Contogouris et al v. WestPac Resources, LLC et al
Filing
603
ORDER and REASONS denying 595 Motion for a New Trial as stated within document. Signed by Judge Martin L.C. Feldman on 7/23/2012. (cab)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SPYRIDON C. CONTOGOURIS, ET AL.
CIVIL ACTION
Versus
NO: 10-4609
WESTPAC RESOURCES, ET AL.
SECTION “F”
ORDER AND REASONS
Before the Court is the plaintiffs’ motion for a new trial.
For the reasons that follow, the motion is DENIED.
I. Background
The facts of this case are well known by now.
Reasons dated March 30, 2012.
See Order and
On the morning of trial, the Court
granted the defendants’ motion in limine to exclude evidence of
Patrick Smith’s prior “bad acts.”
The Court held that the danger
of unfair prejudice resulting from the presentation of such
evidence would substantially outweigh its probative value in this
case under FRE 403.
Following an eight day jury trial, and pursuant to the
jury’s verdict, the Court entered judgment in favor of the
defendants.
Plaintiffs now move the Court for a new trial.
II. Standard of Review
Federal Rule of Civil Procedure 59(a)(1)(A) provides that:
“The court may, on motion, grant a new trial on all or some of
the issues - and to any party - as follows [...] after a jury
trial, for any reason for which a new trial has heretofore been
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granted in an action at law in federal court. . . .”
The United
States Court of Appeals for the Fifth Circuit has explained that
a new trial is only appropriate where “the district court finds
the verdict is against the weight of the evidence, the damages
awarded are excessive, the trial was unfair, or prejudicial error
was committed during its course.”
Smith v. Transworld Drilling
Co., 773 F.2d 610, 612-613 (5th Cir. 1985).
In addition, “[N]ew
trials should not be granted on evidentiary grounds unless, at a
minimum, the verdict is against the great not merely the greater
weight of the evidence.”
Conway v. Chemical Leaman Tank Lines,
Inc., 610 F.2d 360, 363 (5th Cir. 1980).
A Court’s decision
whether to grant a new trial is reviewed for abuse of discretion.
Id.
“Factors militating against new trials [...] are simplicity
of the issues, the degree to which the evidence was in dispute,
and the absence of any pernicious or undesirable occurrence at
trial.”
Id.
III. Analysis
Plaintiffs move the Court for a new trial on two grounds:
(1) that the Court erred in granting the defendants’ motion in
limine excluding evidence of Smith’s bad acts; and (2) because
the jury’s verdict is contrary to the great weight of the
evidence, and is a miscarriage of justice.
A. Exclusion of “bad acts” evidence
The Court is persuaded that its ruling on the defendants’
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motion in limine was correct, and did not lead to a miscarriage
of justice at trial.
Rule 403 of the Federal Rules of Evidence
permits the Court to exclude otherwise relevant evidence where
“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.”
As an initial matter, the Court notes that plaintiffs’
assertion that the Court prevented the plaintiffs from inquiring
into certain bad acts evidence is simply incorrect.1
Specifically, the jury heard evidence that Patrick Smith
allegedly stole money from Ted Skokos, an investor in the company
at the center of the trial.
The Court permitted that evidence
once Patrick Smith opened the door to attacks on his credibility
by testifying as to his good character at trial.
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And plaintiffs
The bad acts were: Smith’s default on an obligation to
repay $194 million to New York banks in connection with a
Snowmass, Colorado real estate development, which plaintiffs
intended to offer as proof of financial motive; (b) Smith’s
misleading statements in opening an unauthorized bank account for
OTS at Rabobank, an account which enabled Smith to use OTS’ money
to purchase plaintiff’s interest in the company; (c) Smith’s
theft of a $1.045 million loan made by Ted Skokos’s charitable
fund to OTS; (d) Smith’s misappropriation of millions of dollars
from OTS and Pacific West Resources; (e) Smith’s submission of a
false financial statement to an Italian investor, Gian Angleo
Perucci, which induced Perucci to invest $3.75 million, in Blue
Planet Solutions, and whose money was used to facilitate the
buyout of John Houghtaling; and (f) Smith’s theft of monies from
OTS by disguising them as expense reimbursements for expenses
that were never incurred.
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also were permitted to present testimony to try to establish that
the California Rabobank account was unauthorized, and that
Patrick Smith claimed false expenses from OTS.
into evidence.
All that was put
Plaintiffs’ assertions that the Court prevented
them from examining these issues by granting the defendants’
motion in limine is simply untrue.
As to these issues, the jury
had ample opportunity to assess Smith’s credibility.
As to other
such conduct, one could only conclude it was plaintiffs’ certain
hope to use evidence whose purpose was unfair prejudice, rather
than something of probative value.
As to other bad acts evidence, the Court stresses that such
evidence was at best remotely relevant to the plaintiffs’ claims
in this case that they were misled by defendants.
The Court held
then and now that the probative value of the excluded evidence
would have been far outweighed by the danger of unfair prejudice
to Patrick Smith.
In addition, presentation of such evidence
would have wasted time, caused undue delay, and posed a
significant risk of confusing the jury.
Smith’s record of
business conduct has been far from admirable.
And that conduct
which should have been admitted at trial on the issue of his
prior bad acts, was admitted.
B. Miscarriage of Justice
Plaintiffs also take issue with the fact that despite
supposedly “uncontroverted evidence” proving that material
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information was withheld from the plaintiffs prior to the sale of
their OTS interests, the jury nonetheless found that the
defendants did not conceal information from them.2
According to
plaintiffs, this means that the jury’s verdict went against the
great weight of the evidence, and therefore represents a
miscarriage of justice.
But it is simply inaccurate for the
plaintiffs to claim that these issues were established by
uncontroverted evidence.
To the contrary: conflicting evidence
was presented on these issues by both sides.
It was entirely
proper for a reasonable jury, as the trier of fact, to weigh the
evidence and arrive at its conclusion.
In addition, plaintiffs
fail to contend with a glaring reality, which is fatal to their
position, that a miscarriage of justice occurred here: the jury
specifically found that the plaintiffs had confirmed the sale of
their OTS interests “despite having knowledge of the defendants’
misrepresentation, suppression or omission, or of plaintiffs’ own
error.”
Confirmation of their sale and transfer agreement was
2
Plaintiffs claim that the following were established
beyond dispute: The proposed cash call was a sham; BP looked
favorably on giving an advance to OTS; Ted Skokos had infused
capital into the company; Defendants had agreed to divide their
shares and the Levy shares; BP’s Suttles indicated at the June 7
meeting that BP would place an order; a contract calling for an
$18 million deposit had been prepared; an unauthorized and
illegal bank account was formed and OTS’ money was used to
acquire their interest; and Smith had placed an order with CINC
for the first 10 units on June 10, 2010, the day prior to the
sale of plaintiffs’ interests. The jury assessed the evidence.
The Court cannot say that a reasonable jury could not have
reached the verdict it did.
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one of the trial’s central issues.
Thus, even if the plaintiffs
had been misled, the result of the trial would be the same on
alternate grounds.3
Accordingly, IT IS ORDERED: the plaintiffs’ motion for a new
trial is DENIED.
New Orleans, Louisiana, July 23, 2012.
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
3
The Court would add that the jury in this case was, in the
Court’s decades of experience, the best jury this Court has ever
observed.
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