Court Rejects Defendant’s Reliance on “After-Acquired Evidence” Doctrine

In Hefti v. Brand Union, Inc. (a wrongful termination lawsuit), decided July 2, 2014, the New York Supreme Court denied defendant’s motion to dismiss plaintiff’s complaint for failure to state a claim.

Plaintiff alleged that she was subjected to discrimination based on her disability (clinical depression and bipolar disorder), including by forcing her to disclosing personal medical information about her illness and firing her. Here’s her complaint.

The defendant filed a motion in limine entitled “Motion to Limit Damages”, arguing

that even assuming TBU is liable to plaintiff, plaintiff’s damages must be limited under the “after-acquired evidence” doctrine to those damages allegedly suffered between her termination on November 15, 2013, and TBU’s discovery on February 26, 2014, of her disloyal and wrongful conduct which took place during her employment.

The court denied defendant’s motion, finding that it was, in effect, a summary judgment motion in disguise. It reasoned:

Here, TBU’s motion, though dressed up as a motion in limine, is really one for partial summary judgment on the issue of damages. For one, the motion is explicitly entitled as a motion “to limit damages.” The initial moving papers make clear that the purpose of the motion, as counsel states, is to limit damages to the period between plaintiff’s termination on November 15, 2013 and February 26, 2014, if plaintiff is ultimately able to establish that TBU was liable to her. TBU’s initial submission seeks merely a ruling that the damages are limited to the aforementioned period. Moreover, all of TBU’s cited cases in the moving papers concern motions to dismiss or motions for summary judgment.

Further, TBU’s attempt, in reply, to modify its request to limit “the use of evidence” likewise fails. While TBU asserts that it does not seek a ruling on the merits of plaintiff’s claim or TBU’s counterclaims, its motion is based on lengthy factual submissions which purport to demonstrate additional reasons which would have legitimized plaintiff’s termination had they been known to TBU during her employment.

TBU’s request to limit the damages plaintiff can recover in this action is premised on its contention that plaintiff breached her fiduciary duty and employment agreement with TBU, and that based on such conduct, TBU’s liability, if at all is limited. Thus, contrary to TBU’s contentions, the motion requires a resolution of disputed issues of fact, namely, the additional reasons for plaintiff’s termination, so as to justify limiting plaintiff’s damages.

And, TBU’s intimation, in reply, that summary judgment in its favor should be granted since plaintiff “did not submit any evidence in opposition” and thus concedes TBU’s allegations ignores the procedural posture of this case. There is no basis to treat TBU’s motion in limine, made in conjunction with its Answer and prior to any discovery, as one for summary judgment. The parties have not held a preliminary conference and have yet to begin discovery, and more importantly, have not chartered a summary judgment course. (Emphasis added.)

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