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Berger v. Zeghibe

September 24, 2010

BERISH BERGER, ET AL., PLAINTIFF,
v.
RICHARD ZEGHIBE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Schiller, J.

MEMORANDUM

On August 2, 2010, the Court entered judgment against Defendants including Eli Weinstein and Pine Projects LLC (the "Weinstein Defendants") following a two-week jury trial. The jury heard evidence describing a number of interrelated business deals between and among Defendants and Plaintiffs. The Court occasionally interrupted the examination of witnesses, including Weinstein, in an effort to maintain the parties' focus on the transactions at issue. The jury found the Weinstein Defendants liable to Plaintiffs in tort, for unjust enrichment, and for promissory estoppel. The jury also found that a contract existed between Weinstein and Plaintiff Berish Berger. The Weinstein Defendants argue in the alternative that the Court should (1) amend or alter the judgment against them to eliminate Plaintiffs' successful tort and unjust enrichment claims, or (2) order a new trial due to comments from the bench during Weinstein's testimony. Presently before the Court is the Weinstein Defendants' Post Trial Motion to Alter or Amend the Judgment and for a New Trial [Weinstein Mot.]. The Weinstein Defendants' Motion will be denied for the reasons stated below.

I. BACKGROUND

This case arises from a series of real estate transactions between Plaintiffs including Berish Berger and corporate entities associated with Berger (the "Berger Plaintiffs") and Defendants including the Weinstein Defendants. The facts relevant to the present motion are set forth below.

According to the Berger Plaintiffs, the Weinstein Defendants were part of a conspiracy which defrauded them of $36.5 million by inducing Berger to invest in two properties in Philadelphia: a building located at 2040 Market Street, and a parcel of land between JFK Boulevard and the Schuylkill River (the "River City Properties").

Weinstein participated in a December 2006 meeting with Berger in which Weinstein and a number of his co-Defendants presented the River City Properties to Berger as an opportunity for a high-rise development despite the fact that a municipal ordinance imposing a 125-foot height limit on the parcel would make those plans impossible to fulfill. To promote the property, the Defendants worked with architect James Rappoport to prepare designs and to construct models representing possible uses of the site. These designs, including an animated "fly-through" computer model, depicted River City as a collection of skyscrapers up to sixty stories tall. Weinstein also represented to Berger that $51.5 million in bank financing was available for the property.

With respect to the 2040 Market Street property, the Berger Plaintiffs demonstrated at trial that the Weinstein Defendants marketed to them a plan involving the acquisition of the building and subsequent sale of the property's air rights. In furtherance of this scheme, Weinstein and various co-Defendants made it appear that an independent investor was prepared to spend $31 million for the air rights, $3 million more than the purchase price of $28 million.

The Weinstein Defendants thus induced Berger to invest in these projects. Between December 18, 2006, and January 19, 2007, Berger arranged for the transfer of $36.5 million from the accounts of the other Berger Plaintiffs to accounts controlled by Weinstein to complete the acquisitions of the 2040 Market Street and River City Properties. The Berger Plaintiffs ultimately had nothing to show for their investments.

Following a two-week jury trial, the jury found the Weinstein Defendants liable to the Berger Plaintiffs for fraud, conspiracy to defraud, conversion and unjust enrichment. The jury also found Weinstein liable for converting the Berger Plaintiffs' funds, and for promissory estoppel. The jury found that Weinstein had proven that "a contract exists between him and Berger," but did not find Berger liable for breach of contract.

II. STANDARD OF REVIEW

A motion to alter or amend a judgment under Federal Rule of Civil Procedure 59(e) "must rely on one of three major grounds: (1) an intervening change in controlling law; (2) the availability of new evidence not available previously; or (3) the need to correct clear error of law or prevent manifest injustice." N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995). Courts undertaking this analysis examine the trial record and defer to the jury's findings if, drawing all justifiable inferences in the prevailing party's favor, there is a reasonable basis to uphold the verdict. Bhaya v. Westinghouse Elec. Co., 832 F.2d 258, 259 (3d Cir. 1987); Nissim v. McNeil Consumer Prods., 957 F. Supp. 600, 602-04 (E.D. Pa. 1997).

Federal Rule of Civil Procedure 59(a) governs the Weinstein Defendants' request for a new trial. Courts may grant a new trial after a jury verdict "for any reason for which a new trial has heretofore been granted in an action at law in federal court." Fed. R. Civ. P. 59(a)(1)(A). A court may grant a new trial due to improper conduct by the trial judge if that conduct unfairly influenced the verdict. Marcavage v. Bd. of Trustees of Temple Univ., 400 F. Supp. 2d 801, 804 (E.D. Pa. 2005). The Third Circuit evaluates the propriety of a trial judge's conduct in the jury's presence by weighting the following factors: (1) the materiality of the comments; (2) their emphatic or overbearing nature; (3) the efficacy of any curative instruction; and (4) the prejudicial effect of the comments in light of the jury instruction as a whole. United States v. Olgin, 745 F.2d 263, 268-69 (3d Cir. 1984).

III. DISCUSSION

A. The Weinstein Defendants' Motion to Alter or ...


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