Free Reply Brief - District Court of Delaware - Delaware

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Analysis As of: Mar 05, 2007 DARRYL L. DAGEN, Plaintiff, -against- CFC GROUP HOLDINGS LTD., ET AL., Defendants. 00 Civ. 5682 (CBM) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

2004 U.S. Dist. LEXIS 6582 April 12, 2004, Decided April 13, 2004, Filed SUBSEQUENT HISTORY: Costs and fees proceeding at, Motion granted by, in part, Motion denied by, in part Dagen v. CFC Group Holdings Ltd., 2004 U.S. Dist. LEXIS 6839 (S.D.N.Y., Apr. 20, 2004) PRIOR HISTORY: Dagen v. CFC Group Holdings Ltd., 2003 U.S. Dist. LEXIS 20029 (S.D.N.Y., Nov. 7, 2003) DISPOSITION: [*1] Plaintiff's motion for judgment as matter of law, new trial, or relief from judgment denied. CASE SUMMARY: circumstance warranting judgment as a matter of law or a new trial given the court's wide latitude in determining whether evidence was admissible and controlling the mode and order of evidence presentation. The president was not entitled to a new trial on the grounds that the verdict was contrary to the evidence presented because evidence that he spent business time locating a personal apartment, did not close any sales during his tenure, and stole a company check was sufficient to support the jury's verdict. Moreover, there was nothing inconsistent about the jury's verdict because the fact that the employer did not prove by a fair preponderance of the credible evidence that the president breached the contract or his fiduciary duties did not necessarily mean that the president proved that the employer constructively discharged him, breached the contract, or owed him damages. In addition, the president had failed to complain of a possible inconsistency in the jury charges, thus he waived any argument regarding the jury charges. OUTCOME: The motion for judgment as a matter of law, a new trial, or relief from judgment was denied. CORE TERMS: matter of law, new trial, constructively discharged, juror, directed verdict, breached, inconsistency, conversation, extraordinary circumstances, breach of contract, uncertified, sheer, tapes, fiduciary Page 1

PROCEDURAL POSTURE: Plaintiff former president sued defendant employer for breach of contract, intentional interference with contractual relations, unjust enrichment, and failure to pay wages pursuant to state law. The jury rendered a verdict for the employer on the president's claims. The president moved to set aside the verdict, Fed. R. Civ. P. 50(b)(1)(c), for a new trial, Fed. R. Civ. P. 59(e), or for relief from judgment, Fed. R. Civ. P. 60(b)(6). OVERVIEW: The court's refusal to allow the publication of exhibits during testimony and exclusion of uncertified transcripts was not an extraordinary

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duties, reimbursement, counterclaims, internally inconsistent, inconsistent verdicts, extraordinary relief, entitled to judgment, closing arguments, entering judgment, sound discretion, jury verdict, moving party, fair minded, tape-recorded, miscarriage, conjecture, quotation LexisNexis(R) Headnotes

overturn a verdict based on the sufficiency of the evidence bears a very heavy burden. Civil Procedure > Judicial Officers > Judges > Discretion Civil Procedure > Trials > Judgment as Matter of Law > General Overview Civil Procedure > Judgments > Relief From Judgment > Motions for New Trials [HN3] A motion for a judgment as a matter of law under Fed. R. Civ. P. 50(b) may be joined with a motion for a new trial after an earlier trial by jury under Fed. R. Civ. P. 59(e). The decision to grant a new trial under the Rule is committed to the sound discretion of the trial judge. The trial judge's discretion, however, is limited to extraordinary circumstances where, based on the weight of the evidence, the jury's verdict is seriously erroneous or a miscarriage of justice. Civil Procedure > Judgments > Relief From Judgment > Extraordinary Circumstances [HN4] Under Fed. R. Civ. P. 60(b)(6), a court may relieve a party from a final judgment, order, or proceeding for any reason justifying relief from the operation of the judgment. The Rule is designed to strike a balance between the interest of fairness and finality of judgments. Fed. R. Civ. P. 60 motions are addressed to the sound discretion of the trial court. However, in light of the fact that courts should not lightly reopen final judgments, Fed. R. Civ. P. 60(b) motions are extraordinary relief that can be granted only upon a showing of exceptional circumstances. Civil Procedure > Trials > Judgment as Matter of Law > General Overview Labor & Employment Law > Wrongful Termination > Remedies > Compensatory Damages [HN5] The provisions of Fed. R. Civ. P. 50(b) proscribe a court from entering judgment as a matter of law on any ground not specifically raised in an earlier motion for a directed verdict at the close of all the evidence. Civil Procedure > Trials > Closing Arguments > General Overview Evidence > Procedural Considerations > Preliminary Questions > Admissibility of Evidence > General Overview Page 2

Civil Procedure > Trials > Judgment as Matter of Law > Directed Verdicts [HN1] Under Fed. R. Civ. P. 50(b)(1)(C), a court is permitted to enter judgment as a matter of law where a party renews its motion after a trial. Procedurally and technically, a motion under Fed. R. Civ. P. 50(b) is a motion for a directed verdict which may not be granted on any ground not specifically raised in an earlier motion at the close of all the evidence. Civil Procedure > Summary Judgment > Evidence Civil Procedure > Trials > Jury Trials > Province of Court & Jury Criminal Law & Procedure > Juries & Jurors > Province of Court & Jury > Factual Issues [HN2] Motions for judgment as a matter of law must be considered against the backdrop of the Seventh Amendment's command that no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law. U.S. Const. amend. VII. Because fact issues are within the jury's province, the court must give deference to all credibility determinations made by the jury and to all reasonable inferences from the evidence the jury might have drawn in favor of the nonmoving party. In short, the court cannot substitute its judgment for that of the jury. Accordingly, a court may not award judgment as a matter of law unless (1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise or conjecture, or (2) there is such an overwhelming amount of evidence in favor of the nonmovant that reasonable and fair minded persons could not arrive at a verdict against it. Weakness in the evidence does not justify judgment as a matter of law; as with summary judgment, the evidence must be such that a reasonable juror would have been compelled to accept the view of the moving party. These standards illustrate that a party seeking to

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Evidence > Testimony > Examination > Cross-Examination > General Overview [HN6] District courts have wide latitude to determine whether evidence is admissible and in controlling the mode and order of its presentation to promote the effective ascertainment of the truth. Fed. R. Evid. 611(a). Evidence > Authentication > General Overview Evidence > Demonstrative Evidence > Recordings Evidence > Documentary Evidence > Writings > Transcripts & Translations > General Overview [HN7] Before a transcript can be introduced to aid jurors in following a recorded conversation, the original recording and transcript must be properly authenticated. Civil Procedure > Trials > Jury Trials > Verdicts > Inconsistent Verdicts Civil Procedure > Trials > Jury Trials > Verdicts > Special Verdicts Civil Procedure > Judgments > Relief From Judgment > General Overview [HN8] In certain circumstances, a court retains authority, even in a civil case, to allow an apparently inconsistent verdict to stand. When confronted with a potentially inconsistent jury verdict, the court must adopt a view of the case that resolves any seeming inconsistency. Before a trial court may set aside a special verdict as inconsistent and remand the case for a new trial, it must make every attempt 'to reconcile the jury's finding, by exegesis if necessary. This role stems from the Seventh Amendment's obligation on courts not to recast factual findings of the jury and is based on the notion that juries are not bound by what seems inescapable logic to judges. Civil Procedure > Pleading & Practice > Motion Practice > Time Limitations Civil Procedure > Trials > Jury Trials > Jury Instructions > Objections to Instructions Civil Procedure > Trials > Jury Trials > Verdicts > Inconsistent Verdicts [HN9] An objection to inconsistent verdicts raised for the first time in a post-trial motion is untimely and procedurally barred. COUNSEL: For Plaintiff: Chaim B. Book, Moskowitz & Book, LLP, New York, NY. For Defendants: Steven M. Hecht, Lowenstein Sandler

PC, New York, NY. JUDGES: CONSTANCE BAKER MOTLEY, United States District Judge. OPINION BY: CONSTANCE BAKER MOTLEY OPINION: MEMORANDUM OPINION AND ORDER MOTLEY, J. BACKGROUND This action arises out of the employment of plaintiff, Darryl L. Dagen, by defendants CFC Group Holdings and CFC Securities. In November of 1998, plaintiff and defendants entered into an agreement pursuant to which plaintiff agreed to serve as the President and Managing Director of CFC's new Hong Kong affiliate, CFC Securities Asia, until June of 2001. The contract provided that CFC would pay Dagen $ 300,000 per year, a bonus representing a percentage of CFC Asia's annual revenue earnings, $ 7,000 per month as an apartment allowance, relocation costs, travel costs to visit his family, in addition to providing him insurance and a pension. According to Dagen, during the tenure of his employ, Boris Merkenich, the principal owner of all CFC companies, "made unreasonable constraints on plaintiff's [*2] ability to build the business in Hong Kong," Pl.'s Complaint at 42, by, inter alia, canceling his lease and his cellular phone, removing his signatory status on CFC's bank account, limiting his expenditures on client development, and allowing him to use only one recruiting firm. He maintains that Merkenich strategically pushed plaintiff out of the company, culminating in the constructive termination of his employment in July of 2000. In August of 2001, plaintiff commenced this action charging defendants with breach of contract, intentional interference with contractual relations, unjust enrichment and failure to pay wages pursuant to New York Labor Law Article § 190 et seq. He seeks financial compensation totaling the wages, bonuses, and benefits he claims he is entitled to under the contract had defendants not constructively discharged him. Page 3

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Defendants present a strikingly different version of the events motivating this lawsuit. They claim that Dagen fraudulently induced CFC into hiring him by misrepresenting his qualifications for the position, utterly failed to perform the job responsibilities contemplated by the contract, collected company funds for personal expenditures, [*3] stole a company check and overpaid himself for a full month's wages when he worked for only two weeks, and walked off the job nearly a year before having satisfied his two-year contractual obligation. Accordingly, defendants counterclaimed for breach of contract, fraudulent inducement to contract, negligent misrepresentation, conversion, and breach of fiduciary duty. The case was tried before a jury from November 10th through November 19th, 2003. The evidence offered by Dagen to substantiate his claims included his own testimony, the testimony of Steven Domney of CFC Securities, and a wide range of exhibits. Although the court permitted Dagen to play audio tapes to the jury, the contents of which were conversations between Dagen and Merkenich which Dagen recorded by wearing a concealed wire, the court barred Dagen from publishing uncertified transcripts Dagen created of the tape's conversations because doing so was inconsistent with the Best Evidence Rule, Fed. R. Evid. 1002. See Order, November 13, 2003. Further, while the court barred both parties from publishing exhibits to the jurors during the presentation of testimony, the court allowed [*4] them to publish exhibits during summation and further instructed the jurors that they were free to request and inspect all matters admitted into evidence during deliberations. Before the case went to the jury, plaintiff made a motion for a directed verdict on defendants' counterclaims. The court reserved decision on the motion. See Transcript at 9, lines 9-12 (Nov. 19, 2003). After an hour and a half of deliberating, the jury rendered a verdict for plaintiff on defendants' counterclaims and for defendants on plaintiff's claims. More specifically, the jury found that Dagen did not prove that 1) defendants constructively discharged him, 2) defendants breached the employment contract, 3) Merkenich and CFC Asia interfered with the contractual relationship between Dagen and CFC Group and CFC Securities, or 4) he sustained damages as a result of defendants' conduct. They also found that defendants did not prove that 1) Dagen breached the employment

agreement or his fiduciary duties by walking off the job before he had fulfilled the contract's term or 2) Dagen breached the contract, unjustly enriched himself, or acted fraudulently or negligently by failing to close any sales, abusing [*5] the expense reimbursement policy, or cashing a company check. On December 18, 2003, plaintiff moved the court to set aside the verdict, Fed. R. Civ. P. 50(b)(1)(C), grant a new trial, Fed. R. Civ. P. 59(e), or grant relief from judgment, Fed. R. Civ. P. 60(b)(6), on the grounds that the court erred in limiting the publication of exhibits to closing arguments, the court erred in disallowing plaintiff the opportunity to publish his self-made transcripts of the tape-recorded conversations to the jury, defendants did not offer any witnesses, Merkenich made an admission in one of the tape-recorded conversations, and the jury's verdict was internally inconsistent. STANDARD OF REVIEW FOR JUDGMENT AS A MATTER OF LAW, NEW TRIAL, OR RELIEF FROM JUDGMENT A. Judgment As a Matter of Law [HN1] Fed. R. Civ. P. 50(b)(1)(C) permits a court to enter judgment as a matter of law where a party renews its motion after a trial. Procedurally and technically, a motion under Rule 50(b) is a motion for a directed verdict which may not be granted on any [*6] ground not specifically raised in an earlier motion at the close of all the evidence. Doctor's Assocs., Inc. v. Weible, 92 F.3d 108, 112 (2d Cir. 1996). [HN2] Motions for judgment as a matter of law must be considered against the backdrop of the Seventh Amendment's command that "no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law." U.S. Const. amend. VII. Olin Corp. v. Insurance Co. of North America, 221 F.3d 307, 320 (2d Cir. 2000). Because fact issues are within the jury's province, the court "must give deference to all credibility determinations made by the jury and to all reasonable inferences from the evidence the jury might have drawn in favor of the nonmoving party." Vasbinder v. Ambach, 926 F.2d 1333, 1339 (2d Cir. 1991). In short, the court cannot "substitute its judgment for that of the jury." LeBlanc-Sternberg v. Fletcher, 67 F.3d 412, 429 (2d Cir. 1995) (citations omitted). Accordingly, a court may not Page 4

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award judgment as a matter of law unless 1) there is such a complete absence of evidence supporting the verdict that the jury's [*7] findings could only have been the result of sheer surmise or conjecture, or 2) there is such an overwhelming amount of evidence in favor of the nonmovant that reasonable and fair minded persons could not arrive at a verdict against it. Galdieri-Amrbrosini v. Nat'1 Realty & Dev. Corp., 136 F.3d 276, 289 (2d Cir. 1998) (quoting Cruz v. Local Union No. 3 of the IBEW, 34 F.3d 1148, 1154 (2d Cir. 1994) (internal quotation marks omitted). "Weakness in the evidence does not justify judgement as a matter of law; as with summary judgment, the evidence must be such that 'a reasonable juror would have been compelled to accept the view of the moving party." This is Me, Inc., v. Taylor, 157 F.3d 139, 142 (2d Cir. 1998) (quoting Piesco v. Koch, 12 F.3d 332, 341, 343 (2d Cir. 1993)). These standards illustrate that "[a] party seeking to overturn a verdict based on the sufficiency of the evidence bears a very heavy burden." Norton v. Sam's Club, 145 F.3d 114, 118 (2d Cir. 1998). See also Barbara Lavin-McEleney, 239 F.3d 476, 479 (2d Cir. 2001) (the moving party faces a "high [*8] bar."). B. New Trial [HN3] A motion for a judgment as a matter of law under Rule 50(b) may be joined, as here, with a motion for a new trial after an earlier trial by jury under Fed. R. Civ. P. 59(e). The decision to grant a new trial under the Rule is "committed to the sound discretion of the trial judge." Metromedia Co. v. Fugazy, 983 F.2d 350, 363 (2d Cir. 1992), cert denied, 508 U.S. 952, 113 S. Ct. 2445, 124 L. Ed. 2d 662 (1993). The trial judge's discretion, however, is limited to extraordinary circumstances where, based on the weight of the evidence, the jury's verdict is seriously erroneous or a miscarriage of justice. United States v. Locascio, 6 F.3d 924, 949 (2d Cir. 1993); Piesco v. Koch, 12 F.3d at 344; Purnell v. Lord, 952 F.2d 679, 686 (2d Cir. 1992). C. Relief from, Judgment [HN4] Fed. R. Civ. P. 60(b)(6) provides that a court may relieve a party from a final judgment, order, or proceeding for any reason justifying relief from the operation of the judgment. The Rule was designed to strike a balance [*9] between the interest of fairness and finality of judgments. Williams v. N.Y. City Dep't of Corrections, 219 F.R.D. 78, 84 (S.D.N.Y. 2003) (citations omitted). Rule 60 motions are addressed to the

sound discretion of the trial court. Mendell In Behalf of Viacom, Inc. v. Gollust, 909 F.2d 724, 731 (2d Cir. 1990). However, in light of the fact that courts should not lightly reopen final judgments, Rule 60(b) motions are extraordinary relief that can be granted only upon a showing of exceptional circumstances, Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986). By definition, such circumstances are rare. Velez v. Vassallo, 203 F. Supp.2d 312, 333 (S.D.N.Y. 2002). DISCUSSION The court begins its analysis by noting that while Dagen made a motion at the close of all the evidence for a directed verdict on defendants' counterclaims, he did not make a parallel motion for directed verdict on his claims. Because [HN5] Fed. R. Civ. P. 50(b) proscribes a court from entering judgment as a matter of law on any ground not specifically raised in an earlier motion for a directed verdict at [*10] the close of all the evidence, Doctor's Assocs. Inc., 92 F.3d at 112, Dagen is not entitled to judgment as a matter of law on his claims for breach of contract, constructive discharge, and damages. Nevertheless, the court addresses each of plaintiff's arguments as to why he is entitled to either judgment as a matter of law or a new trial in turn, concluding that his arguments are insufficient to warrant the court in awarding him relief under either Rule 50(b) or Rule 59(e). Dagen's first argument is that the court erred in prohibiting both parties from publishing exhibits to the jury until closing arguments and barred plaintiff from publishing uncertified transcripts of the tapes he created. [HN6] District courts have wide latitude to determine whether evidence is admissible and in controlling the mode and order of its presentation to promote the effective ascertainment of the truth, Fed. R. Evid. 611(a). Manley v. AmBase Corp., 337 F.3d 237, 247 (2d Cir. 2003) (quoting Meloff v. New York Life Ins. Co., 240 F.3d 138, 148 (2d Cir. 2001) (citations omitted). [HN7] Before a transcript can be introduced to aid jurors in following [*11] a recorded conversation, the original recording and transcript must be properly authenticated. Breezy Point Co-op., Inc. v. Cigna Property and Cas. Co., 868 F. Supp. 33 (E.D.N.Y. 1993). Thus, the court's refusal to allow the publication of exhibits during testimony and exclusion of uncertified transcripts is a far cry from the kind of extraordinary circumstances necessary to warrant judgment as a matter of law or a Page 5

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new trial. Dagen also seeks judgment as a matter of law, a new trial, or relief from judgment on the grounds that defendants did not present any testimony and the jurors allegedly heard defendant Merkenich make a statement to the effect that defendants had a continuing obligation to pay plaintiff. In effect, Dagen seeks relief on the grounds that the verdict is contrary to the evidence presented. During the trial, the jury heard evidence that Dagen spent ample business time locating his personal apartment; Merkenich encouraged plaintiff to improve his work performance and earn money for CFC the day before Dagen claims he was constructively discharged; Dagen did not close any sales during the tenure of his employ; he stole a company check and overpaid himself [*12] in July of 2000; the contract did not provide for CFC to secure Dagen's residential lease, pay for his cell phone, or maintain his licenses, all of which Dagen cites as evidence that defendants constructively discharged him; Dagen included personal items in expenses he submitted to CFC for reimbursement; and the employment contract in question does not entitle Dagen to many of the items he claims as damages, including, for example, an equity stake in CFC Securities Asia or reimbursement for unused vacation time. Judged in light of this evidence, it was not sheer conjecture for the jury to conclude that plaintiff was neither constructively discharged or entitled to damages. Also, the evidence presented was not so overwhelmingly in favor of Dagen that a reasonable and fair minded jury could not have reached a verdict against him. Because there was a legally sufficient basis for the jury's verdict, the court declines to set aside its verdict by entering judgment as a matter of law. Similarly, because the jury's conclusion was not seriously erroneous or a miscarriage of justice, the court declines to grant a new trial. Finally, Dagen seeks relief on the grounds that the jury's verdict [*13] was internally inconsistent. He argues that because the jury did not find that defendants proved that Dagen breached the contract or his fiduciary duties by walking off the job, then the jury should have found that Dagen was entitled to compensation as if he had worked for defendants for the full term of the contract. Plaintiff's argument is sheer sophistry. There is nothing inconsistent about the jury's conclusion. That defendants did not prove by a fair preponderance of the

credible evidence that plaintiff Dagen breached the contract or his fiduciary duties does not necessarily mean that Dagen proved that defendants constructively discharged him, breached the contract, or owe him damages. Even if, however, the court could detect a kernel of inconsistency in the jury verdict in question, plaintiff would not be entitled to judgment as a matter of law or a new trial on this basis. [HN8] "In certain circumstances, a court retains authority, even in a civil case, to allow an apparently inconsistent verdict to stand." City of Los Angeles v. Heller, 475 U.S. 796, 806, 106 S. Ct. 1571, 1576, 89 L. Ed. 2d 806 (Stevens, J. dissenting) citing United States v. Powell, 469 U.S. 57, 105 S. Ct. 471, 83 L. Ed. 2d 461 (1984) [*14] (reaffirming general rule that inconsistent verdicts can stand), Harris v. Rivera, 454 U.S. 339, 345, 102 S. Ct. 460, 464, 70 L. Ed. 2d 530 (1981) ("Inconsistency in verdict is not a sufficient reason for setting it aside"). When confronted with a potentially inconsistent jury verdict, the court must adopt a view of the case that resolves any seeming inconsistency. Turley v. Police Dep't, 167 F.3d 757, 760 (2d Cir. 1999). "Before a trial court may set aside a special verdict as inconsistent and remand the case for a new trial, it must make every attempt 'to reconcile the jury's finding, by exegesis if necessary.'" Id., citing Gallick v. Baltimore & Ohio R.R., 372 U.S. 108, 119, 83 S. Ct. 659, 9 L. Ed. 2d 618 (1963). "This role stems from the Seventh Amendment's obligation on courts not to recast factual findings of the jury and is based on the notion that juries are not bound by what seems inescapable logic to judges." Indu Craft, Inc. v. Bank of Baroda, 47 F.3d 490, 497 (2d Cir. 1995) (internal citations and quotations omitted). Moreover, the verdict sheet given to the jury in this case contained [*15] questions that were taken, almost verbatim, from plaintiff's and defendants' proposed jury charges. The court made very few changes to the questions the jurors were directed to answer, all of which were relatively minor and either requested or approved by the parties. Given the failure of plaintiff's to complain of a possible inconsistency before the jury was charged, plaintiff waived the argument. Laborde v. City of New York, 1999 U.S. Dist. LEXIS 642, 1999 WL 38253 at 7 (S.D.N.Y. Jan. 27, 1999) [HN9] ("An objection to inconsistent verdicts raised for the first time in a post-trial motion is untimely and procedurally barred"). See also Denny v. Ford Motor Co., 42 F.3d 106, 111 (2d Cir. Page 6

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1994); Lavoie v. Pacific Press & Shear Co., 975 F.2d 48, 54 (2d Cir. 1992). Finally, the above discussion illustrates that the court would be remiss in exercising its "grand reservoir of equitable power" under Rule 60(b)(6) by granting Dagen relief from judgment. Nothing about the trial or the jury's verdict suggests that the requisite "extraordinary circumstances" are present to justify the extraordinary relief sought here. CONCLUSION

Plaintiff's motion for judgment [*16] as a matter of law, a new trial, or relief from judgment is DENIED. SO ORDERED. Dated: April 12, 2004 CONSTANCE BAKER MOTLEY United States District Judge

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Analysis As of: Mar 05, 2007 MINERVA MARINE, INC., Plaintiff, v. JAMES SPILIOTES, individually, and WORLDWIDE MARINE SERVICES, INC., Defendants. JAMES SPILIOTES, individually, and WORLDWIDE MARINE SERVICES, INC., Third-Party Plaintiffs v. ANDREAS MARTINOS, individually, Third-Party Defendant. Civ. No. 02-2517 (WHW) UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

2006 U.S. Dist. LEXIS 13922 March 13, 2006, Decided March 13, 2006, Filed NOTICE: [*1] NOT FOR PUBLICATION PRIOR HISTORY: Minerva Marine, Inc. v. Spiliotes, 2006 U.S. Dist. LEXIS 13939 (D.N.J., Mar. 13, 2006) CORE TERMS: third-party, vessel, counterclaim, ship, summary judgment, cargo, captain, motion to strike, deposition testimony, mate, onboard, personal knowledge, deposition, port captain, port, independent contractor, stricken, terminal, invoice, inspection, tariff, sentence, weigh, surveyor, malicious use, self-serving, defamation, admissible, genuine issue, hearsay COUNSEL: For MINERVA MARINE, INC., Plaintiff, ANDREAS MARTINOS, individually, ThirdParty Defendant: PAMELA LYNN SCHULTZ, FREEHILL HOGAN & MAHAR LLP, JERSEY CITY, NJ US; MICHAEL FERNANDEZM FREEHILL, HOGAN & MAHAR, NEW YORK, NY. For JAMES SPILIOTES, individually, WORLDWIDE MARINE SERVICES, INC., Defendants: RONALD BETANCOURT, BETANCOURT, VAN HEMMEN & GRECO, RED BANK, NJ; TODD PATRICK KENYON, BETANCOURT, VAN HEMMEN, GRECO & KENYON, RED BANK, NJ. For JAMES SPILIOTES, WORLDWIDE MARINE SERVICES, INC., ThirdParty Plaintiffs, Counter Claimants: RONALD BETANCOURT, BETANCOURT, VAN HEMMEN & GRECO, RED BANK, NJ, JUDGES: William H. Walls, United States Senior District Judge. OPINION BY: William H. Walls OPINION: Walls, District Judge Plaintiff Minerva Marine, Inc. ("Plaintiff" or "Minerva") moves for partial summary judgment on Defendants/Third-Party Plaintiffs James Spiliotes ("Spiliotes") and Worldwide Marine Services, Inc.'s ("WWM") (together, "Defendants/Third-Party Plaintiffs") counterclaims for: violation of the New Jersey Conscientious Employee Protection Act ("CEPA"), N.J.S.A. 34:19-1, et seq., (first counterclaim); defamation (third counterclaim); tortious [*2] interference (fourth counterclaim); malicious use of process (fifth counterclaim); intentional infliction of emotional distress (sixth counterclaim); and negligent infliction of emotional distress (seventh counterclaim). Plaintiff and Defendants/Third-Party Plaintiffs have also filed several Page 1

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motions to strike in connection with the Plaintiff's motion for partial summary judgment. The motions are decided without oral argument pursuant to Fed.R.Civ.P. 78. FACTS AND PROCEDURAL BACKGROUND Some of the factual background in this matter has been set forth in this Court's April 5, 2005 Opinion, which granted in part and denied in part the Defendants/Third-Party Plaintiffs' motion for summary judgment on the Plaintiff's first claim for defamation, and granted the Defendants/Third-Party Plaintiffs' motion for summary judgment on the Plaintiff's second claim for injurious falsehood. Minerva Marine, Inc. v. Spiliotes, et al, 2005 U.S. Dist. LEXIS 41854, No. 02-2517, slip op. at 1 (D.N.J. April 4, 2005). For purposes of this motion, the Court will again present the circumstances of the case, incorporating those facts particularly relevant to the Plaintiff's present motion. Minerva is a Liberian corporation, [*3] operating with an office and place of business in Voula, Greece. Minerva is in the business of managing ships that transport materials and cargo to various ports. Andreas Martinos ("Martinos") is the managing director of Minerva. Before he formed Minerva, Marlins operated, along with his family, Thenamaris Ship Management, Inc. ("Thenamaris"), a Greek ship operating company. Captain James Spiliotes, a resident of Cliffside Park, New Jersey, is an officer and director of WWM, a New Jersey corporation with an office and place of business also located in Cliffside Park, New Jersey. WWM is a company formed by Spiliotes in 1985 for the purpose of providing surveying and other services to the marine industry. The corporation allows Spiliotes to offer his maritime skills in a shoreside capacity. From 1998 to 2001, WWM was frequently retained by Minerva to protect Minerva's vessels and owner's interests while Minerva's vessels were in port. WWM was primarily hired to attend to Minerva's ships while docked in ports in the northeastern United States. The precise nature of the employment relationship between Spiliotes, WWM and Minerva, however, is one of the primary facts in dispute in this [*4] case, particularly with respect to the CEPA counterclaim (first counterclaim). Spiliotes contends that he was a "port captain" or employee of Minerva, while Minerva contends that he was a "vessel agent" or independent contractor.

This action arises from events that took place on September 26, 2001, on board the Plaintiff's vessel, the M/T Minerva Julie ("the "Minerva Julie"). On that day, just a few weeks after the September 11 terrorist attacks on the World Trade Center, the Minerva Julie was docked at the IMTT terminal in Bayonne, New Jersey. Spiliotes, acting in the scope of his employment and on behalf of WWM, was a vessel agent for the Plaintiff while the Minerva Julie was docked in Bayonne. n1 The vessel was discharging its cargo of unleaded gasoline. While Spiliotes was onboard the vessel, he asked Chief Officer Kyriakos Tsingis when the discharge would be completed. The parties dispute the substance of Tsingis's answer. Plaintiff contends that Tsingis said that the discharge would be completed between 1955 and 2000 hours and that he could not increase the pressure on the lines because some of the cargo might leak causing an explosion or fire. Spiliotes claims that Tsingis [*5] said that the discharge would be completed in 2000 hours unless he puts a bomb on the ship and blows it up. n1 For purposes of this factual background, the Court has described Spiliotes as a "vessel agent" for Minerva, but this label bears no influence on this Court's determination of the actual relationship between Spiliotes and Minerva.

After Tsingis answered Spiliotes, there is some dispute over what happened next between Spiliotes and the Master of the vessel, Vasilios Kazepis. There is no dispute that after this, Spiliotes left the vessel and informed IMTT Port Security that Tsingis had threatened to blow up the ship. Port Security, in turn, informed the Federal Bureau of Investigations, the United States Coast Guard, and the Bayonne Police Department. Tsingis was arrested by the Bayonne Police, released later that night, and departed with the vessel. After Tsingis was arrested but before he returned to the vessel, the Master of the vessel fired Spiliotes. Minerva filed suit in the District of New Jersey [*6] against Spiliotes and WWM, alleging claims of defamation and injurious falsehood. The basis for these claims was a statement made by Spiliotes to IMTT Port Security, that Tsingis had threatened to blow up the vessel with a bomb, and six additional statements contained in a letter from Spiliotes to the Coast Guard, suggesting that Minerva was employing "individuals with Page 2

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terrorist affiliations or who are terrorist sympathizers," and that Minerva should be punished for employing such people. Minerva Marine, Inc. v. Spiliotes, et al, 2005 U.S. Dist. LEXIS 41854, No. 02-2517, slip op. at 3 (D.N.J. April 4, 2005). On August 2, 2002, Defendants/Third-Party Plaintiffs filed their answer to the complaint, including counterclaims against Minerva and a third-party complaint against Martinos. After Minerva filed its complaint against Spiliotes and WWM, Spiliotes and/or their agents proceeded to forward copies of the complaint to the International Shipping Gazette TradeWinds (" TradeWinds"). On August 16, 2002, TradeWinds published an article titled "US agent sues Martinos over bomb threat." The article states that Martinos was being sued by Spiliotes for $ 110 million, after Spiliotes had been fired for [*7] reporting a Minerva crew member's alleged anti-American threats. According to the article, Minerva said that Spiliotes's "account of what happened was fabricated." The article also states that, according to Minerva, Spiliotes came on board the Minerva Julie and started verbally abusing Tsingis and insisted that he speed up the discharge process. The article adds that when Tsingis refused to speed up the discharge process, Spiliotes maliciously filed a false report to terminal security. On October 18, 2002, TradeWinds published a second article titled "Minerva denies it is a Martinos company." The article stated, inter alia, that Spiliotes lied about the Chief Mate's comments. Spiliotes alleges that Minerva and/or Martinos have engaged in conduct that has caused him harm. Primarily, Spiliotes alleges that Minerva retaliated against him by firing him for reporting threatening statements to IMTT Port Security. Additionally, Spiliotes alleges that Minerva has contacted other ship owners and instructed them not to hire him; threatened him with legal action to prevent him from cooperating in the criminal case against Tsingis; filed a baseless lawsuit against him; and defamed him [*8] in TradeWinds. According to Spiliotes, Minerva's conduct has had a severe negative effect on his emotional state and life, causing him to suffer from anxiety and depression, for which he has had to seek psychological treatment. These allegations are disputed by Minerva. Spiliotes claims that since 2001, his work as a vessel's agent has significantly declined. Before September of 2001, he received seven jobs from UK P&I

Club, but has only received one job since. He adds that he received one or two jobs a year from Ranger Marine before 2001, but has only received one job from them since September of 2001. On August 7, 2003, Spiliotes and WWM filed a second amended answer with counterclaims against Minerva, and a third-party claim against Martinos. n2 The counterclaims against Minerva were for violation of the New Jersey Conscientious Employee Protection Act (first counterclaim); defamation (second counterclaim); defamation (third counterclaim); interference with perspective economic advantage (fourth counterclaim); malicious use of process (fifth counterclaim); intentional infliction of emotional distress (sixth counterclaim); negligent infliction of emotional distress (seventh [*9] counterclaim); breach of contract (eighth counterclaim); unjust enrichment (ninth counterclaim); quantum meruit (tenth counterclaim); and an alter ego claim against Martinos (eleventh counterclaim). n3 Plaintiff now moves for partial summary judgment on the first, third, fourth, fifth, sixth and seventh counterclaims, on the grounds that there are no genuine issues of material fact. Both parties have submitted motions to strike testimony in connection with the motion for summary judgment. n2 A first amended answer with counterclaims and a third-party claim was filed on July 22, 2003. n3 The second counterclaim was withdrawn with prejudice by the Defendants/Third-Party Plaintiffs on June 18, 2004.

SUMMARY JUDGMENT STANDARD Summary judgment will be granted if the record establishes that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). A factual dispute is genuine only "if the evidence is such that [*10] a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A factual dispute is material if, under the substantive law, it would affect the outcome of the suit. Id. at 248. The burden of establishing the nonexistence of a "genuine issue" is on the party moving for summary Page 3

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judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). The moving party may satisfy this burden by either (1) submitting affirmative evidence that negates an essential element of the nonmoving party's claim; or (2) demonstrating to the Court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's case. Id. Once the moving party has met this burden, the burden then shifts to the opposition to "set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(c). To do so, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). [*11] The non-moving party must prove beyond a "mere scintilla" of evidence that a genuine issue of material fact exists. Big Apple BMW v. BMW of N. Am., 974 F.2d 1358, 1363 (3d Cir.1992). Moreover, "a party cannot rely upon self-serving conclusions, unsupported by specific facts in the record." LaResca v. AT&T, 161 F. Supp. 2d 323, 327 (D.N.J.2001) (citing Celotex Corp., 477 U.S. at 322-23). Nor may a party simply "replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S. Ct. 3177, 111 L. Ed. 2d 695 (1990) (citing Anderson, 477 U.S. at 249). Rather, to survive summary judgment, the nonmoving party must "make a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial." Serbin v. Bora Corp., 96 F.3d 66, 69 n. 2 (quoting Celotex, 477 U.S. at 322). "If the non-movant's evidence on any essential element of the claims asserted is merely 'colorable' or is 'not significantly probative, [*12] ' the court must enter summary judgment in favor of the moving party." Heffron v. Adamar of New Jersey, Inc., 270 F. Supp. 2d 562, 569 (D.N.J. 2003) (citing Anderson, 477 U.S. at 249-50.). The evidence need not be in a form that would be admissible at trial. Celotex, 477 U.S. at 324. But Fed.R.Civ.P. 56(e) provides that affidavits opposing summary judgment motions must "be made on personal knowledge," and hearsay within such affidavits or testimony may be considered, but only where the hearsay

declarant can be produced at trial to offer his or her statements in admissible form. E.g., Rossi v. Standard Roofing, Inc., 156 F.3d 452, 470 n. 13 (3d Cir. 1998); Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., Inc., 998 F.2d 1224, 1235 n. 9 (3d Cir. 1993). At the summary judgment stage, the court's function is not to weigh the evidence and determine the truth of the matter, but rather to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly [*13] supported motion for summary judgment. Id. at 247-48. In determining whether there exists a material issue of disputed fact, however, the facts and the inferences to he drawn from the facts are to be viewed in the light most favorable to the nonmoving party. Curley v. Klem, 298 F.3d 271, 277 (3d Cir. 2002). DISCUSSION Before turning to the Plaintiff's motion for partial summary judgment, this Court must address the various motions to strike that have been filed by both parties. I. Motions to Strike Defendants/Third-Party Plaintiffs have moved to strike the depositions of Elias Katsaros and Andreas Spiridonakos, and the affidavit of Michael Fernandez concerning the Declaration of James Baker (the "Baker Declaration") from the Plaintiff's papers in support of its motion for summary judgment. Plaintiff has moved to strike the Baker Declaration and various sections of the "Declaration of James Spiliotes in Opposition to Plaintiff's Motion for Partial Summary Judgment" (the "Spiliotes Declaration"). A. Defendants/Third-Party Plaintiffs' Motion to Strike Plaintiffs Deposition of Elias Katsaros Defendants/Third-Party Plaintiffs [*14] move to strike the deposition testimony of Captain Elias Katsaros ("Katsaros"), submitted by the Plaintiff in support of its motion for summary judgment, on the grounds that Katsaros was never designated an expert witness under Rules 702, 703 and 705 of the Federal Rules of Evidence. According to Defendants/Third-Party Plaintiffs, the Plaintiff did not file an expert report for Katsaros by the November 3, 2003 deadline for submission of expert reports, as set by Magistrate Judge Wigenton. Page 4

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Defendants/Third-Party Plaintiffs argue that Katsaros is clearly being used as an expert witness within the meaning of Fed.R.Evid. 702, not as a lay witness. Specifically, they argue that Katsaros never had any knowledge of the relationship between Spiliotes and Minerva, nor did he possess knowledge of the events onboard the Minerva Julie during the September 24 through 26, 2001 time period. Rather, they argue that Katsaros is being used to provide expert testimony on the general role of a protective agent for a vessel owner. They note that his testimony covers the following: Katsaros's qualifications and work history; the formation of his company, Maritime Endeavors; the definition of a protective [*15] agent; the services provided by such agents; the services provided by Maritime Endeavors as protective agent; the forms and lists Maritime Endeavors provides to owners; what is meant by the phrase "smooth and quick turn around" of the vessel; when Marine Endeavors stays onboard vessels; and special discounts Maritime Endeavors provides owners. (Plaintiff's Supplemental Local Rule 56.1 Statement of Undisputed Material Facts ("Supplemental SUMF") at PP170-84). Plaintiff, on the other hand, argues that Katsaros's deposition testimony is that of a lay witness. According to Plaintiff, one of the issues in this case is the role that Spiliotes performed for Minerva. Plaintiff contends that Spiliotes was a typical vessel agent, while Defendant/Third-Party Plaintiff argues that Spiliotes was a port captain. Plaintiff intends to use the deposition testimony of Katsaros, based on his own personal knowledge and experience, to show that the services Spiliotes provided to Minerva were merely those of a vessel agent, not of a port captain. Plaintiff notes that Katsaros has not been provided any facts, data or anything else upon which to render an opinion, and readily acknowledges that Katsaros [*16] had no knowledge of the events that took place on board the Minerva Julie in September of 2001. Rather, Katsaros is testifying as to his own personal knowledge concerning the role of a vessel agent. Plaintiff argues that Katsaros's testimony is critical because it establishes that all of the functions provided by WWM to Minerva (which Spiliotes relies upon in arguing that he was a port captain or otherwise an integral part of Minerva) are commonplace for an owner's protective agent. In other words, Plaintiff wants to use Katsaros's testimony to show that there is nothing special and integral about the services WWM provided to Minerva

that would have given rise to an employment relationship. Having reviewed the testimony of Katsaros, this Court concludes that Katsaros is being used to testify as an expert in contravention of the requirements of Fed.R.Evid. 701. Rule 701 of the Federal Rules of Evidence contains the requirements for lay witness opinion testimony, and provides: If the witness is not testifying as an expert, the witness' testimony in the form of opinions or inferences is limited to those opinions or inferences which are (a) rationally based on the perception [*17] of the witness, and (b) helpful to a clear understanding of the witness' testimony or the determination of a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702. Fed.R.Evid. 701. The rule was amended in 2000 to include subsection (c), which states that lay opinions may "not [be] based on scientific, technical or other specialized knowledge within the scope of Rule 702." Fed.R.Evid. 701. The question here is whether Katsaros's testimony falls under Fed.R.Evid. 701(c)'s definition of "specialized knowledge," which would require this court to exclude his testimony on the grounds that it is expert testimony. Since 2000, relatively few cases have construed the scope of subsection (c). One of the cases addressing this matter that has been cited by the Plaintiff is Tampa Bay Shipbuilding & Repair Co. v. Cedar Shipping Co., Ltd., 320 F.3d 1213 (11th Cir. 2003). That case involved a contract dispute over the amount due to a ship repair company for repairs that it made to a ship. At issue was whether the District Court properly permitted ship repairer's employees to testify as lay witnesses. [*18] The employees testified that the charges were fair and reasonable and in line with similar services provided by similar operations. Following an extensive review of the 2000 amendment to Fed.R.Evid. 701 and the accompanying advisory committee notes, the Circuit concluded that the testimony was permissible, as it was of a type traditionally and properly considered lay witness testimony, and was not based on specialized knowledge subject to Fed.R.Evid. 702. 320 F.3d at 1223. Page 5

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In permitting the evidence, the Circuit placed particular emphasis on the advisory committee's note to Rule 701, concerning testimony of business owners and officers. The relevant portion of the Committee notes reads:

testimony. Because Katsaros has not been properly admitted as an expert witness, the motion to strike his testimony is granted. B. Defendants/Third-Party Plaintiffs' Motion to Strike Plaintiff's Deposition of Andreas Spiridonakos Defendants/Third-Party Plaintiffs have also moved to strike the deposition of Andreas Spiridonakos ("Spiridonakos") on the grounds that Plaintiff has failed to submit an expert disclosure report for this witness, in violation of Fed.R.Civ.P. 26. Defendants/Third-Party Plaintiffs contend that Spiridonakos had no knowledge of Spiliotes's relationship with Thenamaris or with Minerva, yet Plaintiff intends to use Spiridonakos's deposition testimony as expert testimony that covers: his work history and qualifications; the general role and duties of port captains; the general role of vessel and charterer's agent; the role of an owner's representative; the employment status of [*21] such representatives; special payment arrangements; the reporting requirements of an agent or representative; and the role of a representative with respect to cargo discharge. (Supplemental SUMF at PP157-163). Plaintiff argues that Spiridonakos's deposition testimony is being used to rebut Spiliotes's argument that he was forced to create WWM by Thenamaris, and that WWM was basically a shell corporation for Thenamaris and Minerva. According to Plaintiff, Spiridonakos trained Spiliotes as a surveyor and employed him, and has knowledge of the formation of WWM. Spiridonakos has testified that he had various conversations with Spiliotes concerning the formation of WWM, and what type of work Spiliotes was performing, but at no point did Spiliotes ever tell Spiridonakos that he was a port captain for Thenamaris or that Spiliotes formed a shell company for Thenamaris. (Supplemental SUMF at PP166-67). Having reviewed the testimony of Spiridonakos, the Court concludes that while the majority of his testimony objected to by Defendants/Third-Party Plaintiffs conforms with the requirements of lay opinion testimony under Fed.R.Evid. 701, some of his testimony more appropriately qualifies [*22] as expert testimony under Fed.R.Evid. 702. For example, in paragraph 163 of the Plaintiff's Supplemental Local Rule 56.1 Statement, Spiridonakos was asked a hypothetical question during his deposition, concerning what obligations an owner's representative has to the managers or owners of a ship if a vessel's chief officer is removed from a ship. Page 6

most courts have permitted the owner or officer of a business to testify to the value or projected profits of the business, without the necessity of qualifying the witness as an accountant, appraiser, or similar expert. See, e.g., Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir. 1993) (no abuse of discretion in permitting the plaintiffs owner to give lay opinion testimony as to damages, as it was based on his knowledge and participation in the day-to-day [*19] affairs of the business). Such opinion testimony is admitted not because of experience, training or specialized knowledge within the realm of an expert, but because of the particularized knowledge that the witness has by virtue of his or her position in the business. The amendment does not purport to change this analysis.. Fed.R.Evid. 701 advisory committee's note (emphasis added). The Circuit read this comment to mean that opinion testimony by business owners and officers is one of the prototypical areas intended to remain undisturbed. There is an important distinction to be drawn between Tampa Bay and this case, however. In Tampa Bay, the issue was whether the Court could permit the testimony of witnesses who were all involved in the process of determining the final invoice price for the ship repairs. After offering their testimony as to how the charges were determined, each witness was asked whether the charges were fair and reasonable in the context of the ship industry. Tampa Bay, 320 F.3d at 1217-21. The Circuit found this testimony permissible because the testimony was of a type traditionally considered permissible lay witness testimony, [*20] not based on specialized knowledge subject to Rule 702. Unlike the employees in Tampa Bay, Katsaros has not perceived firsthand any of the events that are involved in this case. As a result, Katsaros is merely offering specialized knowledge that is within the scope of expert

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(Spiridonakos Dep. at 192:6-9). Spiridonakos responded that the owner's representative has an obligation to inform the owner immediately. (Spiridonakos Dep. at 192:10-14). Spiridonakos also responded to a question about whether an owner's representative had any right to interfere in a vessel's discharge. (Spiridonakos Dep. at 192:15 - 193:19). These questions and answers concerned hypothetical facts, not facts gleaned from Spiridonakos's personal perception. But a lay witness may not answer hypothetical questions. See Teen-Ed, Inc. v. Kimball International, Inc., 620 F.2d 399, 404 (3d Cir. 1980) (essential difference between lay testimony and expert testimony is that expert may answer hypothetical questions); 4 Jack B. Weinstein & Margaret A. Berger, Weinstein's Federal Evidence § 701.03[4][a], at 701-21 to 701-22 (2d [*23] ed. 2004) ("Lay witnesses are limited to testifying to opinions gleaned from factual information that they personally perceived."). As Defendants/Third-Party Plaintiffs have noted, Spiridonakos has not been admitted to testify as an expert in this case. For this reason, the Court will disregard Spiridonakos's statements referenced in paragraph 103 of the Plaintiff's Supplemental Local Rule 56.1 Statement, as well as any other statements that qualify as expert testimony under Fed.R.Evid. 702, but will permit statements that conform to the requirements of lay witness testimony under Fed.R.Evid. 701. Defendants/Third-Party Plaintiffs motion to strike the testimony of Spiridonakos is granted in part, and denied in part. C. Plaintiff's Motion to Strike Defendants/Third-Party Plaintiffs' Declaration of James Baker; Defendants/Third-Party Plaintiffs' Motion to Strike the Fernandez Affidavit Concerning James Baker Defendants/Third-Party Plaintiffs have submitted the Baker Declaration in opposition to the Plaintiff's motion for summary judgment. James Baker was a claims adjuster for UK P&I Club from 1980 to 1994, and claims to have knowledge of Spiliotes's relationship with Thenamaris, [*24] the shipping company owned by the Martinos family before the formation of Minerva. The Baker Declaration supports the Defendants/Third-Party Plaintiffs' claim that Spiliotes was an employee of Minerva - an issue that is in dispute. Plaintiff moves to strike Defendants/Third-Party

Plaintiffs' Baker Declaration on the grounds that it fails to comply with Fed.R.Civ.P. 56(c)'s requirements for affidavits submitted in opposition to a motion for summary judgment. Fed.R.Civ.P. 56(e) provides that when affidavits are used to support or oppose a summary-judgment motion, they "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters staled therein." Fed.R.Civ.P. 56(e). "These rules are mandatory." 10B Wright & Miller, Federal Practice & Procedure § 2738 at 328 (2005). In support of its motion to strike the Baker Declaration, Plaintiff has submitted an affidavit of their attorney, Michael Fernandez (the "Fernandez Affidavit"). Paragraphs 5 through 7 of the Fernandez Affidavit recount Fernandez's version of a telephone conversation he allegedly had with Baker [*25] on June 14, 2004, and paragraphs 10 through 12 of the declaration recount a telephone conversation he allegedly had with Baker on July 19, 2005. Plaintiff wishes to use the statements made by Baker during these telephone conversations to support its argument that the Baker Declaration is not based on personal knowledge. Defendants/Third-Party Plaintiffs contest the Fernandez Affidavit and have moved to strike it from the record on the grounds that the statements constitute hearsay, in violation of the requirement of Rule 56(c) that supporting affidavits "set forth facts as would be admissible in evidence." Fed.R.Civ.P. 56(e). The Court finds, however, that the statements are admissible as statements against interest. Fed.R.Evid. 804(b)(3). Returning to the Baker Declaration, Plaintiff argues that it should be stricken because Baker lacks personal knowledge of Spiliotes's relationship with Thenamaris. In paragraph 4 of the Baker Declaration, Baker avers, I was aware that [Spiliotes] was primarily working for Thenamaris, a Greek shipowner, with whom I understood he had a special working relationship. Based on my conversations with Spiliotes during those years, I believed [*26] that James Spiliotes was Thenamaris' local port captain for their tankers calling on the North East Coast of the United States.

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(Baker Declaration at P4). The first sentence violates the personal knowledge requirement of Fed.R.Civ.P. 56(c), as Baker merely states that he was "aware" that Spiliotes worked for Thenamaris. See Steelman v. Carper, 124 F.Supp.2d 219, 228 n.25 (D.Del. 2000) (court could not accept affiant's statement that was based on his "personal awareness" rather than upon personal knowledge). Baker fails to provide any basis for his knowledge that Spiliotes worked for Thenamaris or that they had a special working relationship, other than what he had heard directly from Spiliotes. See Visser v. Packer En'g Assoc., 924 F.2d 655, 659 (7th Cir. 1991) (inferences and opinions must be grounded in observation or other first-hand personal experience). The second sentence also fails to satisfy the personal knowledge requirement of Fed.R.Civ.P. 56(e), as Baker's use of the word "believed" underscores his lack of personal knowledge concerning Spiliotes's relationship with Thenamaris. See Hlinka v. Bethlehem Steel Corp., 863 F.2d 279, 282 (3d Cir. 1988) [*27] (use of the word "believe" insufficient to aver personal knowledge); 10B Wright & Miller, Federal Practice & Procedure § 2738 at 350 (2005). Because these statements fail the personal knowledge requirements of Fed.R.Civ.P. 56(e), they must be stricken from the record. The remaining three paragraphs of the Declaration are irrelevant. Plaintiff's motion to strike the Baker Declaration is granted. D. Plaintiff's Motion to Strike Portions of Defendants/Third-Party Plaintiffs' Declaration of James Spiliotes The Spiliotes Declaration contains 73 paragraphs, some of which are quite lengthy. Plaintiff has moved to dismiss 42 of the 73 paragraphs contained in the Spiliotes Declaration, and has offered three potential reasons as to why each paragraph should be dismissed. n4 First, Plaintiff claims the paragraphs violate the requirements of Fed.R.Civ.P. 56(e), that affidavits must be based on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall affirmatively show that the affiant is competent to testify. Second, Plaintiff argues that the statements constitute self-serving conclusions "unsupported by specific facts in the record." Heffron, 270 F.Supp.2d at 574-75 [*28] ("in order to defeat a properly supported motion for summary judgment, a plaintiff cannot simply rely on "vague", "self serving" statements which are unsupported by specific facts in the record.") (citations omitted). Third, Plaintiff

argues that the statements are barred by the "sham affidavit" doctrine, in that Spiliotes's Declaration statements contradict his earlier deposition testimony. See Baer v. Chase, 392 F.3d 609, 625-26 (3d Cir. 2004) (trial court will disregard an affidavit submitted in opposition to a motion for summary judgment when the affidavit contradicts the affiant's earlier testimony, unless there is a good faith basis for the contradiction). n4 Defendants/Third-Party Plaintiffs have mistakenly repeated numbers 32 through 37 in the Spiliotes Declaration. While the last numbered paragraph is 68, there are in fact 73 paragraphs. Defendants/Third-Party Plaintiffs have submitted an Amended Spiliotes Declaration to correct this error.

A careful review of the Spiliotes Declaration [*29] shows that it is also replete with inappropriate factual assertions and legal conclusions, in violation of Local Civil Rule 7.2(a). That rule provides in pertinent part: "Affidavits shall be restricted to statements of facts within the personal knowledge of the affiant. Argument of the facts and the law shall not be contained in affidavits." L.Civ.R. 7.2(a). "Such argumentative and speculative statements are limited to briefs, and should not be included in sworn submissions to this Court." Resolution Trust Co. v. Fidelity & Deposit Co., 1998 U.S. Dist. LEXIS 3431, at *4 (D.N.J. Jan. 27, 1998). This Court will not consider any argumentative or speculative portions of Captain Spiliotes's Declaration, nor will it consider any portions that violate the requirements of Fed.R.Civ.P. 56(e). Because the Spiliotes Declaration contains 73 paragraphs that cover a broad range of subjects, the Court will neither attempt to summarize the declaration, nor engage at this point in a lengthy analysis to determine which paragraphs should and which should not be stricken from the declaration. To give some context to Spiliotes's Declaration statements, the Court will consider the motion [*30] to strike Spiliotes's statements, as the need arises, during the summary judgment analysis. II. Plaintiff's Motion for Partial Summary Judgment A. First Counterclaim: Violation of CEPA Defendants/Third-Party Plaintiffs have alleged in Page 8

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their rust counterclaim that Minerva violated CEPA, N.J.S.A. 34:19-1, et seq., by firing Spiliotes in retaliation for: disclosing the Chief Mate's threatening statements and behavior; cooperating with law enforcement authorities in their investigation into the Chief Mate's threatening statements and behavior; and complying with the official legal notices sent to Spiliotes by the Bayonne City Municipal Court. (Second Amended Answer with Counterclaim and Third-Party Claims ("Answer with Counterclaims") at P90). Plaintiff now moves for summary judgment on the first counterclaim. 1. Legal Standard CEPA was "enacted in 1986 to encourage employees to notify authorities of any and all illegal or unethical work-place activities conducted by an employer." DaBronzo v. Roche Vitamins, Inc., 232 F.Supp.2d 306, 310 (D.N.J. 2002). N.J.S.A. 34:19-3 provides:

customer, employee, former employee, retiree or pensioner of the employer or any governmental entity; b. Provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into [*32] any violation of law, or a rule or regulation promulgated pursuant to law by the employer, or another employer, with whom there is a business relationship, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity, or, in the case of an employee who is a licensed or certified health care professional, provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into the quality of patient care; or c. Objects to, or refuses to participate in any activity, policy or practice which the employee reasonably believes: (1) is in violation of a law, or a rule or regulation promulgated pursuant to law, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity, or, if the employee is a licensed or certified health care professional, constitutes improper quality of patient care; (2) is fraudulent or criminal, including [*33] any activity, policy or practice of deception or misrepresentation which the employee reasonably believes may defraud any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity; or (3) is incompatible with a clear mandate of Page 9

An employer shall n