Rhee v. Sante Ventures

Background

The court addressed two motions before a limited retrial on damages. Youngjoo Rhee moved for reconsideration of the court’s earlier oral ruling denying her motion to prevent SHVMS, LLC, doing business as SANTE VENTURES, from seeking a setoff based on a $300,000 payment. SHVMS separately moved to prevent Rhee from offering evidence or making arguments that SHVMS breached the implied covenant of good faith and fair dealing by terminating her to avoid paying her a bonus.

Rhee’s Motion for Reconsideration

The court denied Rhee’s motion for reconsideration. Rhee argued that SHVMS had forfeited the right to introduce evidence of the $300,000 payment because it had not expressly pleaded partial payment as an affirmative defense. The court explained that payment is an affirmative defense under New York law, but a defendant’s failure to plead that defense may be excused when the plaintiff had sufficient notice.

The court found that Rhee had sufficient notice. SHVMS’s answer stated that Rhee’s claims were barred in whole or in part by accord and satisfaction, which the court explained involves payment in exchange for extinguishing a debt. The court also relied on the parties’ conduct: Rhee introduced the payment at the initial trial, SHVMS presented testimony about it without objection, the parties discussed it in post-trial briefing, and Rhee did not seek additional discovery about it after the court ordered a retrial on damages. The court further found that Rhee did not claim, and the court did not find, prejudice from allowing the evidence. Rhee therefore had not shown a clear error or manifest injustice requiring reconsideration.

SHVMS’s Motion in Limine

The court granted SHVMS’s motion in limine, both because Rhee did not oppose it and on the merits. A motion in limine asks the court to rule before trial about the admissibility or use of anticipated evidence or arguments.

The court noted that Rhee had originally pleaded a separate claim for breach of the implied covenant of good faith and fair dealing, but later sought permission to file a third amended complaint and voluntarily dismiss that claim. The court granted that request. Rhee later tried to revive the theory in opposition to summary judgment, but the court previously held that the third amended complaint did not adequately plead it and did not give SHVMS sufficient notice.

Because the court had not instructed the initial jury on the implied-covenant theory, the jury had not found SHVMS liable on that basis. The court held that the original liability determination would bind the upcoming damages retrial, and that Rhee could not expand the verdict by presenting a new theory of liability. The court therefore precluded Rhee from offering evidence or argument at the retrial supporting the theory that SHVMS breached the implied covenant of good faith and fair dealing.

Disposition

The court denied Rhee’s motion for reconsideration, Docket No. 164, and granted SHVMS’s motion in limine, Docket No. 172. The clerk was directed to close both motions.