`
`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`INDEX NO' 508010/2017
` FILED' KINGS COUNTY CLERKV 08m2017 02. 47 PM"
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 1 of 11
`
`
` 3NYSCIZF DOC. NO. Q39 leIec 08/18/16RlfifigQIZIBQIYJS1-SEFi 08/11/2917
`
`
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`
`USDC sDNv;
`DOCUMENT -
`
`ELECTRONICALLY FILED
`
`: DOC#:
`_
`‘7
`' DATE FILED: g»: 5 ID:- __I
`
`
`WWW-:1
`
` I
`
`‘
`
`UNITED STATES DISTRICT COURT
`
`SOUTHERN DISTRICT OF NEW YORK
`
`ALEKSANDR PALATKEVICH and BPVN
`
`TECHNOLOGIES, INC,
`
`.
`.
`
`Plaintiffs,
`
`-against-
`
`No. 12 Civ. 1681 (CM)
`
`MICHAEL CHOUPAK, ANASTASIA KOROLEVA,
`STANACARD, LLC, INTERMEDIA NET, INC.
`Individually and as the Successor to INTERMEDIA
`NET, LLC and INTERMEDIA, INC, UNISON
`TECHNOLOGIES, INC, Individually and as
`Successor to UNISON TECHNOLOGIES, LLC,
`VICTORIAN MANAGEMENT, LLC, KEKU, INC,
`Individually and as Successor to KEKU, LLC,
`STANACARD, LTD., and EDUARD ROMANOV,
`
`Defendants.
`
`ARTUR NATAN ZAYTSEV and ANZFS, INC,
`
`Plaintiffs,
`
`~against—
`
`No. 12 Civ. 1682 (CM)
`
`MICHAEL CHOUPAK, ANASTASIA KOROLEVA,
`STANACARD, LLC, INTERMEDIA NET, INC,
`UNISON TECHNOLOGIES INC, VICTORIAN
`MANAGEMENT, LLC, KEKU, LLC,
`STANACARD, LTD. and EDUARD ROMANOV,
`
`Defendants.
`
`x
`
`MEMORANDUM DECISION AND ORDER DENYING PLAINTIFFS’ MOTION FOR A
`NEW TRIAL
`
`McMahon, J. :
`
`

`

`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`INDEX NO' 508010/2017 1
` FILED' KINGS COUNTY CLERKV 08m2017 02. 47 PM
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 2 of 11
`
`
`
`NYSCIZF DOC. NO. 3.36
`3
`Document
`Flea 08/18/16R1RfigQfiQiiyjs1est: 08/11/2017
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`The court assumes the reader‘s familiarity with the numerous opinions previously issued
`
`in this action that set forth the background of the parties’ dispute. The only relevant new fact is
`
`that on May 5, 2016, after a seven day trial, a jury unanimously rejected Plaintiff Palatkevich's
`
`breach of contract claim, Plaintiff Zaytsev’s fraud claim, and Defendant Stanacard’s
`
`counterclaim against Palatkevich for repayment of a loan.
`
`Plaintiffs seek a new trial under rule 59(a)(1) of the Federal Rules of Civil Procedure.
`
`(Plaintiffs’ Memorandum of Law in Support of Their Motion for a New Trial, Docket # 207 (“Pl
`
`Meta”) at 4.) I note that while this motion is brought on behalf of Plaintiffs (plural) the
`
`substance of the arguments is directed entirely to Plaintiff Palatkevich’s case. To the extent that
`
`counsel intended to bring this motion on Zaytsev’s behalf as well, that aspect of the motion is
`
`denied because Plaintiff Zaytsev has failed to articulate any basis for such relief For the reasons
`
`discussed below, Plaintiff Palatkevich’s motion is denied.
`
`DISCUSSION
`
`I.
`
`Rule 59
`
`Rule 59(a)(l)(A) provides that the trial court “may, on motion, grant a new trial on all or
`
`some of the issues — and to any party — .
`
`.
`
`. after a jury trial, for any reason for which a new trial
`
`has heretofore been granted in an action at law in federal cou1t.” F.R.C.P. 59(a)(1)(A).
`
`The Court has significant discretion in deciding whether to grant a Rule 59 motion for a
`
`new trial. See, e.g., Amara v. City ofSaratoga Springs, 170 F.3d 311, 314 (2d Cir. 1 999). In
`
`determining whether to order a new trial under Rule 59, a district court may independently weigh
`
`the evidence. See. e.g., Song 12. Ives Labs, Inc, 957 F.2d 1041, 1047 (2d Cir. 1992); Geressy v.
`
`Digital Equip. Corp, 980 F.Supp. 640, 646 (E.D.N.Y.1997). A motion for a new trial “may be
`
`granted even if there is substantial evidence to support the jury’s verdict.” Song, 957 F.2d at
`
`1047. A jury’s verdict, however, should not be disturbed unless it is seriously erroneous: “The
`
`2
`
`
`
`

`

`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`INDEX NO. 508010/2017
` FILED: KINGS COUNTY CLERK 08m2017 02: 47 PM
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 3 of 11
`
`
`
`NYSCIZF DOC. NO. Q39
`1
`Document
`Flee 08/18/16R1figg93%q{y]s1€3F:
`08/11/2017
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`
`
`trial judge, exercising a mature judicial discretion, should View the verdict in the overall setting
`
`of the trial; consider the character of the evidence ...; and abstain from interfering with the
`
`verdict unless it is quite clear that the jury has reached a seriously erroneous result. The judge’s
`
`duty is essentially to see that there is no miscarriage ofjustice.” Bevevino v. Sayajiari, 574 F.2d
`
`676, 684 (2d Cir.1978); see also Caruolo v. John Crane, Inc, 226 F.3d 46, 54 (2d Cir.2000)
`
`(noting that courts exercise their discretion to grant a new trial if “the jury has reached a
`
`seriously erroneous result or
`
`the verdict is a miscarriage ofjustice”).
`
`I].
`
`There is No Basis to Disturb The Jury’s Determination that Stanacard Did Not Act
`in Bad Faith
`
`Plaintiffs proffer four reasons that this court should set aside the jury’s determination that
`
`Stanacard did not act in bad faith so as to breach its contract with Palatkevich: (1) the evidence
`
`demonstrated that Stanacard acted in bad faith with respect to the MFA valuation, (2) Plaintiffs
`
`were entitied to an adverse inference instruction to the-jury based on Defendants’ failure to call
`
`Anastasia Koroleva and William A. Duratti as witnesses, (3) Defendants’ own evidence a
`
`namely, the valuation of Stanacard by Terrence Griswold of Empire Valuation Consultants —
`
`demonstrates that Stanacard’s valuation of Palatkevich’s stake was “not proceduraliy or
`
`substantively fair or reasonable” (Pl. Mem. at 13), and (4) the jury’s denial of Stanacard’s
`
`counterclaim “necessarily means that Stanacard owes Paiatkevich
`
`$32,000” and thus cannot
`
`be squared with the jury’s verdict that Stanacard did not breach its contract with Palatkevich. (Pl.
`
`Mem. at 15.) Plaintiffs also argue that the court’s purported “reversal” of its summary judgment
`
`order changed the nature of Palatkevich’s claim and prejudiced hirn, necessitating a new trial.
`
`(Pl. Mem. at 17.)
`
`

`

`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`FILED' KINGS COUNTY CLERKV 08m2017 02. 47 PM
`INDSX NO 508010/2017
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 4 of 11
`
`
`
`NYSCIZF DOC. NO. 3139
`3
`Document
`Flea 08/18/16R1fifi99fiQirjsh3F: 08/11/2017 i
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`
`
`
`
`A.
`
`The Jury’s Verdict Was Not Against the Weight of the Evidence
`
`Palatkevich points generally to evidence that Stanacard and Michael Choupak previously
`
`claimed that Stanacard was worth tens or hundreds of millions of dollars (Leon Decl. Exs. 4-6),
`
`that comparable companies sold for hundreds of millions of dollars, and that both Plaintiffs” and
`
`Defendants’ expert valued Palatkevich’s stake in Stanacard at greater than $32,000 as evidence
`
`that MFA’s valuation of Palatkevich’s stake was “grossly unreasonable and unfair.” (Pl. Mom. at
`
`1—2.) Palatkevich argues that Stanacard’s failure to “defend” the MFA valuation suggests that
`
`Stanacard did not comply with its obligations under the Amended LLC Agreement.
`
`(Id. at 7.)
`
`Finally, Palatkevich contends that “substantial evidence” that Choupak acted in bad faith towards
`
`Palatkevich, combined with “serious issues of credibility” with respect to Choupak’s trial
`
`testimony compel this court to set aside the jury’s verdict.
`
`Palatkevich’s arguments are premised on a misunderstanding of the burden of proof in
`
`his case. As this court has repeatedly emphasized, Palatkevich bore the burden of proving his
`
`case by a preponderance of the evidence. Defendants were under no obligation to prove that
`
`MFA’s valuation of $32,000 was reached in good faith; to the contrary, Defendants were
`
`perfectly entitled to sit back and watch Palatkevich struggle to convince a jury otherwise. And
`
`struggle he did. Not only was a jury unconvinced by Palatkevich’s case, but so was this court.
`
`As this court stated throughout trial, there was absolutely no direct evidence that Choupak or
`
`anyone else at Stanacard misled MFA — either by falsifying or withholding relevant information
`
`— in order to obtain a low—ball valuation.
`
`(See, e.g., Trial Tr. p.754:8-17.) In other words, there
`
`was no direct evidence that Defendants breached the implied covenant of good faith and fair
`
`dealing by buying Palatkevich out.
`
`I nonetheless allowed the breach of contract claim go to the
`
`jury because there was sufficient circumstantial evidence 7 namely the evidence of Choupak’s
`
`animus towards Palatkevich, along with the enormous differential between MFA’s valuation and
`
`4
`
`

`

`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`FILED: KINGS COUNTY CLERK 08m2017 02: 47 PM
`IDN33X NO 508010/2017
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 5 of 11
`
`
`
`
`NYSCEF DOC. NO. Q39
`3
`Document
`Flea 08/18/16Rififi993'bcllvjsle3r: 08/11/2017
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`Plaintiff’ s expert’s — such that a reasonable juror could conclude that Stanacard breached its
`
`implied contractual obligation to Palatkevich to act in good faith.
`
`To say that I was surprised by the verdict would be an understatement. Not only was
`
`there no direct evidence to support Palatkevich’s claim, but the circumstantial evidence
`
`Palatkevich presented was squarely and convincingly rebutted by the defense. Defendants’
`
`expett, Terrence Griswold, eviseerated the valuation by Plaintiffs’ expert, Anthony Fazzone, and
`
`cross examination by Defendant’s counsel all but established that the financial assumptions
`
`underpinning Fazzone’s analysis were Wildly unrealistic. (See Krol Decl. Exs. B (cross—
`
`examination of Fazzone) and C (Griswold testimony)). Whether this court found Choupak’s
`
`testimony as to his lack of involvement in Palatkevieh’s buyout credible — and I note that “a
`
`court should rarely disturb a jury’s evaluation of a witness’s credibility,” DLC Management
`
`Corp. v. Town ofHyde Park, 163 F.3d 124, 133—34 (2d Cir.l998) (internal quotations and
`
`citations omitted) m is really of no moment. A finding that Choupak lacked credibility with
`
`respect to his involvement in the buyout would not tip the weight of the evidence in
`
`Palatkevich’s favor.
`
`On motions at the close of evidence, I noted that Palatkevich had put on a “very weak
`
`case,” albeit one that would go to the jury. (Trial Tr. p. 758116-17.) Nothing presented in this
`
`motion alters my view.
`
`B.
`
`Plaintiffs were not Entitled to a Missing Witness Charge
`
`Palatkevich argues that a “missing witness charge” — by which the jury could draw an
`
`adverse inference for Defendants’ failure to call Anastasia Koroleva, CEO of Stanacard at the
`
`time of the events in question, and William A. Duratti, Managing Director of MFA — was
`
`“imperative to a fair trial.” (P1. Mom. at 9.)
`
`
`
`
`

`

`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`F:ILED KINGS COUNTY CLERK 08.112017 02: 47 PM
`INDISX NO 508010/2017
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 6 of 11
`
`
`
`NYSCEF DOC. NO. 3139
`3
`Document
`Flea 08/18/16RififigQE‘bQiyjslesF: 08/11/2017
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`“A missing witness charge permitting the jury to infer that the testimony of an
`
`unproduced witness would have favored one party is appropriate if production of the witness is
`
`‘peculiarly within [the] power’ of the other party.” United States v. Rabbani, 382 Fed.Appx. 39,
`
`41 (2d Cir.2010). “Hence, where one party alone could produce a material witness but fails to do
`
`so, an inference that the testimony would favor the opposing party may be appropriate.” Chevron
`
`Corp. v. Donziger, 974 F. Supp. 2d 362, 700 (S.D.N.Y. 2014), afl’d sub nom. Chevron Corp. v.
`
`Donziger, No. 14-0826(L), 2016 WL 4173988 (2d Cir. Aug. 8, 2016). However, “An adverse
`
`inference is not warranted, for example, where the controlling or related party makes the missing
`
`witness available to its opponent, the party seeking the adverse inference equally could obtain
`
`the missing witness’s testimony, or the party seeking the adverse inference made no attempt to
`
`obtain the witness’s testimony.” Id. Whether to provide a missing witness charge “is committed
`
`to the sound discretion of the trial judge.” United States v. Nichols, 912 F.2d 598, 601 (2d Cir.
`
`1990) (internal citation omitted).
`
`Ms. Koroleva appeared for deposition in June of 2014 .__ without any need for this court to
`
`compel her to do so. Palatkevich was perfectly free to read her deposition testimony into the
`
`record; he made no effort to do so.
`
`As for Mr. Duratti, Plaintiffs made no effort to depose him or anyone else from MFA — a
`
`fact that has confounded the court throughout this entire case. That Duratti was purportedly
`
`outside the court’s subpoena power, so he could not be compelled to testify at trial, makes no
`
`difference when Plaintiffs never even sought to depose him, which they easily could have done
`
`in Massachusetts, where MFA is headquartered. Astoundingly, Plaintiffs argue that the lack of
`
`Duratti’s testimony rendered this trial unfair when Plaintififr themselves opposed Defendants’ last
`
`
`
`

`

`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`FILED' KINGS COUNTY CLERKV 08m2017 02. 47 PM
`IND3X NO 508010/2017
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 7 of 11
`
`
`
`
`NYSCEF DOC. NO. Q39
`3
`Document
`Flea 08/18/16R1RfigQEBQlYJS1riEF: 08/11/2017
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`
`
`minute attempt to add Duratti to their witness list. (See Plaintiffs“ Response in Opposition to
`
`Motion for Reconsideration, Docket #197.)
`
`It is axiomatic that “A witness is not unavailable to a party that fails to make any effort to
`
`seek his or her testimony.” Chevron, 974 F. Supp. 2d at 702. Here, that applies to both
`
`Koroleva and Duratti. No adverse inference charge was warranted.
`
`C.
`
`The Valuation by Defendants’ Experts Does Not Necessitate a New Trial
`
`Plaintiffs argue that the disparity between MFA’s valuation of Palatkevich’s stake
`
`($32,000) and the valuations by Plaintiffs’ expert ($505,623) and Defendants’ expert (a range of
`
`$53,800 to $85,500) establishes that the jury’s verdict denying Palatkevich’s breach of contract
`
`claim was against the weight of the evidence. (Pl. Mem at 13-14; Leon Decl. Exs. 13, 16, and
`
`20).
`
`Plaintiffs misconstrue the nature of Palatkevich’s breach of contract claim. To prove that
`
`Stanacard breached its obligations to Palatkevich under the Amended LLC Agreement, Plaintiffs
`
`needed to do more than point to a discrepancy in expert valuations. As has been stated time and
`
`again in this case, the Amended LLC Agreement gave Stanacard the right to buy back the
`
`interests of LLC members who no longer worked for the company and to do so at a “fair market
`
`value” to be determined by a third party appraiser of Stanacard’s choosing. (See e.g., Summary
`
`Judgment Decision, Docket # 150 at 25-27.) That is precisely what Stanacard did. However, the
`
`Court (generously) construed Palatkevich to have pleaded a claim for breach of the implied
`
`covenant of good faith and fair dealing (Id. at 25), some evidence ofwhich included the vast
`
`discrepancy between MFA’S valuation and Fazzone’s valuation]
`
`1 Fazzone’s original valuation, which this court considered as evidence of Palatkevich’s claim at
`the summary judgment stage, calculated the “fair value” of Palatkevich’s stake rather than the
`“fair market value.” This error was pointed out to the court just prior to trial, and Fazzone was
`
`7
`
`

`

`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`F:ILED KINGS COUNTY CLERK 08.112017 02: 47 PM
`INDEX NO 508010/2017
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 8 of 11
`
`
`
`NYSCEF DOC. NO. Q39
`3
`Document
`Flea 08/18/16RififigQfiinjsk3F: 08/11/2017 i
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`As stated in the April 18, 2016 Order Granting Defendants’ Motion for Reconsideration,
`
`Docket # 185 (“Reconsideration Order”), the issue for the jury was: “did Choupak comply with
`
`his duty of good faith toward his minority shareholder when he and Stanacard supplied
`
`information to the appraiser ... chosen by Stanacard to calculate the fair market value of
`
`Paiatkevich’s interest.” (Id. at 2-3.) Pointing to the discrepancy in competing valuations is
`
`certainly some evidence of an alleged breach, but it is not dispositive. Nor does the fact that
`
`Defendants’ own expert reached a higher valuation than did MFA alter that conclusion.
`
`Valuation is not an exact science. That both Plaintiffs’ and Defendants’ experts valued
`
`Palatkevich’s 10% stake at more than $32,000 may suggest that $32,000 was indeed too low, but
`
`it does not establish by a preponderance of the evidence that MFA’S low valuation was a
`
`consequence of a breach of the implied covenant of good faith.
`
`I).
`
`The Verdicts on Palatkevich’s Breach of Contract Claim and Defendants’
`
`Counterclaim for Repayment of a Loan are not Inconsistent
`
`Finally, Plaintiffs argue that the jury’s verdict denying Stanacard’s counterclaim for
`
`repayment of a loan “necessariiy means that Stanacard owes Palatkevich the $32,000 it never
`
`paid him.” (Pl. Mem. at 15.) In other words, Plaintiffs claim that the verdict on Palatkevich’s
`
`breach of contract claim and the verdict on Stanacard’s counterclaim are inconsistent.
`
`It is a court’s “duty to harmonize inconsistent verdicts, viewing the case in any
`
`reasonable way that makes the verdicts consistent.” Anheuser—Busch, Inc. v. John Labott Ltd. , 89
`
`F.3d 1339, 1347 (8th Cir. 1996) (citing Gallick v. Baltimore & Ohio RR. C0,, 372 US. 108, 119,
`
`(1963)); see also Moore’s Federal Practice - Civil § 59.13 (2015).
`
`directed to amend his report, which resulted in a valuation of $505,623 — a significant discount
`from the previousiy calcuiated $805,085 valuation.
`
`8
`
`E?
`
`
`
`
`
`

`

`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`
`INDEX NO' 508010/2017
` FILED' KINGS COUNTY CLERKV 08m2017 02. 47 PM
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 9 of 11
`
`
`
`NYSCIZF DOC. NO. Q39
`3
`Document
`Flea 08/18/16Rififigefiqivjsle3r: 08/11/2017
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`There were two theories by which Palatkevich could have recovered on his breach of
`
`contract claim. First, as discussed in detail above, he could have proved that Stanacard breached
`
`the implied covenant of good faith and fair dealing by paying him out at a value of $32,000 for
`
`his 10% equity stake. Second, he could have proved that Stanacard never paid him the $32,000
`
`it owed him. The iatter formulation of the claim is related to Stanacard’s counterclaim that it
`
`paid a certain amount ($58,000 according to Stanacard and $14,000 or $15,000 according to
`
`Palatkevich) for Palatkevich’s New York State tax liability — an amount Palatkevich allegedly
`
`never repaid —~ and that this amount was greater than the $32,000 Stanacard owed Palatkevich.
`
`The verdicts are not necessarily inconsistent. The parties agree that Stanacard owed
`
`Palatkevich $32,000 for his equity stake and that Stanacard paid some amount of money for
`
`Palatkevich’s tax liability. Indeed, Palatkevich conceded at trial that he owed Stanacard money
`
`because Stanacard had, in fact, paid his tax liability. (See Krol Decl. Ex. E at 72.) He also stated
`
`that he did not know the precise amount he owed Stanacard, though he thought it was around
`
`$14,000. (Li) Based on this evidence, a reasonable juror could easily conclude that Palatkevich
`
`failed to carry his burden of proof on the claim that Stanacard breached its contract with him by
`
`failing to cut him a check for his $32,000 equity stake. A reasonable juror could simultaneously
`
`find that Stanacard failed to carry its burden of proof on the claim that Palatkevich owed it
`
`money, by failing to provide sufficient evidence as to the full amount of that tax liability.
`
`In
`
`other words, the very thin evidence presented at triai on this issue could lead a juror to conclude
`
`that neither party had sufficiently carried its burden so as to merit recovery. Since the evidence
`
`as to this point consisted only of the fuzzy recollections of the parties to this action, the comt
`
`finds such verdicts eminently justified.
`
`
`
`
`
`

`

`
`
`
`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`FILED: KINGSfieCOUNTY CLERK 08m2017 02: 47 PM
`INDEX NO 508010/2017
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 10 of 11
`
`msczr DOC. N0.
`"
`Document
`Fle 08/18/16 Ragga/g9 taffeta”. 08/11/2017
`
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`III.
`
`Palatkevieh was Not Prejudiced by the Manner in which this Court Construed His
`Breach of Contract Claim
`
`Plaintiffs argue that this court’s clarification of Palatkevich’s breach of contract claim
`
`prejudiced Plaintiffs, insofar as they were not previously aware of the significance of the
`
`testimony of certain witnesses — namely, Ms. Koreleva and individuals at MFA. (Pl. Mem. at
`
`17—21.)
`
`At summary judgment, the court stated that there would be a trial as to the “fair value of
`
`Palatkevich’s 10% stake.” I readily admit that the court struggled to interpret Plaintiffs’ claims
`
`prior to trial, in part because of the substantial effort both the parties and this court directed
`
`toward Plaintiffs’ RICO allegations. But after consideration of relevant exhibits at the final pre—
`
`trial conference — namely documents that bore on Choupak’s and Stanacard’s good faith, that
`
`had previously been “lost” by the parties — I determined that “the issue of Choupak’s good faith
`
`was not finally resolved on the motion for summary judgment.” (Reconsideration Order, Docket
`
`#135 at 3.) l thus clarified that the fair value of Palatkevich’s 10% stake was relevant insofar as
`
`it implicated whether Choupak and Stanacard had deliberately misled Stanacard’s chosen
`
`valuation firm, MFA.
`
`(Id. at 2-3.) Indeed, since the Amended LLC Agreement permitted
`
`Stanacard to buy out Palatkevich at a value determined by an appraiser of Stanacard’s choosing,
`
`the only means by which Stanacard could possibly have breached the contract was by violating
`
`the implied duty of good faith. By “reviving” this aspect of the breach of contract claim, the
`
`court arguably helped Plaintiffs — without it, the “correct” fair market value of Palatkevich’s
`
`stake would have been irrelevant.2
`
`2 While Plaintiffs contend that they were unaware of the need to prove Defendants’ breach of the
`duty of good faith until they reviewed the court’s memorandum to the parties dated April 29, the
`Reconsideration Order was docketed on April 18, shortly after the final prentrial conference and
`a week prior to trial. The April 29 memorandum merely reiterates the clarification set forth in
`the Reconsideration Order.
`
`10
`
`
`
`
`
`

`

`
`
`
`
`INDEX NO. 508010/2017
`FILED: KINGS COUNTY CLERK 08/11/2017 02:47 PM
`F:ILED KINGSfieCOUNTY CLERK 08312017 02:47 PM
`INDISX NO 508010/2017
`Case 1:12-cv-01681-CM-GWG Document 226 Filed 08/18/16 Page 11 of 11
`
`NYSCEF DOC. 11..
`"
`Document
`FIe- 8/18/16 Rfieeess steam. 08/11/2017
`
`NYSCEF DOC. NO. 17
`RECEIVED NYSCEF: 08/11/2017
`
`
`
`
`
`The notion that Plaintiffs were not previously aware of the importance of what was and
`
`what was not provided to MFA by Choupak/Koroleva and others, and were thus prejudiced by
`
`the court’s const‘rual of its breach of contract claim, is preposterous. The legitimacy of MFA’s
`
`valuation has been central to this casefrom the very beginning. Palatkevich’s entire breach of
`
`contract claim was — and has always been — premised on the fact that Choupak and Stanacard
`
`sought to “squeeze him out” by forcing a buyback of his shares at an intentionally low valuation.
`
`That Palatkevich’s counsel (and I appreciate the fact that current counsel was not representing
`
`Plaintiff prior to trial) made the choice not to depose anyone from MFA regarding this valuation
`
`was a strategic decision, if a peculiar one. Perhaps prior counsel was concerned that deposing
`
`someone from MFA would damage Plaintiffs’ RICO claims, with which she was so enamored.
`
`In any event, parsing counsel’s strategy is a fool’s errand. The choice not to depose MFA may
`
`have been foolish or clever, but it should come as no surprise to anyone even remotely familiar
`
`with this case that such testimony was ... from the outset — highly relevant.
`
`Thus, this court’s clarification of Palatkevich’s breach of contract claim did not prejudice
`
`Plaintiffs in the least.
`
`CONCLUSION
`
`For the foregoing reasons, Plaintiffs’ motion for a new trial is denied. The Clerk of the
`
`Court is directed to remove Docket No. 206 from the court’s list of pending motions.
`
`Dated: August 18, 2016
`
`BY ECF TO ALL COUNSEL
`
`U.S.D.J.
`
`11
`
`