17‐2572‐cv (L)
Vioni v. Providence Inv. Mgmt., et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 12th day of September, two thousand eighteen.
PRESENT: ROBERT D. SACK,
REENA RAGGI,
DENNY CHIN,
Circuit Judges.
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LISA VIONI,
Plaintiff‐Appellant‐Cross‐
Appellee,
HEDGE CONNECTION, INC.,
Plaintiff,
v. 17‐2572‐cv, 17‐2636‐cv
PROVIDENCE INVESTMENT MANAGEMENT,
LLC, RUSSELL JEFFREY,
Defendants‐Appellees‐Cross‐
Appellants,
PROVIDENCE INVESTMENT PARTNERS, LLC,
AMERICAN CAPITAL STRATEGIES, LTD.,
Defendants.
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FOR PLAINTIFF‐APPELLANT‐ COREY S. STARK, Corey Stark PLLC, and
CROSS‐APPELLEE: H.P. Sean Dweck, The Dweck Law Firm, LLP,
New York, New York.
FOR DEFENDANTS‐APPELLEES‐ NEAL H. KLAUSNER (David S. Greenberg,
CROSS‐APPELLANTS: Jacob P. Freeman, Jacklyn M. Siegel, on the
brief), Davis & Gilbert LLP, New York, New
York.
Appeal from the United States District Court for the Southern District of
New York (Crotty, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff‐appellant Lisa Vioni appeals from a final judgment entered
August 4, 2017, which (1) granted judgment as a matter of law to defendants‐appellees
Providence Investment Management, LLC (ʺPIMʺ) and Russell Jeffrey, and (2)
conditionally granted, in the event of a reversal or remand, a retrial on damages or
remittitur of the juryʹs award to $150,000. The jury awarded Vioni $750,000 in quantum
meruit for her services in facilitating an agreement by American Capital Strategies, Ltd.
(ʺACASʺ) to hire Jeffrey and eight PIM employees. The district court held that Vioni
had not established the reasonable value of her services, and so granted judgment as a
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matter of law to PIM and Jeffrey. We assume the partiesʹ familiarity with the
underlying facts, procedural history, and issues on appeal.
Vioni is the founder and chief executive officer of Hedge Connection, Inc.,
a company that specializes in marketing and raising capital for hedge funds. Jeffrey is
the founder and principal of PIM, which operated a hedge fund focusing on mortgage‐
backed securities.
In early 2007, Jeffrey was seeking capital for a new credit fund and real
estate investment trust (ʺREITʺ), and asked Vioni to help introduce him to possible
investors. Vioni agreed to do so. During an exchange of emails, Jeffrey wrote Vioni
that ʺwe should have a discussion about financial considerations. I want you to have
comfort and confidence about the whole process so that if a deal is consummated, you
are compensated accordingly.ʺ Appʹx at 1134.
Vioni arranged and participated in a conference call, and later an in‐
person meeting, between Jeffrey and Robert Grunewald, the managing director of
ACAS. At the time, Jeffrey did not know Grunewald and had no connections to ACAS.
Vioni provided Jeffrey information on ACAS and Grunewald so that Jeffrey could tailor
his presentation, and she also provided feedback on PIM materials and paid for the
meeting space.
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By August 10, 2007, Jeffrey and ACAS reached a deal by which ACAS
hired Jeffrey and eight PIM employees. Defendants, however, never paid Vioni for her
services in bringing the parties together.
In March 2008, Vioni filed this diversity suit against ACAS, Jeffrey, and
PIM, alleging claims for breach of contract, quantum meruit, and promissory estoppel.
See Vioni v. Am. Capital Strategies Ltd., No. 08 Civ. 2950, 2009 WL 174937 (S.D.N.Y. Jan.
23, 2009). The district court dismissed the breach of contract and promissory estoppel
claims, id., and granted defendants summary judgment on the quantum meruit claim.
See Vioni v. Am. Capital Strategies Ltd., No. 08 Civ. 2950, 2011 WL 4444276 (S.D.N.Y. Sept.
26, 2011). The case was appealed and remanded twice. See Vioni v. Am. Capital
Strategies, Ltd. (Vioni I), 508 F. Appʹx 1 (2d Cir. 2013); Vioni v. Providence Inv. Mgmt.,
L.L.C. (Vioni II), 648 F. Appʹx 114 (2d Cir. 2016). Ultimately, the only claim that went to
trial was Vioniʹs quantum meruit claim against PIM and Jeffrey.
On the second remand, litigation ensued over Vioniʹs expert witnesses.
Eventually, Vioni voluntarily withdrew two of her proposed experts. Accordingly, she
was left with only one expert, Robert Warren, who had been identified as a rebuttal
witness. During PIMʹs deposition of Warren, however, he testified that he did not
recognize large portions of the expert report that bore his name and that he did not sign
the report. On February 24, 2017, before the district court received this testimony, it
issued an order denying Vioniʹs request to call Warren in her case‐in‐chief. After a
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conference with the district court on March 2, 2017, Vioni voluntarily withdrew Warren
as a rebuttal expert witness, without prejudice to her right to call Warren on her
affirmative case.
In an opinion and order filed March 6, 2017, the district court explained its
reasoning in denying Vioniʹs request to call Warren on her direct case. The court
concluded that Vioni had failed to show either substantial justification for her failure to
make timely disclosure or that the delay was harmless. The court also relied on
Warrenʹs deposition testimony that he did not sign what purported to be his report and
that he did not recall seeing much of it.
PIM moved for summary judgment, arguing that Vioni could not prove
an essential element of her prima facie case ‐‐ the reasonable value of the services she
rendered to PIM ‐‐ without expert testimony. Ruling from the bench, the district court
denied the motion on March 9, 2017. Trial commenced on March 13, 2017. After the
close of evidence, PIM moved for judgment as a matter of law under Federal Rule of
Civil Procedure 50, and the district court reserved judgment.
The jury returned a verdict in favor of Vioni, awarding her $750,000 plus
interest running from September 23, 2007. PIM and Jeffrey renewed their motion for
judgment as a matter of law and requested, in the alternative, that the district court
reduce the damages award. On August 2, 2017, the district court granted their motion
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for judgment as a matter of law, and, in the alternative, conditionally granted a new
trial on damages or remittitur reducing the award to $150,000.
On appeal, Vioni argues that the district court erred by (1) precluding her
expert testimony, and (2) granting judgment as a matter of law. PIM cross appeals from
the district courtʹs failure to include certain language in the juryʹs special verdict form.
I. Preclusion of Expert Testimony
Parties must provide timely disclosure of expert testimony as ordered by
the court or, if there is no applicable court order, ʺat least 90 days before the date set for
trial.ʺ Fed. R. Civ. P. 26(a)(2)(D)(i). If a party does not make a timely expert disclosure,
ʺthe party is not allowed to use that information or witness to supply evidence . . . at a
trial, unless the failure was substantially justified or is harmless.ʺ Fed. R. Civ. P.
37(c)(1). The district court may grant ʺthe extreme sanction of preclusionʺ of expert
testimony when a party fails to make a timely disclosure, Outley v. City of N.Y., 837 F.2d
587, 591 (2d Cir. 1988), but it must first consider four factors: ʺ(1) the partyʹs explanation
for the failure to comply with the [disclosure requirement]; (2) the importance of the
testimony of the precluded witness; (3) the prejudice suffered by the opposing party as
a result of having to prepare to meet the new testimony; and (4) the possibility of a
continuance,ʺ Patterson v. Balsamico, 440 F.3d 104, 117 (2d Cir. 2006) (alteration and
citation omitted). A district courtʹs order precluding an expert witness based on
untimely disclosure is reviewed for abuse of discretion. Id.
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We affirm the denial of Vioniʹs motion for leave to offer Warrenʹs
testimony in her case‐in‐chief largely for the reasons explained by the district court in
its March 6, 2017 order. The district court did not abuse its discretion in finding that
Vioni failed to show substantial justification or harmlessness. Moreover, we are
particularly troubled by the fact that, as the district court noted, Warren testified at his
deposition that he did not sign his purported report or remember seeing a majority of it.
See Fed. R. Civ. P. 26(a)(2)(B) (ʺthis disclosure must be accompanied by a written report
‐‐ prepared and signed by the witnessʺ).
II. Judgment as a Matter of Law
ʺWe review a district courtʹs grant of judgment as a matter of law de novo,
applying the same standards as the district court.ʺ Caceres v. Port Auth. of New York &
New Jersey, 631 F.3d 620, 622 (2d Cir. 2011). ʺJudgment as a matter of law is appropriate
when ʹa party has been fully heard on an issueʹ and ʹa reasonable jury would not have a
legally sufficient evidentiary basis to find for the party on that issue.ʹʺ Id. (quoting Fed.
R. Civ. P. 50(a)(1)). In making this determination, we view the evidence ʺin the light
most favorableʺ to the non‐moving party and give her ʺthe benefit of all reasonable
inferences that the jury might have drawn in [her] favor from the evidence.ʺ Tolbert v.
Queens Coll., 242 F.3d 58, 70 (2d Cir. 2001) (citation omitted).
The purpose of the quantum meruit doctrine is ʺto make sure that a person
who receives the benefit of services pays the reasonable value of such services to the
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person who performed them.ʺ Zolotar v. New York Life Ins. Co., 576 N.Y.S.2d 850, 854
(1st Depʹt 1991). ʺIn order to recover in quantum meruit under New York law, a claimant
must establish (1) the performance of services in good faith, (2) the acceptance of the
services by the person to whom they are rendered, (3) an expectation of compensation
therefor, and (4) the reasonable value of the services.ʺ Mid‐Hudson Catskill Rural
Migrant Ministry, Inc. v. Fine Host Corp., 418 F.3d 168, 175 (2d Cir. 2005) (citation and
internal quotation marks omitted) (emphasis added). The district court held that Vioni
had proven the first three elements of her quantum meruit claim. The only issue on
appeal is whether Vioni established the fourth element: the reasonable value of her
services.
Reasonable value is ʺthe amount for which such services could have been
purchased from one in the plaintiffʹs position at the time and place the services were
rendered,ʺ or ʺthe amount for which the defendant could have obtained services under
like circumstances.ʺ Carlino v. Kaplan, 139 F. Supp. 2d 563, 565 (S.D.N.Y. 2001) (citation
and internal quotation marks omitted). This value is generally based on hourly rates,
but there are ʺwell‐recognized exceptions based on clear and accepted market place
conventions.ʺ Id.
Vioni provided no evidence of the number of hours she spent on the
matter or as to the prevailing hourly rates, and instead she opted to prove the
reasonable value of her services through market place conventions. The district court
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held, and we previously affirmed, that Vioni was limited to recovering the market place
convention of a ʺfinderʹs feeʺ or ʺlift‐out fee.ʺ Vioni II, 648 F. Appʹx at 117‐18. A lift‐out
fee is paid to executive recruiters in connection with services that result in the
acquisition of a team of individuals from another firm. The evidence at trial established
that the industry practice for lift‐out fees is for the hiring institution to pay a fee of 20 to
30 percent of the hired employeesʹ first‐year guaranteed or anticipated base and bonus
compensation. Defendantsʹ expert testified that she was ʺnot familiar with any instance
in which the candidate paid [this] fee,ʺ Appʹx at 1288, and that the industry standard for
what a candidate would pay a recruiter for successful placement is ʺzero,ʺ id. at 1334.
Vioni provided no evidence of any market place convention for what, if anything, the
candidate, rather than the employer, would pay a recruiter for a successful placement,
nor did she provide any evidentiary support for her position that a candidate would
pay the same rate as a hiring institution. While she sought to rely on defendantsʹ expert
witness, the expertʹs testimony did not support Vioniʹs assertion that she was entitled to
the same fee from successful candidates that a hiring institution would have paid.
Vioni failed to present sufficient evidence to support her position that the
jury awarded ʺthe amount for which the defendant could have obtained services under
like circumstances.ʺ Carlino, 139 F. Supp. 2d at 565. Under these circumstances, we
ʺcannot assume the terms that the partiesʺ would ʺhave written into a contractʺ and the
jury was not in the position to impose a fee on the defendants without a clear and
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accepted market place convention. Id. at 566. Indeed, while Vioni perhaps could have
identified a viable theory of damages and provided evidence to support an award of
damages under that theory, she simply did not do so. Hence, the district court did not
err in awarding defendants judgment as a matter of law.
. . .
We have considered Vioniʹs remaining arguments and find them to be
without merit. As we are affirming the district courtʹs judgment, we do not reach
defendantsʹ arguments on cross appeal. Accordingly, we AFFIRM the judgment of the
district court.
FOR THE COURT:
Catherine OʹHagan Wolfe, Clerk
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