FILED: SUFFOLK COUNTY CLERK 09/07/2018 02:29 PM
`NYSCEF DOC. NO. 460
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`INDEX NO. 003655/2012
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`RECEIVED NYSCEF: 09/07/2018
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`E-FILE
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`SHORT FORM ORDER
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`INDEX NO. 3655t2012
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`SUPREME COURT. STATE OF NEW YORK
`COMMERCIAL DIVISION IAS PART 48 - SUFFOLK COUNTY
`
`PRESENT:
`
`HON, JERRY GARGUILO
`SUPREME COURT JUSTICE
`
`ORIG. RETURN DATE: 5/23llE
`FINAL SUBMITTED DATE: 6/20/lE
`MOTION SEQ#0r5
`MOTION: MG
`
`JOHN R. RICONDA,
`
`Plaintiff,
`
`- against -
`
`LIBERTY INSI.]RANCE UNDERWRITERS, INC.,
`
`Defendant.
`
`PLAINTIFF'S ATTORNEY:
`WHITE & CASE LLP
`I22I AVENUE OF THE AMERICAS
`NEW YORK, NEW YORK IOO2O
`
`DEFENDANT'S ATTORNEY:
`D'AMATO & LYNCH LLP
`225 LIBERTY STREET
`NEW YORK, NEW YORK I O28I
`
`Defendant, Liberty Insurance Underwriters, Inc' ("Liberty"), petitions the Court to
`set aside the Verdict rendered against it on May 4, 2018 and direct judgment in its favor as
`a matter of law; or for a new trial; or to reduce the Jury Verdict. Plaintiff opposes the
`application in all respects.
`
`In making its determination, the Court has considered the following submissions:
`l.
`
`Defendant's Notice of Motion To Set Aside The Verdict and Direct Judgment
`As A Matter of Law To Liberty; Affirmation of Peter A. Stroili In Support,
`inclusive of Exhibits I through 7 and A through BB and Memorandum of Law
`In Support;
`2. Plaintiffs Memorandum of Law In Opposition; and
`3. Defendant's Reply Affirmation of Peter A' Stroili with Exhibits A through G
`and Memorandum of Law In RePlY.
`
`The statutory framework within which Defendant seeks relief is found at civil
`practice Law and Rules $ a\a@).It provides that after a verdict is rendered the court can
`set it aside and either (1) grant judgment to which a party is entitled to it as a matter of law
`or (2) order a new trial on the ground that the verdict is "contrary to the weight ofevidence".
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`FILED: SUFFOLK COUNTY CLERK 09/07/2018 02:29 PM
`NYSCEF DOC. NO. 460
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`INDEX NO. 003655/2012
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`RECEIVED NYSCEF: 09/07/2018
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`RICONDA V LIBERTY INSURANCE UNDERIYRITERS, INC.
`|NDEX NO.03655/2012
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`As is its habit, the Court has consulted New York Practice, Fifth Edition Practitioner
`Treatise Series, David D. Siegel, West Publishing. Professor Siegel notes at section 405:
`
`The judge is authorized to grant judgment as a "matter of law"
`only when [he/she] believes that on this record reasonable minds
`could not differ and there is therefore only one way thejury can
`go. The difficulty is that reasonable minds may differ about
`whether reasonable minds may differ, and among them may be
`the reasonable minds that inhabit the appellate court. Ifthe trial
`court grants judgment for a side under CPLR 4401 without
`letting ajury pass on the issues, an appellate court that disagrees
`with the judges's action has no verdict to reinstate and must
`therefore order a new trial, wasting the earlier one. But if the
`trial court waits until a verdict is in, saving its action for CPLR
`4404 and granting judgment notwithstanding the verdict (should
`thejury have found the other way), a disagreeing appellate court
`has a verdict to reinstate. This is no small economy, and it
`accounts for the widespread practice among judges of letting a
`fully tried case go to the jury before ruling on a motion for
`judgment.
`
`This Court allowed the case to be submitted to the jury.
`
`Defendant's application as noted hereinabove seeks one of three remedies:
`(l)judgment as a matter of law; (2) a new trial; or (3) to reduce the jury verdict.
`
`Preceding trial, this matter was the subject of comprehensive motion practice. On
`March 6, 2018, this Court issued a Short Form Order which noted:
`
`This is an action to recover damages for breach ofcontract, bad
`faith, and breach of the covenant ofgood faith and fair dealing
`based upon the alleged improper denial of insurance coverage
`to certain non parties by the defendant. It is undisputed that the
`defendant issued a director's and officer's liability insurance
`policy to the directors and officers of nonparty QGSI, Inc. in
`July 2007. In May 2008, QSGI created a special purpose
`vehicle called QSGI-CCSI, Inc. in order to complete the
`acquisition of Contemporary Computer Services, Inc. ("CCSI"),
`located at 200 Knickerbocker Avenue, Bohemia, New York
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`FILED: SUFFOLK COUNTY CLERK 09/07/2018 02:29 PM
`NYSCEF DOC. NO. 460
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`INDEX NO. 003655/2012
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`RICONDA V LIBERTY INSARANCE ANDERWRITERS, INC.
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`11716. At that time, the plaintiff was the president and owner
`of CCSL The Stock Purchase Agreement between QSGI-CCSI,
`Inc. and QSGI, as buyers, and the plaintiff, as seller, was
`executed by all parties in May of 2008.
`
`Pursuant to an insurance renewal application filed by QGSI,
`Inc., the defendant issued Directors & Officers Policy No.
`D04N386075004 to QSGI, Inc. of Hightstown, New Jersey,
`effective July 8,2008 to July 8, 2009 (the D&O policy)... After
`the closing of the sale on July 7, 2008, CCSI ceased to exist as
`a freestanding company and became QSGI-CCSI, Inc., doing
`business as CCSI. After QGSI, Inc. failed to pay the plaintiff
`the agreed compensation for the purchase of CCSI, QGSI, Inc.
`declared bankruptcy... (emphasis added)
`
`Thereafter, the plaintiff commenced an action against the
`directors and officers of QGSI, Inc. for fraud, self-dealing and
`breach offiduciary duty entitled Riconda v Sherman, Supreme
`Court, Suffolk County, Index No. ll-6678 (the underlying
`action). Despite requests by the defendants in said action, their
`insurer, the defendant herein, disclaimed coverage. The
`underlying action was settled when, among other things, Edward
`L. Cummings (Cummings), a former officer of QSGI and a
`defendant in the underlying action, entered into a confession of
`judgment in favor of the plaintiff, and assigned his right to
`proceed against the defendant for the failure to indemnifu him
`as an insured in the underlying action to the plaintiff.
`
`The instant action was commenced by the plaintiff against the
`defendant, as Cumming's assignee, alleging that the defendant
`has breached the contract of insurance and the D&O policy by
`failing to provide coverage to Cummings and to pay the amount
`due under the confession ofjudgment, has acted in bad faith,
`and has breached its duty ofgood faith and fair dealing.
`
`This Court's findings in the March 6, 201 8 Short Form Order referenced hereinabove
`presents findings of fact tantamount to the law of the case. That history undeniably
`establishes that Plaintiff, John R. Riconda ("Riconda") stepped into shoes of an insured,
`Cummings, as his assignee and thereafter prosecuted claims against Defendant, Liberty. In
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`essence, Riconda as the assignee ofan insured was suing the insurer to defend his assignor
`against claims brought by Riconda.
`
`The history of this litigation, inclusive of the underlying litigation, reveals that
`Plaintiff originally commenced an action for breach of contract. That contract involved the
`sale of his company. It is apparent to the Court, that case (the underlying case) lacked
`ffaction. At that point in time, as a matter of strategy, Riconda changed directions. The
`change in direction led to the negotiation of the assignment by Cummings in return for a
`covenant not to enforce a confession ofjudgment duly negotiated and executed between
`Cummings and Riconda. That change of strategy was prompted by the realization that the
`only entity with "deep pockets" was Defendant, Liberty.t
`
`Throughout the pre-trial and trial, the exclusion relied upon by Defendant conceming
`coverage was found at section 5.6 of the policy (the insured versus insured exception).
`Section 5 reads as follows:
`
`5. Exclusions: The insurer shall not be liable to make any
`payment for loss in connection with any claim:
`
`5.6 brought or maintained by or on behalf of the insured
`organization to any insured person, in any capacity'
`
`On or about July 8, 2008, Liberty issued a renewal executive advantage policy
`(Directors & officers Policy) to QSGI, Inc. ("QSGI") for the policy period commencing July
`8, 2008 through and including July 8, 2009. As noted above, the exclusion found at section
`5.6 of the Policy also known as the Insured versus Insured Exclusion provided that the
`"insurer shall not be liable to make any payment for loss in connection with any claim:
`brought or maintained by... any insured person defined as an officer or director of the
`insured organization, QSGI or any subsidiary." No party raised "ambiguity" as an issue.
`
`The evidence adduced at trial was that Plaintiff commenced negotiations with QSGI
`
`1. As an aside, throughout the proceeding conceming the issue of a bad-faith denial by the
`insurer, the Court inquired as to whether or not Plaintiff offered Liberty the opportunity to
`resolve the claim within the limits of available coverage. It became apparent to the Court
`that the traditional protocol, i.e. calling upon the insurer to tender its limits was never
`followed.
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`FILED: SUFFOLK COUNTY CLERK 09/07/2018 02:29 PM
`NYSCEF DOC. NO. 460
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`INDEX NO. 003655/2012
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`RICONDA V LIBERTY INSARANCE UNDERIYRITERS, INC.
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`for the acquisition of his company, CCSI. Those negotiations, resulted, in May 2008, of a
`stock purchase agreement. The agreement provided for the purchase ofall ofthe issued and
`outstanding shares of CCSI (Plaintiff s company) by QSGI-CCSI, Inc. ("QSGI-CCSI"), 3
`wholly owned subsidiary ofthe insured. OSGI. In consideration for the transfer Plaintiff was
`provided with a $10 million, 10oz convertible Note. That Note was subordinated to QSGI's
`obligation to an entity known as Victory Park. Victory Park provided QSGI with a $10
`million revolving credit line. It is undisputed that the Stock Purchase Agreement provided
`that Mr. Riconda "would resign as Chief Executive Officer of CCSI, but he would remain
`employed as president to run the dayto-day operations ofthe company." (emphasis adde$
`
`Worthy of mention is the fact that with the July 7, 2008 closing of the transaction, Mr.
`Riconda executed and entered into various documents referred to as the "transition
`documents" including an employment agreement with QSGI-CCSI, INC d,rbla CCSI.
`Additionally, transition documents were executed at the closing, which included an
`Employment Agreement with QSGI-CCSI, Inc, d/b/a CCSI, that provided Riconda "will be
`employed by the company [QSGI-CCSI ,lnc., Nbla CCSI] as president of the company."
`Furthermore, the transition documents clearly established that QSGI-ccsI, d/b/a ccSI " was
`a wholly owned subsidiary of OSGI 2 as well as a resignation letter, whereby Plaintiff
`resigned "from all positions held as an officer of [CCSI] his prior company except for the
`position of President effective immediately. (emphasis added)
`
`It is undisputed that QSGI filed on the day of the closing a schedule 13D with the
`Securities Exchange Commission disclosing the completed acquisition and confirming:"as
`a result of the acquisition, John R. Riconda has joined the executive management team of
`QSGI Inc."
`
`As alluded to earlier, on June 10, 2009 approximately I I months after the July 7, 2008
`transaction, Plaintiff commenced a lawsuit against QSGL In essence, alleging that QSGI
`breached its obligations under the Note (defaulted in payment). As pointed out in
`Defendant's submission, paragraph seven of Plaintiff s verified complaint against QSGI
`stated unequivocally: "The QSGI-C CSI transaction closed on July 7, 2008." Plaintiffin that
`(prior) action sought to rescind the various documents he executed in connection with the
`sale of his company to QSGI and QSGI-CCSI. Contrary to his position at trial, he did not
`assert that the ciosing never occurred or that ownership was never transferred. As noted by
`Defendant "to the contrary, Plaintiff alleged: QSGI should be compelled to pay for the
`
`2. Exhibit C [Trial Exhibit 58].
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`FILED: SUFFOLK COUNTY CLERK 09/07/2018 02:29 PM
`NYSCEF DOC. NO. 460
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`INDEX NO. 003655/2012
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`company it bought..." No court issued any order in connection with the early litigation
`rescinding the transaction. Instead, Riconda negotiated with a Defendant therein
`(Cummings) to take an assignment of rights and step into his shoes in exchange for a
`confession ofjudgment containing a covenant not to enforce.
`
`On or about February 25,2011, Plaintiff brought an action against Mark Sherman,
`Edward L. Cummings, et al, in Supreme Court, Suffolk County. In paragraph 4 of his
`complaint in that action (Exhibit D), Plaintiff alleged:
`
`4. In July 2008 John Riconda consummated a transaction with
`QSGI in which Riconda, as seller, agreed to sell the stock and
`assets of CCSI to QSGI... To collateralize the Note, QSGI
`placed 100% of the capital stock ofCCSI, in escrow, pursuant
`to a pledge and escrow agreement dated July 7 ,2008.
`
`During the course of the trial (March 28, 201 8) the following question was put to Mr.
`Riconda:
`
`Q. So the transaction on that date was consummated, correct?
`
`A. Whatever that means.
`
`Furthermore, is undisputed that the referenced Escrow and Pledge Agreement [Trial Exhibit
`ZZf, intum provides that"consummation" means, Pledgor [QSGI-CCSI will be the record
`and beneficial owner ofone hundred percent (100%) of the capital stock ofthe Company
`lccsll.'
`This action (the D & O action) was forwarded to Defendant for consideration.
`Transaction documents contemporaneous with the closing ofthe transaction were studied by
`the Defendant. Those documents report that Plaintiff became the President of a subsidiary.
`Eventually Liberty denied coverage based on the Insured Versus Insured Exclusion found
`at exclusion 5.6 ofthe Policy. Liberty thereafter issued three coverage letters to consider
`additional information provided by its insured's.
`
`It should be noted at this point, the litigation posture taken by Plaintiff in the D & O
`action, was that the original sale never completely closed and that the ownership of his
`former company [ccs! was not transferred to QSGI-CCSI as a result of a closing. This
`despite the fact as noted hereinabove, that in Plaintiffs verified pleadings, he alleged that the
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`FILED: SUFFOLK COUNTY CLERK 09/07/2018 02:29 PM
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`INDEX NO. 003655/2012
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`closing was "consummated" and that ownership was transferred from CCSI to QSGI-CCSI,
`a subsidiary.
`
`At the trial, Plaintiff was confronted with his deposition testimony. Plaintiff swore
`in accord with his verified pleadings: (i) that the closing occurred; (ii) that CCSI's shares
`were transfened to QSGI-CCSI; and (iii) that the Company of which he was President and
`where he was employed was then owned by QSGI-CCSI to wit:
`
`"At the time ofthe closing ofthe Stock Purchase Agreement,, the
`shares of CCSI that you owned were transferred to QSGI or
`QSGI-CCSI; is that correct?"...
`
`ANSWER: Right." 3
`
`"QUESTION: Your understanding after July 7th 2008 CCSI
`became a subsidiary of QSGI-CCSI? a
`
`ANSWER: Right. That's my recollection. That's why they
`formed that, for that purpose."
`
`"QUESTION: But the stock, the company itself, CCSI, was
`owned by QSGI-CCSI?
`
`ANSWER: That's correct. "5
`
`"QUESTION: What entity were you an employee ofl '..
`
`ANSWER: CCSI.
`
`3. (Ex. 5, Tr. 3129, at 18, from p. 272 ofhis deposition).
`
`4.(ld. ar22:9-13, reading fromp.292 of his deposition).
`
`5.(Tr.,3/29 AM, at 29:6-8, reading from p.333 of his deposition)'
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`QUESTION: And CCSI, at that point in time, was owned by
`what entity?
`
`ANSWER: "I believe it was QSGI-CCSI." 6
`
`It is a well settled principle of law in our state that a party who assumes a certain
`position in a legal proceeding may not thereafter, simply because his interests have changed,
`assume a contrary position. Invocation ofthe doctrine ofjudicial estoppel is required in such
`circumstances lest a mockery be made of the search for the truth.
`
`The doctrine ofjudicial estoppel precludes a party from taking a position in one legal
`proceeding, which is contrary to that which he or she took in a prior proceeding, simply
`because his or her interest have changed. Tedesco v. Tedesco,64 A.D.3d 583, Supreme
`Court, Appellate Division Second Department. The doctrine rests upon the principle that a
`litigant should not be permitted to lead a court to find a fact one way and then contend in
`another judicial proceeding that the same facts should be found otherwise (Environmental
`Concernv Larchwood Constr. Corp.,l01A.D.2d 591, 594,476 N.Y.S .2d17 5. The doctrine
`is invoked to estop parties from adopting such contrary positions because thejudicial system
`"cannot tolerate this playing fast and loose with the courts." Scarano v. Central R. Co. of
`N.J.,203 F.2d 510, 513 [Third Circuit 1953]. In the case of Fesringer v Edrich.32 A.D.3d
`412, dicta indicates that the doctrine ofjudicial estoppel warranted dismissal of Plaintiffs
`suit claiming ownership interest in real and personal property on ground that he had funded
`his sister's purchase ofland and transferred cash and personal property to her for safekeeping.
`since plaintiffs claims were manifestly at odds with his representations in prior sentencing
`proceeding, for violating probation by failing to report assets and income available for
`restitution, that he had no money or assets; lenient sentence which Plaintiff received
`constituted such benefit for the purposes ofthe doctrine ofjudicial estoppel, and application
`of doctrine was essential to avoid fraud upon the court and mockery of truth-seeking
`function. The doctrine ofjudicial estoppel precludes a party from taking a position in one
`legal proceeding which is contrary to that which he or she took in a prior proceeding, simply
`because his or her interest have changed. Private Capital Group, LLC v Hosseinipour,86
`A.D. 3-D 554,556 [2011], quoting Matter ofNew Cr. Bluebelt, Phase 4,79 A.D.3d 888, 890
`[2010].
`
`Many of the cases where the doctrine of judicial estoppel has been successfully
`
`6. (Tr.,3129 AM, at23:14-21, reading fromp.327 of his deposition).
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`invoked tum on whether or not the party against whom the doctrine is invoked received any
`form of benefit as a result of taking the prior inconsistent position. In the matter at bar,
`Plaintiffnegotiated atransaction and resolution with an admittedly insured party (Cummings)
`to obtain that party's rights under the subject insurance policy. Liberty was not a party on the
`prior action and compellingly the heart of Riconda's claim in the action against Cummings,
`et. al. was a breach of contract in failing to pay the agreed price for his company.
`
`Defendant correctly asserts that the doctrine ofjudicial estoppel mandates this Court
`grant it relief. Why? In simple terms, at trial for the first time, Plaintiff contended that
`specific conditions precedent compelled a finding that the transaction never closed. In
`essence, Plaintiffput forth a prosecution that looked back to the time ofearlier litigation not
`involving Defendant herein and said "never mind."
`
`Defendant's submission accurately reflects that during the summary judgment stage,
`consistent with the aforementioned verified pleadings as well as deposition testimony,
`Plaintiff admitted that the closing took place and that ownership of CCSI was transferred to
`QSGI-CCSI. It is accurate that Plaintiff s position, up until the time of trial, was not that the
`deal never closed, and therefore he never became president, which, iftrue would neutralize
`the exclusion relied upon by the Defendant, but that "after the sale," his authority was so
`eclipsed that "he retained purely ceremonial title of president after the sale." (emphasis
`addefi
`
`Once again at the summary judgment stage, Plaintiff submitted another sworn
`affidavit, dated July 17, 2017, which was read into the record at trial, confirming:
`"ultimately, the deal signed on July 7, 2008. At that time CCSI, Inc. ceased to exist as an
`independent legal entity." Furthermore, as noted hereinabove, this Court on its March 6,
`2019 Short Form Order conceming the choice of law question noted the following: "after the
`closing of the sale on July 7,2008 CCSI ceased to exist as a freestanding company and
`became QSGI-CCSI, Inc. d/b/a CCSI."
`
`As an aside, the Court's choice of law decision became a critical moment to the
`Plaintiff. It is apparent to the Court that Plaintiff was somewhat confident that the Court
`would find that Florida law as opposed to New York law was applicable to this litigation.
`Under Florida law the admission that the transaction closed would be grossly immatedal and
`irrelevant to the coverage issue and therefore Plaintiff could remain faithful to his verified
`allegations and testimony alleged in the earlier (Cummings) suit.
`
`At trial, Plaintiff s memorandum of law (trial Exhibit FFFFF),, noted at pages 3-4: "as
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`of the close of the transaction, CCSI ceased to exist as a distinct legal entity, and became a
`dlb/a for QSGI-CCSI Inc." Followed by a chart showing that "after the closing:" CCSI
`became QSGI-CCSI, d/b/a CCSI.
`
`As another aside the Court focused on Plaintiffs responses to Liberty's Commercial
`Division Rule l9-a Statement of Material Facts (the "responses"), which mirrored the
`aforementioned deposition testimony whereby Plaintiff admitted that the closing took place.
`That the closing took place, that CCSI ceased to exist as an independent entity; and its stock
`was transferred as a wholly-owned subsidiary of QSGI. When questioned by the Court as
`to the import of the Rule 19 a Statement of Material Facts it was suggested by counsel that
`Plaintiff is not bound by his statement of material facts other than to suggest that for the
`purposes ofthe motion those facts are only offered essentially as a stipulation and not to be
`deemed an admission by Plaintiff. Essentially, if the Court applied Florida law as Plaintiff s
`counsel hoped, the question of whether or not a closing took place would become immaterial
`and irrelevant. However, under New York law, the admission is fatal as the exclusion relied
`upon by Defendant bars coverage. Once the Court made a determination to apply New York
`law, Plaintiff was required to change the theory of his case and contest the fact that "the
`closing" took place. This despite the fact that throughout the litigation history, inclusive of
`the prior litigation, the Plaintiff steadfastly prosecuted his claims for breach of contract in
`failing to pay the bargained for consideration.
`
`Defendant convincingly argues that Plaintiff improperly changed its course at trial.
`In fact, as noted in Defendant's submissions, its counsel objected to Plaintiffs counsel being
`allowed to put on a case at trial centered around the proposition that the closing was like a
`"mirage" that never happened, and a total contradiction to Plaintiffs formal judicial
`admissions prior to trial. Defendant's counsel noted in the absence ofthejury the following:
`
`Mr. Riconda's attomey is not permitted, during the course ofthis
`trial, to try to put in evidence which is contrary to what they
`have admitted.... And now he comes into court and tries to say
`to this jury, this transaction never happened. That this is all a
`mirage. That this never went on. He never sold his company...'
`So they are basically trying to create imagery before this Court,
`which does not have basis in fact or their own admissions.
`
`On the record, Plaintiffs counsel then proceeded to admit at
`least eight times that the closing occurred, noting:
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`John is not going to get up there and deny that he went,
`scheduled a closing and at that certain things happened. The
`question is what's what' the effect?" 7
`
`"If you look at the way this is, Riconda was president after the
`closing. We don't deny that there was a closing; what we deny
`is what the effect was." 8
`
`"John will admit, and he's right here, he will say, Sure, there was
`a closing. We traded signature pages in advance. This July 7th
`was the date. All those blanks, everyone signed it. Both sides."e
`
`"So we don't dispute that there was a closing, and we don't, in
`fact, dispute that John said, I'm going to give you time to come
`up with the money, let's kind of hold this in abeyance, I'm going
`to put the shares in a vault, and I'll I' give you time. Let's try to
`work together while you come up with the money. 'o
`
`"After the closing of the transaction. Well, it closed, but we saw
`[sought] a rescission" - which is patently false.rr
`
`"I'm not going to deny, and John is not going to deny that there
`was a closing." 12
`
`"He will not deny that he was the president of CCSI after
`
`7. Ex. 1,Tr.3123, at203:9-12.
`
`8. Id. at204:8-11.
`
`9. Id. at 204:16-20.
`
`10. Id. at 205:3-12.
`
`1 1. Id. at 206:15-16.
`
`12. ld. at206:23-24.
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`closing. Absolutely not." r3
`
`Upon all parties resting, Liberty petitioned the Court for a directed verdict. To wit:
`
`Mr. Riconda was a president after the sale of the stock of CCSI
`and that whether you call it the company CCSI after July 7, 2008
`or you call it QSGI-CCSI doing business as, the result is the
`same, he was president, he admits he was president, and as
`president of a subsidiary of QSGI after July 7th, he is the
`insured person that makes the position ofthe insurance company
`with respect to the applicability ofthe exclusion correct.ra
`
`Defendant correctly points out that during the argument on Liberty's Motion for a
`Directed Verdict, the Court asked Plaintiffs counsel to "address the allegation that the deal
`closed." The Court posed the following question to Plaintiffs counsel "would you concede
`that ifthe deal closed, if it closed, he is an insured and the insured versus insured exclusion
`precludes recovery?" Although the Court was not provided with a concise answer during
`closing remarks, Plaintiffs counsel conceded that if the deal closed, Plaintiff would have
`been an insured person under the policy and the exclusion would preclude recovery:
`
`Now, there's no dispute, there's no dispute that if this deal went
`according to plan John would have been an insured. Of course
`he would have. He would have been nominated as a Director of
`QSGI. That was supposed to happen. He would have become
`the president of QSGI-CCSI, and QSGI would have owned his
`company. That was the plan.
`
`The Court made an inquiry during the course of Plaintiffs counsel's argument on
`Liberty's Petition for a directed verdict: "Don't conditions precedent have to happen before
`the closing?" In the Court's mind, what Plaintiff s counsel depicted as a failure of a condition
`precedent to closing was actually an alleged breach. The Court noted "That's a breach"...
`"There is a difference between a closing and a breach of contract. It's clearly a breach here."
`
`13.
`
`Id. at 207:10-11).
`
`14.
`
`Ex. 5, Tr. 3129, at 160:23-16l:6).
`
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`

`

`FILED: SUFFOLK COUNTY CLERK 09/07/2018 02:29 PM
`NYSCEF DOC. NO. 460
`
`INDEX NO. 003655/2012
`
`RECEIVED NYSCEF: 09/07/2018
`
`RICONDA V LIBERTY INSARANCE ANDERIYRIT:ERS, INC.
`INDEX NO.03655/2012
`PAGE 13
`
`Ultimately thejury rendered a verdict in favor of Plaintiffpursuant to interrogatories
`placed to the jurors. The jury awarded Plaintiff $2,282,000.
`
`The rule is that a claim made or position taken in a former action or judicial
`proceeding will estop the party from making any inconsistent claim or taking a conflicting
`position in a subsequent action or judicial proceeding to the prejudice of the adverse party.
`It is the finding ofthis Court that this verdict of the jury must be set aside as a matter of law.
`
`This Court finds the doctrine of judicial estoppel compels the Court to GRANT
`Defendant's application in all respects.
`
`The foregoing constitutes the decision and Order of the Court. Submit Order on
`Notice.
`
`Dated: September 7, 2018
`
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`
`