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` OPINION AND ORDER
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` 15 Civ. 5514 (ER)
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`JAMES T. EVANS,
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`Plaintiff,
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`
` – against –
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`SSN FUNDING, L.P., EDWIN AVENT, HSE,
`INC., and HSE, LLC,
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`Defendants.
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`Ramos, D.J.:
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`James T. Evans (“Evans”) brings this action in diversity against SSN Funding, L.P.
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`(“SSN Funding”) for breach of two promissory notes, against Edwin Avent (“Avent”) for breach
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`of fiduciary duty and negligent misrepresentation, and against Avent, HSE, Inc. and HSE, LLC
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`(together, “HSE”) (collectively, “Defendants”), for conversion and an accounting, and for fraud
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`against all Defendants. After a four-day trial before this Court, a jury found that SSN Funding
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`had procured one of the promissory notes by fraud, and awarded Evans compensatory and
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`punitive damages. Schoenstein Aff., Doc. 101, Ex. 1, Verdict Sheet, at 4–5. The jury, however,
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`rejected Evans’ breach of contract claim against SSN Funding, concluding that Evans had
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`converted the promissory notes into an equity interest in SSN Funding. Id. at 1. The jury found
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`the remaining Defendants not liable on all claims brought against them. See Verdict Sheet.
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`Before the Court are Evans and SSN Funding’s post-trial motions: Evans moves the
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`Court for entry of judgment as a matter of law, or a new trial, pursuant to Federal Rule of Civil
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`Procedure 50(b) and 59, respectively, Doc. 99, arguing that the jury’s finding of conversion lacks
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`support in the record. SSN Funding asks the Court to deny Evans’ motion as baseless and
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`dismiss the case, arguing that the jury’s finding of conversion renders Evans a limited partner of
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 2 of 25
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`SSN Funding and destroys diversity jurisdiction. Alternatively, SSN Funding moves for
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`judgment as a matter of law pursuant to Rule 50(b), on the basis that the jury’s finding of fraud
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`as to SSN Funding is inconsistent with its finding absolving Avent of liability for fraud. Doc.
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`106. For the reasons set forth below, both parties’ motions are DENIED, and the case is
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`dismissed for lack of subject matter jurisdiction.
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`I.
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`BACKGROUND
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`Factual Background
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`The Court assumes familiarity with the record and its prior summary judgment opinion,
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`which details the facts and procedural history of this case, and discusses here only those facts
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`necessary for its disposition of the instant motion. See Evans v. SSN Funding, L.P., No. 15 CIV.
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`5514 (ER), 2017 WL 3671180 (S.D.N.Y. Aug. 23, 2017) (the “Summary Judgment Opinion”).
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`As relevant here, this dispute stems from Evans’ $250,000 investment in the Soul of the
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`South Network (“Soul of the South”), a regional broadcast television network that caters to an
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`African-American audience, in which SSN Funding holds an indirect interest. Defs.’ 56.1 Stmt.
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`¶ 5.1
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`1.
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`Promissory Notes
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`On December 12, 2011, Evans and SSN Media Group, LLC (“SSN Media LLC”),
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`another entity related to SSN Funding, executed a promissory note pursuant to which Evans lent
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`1 Evans is an attorney residing in New York City. Defs.’ 56.1 ¶¶ 1–2; Pl.’s 56.1 Counterstmt. ¶ 31. SSN Funding is
`an Arkansas limited partnership with its principal place of business in Arkansas, and is the successor-in-interest to
`SSN Media Group, Inc. (“SSN Media”). Defs.’ 56.1 ¶ 4; Pl.’s 56.1 Counterstmt. ¶ 32. Avent, a citizen of the State
`of Maryland, was the Chairman and CEO of SSN Media, SSN Funding, S.O.S. Media Holdings, Inc. (“S.O.S.”), and
`HSE at all relevant times. Pl.’s 56.1 Counterstmt. ¶ 34; LPA at 65. HSE, Inc. was a Maryland corporation with its
`principal place of business in Maryland. Pl.’s 56.1 Counterstmt. ¶ 35.
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`2
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 3 of 25
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`SSN Media LLC $150,000 (the “December Note”).2 Schoenstein Aff., Ex. 3, December Note;
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`Schoenstein Aff., Ex. 4, Tr. 41:11–24. Several months later, on March 20, 2012, Evans and SSN
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`Media executed a second promissory note for $100,000 (the “March Note”). Schoenstein Aff.,
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`Ex. 4, March Note; Tr. 43:24–44:2. Both the December and March Notes (together, the
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`“Promissory Notes”) allowed Evans to elect to cancel the Notes within one year—by March 20,
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`2013 and March 21, 2013 respectively—and receive “in lieu thereof, such other securities and/or
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`notes and/or agreements and/or instruments as shall be similar to other securities and/or notes
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`and/or agreements and/or instruments which may be issued to any other lender [] or investor in
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`the Borrower.” See December Note at 1; March Note at 1. In other words, the Notes permitted
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`Evans to convert the loans he made to SSN Media to equity in the company, but only if he
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`exercised that right within one year.
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`At trial, Evans testified that before executing the March Note, he spoke to two
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`representatives of Soul of the South, Frank Mercado-Valdes (“Mercado-Valdes”) and Chris
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`Clark (“Clark”). Tr. 44:2–16. According to Evans, he “was very hesitant” to lend additional
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`funds to Soul of the South because “[he] didn’t know” how his initial investment was being used
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`and was leery of continuing to invest in a startup that had not yet secured sufficient funding to
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`commence operation. Tr. 45:8–12, 46:1–2. To hedge against this concern, the parties agreed
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`that the proceeds from the $100,000 March Note would be placed in an escrow account and
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`would not be utilized for any purpose unless and until a total of $2 million was raised for Soul of
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`the South. Tr. 124:9–10 (Evans stating that “this second investment was to be in escrow until
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`SSN reached $2 million in investment”); see also Tr. 35:25–36:2, 39:16–17, 45:21–25, 156:3–5.
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`Consistent with this understanding, upon wiring the funds, Evans emailed Clark to verify that
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`2 The December Note was amended on March 21, 2012 to assign SSN Media LLC’s rights to SSN Media. See Doc.
`101 Ex. 3 at 1; Tr. 53:20–25.
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`3
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 4 of 25
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`they would be held in an “escrow account and not the checking account . . . . until funds are
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`collected from other lenders.” Tr. 51:1–6 (quoting Doc. 101, Ex. 5, March 21, 2012 Email Chain
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`from Evans to Clark). In response, Clark confirmed that that was “[t]he plan.” Tr. 51: 7–18.3
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`Despite these representations, and unbeknownst to Evans, the funds were never placed in
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`escrow. Id. 51:19–24. Instead, Avent placed the funds in an HSE operating account where they
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`were comingled with the funds therein and used to pay for the day-to-day operations of SSN
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`Media. Tr. 122–123:2; Tr. 263:24–264:13, 277:15–20 (Avent testifying that HSE and SSN
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`funds were comingled in the same account). At trial, Avent testified that he “only did with
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`[Evans’] investment as [he] was directed by . . . Clark”, that “[a]n escrow account was never
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`established, and [that he] was never instructed to transfer [Evans’] money into an escrow
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`account.” Tr. 277:15–24.
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`Evans testified that Mercado-Valdes and Clark approached him in June 2012 and asked if
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`he would authorize the release of the $100,000 from escrow so that SSN Media could purchase
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`an interest in SSN Media Gateway, LLC (“Gateway”).4 Tr. 59:13–60:14. He agreed to release
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`the funds, but only for this purpose. Tr. 61:1–18. To memorialize that agreement, Clark sent
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`Evans a Memorandum of Understanding that was purportedly signed by Avent, among others.
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`Tr. 64:8–65:14; Memorandum of Understanding, Doc. 101, Ex. 6. SSN Funding, however,
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`never received an interest in Gateway. Tr. 67:11–12. Instead, Avent acquired a $100,000
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`interest in Gateway on behalf of HSE. Tr. 67:16–22, 263:6–23. At trial, Avent confirmed that
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`Evans did not have an interest in Gateway. Tr. 265:16–22. Indeed, Avent asserted that he
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`3 Notably, nothing in the March Note stipulated that the funds would be held in escrow. See March Note; Tr. 157:6–
`10.
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` 4
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` Evans testified that Gateway was formed to purchase a mechanism that would allow the Soul of the South network
`to send media feed in a faster and less cost intensive manner. See Tr. 59:25–60:8; Memorandum of Understanding
`at 1 (noting that the funds would be used to “acquire the Central Automated Satellite Hub,” which would be
`“leverage[ed] . . . to operate Soul of the South Network”).
`4
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 5 of 25
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`“would have never signed any document that included James Evans having a hundred thousand
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`dollars in the media Gateway because that was not true,” and that Clark had forged his signature
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`on the Memorandum of Understanding, which Avent claimed he had not previously seen. Tr.
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`264:14–265:15. As far as Avent was concerned, Clark “outright lie[d]” to Evans and “forged”
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`Avent’s signature to give the fraudulent transaction the appearance of validity. Tr. 266:2–16.
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`Subscription Agreements
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`2.
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`In late 2012, Clark approached Evans with the possibility of converting the $250,000 of
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`debt into an equity interest in SSN Funding. Tr. 68:3–21. Evans testified that he informed Clark
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`that he was “very uncomfortable” with the idea of converting his Promissory Notes to equity,
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`because he “just really wanted to get paid.” Tr. 70:10–12. By simply holding on to the
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`Promissory Notes, which would mature in December 2013, Evans had a low risk way to ensure
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`he would recover his loan proceeds. December Note ¶ 2; March Note ¶ 2. As such, Evans
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`informed Clark that “the only way that [he] would” agree to convert his Promissory Notes to
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`equity was if he could condition the conversion of his notes on SSN Funding raising $4 million.
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`Tr. 70:14–24. Pursuant to this planned transaction, in March 2013, Clark asked Evans to execute
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`a subscription agreement (the “March Subscription Agreement”), Tr. 162:8–11, which upon
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`signature and acceptance by SSN Funding, would convert Evans’ Promissory Notes to an equity
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`interest in SSN Funding.5 Evans testified that Clark also sent Evans a Limited Partnership
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`Agreement (“LPA”), which would memorialize Evans’ limited partnership in SSN Funding, and
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`a side letter. Tr. 165:4–10. On March 18, 2013, Evans signed the March Subscription
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`Agreement with a commitment of $250,000, described as convertible interests, and emailed the
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`5 The March Subscription Agreement states that upon S.O.S.’ “acceptance of this application,” Evans will become a
`“[l]imited [p]artner [of SSN Funding] under the terms and conditions of the Partnership Agreement.” March
`Subscription Agreement ¶¶ 1-2. Moreover, it states that the commitment will be treated as equity for United States
`federal tax purposes. Id. at ¶ 17(l).
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`5
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 6 of 25
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`agreement to Clark, along with an executed copy of the LPA and an “Acknowledgment” signed
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`by Evans. See Schoenstein Aff., Doc. 101, Ex. 7, March 18, 2013 Email from Evans to Clark
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`attaching signed Subscription Agreement, Executed Limited Partnership Agreement, and
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`Acknowledgment. Evans concedes that at that point it was his “intention to become a limited
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`partner of SSN,” Tr. 162:20–24, though he asserts that he was never informed that the March
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`Subscription Agreement was “accepted” by SSN Funding, Tr. 105:1–6.
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`At trial, Evans insisted that the Acknowledgement that he attached to the March 18 email
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`was a “side letter” that was drafted by Clark and had been discussed between the parties,
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`although Evans offered no documentary proof that the Acknowledgment originated with Clark.
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`Tr. 165:16–18. As relevant here, the Acknowledgment states that SSN Funding would only
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`convert Evans’ Promissory Notes to equity upon raising and issuing $4.5 million in limited
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`partner interest. See Acknowledgment, Schoenstein Aff., Doc. 101, Ex. 7, ¶ (g) (providing that
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`Evans releases SSN Media from any and all claims that he may have upon the issuance to him
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`“of a Limited Partnership Interest in SSN Funding, L.P. corresponding to a $250,000 capital
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`contribution . . . and provided that SSN Funding[,] L.P. shall concurrently therewith issue a
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`minimum of $4,500,000[] in Limited Partnership Interests”). On cross examination, Evans
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`acknowledged that the “side letter” was “drafted . . . in the first person,” as if it were written by
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`Evans, was signed only by Evans, and was an offer from Evans to SSN Funding. Tr. 165:19–24,
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`169:7–13, 170:3–9. Defense counsel also noted that the Paragraph 6 of the March Subscription
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`Agreement contains an anti-reliance provision, which provides:
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`“[The subscriber(s)] confirm that our subscription for limited partnership interests
`. . . in, and our Commitment to, the Partnership is made solely on the basis of the
`information contained in a Disclosure Memorandum dated February 25[,] 2013,
`and other ancillary documents relating to the business of the Partnership provided
`by its authorized representatives during the course of meetings in person with the
`undersigned or its authorized representatives, the Partnership Agreement, any side
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`6
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 7 of 25
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`letter we have entered into with the Partnership and the General Partner and this
`Subscription Agreement . . . and not in reliance on any other information,
`representations or warranties, whether oral or written, provided by any Person
`including for the avoidance of doubt[,] the General Partner or any Affiliate thereof
`or any officer, agent, director, member, partner or employee of any such Person.”
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`Tr. 166:22–167:12 (quoting March Subscription Agreement ¶ 6). In effect, Defense counsel
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`argued that since the “side letter” was not signed by the SSN Funding partnership, it was not the
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`kind of side letter contemplated by Paragraph 6. Tr. 169:1–170:10. Defense counsel further
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`noted that the March Subscription Agreement contained a forward looking statement, which
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`provided in pertinent part:
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`Any statements made on behalf of the Partnership that are not statements of
`historical fact, should be considered forward looking statements. Such
`statements include, without limitation, those relating to the Partnership’s future
`business prospects, business plans, revenues, expenditures, capital needs, and
`income. [The subscriber(s)] acknowledge that such statements are estimates
`reflecting the best judgment of the Partnership and involve a number of risks
`and uncertainties that could cause actual results to differ materially from those
`suggested
`by
`any
`forward
`looking
`statements.”
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`Tr. 171:18–172:2 (quoting March Subscription Agreement ¶ 17(o)).
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`Relying on that provision, Defense counsel asked Evans whether he ever “raised an
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`objection about the inherent contradiction” between the Acknowledgment conditioning Evans’
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`partnership interest on SSN Funding raising $4.5 million and the March Subscription
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`Agreement’s forward looking statement clause. Tr. 174:11–175:1. Evans responded that he did
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`not raise an objection because he did not view the statements as contradictory. Tr. 174:18.
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`Evans thus maintained that he understood the documents he executed would not become final,
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`and his Promissory Notes would not be converted into equity, until SSN Funding met the $4.5
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`million capital raise threshold. Tr. 176:1–10, 185:8–20. Two months after Evans executed the
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`March Subscription Agreement and the LPA, on May 15, 2013, Avent signed the LPA.
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`Schoenstein Aff., Ex. 8, LPA at 1, 65. Avent testified that when he signed the LPA he had “the
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`7
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 8 of 25
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`authority to bind the company to Evans” and “[a]bsolutely” considered Evans a limited partner
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`of SSN Funding at that point in time. Tr. 290:16–291:12. On cross examination, Avent
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`acknowledged that the LPA provided that the limited partners’ names would be listed on an
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`Annex A, and that the LPA that was provided to Evans did not contain an Annex A. Tr. 395:7–
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`18. Avent stated that that “probably is the case because Mr. Evans [was] the first limited partner
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`[and] he would [have been] the only one that would be on the [A]nnex.” Id. No Annex A was
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`ever entered into evidence.
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`Several months later, on September 30, 2013, Evans signed a second subscription
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`agreement, but this time Evans executed the agreement on behalf of Evans & McConnell, LLC
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`(“E&M”) as the prospective subscriber with a commitment of $350,000, instead of $250,000
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`(“September Subscription Agreement”). Schoenstein Aff., Ex. 9, September Subscription
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`Agreement at 1, 9. As Evans explained at trial, Clark wanted SSN Funding to remain a
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`“minority-owned business” so that the venture was eligible for additional funding and
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`programming opportunities that were set aside for such businesses. Tr. 108:18–109:4. Thus,
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`Clark asked Evans, who is a minority, to combine his equity stake with a non-minority investor
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`named Peter Moore. The idea was that Evans and Moore could funnel their investments through
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`an LLC so that SSN Funding could continue to claim minority status. Id. 108:22–109:24. Evans
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`consented to that arrangement and, in May 2013, filled out the necessary paperwork and “paid to
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`form” the E&M LLC. Id. 109:25–110:14. Evans conceded that Moore is not in fact a member
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`of E&M—that Evans is its sole member—and that Moore’s $100,000 investment was only
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`channeled through E&M. Tr. 113: 4–6. Thus, there is no dispute that $250,000 of the $350,000
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`commitment was the same $250,000 Evans initially loaned to SSN Media through the
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`8
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 9 of 25
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`Promissory Notes, and that the remaining $100,000 was Moore’s. See Tr. 115:21–23, 183:1–9.
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`Evans does not know if Moore is even a limited partner of SSN Funding. Tr. 183:12–14.
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`The September Subscription Agreement provides: “NOTE: This subscription agreement
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`encompasses Moneys already received and acknowledged by SSN Funding and creates no new
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`obligations for subscriber herein.” September Subscription Agreement at 1. It otherwise
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`contains the same provisions as the March Subscription Agreement. See id.
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`In a September 30, 2013 email exchange in which Clark asked Evans to execute the
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`September Subscription Agreement, Clark wrote, “it[’]s the same thing you already signed. This
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`is just a new subscription agreement. I will take care of the rest of the information.” Doc. 63,
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`Ex. 7 at 3; Tr. 114–115. Likewise, Douglas McHenry, the CEO of SSN Funding, Tr. 417:20–
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`21, explained that the $250,000 that Evans invested to enter the “original . . . Evans . . . limited
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`partnership agreement that he signed as a single individual” was “[t]he same $250,000” invested
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`through E&M. Id. 435:1–15. McHenry expounded: “So we can talk about the sophistry of this
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`company versus that company. In the end, James Evans whether it is through the [March
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`Subscription Agreement] or the [September Subscription Agreement], is a limited partner.” Id.
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`435:16–19.
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`3.
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`Parties’ Course of Conduct
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`At trial, there was little dispute that Evans was treated as a limited partner for at least
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`some period of time. Evans conceded that following the execution of the September
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`Subscription Agreement he was treated as a limited partner of SSN Funding and “conduct[ed]”
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`himself as such. Tr. 184:6–16. In this regard, Evans acknowledged that he “was invited to
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`several [limited partner] meetings,” Tr. 184:15–16, and that he attended “[m]aybe seven” of
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`those limited partner meetings, that he “sent and received” emails in his capacity as a limited
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`9
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 10 of 25
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`partner, Tr. 118:1–14, and that he “raised objections under the ambit of being a limited partner.”
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`Tr. 119:8–10. According to Evans, however, he only conducted himself as a limited partner on
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`behalf of E&M, and not in his individual capacity. Tr. 118:10–17. Evans also noted that E&M
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`received K-1 tax statements, though Evans never filed that form as part of his or E&M’s tax
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`returns. Tr. 120:9–24. Notwithstanding these admissions, Evans asserts that SSN Funding did
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`not treat him the same as other limited partners were treated, and that as a result Evans drafted a
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`shareholder derivative demand letter, but never formally filed a complaint, and never received a
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`response from SSN Funding. Tr. 119:10–120:8.
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`Testimony from the other members of SSN Funding indicated that Evans was indeed
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`treated like a limited partner. Avent specifically testified that, despite his druthers, following
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`Evans’ execution of the LPA he considered Evans a limited partner and treated him as such. Tr.
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`290:16–291:12; 391:11–14 (stating that Evans was the “first limited partner to sign the limited
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`partnership agreement”). William Campbell, an SSN Funding representative, provided
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`corroborating testimony. At his deposition, which was read into the record at trial, Campbell
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`asserted that Evans was treated as an SSN Funding limited partner, stating that the limited
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`partnership held “four or five” telephonic meetings and that Evans “was always invited to
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`participate . . . and a number of times he did.” Tr. 308:13–18. Similarly, McHenry testified at
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`trial that “Evans was one of the larger limited partner stakeholders [in SSN Funding].” Tr.
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`426:10–13. He further testified, ostensibly as proof of Evans’ active role as a limited partner,
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`that Evans “certainly was aware of, . . . and I believe was ultimately in favor of, [SSN Funding
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`being acquired by another entity].” Tr. 426:10–15. Finally, McHenry noted that prior to the
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`lawsuit Evans never claimed that he was owed money on the Promissory Notes, Tr. 424:22–25.
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`10
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 11 of 25
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`Procedural History
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`On February 28, 2017, SSN Funding filed a motion for summary judgment, arguing that
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`because Evans converted the Promissory Notes into an equity interest in SSN Funding, there was
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`no diversity of citizenship, and moreover, no contractual debt to enforce. Doc. 61. On August
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`23, 2017, the Court denied SSN Funding’s summary judgment motion, reasoning that there were
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`triable issues of fact. Specifically, the Court concluded that there was a triable issue regarding
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`“whether there was sufficient mutual assent by both parties, causing Evans to become a limited
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`partner in his individual capacity under the March Subscription Agreement.” Summary
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`Judgment Opinion at *10. Next, because there was evidence that some portion of the $250,000
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`loan was diverted by Avent and comingled with an HSE operating account, there was a triable
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`issue on whether that loan “was ever given to SSN Funding and whether the [March]
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`[S]ubscription is void ab initio as a result.” Id. Finally, the Court determined that there was a
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`genuine dispute of material fact as to Evans’ claim that the Subscription Agreements were void
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`ab initio because they were procured by fraud. Id. at *11.
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`A four day trial was held from October 23–26, 2017.6 On October 26, the jury rendered
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`its verdict. Verdict Sheet at 16. The jury concluded that SSN Funding was not liable for breach
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`of contract, i.e., that Evan was not entitled to the return of his initial $250,000 loan, finding that
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`Evans had converted his Promissory Notes to equity. Verdict Sheet at 1, No. 1. The jury also
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`found that SSN Funding was liable for fraud in connection with the March Note and awarded
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`6 During the course of the trial, the parties moved for judgment as a matter of law on a range of claims. Defendants
`sought judgment as a matter of law on Plaintiff’s breach of fiduciary duty, negligent misrepresentation, conversion,
`and fraud claims. Tr. 316–317, 331:17–20. The Court denied those motions on the basis that their resolution turned
`on issues of fact that should be decided by the jury. Tr. 327:16–20, 331:12–15, 334:20–25. Plaintiff also sought
`judgment as a matter of law on their conversion claim, asserting that the witnesses uniformly testified that E&M was
`treated as a limited partner, and not Evans in his individual capacity. Tr. 335–336. The Court likewise denied that
`motion on the grounds that there was “a basis for the jury to determine that by executing [the March Subscription
`Agreement], Mr. Evans became a limited partner.” Tr. 336:24–337:1.
`11
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 12 of 25
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`Evans $100,000 plus interest in compensatory damages, and $75,000 in punitive damages.
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`Verdict Sheet at 4–5, Nos. 12, 17–18. In contrast, the jury absolved Avent and the remaining
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`Defendants from liability for fraud. Verdict Sheet at 2, 6–8, Nos. 5, 19, 26. The jury returned a
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`verdict of non-liability on the remaining claims of negligent misrepresentation, breach of
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`fiduciary duty, and conversion. Verdict Sheet at 10–15.
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`II.
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`LEGAL STANDARD
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`
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`Judgment as a Matter of Law and New Trial
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`Judgment as a matter of law may not properly be granted under Federal Rule of Civil
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`Procedure 50(b) unless the evidence, viewed in the light most favorable to the opposing party, is
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`insufficient to permit a reasonable juror to find in his favor.” Galdieri-Ambrosini v. Nat’l Realty
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`& Dev. Corp. 136 F.3d 276, 289 (2d Cir. 1998); see also MacDermid Printing Sols. LLC v.
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`Cortron Corp., 833 F.3d 172, 180 (2d Cir. 2016) (where a jury has returned a verdict in favor of
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`the non-movant, a court may grant judgment as a matter of law to the movant “only if the court,
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`viewing the evidence in the light most favorable to the non-movant, concludes that a reasonable
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`juror would have been compelled to accept the view of the moving party.”) (quoting Cash v. Cty.
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`of Erie, 654 F.3d 324, 333 (2d Cir. 2011))); see also Fed. R. Civ. P. 50(a) (A court may grant a
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`motion as a matter of law “[i]f a party has been fully heard on an issue during a jury trial and the
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`court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for
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`the party on that issue.”). A party seeking judgment as a matter of law bears a “‘particularly
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`heavy’” burden “where, as here, ‘the jury has deliberated in the case and actually returned its
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`verdict’ in favor of the non-movant.” Cash, 654 F.3d at 333 (quoting Cross v. N.Y.C. Transit
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`Auth., 417 F.3d 241, 248 (2d Cir. 2005)). A court should accordingly set aside a jury’s verdict
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`only “where there is such a complete absence of evidence supporting the verdict that the jury’s
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`findings could only have been the result of sheer surmise and conjecture, or there is such an
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`overwhelming amount of evidence in favor of the movant that reasonable and fair minded
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`[persons] could not arrive at a verdict against him.” Vangas v. Montefiore Med. Ctr., 823 F.3d
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`174, 180 (2d Cir. 2016) (alteration in original) (quoting Stampf v. Long Island R.R. Co., 761 F.3d
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`192, 197 (2d Cir. 2014)). In deciding such a motion, “‘[t]he court cannot assess the weight of
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`conflicting evidence, pass on the credibility of the witnesses, or substitute its judgment for that of
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`the jury,’ and ‘must disregard all evidence favorable to the moving party that the jury is not
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`required to believe.’” ING Glob. v. United Parcel Serv. Oasis Supply Corp., 757 F.3d 92, 97 (2d
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`Cir. 2014) (quoting Tolbert v. Queens Coll., 242 F.3d 58, 70 (2d Cir. 2001)).
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`Pursuant to Rule 59(a), a court may grant a new trial “for any reason for which a new
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`trial has heretofore been granted in an action at law in federal court.” Fed. R. Civ. P. 59(a)(1)(A).
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`The standard under Rule 59(a) is less stringent than that of Rule 50 in two respects: “(1) a new
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`trial under Rule 59(a) ‘may be granted even if there is substantial evidence supporting the jury’s
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`verdict,’ and (2) ‘a trial judge is free to weigh the evidence himself, and need not view it in the
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`light most favorable to the verdict winner.’” Manley v. AmBase Corp., 337 F.3d 237, 244–45
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`(2d Cir. 2003) (quoting DLC Mgmt. Corp. v. Town of Hyde Park, 163 F.3d 124, 133–34 (2d Cir.
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`1998)). “That being said, for a district court to order a new trial under Rule 59(a), it must
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`conclude that the jury has reached a seriously erroneous result or . . . the verdict is a miscarriage
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`of justice, i.e., it must view the jury’s verdict as against the weight of the evidence.” Id. (internal
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`citation and quotation marks omitted).
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`III. DISCUSSION
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`Judgment as a Matter of Law
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`Evans contends that he is entitled to judgment as a matter of law because the evidence at
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`trial demonstrates that there was no meeting of the minds sufficient to convert the Promissory
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`Notes to an equity interest in SSN Funding, Pl.’s Mem., Doc. 100, at 15, and that the jury’s
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`finding of fraud against SSN Funding renders the conversion void ab initio, id. at 19. By
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`contrast, SSN Funding asserts that Evans’ motion is meritless because the trial record adequately
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`supports the jury’s finding of conversion, and that that finding destroys diversity and requires
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`dismissal of the case for lack of subject matter jurisdiction. Defs.’ Mem., Doc. 107, at 15–18. In
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`addition, SSN Funding argues that the jury’s finding of fraud does not void the conversion,
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`because it runs counter to the law of the case. Id. at 15. Alternatively, SSN Funding asks the
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`Court to grant its motion for judgment as a matter of law on the basis that the jury’s finding of
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`fraud against SSN Funding is inconsistent with the jury’s finding of non-liability as to Avent, the
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`only SSN Funding agent named as a defendant in this case. Id. at 20.
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`1.
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`Mutual Assent
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`In substance, Evans seeks to undermine the jury’s finding of mutual assent in three ways.
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`a) The Acknowledgement
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`First, the core of Evans’ argument turns on the Acknowledgement that he submitted with
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`the March Subscription Agreement. Evans asserts that although he signed the March
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`Subscription Agreement, Paragraph (g) of the Acknowledgement conditioned the conversion of
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`his Promissory Notes on the fulfillment of a condition precedent: that SSN Funding would raise
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`$4.5 million in capital and issue that equity contemporaneous with the conversion of Evans’
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`Promissory Notes. See Acknowledgment, Schoenstein Aff., Doc. 101, Ex. 7, ¶ (g) (providing
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`Case 1:15-cv-05514-ER Document 117 Filed 08/21/18 Page 15 of 25
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`that Evans releases SSN Media from any and all claims that he may have upon the issuance to
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`him “of a Limited Partnership Interest in SSN Funding, L.P. corresponding to a $250,000 capital
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`contribution . . . and provided that SSN Funding[,] L.P. shall concurrently therewith issue a
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`minimum of $4,500,000[] in Limited Partnership Interests”). Because that condition was never
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`satisfied, the logic goes, the March Subscription Agreement was never consummated and the
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`Promissory Notes were never converted to equity. See Pl.’s Mem. at 18 (“[O]ne of two things is
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`true. Either the parties agreed to convert Evans’ loans into equity, but only if the predicate
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`capital raise of $4.5 million was achieved, or Evans and SSN simply failed to achieve a meeting
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`of the minds on any agreement.”). This argument fails because it is contrary to the settled law of
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`the case. See Musacchio v. United States, 136 S. Ct. 709, 716 (2016) (“The law-of-the-case
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`doctrine generally provides that when a court decides upon a rule of law, that decision should
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`continue to govern the same issues in subsequent stages in the same case.”) (quotation marks and
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`citation omitted).
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`Specifically, as SSN Funding notes, Defs.’ Mem. at 16, at summary judgment the Court
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`rejected this very argument, concluding that, as a legal matter, the “consummation of the March
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`Subscription Agreement did not depend on