Funk v. Belneftekhim

• Court: U.S. District Court — Eastern District of New York
• Writing for the Court: COGAN, District Judge.
• Decision Date: 21 September 2020
• Docket Number: 14-cv-376 (BMC)
• Citation: Funk v. Belneftekhim, 14-cv-376 (BMC) (E.D. N.Y. Sep 21, 2020)
• Parties: VLADLENA FUNK and EMANUEL ZELTSER, Plaintiffs, v. BELNEFTEKHIM and BELNEFTEKHIM USA, INC., Defendants.

VLADLENA FUNK and EMANUEL ZELTSER, Plaintiffs, v. BELNEFTEKHIM and BELNEFTEKHIM USA, INC., Defendants.

14-cv-376 (BMC)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

September 21, 2020

MEMORANDUM DECISION AND ORDER

COGAN, District Judge.

Before me is defendants' motion for partial summary judgment to dismiss six of plaintiffs' nine causes of action. Defendants contend that, because plaintiffs have conceded they are seeking only "noneconomic damages" (i.e., emotional distress for pain and suffering), under New York law, plaintiffs cannot recover any damages for these remaining causes of action. Defendants are correct, and their motion is therefore granted.

Defendants also seek reconsideration as to various in limine rulings I made on June 22, 2020.¹ The motion is granted in part and denied in part.

BACKGROUND

The Court has taken the facts set forth below from the parties' second amended joint pretrial order and other filings on the docket.²

Plaintiff Emanuel Zeltser, a United States citizen, represented a group of investors who, in the late 1990s and early 2000s, purchased a block of stock in Belnheftekhim, a Belarusian petrochemical cooperative. In 2006 and 2007, the United States imposed sanctions on members of the Belarusian government, including its President, Alexander Lukashenko, and other Belarusian entities, including defendants. Sometime later, defendants abrogated their agreement with Zeltser's clients and refused to compensate them for the breach. Zeltser then threatened legal action and a series of meetings occurred as the parties tried to resolve their dispute.

In March 2008, defendants' representatives met twice with Zeltser and his assistant, plaintiff Vladlena Funk, in New York City to explore the possibility of a settlement. Plaintiffs were invited to travel to Belarus for an additional meeting, but they declined this offer. Instead, the parties met in London later that month. Once in London, plaintiffs allege that they were drugged, kidnapped, and flown to Belarus under the direction of defendants' representatives.

Plaintiffs were then confined in a Belarusian detention facility. They claim to have been tortured and denied adequate food, water, and medical treatment. After intervention by the United States Government and others, Funk and Zeltser were released in March and June of 2009, respectively. This lawsuit followed a few years later.

In June 2018, defendants filed a motion in limine to preclude plaintiffs from offering evidence of damages at trial. The basis for this contention was that plaintiffs neither provided "a computation of each category of damages claimed," nor made "available for inspection and copying ... the documents or other evidentiary material" underlying their damages claim, asrequired by Fed. R. Civ. P. 26(a)(1)(A)(iii). Nor did plaintiffs produce any damages-related documents under Fed. R. Civ. P. 34(a)(1).

In opposing that motion, plaintiffs acknowledged their failure to provide disclosures as to damages under those two rules. However, they maintained that this was immaterial, because the damages they were seeking at trial were "largely for physical and emotional pain and suffering and are not amendable for computation." Thus, plaintiffs argued that they "were not required to provide a computation of damages or to produce supporting discovery documents or exhibits." This position was reaffirmed in their opposition, when they clarified that they sought "compensatory and punitive damages for non-economic losses arising from the atrocities and indignities committed by [d]efendants" and that "[p]laintiffs will seek only non-economic damages."

I later granted defendants' motion in limine as to the conversion of personal property claim, but otherwise denied defendants' motion because "an in limine pleading is generally not the appropriate vehicle for effecting dismissal of entire claims." Funk v. Belneftekhim, No. 14-cv-376, 2019 WL 3035124, at *4 (E.D.N.Y. July 11, 2019) (quoting New Am. Mktg. FSI LLC v. MGA Entm't, Inc., 187 F. Supp. 3d 476, 481 (S.D.N.Y. 2016)).

Having received leave to file the instant motion, defendants are entitled to partial summary judgment as to six of the remaining nine causes of action.

DISCUSSION

I. Standard of Review

"[S]ummary judgment may be granted only if there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 135 (2d Cir. 2013) (internal quotation marks omitted). "In determiningwhether there is a genuine dispute as to a material fact, [the court] must resolve all ambiguities and draw all inferences against the moving party." Id. In ruling on a motion for summary judgment, a district court "may rely on any material that would be admissible at a trial." Lyons v. Lancer Ins. Co., 681 F.3d 50, 57 (2d Cir. 2012) (internal quotation marks omitted); see also Call Ctr. Techs., Inc. v. Grand Adventures Tour & Travel Pub. Corp., 635 F.3d 48, 52 (2d Cir. 2011) ("[T]he nonmoving party must come forward with admissible evidence sufficient to raise a genuine issue of fact for trial in order to avoid summary judgment.") (internal quotation marks omitted). A dispute is not "genuine" if no reasonable jury "could return a verdict for the nonmoving party." Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

A. Fraud

To establish a claim for common law fraud under New York law, a plaintiff must allege: "(1) a material misrepresentation or omission of fact, (2) made with knowledge of its falsity, (3) with an intent to defraud, and (4) reasonable reliance on the part of the plaintiff, (5) that causes damage to the plaintiff." Schlaifer Nance & Co. v. Estate of Warhol, 119 F.3d 91, 98 (2d Cir. 1997). "The damages incurred by reason of the fraudulent conduct must be actual pecuniary loss." Woods v. Sieger, Ross & Aguire, LLC, No. 11-cv-5698, 2012 WL 1811628, at *8 (S.D.N.Y. May 18, 2012) (citing Pope v. Saget, 29 A.D.3d 437, 441, 817 N.Y.S.2d 1, 4 (1st Dep't 2006)). In other words, "New York law does not allow recovery for non-economic damages, such as pain and suffering, in fraud." Zimmerman v. Poly Prep Country Day Sch., 888 F. Supp. 2d 317, 334 (E.D.N.Y. 2012). Because plaintiffs have conceded that they are seeking only damages due to their pain and suffering, they cannot maintain their fraud claim.

Plaintiffs cite Clearview Concrete Prod. Corp. v. S. Charles Gherardi, Inc., 88 A.D.2d 461, 453 N.Y.S.2d 750 (2nd Dep't 1982), for the proposition that they can still pursue a fraud claim because nominal damages are available to them. However, Clearview is no longer good law on this point. In Connaughton v. Chipotle Mexican Grill, Inc., 135 A.D.3d 535, 540, 23 N.Y.S.3d 216 (1st Dep't 2016), aff'd, 29 N.Y.3d 137, 143, 53 N.Y.S.3d 598 (2017), the First Department expressly declined to follow Clearview, holding that the plaintiff was not entitled to nominal damages in a fraudulent inducement case. The New York Court of Appeals affirmed, holding that the plaintiff was not entitled to nominal damages on the fraud claim because nominal damages are unavailable when actual harm is an element of the tort, as is the case in a cause of action for fraud.

B. Prima Facie Tort

Under New York law, an action of prima facie tort consists of four elements: "(1) intentional infliction of harm, (2) causing special damages, (3) without excuse or justification, (4) by an act or series of acts that would otherwise be unlawful." Curiano v. Suozzi, 63 N.Y.2d 113, 117, 408 N.Y.S.2d 446, 469 (1984). "[A] critical element of the cause of action is that plaintiff suffered specific and measurable losses, which requires an allegation of special damages. Such damages must be alleged with sufficient particularity to identify actual losses and be related causally to the alleged tortious act." Epifani v. Johnson, 65 A.D.3d 224, 233, 882 N.Y.2d 234, 242 (2nd Dep't 2009) (internal quotation marks and citations omitted); see also Carlson v. Geneva City Sch. Dist., 679 F. Supp. 2d 355, 372 (W.D.N.Y. 2010) ("Alleging merely general damages for noneconomic loss is insufficient" for a prima facie tort claim).

In Berland v. Chi, 142 A.D.3d 1121, 1123, 38 N.Y.S.3d 57, 59 (2nd Dep't 2016), the Second Department held the trial court properly determined that the allegations in the complaint,which amounted to a claim of emotional distress, "were insufficient to allege special damages." To prevail on its prima facie tort cause of action, the complaining party had to show "special damages, i.e., 'the loss of something having economic or pecuniary value.'" Id. (citation omitted).

In our case, plaintiffs' vague assertion of "non-economic" damages for their pain and suffering is equally insufficient. Plaintiffs were required to identify special damages and to provide adequate disclosures under the Federal Rules of Civil Procedure, but they did not. They therefore cannot maintain a prima facie tort claim.

C. Tortious Interference Claims

Under New York law, a party who is liable for interference with a contract owes damages for "(a) the pecuniary loss of the benefits of the contract or the prospective relation; (b) consequential losses for which the interference is a legal cause; and (c) emotional distress or actual harm to reputation, if they are reasonably expected to result from the interference." Rich v. Fox News Network, LLC, 939 F.3d 112, 128 (2d Cir. 2019) (quoting Restatement (Second) of Torts § 774A(1)); see also Guard-Life Corp. v. S. Parker Hardware Mfg. Corp., 50 N.Y.2d 183, 197 n.6, 428 N.Y.S.2d 628, 636 n.6 (1980). "The only elements of a claim for tortious interference with economic advantage that differ from those for a tortious interference with contract are the level of the relationship interference with and the level of interference." G-I Holdings, Inc. v. Baron & Budd, 179 F. Supp. 2d 233, 254 (S.D.N.Y. ...