Opinion
8295- 8296 Index 651788/11
01-31-2019
HIGH VALUE TRADING, LLC, et al., Plaintiffs–Respondents, v. Jack SHAOUL, et al., Defendants–Appellants.
Malcolm S. Taub LLP, New York (Malcolm S. Taub of counsel), for appellants. Budd Larner P.C., New York (Philip C. Chronakis, New York, of counsel), for respondents.
Malcolm S. Taub LLP, New York (Malcolm S. Taub of counsel), for appellants.
Budd Larner P.C., New York (Philip C. Chronakis, New York, of counsel), for respondents.
Renwick, J.P., Gische, Kapnick, Gesmer, Moulton, JJ.
Judgment, Supreme Court, New York County (Margaret A. Chan, J.), entered February 9, 2018, after a jury trial, against defendants in favor of plaintiff Alskom Realty, LLC, unanimously affirmed, with costs.
Plaintiff Alskom purchased from defendants a painting that defendant Jack Shaoul represented was a genuine Renoir but was later found to be a fake.
The trial court providently exercised its discretion in granting plaintiffs' motion in limine for leave to present evidence of Shaoul's conviction for conspiracy and mail fraud (see United States v. Shaoul, 41 F.3d 811 [2d Cir. 1994] ) and the judgment in a civil case in which Shaoul and defendant Universe Antiques, Inc. were found to have sold a fake Tiffany window (see Universe Antiques, Inc. v. Vareika, 510 Fed. Appx. 74 [2d Cir. 2013] ), although the prior conviction was old (see People v. Sandoval, 34 N.Y.2d 371, 377, 357 N.Y.S.2d 849, 314 N.E.2d 413 [1974] ).
Defendants contend that plaintiffs exceeded the bounds of the in limine ruling by referring to Shaoul's prior conviction and prior art fraud case before he testified. To the extent this argument is based on plaintiffs' questioning of nonparty Alexander Komolov (their principal), it is unpreserved, and we decline to reach it in the interest of justice (see Boyd v. Manhattan & Bronx Surface Tr. Operating Auth., 79 A.D.3d 412, 413, 912 N.Y.S.2d 196 [1st Dept. 2010] ). To the extent defendants' argument is based on plaintiffs' counsel's opening statement, it is unavailing. Although plaintiffs sought to use Shaoul's prior legal history if he testified, defense counsel confirmed before plaintiffs' opening that Shaoul would testify. Moreover, evidence of other similar acts can be introduced to establish intent in fraud cases ( Matter of Brandon, 55 N.Y.2d 206, 211, 448 N.Y.S.2d 436, 433 N.E.2d 501 [1982] ; see also People v. Schwartzman, 24 N.Y.2d 241, 246–248, 299 N.Y.S.2d 817, 247 N.E.2d 642 [1969], cert denied 396 U.S. 846, 90 S.Ct. 103, 24 L.Ed.2d 96 [1969] ; compare People v. Allen, 198 A.D.2d 789, 789, 604 N.Y.S.2d 378 [4th Dept. 1993], affd 84 N.Y.2d 982, 622 N.Y.S.2d 905, 647 N.E.2d 111 [1994] ).
Defendants contend that the judgment in Alskom's favor should be reversed because, during his cross-examination of Shaoul, plaintiffs' counsel read from court transcripts that were not in evidence and displayed them to the jury. However, United States v. Shaoul, 41 F.3d 811 is a matter of public record (see CPLR 4513 ). While extrinsic evidence may not be used "to contradict a witness's answers on collateral matters" ( Badr v. Hogan, 75 N.Y.2d 629, 631, 555 N.Y.S.2d 249, 554 N.E.2d 890 [1990] ), Shaoul's prior conviction and prior art fraud case were not collateral, because they were relevant to his intent in this action (see Schwartzman, 24 N.Y.2d at 246, 299 N.Y.S.2d 817, 247 N.E.2d 642 ).
Defendants' argument as to the extent of plaintiffs' cross-examination of Shaoul is unavailing (see e.g. id. at 244, 299 N.Y.S.2d 817, 247 N.E.2d 642 ["questions are not rendered improper merely because of their number provided they have some basis in fact and are asked in good faith"] ).
Defendants' arguments about plaintiffs' summation and their argument that the court erred in allowing Komolov to testify about what he understood a document to be are unpreserved, and we decline to reach them in the interest of justice.
The verdict was not against the weight of the evidence (see Gonzalez v. City of New York, 45 A.D.3d 347, 846 N.Y.S.2d 92 [1st Dept. 2007], lv denied 10 N.Y.3d 701, 853 N.Y.S.2d 542, 883 N.E.2d 369 [2008] ). As both plaintiffs' and defendants' key documents were suspect (the March 2010 invoice for plaintiffs and the September 2008 consignment agreement for defendants), the case turned on witness credibility, which, along with the weight to be given witnesses' testimony, is an issue for the jury (see Mazella v. Beals, 27 N.Y.3d 694, 708, 37 N.Y.S.3d 46, 57 N.E.3d 1083 [2016] [internal quotation marks omitted]; see also e.g. Lipson v. Bradford Dyeing Assn. of U.S.A., 266 App.Div. 595, 598, 42 N.Y.S.2d 577 [1st Dept. 1943] ). Contrary to plaintiffs' claim, defendants preserved their argument that the court should have given a sophisticated dealer charge, i.e., that, because its principal was an art dealer, Alskom could not prove justifiable reliance but had the obligation to conduct due diligence before buying the painting in question. However, although Alskom and Komolov are art dealers, "the fact that one party is sophisticated does not end the fact-intensive question of what constitutes reasonable reliance, because [courts] consider the entire context of the transaction" ( Universe Antiques, 510 Fed. Appx. at 76 [citation and internal quotation marks omitted] ). The jury had before it evidence that, at the time of the subject transaction, Komolov trusted Shaoul as a member of his own family and that, according to Shaoul himself, he and Komolov had done approximately 30 to 40 deals, before the subject transaction. Furthermore, although the court did not give the charge that they wanted, defendants were able to make their point in other ways.
Regardless of whether the court should have limited defendants' ability to refer to the summons with notice, or the jury's right to review it during deliberations, it was harmless error because the document was referred to during the trial and published to the jury at that time.
As defendants never moved to dismiss the unjust enrichment claim as duplicative of the fraud claim, their argument that the court erred in submitting unjust enrichment to the jury is unpreserved and does not warrant interest-of-justice review. As to the specific wording of the charge, unlike defendants' proposed charge, the court's charge correctly stated the elements of unjust enrichment (see Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 182, 919 N.Y.S.2d 465, 944 N.E.2d 1104 [2011] ).
We have considered defendants' remaining arguments and find them unavailing.