Cantiere DiPortovenere Piesse SpA v. Kerwin

Decision Date04 May 1990
Docket NumberCiv. A. No. 86-2895.
Citation739 F. Supp. 231
PartiesCANTIERE DiPORTOVENERE PIESSE S.p.A. v. Jerome J. KERWIN and Helen Kerwin.
CourtU.S. District Court — Eastern District of Pennsylvania

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Stephen M. Calder, Palmer, Biezup & Henderson, Philadelphia, Pa., for plaintiff.

Roger D. Susanin, John H. Widman, McAleese, McGoldrick & Susanin, P.C., King of Prussia, Pa., for defendants.

MEMORANDUM

LOWELL A. REED, Jr., District Judge.

Plaintiff Cantiere DiPortovenere Piesse (Cantiere) brought this action for recovery of a judgment in the amount of $190,981.33 obtained against NRG Enterprises, Inc. (NRG). Discovering that the corporation was insolvent, plaintiff filed the instant lawsuit1 against Jerome Kerwin, sole shareholder of NRG, and Helen Kerwin, an officer of the corporation, alleging, inter alia, that NRG was a sham corporation over which the Kerwins had exercised total control, rendering the corporation insolvent by plundering and/or converting corporate assets. A trial was held in January 1989, and a jury returned a verdict against the defendants, finding that the actions of both defendants constituted a disregard of the corporate entity known as NRG Enterprises. Accordingly, the jury found defendants personally liable for the NRG debt to Cantiere.

Before the court is the motion of the defendants for a new trial or in the alternative for judgment notwithstanding the verdict. For the reasons set forth below, defendants' motion will be denied in its entirety.

I. FACTUAL AND PROCEDURAL BACKGROUND

NRG Enterprises is a Pennsylvania corporation engaged in the business of "oil country tubular goods."2 Jerome Kerwin was the chief executive officer and sole shareholder of NRG3 and Helen Kerwin was the secretary of the corporation.4 In the summer of 1981, NRG entered into a contract with plaintiff Cantiere DiPortovenere Piesse, an Italian joint stock company, in which Cantiere offered to sell and NRG offered to buy reject steel casings, a form of steel pipe.5 A series of events followed6 which culminated in plaintiff filing a lawsuit against NRG on January 14, 1983, alleging that NRG breached a contract for the purchase of 5,600 metric tons of seamless reject casing and asserting that NRG was indebted to Cantiere in the amount of $450,000.

A trial was held before the Honorable Louis H. Pollak of this court and Judge Pollak, after finding NRG Enterprises liable for breaching its contract with Cantiere,7 entered judgment on October 15, 1985 against NRG in the amount of $125,852.59 plus 18 percent interest computed from December 1, 1982—the date of defendant's breach of its agreement with plaintiff—until the date of judgment (an amount calculated at $65,128.74), or the total amount of $190,981.33. Plaintiff contends that it was unable to collect the judgment against NRG because the corporation was insolvent.8

On May 15, 1986, plaintiff instigated the present action against the defendants, alleging that Jerome Kerwin and Helen Kerwin were the alter egos of NRG Enterprises.9 Plaintiff sought to pierce the corporate veil and recover the NRG judgment against defendants.10 On July 10, 1986, defendants filed an answer to plaintiff's complaint denying plaintiff's allegations. In their answer, defendants demanded a jury trial and set forth nineteen affirmative defenses.11 The case was tried before a jury and on January 9, 1989, the jury returned a verdict in favor of the plaintiff and against the defendant, assessing damages in the amount of $190,981.33.12

II. DISCUSSION
A. Standard of Review

In order to grant a motion for a new trial pursuant to Federal Rule of Civil Procedure 59, a court must find "`that the verdict is against the clear weight of the evidence, or is based upon evidence which is false, or will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict.'" Nebel v. Avichal Enterprises, Inc., 704 F.Supp. 570, 574 (D.N.J.1989) (quoting Aetna Casualty & Surety Co. v. Yeatts, 122 F.2d 350 (4th Cir.1941)). The purpose of a Rule 59 motion is to allow the court to reevaluate the basis for an earlier decision. Tevelson v. Life and Health Ins. Co. of America, 643 F.Supp. 779, 782 (E.D.Pa.1986), aff'd, 817 F.2d 753 (3d Cir.1987). See generally 11 C. Wright & A. Miller, Federal Practice & Procedure § 2805. The "decision to grant or deny a new trial is `confided almost entirely to the ... discretion ... of the trial court,'" Shanno v. Magee Industrial Enterprises, Inc., 856 F.2d 562, 567 (3d Cir. 1988) (quoting Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 190, 66 L.Ed.2d 193 (1980)), and the court will "set aside the jury's verdict only if manifest injustice will result if the verdict is allowed to stand." Emigh v. Consolidated Rail Corp., 710 F.Supp. 608, 609 (W.D.Pa.1989). A new trial may be granted even where an entry of judgment notwithstanding the verdict is inappropriate. Roebuck v. Drexel University, 852 F.2d 715, 735-36 (3d Cir.1988).

Federal Rule of Civil Procedure 50(b) permits a motion for judgment notwithstanding the verdict to be joined with a motion for a new trial. See Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 250-51, 61 S.Ct. 189, 193-94, 85 L.Ed. 147 (1940). A motion for judgment notwithstanding the verdict raises only the legal question of whether there was sufficient evidence to allow a reasonable juror to arrive at the verdict. Link v. Mercedes-Benz of North America, 788 F.2d 918, 921 (3d Cir.1986). A judgment notwithstanding the verdict may be granted only if, as a matter of law, "the record `is critically deficient of the minimum quantity of evidence from which the jury might reasonably afford relief.'" Simone v. Golden Nugget Hotel & Casino, 844 F.2d 1031, 1034 (3d Cir.1988) (quoting Link, 788 F.2d at 921). In deciding the motion, the prevailing party is entitled to the benefit of all reasonable inferences to be drawn from the evidence and the court must determine whether that evidence affords "any rational basis for the verdict." Bhaya v. Westinghouse Elec. Comp., 832 F.2d 258, 259 (3d Cir.1987), cert. denied, 488 U.S. 1004, 109 S.Ct. 782, 102 L.Ed.2d 774 (1989). Thus, a motion for judgment notwithstanding the verdict should be granted only when there is no evidence or reasonable inference to sustain the position of the non-moving party. SCNO Barge Lines, Inc. v. Anderson Clayton & Co., 745 F.2d 1188, 1192-93 (8th Cir.1984).

In support of their motion for a new trial, or in the alternative for judgment notwithstanding the verdict, defendants focus on several issues. First, defendants argue that this court had no discretion to deny defendants' request on the eve of trial to waive their jury demand and proceed nonjury. Second, defendants submit that this court was not authorized to require that the case be tried by a jury13 because the action was equitable in nature and the parties had not consented to a jury trial. Third, defendants assert that there was insufficient evidence to support the jury's verdict against both Jerome and Helen Kerwin. Finally, defendants contend that I was required to recuse myself and transfer this case to another judge because I was unable to preside impartially over the case. I will address each of these arguments seriatim.

B. Jury Trial Demand

In their first pleading filed in the instant case, defendants demanded a jury trial. Accordingly, pursuant to Federal Rule of Civil Procedure 16, I issued a pretrial scheduling order dated July 7, 1988 which was fashioned specifically to effectuate the advancement of a jury case. The lawsuit proceeded through the entire discovery process as a jury case and was placed on the court's trial list on November 28, 1988.

The case was called for trial on January 3, 1989, at which time the defendants informed me that they wished to waive their jury demand and proceed with the case nonjury.14 Defendants now argue that I erred because I had no discretion to deny their request on the eve of trial to proceed nonjury. I disagree. For more than two and a half years, this action proceeded, at defendants' request, as a jury case. Then, as jury selection was to begin, defendants requested that their jury demand be stricken and the case proceed nonjury. Their primary explanation for transforming the action into a nonjury case was that it would be more efficient due to what they believed was the technical nature of the action.15 Because the management of the case would have been conducted in a wholly different manner had a jury trial not originally been demanded,16 I believed that converting the action to a nonjury case on the eve of trial would cause a significant delay in the court's trial calendar because the parties had not complied with my standing pretrial scheduling order which would have been issued originally had no jury demand been made. Moreover, I determined that neither party would be prejudiced by proceeding with the case before a jury and that in fact it would be more expeditious at that stage of the case to proceed with a jury trial. Thus, I exercised my discretion "to effectuate a more speedy, efficient judicial determination of the case," 5 J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice ¶ 39.09, at 39-29 (2d ed. 1988), and denied defendants' request for a nonjury trial.17 Because I believe now, as I believed at the time I made my ruling, that I possessed the discretion to deny defendants' request to strike their jury demand, I will deny their motion for a new trial on this ground.

C. Piercing the Corporate Veil

Next, defendants argue that even if I did have the discretion to deny their eleventh hour request to proceed nonjury, I erred in submitting the only remaining claim in the case at the time it was submitted to the jury: piercing the corporate veil.18 Thus, defendants contend that because plaintiff withdrew all its legal claims at the close of the evidence, with only the equitable...

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