City of Almaty, Kazakhstan v. Sater

Background

The plaintiffs are the City of Almaty, Kazakhstan, and BTA Bank JSC. They sued several defendants, including Felix Sater, Bayrock Group Inc., Global Habitat Solutions Inc., and MeM Energy Partners LLC. The court refers to Sater, Bayrock, and GHS as the “Sater Defendants” and to all defendants against whom the jury returned a verdict as the “Trial Defendants.”

After extensive pretrial proceedings and a nearly three-week trial, the jury returned a verdict for the plaintiffs and against each Trial Defendant. The Trial Defendants moved for judgment as a matter of law or a new trial. The plaintiffs moved for entry of judgment consistent with the verdict.

On January 15, 2025, the court granted the Trial Defendants’ motion for a new trial on the plaintiffs’ conversion and unjust-enrichment claims under Rule 59(a)(1)(A) of the Federal Rules of Civil Procedure. The court denied the parties’ other requests for post-trial relief. The plaintiffs then moved for reconsideration of that ruling and for entry of judgment based on the jury’s verdict.

The court’s analysis

A motion for reconsideration is subject to a strict standard. It generally requires the moving party to identify controlling decisions or information that the court overlooked and that could reasonably change the result. The recognized grounds include an intervening change in controlling law, new evidence, or the need to correct a clear error or prevent serious injustice.

The plaintiffs argued that the Trial Defendants had invited the erroneous jury instruction and therefore could not challenge it. The court rejected that argument. Before trial, the defendants had proposed instructions that accurately stated New York law concerning when conversion and unjust-enrichment claims accrue. The erroneous instruction appeared in a draft jury charge supplied before the charge conference. No party objected at the conference or when the instruction was given, but the court found that the defendants had, at most, accepted the instruction without objecting; they had not requested or caused the error.

The court also rejected the plaintiffs’ argument that the defendants’ earlier effort to rely on Kazakhstani law caused the erroneous instruction. The court explained that it did not apply Kazakhstani law at trial. Instead, the instruction incorrectly stated New York law by giving the jury a discovery-based rule for accrual. Under the New York law described in the opinion, conversion claims accrue when the conversion occurs, and unjust-enrichment claims accrue when the wrongful act creating the restitution duty occurs.

The plaintiffs further argued that the error was not serious because the trial’s outcome would have been the same with a proper instruction. The court disagreed. The jury found that the earliest ascertainable dates for the relevant claims were in 2013. The court concluded that, without the erroneous discovery rule, the jury would have found the conversion and unjust-enrichment claims barred by the statute of limitations.

The plaintiffs relied on evidence showing delayed discovery and argued that the same evidence could have supported equitable estoppel. Equitable estoppel is a doctrine that can prevent a defendant from relying on a limitations defense when the defendant’s fraud, misrepresentation, or deception caused the delay in filing. The court held that delayed discovery alone did not establish the affirmative wrongdoing required for equitable estoppel. It also noted that the Trial Defendants had the burden of proving the statute-of-limitations defenses, while the plaintiffs had the burden of proving equitable estoppel. The jury’s rejection of the defendants’ defenses under the erroneous instruction therefore did not show that the plaintiffs would have met their separate burden on equitable estoppel.

Disposition

Judge John G. Koeltl denied the plaintiffs’ motion for reconsideration and entry of judgment for the plaintiffs. The new trial ordered on the conversion and unjust-enrichment claims therefore remained in place. The court directed the parties to submit a joint status report by April 2, 2025, including information about proceeding with a new trial and their availability if they chose to do so. The clerk was directed to close the plaintiffs’ reconsideration motion.