United States District Court, E.D. Pennsylvania
T. LEVY ASSOCIATES, INC.
KAPLAN, et al.
return to the unfortunate saga of an elderly widowed father
suing his adult daughter and son-in-law for racketeering and
related misconduct in managing the father's beauty supply
business resulting in family fissure better resolved outside
the courtroom. As the family could not amicably resolve their
money issues for reasons best left to their consciences, we
asked our jury to address the credibility of many witnesses
in determining whether the daughter and son-in-law, along
with her separate beauty supply business, engaged in
racketeering, misappropriation, conversion, breach of
fiduciary duty and tortious interference in light of defenses
of the father's consent, knowledge and waiver. After the
jury unanimously found the daughter, son-in-law, and their
company liable for most, but not all of the father's
claims, they now move to set aside the jury's verdict on
grounds largely waived at trial or not constituting clear
error. This lawsuit further fractures a once-close family
over money but, having chosen to gamble on this jury route,
we must respect the jury's consistent verdict for much,
but not all, of the father's claimed damages based on the
adduced evidence and correct instructions on the governing
law. We deny the son-in-law's, daughter's, and her
company's post-trial motion in the accompanying Order.
Associates, Inc. ("the Company") is a beauty
products company partially formed and largely owned by Ted
Levy. In the mid-2000s, Ted Levy entrusted the Company's
business operations to his son-in-law Michael
Kaplan. Ted Levy's daughter Nina Kaplan-whose
spouse is Mr. Kaplan-owns a beauty products wholesale and
retail operation called BLC Beauty, Inc. Nina Kaplan is a
talented artist/graphic designer and relied upon her husband
and bookkeeper to assist her in managing and operating BLC
September 2016, the Company sued Mr. Kaplan, Mrs. Kaplan, and
BLC Beauty for a variety of federal and state law claims,
including violating the Racketeer Influenced and Corrupt
Organizations Act ("RICO"),  conversion,
breach of fiduciary duty, misappropriation of trade secrets,
tortious interference with existing and prospective
contractual relationships. Stated briefly, the Company's
claims arose from Defendants' misappropriation and
conversion of Company funds, products, and contractual
relationships while Michael Kaplan managed the Company and
Nina Kaplan owned and managed BLC Beauty.
discovery, summary judgment motions and an abundant variety
of pretrial motions, we empaneled a jury to resolve multiple
fact disputes in a family-run business largely relying on
each other's good faith oral statements rather than
lawyered documents. During the trial, the Company's
damages expert David Anderson, a forensic accountant,
testified the Company's damages exceeded $1, 660,
After the Company's case-in-chief, Defendants did not
move for judgment as a matter of law.
a charging conference with counsel. During our jury charge,
we instructed the jury about the Company's burden of
proof under the preponderance of the evidence standard. We
then instructed the jury on Defendants' burden of proof
on their affirmative defenses:
Conversely, to the extent the defense has said something to
you which they claim is a reason why they should win, not
just accusing them, not just saying the plaintiff has not
proven its case, but also claiming its claim or any defense,
if they don't prove it to you by a preponderance, then
they have not met their standard of proof
we finished our charge, we invited counsel to sidebar to
preserve any objection to our charge. Defendants objected to
the preponderance of evidence instruction on their defenses,
to the extent they raised any. But when we asked Defendants
if they wanted us to provide a curative instruction, they
[The Court:] Is there anything that counsel would like to see
me at sidebar on any issue?
Mr. Dugan: No.
Mr. Winterhalter: The preponderance charge, you had added a
contrary instruction that was not in here. There's a
counterclaim in this case and you said that if the - you said
if T. Levy Associates failed to meet its burden of proof,
find in favor of the defendant. If the defendant did not
present evidence to establish defenses, then you are held to
the same standard. I believe that this case -
The Court: You have no defenses.
Mr. Winterhalter: I do have defenses, but if they don't
produce any evidence of the claim then they lose.
The Court: Sure, I think I said that.
Mr. Winterhalter: You did say that, but then you also said if
the Defendants don't meet their burden of the
preponderance of the evidence, then they lose.
The Court: What I meant is -1 think what I said was the
defense does not - the defense does not - you can't
accept their defense if they have not met the preponderance
of the evidence. I thought you were raising defenses.
Mr. Winterhalter: I certainly am rising [sic] defenses. There
is not an issue with that.
The Court: I can read the sentence again. I don't really
Mr. Winterhalter: I don't think it's necessary.
The Court: Your objection is noted.
Mr. Winterhalter: I think I am fine.
jury rendered a verdict against Defendants on all but one of
the Company's remaining claims. For example, the jury found
Mr. Kaplan did not misappropriate trade secrets, but both he
and BLC Beauty, Inc. tortiously interfered with the
Company's contractual relationships. The jury awarded
damages totaling $1, 044, 175, approximately $600, 000 less
than the damages calculated by Defendants' damages
expert. On June 30, 2017, we entered judgment
against Mr. Kaplan, Mrs. Kaplan, and BLC Beauty, Inc. in the
amounts of $966, 262.50, $583, 132.00, and $583, 130.50,