Kleiman v. Wright

District Court, S.D. Florida·Decided February 28, 2022·No. 9:18-cv-80176·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Case No. 18-cv-80176-BLOOM/Reinhart

IRA KLEIMAN, et al.,

Plaintiffs, v.

CRAIG WRIGHT,

Defendant. _______________________/

ORDER ON MOTION FOR NEW TRIAL

THIS CAUSE is before the Court upon the Estate of David Kleiman’s (“Estate”) Motion for a New Trial Based on Violations of Order Excluding Sibling Relationship Evidence, ECF No. [861] (“Motion”). Defendant Craig Wright (“Defendant”) filed an Opposition to the Motion, ECF No. [869] (“Response”), to which Plaintiff filed a Reply, ECF No. [875] (“Reply”). The Court has carefully reviewed the Motion, all opposing and supporting materials, the record in this case, the applicable law, and is otherwise fully advised. For the reasons set forth below, the Motion is denied. I. BACKGROUND The Court assumes the parties’ familiarity with the general factual allegations and evidence presented at the trial. On February 14, 2018, the Estate and W&K Info Defense Research, LLC (“W&K”) (collectively, “Plaintiffs”) initiated this action concerning a dispute over the ownership of bitcoins and bitcoin-related intellectual property. On January 14, 2019, Plaintiffs filed the operative Second Amended Complaint ECF No. [83] (“Complaint”), asserting the following claims for relief: conversion (Count I); unjust enrichment (Count II); misappropriation (Count III); violation of the Defense of Trade Secrets Act (Count IV); breach of fiduciary duty (Count V); breach of partnership duties of loyalty and care (Count VI); fraud (Count VII); constructive fraud (Count VIII); permanent injunction (Count IX); and civil theft (Count X).1 Following a 21-day jury trial commencing on November 1, 2021, the jury returned a verdict solely in favor of W&K as to its conversion claim against Defendant. ECF No. [812]. As to this

claim, the jury awarded W&K $100,000,000.00. Id. On December 7, 2021, the Court entered Final Judgment reflecting the jury’s award. ECF No. [814]. The Estate now moves for a new trial on its claims pursuant to Rule 59 of the Federal Rules of Civil Procedure. See generally ECF No. [861]. The Estate argues that notwithstanding the Court’s Order on Motion in Limine excluding evidence about Ira Kleiman’s relationship with his brother David Kleiman, except as to the siblings’ dinner conversation on Thanksgiving Day 2009, Defendant “inappropriately focused the jury’s attention on the brothers’ relationship more than ten times during trial.” Id. at 1-2; see also ECF No. [623] (“Order”).2 The Estate maintains that: (1) the references to the sibling relationship suggested to the jury that the relationship between David and Ira Kleiman was a valid consideration in deciding the

Estate’s claims; (2) defense counsel made several references to the sibling relationship; (3) the Court overruled the Estate’s objections to defense counsel’s questioning on the sibling relationship; (4) the Estate could not correct misleading aspersions that Defendant cast on the sibling relationship; and (5) there is direct information demonstrating that Defendant’s violation

1 On December 27, 2018, the Court dismissed with prejudice as time barred Plaintiffs’ claims for misappropriation (Count III) and violation of the Defense of Trade Secrets Act (Count IV) under a preceding version of the Complaint. See ECF No. [68].

2 In the Order, the Court held that “[e]vidence about Ira Kleiman’s sibling-relationship with [David] Kleiman is excluded except as to the Thanksgiving Day 2009 dinner conversations.” ECF No. [623] at 16. The Court explained that the “post-2009 relationship evidence has little bearing, if any, on material issues in dispute in this case” and that evidence regarding “whether Ira Kleiman visited his brother at the hospital, spoke to him infrequently, or whether [David] Kleiman mentioned Ira Kleiman to others had limited probative value but substantial capacity to cause undue prejudice.” Id. at 15. of the Order affected the jury’s deliberations. ECF No. [861] at 9-12. Defendant opposes the Motion. See generally ECF No. [869]. II. LEGAL STANDARD Among other relief, a court may grant a new jury trial under Rule 59 “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). For instance, a party may assert that “the verdict is against the weight of the evidence, that the damages are excessive, or that, for other reasons, the trial was not fair to the party moving.” Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940). Thus, a motion for new trial should be granted “when the verdict is against the clear weight of the evidence or will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict.” Brown v. Sheriff of Orange Cnty., Fla., 604 F. App’x 915 (11th Cir. 2015) (quoting Lipphardt v. Durango Steakhouse of Brandon, Inc., 267 F.3d 1183, 1186 (11th Cir. 2001)); see Tucker v. Hous. Auth. of Birmingham Dist., 229 F. App’x 820, 826 (11th Cir. 2007) (“[N]ew trials should not be granted on evidentiary grounds unless, at a minimum, the verdict is

against the great—not merely the greater—weight of the evidence.”). “[G]ranting motions for new trial touches on the trial court’s traditional equity power to prevent injustice and the trial judge’s duty to guard the integrity and fairness of the proceedings before [her].” Sherrod v. Palm Beach Cnty. Sch. Dist., 237 F. App’x 423, 424 (11th Cir. 2007) (quoting Christopher v. Florida, 449 F.3d 1360, 1366 n.4 (11th Cir. 2006)). Ultimately, “motions for a new trial are committed to the discretion of the trial court.” Montgomery v. Noga, 168 F.3d 1282, 1295 (11th Cir. 1999); Steger v. General Elec. Co., 318 F.3d 1066, 1081 (11th Cir. 2003) (citing Deas v. PACCAR, Inc., 775 F.2d 1498, 1503 (11th Cir. 1985)) (“A district court is permitted wide discretion in considering a motion for new trial based on an erroneous jury instruction.”). III. DISCUSSION The Estate argues that a new trial is warranted based upon the misconduct of defense counsel in violating the Court’s Order. See generally ECF No. [861]. The Estate maintains that the parties vigorously litigated, in pretrial motions in limine, Defendant’s ability to inject Ira

Kleiman’s relationship with his brother David Kleiman into the trial as an attempt to persuade the jury that the Estate should not recover because Ira was somehow undeserving. Id. at 1. Yet, according to the Estate, despite the Court’s exclusion of evidence about the brothers’ relationship, except for the Thanksgiving Day 2009 conversation, “Defendant inappropriately focused the jury’s attention on the brothers’ relationship more than ten times during trial.” Id. at 2; see also ECF No. [838] at 184:19-24; ECF No. [839] at 149:22-150:24; ECF No. [840] at 23:12-24:1, 84:1-2, 135:22-136:3, 173:13-25; ECF No. [841] at 68:7-21, 70:16-21. The Estate maintains that a new trial on its claims is necessary and, in support, raises five overarching arguments.

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