Ensign Yachts, Inc v. Arrigoni et al

Filing 440

ORDER denying 426 Motion for New Trial. See attached Memorandum of Decision. Signed by Judge Vanessa L. Bryant on 11/2/11. (Hildebrand, J.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

ENSIGN YACHTS, INC.,
Plaintiff,

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v.

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JON ARRIGONI,
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Defendant,
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CERTAIN UNDERWRITERS AT LLOYDS OF :
LONDON SUBSCRIBING TO POLICY NOS. :
R704230/112 AND R704390/010,
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Third Party Plaintiff,
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CIVIL NO.
3:09-cv-209 (VLB)

v.

November 2, 2011

James M. Ross,
Third Party Defendant

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Decision Denying [Dkt. #426] Plaintiff’s Motion for a New Trial
The Plaintiff, Ensign Yachts [“Ensign”], and Third-Party Defendant, James
M. Ross [“Ross Sr.”] move pursuant to Rule 59 of the Federal Rules of Civil
Procedure for a new trial on two grounds. First, Ensign and Ross Sr. move for a
new trial on the grounds that the jury verdict finding that Ensign and Ross Sr.
committed fraud was against the weight of the evidence. Second, Ensign and
Ross Sr. move for a new trial on the grounds that the Court’s Order [Dkt. #191]
denying Plaintiff’s Motion for Leave to Substitute an Expert Witness in the place
of Ross Sr. resulted in unfair influence or prejudice against Ensign and Ross Sr.
by forcing them to rely on a witness that was facing a fraud claim to prove
damages which resulted in Ensign receiving only a portion of its actual damages
on its Carmack claim.

I.

Background

Plaintiff, Ensign Yachts, brought this action against the Defendant, Jon
Arrigoni, [“Arrigoni”] under the Carmack Amendment for damages sustained
during the transit of Ensign’s 2008 55’ Cigarette Super Yacht, [the “yacht”] from
New Jersey to Florida in December 2007. Arrigoni and Arrigoni’s insurer, Lloyd’s
of London [“Lloyd’s”], filed, respectively, a Counterclaim and Third-Party
Complaint against Ensign and Ross Sr. alleging that Ensign and Ross Sr.
committed fraud by falsely representing to Arrigoni and Lloyd’s that Ensign had
obtained a contract to sell the yacht to Masterski Pilou Agency and seeking
losses allegedly arising out of the sale to Masterski Pilou Agency.
Between September 13, 2011 and September 23, 2011 the Court presided
over a jury trial addressing: (1) Ensign’s claim under the Carmack Amendment for
damages against Arrigoni and (2) Arrigoni and Lloyd’s claims of fraud against
Ensign and Ross Sr.
Regarding the fraud Claim, Ross. Sr. testified that after a series of
communications and negotiations, a contract for sale of the yacht to Masterski
Pilou Agency was established in early December 2007, necessitating the
transport of the yacht to Florida. Several of these communications were entered
into evidence, including an email from “Pilou” to “Xtreme Games,” where Fabrice
Fontanez worked as a yacht broker, stating that the client was “hot to buy” the
yacht. [Pl. Ex. 47].
Ross Sr. testified that the contract for sale was obtained prior to his
retention of Arrigoni to transport the yacht to Florida. Ross Sr. further testified

that although he created the document titled “Yacht Purchase Agreement” in
advance of arranging for the yacht’s transportation to Florida, the document
statistics indicate that the document was created on December 15, 2007 because
after modifying the document in order to transmit the final version to Masterski
Pilou Agency for execution, he used the “save as” function in his word processor
which resulted in a new date being assigned to the document and caused the
original document to disappear. Ross Sr.’s son, Ross Jr. testified that he serves
as his father’s technology assistant and that pursuant to this role he has advised
his father to use the “save as” function when modifying documents. However,
Ross Jr. testified that it is his understanding that if a document is modified and
then saved using the “save as” function, the original document remains in
existence, and the newly modified document is saved as a separate document.
Additionally, five witnesses testified that Ross Sr. informed them that the
yacht was being transported to Florida because it had been sold. Finally, Fabrice
Fontanez, an agent for Masterski Pilou, testified that he emailed an executed copy
of the Yacht Purchase Agreeement to Ross Sr.1
In support of their fraud claim, Arrigoni and Lloyd’s offered evidence to
establish that Ensign and Ross Sr. knew or had reason to know that no contract
to sell the yacht to Masterski Pilou agency existed. Arrigoni and Lloyd’s offered
into evidence communications between Pilou, Fontanez, and Ross Sr. informing
Ross that the transaction could move quickly provided that several conditions
could be satisfied, including the procurement of a Certificate of European
Compliance. Further, the Yacht Purchase Agreement itself was offered into
1

Fontanez was not responsive to attempts to secure his presence at trial.

evidence, signed at the bottom by “Philippe Brun/Masterski Pilou Agency” and
dated “12-15-2007.” [Pl. Tr. Ex. 54]. Arrigoni and Lloyd’s also offered into
evidence a computer screen shot of Ross Sr.’s computer file labeled “Masterski”
containing a document titled “Yacht Purchase Agreement 12-07.” [Def. Tr. Ex. F].
The computer screen shot recorded both the “Date Created” and the “Date
Modified” of the Yacht Purchase Agreement as “12/15/2007,” contrary to the
testimony of Ross Sr. that he had created the Yacht Purchase Agreement much
earlier but deleted the source document by using the “save as” function. Finally,
Arrigoni and Lloyd’s offered a sworn statement of Philippe Brun, unavailable to
testify at trial, that he did not sign the Yacht Purchase Agreement. Brun’s
testimony also confirmed the existence of a condition precedent to the sale
requiring the procurement of a Certificate of European Compliance and
addressed the time and cost required to secure such a certificate.
In charging the jury, the Court instructed the jurors of their ability to
consider the credibility of witnesses and any interest that a witness may have to
testify falsely. The jurors were instructed that if they found a witness to have
testified falsely, they could choose to believe all, some or none of that witness’s
testimony.
On September 23, 2011, the jury returned a verdict for Ensign on its
Carmack Claim, awarding $107,080.62 in damages. The jury also returned a
verdict for Arrigoni and Lloyd’s on their fraud claims against Ensign and Ross
Sr., finding that Arrigoni had sustained $1,997.50 in damages and Lloyd’s had
sustained $13,683.92 in damages as a result of the fraud committed by Ross Sr.

and Ensign, and finding that punitive damages should be awarded against Ensign
and Ross Sr. on behalf of both Arrigoni and Lloyd’s.

II.

Standard of Review

Rule 59(a) of the Fed. R. of Civ Pr. provides that a court may grant a new
trial on some or all of the issues raised at trial “after a jury trial, for any reason for
which a new trial has heretofore been granted in an action at law in federal court.”
Fed. R. Civ. Pr. 59(a)(1). A motion for a new trial “ pursuant to Rule 59 of the
Federal Rules of Civil Procedure ‘should not be granted unless the court is
convinced that the jury has reached a seriously erroneous result or that the
verdict is a miscarriage of justice.” Izzarelli v. R.J. Reynolds Tobacco Co., No.
3:99-cv-2338 (SRU), 2011 WL 3803900, at *6 (D. Conn. Aug. 26, 2011) (quoting
Kosmynka v. Polaris Indus., 462 F.3d 74, 82 (2d Cir. 2006).
In analyzing a Rule 59(a) motion for a new trial, “the court may consider the
credibility of the witnesses and the weight of the evidence, however, ‘Rule 59 is
not a vehicle for the relitigation of old issues, presenting the case under new
theories, securing a rehearing on the merits, or otherwise taking a ‘second bite at
the apple.’’” Id. (citing Lawyers Title Ins. Corp. v. Singer, No. 3:07cv804 (MRK),
2011 WL 1870277 at *5 (D.Conn. May 16, 2011) (citation omitted)). The standard for
granting a motion for a new trial is high, and a court should only grant such a
motion when the jury’s verdict is “egregious.” DLC Management Corp. v. Town of
Hyde Park, 16 3 F.3d 124, 134 (2d Cir. 1998). Accordingly, “a court should rarely
disturb a jury’s evaluation of a witness’s credibility.” Id.

III.

Discussion
a. Fraud Verdict

Ensign and Ross Sr. have moved for a new trial on the grounds that the
fraud verdict against them was not supported by the evidence. Specifically,
Ensign and Ross Sr. assert that neither the Defendant, Jon Arrigoni, nor ThirdParty Plaintiff Lloyd’s of London produced any evidence to satisfy their burden of
establishing by clear and convincing evidence that either Ensign or Ross Sr.
forged the signature of Philippe Brun/Masterski Pilou on the Yacht Purchase
Agreement or knew that it had been forged to contradict the evidence submitted
by the Plaintiff demonstrating that Ensign and Ross Sr. reasonably believed that
a valid contract for sale existed.
Considering both the weight of the evidence and the credibility of
witnesses, the Court finds that in imposing a fraud verdict against both Ensign
and Ross Sr. the jury did not reach a seriously erroneous result. The jury was
presented with ample evidence contradicting Ensign and Ross Sr.’s claim of a
good faith, reasonable belief that a contract existed prior to the transport of the
yacht.
Most notably, the jury saw the Yacht Purchase Agreement itself which
lacked facial credibility. [Pl. Tr. Ex. 54]. The Agreement was signed by “Philippe
Brun/Masterski Pilou Agency” and was dated “12-15-2007,” contrary to the
standard French method of writing the date which lists the day, the month, and
then the year. Id. Moreover, Brun’s signature was entirely dissimilar to his
signature on his passport, also offered into evidence. [TP. Tr. Ex. 5-5 Brun]. The

validity of the Yacht Purchase Agreement was further undermined by the
introduction of a Certified Translation of an Affidavit of Philippe Brun affirming
that he did not sign, nor authorize anyone to sign for him, the Yacht Purchase
Agreement and that “no contract, be it verbal or in writing, was concluded.” [Def.
Tr. Ex. C-1].
The jury also saw a computer screen shot of Ensign’s “Masterski” file
listing both the “Date Created” and the “Date Modified” of the Yacht Purchase
Agreement as “12/15/2007” in contradiction of Ross Sr.’s sworn testimony that an
agreement for the sale of the yacht to Masterski Pilou Agency had been obtained
in early December, prior to his retention of Arrigoni to transport the yacht to
Florida [Def. Tr. Ex. F]. Ross Jr. testified in further contradiction of his father’s
sworn testimony that the “Dated Created” had been modified through the use of
the “save as” function, that the use of the “save as” function does not destroy
the original document, but merely saves a second, new document in addition to
the original.
The jury was also offered evidence of several communications between
Pilou, Fontanez and Ross Sr. notifying Ross Sr. of several prerequisites to the
finalization of an agreement for sale, including an email from Pilou to Ross Sr.
dated December 12, 2007 stating “Merci Jim I need to know if wee can have the
europeen agreement because you know how the French authority” and
concluding “I think the deal can go fast,” allowing the jury to conclude that that a
deal had not yet been obtained as of December 12, 2007. [TP Tr. Ex. 5-3-Brun].
The jury received a corresponding email from Ross Sr. to Pilou stating “I am not

familiar with the Europeen Agreement. Can you explain this in detail and we will
be happy to provide it for you,” which the jury could reasonably have interpreted
to indicate Ross Sr.’s acknowledgment of the Certificate of European Conformity
as a prerequisite to the sale.
From this evidence, the jury could have reasonably inferred that Ross Sr.,
motivated to recover his losses due to his inability to sell the yacht and overleveraged by his construction of a $4,000,000 home, colluded with Fontanez to
present a false contract for sale.
Moreover, the only testimony Ensign and Ross Sr. offered to support their
allegation that they had a good faith and reasonable belief that a contract for sale
of the yacht existed prior to the transportation of the yacht to Florida was the
testimony of Ross Sr. and several witnesses who had been informed by Ross Sr.
that he had obtained a contract to sell the yacht. Ensign and Ross called James
Robert Gardella, Skip Braver, Steven Babbitz, Phillip Melillo and James Ross Jr.
to testify that Ross Sr. had advised them prior to the yacht’s transportation to
Florida, that the vessel had been sold to an entity in the Caribbean and was being
transported to Florida to be shipped to the purchaser. However, each of these
witnesses had a connection to Ross Sr. to allow the jury, consistent with the jury
charge allowing them to consider the credibility of witnesses, to infer a bias to
discredit the testimony. James Ross Jr., as Ross Sr.’s son has an obvious motive
to protect his father. Phillip Melillo is a close personal friend of Ross Sr. and
extended a generous loan to Ross Sr. and therefore had both a personal and a
financial incentive to protect him. Ross Sr. and Melillo were such close friends

that Melillo went to assess the damage to the yacht and adjust the claim as a
favor to Ross Sr. Lastly, Skip Braver was a former business partner of Ross Sr.
and Robert Gardella had stored the yacht at his marina.
In addition to the relationships of each of these witnesses to Ross Sr.
enabling the jury to discredit their testimony as biased, the testimony of these
five witnesses is inherently linked to jury’s perceived credibility of Ross Sr. given
that their testimony simply conveyed what Ross Sr. had told them. Therefore,
once the jury was presented with evidence impeaching Ross Sr.’s credibility, the
jury, consistent with the jury charge regarding credibility of witnesses, was free
to discredit, all or some of Mr. Ross’s testimony.
Ross Sr.’s credibility was severely impeached at trial, most notably through
the introduction of a YouTube video of Ross Sr. and Fabrice Fontanez on a yacht
in the South of France directly contradicting Ross Sr.’s sworn testimony that he
had only seen Fontanez on one occasion, at the Norwalk Cove Marina in
Connecticut, since the dealings regarding the sale of the yacht and that he had no
business relationship with Fontanez. Contrary to this testimony, the YouTube
video, a promotional video for NuMarine, displayed Ross Sr. with one of his yacht
dealers on a yacht in St. Tropez with Fabrice Fontanez in 2010, establishing that
he had not only seen Fontanez on at least one additional occasion, but also that
he had a business relationship with Fontanez. Further, when presented with this
video on cross-examination, Ross Sr. was at best evasive in answering questions
concerning the identities of the people shown in the video.

Analyzing the weight of the evidence presented, it is readily apparent that
the jury’s fraud verdict against Ensign and Ross Sr. was not “egregious” or
“seriously erroneous” to justify granting a new trial. See Kosmynka, 462 F.3d at
82; DCL Management, 16 F.3d at 134. The jury was presented with ample
evidence to support their conclusion that Ensign and Ross knowingly and falsely
represented to Arrigoni and Lloyd’s that they had obtained a contract to sell the
yacht prior to the yacht’s transport to Florida. Moreover, whereas here a
significant portion of the evidence evaluated by the jury related to Ross Sr.’s
credibility and trustworthiness, the Court will not disturb the jury’s evaluation of
the witnesses’ credibility. See DCL Management, 16 F.3d at 134.

b. Unfair Prejudice Resulting from Denial of Leave to Substitute
Expert Witness

Ensign and Ross Sr. also contend that they are entitled to a new trial on the
grounds that the Court’s denial of their request to substitute another expert
witness in the place of Ross Sr. resulted in unfair influence and prejudice against
them and prevented them from obtaining all of their out of pocket losses
sustained as a result of the damage to the yacht.
This claim is not an appropriate basis for a new trial. A Motion for a New
Trial under Rule 59(a) requires a court to evaluate “the verdict in the overall
setting of the trial; consider the character of the evidence and the complexity or
simplicity of the legal principles which the jury was bound to apply to the facts;
and abstain from interfering with the verdict unless it is quite clear that the jury

has reached a seriously erroneous result.” Bevevino v. Saydjari, 574 F.2d 676,
684 (2d Cir. 1978). The Court’s ruling relating to the extension of the discovery
period and the retention of an additional expert witness in advance of trial is
simply not relevant to the evidence considered by the jury and relied upon to
reach its verdict. [Dkt. #191].
Although, as Ensign and Ross Sr. contend in their Motion for a New Trial,
courts have granted new trials on the basis of prejudice caused by a judge’s
actions, these decisions relate to judicial activity during a trial causing such
severe prejudice to a party so as to deprive the party of a fair trial. See Aggarwal
v. Ponce School of Medicine, 837 F.2d 17, 21-22 (1st Cir. 1988) (holding that bias
and improper conduct by a trial judge may be grounds for a new trial, if “a party
was so seriously prejudiced as to be deprived of a fair trial.”). Accordingly, here,
where the Court’s ruling occurred over a year in advance of trial, it is an entirely
inappropriate basis for a Rule 59(a) Motion for a New Trial.
Moreover, Ensign and Ross Sr. learned of the allegations of fraudulent
conduct long before their motion for leave to add an additional expert. Ross Sr.
became aware that his credibility was subject to impeachment when he learned at
Brun’s deposition of Brun’s sworn testimony that he did not sign the Yacht
Purchase Agreement. At the very latest, Ensign and Ross Sr. became aware of
the fraud claim against them on July 7, 2010 when Lloyd’s of London filed a Third
Party Complaint against them sounding in fraud and yet Ensign and Ross did not
seek to add an additional expert until September 2010, on the eve of the
discovery deadline. Therefore, Ensign and Ross Sr.’s contention that the Court’s

refusal to allow the retention of an additional expert witness resulted in unfair
prejudice against them at trial and tainted the jury’s verdict is wholly without
merit because it is not the proper subject matter of a motion for a new trial, and
because Ensign and Ross Sr. had ample notice of the allegation of fraud.

IV.

Conclusion

Based upon the foregoing reasoning, Ensign and Ross Sr.’s Motion for a
New Trial is DENIED. The Court holds that the evidence and testimony presented
at trial fully justified the jury’s verdict of fraud entered against Ensign and Ross
Sr. Additionally, the Court holds that the pre-trial ruling denying Ensign and Ross
Sr.’s request to obtain an additional expert is wholly irrelevant to the evidence
presented to and reviewed by the jury at trial, and therefore does not warrant a
new trial.

IT IS SO ORDERED.
/s/
Vanessa L. Bryant
United States District Judge

Dated at Hartford, Connecticut: November 2, 2011.