NV Petrus SA et al v. LPG Trading Corp. et al

Filing 121

MEMORANDUM & ORDER, For the foregoing reasons, Plaintiffs' motions in limine (Dkt. 91 ) and Defendants' motions in limine (Dkt. 89 ) are GRANTED IN PART and DENIED IN PART, with ruling on certain questions RESERVED until trial. So Ordered by Judge Nicholas G. Garaufis on 5/8/2017. (Lee, Tiffeny)

0/F

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-X

NV PETRUS SA and PETROLEUM RESOURCES
MEMORANDUM & ORDER

PETRUS SA,
Plaintiffs,

14-CV-3138(NGG)
(PK)

-againstLPG TRADING CORP., VIKTORIA
KRAKOVSKAYA,and EDUARD K. KRAKOVSKY,
Defendants.
-X

NICHOLAS G. GARAUFIS,United States District Judge.

Plaintiffs NV Petrus SA ("Petrus") and Petroleum Resources Petrus SA("PRP")assert
breach of contract claims and claims for violations ofthe New York Debtor and Creditor Law

("DCL")against Defendants LPG Trading Corp.("LPG"), Viktoria Krakovskaya, and Eduard K.

Krakovsky.^ (First Am. Compl.("FAC")(Dkt. 33).) Defendants have asserted four
coimterclaims.^ (See Answer to FAC(Dkt. 38)at ECF pp.5-6.) The court assumes the parties'
familiarity with the factual and procedural background ofthis action.

The parties have each submitted motions in limine seeking to preclude the admission of
certain evidence at trial and to remedy certain alleged violations of discovery procedures. (Pis.

Mots,in Lim.("Pis. Mots.")(Dkt. 91); Defs. Mots, in Lim.("Defs. Mots.")(Dkt. 89); see also
Pis. Mem.in Supp. ofPis. Mots.("Pis. Mem.")(Dkt. 93); Defs. Mem.in Supp. of Defs. Mots.
("Defs. Mem.")(Dkt. 89-1).) For the reasons set forth below, Plaintiffs' motions in limine and

'Viktoria Krakovskaya and Eduard K. Krakovsky are husband and wife. (First Am. Compl.("FAC")(Dkt. 33)at 2
n.l.) The First Amended Complaint refers to them collectively as the "Krakovskys." (Id) This Memorandum and
Order does the same.

2 Defendants stipulated to the dismissal oftheir Third Counterclaim. (See Stip. ofDismissal(Dkt. 98).)
1

Defendants' motions inlimine are GRANTED IN PART and DENIED IN PART, with ruling on

certain questions RESERVED until trial.
I.

LEGAL STANDARD

"The purpose ofa motion in limine is to allow the trial court to rule in advance oftrial on
the admissibility and relevance of certain forecasted evidence." Gorbea v. Verizon N.Y., Inc.,
No. 1 l-CV-3758(KAM),2014 WL 2916964, at *1 (E.D.N.Y. June 25,2014)(citing Luce v.
United States. 469 U.S. 38,40 n.2(1984); Palmieriv. Defaria. 88 F.3d 136,141 (2d Cir. 1996);
Nat'l Union Fire Ins. Co. ofPittsburgh v. L.E. Mvers Co.. 937 F. Supp. 276,283

(S.D.N.Y. 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). "[CJourts considering a motion in limine may reserve decision until trial,
so that the motion is placed in the appropriate factual context." Jean-Laurent v. Hennessv.

840 F. Supp. 2d 529,536(E.D.N.Y. 2011)(citing Nat'l Union Fire Ins. Co.. 937 F. Supp.
at 287). Further, a district court's ruling on a motion in limine is preliminary and "subject to
change when the case unfolds." Luce,469 U.S. at 41.
II.

PLAINTIFFS' MOTIONS

A.

Plaintiffs' Objections to Russian Language Documents
1.

Defendants' Exhibits 5. 8. and 9

Plaintiffs assert that "portions ofDefendants' Exhibit 5, and the entirety of Defendants'
Exhibits 8 and 9, have not been translated from Russian into English," despite repeated warnings

from Magistrate Judge Peggy Kuo and the undersigned that such exhibits cannot be used at trial
absent such translation. (Pis. Mem. at 1-2; see, e.g.. July 6, 2016, Min. Entry of Judge Kuo

("Counsel were reminded that all exhibits need to be translated into English."); Jan. 18, 2017,
Min. Entry of Judge Kuo ("With respect to Defendants' trial exhibit numbers 5,8 and 9... the
2

Court reminded Defendants' counsel that in order to be used as trial exhibits, all documents that

are in Russian must be translated into English by a certified translator.").) Plaintiffs argue that
Defendants should not be permitted to introduce Exhibits 5, 8,and 9, at trial. (Id. at 3.)

Defendants maintain that they are "aware ofthe warnings... and will provide such translations
in [a] short period oftime." (Defs. Mem.in Opp'n to Pis. Mots.("Defs. Opp'n")(Dkt. 97)117.)
The court holds that Exhibits 5, 8 and 9 are inadmissible at trial unless Defendants, by no

later than May 9,2017, at 5:00 p.m., provide Plaintiffs with complete, certified translations of
these documents.^Fed. R. Civ. P. 16(f)(1)(C)(court may issue "any just orders ... if a party

or its attorney ...fails to obey a scheduling or other pretrial order); see, e.g.. Chevron Corp. v.
DoTiztper, 974 F. Supp. 2d 362,704(S.D.N.Y. 2014)(striking Defendants' exhibits that were

entirely or partly in Spanish and noting that defendants "had five months after the filing oftheir
proposed pretrial order in which to provide translations for those documents and ... declined [to
provide such translations]"). Plaintiffs are also reminded that they must provide certified
translations of any foreign language documents that they seek to introduce at trial.
B.

Plaintiffs' Objections to Hearsay Evidence
1.

Defendants' Exhibit 2

Plaintiffs maintain that Defendants' Exhibit 2, a compilation ofinvoices issued by LPG

to Petrus, should be excluded at trial because the exhibit constitutes inadmissible hearsay.

(Pis. Mem. at 5.) Specifically, Plaintiffs argue that the documents are not subject to the
"business records" exception to the prohibition against hearsay, Fed. R. Evid. 803(6). (Pis.
^
Mem.at 5-6.) Plaintiffs point to the following facts, which they claim place Defendants'
Exhibit 2 outside the business records exception:(1)the invoices "must have been prepared by

Mrs. Krakovskaya," who admits that she "does not have any [independent] knowledge of LPG[]

Trading's business";(2)the invoices were "not authenticated by someone with knowledge ofthe
business," as Mr. Krakovsky did not sign them; and(3)there is no basis to conclude that the

invoices were prepared "contemporaneously." (Id) In response, Defendants argue that"Mr.
Krakovsky, who was managing Defendant LPG['s] daily operations will testify at trial, making

the records admissible under [Federal Rule of Evidence 803]."^ (Id. H 26.)
"To lay a proper foundation for a business record, a custodian or other qualified witness

must testify that the document was kept in the course of a regularly conducted business activity
and also that it was the regular practice ofthat business activity to make the [record]." United
States V. Komasa,767 F.3d 151,156(2d Cir. 2014)(intemal quotation marks and citation

omitted)). "The custodian need not have personal knowledge ofthe actual creation ofthe
document to lay a proper foundation." Id (intemal quotation marks and citation omitted).
Accordingly, even ifPlaintiffs are correct that Mrs. Krakovsky prepared the invoices, Mr.

Krakovsky may be able to lay the necessary foundation for admission ofthe invoices as business
records. The court therefore DENIES Plaintiffs' motion to exclude Defendants' Exhibit 2 at this

time. To the extent Plaintiffs seek to argue that the invoices were not kept in the course of
LPG's business and that it was not LPG's regular practice to make such records. Plaintiffs can
make this argument at trial.
2.

Defendants' Exhibit 8

Plaintiffs argue that Defendants' Exhibit 8 should be excluded because it constitutes
inadmissible hearsay. (Pis. Mem.at 6.) As stated supra in Section I.A.I., Defendants' Exhibit 8
will be excluded at trial unless Defendants, by no later than May 9,2017, at 5:00 p.m., provide

^ Defendants appear to also argue that the invoices contained within Defendants' Exhibit 2 are admissible because
these invoices were used to prepare other exhibits that Plaintiffs seek to offer at trial. (Defs. Opp'n 23-25.) The
court does not see how this fact makes Defendants' Exhibit 2 admissible, however.
4

Plaintiffs with a complete, certified translation of this document. Because the court cannot

properly evaluate the exhibit—as it is currently in Russian—^the court reserves decision as to
whether Defendants' Exhibit 8 constitutes inadmissible hearsay.

C.

Plaintiffs' Objections on the Basis ofIncompleteness

Plaintiffs argue that Defendants' Exhibits 5,7,8,and 10 should be excluded because they
are incomplete documents. (Pis. Mem. at 6.) Federal Rule of Evidence 106 provides that
"[w]hen a writing or recorded statement or part thereof is introduced by a party, an adverse party
may require the introduction at that time ofany other part or any other writing or recorded
statement which ought in faimess to be considered contemporaneously with it." Fed. R.
Evid. 106. As further explained by the Second Circuit, Rule 106 requires that"a full
document... be admitted when it is essential to explain an already admitted document,to place

the admitted document in context, or to avoid misleading the trier offact." Phoenix Assocs. Ill

V. Stone.60 F.3d 95, 102(2d Cir. 1995)(intemal quotation marks and citations omitted).
1.

Defendants' Exhibit 5

Plaintiffs contend that Defendants' Exhibit 5 is incomplete because:(i) portions ofthe
document are in Russian and have not been translated into English; and (ii) the exhibit includes

"scattered excerpts ofLPG Trading's balance sheet with Petrus." (Pis. Mem. at 7.) Defendants

point out that Plaintiffs produced Defendants' Exhibit 5 in discovery, seeming to imply that
Plaintiffs are at fault for any omissions in their own documents. (Defs. Opp'n

28-30.)

As set forth supra in Section I.A.1., Defendants' Exhibit 5 is excluded unless Defendants

provide Plaintiffs a certified English translation ofthe document by no later than May 9, 2017, at

5:00 p.m. In the event that Defendants meet that deadline and Plaintiffs believe the exhibit is
still incomplete. Plaintiffs may renew their objection at trial.

2.

Defendants' Exhibit 7

With respect to Defendants' Exhibit 7, Plaintiffs aver that "at least one ofthe attachments
to the email bearing Bates stamp LPG 1 is missing" and "both attachments to the email bearing

Bates stamp LPG 4 are missing.'"^ (Pis. Mem. at 7.) Accordingly, Plaintiffs argue that
Defendants' Exhibit 7 should be excluded as incomplete. (Id at 6-7.) Defendants assert that

they will "provide the entire Exhibit 7 in electronic form." (Defs. Opp'n ^ 33.) Defendants are

DIRECTED to produce the complete exhibit to Plaintiffs by no later than May 9,2017, at 5:00
p.m. If Defendants do not comply with this directive. Plaintiffs may renew their objection at
trial.

3.

Defendants' Exhibit 8

Plaintiffs further argue that Defendants' Exhibit 8 "cannot be admitted because it appears

to be incomplete, although considering it is in Russian, we cannot be sure." (Pis. Mem. at 7.) As
set forth supra in Section I.A.I., Defendants' Exhibit 8 is excluded unless Defendants provide

Plaintiffs a certified English translation ofthe document by no later than May 9, 2017, at 5:00

p.m. In the event that Defendants meet that deadline and Plaintiffs believe the exhibit is still
incomplete. Plaintiffs may renew their objection at trial.
4.

Defendants' Exhibit 10

Plaintiffs argue that Defendants' Exhibit 10 "is inadmissible on grounds of

incompleteness, because it is an unsigned version ofa promissory note from Mr. Krakovsky to
Petrus." (Pis. Mem. at 7.) Defendants respond that the document is complete. (Defs. Opp'n

* Plaintiffs further allege that "Defendants have combined multiple unrelated documents into a single exhibit." (Pis.
Mem. at 7.) The parties are reminded that each exhibit should consist of only one document.

K 34.) Upon review. Defendants' Exhibit 10 appears to be a complete document, albeit perhaps a
draft agreement.
Plaintiftis further maintain that the exhibit is not relevant:"Considering that the

promissory note is unsigned, it is not evidence of any agreement that Mr. Krakovsky may or may
not have entered into with Petrus." (Pis. Mem. at 7.) Defendants argue that the exhibit is
relevant insofar as it shows Mr. Krakovsky did not sign this particular agreement. (Defs. Opp'n
111136-38.)

Federal Rule ofEvidence 401 provides that "[ejvidence is relevant if:(a)it has any

tendency to make a fact more or less probable than it would be without the evidence; and(b)the
fact is of consequence in determining the action." Fed. R. Evid. 401. The Second Circuit has
characterized the relevance standard as "very low."

White. 692 F.3d at 246(quoting

United States v. Al-Moavad. 545 F.3d 139,176(2d Cir. 2008)). Indeed,"[t]o be relevant,

evidence need not be sufficient by itselfto prove a fact in issue, much less to prove it beyond a
reasonable doubt." United States v. Abu-Jihaad,630 F.3d 102, 132(2d Cir. 2010). In view of

the admittedly sparse record provided by the parties and the "very low" bar for relevance, the
court finds that Defendants' Exhibit 10 is relevant to the action. Plaintiffs' motion to exclude
Defendants Exhibit 10 is therefore DENIED.

D.

Plaintiffs' Objections to Cumulative Evidence
1.

Defendants' Exhibit 11

Plaintiffs aver that the page bearing bates-stamp PETRUS6240, within Defendants'
Exhibit 11,is cumulative and should not be admitted into evidence. (Pis. Mem. at 8.)
Defendants "concede that Defendants Exhibit 11 contains a cumulative, unsigned page" and that

page "thus should be redacted." Defendants are DIRECTED to redact Defendants' Exhibit 11

accordingly. Plaintiffs' motion to exclude this page within Defendants' Exhibit 11 is DENIED
as moot.

in.

DEFENDANTS'MOTIONS

A.

Defendants' First and Second Motions In Limine

Defendants seek to have Plaintiffs' Exhibits 23,26, 28, and 29—^Plaintiffs' intemal

accounting records—excluded on the grounds that these documents are inadmissible hearsay.

(Defs. Mem.fll 5-6,16.) Defendants specifically argue that Plaintiffs' Exhibits 23 and 26 should
not be admitted absent proofthat Olga Komeva,an "employee ofPlaintiffs" who created the
exhibits, will be a witness at trial. (Id,

4,7.) Plaintiffs confirm that Komeva prepared these

exhibits, will be a witness at trial, and "will able to provide a foundation for [Plaintiffs'

Exhibits 23, 26,28,and 29]that satisfies [the business records exception to the hearsay rule]."

(Pis. Opp'n to Defs. Mots.("Pis. Opp'n")(Dkt. 95)at 1.) Accordingly, Defendants' motion to
exclude Plaintiffs' Exhibits 23, 26,28, and 29 is DENIED as moot.

Defendants further argue that Plaintiffs' Exhibits 23 and 26 show payments made to third

parties, such as Petroleum Delivery and Rodrail, and that these payments should be redacted
absent proofthat:(i)such charges were in fact made to third-parties; and (ii) Ina Dimitrova, an
individual who "dealt with suppliers in Kazakhstan on behalf ofNV Petms and Petroleum

Resources," will appear at trial as a witness. (Defs. Mem.

8-15.) Plaintiffs reiterate that

Komeva,the person who prepared these exhibits, will testify at trial. (Pis. Opp'n at 1.)
The court finds that Komeva is properly positioned to authenticate the exhibits in
accordance with Federal Rule ofEvidence 901, as she created them. Any questions concerning

Komeva's knowledge ofthe payments made to third parties goes to the weight ofthe evidence,
and not its admissibility. See United States v. Tin Yat Chin. 371 F.3d 31,38(2d Cir. 2004)
8

("Riile 90rs requirements are satisfied if sufficient proof has been introduced so that a
reasonable juror could find in favor of authenticity or identification. Once Rule 90rs

requirements are satisfied, the evidence's persuasive force is left to the jury."(internal quotations
and citations omitted)): see also SCS Commc'ns,Inc. v. Herrick Co.. Inc., 360 F.3d 329, 344-45

(2d Cir. 2004)(challenges to the reliability of evidence go to its weight, not its admissibility).
Defendants' motion to redact Plaintiffs' Exhibits 23 and 26 is therefore DENIED.
B.

Defendants' Third Motion In Limine

1.

Defendants' Hearsav Objection to Plaintiffs' Exhibits 15.20, and 21

Defendants seek to exclude Plaintiffs' Exhibits 15,20, and 21—^what they refer to as

"foreign bank statements"—on the grounds that these exhibits are inadmissible hearsay. (Defs.
Mem.K 17.) The exhibits,they argue,"lack proper certification from the issuing banks" and

"[ajbsent an offer of proof as to the foundation, they should not be admi[tted]." (Id.f 18, 20.)
In response. Plaintiffs assert that these documents are not bank statements, but rather
"wire transfer confirmations reflecting payments made by Plaintiffs for the benefit ofDefendants
which constitute a portion ofPlaintiffs' damages." (Pis. Opp'n at 2.) After Defendants filed
their motions in limine. Plaintiffs submitted the requested certifications for Plaintiffs' Exhibits

15,20, and 21. (See Ex. B to Schalk 2d Suppl. Deck (Dkt. 118-2).) Notwithstanding,Plaintiffs
argue that"even without certifications, these wire transfer confirmations are admissible as
business records, or alternatively, under the residual hearsay rule." (Pis. Opp'n at 2.)

Specifically, Plaintiffs assert that they "will provide testimony that the wire transfer receipts
were made in the ordinary course ofPlaintiffs' business in trading petroleum products," and that
the exhibits are therefore admissible under the business records exception. (Id. at 3.) Plaintiffs

further argue that,"[e]ven if Defendants were correct in claiming that the wire transfer

confirmations were bank statements, as opposed to wire transfer confirmations," they would still
be admissible under the residual hearsay exception, as these documents "are highly probative as
r

they are direct proof ofPlaintiffs' damages, and they have every indicia oftrustworthiness." (Id
at 3-4.)

The burden to establish that evidence is inadmissible for any purpose, and thus

excludable on a motion in limine, is on the movant.

United States v. Pugh, 162 F. Supp. 3d

97, 101 (E.D.N.Y. 2016). Defendants have failed to carry this burden. Accordingly, the court
DENIES Defendants' motion to exclude Plaintiffs' Exhibits 15, 20, and 21 as inadmissible

hearsay. Defendants may renew their application at trial.
2.

Defendants' Relevancv Objection to Plaintiffs' Exhibits 15.20. and 21

With respect to Plaintiffs' Exhibits 15,20, and 21, Defendant argue that Plaintiffs have
not "demonstrate[d] any connection between Petrus N.A,Petroleum Resources, and LPG

Trading." (Defs. Mem.^ 19.) Defendants do not explain how this objection justifies excluding
Plaintiffs' Exhibits 15,20, and 21; however,the court will construe Defendants' argument as a
relevance objection.

Plaintiff argue that they will "introduce testimony and documentary evidence at trial
demonstrating that Mr. Krakovsky directed that in pre-paying for an order ofliquid petroleum

gas. Plaintiffs should pay these third-party shippers directly. However, after Plaintiffs followed
those instructions. Defendants used the payments that Plaintiffs made on Defendants' behalfto

its shippers in order to pay for the delivery of product to a different customer than Plaintiffs."
(Pis. Opp'n at 5.) Based on Plaintiffs' proffered explanation, the court finds that the exhibits
meet the "very low" threshold for relevance. See White.692 F.3d at 246. The court therefore
DENIES Defendants' request to exclude Plaintiffs' Exhibits 15, 20, and 21 on this basis.
10

C.

Defendants' Fourth Motion In Limine

Plaintiffs' Exhibit 40 is a letter firom Plaintiffs' counsel, Judd Burstein, to the

Krakovskys, which predates this litigation. (See Ex. H to Schalk Decl.(Dkt. 94-8).) The letter
states that LPG owes Plaintiffs over $1 million and threatens to commence litigation unless

Defendants pay Plaintiffs the monies owed. (See id.) Plaintiffs' Exhibit 41 is a letter from Mr.
Krakovsky to Burstein "confirmpng] that [Defendants] have a debt in excess of$1 million."
(See Ex. I to Schalk Decl.("Apr. 9 Ltr.")(Dkt. 94-9).) Defendants seek to have these letters
excluded unless Burstein certifies them as business records. (See Defs. Mem. H 22.) Without

providing any support or explanation, Defendants assert that if Burstein becomes a witness,
Burstein will no longer be able to represent Plaintiffs. (Id.^ 23.)

Plaintiffs argue that Plaintiffs' Exhibit 41 is admissible as an opposing party's statement
under Federal Rule of Evidence 801(d)(2)(D). (Pis. Opp'n at 6.) The court agrees. Federal Rule

ofEvidence 801 provides that a statement is not hearsay if it is "offered against an opposing

party and... was made by the party's agent or employee on a matter within the scope ofthat
relationship when it existed." Fed. R. Evid. 801(d)(2)(D). "Admissibility under this rule should
be granted freely." Pannas v. Middle Earth Condo. Ass'n. 963 F.2d 534,537(2d Cir. 1992).

Mr. Krakovsky states in his letter that he is writing "in [his] capacity as duly authorized general
manager of'L.P.G. Trading Corp.'" (See Apr. 9 Ltr.) The subject ofthe letter is LPG's debts to
Plaintiffs. (See id.) On this basis,the court finds that Plaintiffs' Exhibit 41 and statements made

therein constitute opposing party statements and are not hearsay. Accordingly, Defendants'
motion to exclude Plaintiffs' Exhibit 41 is DENIED.

Plaintiffs argue that there is no need for them to proffer Plaintiffs' Exhibit 40 as a
business record because that document is not being offered for its truth and therefore is not
11

hearsay. (Pis. Opp'n at 6-7.) Plaintiffs' Exhibit 40 is "merely intended to provide context for
LPG Trading's admission ofthe debt it owes to Plaintiffs," i.e. to show that Mr. Krakovsky's.

acknowledgement of Defendants' debt to Plaintiffs(in Plaintiffs' Exhibit 41)was in response to
Burstein's demand letter. (Id, at 6.) The court concurs and finds that the letter is not being
offered for its truth and so is not hearsay. There is therefore no need for Burstein to testify as a

qualifying witness under the business records exception to the hearsay rule. Defendants' motion
to exclude Plaintiffs' Exhibit 40 is DENIED.

D.

Defendants' Fifth Motion In Limine

Defendants argue that Plaintiffs' Exhibits 24,27,32, and 34—documents that have been

translated from Russian into English—should be excluded, as they "lack ... certification of New
York State certified Russian court interpreter[s]." (Defs. Mem.

25-26.) They elaborate that,

"absent[an] offer of proof...the translator of[these] documents ...[must] be available as a
witness, who may be cross-examined as to [the] translation[s]." (Id

27-28.)

On April 19, 2017, after Defendants filed their motions in limine. Plaintiffs submitted a
notarized affidavit firom Anna Sosnovskaya,the translator ofPlaintiffs' Exhibits 11, 13,19, 24,

27, 32, and 34.(^Ex. A to Schalk Suppl. Decl.(Dkt. 96-1)). Sosnovskaya attests to the fact

that(i)she is "a native speaker ofthe Russian Language, and a fluent speaker ofthe English

Language";(ii) works as an interpreter in the United States District Court for the Central District
of California; and (iii) the translations, which she produced for Plaintiffs, are "true and accurate."

(Id fl 2, 4, 10,11.) Because Plaintiffs have submitted the requested certifications, the court
DENIES Defendants' motion to exclude Plaintiffs' Exhibits 24,27, 32, and 34 as moot.

12

E.

Defendants' Sixth, Seventh, and Eighth Motions In Limine

Defendants seek to exclude evidence ofthe Krakovskys' personal expenses and spending

on the basis that the probative value ofthis evidence is substantially outweighed by its
prejudicial effect. (See Defs. Mem.

29-39.) Specifically, Defendants ask the court to

preclude Plaintiffs from introducing the following evidence: the Krakovskys' personal income
tax statements (Plaintiffs' Exhibits 80-87);the Krakovskys' personal bank statements (Plaintiffs'
Exhibit 77); the Krakovskys' personal checking account statements (Plaintiffs' Exhibits

100-102); Viktoria Krakovskaya's personal checking account statements (Plaintiffs' Exhibits
104-110); Viktoria Krakovskaya's personal Saks Fifth Avenue credit card statements (Plaintiffs'
Exhibits 111-117); and Viktoria Krakovskaya's personal Neiman Marcus credit card statements

(Plaintiffs' Exhibits 118-124). (See id.^ 30.) Defendants also request that the court require
Plaintiffs to redact LPG's financial records (Plaintiffs' Exhibits 88-93, 95-99,135-138)to

remove any personal expenses attributable to the Krakovskys. (See id. H 36.) Finally,
Defendants request that the court exclude Plaintiffs' Exhibits 129-133, which relate to the
Krakovskys' purchase of a condominium apartment. (See id. ^ 38.)
Plaintiffs aver that the above-listed evidence is relevant to their claims against

Defendants for fraudulent conveyance under the DCL. (Pis. Opp'n at 11; s^ FAC.) Plaintiffs
bring claims pursuant to DCL §§ 273(conveyances by insolvent), 274(conveyances by persons

in business), and 276(conveyances made with intent to defraud). (FAC

27-40.) In support of

these claims. Plaintiffs allege, inter alia, that:(i) LPG has been insolvent since 2007(id H 17);
Petrus has been a creditor of LPG since approximately March 2007(id ^ 28);PRP has been a

creditor of LPG since approximately March 2009(id); since August 2009, Plaintiffs have been
creditors ofLPG "with regard to the specific breaches of contract alleged herein"(id.); and
13

"commencing sometime on or after May 19, 2008, LPG Trading began conveying monies and
other property to Viktoria Krakovskaya and/or Eduard Krakovsky without fair consideration"

(id. H 30), They assert that, because LPG has been insolvent since 2007,"all profit distributions
from that date onward were fraudulent conveyances." (Id. ^ 32.)

Plaintiffs contend that they need the Krakovskys' financial information in order to

identify the fraudulent transfers and prove that:(i) LPG was insolvent when the transfers were

made;(ii)the transfers were not made for consideration; and (iii) the transfers were made with
the intent of hindering or delaying creditors. (Pis. Opp'n at 11.)
1.

Analvsis

Under Federal Rule ofEvidence 403,the court"may exclude relevant evidence if its

probative value is substantially outweighed by a danger ofone or more ofthe following: unfair
prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly
presenting cumulative evidence." Fed. R. Evid. 403.
The court finds that evidence ofthe Krakovskys' personal fmancial information is
irrelevant to whether LPG was insolvent when the transfers were made. Defendants' motion to

exclude evidence is therefore GRANTED insofar as Plaintiffs seek to introduce evidence ofthe

Krakovskys' personal finances to prove that LPG was insolvent.

Notwithstanding, the court fmds that evidence ofthe Krakovskys' personal fmances is
relevant insofar as Plaintiffs could use this evidence to identify the alleged fraudulent transfers

between LPG and the Krakovskys. Similarly, evidence that Defendants bought a condominium
is relevant to the extent that Plaintiffs seek to show that the funds used for that purchase resulted
from a fraudulent transfer from LPG.

14

On the other hand,the court understands that introducing evidence ofthe Krakovskys'

spending habits could be embarrass Defendants or result in unfair prejudice against them. On the
basis ofthe current record, the court is unable to conclude that the evidence's prejudicial effect

substantially outweighs its probative value, however. Defendants' motion is therefore DENIED
insofar as Plaintiffs seek to introduce evidence ofthe BCrakovskys' finances to identify or prove

the fact ofthe alleged fraudulent conveyances. That said, the court retains discretion to exclude
this evidence if it finds it is cumulative; Plaintiffs may have other available records, for example,

LPG's financial records, which also identify the transfers but lack the potential to prejudice the

Krakovskys. See United States v. Ozsusamlar,428 F. Supp. 2d 161, 170(S.D.N.Y. 2006)

("[DJistrict courts must take care to determine whether there exists any altemative evidence with
the same or greater probative value, but with a lesser threat of unfairly prejudicing the defendant,

as the proffered evidence.")(citing Old Chief v. United States. 519 U.S. 172,182-83(1997)).
Finally, the court notes that it presently lacks adequate information to determine whether
evidence ofthe Krakovskys' personal finances is relevant to whether the transfers were made
(1) without consideration and (2) with the intent of hindering or delaying creditors. The court
therefore RESERVES decision as to whether the proffered evidence is admissible for these

purposes.^Jean-Laurent, 840 F. Supp. 2d at 536("[Cjourts considering a motion in limine
may reserve decision until trial, so that the motion is placed in the appropriate factual context."
rcitingNat'l Union Fire Ins. Co.. 937 F. Supp. at 287)).
F.

Defendants' Ninth Motion In Limine

Defendants argue in their final motion in limine that this case should be governed by the

law ofEngland and Wales. (Defs. Mem.^ 40.) The court held in its May 3, 2017, Memorandum

15

and Order, denying Defendants' motion to dismiss, that New York law applies to this action.
(Mem.& Order(Dkt. 116)at 9-10.) Accordingly, Defendants' motion is DENIED.
IV.

CONCLUSION

For the foregoing reasons. Plaintiffs' motions in limine (Dkt. 91)and Defendants'

motions in limine(Dkt. 89)are GRANTED IN PART and DENIED IN PART,with ruling on
certain questions RESERVED until trial.
SO ORDERED.

s/Nicholas G. Garaufis

NICHOLAS 0. GARAU|IS

Dated: Brooklyn, New York
May$ ,2017

United States District Judge

16