaintiffs' claim for unjust enrichment. “To
prevail on a claim for unjust enrichment in New York, a
plaintiff must establish (1) that the defendant benefitted;
(2) at the plaintiff's expense; and (3) that equity and
good conscience require restitution.” Kaye v.
Grossman, 202 F.3d 611, 616 (2d Cir. 2000) (internal
quotation marks and citation omitted). “Because the
doctrine of unjust enrichment is grounded in restitution, the
measure of damages for an unjust enrichment claim is based on
the amount of benefit retained by the defendant, rather than
by a plaintiff's loss.” Swan Media Grp., Inc.
v. Staub, 841 F.Supp.2d 804, 809-10 (S.D.N.Y. 2012);
see also 3 D. Dobbs, Law of Remedies § 12.1(1),
at 9 (“Restitutionary recoveries are based on the
defendant's gain, not on the plaintiff's
loss.”); Giordano v. Thomson, 564 F.3d 163,
170 (2d Cir. 2009) (“Recovery on such a claim [of
unjust enrichment] is limited to the reasonable value of the
services rendered by the plaintiff.”) (citations and
internal quotation marks omitted).
state that “[f]or the real profit margin and
calculation of unjust enrichment to Woodway, Plaintiffs will
use EBITDA and Alex[ Astilean]'s testimony of what his
cost of goods is based upon his own sale of the Speedfit
Speedboard.” (Opp. 10.) Plaintiffs intend to then
“ask the jury to apply [Speedfit's] margin or
profit to Woodway's gross sales and ask for a money
judgment in this amount.” (Id.) But plaintiffs
do not articulate in the least how Speedfit's profits are
relevant to Woodway's profits, or to damages for unjust
enrichment generally. Nor do plaintiffs provide any authority
for their proposed methodology of calculating unjust
enrichment damages, or name any expert witness competent to
advocate such method. Plaintiffs have also not provided any
framework to compare Speedfit's Speedboard with
Woodway's Legacy Treadmills, or otherwise demonstrate
what application Speedfit's alleged profits could
possibly have to Woodway's profits, given the different
operating capacities and circumstances of both companies.
(See Reply 3.) The court also notes the significant
risk, assuming a finding of liability, that the jury could
conflate Speedfit's sales and profits with gains accrued
by Woodway, and erroneously use the resulting figures as a
measure for unjust enrichment damages. Under these
circumstances, the danger of unfair prejudice to defendant
substantially outweighs whatever probative value evidence of
Speedfit's sales and margins might have. Preclusion under
FRE 403 is therefore warranted.
first motion in ...