Novick v. AXA Network LLC, AXA Advisors, LLC

714 F. App'x 22
CourtCourt of Appeals for the Second Circuit
DecidedOctober 27, 2017
Docket16-3033-cv; 16-3749-cv
StatusUnpublished
Cited by9 cases

This text of 714 F. App'x 22 (Novick v. AXA Network LLC, AXA Advisors, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Novick v. AXA Network LLC, AXA Advisors, LLC, 714 F. App'x 22 (2d Cir. 2017).

Opinion

SUMMARY ORDER

Plaintiff-Counter-Defendant-Appellant Steven Novick appeals from several rulings by the United States District Court for the Southern District of New York (Hellerstein, /.) issued over the course of lengthy litigation, specifically: a February 1, 2011 order dismissing tort-based claims; a September 15, 2016 order granting attorney fees to defendants; and rulings made prior to and during a trial held between June 27, 2016 and July 14, 2016 that disallowed expert testimony, excluded parol evidence, and denied an adverse inference that had been previously approved by the district court. We assume the parties' familiarity with the underlying facts, procedural history, and specification of issues for review.

In November 2002, Novick, a stockbroker and insurance salesman with a sizeable book of clients, entered into several agreements with AXA Advisors, a broker/dealer, and AXA Network, an insurance company (collectively, “AXA”), pursuant to which Novick became affiliated with those companies as an independent contractor. AXA also agreed to loan Novick a total of $1.5 million to assist in his employment transition. In connection with these loans, No-vick executed promissory notes in favor of AXA, one in January 2003 for $500,000 (the “January Note”) and the other in August 2003 for $1 million (the “August Note”). The parties also signed a “clarifying document,” which provided that No-vick’s customer lists acquired prior to his affiliation with AXA that did not pertain to his business with AXA would remain his property.

Novick’s affiliation with AXA was terminated in October 2006. Novick asserts that AXA retaliated against him for whistle-blowing on a fellow AXA affiliate, while AXA claims that Novick violated its business practices. Novick brought suit alleging a variety of contract and tort-based claims; AXA counter-sued for the balance of the notes.

On appeal, Novick first challenges the district court’s 2011 order dismissing his tort-based claims as duplicative of his contract claims. We review a district court’s grant of a motion to dismiss de novo, “construing the complaint liberally, accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiffs favor.” Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). Under New York law, when a valid agreement governs the subject matter of a dispute between parties, claims arising from that dispute are contractual; attempts to repackage them as sounding in fraud, conversion, and other torts are generally precluded, unless based on a duty independent of the contract. See N.Y. Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 639 N.Y.S.2d 283, 662 N.E.2d 763 (1995); Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 54 (2d Cir. 2011); Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp., 418 F.3d 168, 175 (2d Cir. 2005). As a result, “causes of action ... based on the same facts as the cause of action to recover damages for breach of contract” generally should be dismissed as duplicative of the contract claim. Edem v. Grandbelle Int’l, Inc., 118 A.D.3d 848, 988 N.Y.S.2d 244, 245 (2d Dep’t 2014).

Here, the district court did not err in dismissing Novick’s tort-based claims as duplicative of his breach of contract claim. Beyond the bare argument that his tort claims “implicate different legal duties,” Novick did not allege any actionable legal duty owed to him by AXA, outside the contract, that would support a tort-based claim. Indeed, Novick himself has repeatedly acknowledged that the tort-based claims are based on contractual obligation.

Novick also challenges the district court’s refusal to give a previously approved adverse inference, arguing that the district court violated the law-of-the-case doctrine. We review a district court’s adherence to its prior rulings under the law-of-the case doctrine for abuse of discretion. See Devilla v. Schriver, 245 F.3d 192, 198 (2d Cir. 2001). “[W]hen a court has ruled on an issue, that decision should generally be adhered to by that court in subsequent stages in the same case.” United States v. Uccio, 940 F.2d 753, 758 (2d Cir. 1991) (citing Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983)). However, we have noted that “[t]he doctrine of the law of the case is not an inviolate rule,” United States v. Birney, 686 F.2d 102, 107 (2d Cir. 1982); rather, the doctrine “is discretionary and does not limit a court’s power to reconsider its own decisions prior to final judgment,” Aramony v. United Way of Am., 254 F.3d 403, 410 (2d Cir. 2001) (citation omitted). The decision whether or not to apply law-of-the-case is, in turn, informed principally by the concern that disregard of an earlier ruling not be allowed to prejudice the party seeking the benefit of the doctrine. Birney, 686 F.2d at 107. “In this context, prejudice refers to a lack of sufficiency of notice or a lack of sufficient opportunity to prepare armed with the knowledge that the prior ruling is not deemed controlling.” Uccio, 940 F.2d at 758 (quoting Birney, 686 F.2d at 107).

In the instant case, the district court initially ordered an adverse inference in 2015, finding that AXA had acted improperly in connection with certain audio tapes that documented the period immediately prior to and following Novick’s termination. At the final pretrial conference in 2016, the district court heard argument on a motion made by AXA to preclude the adverse inference, and reserved decision. Ultimately, the district court declined to give the adverse inference charge. Under these circumstances, Novick had extensive notice that the court intended to reconsider its earlier ruling, given AXA’s motion and the district court’s clear indication that it would consider the matter further. Thus, Novick did not lack “sufficient opportunity to prepare armed with the knowledge that the prior ruling is-not deemed controlling.” Uccio, 940 F.2d at 758 (quoting Birney, 686 F.2d at 107).

Next, Novick challenges myriad eviden-tiary rulings. “We review a district court’s evidentiary rulings, including those as to expert testimony, for abuse of discretion.” Callahan v. Wilson, 863 F.3d 144, 153 (2d Cir. 2017) (citing Lore v. City of Syracuse, 670 F.3d 127, 155 (2d Cir. 2012)).

First, Novick argues that he was impermissibly prevented from calling an expert at trial. Expert testimony should be liberally admitted, if the expert’s “scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence.” Fed. R. Evid. 702; Nimely v. City of New York, 414 F.3d 381, 395 (2d Cir. 2005).

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Bluebook (online)
714 F. App'x 22, Counsel Stack Legal Research, https://law.counselstack.com/opinion/novick-v-axa-network-llc-axa-advisors-llc-ca2-2017.