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Kelley v. Boosalis

United States District Court, D. Minnesota

December 7, 2018

Douglas A. Kelley, in his Capacity as the PCI Liquidating Trustee for the PCI Liquidating Trust, Plaintiff,
v.
Gus Boosalis, Defendant.

          John R. Marti, Andrew B. Brantingham, Christina Hanson, and J. David Jackson, Dorsey & Whitney LLP, for Plaintiff Douglas A. Kelley, in his Capacity as Trustee for the PCI Liquidating Trust.

          Daniel J. Frisk and Mark A. Schwab, Schwab, Thompson & Frisk, Don R. Grande for Defendant Gus Boosalis.

          ORDER ON POST-TRIAL MOTIONS

          SUSAN RICHARD NELSON, UNITED STATES DISTRICT JUDGE

         Plaintiff Douglas A. Kelley, in his Capacity as the PCI Liquidating Trustee for the PCI Liquidating Trust (“the Trustee”) asserted fraudulent transfer claims against Defendant Gus Boosalis under provisions of the U.S. Bankruptcy Code, 11 U.S.C. §§ 544(b), 550, 551, 1106, and the Minnesota Uniform Fraudulent Transfer Act, (the “MUFTA”), Minn. Stat. §§ 513.41-.51.

         Before the Court are Defendant's Motion to Set Aside the Verdict as a Matter of Law and Request for a New Trial [Doc. No. 107] and Plaintiff's Motion for Prejudgment Interest [Doc. No. 104]. For the reasons set forth herein, Defendant's motion is denied and Plaintiff's motion is granted.

         I. DISCUSSION

         A. Defendant's Motion to Set Aside the Verdict

         This matter was tried to an eight-person jury on November 26-30, 2018 and December 4, 2018. The jury heard testimony from eight witnesses and over 175 exhibits were received into evidence. After deliberating for approximately three hours on December 4, 2018, the jury concluded that the Trustee had proved his claims. In particular, with respect to the claim regarding actual fraudulent transfers, the jury found that: (1) the Trustee had established by a preponderance of the evidence that Petters Company, Inc. made one or more interest payments to Boosalis with the intent to hinder, delay, or defraud any of its creditors; (2) Boosalis did not prove by a preponderance of the evidence the affirmative defense that he received the payments in good faith and in exchange for reasonably equivalent value; and (3) the total dollar value of the interest payments resulting from the actual fraudulent transfers was $3, 502, 455.00. (Redacted Jury Verdict at 2 [Doc. No. 116].)

         With respect to the Trustee's constructive fraudulent transfer claim, the jury found that the Trustee proved by a preponderance of the evidence that: (1) Petters Company, Inc. made interest payments to Boosalis; and (2) Petters Company, Inc. did not receive reasonably equivalent value in exchange for the interest payments paid to Boosalis. (Id. at 3.) In addition, the jury found that the Trustee proved by a preponderance of the evidence that at the time the transfers were made: (1) Petters Company, Inc. was engaged or was about to engage in a business or a transaction for which Petters Company, Inc.'s remaining assets were unreasonably small in relation to the business or transaction; and/or (2) Petters Company, Inc. intended to incur, or believed or reasonably should have believed it would incur, debts beyond Petters Company, Inc.'s ability to pay as they became due. (Id.) The jury found that the total dollar value of the interest payments for which the Trustee established constructive fraudulent transfer was $3, 502, 455.00. (Id.)

         Prior to the submission of the case to the jury, Defendant moved for judgment as a matter of law, which this Court denied. (See Nov. 30, 2018 Minutes [Doc. No. 109].) Pursuant to Federal Rule of Civil Procedure 50(b), he now renews his motion. (See Def.'s Mem. Supp. Mot. at 1-3 [Doc. No. 108].) In the alternative, under Rule 59, he moves for a new trial. (Id.)

         In analyzing a renewed motion for judgment as a matter of law under Rule 50(b), the Court must consider the legal question of whether the evidence sufficiently supports the jury's verdict. White v. Pence, 961 F.2d 776, 779 (8th Cir. 1992). In doing so, the Court is to analyze the evidence in the light most favorable to the prevailing party, without weighing or evaluating the evidence or considering witnesses' credibility. Id. In order to succeed on a post-trial motion for judgment as a matter of law, “all the evidence must point one way and be susceptible of no reasonable inference sustaining the position of the nonmoving party.” Id.

         The Court is thoroughly familiar with the evidence presented in this case and finds that the verdict is well-supported by the evidence. Witness testimony and exhibits sufficiently supported the jury's finding that the Trustee proved his claims of actual and constructive fraud in the amount determined by the jury. Defendant has not met the standard for judgment as a matter of law under Rule 50.

         As to Defendant's alternative request for a new trial, Rule 59(a)(1) provides that the Court “may, on motion, grant a new trial on all or some of the issues-and to any party- as follows: (A) after a jury trial, 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). The “key question” which the Court must consider is whether retrial is necessary “to avoid a miscarriage of justice, ” McKnight v. Johnson Controls, Inc., 36 F.3d 1396, 1400 (8th Cir. 1994), due to legal errors made during the trial or because the verdict goes against the weight of the evidence. White, 961 F.2d at 780. In contrast to a motion brought under Rule 50(b), under Rule 59, the district court may rely on its own reading of the evidence, including by weighing the evidence and considering the credibility of witnesses. Id.

         Boosalis contends that the verdict here was against the weight of the evidence. Again, the Court finds that the verdict is well-supported by the evidence and a new trial is not warranted in order to avoid a miscarriage ...


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