Foresco Co. v. Oh, 315 F. Supp. 3d 812 (2018)

May 17, 2018 · United States District Court for the Southern District of Illinois · 15 Civ. 2841 (VM)

315 F. Supp. 3d 812

FORESCO CO., LTD., Plaintiff,
v.
Albert OH, Defendant.

15 Civ. 2841 (VM)

United States District Court, S.D. New York.

Signed May 17, 2018

Kurt Bernard Gerstner, Campbell Campbell Edwards & Conroy, Boston, MA, Heath Douglas Rosenblat, Heath D. Rosenblat, PLLC, Marsha Jessica Indych, Drinker Biddle & Reath, LLP, New York, NY, for Plaintiff.

Andrew Peter Saulitis, Law Offices of Andrew P. Saulitis P.C., New York, NY, for Defendants.

DECISION AND ORDER

VICTOR MARRERO, United States District Judge Trial in this action is scheduled to begin on May 29, 2018. Plaintiff Foresco Co., Ltd. ("Foresco") filed a motion in limine dated May 3, 2018 (Dkt. Nos. 73, 74) pursuant to Federal Rules of Evidence ("FRE") 401, 402, and 403, and the law of the case doctrine. In particular, Foresco requests that the Court preclude defendant Albert Oh ("Oh") from: (1) presenting evidence regarding Foresco's audit, and (2) offering evidence relating to a subsequent form of personal guaranty between the parties.¹

Oh filed an opposition on May 10, 2018 (Dkt. No. 76), and Foresco filed a reply on May 15, 2018 (Dkt. No. 77).

For the following reasons, Foresco's motion is DENIED .

I. FORESCO'S AUDIT

FRE 402 provides that relevant evidence is generally-admissible, and FRE 403 provides that evidence that is relevant may nonetheless be excluded if its probative value is substantially outweighed by, among other considerations, the danger of unfair prejudice, confusion of the issues, or misleading the jury. Fed. R. Evid. 402, 403. Under FRE 401, "[e]vidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action." Fed. R. Evid. 401.

Foresco requests that the Court preclude Oh from presenting evidence or argument regarding Foresco's audit. Foresco argues that evidence regarding whether the audit was the impetus for the guaranty at issue ("Guaranty" or "Promissory to Settle Balance") is irrelevant because such evidence is related to the validity of the Guaranty, and the Court of Appeals for the Second Circuit has already determined the existence of a guaranty. In addition, Foresco argues that even if the evidence can be seen as relevant, "it will mislead the jury into believing that the only purpose for the creation of the Guaranty was the audit, instead of the reality of the facts that existed at the time of the Guaranty-namely, the need for a written instrument evidencing Oh's repeated promises to personally pay back Foresco." (Dkt. No. 74 at 4.)

Oh counters that evidence regarding the audit is probative of whether or not there was consideration for the Guaranty because according to Oh, the Guaranty was intended to help Foresco with the audit and did not include a benefit to Oh. In addition, Oh notes that the audit's relevance is supported by the fact that the audit is mentioned in the two-sentence Promissory to Settle Balance.

Foresco is correct that the Court of Appeals has ruled that the Promissory to Settle Balance is "unambiguous as to the existence of a guaranty," and that the limited issue for the jury to decide at trial is whether the Guaranty is supported by consideration. Foresco Co. v. Oh, 696 Fed. App'x 550, 551 (2d Cir. 2017). However, as Oh explains in his opposition, evidence regarding the audit is relevant to his interpretation of the Guaranty's lack of consideration. Whether and to what extent the audit was a part of the parties' intentions regarding consideration for the Guaranty will be determined by the jury; but the jury is entitled to all the evidence that has any tendency to make either party's proposed interpretation of the agreement more or less probable.

Therefore, the Court DENIES Foresco's motion to preclude evidence relating to Foresco's audit.

II. SUBSEQUENT GUARANTY

Foresco also seeks to preclude Oh from presenting evidence or argument relating to a subsequent form of personal guaranty that was exchanged between the parties. Foresco argues that the existence of subsequent negotiations regarding a guaranty is irrelevant to the issue of whether there was consideration for the Guaranty at issue. Moreover, Foresco contends that the inclusion of such evidence would prejudice Foresco because it would confuse the jury regarding whether "the Guaranty at issue here is somehow legally insufficient." (Dkt. No. 74 at 7.)

Oh counters that evidence regarding the subsequent personal guaranty is relevant to the intent of the parties on the question of consideration regarding the Guaranty at issue. Oh argues that the subsequent personal guaranty document shows that the parties were capable of clearly indicating the existence of consideration for a guaranty, which is probative of whether the parties intended for there to be consideration in the Guaranty at issue.

The Court agrees that this evidence is probative of the issue for trial and is not unduly prejudicial. See CDR-Wantagh, Inc. v. Shell Oil Co., No. 07-CV-4497, 2011 WL 6371582, at *10 (E.D.N.Y. Dec. 20, 2011) ("[E]xtrinsic evidence concerning the contracting parties' understanding as to a particular contract provision is not limited to documents or witnesses bearing directly on the facts surrounding its execution. Instead, evidence, e.g., pertaining to past, or even subsequent courses of conduct between the contracting parties in like situations may prove instructive."); Gordon v. Vincent Youmans, Inc., 358 F.2d 261, 264 (2d Cir. 1965) ("Where ambiguity is present in a contract, the subsequent conduct of the parties may be used to indicate their intent.").

Therefore, the Court DENIES Foresco's motion to exclude from trial all evidence relating to the subsequent guaranty.

III. ORDER

For the reasons stated above, it is hereby

ORDERED that the motion in limine (Dkt. Nos. 73, 74) of plaintiff Foresco Co., Ltd. ("Foresco") to preclude defendant Albert Oh from presenting evidence (i) regarding Foresco's audit and (ii) relating to a subsequent form of personal guaranty between the parties is DENIED.

1 Foresco did not identify which specific documents or testimony it objects to in its motion.

SO ORDERED.