KREMSKY v. KREMSKY

Filing 140

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE MARK A. KEARNEY ON 11/21/17. 11/21/17 ENTERED AND COPIES EMAILED TO COUNSEL.(jaa, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
STANTON S. KREMSKY

CIVIL ACTION

v.

N0.16-4474

KENNETH F. KREMSKY
MEMORANDUM
November 21, 2017

KEARNEY, J.

We rely upon juries to evaluate credibility of witnesses and return verdicts based solely
on the evidence.

This Court particularly treasures the jury's collective wisdom when, after

presented with days of competent evidence vetted through several pre-trial motions in a complex
financial fraud, conversion and fiduciary duty claim brought by an uncle against his nephew, it
unanimously decides to believe the uncle in part. Following days of conflicting fact and expert
testimony, our jury returned a split verdict parsing through liability on the uncle's four claims,
awarding specific compensatory and punitive damages for three of his four claims and deciding
whether recovery on the three claims should be barred by the statute of limitations.

As is the

nature of our adversarial system, one side may be more disappointed than the other.

The

disappointed party finds it hard to believe a jury could make findings so contrary to their
arguments. Disappointed parties now represented by new appellate counsel seek judgment, a
new trial or reduced punitive damages.

Their arguments challenge the jury's considered fact

findings and attempt to craft a pre-trial stipulation as to ownership of certain properties never
asked to be shown to the jury. We find no basis to usurp the jury's considered verdict. Both
parties had ample opportunity to present a case and one side's disappointment in the jury's fact
findings does not warrant setting aside the verdict, ordering a new trial or reducing damages.

I.

Evidence presented to the jury.

Stanton Kremsky ("Uncle") is a California radiologist who sought financial and
investment assistance after a former girlfriend stole his savings. 1 Uncle met with his brother and
his three nephews, including his nephew Kenneth Kremsky ("Nephew"), and his brother
recommended the Uncle ask the Nephew to manage some of his investments.2 Nephew is not a
stockbroker or investment advisor.

He is an accountant by trade who admittedly has some

knowledge in buying and selling securities, real estate and other valuables on his own account.
Uncle and Nephew enjoyed a close personal familial relationship before the unfortunate
discoveries leading to our jury trial.
Uncle and Nephew reached an informal agreement Nephew would begin managing some
of Uncle's investments in 2004. 3 During the first five years, their practice involved Nephew
describing an investment opportunity to Uncle and Uncle would give Nephew the funds to
invest. 4 Nephew did not provide Uncle with statements tracking the investments nor did Uncle
ask or expect statements because he "totally trusted" Nephew. 5
Later in their investment relationship, Nephew opened investment accounts in Uncle's
name and gained direct access to Uncle's existing accounts to "streamline" investments made on
Uncle's behalf. 6 Uncle believed, based on Nephew's representations, he invested in real estate,
stocks, and precious metals.

7

Uncle did not doubt Nephew when he said Uncle's investments

were "doing great" and "making lots of money." 8
In September 2015, Uncle needed more funds for his defined benefit plan and discovered
suspicious withdrawals and underfunded accounts. 9

Uncle questioned Nephew demanding

account information and asset inventories. 10 Unhappy with Nephew's inability to account for
missing funds and investments, Uncle sued Nephew alleging he breached a fiduciary duty and

2

committed fraudulent misrepresentation, negligent misrepresentation, and conversion while
managing some of the Uncle's financial, real estate, and precious metal investments.
After four days of trial, the jury returned a unanimous verdict finding Nephew: (1)
committed fraudulent misrepresentation awarding $600,000 in compensatory damages and
$5,000 in punitive damages; (2) committed negligent misrepresentation awarding $110,000 in
compensatory damages; and, (3) committed a breach of fiduciary duty awarding $29,772.99 in
compensatory damages and $5,000 in punitive damages. 11
conversion. 12

The jury found no evidence of

As to each of the claims for which it awarded damages, the jury found Nephew

did not prove Uncle should have discovered the Nephew's conduct within the statute of
limitations. 13
II.

Analysis

Nephew moves for judgment as a matter of law on three grounds, moves for new trial on
three grounds, and moves to vacate the jury's award of punitive damages. Nephew moves for
judgment as a matter of law on Uncle's fraudulent misrepresentation claim because we
questioned the strength of Nephew's Rule 50 motion at the close of Uncle's case. Nephew also
moves for judgment as a matter of law on Uncle's negligent misrepresentation claim arguing
there is no evidence of negligent misrepresentations. Nephew moves for judgment as a matter of
law on Uncle's breach of fiduciary duty claim arguing the adduced evidence did not show a
fiduciary relationship under Pennsylvania law.
Nephew argues a new trial is required on the jury's finding Uncle's claims tolled under
Pennsylvania's discovery rule because evidence showed Uncle remained deliberately ignorant of
his possible claims. Nephew seeks new trial based on our admission of Brad Ryden's expert
report and testimony because Uncle untimely disclosed it. Nephew also moves for new trial

3

arguing Uncle's proposed damages calculation failed to credit Uncle with fifty percent
ownership of certain properties and used the appraisal price of precious metals, not their
purchase price.
Nephew also moves to vacate the jury's award of punitive damages on Uncle's fraudulent
misrepresentation and breach of fiduciary claims "for the same reasons [we] did not allow the
jury to consider whether to award punitive damages on [Uncle's] claim for conversion." 14
A.

We deny Nephew's motion for judgment as a matter of law.

Nephew moves for judgment as a matter of law under Fed. R. Civ. P. 50 for three
reasons. We may grant a motion for judgment as a matter of law, "only if, viewing the evidence
in the light most favorable to the nonmovant and giving it the advantage of every fair and
reasonable inference, there is insufficient evidence from which a jury reasonably could find
liability." 15 In considering Nephew's motion, we cannot ''weigh the evidence, determine the
credibility of witnesses, or substitute [our] version of the facts for the jury's version." 16
1.

The jury's finding of fraudulent misrepresentation is supported by
evidence.

The jury heard evidence supporting its finding Nephew fraudulently misrepresented his
investment activities on Uncle's behalf. The jury can find fraudulent misrepresentation where
there is evidence the Nephew made a material representation to Uncle and: (1) Nephew knew the
falsity of representation or recklessly disregarded the true of misrepresentation; and, (2) intended
to mislead Uncle into relying on the representation. 17 There must be evidence Uncle justifiably
relied on Nephew's misrepresentation and suffered injury because his reliance. 18
The jury heard evidence Nephew requested funds from Uncle and misrepresented the
funds were for Uncle's real estate investments when Nephew used the funds for his own personal
use or to purchase real estate in Nephew's name only. For example, on May 12, 2008, Nephew
4

asked Uncle to transfer $40,000 into the Everbank account and represented it was for a real
estate purchase in Ocean City, New Jersey as an investment for Uncle. 19 Nephew, however, did
not purchase any real estate in Ocean City, New Jersey for Uncle. 20 Nephew used Uncle's funds
to purchase a condo (Bl 17) but testified the Uncle had no ownership interest in the condo. 21
On November 2, 2010, Nephew asked Uncle to transfer $40,000 for a real estate purchase
and some closing costs as an investment. 22 Nephew used Uncle's funds to pay his home equity
line of credit on the B 117 condo in which Uncle had no ownership interest. 23 Nephew also
purchased a condo (B123) with funds from the account he shared with his Uncle but testified
Uncle had no ownership interest in the condo.24 Nephew did not put Uncle's name on the deeds
of any properties he purchased in Atlantic City, New Jersey. 25 Uncle never received income
from any of the Atlantic City properties purchased as investments by the Nephew. 26
Nephew also asked Uncle for access to Uncle's Chase Bank accounts to "streamline" the
investing process and "make a larger profit" for Uncle. 27 Uncle saw money leaving the Chase
account but "knew money was going out for investments and for this strategy."28 Uncle totaled
Nephew made $640,000 in withdrawals from his Chase account in one year with no
corresponding investment on Uncle's behalf. 29 Uncle never gave Nephew permission to use his
money for Nephew's personal expenses, to pay his credit cards, or to purchase his vehicles. 30
Nephew represented he would open investment accounts for Uncle and based on
Nephew's representation Uncle regularly deposited money into each account which Nephew did
not use to invest on Uncle's behalf. 31
For example, Uncle testified Nephew represented to him he opened up an Everbank
account in Uncle's name for his investments. 32

Uncle did not know Nephew opened the

Everbank bank account in both Uncle and Nephew's names as a joint account and did not give

5

Nephew permission to put Nephew's funds into the account. 33 Uncle did not have an ATM card
for the account, did not receive monthly statements, and had issues accessing the account until
2015.

34

During this time period, Nephew told Uncle, "[o]ur investments are doing great. We're

making lots of money. Everything is fine" and, at another point, told Uncle he made him a
$93,000 profit. 35
While Nephew represented the Everbank account was solely Uncle's investments,
Nephew withdrew a total of $37,000 from the account over a one year period. 36 Nephew paid
his doctor with funds from the Everbank checking account. 37 Nephew wrote a check for $30,000
from the Everbank checking account to his fourteen year old daughter. 38 Nephew wrote a check
from the Everbank checking account for $1,500 as the down payment to the disc jockey for his
son's bar mitzvah celebration. 39 Nephew used $6,900 from the Everbank checking account to
purchase a vehicle then used $15,000 from the same account to lease another vehicle. 40
Nephew also represented to Uncle he opened an Ironbeam brokerage account for Uncle's
future and options trading. 41

Uncle did not give Nephew permission to open the Ironbeam

account as a joint account or deposit Nephew's money into the account. 42 Uncle never knew
Nephew took the steps because Nephew had the monthly statements sent to himself. 43
Nephew requested $15,000 from Uncle's Ironbeam account and deposited the check in
his personal checking account.

44

The jury could disbelieve Nephew's testimony Uncle knew of

the withdrawal and signed the check himself via fax. 45 Nephew then made the same request to
Uncle's Ironbeam account for $8,000 and deposited the check with both his and Uncle's
signatures into his personal account. 46 Nephew then made a third same request, this time for
$7,000, also signed by Uncle and Nephew and deposited into Nephew's personal account. 47

6

Uncle never gave Nephew permission to sign checks from the account. 48

Uncle believed

Nephew's representation the Ironbeam account was for Uncle's investments. 49
Nephew also abused his access to Uncle's funds to purchase $44,000 of rare alcohol as an
investment but Uncle never received the rare alcohol bottles for investments. 50
Nephew argues we should grant judgment as a matter of law on Uncle's fraudulent
misrepresentation claim because of questions we to Uncle's counsel during oral argument on
Nephew's Rule 50 motion about the sufficiency of his evidence based on our recollection.
Nephew did not address Uncle's counsel argument Nephew made affirmative misrepresentations
about what he planned to do with Uncle's money. 51

Post-trial study of the trial transcripts

confirm Uncle adduced evidence for the jury to find Nephew fraudulently misrepresented to
Uncle his funds would be used to benefit Uncle's investments and instead, Nephew used the
funds for his own personal benefit.
2.

The jury's finding of negligent misrepresentation is supported by the
evidence.

Nephew also moves for judgment on Uncle's negligent misrepresentation claim arguing
Uncle adduced no evidence Nephew made negligent misrepresentations.

The jury can find

negligent misrepresentation based on evidence Nephew misrepresented a material fact either
knowing its falsity, without knowledge of its truth or falsity, or ought to know its falsity and
which he intended the Uncle to rely on. 52 There must also be evidence Uncle justifiably relied
on Nephew's misrepresentation and suffered injury because of his reliance. 53
Uncle testified Nephew purchased precious metals on Uncle's behalf and either shipped
them or brought them in person to Uncle. 54 An appraiser, John Woodlock, testified he knew the
coins were fake because "[i]t was obvious to me just be looking at them." 55 Mr. Woodlock also
testified the coins, if real, would be worth $115,515.25. 56 The jury heard Nephew testify he

7

routinely purchased precious metals for investments and the jury could find Nephew ought to
have known the coins he purchased were fake. 57
There is evidence for the jury to find Nephew misrepresented the genuine nature of the
precious metals he purchased using Uncle's funds for Uncle's investments and caused harm to
the Uncle. 58
3.

The jury's finding of breach of fiduciary duty is supported by the
evidence.

Nephew moves for judgment on Uncle's breach of fiduciary duty claim arguing the
evidence did not show a fiduciary relationship. Under Pennsylvania law, Uncle can prove a
fiduciary relationship exists where "the relative positions of the parties is such that one has the
power and means to take advantage of, or exercise undue influence over, the other." 59 Whether a
fiduciary relationship exists is "necessarily fact specific . . . . [f]amily relationships or close
personal friendships, while also not dispositive of the existence of a confidential relationship,
have also often played significant roles in particular determinations. " 60
Uncle described himself as a "fiscal idiot" who lost money on previous investment
ventures. 61 After a family meeting in 2004, Uncle agreed Nephew would take "on the task of
managing [his] financial affairs. " 62 From 2004 until 2015, Nephew told Uncle, "[o]ur
investments are doing great. We're making lots of money. Everything is fine." 63 Uncle "put
full faith in what [Nephew's] statements and actions were." 64 Uncle also testified he did not ask
Nephew questions because he "thought he was doing the right this by [him]. [Nephew] said he
was depositing it in my accounts and I assumed he was doing so." 65 At some point during the
investment relationship, Nephew told Uncle he made him a $93,000 profit. 66 The jury heard
three days of testimony, including Nephew's very different account, and determined based on

8

evidence and their credibility evaluation a fiduciary relationship existed between Uncle and
Nephew.
Uncle wanted to fund a defined benefit plan for retirement.

Uncle testified he and

Nephew worked with a pension fund administrator to establish his defined benefit plan and he
needed to contribute $241,000 to meet the maximum contribution threshold. 67 Nephew told
Uncle he would transfer $29,000 from his Chase account along with money from the brokerage
accounts and precious metals investments to meet the threshold. 68 Nephew represented to the
Uncle he completed the transfer of the $29,000. 69
Nephew never deposited the $29,000 into the Uncle's defined benefit plan. 70 Instead,
Nephew told Uncle he would wire $29,000 from the joint account to fund Uncle's defined
benefit plan. 71 Nephew placed $29,779.56 in a joint account and then transferred $29,779.56
back into his account, never funding the defined benefit plan for Uncle's retirement. 72 When
Uncle inquired why Nephew did not fund the defined benefit plan and asked for the location of
the $29,000, Nephew told him he did not know what happened and would look it up, even
though Nephew transferred the $29,779.56 to his personal account. 73 Uncle then asked again
and Nephew told him he transferred the money to Uncle's account and "nothing happened." 74
Nephew later told Uncle the money was not transferred due to "glitch" in the bank's system and
Nephew planned to complain to the FDIC about the bank's glitch. 75

The jury awarded

$29,772.99 on Uncle's breach of fiduciary duty claim, the exact amount Nephew placed in his
personal account instead of Uncle's defined benefit plan.
Nephew argues we should disturb the jury's credibility findings based on a Pennsylvania
Supreme Court case decided after our trial. In Yenchi v. Ameriprise Financial, Inc., an insurance
agent with a life insurance company cold-called a married couple about their finances. 76 The

9

insurance agent met with the couple twice and reviewed their disability policy and told them it
was a good product. 77

At their next meeting, the insurance agent presented a financial

management proposal to the couple for which they paid him $350 to prepare. 78 The couple
followed the insurance agent's recommendations including cashing out their current life
insurance policies and using the proceeds to buy his recommended whole life insurance
policies. 79 Several years later, the couple had their portfolio reviewed and discovered the whole
life insurance policy recommended by the insurance agent was "underfunded, destined to lapse,
and that additional premiums beyond those allegedly represented by [the insurance agent]."80
The couple sued the insurance agent and his employers alleging breach of fiduciary duty among
other claims. 81 The trial court held the "no fiduciary duty arises between an insurance agent and
a policyholder unless the policyholder delegates decision-making control" to the agent and the
evidence showed the couple made their own financial decisions. 82
The Pennsylvania Supreme Court affirmed finding the couple did not adduce evidence to
create a genuine issue of material fact as to whether a fiduciary relationship existed. 83 The
supreme court noted while couple argued they lacked financial and legal sophistication, they
offered no supporting testimony. 84 The couple also argued because they paid a fee for the
insurance agent's proposal, they were "justified in believing that the advice was being provided
in their best interests, and was more than an ordinary's arm's-length transaction involving the
purchase of insurance" but did not testify they had a close, personal relationship with the
insurance agent or he told them he acted only in their best interests. 85

The Pennsylvania

Supreme Court held the couple could not establish a fiduciary relationship because the only
adduced evidence is they paid for and relied on the insurance agent's specialized skill. 86

10

The Nephew's conduct towards Uncle is much different. Uncle testified as to sharing
both a familial bond and a personal friendship with Nephew, including traveling to Florida to see
the Phillies in Spring Training. In Yenchi, the insurance agent cold-called the couple and had
only a business relationship. Uncle also testified he is a "fiscal idiot" and agreed Nephew would
take "on the task of managing [his] financial affairs" after he made poor investment decisions on
his own. 87 Uncle also testified the relationship lasted over ten years throughout which Nephew
reassured Uncle "[ o]ur investments are doing great," unlike in Yenchi, where the couple offered
no evidence the insurance agent lead them to believe he was acting in their best interest and their
relationship only consisted of a few in-person or telephone meetings. 88 Uncle also testified he
had "full faith" in Nephew as a family member so he did not need to question Nephew's
investment actions. In Yenchi, the supreme court specifically distinguished the relationship from
a family or personal relationship because "[f]amily relationships or close personal friendships,
while also not dispositive of the existence of a confidential relationship, have also often played
significant roles in particular determinations." 89 The Pennsylvania Supreme Court's decision did
not fundamentally change how we determine if a confidential relationship exists. Uncle adduced
evidence which the jury found credible of Nephew "exercis[ing] undue influence over" him
.
.
creatmg a fiduciary duty. 90
1

We deny judgment as a matter of law as the jury heard evidence to find Nephew owed a
fiduciary duty to Uncle and breach his duty.

11

B.

We deny Nephew's motion for new trial.

Nephew moves for a new trial on three grounds. We grant a new trial "only where the
'great weight' of evidence cuts against the verdict and 'where a miscarriage of justice would
result if the verdict were to stand. '"91
1.

Evidence supports the jury's specific finding the discovery rule tolled
the statute of limitations.

Nephew argues a new trial is required on Uncle's claims tolled under Pennsylvania's
discovery rule because Uncle "remained willfully ignorant" of his possible claims and this
should bar his claims. With the parties' consent, we asked the jury to decide this fact.
Under Pennsylvania law, "the statute of limitations begins to run when '[Uncle] knows,
or in the exercise of reasonable diligence should have known, (1) that he has been injured, and
(2) that his injury has been caused by another's conduct." 92 The jury's finding the discovery rule
tolled the statute of limitations is supported by evidence at trial.
Uncle testified Nephew took "on the task of managing [his] financial affairs" and
Nephew told Uncle, "[o]ur investments are doing great.
Everything is fine." 93

We're making lots of money.

Uncle also testified he saw Nephew's withdraws from his checking

account and gave Nephew the funds requested to purchase real estate because he "knew money
was going out for investments and for this strategy." 94 The evidence found credible by the jury
is Uncle did not discover Nephew's conduct until 2015 because he believed Nephew's
reassurances and trusted his investment strategy.
Nephew is asking us to override the jury's credibility determination based on our court of
appeals' decision in Blanyar v. Genova Products Inc. In Blanyar, former employees sued their
employer alleging they were exposed to toxic substances in at the plant and requesting medical
monitoring. 95

The employees filed suit in 2015, and the employer argued the statute of
12

limitations barred their claims because they filed them more than two years after the plant closed
in 2012. 96 The employees agued the discovery rule tolled the statute of limitation because they
could not discover the dangers of the toxic substances within two years. 97 Our court of appeals
held the discovery rule did not apply because the employees knew they were exposed to toxic
substances and information about medical literature and federal regulation documented the toxic
effect of these substances on health beginning in the 1970s, "well before" the discovery date. 98
Our court of appeals' decision in Blanyar does not change how Pennsylvania's discovery
rule applies in this case because there the employees knew they were exposed to the substance
and the danger of the substance was well documented in publically available sources. Uncle's
injury stemmed from his close personal relationship with his Nephew who functioned as his
investment advisor, who reassured him his investments were on track and profitable while using
Uncle's money for Nephew's personal pursuits. Nephew ably argued Uncle chose ignorance and
failed to reasonably investigating his financial affairs to the jury in cross-examination and in
closing arguments, but the jury did not credit Nephew's arguments.

The jury's finding in

response to a special interrogatory Uncle could not, through reasonable diligence, discover
Nephew's conduct before August 15, 2014 is not against the weight of evidence and is not a
miscarriage of justice.

2.

Our admission of Mr. Ryden's expert testimony did not prejudice
Nephew.

Nephew also seeks a new trial because we admitted Mr. Ryden's expert report and
testimony because Uncle untimely disclosed this testimony thus prejudicing Nephew.
Nephew moved to preclude Mr. Ryden from testifying before trial based on the untimely
disclosures. 99

We fully incorporate our February 22, 2017 Order-Memorandum where we

weighted the four factors in deciding whether to exclude of evidence under Fed. R. Civ. P.
13

37(b)(2) and found Uncle's late disclosure of his expert report prejudiced Nephew but Nephew
could cure the prejudice. 100 To cure the prejudice, we ordered Uncle to produce Mr. Ryden for a
three hour deposition, allowed Nephew to prepare a rebuttal report, and ordered Uncle to pay
Nephew's costs and attorneys for the deposition and rebuttal report. 101
Nephew deposed Mr. Ryden and prepared a rebuttal report before trial, and he then ably
cross-examined him at trial curing the prejudice. 102 Nephew argues Mr. Ryden's testimony
prejudiced him because he testified Uncle suffered damages of $750,000 and the jury then
awarded a substantially similar amount in its verdict. The fact the jury found Mr. Ryden's
testimony credible on damages does not mean the testimony prejudiced him particularly where
the Nephew deposed the expert, presented a rebuttal expert, and thoroughly cross-examined him.
The belated testimony did not prejudice Nephew. We deny his motion for new trial.

3.

Our admission of Uncle's expert report and testimony did not
prejudice Nephew.

Nephew moves for new trial arguing Uncle's proposed damages calculation failed to
credit Uncle with fifty percent ownership of certain properties and used the appraisal price of
precious metals, not their purchase price.
Nephew never asked for a stipulation to be read to the jury about the ownership of the
three Atlantic City properties. Nephew testified Uncle shared fifty percent ownership. 103 But
Uncle testified he did not find his name as an owner on deeds of property owned by Nephew. 104
During trial, Nephew raised this issue to the jury by asking Uncle's expert, Mr. Ryden, why he
did not account for the three properties Nephew testified he and Uncle shared fifty percent
ownership.

105

Mr. Ryden testified Uncle is not on the deeds and "real estate does have to be in

writing." 106 The jury chose to credit Mr. Ryden's and Uncle's testimony over Nephew's and
found Uncle did not have an ownership interest in the properties.
14

Nephew argues our recognition of the parties' stipulation for the preliminary injunction
overrides the jury verdict. This is incorrect. Our October 5, 2016 Order granting Uncle a partial
preliminary injunction is an interlocutory order which governed the parties until the jury returned
its verdict. 107 We deny Nephew's motion for new trial because the jury's factual findings are not
bound by the preliminary injunction and Nephew did not request a stipulation of ownership be
submitted to the jury.
Nephew also argues for a new trial because Uncle's expert, Mr. Ryden, used the appraisal
price of precious metals, not their purchase price and objects to John Woodlock's testimony on
the subject. Nephew cites no law to support his argument the jury must use the purchase value
of precious metals, not the appraised values. Nephew did not request a jury instruction about the
proper valuation for precious metals and did not raise an objection to its absence. His argument
is waived.
Nephew also interjects an argument we should have precluded Mr. Woodlock's
testimony. Nephew raised this objection before trial and we allowed Mr. Woodlock to testify but
not mention or discuss the other appraiser in his testimony. 108 Nephew argues Mr. Woodlock
only briefly reviewed the 930 precious metal items and relied entirely on the other appraiser's
valuation. Nephew raised the issue to the jury during Mr. Woodlock's testimony numerous
times. The jury could credit Mr. Woodlock's testimony the coins were obviously fake on their
face and many individual items were the same type of coin making it easier and faster to
appraise. 109 Nephew challenged this testimony. The jury disagreed.
We deny a new trial on the basis the jury may have used the appraised value of precious
metals, not the purchase price and we properly admitted Mr. Woodlock's testimony.

15

C.

The jury's award of punitive damages is proper.

The jury awarded punitive damages against Nephew after finding breach of fiduciary
duty and fraudulent misrepresentation. As discussed, the jury heard evidence Nephew took
Uncle's money meant to fund his retirement and purchased vehicles, real estate, pay for a disc
jockey for his son's bar mitzvah, paid $30,000 to his pre-teen daughter, and purchased $1,000
plus bottles of rare liquor for himself totaling $44,000. Based on the evidence the jury could find
Nephew's conduct outrageous because it is "malicious, wanton, willful, oppressive or showed
reckless indifference" to Uncle's interests.

We deny Nephew's request to vacate punitive

damages. 110
Ill.

Conclusion

We deny Nephew's motion for judgment as a matter of law because the jury heard
sufficient evidence to amply support its finding of fraudulent misrepresentation, negligent
misrepresentation, and breach of fiduciary duty.

We deny Nephew's motion for new trial

because the jury's verdict is not against the weight of the evidence. We also deny Nephew's
motion to vacate punitive damages because the jury heard sufficient evidence to find Nephew's
conduct outrageous.

1

N.T. March 8, 2017, pp. 62:1-6; 64:19-66:1.

2

Id. at pp. 66:7-67:22.

3

Id. at p. 67: 13-22.

4

Id. at pp. 68:17-69:5.

5

Id. at pp. 69:3-70:9.

16

6

N.T. March 7, 2017, p. 103:2-24.

7

N.T. March 8, 2017, pp. 84:14-85:14; 101:16-19.

8

Id at pp. 84:14-85:14; 101:16-19.

9

Id at pp. 76:3-80:12.

10

Id at pp. 79:3-85:12.

11

ECF Doc. No. 93.

12

Id

13

Id

14

ECF Doc. No. 131 at 3.

15

Mancini v. North Hampton County, 836 F.3d 308, 314 (3d Cir. 2016) (quoting Lighting Lube,
Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993)).
16

Id (quoting Lighting Lube, 4 F.3d at 1166).

17

See Bouriez v. Carnegie Mellon University, 585 F.3d 765, 771 (3d Cir. 2009) (quoting Overall
v. Univ. of Pa., 412 F.3d 492, 498 (3d Cir. 2005) and Gibbs v. Ernst, 647 A.2d 882, 889 (Pa.
1994)) (Under Pennsylvania law, a fraudulent misrepresentation claim has six elements: "(1) a
representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge
of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading
another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting
injury was proximately caused by the reliance.").
18

See id

19

N.T March 8, 2017, p. 95:14-17; 96:5-7.

20

Id at p. 97:2-5.

21

N.T. March 6, 2017, pp. 187:4-188:25.

22

N.T. March 8, 2017, pp. 98:23-99:7.

23

N.T. March 6, 2017, pp. 202:4-204:24.

24

Id at pp. 177:23-179:6.

17

25

N.T. March 8, 2017, p. 147:13-18.

26

N.T. March 7, 2017, p. 51:13-19; N.T. March 8, 2017, p. 99:18-21.

27

N.T. March 8, 2017, p. 103:1-24.

28

Id. at p. 105:10-11.

29

Id. at p. 114:12-16.

30

Id. at p. 165:5-8.

31

See N.T. March 7, 2017, p. 103:2-12.

32

N.T. March 8, 2017, p. 70:20-71 :11.

33

Id. at p. 72:3-6.

34

Id. at pp. 73:22-76:3.

35

N.T. March 6, 2017 p. 154:15-20; N.T. March 8, 2017 p. 101:8-19.

36

N.T. March 6, 2017, p. 208:5-18.

37

Id. at p. 234:4-16.

38

Id. at p. 237:9-18.

39

Id. at pp. 242:16-242:7.

40

Id. at pp. 244:14-245:7.

41

N.T. March 8, 2017, p. 87:15-22; 90:15-16.

42

Id. at p. 88:3-12.

43

Id. at p. 87:15-22; 90:15-16.

44

N.T. March 7, 2017, pp. 20:2-23:12.

45

Id. at pp. 20:2-23:12.

46

Id. at pp. 25:4-26:19.

18

47

Id. at pp. 27:4-29:4.

48

N.T. March 8, 2017, p. 91:17-19.

49

Id.

50

N.T. March 7, 2017, p. 13:18-24; N.T. March 8, 2017, p. 160:11-22.

51

See N.T. March 8, 2017, p. 273:1-8.

52

See Azarchi-Steinhauser v. Protective Life Ins. Co., 629 F. Supp. 2d 495, 502 (E.D. Pa. 2009)
(quoting Gibbs, 647 A.2d at 890) ("In Pennsylvania, the elements of a negligent
misrepresentation claim are '(l) a misrepresentation of a material fact; (2) the representor must
either know of the misrepresentation, must make the representation without knowledge as to its
truth or falsity or must make the representations under circumstances in which he ought to have
known of its falsity; (3) the representor must intend the representation to induce another to act on
it; and (4) injury must result to the party acting in justifiable reliance on the misrepresentation"').
53

See id.

54

N.T. March 8, 2017, p. 131 :5-8; 135:13-21.

55

Id. at p. 262:12-13 (Videotape of John Woodlock played to the jury). Deposition ofJohn
Woodlock, p. 30:15.
56

Id. Deposition of John Woodlock, p. 38:11.

57

See e.g., N.T. March 6, 2017, pp. 220:2-221 :5; 146:16-147:16.

58

See Azarchi-Steinhauser, 629 F. Supp. 2d at 502.

59

Yenchi v. Ameriprise Financial, Inc., 161A.3d811, 820 (Pa. 2017).

60

Id. at 821 (citing Silver v. Silver, 219 A.2d 659, 663 (1966)).

61

N.T. March 8, 2017, p.164:6-9.

62

Id. at p. 67:20-22.

63

Id. at p. 101 :8-19.

64

Id. at 102:15-16.

65

Id. at pp. 99:22-100:2.

19

66

N.T. March 6, 2017, p. 154:15-20.

67

N.T. March 8, 2017, pp. 118: 18-119:24.

68

Id. at pp. 117:25-118:13.

69

Id. at p. 123:12-15.

70

N.T. March 6, 207 pp. 249:2-254:16; 255:18-256:19.

--,,
1

I
I
I

11

Id.

n Id.
73

Id. at pp. 261 :25-263 :25.

74

Id. at pp. 265:15-267:5.

75

N.T. March 8, 2017, p. 127:1-4.

76

Yenchi, 161 A.3d at 814.

77

Id.

78

Id.

79

Id. at 815.

80

Id.

81

Id. at 815-16.

82

Id. at 816.

83

Id. at 819.

84

Id.

85

Id.

86

Id. at 822-23.

87

N.T. March 8, 2017, p.164:6-9; 67:20-22.

88

Id. at p. 101 :8-19.

20

89

Id. at 821 (citing Silver v. Silver, 219 A.2d 659, 663 (1966)); N.T. March 8, 2017 pp. 99:22100:2.

90

Yenchi, 161 A.3d at 820.

91

Springer v. Henry, 435 F.3d 268, 275 (3d Cir. 2006) (quoting Sheridan v. E.l DuPont de
Nemours & Co., 100 F3d 1061, 1076 (3d Cir. 1996)(en bane)).
92

Blanyar v. Genova Products Inc., 861 F.3d 426, 432 (3d Cir. 2017) (internal citations omitted).

93

N.T. March 8, 2017, p. 67:20-22; 101:8-19.

94

Id. atp.105:10-11.

95

Blanyar, 861 F.3d at 428.

96

Id. at 429.

97

Id. at 430.

98

Id. at 432-33.

99

ECF Doc. Nos. 38, 45-1.

100

ECF Doc. No. 73.

101

Id.

102

See ECF Doc. No. 88.

103

N.T. March 6, 2017, pp. 173:11-174:3.

104

N.T. March 8, 2017, p. 100:10-11.

105

Id. at pp. 19:22-21:9.

106

Id.

107

See New Jersey Hosp. Ass'n v. Waldman, 73 F.3d 509, 519 (3d Cir. 1995) (citing Oburn v.
Shapp, 531 F.2d 142, 149 n.18 (3d Cir. 1975)) (until a final judgment on the merits, "the findings
of fact and conclusions of law made in conjunction with the preliminary injunction are indeed
preliminary. As such, they do not foreclose any findings or conclusions to the contrary based on
the record as developed ... ").

21

108

See ECF Doc. No. 85.

109

N.T. March 8, 2017, p. 262:12-13 (Videotape of John Woodlock's deposition testimony
played to the jury). Deposition of John Woodlock, pp. 30:15; 44:6-45:21.
110

N.T. March 9, 2017, p. 191:5-7.

22