Opposition Brief — Sean Dunne, Petitioner v. Richard M. Coan, et al.
Supreme Court briefMay 17, 2024
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Nos. 23-721, 23-818
In the
Supreme Court of the United States
__________________________________________
GAYLE KILLILEA,
v.
Petitioner,
RICHARD M. COAN, ET AL.,
Respondents.
__________________________________________
SEAN DUNNE,
v.
Petitioner,
RICHARD M. COAN, ET AL.,
Respondents.
__________________________________________
On Petitions for Writ of Certiorari to the
United States Court of Appeals
for the Second Circuit
__________________________________________
RESPONDENT COAN’S BRIEF IN OPPOSITION
__________________________________________
Peter Antonelli, Esq.
PETER ANTONELLI LAW,
PLLC
One Marina Park Drive
Suite 1410
Boston, MA 02110
pantonelli@antonellifirm.
com
May 17, 2024
Charles J. Cooper
Counsel of Record
Vincent J. Colatriano
William V. Bergstrom
COOPER & KIRK, PLLC
1523 New Hampshire
Avenue, N.W.
Washington, D.C. 20036
(202) 220-9600
ccooper@cooperkirk.com
Counsel for Respondent Richard M. Coan
i
QUESTION PRESENTED
The related petitions of Gayle Killilea and Sean
Dunne (“Petitioners”) present a total of six questions
arising out of claims brought by respondent Coan, as
Trustee for the Dunne bankruptcy estate (“Trustee”),
seeking recovery for Irish property fraudulently transferred by the debtor (Dunne) to his wife (now ex-wife)
Killelea. Following a 14-day trial and after deliberating for five days, a jury found against Petitioners and
awarded the Trustee damages against Killilea with respect to those fraudulent transfers.
The Killilea petition (No. 23-721) presents two
questions:
1. Whether the district court abused its discretion
in preventing Petitioners’ expert in Irish property
law—who was permitted to testify regarding background principles, customs, and practices of Irish
property, trust, and conveyancing law—from offering
legal conclusions concerning whether a trust was created in this case, because the court concluded that
such testimony (1) would create an unnecessary risk
of intruding on the role of both judge and jury and (2)
was outside the scope of the witness’s expertise?
2. Whether the district court erred in sustaining
the jury verdict holding Petitioners liable for fraudulent transfer of a property under 11 U.S.C. §548(a)
when the debtor “undisputedly had an interest” in the
property and “the trial evidence was sufficient overall
to sustain the verdict that [the debtor] engaged in intentional and constructive fraud when he transferred”
the property?
ii
The Dunne petition (No. 23-818) presents four additional questions:
3. Whether the district court should have granted
a new trial or judgment as a matter of law where
Dunne alleged that certain property was held in trust
and therefore not subject to avoidance, when the district court concluded that there was “extensive evidence” supporting the jury verdict and showing that
Dunne had owned the property in his individual capacity and that the trust was a sham?
4. Whether a two-year statute of limitations
barred fraudulent transfer claims regarding property
allegedly placed in trust when the existence of the
trust was disputed and the district court concluded
that there was “extensive evidence” supporting the
jury verdict that the trust was a sham and showing
that Dunne had owned the subject property in his individual capacity within the limitations period?
5. Whether the district court erred in instructing
the jury on principles of Irish law governing trust creation and conveyancing and permitting the jury to apply those principles to the facts to determine whether
certain property was held in trust or owned by Dunne
in his individual capacity?
6. Whether the district court should have set aside
a jury verdict finding that Dunne owned certain property in his personal capacity following a decision by a
foreign court, issued years later in a proceeding that
involved different parties and was based on a different, and stipulated, record, treating the property as
held in trust?
iii
STATEMENT OF RELATED PROCEEDINGS
Respondent Trustee writes to identify the following
deficiencies in Petitioners Killilea’s and Dunne’s
statements of related proceedings.
The Second Circuit case on which judgment was
entered October 27, 2023, Coan v. Dunne, consolidated
three separate appeals, Nos. 21-2012 (lead case), 212013, and 22-494.
The United States District Court for the District of
Connecticut proceeding below, Coan v. Dunne, No.
3:15-cv-00050, in which judgment was entered on July
19, 2021, consolidated two actions:
•
Dunne et al., Adv. Proc., No. 15-05019 (Bankr.
D. Conn.)
•
National Asset Loan Management, LLC v. Sean
Dunne, et al., No. FST-CV-12-5013922-S
(Judicial District of Stamford-Norwalk, Conn.)
(removed to federal court on January 12, 2015
and docketed as 15-cv-00050)
There is a parallel Chapter 7 bankruptcy
proceeding pending in United States Bankruptcy
Court for the District of Connecticut, In re Dunne, No.
13-150484. Contrary to Petitioners’ submissions
(which wrongly identify the case with the number 14150484), this case has not been dismissed but is
ongoing, and was not consolidated into the
proceedings in the district court.
iv
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED......................................... i
STATEMENT OF RELATED PROCEEDINGS....... iii
TABLE OF AUTHORITIES ....................................... vi
OPINIONS BELOW .................................................... 1
JURISDICTION .......................................................... 1
INTRODUCTION ........................................................ 1
STATEMENT ............................................................... 3
REASONS FOR DENYING THE PETITIONS........ 10
I.
Certiorari Is Not Warranted With
Respect To The District Court’s Decision
To Limit The Scope Of Petitioners’
Expert’s Testimony. ................................... 10
A. The Trial Court Faithfully Applied
This Court’s Precedent......................... 11
B. There Is No Circuit Split. .................... 15
C. The Trial Court’s Decision Was
Correct. ................................................. 18
II.
Certiorari Is Not Warranted With
Respect To The Jury’s Determination
That Dunne Fraudulently Transferred
81 North Wall Quay To Killilea. ............... 20
III.
None Of The Issues Raised In Dunne’s
Petition Warrant This Court’s
Attention. ................................................... 27
CONCLUSION .......................................................... 31
v
APPENDIX
Omnibus Ruling on Post-Trial Issues in the
United States District Court, District of
Connecticut (July 15, 2021) ................... App. 1a
vi
TABLE OF AUTHORITIES
CASES
Page
Barefoot v. Estelle,
463 U.S. 880 (1983) ................................... 13, 14
Begier v. I.R.S.,
496 U.S. 53 (1990) ..................................... 21, 26
CMI-Trading, Inc. v. Quantum Air, Inc.,
98 F.3d 887 (6th Cir. 1996)....................... 17, 18
Daubert v. Merrell Dow Pharms., Inc.,
509 U.S. 579 (1993) ....................... 11, 12, 14, 15
Gen. Elec. Co. v. Joiner,
522 U.S. 136 (1997) ................................... 12, 17
Harris v. Pac. Floor Mach. Mfg. Co.,
856 F.2d 64 (8th Cir. 1988)....................... 17, 18
In re Fisher,
296 F. App’x 494 (6th Cir. 2008) .................... 27
In re Kaiser,
722 F.2d 1574 (2d Cir. 1983) ............................ 4
In re Wardle,
No. 05-NV-1000, 2006 WL 6811026 (B.A.P. 9th
Cir. Jan. 31, 2006) ........................................... 27
In re Wolf,
2023 WL 6564882 (7th Cir. Oct. 10, 2023) .... 27
Kumho Tire Co., Ltd. v. Carmichael,
526 U.S. 137 (1999) ......................................... 12
Maiz v. Virani,
253 F.3d 641 (11th Cir. 2001)......................... 16
vii
Marx & Co., Inc. v. Diners’ Club, Inc.,
550 F.2d 505 (2d Cir. 1977) ............................ 19
Marx & Co., Inc. v. Diners’ Club, Inc.,
434 U.S. 861 (1977) ......................................... 19
Nimely v. City of New York,
414 F.3d 381 (2d Cir. 2005) ...................... 13, 15
Parklane Hosiery Co. v. Shore,
439 U.S. 322 (1979) ......................................... 30
Stern v. Marshall,
564 U.S. 462 (2011) ......................................... 23
United States v. Flores,
477 F.3d 431 (6th Cir. 2007)........................... 26
United States v. Mohney,
949 F.2d 1397 (6th Cir. 1991)......................... 16
United States v. Scholl,
166 F.3d 964 (9th Cir. 1999)........................... 17
United States v. Scop,
846 F.2d 135 (2d Cir. 1988) ............................ 19
United States v. Scop,
856 F.2d 5 (2d Cir. 1988) ................................ 19
RULES, CODES, AND STATUTES
11 U.S.C. §541(a)(1) ................................................... 26
FED. R. EVID. 702(a) ............................................. 11, 12
S. Ct. R. 10 ................................................................. 11
2d Cir. R. 32.1.1(a) ..................................................... 10
Seventh Cir. R. 32.1(b) .............................................. 26
viii
Ninth Cir. Bankruptcy App. Panel R.
8024-1(c)(2) ...................................................... 26
OTHER AUTHORITIES
Brian Hutchinson, Keane on Company Law
§11.38 (2016) ................................................... 24
Stephen M. Shapiro, et al., Supreme Court Practice
§6.37(i)(3) (10th ed. 2013) ............................... 11
1
OPINIONS BELOW
The court of appeals’ unpublished non-precedential summary order is not reported but is available at
2023 WL 7103275 and is reproduced at App.1a–9a. 1
The district court’s order denying Killilea’s post-trial
motion for a directed verdict or a new trial is not reported but is available at 2022 WL 369012 and is reproduced at App.10a–27a. The district court’s order
denying Dunne’s post-trial motion for directed verdict
or a new trial is not reported but is available at 2021
WL 3012678 and is reproduced in Respondent’s Supplemental Appendix at Resp. App.1a–98a. The district
court’s pretrial ruling limiting the testimony of Petitioners’ expert in Irish property law is also not reported but is available at 2019 WL 369012 and is reproduced at App.31a–38a.
JURISDICTION
The judgment of the court of appeals was entered
on October 27, 2023. This Court has jurisdiction under
28 U.S.C. §1254(1).
INTRODUCTION
“This is a case about international bankruptcy
fraud.” App.10a. Specifically, it is about fraudulent
1 Respondent will cite to Killilea’s Petition as “Pet.,” to Kil-
lilea’s Petition Appendix as “App.,” to Dunne’s Petition as
“Dunne Pet.,” and to the supplemental appendix attached to this
response as “Resp. App.” Citations to “Doc.” refer to the district
court’s docket in this case, citations to “CA2 Doc.” refer to the
Second Circuit’s docket in this case, and citations in the format
A-### and SA-### refer to Dunne’s Second Circuit Appendix
(available at CA2 Docs. 83–102) and to the Trustee’s Supplemental Second Circuit Appendix (available at CA2 Docs. 144 &
145-1), respectively.
2
transfers of properties worth tens of millions of dollars, as part of a scheme by which Petitioner Sean
Dunne and his ex-wife Petitioner Gayle Killilea attempted to deprive Dunne’s creditors of access to his
assets. As relevant here, Respondent Coan, as the
bankruptcy trustee, sought to avoid these transfers as
violative of the Bankruptcy Code. After a lengthy
trial, a jury found that Dunne had made numerous intentionally and constructively fraudulent transfers
within the meaning of Section 548 of the Bankruptcy
Code and found Killilea liable to the Trustee for tens
of millions of Euros in damages. In a pair of comprehensive post-trial decisions, the district court rejected
every argument Dunne and Killilea could muster to
attack the jury’s amply-supported verdict. The Second
Circuit issued a non-precedential opinion, summarily
affirming those decisions “for substantially the same
reasons as those set forth by the district court in its
thorough and exceptionally well-reasoned rulings on
[Petitioners’] post-trial motions.” App.9a.
Petitioners now raise six questions for this Court’s
review, across two petitions, suggesting that the district court (and through it, the Second Circuit) ignored
this Court’s precedent and diverged from the precedent of other circuits in denying their post-trial motions. Not coincidentally, five of the six questions concern the single most valuable property in the case,
which accounted for the vast majority of the jury’s
damages verdict against Killilea. But neither the district court nor the Second Circuit established any new
general legal rule or principle in rejecting Petitioners’
efforts to evade responsibility for their fraud, much
less any rule or principle that conflicts with the precedent of this or any other court. Rather, the courts
3
below faithfully applied established law in resolving a
garden variety evidentiary dispute regarding the admissible scope of expert testimony (an issue on which,
this Court has repeatedly made clear, trial courts are
accorded broad discretion) and in resolving disputes
about the nature of the fraudulent transfers that took
place here. Even if Petitioners could establish that
the courts below erred in resolving these questions—
and they cannot—their attempt to elevate the disputes into important, generally-applicable questions
meriting this Court’s review must be rejected.
STATEMENT
This case is an action by the Trustee to recover, on
behalf of Dunne’s creditors, the value of properties
that Dunne transferred to Killilea in connection with
their efforts to conceal assets in bankruptcy. In finding, inter alia, that Dunne had engaged in intentionally fraudulent transfers of the properties at issue
within the meaning of 11 U.S.C. §548(a)(1), the jury
necessarily concluded that Dunne transferred the
properties with the actual intent to hinder, delay, or
defraud his creditors. See App. 3a–4a. Dunne’s efforts
to defraud his creditors took various forms, including
the fabrication of post-dated sham trusts and the
transfer of properties through intermediaries in the
period up to and including the date Dunne filed for
bankruptcy.
1. Dunne was an Irish real estate developer who
had a reported net worth of nearly a billion dollars in
2007. Resp. App.3a. However, in the global financial
crisis of 2008, Dunne “suffered devastating financial
reversals,” culminating in his moving, with his thenwife Killilea, to Connecticut in 2010 and agreeing to a
4
$235 million judgment against him in favor of an Irish
entity (National Asset Loan Management, Ltd., or
“NALM”) created to recover troubled bank assets and
other financial obligations. Id at 3–4. NALM believed
that Dunne had concealed assets from his creditors,
and in 2012 it filed suit in Connecticut state court
against Dunne and Killilea (as well as several corporate entities) to recover assets involved in various alleged fraudulent transfers. Id. at 4a.
This was just the first of many related suits alleging that Dunne and Killilea had conspired to defraud
creditors by hiding assets. Id. By 2019, all the thenpending actions in United States courts were removed
to the United States District Court for the District of
Connecticut, and consolidated for a jury trial —with
the Trustee serving as plaintiff in the consolidated action. Id. at 5a.
2. The district court held trial for 14 days in May
2019. At trial, the jury heard evidence confirming the
aphorism that “[f]raudulent acts are as varied as the
fish in the sea.” In re Kaiser, 722 F.2d 1574, 1583 (2d
Cir. 1983). Among other things, the Trustee offered
evidence showing:
•
Dunne made tens of millions of dollars’ worth
of fraudulent transfers of assets and money to
Killilea in the period leading up to his bankruptcy petition, including on the same day it
was filed, some of which were nominally traded
in consideration for “cooking the odd meal” or
“ironing the odd shirt.” A-4826:7-15; A-4829:134830:23.
•
Dunne and Killilea traveled to Switzerland to
obtain a sham order from a Swiss court legally
5
separating them “to be able to argue to creditors—as Dunne eventually did—that [an assignment to Killilea] was irreversible” and
made pursuant to a court order. Resp. App.58a.
•
Ten days before filing for bankruptcy, one of
Dunne’s associates emailed a Cypriot trustee
company saying he “ ‘urgently’ needed a ‘a new
standalone Cyprus company,’ ” into which
Dunne then transferred (on the day he filed for
bankruptcy), the largest asset at issue in the
case, a Dublin home called Walford. Id. at 36a–
37a.
•
Dunne and Killilea fabricated and backdated
handwritten documents purporting to place
Walford in a trust in 2005 as part of a post-nuptial agreement. Dunne’s own attorneys had
never seen or heard about this alleged trust until Dunne was being pursued by creditors. Id. at
40a.
Following trial, and after several days of deliberations, the jury reached a verdict finding in the Trustee’s favor on nine separate counts and awarding damages of €17,765,706 and $278,297.18 against Killilea.
Id. at 2a. The damages awarded on the claim pertaining to the transfer of Walford totaled €14 million, and
the damages awarded on the claims pertaining to the
transfer of the other property at issue in Killilea’s petition, 81 North Wall Quay, totaled €300,000.
Following trial, Dunne and Killilea moved to set
aside the verdict and to hold a new trial, raising numerous arguments. The district court, in a lengthy
pair of opinions, addressed and rejected each of them.
See Resp. App.1a–98a; App.10a–27a. As relevant
6
here, Petitioners argued that a new trial was necessary to rectify the district court’s decision to prevent
one of their experts on Irish property law, John Wylie,
from opining on the validity of the alleged trust into
which Dunne claimed he had placed Walford when he
purchased it in 2005. Resp. App.27a; App.18a–19a.
Petitioners also argued that they were entitled to
judgment as a matter of law or a new trial because the
jury’s finding that Dunne had fraudulently transferred 81 North Wall Quay was against the weight of
the evidence. Resp. App.52a–54a; App.24a.
The Expert Testimony of John Wylie. One of
the central issues at trial was the status of the Walford property. Petitioners argued that Dunne had not
owned Walford within the two-year pre-petition window required for a fraudulent transfer claim because
Dunne and Killilea allegedly entered into a postnuptial agreement in March 2005, under which Dunne
purchased the Walford property and placed it in trust,
with Dunne as trustee and Killilea the sole beneficial
owner. Resp. App.28a.
Against this theory, the Trustee offered “extensive
evidence … to show that Dunne actually purchased
Walford in his individual capacity in 2005, that the
‘Declaration of Trust’ was fabricated, and that Dunne
was the beneficial owner of Walford in his individual
capacity until he transferred it to Killilea on March
29, 2013—the very same day he filed for bankruptcy.”
Id. at 29a.
In support of their position that Walford had been
placed in trust in 2005, Petitioners offered Wylie as an
expert to testify as to “general principles of Irish law
and practice relating to land law, trust law, and
7
conveyancing and in particular their application to
the conveyancing and ownership” of Walford. App.32a
(quotation omitted). The Trustee moved to exclude
Wylie’s testimony altogether. Id.
The district court took a middle path, permitting
Wylie to testify about background principles of, and
customs and practices under, Irish law, but precluding him from offering an opinion applying those principles to the facts of the case to opine that Walford was
held in trust from 2005 onward. App.38a. The district
court provided several reasons for striking that balance, noting first that such a proffer of legal opinion
testimony required the court to “consider the request
very carefully,” because such testimony needed to be
“ ‘carefully circumscribed to assure that the expert
does not usurp either the role of the trial judge in instructing the jury as to the applicable law or the role
of the jury in applying the law to the facts before it.’ ”
App.33a–34a. (quoting United States v. Bilzerian, 926
F.2d 1285, 1294 (2d Cir. 1991)). The district court determined that testimony “about or with reference to
the actual documents and evidence in this case” would
run afoul of this principle. App.35a.
The district court took pains to note that there
were “multiple ways in which Wylie could explain the
requirements and practices for Irish real estate transactions without the need to comment on whether any
particular document in this case is consistent with the
law or standard practices.” App.35a–36a. Thus, it
would be “appropriate to allow defendants to call
Wylie to explain the underlying legal requirements for
Irish real estate transactions and to explain, for example, how parties may lawfully use trust and/or
nominee arrangements, how parties may engage in a
8
practice referred to by the defendants as ‘resting on
the contract,’ and how Irish law and practice in general recognizes the formal passing and conveyance of
legal title.” App.35a. Testimony specific to the documents in the case, however, would have “create[d] an
unnecessary risk of intrusion on both this Court’s instructional role and the jury’s fact-finding role.”
App.37a.
The district court also found that commenting on
the specific documents in the case and offering an
opinion about the legal status of the Walford property
would “exceed [Wylie’s] expertise” as an Irish legal expert with no other connection to the transaction, and
would “amount to little more than a marshaling of the
evidence in defendants’ favor.” Id.
Following trial, Petitioners renewed their objections to limiting Wylie’s testimony in this way, but the
district court again rejected their arguments for the
reasons discussed in its earlier decision, noting that
Petitioners had not “explain[ed] how allowing Wylie
to testify to the particular facts in this case would not
have intruded into the Court and jury’s roles,” and
had not made “a serious argument for why the ruling
limiting Wylie’s testimony was a ‘substantial error.’ ”
Resp. App.42a; App.18a.
81 North Wall Quay. As relevant here, Petitioners each moved for post-judgment relief on the ground
that the jury’s finding that Dunne had fraudulently
transferred 81 North Wall Quay for Killilea’s benefit
was not supported by the evidence. The district court
rejected that argument, noting that “the trial evidence
was sufficient overall to sustain the verdict that
Dunne engaged in intentional and constructive fraud
9
when he transferred North Wall Quay to Killilea.”
Resp. App.53a. In particular, it rejected the arguments that (1) the fraudulent transfer claim failed because the property was not owned by Dunne directly
but rather held by a company known as DCD Builders
(“DCD”), through a subsidiary called Page Inns Limited (“Page Inns”), and the Trustee lacked standing to
prosecute claims on behalf of DCD’s creditors, and (2)
Killilea had not received the property directly but rather through her company Amrakbo, and the Trustee
had not sought to pierce the corporate veil as to Amrakbo. Id. at 52a–53a; App.24a–25a. The court explained that the evidence supported a finding that
Dunne owned Page Inns directly, not through DCD,
“because Dunne’s bankruptcy schedule filed on May 3,
2013 listed a 100 percent holding in Page Inns Limited.” Resp. App.52a.
Beyond those particular issues, the Court found
that there was significant evidence that the transfer
of 81 North Wall Quay was both intentionally and constructively fraudulent. For example, “the transaction
between spouses occurred when Dunne was already
insolvent in February 2012, about two weeks before
Dunne consented to a €185,000,000 judgment … and
less than two years before Dunne filed for bankruptcy.” Id. at 53a. Moreover, despite Dunne’s serious
financial troubles and his supposed agreement with
Killilea on a purchase price of €100,000 for the property, “that consideration was never paid because the
check was never cashed.” Id. And the purchase price
was considerably below the €300,000 valuation Killilea gave the property on her own schedule of assets
and even further below the €600,000 she received
when she later sold the property. Id. at 53a–54a.
10
Given that evidence, the district court concluded that
the jury verdict “was not seriously erroneous and
would not result in a miscarriage of justice.” Id. at
54a; App.24a–25a.
3. Both Petitioners appealed to the Second Circuit, which affirmed in a summary non-precedential
order “for substantially the same reasons as those set
forth by the district court in its thorough and exceptionally well-reasoned rulings on Dunne’s and Killilea’s post-trial motions.” App.9a.
REASONS FOR DENYING THE PETITIONS
I.
Certiorari Is Not Warranted With Respect To The District Court’s Decision
To Limit The Scope Of Petitioners’ Expert’s Testimony.
The first question raised by Killilea’s petition is
whether the courts below erred by precluding Wylie
from testifying as to whether Walford had been placed
in trust by Dunne for Killilea’s benefit in 2005. Pet.1518, 22–24. Killilea argues that the district court’s decision, as “adopted and affirmed” by the Second Circuit, established a rule that departed from this Court’s
precedent and opened a Circuit split over whether it
is permissible for an expert “to offer factual opinions
when a basis for the proffered opinion rests in part on
that expert’s understanding of relevant law.” Id. at 15.
Neither contention is true.
For one thing, the Second Circuit affirmed in a
nonprecedential summary order. See 2d Cir. R.
32.1.1(a). It thus did not purport to announce or establish a legal rule with any precedential effect, let
alone one that conflicts with the precedent of this
11
Court (or any other). 2 For this reason alone, the decision below does not warrant this Court’s review. But
even leaving that point aside, this was a run-of-themill application by the district court of settled precedent governing the exercise of its highly discretionary
gatekeeping function to limit expert testimony that
would be unhelpful to the jury. The resolution of this
routine evidentiary dispute, while of considerable significance to the parties, is of no significance to anyone
else, and it would not be worthy of certiorari under
any of this Court’s traditional criteria even if the district court had misapplied the law. See S. Ct. R. 10 (“A
petition for a writ of certiorari is rarely granted when
the asserted error consists of … the misapplication of
a properly stated rule of law.”). But the district court’s
decision was, as the Second Circuit held, “thorough
and exceptionally well-reasoned” and faithful to this
Court’s precedent. App.9a.
A. The Trial Court Faithfully Applied
This Court’s Precedent.
It is well-settled that under Federal Rule of Evidence 702, the trial judge performs an essential “gatekeeping role” with respect to proffered opinion testimony by qualified experts, Daubert v. Merrell Dow
Pharms., Inc., 509 U.S. 579, 589, 597 (1993), which
should be admitted only if the testimony is reliable
and “will help the trier of fact to understand the evidence or to determine a fact in issue.” FED. R. EVID.
2 “[B]ecause the opinion below is unpublished and under cir-
cuit rules lacks precedential value … the court that rendered the
decision may reach a different conclusion in the next case presenting the issue.” Stephen M. Shapiro et al., Supreme Court
Practice §6.37(i)(3) (10th ed. 2013).
12
702(a); see also id. at 2023 Committee Note (reaffirming that the proponent must demonstrate by a preponderance of the evidence that the expert’s testimony
would be helpful to the trier of fact). This Court has
emphasized both “the importance of Daubert’s gatekeeping requirement” and that the trial court must
have considerable latitude in exercising that gatekeeping role. Kumho Tire Co., Ltd. v. Carmichael, 526
U.S. 137, 152 (1999). For this reason, a trial court’s
exercise of its authority under Rule 702 to admit, preclude, or limit expert testimony is reviewable only for
abuse of discretion. Id. at 158; see also Gen. Elec. Co.
v. Joiner, 522 U.S. 136, 142–43 (1997). 3 The district
court’s discretionary exercise of its critical gatekeeping responsibilities, moreover, “must be ‘tied to the
facts’ of a particular case.” Kumho, 526 U.S. at 150
(citing Daubert, 509 U.S. at 591).
Far from conflicting with this Court’s precedents,
the district court faithfully applied them. The district
court conscientiously performed its gatekeeping responsibilities, and determined that while Wylie’s testimony regarding general principles of Irish trust and
conveyancing law was within his expertise and would
aid the trier of fact, his testimony seeking to opine on
the validity of the specific documents supposedly evidencing the establishment of a trust for the Walford
property met neither criterion.
Significantly, Killilea’s petition focuses solely on
the second criterion, ignoring the first. The district
court specifically found that permitting Wylie to offer
Tellingly, Killilea never acknowledges the deferential
standard of review applicable to her challenge to the district
court’s evidentiary ruling.
3
13
opinions regarding whether the specific facts and documents relating to Walford evidenced the establishment of a trust would allow Wylie to “comment on the
evidence in ways that exceed his expertise.” App.37a
(emphasis added). Not only does Killilea fail to mention this finding, which serves as an independent and
sufficient basis for the district court’s evidentiary ruling (and thus for denial of her request for review of
that ruling), she misleadingly claims that “it was undisputed that Wylie was qualified as an expert in the
relevant field.” Pet.8.
But even leaving that fact aside and focusing
solely on the district court’s ruling that Wylie’s proposed testimony would not assist the trier of fact, Killilea fails to demonstrate anything other than the district court’s conscientious exercise of its gatekeeping
duties. The district court’s decision to limit Wylie’s
proposed testimony was based on its conclusion that,
given the particular facts and circumstances of this
case, that testimony would threaten to invade the
roles of judge and jury in a way that would render it
affirmatively unhelpful. This determination was fully
consistent with applicable precedent. See Nimely v.
City of New York, 414 F.3d 381, 397 (2d Cir. 2005)
(noting that “expert testimony that ‘usurp[s] either
the role of the trial judge in instructing the jury as to
the applicable law or the role of the jury in applying
that law to the facts before it,’ by definition” does not
assist the trier of fact) (citation omitted).
Killilea argues that this rationale was contrary to
this Court’s decisions in Barefoot v. Estelle, 463 U.S.
880 (1983), and Daubert, because, she argues, in Barefoot this Court “declined the invitation to ‘excise[] [the
expert testimony] entirely from all trials,’ ” Pet.22
14
(quoting Barefoot, 463 U.S. at 898) (brackets in Killilea’s petition), and in Daubert this Court “reaffirmed
that the focus of a court’s inquiry must remain on
whether the expert is qualified and whether his testimony is reliable,” Pet.23. There is no merit to either
argument: Barefoot is irrelevant to this case and the
trial court’s decision to limit Wylie’s testimony was
fully consistent with Daubert.
In Barefoot—a pre-Daubert case addressing only
constitutional claims—this Court rejected the petitioner’s argument that expert testimony regarding his
future dangerousness violated due process on several
alternate theories. 463 U.S. at 896. Killilea finds an
alleged “conflicting result” in the fact that in Barefoot
an expert “testified not only about general psychology
principles but also applied those principles to the specific facts of the case.” Pet.23. But that is no conflict at
all. Barefoot addressed only what the Constitution
would permit in a death penalty case, and it did not
purport to hold that all experts, no matter the discipline or the facts of a particular case, must always be
permitted to testify with respect to the facts of that
case. The district court’s careful weighing of the issues here did not even implicate, much less run afoul
of, Barefoot.
As for Daubert, far from supporting Killilea, that
decision firmly rejects the imposition of such bright
line rules, recognizing the “flexible” “inquiry envisioned by Rule 702” and reminding trial judges that
they “should also be mindful of other applicable rules”
in exercising their discretion regarding the admission
of expert testimony. Daubert, 509 U.S. at 594–95. Killilea would read this language out of the opinion altogether. Moreover, Daubert explicitly reminded district
15
courts of their duty to weigh whether proposed testimony will help the “ ‘trier of fact to understand the
evidence or determine a fact in issue,’ ” id. at 591
(quoting FED. R. EVID. 702), and the district court’s decision that certain aspects of Wylie’s proposed testimony “would create an unnecessary risk of intrusion
on both this Court’s instructional role and the jury’s
fact-finding role” is rooted, under circuit precedent, in
the well-established principle that such testimony is
often not helpful within the meaning of Rule 702 and
Daubert. Pet. 37a; see Nimely, 414 F.3d at 397.
In sum, Killilea’s attempt to manufacture a conflict between the district court’s thoughtful and balanced exercise of its gatekeeping responsibilities and
this Court’s precedents stressing the importance of
those responsibilities is specious.
B. There Is No Circuit Split.
Killilea is equally wrong that the decision below
conflicts with decisions from other Circuits concerning
the admissibility of proposed expert testimony like
Wylie’s. See Pet.15. Of course, as discussed, supra at
10–11, there could be no circuit split here because the
Second Circuit affirmed the district court in a nonprecedential summary order that itself did not discuss
the applicable evidentiary analysis, much less announce some new principle of expert evidence law. In
other words, the Second Circuit created no new Circuit law below, and hence its decision could not have
created a split warranting this Court’s intervention.
In any event, the decisions below do not conflict
with the decisions of any other Circuit. Killilea argues
that “[o]ther courts of appeals have consistently held
that expert ‘customs and practice’ testimony is
16
admissible under Rule 702.’ ” Pet.15. But neither the
district court nor the Second Circuit held that such
testimony is per se inadmissible. In fact, the district
court made clear that Wylie could testify as to Irish
law and “background legal concepts and practices.”
App.37a. Rather, the district court here made the
case- and fact-specific decision that Wylie’s proposed
testimony regarding the validity of the alleged Walford trust specifically should not be admitted under
settled legal principles regarding the preservation of
the jury’s role that apply equally in other Circuits.
Killilea cites Sixth and Eleventh Circuit decisions
holding that district courts did not abuse their discretion in permitting experts to offer certain testimony.
Pet.15–16. But these cases at most represent divergent applications on different facts of the same legal
principles, not a disagreement over the legal principles applicable to testimony like Wylie’s. See United
States v. Mohney, 949 F.2d 1397, 1406 (6th Cir. 1991)
(noting that district court considered and rejected the
argument that the testimony in question would usurp
the function of the jury); Maiz v. Virani, 253 F.3d 641,
666–67 (11th Cir. 2001) (finding “no reversible error”
and noting that “[e]ven assuming that some small portion of [the expert’s] testimony should in hindsight
have been excluded, Defendants would still not be entitled to a new trial”). The relevant ruling in Maiz,
moreover, was in important respects similar to the
decision here. The court in Maiz permitted an expert
to “testif[y] regarding the passport-stamping practices
of Mexican immigration officials.” Id. at 668. That is
the same sort of background custom-or-practice testimony that Wylie was permitted to give here, and there
is no indication in Maiz that the expert actually
17
testified regarding the specific documents in that
case. And even assuming, counterfactually, that Killilea had found cases involving seemingly inconsistent
district court applications of these principles, that
alone would not create or demonstrate a Circuit conflict, since decisions to admit or exclude expert testimony are reviewed only for an abuse of discretion.
Joiner, 522 U.S. at 142.
In fact, far from creating a conflict among the Circuits on this issue, much less an entrenched one calling out for this Court’s guidance, the decisions below
are in accord with the widespread agreement across
the courts of appeals (including in the Sixth Circuit,
which Killilea highlights) regarding the importance of
“carefully circumscrib[ing]” testimony like Wylie’s to
assure that such testimony does not “ ‘usurp either the
role of the trial judge in instructing the jury as to the
applicable law or the role of the jury in applying that
law to the facts before it.” Nimely, 414 F.3d at 397
(quoting Bilzerian, 926 F.2d at 1294); see, e.g., CMITrading, Inc. v. Quantum Air, Inc., 98 F.3d 887, 890
(6th Cir. 1996) (barring testimony from financial consultant regarding likely intent of parties to create a
lending or joint venture relationship in part because
“[t]he legal concepts of ‘loan’ and ‘joint venture’ are issues of law and are within the sole competence of the
court; ‘experts’ may not testify as to the legal effect of
the contract”); United States v. Scholl, 166 F.3d 964,
973 (9th Cir. 1999) (affirming decision prohibiting
“[t]estimony as to whether Scholl’s record keeping
practices met IRS standards … because the jury did
not need assistance in applying the legal standard declared by the court”); Harris v. Pac. Floor Mach. Mfg.
Co., 856 F.2d 64, 68 (8th Cir. 1988) (“[O]nce the expert
18
explained to the jury what he would consider and how
he would go about forming an opinion ..., the jury was
in a position to apply those criteria for itself. Thus it
had no need for further assistance from the expert in
the form of an opinion on whether this particular
warning was adequate.”).
C. The Trial Court’s Decision Was Correct.
For the reasons discussed above, the question presented in Killilea’s petition would not be remotely
worthy of this Court’s consideration even if the district court’s evidentiary ruling was wrong. But that is
emphatically not the case. Wylie’s proposed testimony would have invaded the province of both the
judge and the jury, and the district court correctly exercised its broad discretion in so ruling.
To create a trust under Irish law, as the district
court instructed the jury, not only is certain written
evidence required, but the evidence must establish
“clear intention to create a trust” which “does not exist
if the trust was created as a sham for the purpose of
hindering or defrauding creditors.” Doc. 511 at 9 (June
4, 2019). In other words, whether a trust was in fact
created requires, among other things, an assessment
of the intentions of Dunne and Killilea. The question
of the parties’ intent is decidedly “within the competence of the jury” such that “expert opinion testimony
will not assist the jury … in determining the factual
issue of intent.” CMI-Trading, 98 F.3d at 890.
Furthermore, Wylie’s proposed testimony was rife
with legal conclusions regarding the validity of the
trust and the availability of the avoidance remedy
that the Trustee was seeking. See, e.g., A-115 (Wylie
19
Rep. ¶ 19) (Any “creditor would have great difficulty”
disregarding the trust as a sham “because of the actions of [Dunne] … in relation to Walford … which
seem to me to point entirely in the direction of implementing the trust in favour of [Killilea].”). Indeed,
had the district court not limited Wylie’s testimony on
these points, it may well have committed an abuse of
discretion. 4 Killilea’s argument that Wylie’s testimony did not embrace the ultimate legal issue of
“whether Dunne had made a fraudulent conveyance
under § 548” but rather went to the “singular and critically important factual issue whether Walford was
held in trust since 2005,” Pet.9, is therefore beside the
point. The district court did not limit Wylie’s testimony because it would have touched on an “ultimate
legal issue,” but because allowing his testimony on the
question of whether a trust was created based upon
the particular documents here would have usurped
the role of both judge and jury. App.17a (emphasis
omitted). Killilea had no answer to this point below,
and has no answer to it now. See id.
4 See, e.g., Marx & Co., Inc. v. Diners’ Club, Inc., 550 F.2d
505, 510 (2d Cir.), cert. denied, 434 U.S. 861 (1977) (reversing
decision to admit expert testimony from an attorney who “repeatedly gave his conclusions as to the legal significance of various
facts adduced at trial”); United States v. Scop, 846 F.2d 135, 140,
modified, 856 F.2d 5 (2d Cir. 1988) (district court erred in permitting expert to state his opinion as “legal conclusions that were
highly prejudicial and went well beyond his province as an expert
in securities trading” and that “invad[ed] the province of the
court to determine the applicable law and instruct the jury as to
that law” (quotation omitted)).
20
II.
Certiorari Is Not Warranted With Respect To The Jury’s Determination
That Dunne Fraudulently Transferred
81 North Wall Quay To Killilea.
Killilea next asks, with respect to the much
smaller claim regarding 81 North Wall Quay,
“[w]hether a trustee may avoid under 11 U.S.C. § 548
the transfer of property the debtor did not own,” Pet.i,
18–22, 24–25. This question, which answers itself, is
based on Killilea’s facially implausible claim that the
Trustee avoided, with the district court’s approval, the
transfer of property that Dunne did not own. That did
not happen, and so this case does not present that
question.
1. To begin with, the Second Circuit’s non-precedential summary disposition, as noted earlier, creates
no Circuit precedent at all, much less precedent that
could conflict with either any decision of this Court or
the law in any other Circuit. But even more fundamentally, the petition’s central premise—that the
courts below held that a trustee may “set aside as a
fraudulent conveyance the transfer of property held
by a non-debtor corporate entity under § 548”—is
simply incorrect. Pet.18.
Of course, Killilea cannot cite or quote anything
from either the district court or the Second Circuit actually stating such a principle. To the contrary, it is
undisputed that the district court instructed the jury
that, to prevail in its fraudulent transfer claim, the
Trustee had to prove that “the debtor transferred the
property that he owned to another party within two
years before his bankruptcy filing.” App.3a (emphasis
added); see also A-136 (jury instructions).
21
Thus, despite her claim that this case presents
some irreconcilable conflict over legal principles concerning the meaning of Section 548, Killilea’s complaint is not really with any legal principle announced
in the decisions below, but instead with how established legal principles were applied to the facts here
on review of the jury’s verdict. See, e.g., Pet.24 (arguing that the court of appeals “did not faithfully adhere
to and apply the test announced” in Begier v. IRS, 496
U.S. 53 (1990)). Killilea’s petition with respect to this
question, as with her first question, boils down to a
textbook request for error correction; it does not remotely present a certworthy question.
2. For these reasons, this case does not raise, let
alone “present[ ] an ideal vehicle” for addressing, the
legal question that Killilea’s petition purports to present. Pet.22. But there are additional “vehicle” problems with Killilea’s petition.
First, Killilea failed to squarely raise in the district court, and thus forfeited, the argument that
Dunne could not have fraudulently transferred 81
North Wall Quay because that property was transferred not by Dunne directly but by his wholly-owned
company, Page Inns. Killilea raised a related but conceptually distinct argument in her Rule 50 motion for
judgment as a matter of law. There she claimed that
she was entitled to judgment with respect to 81 North
Wall Quay because DCD, not Dunne himself, had
owned Page Inns (which owned 81 North Wall Quay),
and so the Trustee did not have standing to assert
claims relating to that property given that he had disclaimed representation of DCD’s creditors. Killilea
thus argued that “Page Inns is not an entity within
the estate of Sean Dunne represented by the
22
[Trustuee].” SA-274. In her post-trial brief, she again
argued that “DCD is the parent company of Page
Inns” and that the Trustee “did not have standing to
avoid transfers made by DCD’s subsidiaries and was
not seeking to do so.” SA-334.
The district court rejected Killilea’s argument concerning the Trustee’s standing, reiterating its prior
conclusion that “Dunne undisputedly had an interest
in North Wall Quay, even if it was formally owned by
Page Inns Limited.” App.24a (quoting Resp. App.52a).
In reaching that prior conclusion, the district court
had relied in part on the fact that Dunne’s own 2013
bankruptcy schedule had “listed a 100 percent holding
in Page Inns.” Resp. App.52a.
It is worth noting, as this history reflects, that the
district court had already reached this conclusion before Killilea moved for post-trial relief, because it had
already ruled on Dunne’s own post-trial motion raising this argument. Id. Even with the benefit of that
ruling, Killilea still never argued, as she does now,
that if Page Inns were part of Dunne’s estate (as the
jury necessarily had found), then 81 North Wall Quay
would still not be reachable for avoidance purposes
unless the Trustee prevailed on a reverse veil-piercing
or alter ego theory with respect to Dunne and Page
Inns. See SA-335. 5 In fact, Killilea’s current argument is very hard to reconcile with the one she made
5 The failure to argue that the Trustee had to pierce the veil
as to Page Inns is all the more notable given that Killilea did
argue against the verdict on the ground that the Trustee had not
pierced the veil as to Amrakbo, the company, nominally owned
by Killilea, to which the 81 North Wall Quay property was transferred. Resp. App.52a, 54; App.24a; see SA 274.
23
in the district court. The implication of the argument
that the transfer of 81 North Wall Quay was not subject to avoidance because DCD and not Dunne owned
Page Inns is that if Dunne did own Page Inns outright, her objection would disappear. For these reasons, Killilea forfeited in the district court the argument that she makes in her petition. 6
Second, assuming Killilea can nevertheless make
this argument now, the district court held, as noted,
that “Dunne undisputedly had an interest in North
Wall Quay, even if it was formally owned by Page Inns
Limited.” App.24a (quoting Resp. App.52a). That
would seem to resolve the issue, but Killilea argues
that under Irish law such a property interest should
not have been reachable by Dunne’s creditors. Pet.12.
Deciding whether or not the court erred thus turns on
a complex issue of Irish law and raises no question
about the interpretation of Section 548.
Whether a property interest exists for purposes of
the Bankruptcy Code’s fraudulent transfer provisions
is ordinarily a question of state law. Stern v. Marshall,
564 U.S. 462, 495 (2011). But it is undisputed that in
this case, where the property is located in Ireland and
the alleged transfer took place in Ireland, the question
whether Dunne had a “legal or equitable interest” in
6 Killilea also had an opportunity before the Second Circuit
to highlight any place in the district court record where she had
fairly raised this argument. She failed to do so. Rather, all of her
citations point back to the argument, already addressed, that because Page Inns was owned by DCD and not by Dunne directly,
Page Inns was not part of the bankruptcy estate. See Defs. Reply
Brief, CA2 Doc. 154 at 22–23 & n.4 (Oct. 11, 2022).
24
81 North Wall Quay under Section 541 of the Code is
a question of Irish law.
While Killilea suggests that “[b]oth Irish and U.S.
law recognize the separateness of legal entities and
their separate property[,]” Pet. 12 (citing Salomon v.
A Solomon & Co. Ltd. [1896] AC Ir. 22, 30), and that
81 North Wall Quay should have been unreachable
absent a finding that Page Inns was Dunne’s alter ego
or a decision to pierce its corporate veil, Pet. 11, it is
not that simple. Under Irish law, piercing the corporate veil is not uniformly necessary in order to treat
assets formally owned by a corporation as the property of the corporation’s sole owner. That is because
Ireland recognizes “a general legal principle that the
courts will not permit a statutory privilege to be used
for fraudulent purposes, using the word ‘fraudulent’
in its more generous equitable sense as including attempts to evade contractual or other legal obligations
or the use of such statutory privilege for improper purposes.” Brian Hutchinson, Keane on Company Law
§11.38 (2016).
Here, there was ample evidence to support the
jury’s determination that regardless of the formal
ownership structure respecting 81 North Wall Quay,
Dunne was the property’s beneficial equitable owner.
For example, Dunne had been actively developing a
large collection of properties along North Wall Quay
in Dublin, of which 81 North Wall Quay was just a
part. Although some of the properties had different
nominal ownership, they were all being developed by
Dunne as part of a single project. See A-4455–4459
(discussing the development of the “North Wall Quay
site”); In re Sean Dunne, No. 13-50484, Doc. 43 at 13
(Bankr. D. Conn. May 3, 2013) (Dunne’s schedule of
25
assets showing a 20% direct stake in 72-80 North Wall
Quay, with the other 80% held by his wholly-owned
company, North Wall Quay Property Holding Limited). In addition, in memorializing the actual transfer
of 81 North Wall Quay, “Dunne and Killilea each
signed the transfer document, which does not indicate
the capacity in which they signed it.” Resp. App.24a.
And significantly, Dunne admitted under oath, at a
meeting with the Trustee, that 81 North Wall Quay
was the last unencumbered property that he held in
Ireland. A-2777 (“When I asked him why did you
[transfer 81 North Wall Quay], he said ‘It was the last
unencumbered property that I had.’ ”). And the fact
that Page Inns never bothered to cash the check with
which Killilea purported to pay for the company (as
Dunne was offloading assets to Killilea in the face of
mounting financial troubles) is more than sufficient
evidence of a broadly fraudulent scheme, as the jury
below found. Resp. App.53a.
For all these reasons, the jury had ample basis on
which to conclude that Irish law would treat 81 North
Wall Quay as having been owned directly by Dunne at
the time of the transfer. At a minimum, the fact that
this ownership issue implicates questions concerning
the potential application of Irish property and corporate law to the specific facts here (questions that were
not raised or addressed below because Killilea did not
squarely present at trial the argument she presses
now) further underscores that the decisions below do
not present generally-applicable legal questions concerning the meaning of the Bankruptcy Code that
need to be resolved by this Court.
3. Even if Killilea had raised in the district court
the question she presents to this Court, Killilea’s
26
arguments that the decision below conflicts with this
Court’s precedent or creates a circuit split that warrants this Court’s review are meritless. Killilea finds
apparent conflict between the decision below and this
Court’s statement in Begier that a transaction is voidable under Section 548 if the transferred property
“would have been part of the estate had it not been
transferred before the commencement of bankruptcy
proceedings.” 496 U.S. at 58.
The decision below is consistent with that rule.
The bankruptcy estate contains “all legal or equitable
interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541(a)(1). And the district court held that “Dunne undisputedly had an interest in North Wall Quay, even if it was formally
owned by Page Inns Limited.” Resp. App.52a. Killilea
argues that such an interest is insufficient to constitute the sort of “legal or equitable interest” that would
bring 81 North Wall Quay into the bankruptcy estate,
but that is not a question answered by Begier.
The contention that the decisions below created a
split of authority in the courts of appeals is equally
meritless. As noted, the Second Circuit’s summary order created no circuit precedent and so could not conflict with the decision of any other circuit court. Compounding the issue, the cases from other circuits that
Killilea claims are on the other side of the split were
also unpublished and nonprecedential. See United
States v. Flores, 477 F.3d 431, 433–34 (6th Cir. 2007);
Seventh Cir. R. 32.1(b); Ninth Cir. Bankruptcy App.
Panel R. 8024-1(c)(2); see also Pet.19–20.
In any event, Killilea’s claim that other circuits
have announced legal rules regarding the meaning
27
and scope of Section 548 that differ with the approach
taken by the courts below is incorrect. All of the relevant decisions—including, as discussed, the district
court decision here—recognize the self-evident principle that a property interest must be owned by the
debtor to be the subject of a fraudulent transfer claim.
Killilea is therefore seeking to elevate supposed differences in how courts have applied that principle in
particular factual contexts into a circuit split over the
principle itself. 7
III.
None Of The Issues Raised In Dunne’s
Petition Warrant This Court’s Attention.
Dunne presents, using conclusory, boilerplate language, four issues for this Court’s review, but none
7 For example, the Seventh Circuit nowhere held in In re
Wolf, 2023 WL 6564882 (7th Cir. Oct. 10, 2023), that a trustee
may not avoid a fraudulent transfer by a wholly-owned subsidiary corporation of the debtor. All that decision established was
that Illinois law likely recognizes reverse-veil piercing, an issue
irrelevant here. Id. at *4. In In re Fisher, 296 F. App’x 494 (6th
Cir. 2008), the Sixth Circuit, following Ohio law, recognized that
assets of a debtor’s wholly-owned corporation could be treated as
the debtor’s own assets in a bankruptcy “ ‘where the ends of justice require it.’ ” Id. at 506 (quoting Knight v. Burns, 22 Ohio
App. 482, 154 N.E.345, 346 (1926)). Finally, In re Wardle, No.
05-NV-1000, 2006 WL 6811026 (B.A.P. 9th Cir. Jan. 31, 2006),
presents a very different set of facts than those present here but,
as relevant to this dispute, the bankruptcy appeal panel of the
Ninth Circuit recognized that where a business is merely the alter ego of a debtor, the property of the business may be used to
satisfy the debtor’s creditors. Id. at *8. In short, none of the cited
cases stand for the proposition that the mere fact that 81 North
Wall Quay was held in name by Page Inns dispositively proves it
cannot be part of the Dunne bankruptcy estate, as the jury found
it was.
28
come close to meeting the threshold for certiorari.
Each of the four relates to the determination that the
Walford property was part of Dunne’s bankruptcy estate at the time it was transferred to Killilea. Notwithstanding Dunne’s overwrought rhetoric in framing his
questions, see, e.g. Dunne Pet.3 (“Under the [decisions
below], any property placed in a trust for a spouse or
family member of a debtor anywhere in the United
States or the world may now be subject to improper
seizure by a Bankruptcy Trustee in the United
States.”), this was a fact-bound determination of little
importance to anyone except the parties.
Moreover, questions regarding the Trustee’s
fraudulent transfer claim with respect to Walford are
of mostly theoretical interest to Dunne himself. According to Dunne’s own version of events, he transferred Walford to Killilea more than a decade ago, and
he has had no interest in the property since that time.
More importantly, the only relief that the Trustee obtained with respect to the Walford transfer was a
monetary recovery (not, as Dunne suggests, “seizure”
of the property) premised on Walford’s value, and that
recovery was obtained against Killilea, not Dunne.
Notably, Killilea has not seen fit to raise the questions
pressed by Dunne.
In any event, Dunne’s assertions as to each of his
questions are unsupported by legal authority and/or
contrary to the jury’s verdict, which was supported
with more than adequate evidence. In his first and
second questions, Dunne asserts that the district
court “ignored” a trust that was “created in 2005 and
redefined in 2006 for the benefit of proper estate planning,” and unlawfully treated real property (Walford)
that was not owned by Dunne (because he claims it
29
was held in trust) as part of the estate. Dunne Pet. 5–
6. These arguments distort the record below. No one
“ignored” the proffered evidence of a purported trust.
Rather, the jury credited “extensive evidence” that the
trust was a sham and that Dunne owned Walford until he transferred it on the same day he filed for bankruptcy. Resp. App.50a. Dunne makes no effort whatsoever to meet the high bar of demonstrating that the
jury’s finding was either seriously erroneous or a miscarriage of justice.
In his third question, Dunne argues that the district court erred in letting the jury decide whether
Walford was held in trust, “as such questions of Irish
law should be determined by the Court pursuant to
Federal Rule of Civil Procedure 44.1.” Dunne Pet.6.
But that is not correct either. As the district court explained: “Dunne’s argument misunderstands the differences between issues of law, issues of fact, and
mixed questions of law and fact.” Resp. App.46a–47a.
The district court appropriately determined that Irish
law applied and then instructed the jury on that law
while leaving it to the jury to make findings regarding
the ownership of Walford. Id. Dunne makes no argument that the district court erred in its instruction.
Finally, Dunne makes a conclusory argument that
the district court should have abandoned the jury’s
findings that Dunne had owned Walford when he
fraudulently transferred it, in deference to a subsequent Irish Tax Appeals Commission decision that apparently ruled, on the basis of a different, stipulated
record in tax assessment proceedings that did not involve the participation of the Trustee, that Walford
30
was held in trust. Dunne Pet.6–7. 8 Dunne characterizes this as alternately raising an issue of comity or of
the act of state doctrine. Id.
This claim is entirely without merit and not
certworthy. The district court undertook a thorough
analysis of Dunne’s argument, and rejected it on several grounds, including but not limited to the fact that
Dunne had “not identified a true or actual conflict between American and Irish law,” but had instead
“simply identified a difference in factual determinations between this proceeding and a later Irish proceeding involving different legal issues and different
parties.” Resp. App.45a. 9 Nor does Dunne make any
attempt to establish the existence of a true conflict between the Irish Commission decision and the judgment here, which simply awarded damages against
Killilea.
At bottom, Dunne’s argument is an attack on the
finality of the district court’s judgment, and he cites
no cases from any context in which such an attack was
successful. Indeed, if the district court had set aside
the jury verdict because of a later-in-time decision
from a foreign proceeding to which the Trustee was
not a party, that would in all likelihood have violated
due process. See, e.g., Parklane Hosiery Co. v. Shore,
439 U.S. 322, 327 n.7 (1979); see also Resp. App.49a
(district court was “particularly troubled by the
8 See Resp. App.42a–46a.
9 See also id. at 46a
(noting that the Irish litigation was
not a parallel proceeding for comity purposes since “it involved
completely different legal issues” and “different parties,” especially since “there was no party even superficially representing
the Trustee’s interests”).
31
implication of Dunne’s argument that suggests a losing litigant is free after trial to seek a contrary finding
in a different forum—without any involvement of the
opposing party and on an uncontested record—and to
use that finding to invalidate or undermine a prior
federal court jury verdict”).
CONCLUSION
This Court should deny the petitions.
May 17, 2024
Respectfully submitted,
Peter Antonelli, Esq.
PETER ANTONELLI LAW,
PLLC
One Marina Park Drive
Suite 1410
Boston, MA 02110
pantonelli@antonellifirm.com
Charles J. Cooper
Counsel of Record
Vincent J. Colatriano
William V. Bergstrom
COOPER & KIRK, PLLC
1523 New Hampshire
Avenue, N.W.
Washington, D.C. 20036
(202) 220-9600
ccooper@cooperkirk.com
Counsel for Respondent Richard M. Coan
APPENDIX
i
APPENDIX
TABLE OF CONTENTS
Appendix 1 Omnibus Ruling on Post-Trial Issues
in the United States District Court,
District of Connecticut
(July 15, 2021). . . . . . . . . . . . . . . App. 1a
App. 1a
APPENDIX 1
2021 WL 3012678
Only the Westlaw citation is currently available.
United States District Court, D. Connecticut.
No. 3:15-cv-00050 (JAM)
Adv. Proc. No. 15-5019 (JAM) (consol.)
[Filed July 15, 2021]
_____________________
Richard M. COAN,
)
Plaintiff-Trustee, )
)
v.
)
)
Sean DUNNE et al., )
Defendants.
)
____________________ )
Attorneys and Law Firms
Timothy D. Miltenberger, Coan, Lewendon, Gulliver &
Miltenberger, New Haven, CT, Douglass C. Lawrence,
Peter Antonelli, Thomas H. Curran, Zachary James
Gregoricus, Curran Antonelli, LLP, Boston, MA, Ryan
D. Sullivan, Sullivan Legal, P.C., South Boston, MA,
for Plaintiff-Trustee.
OMNIBUS RULING ON POST-TRIAL ISSUES
Jeffrey Alker Meyer, United States District Judge
App. 2a
This long-running case is a consolidated action
involving claims by a bankruptcy Trustee seeking to
recover assets relating to the bankruptcy of Sean
Dunne. In May 2019, I presided over a 19-day jury trial
on the Trustee’s claims. The jury returned a split
verdict. It found that Dunne engaged in numerous
fraudulent transfers of assets to his former spouse,
Gayle Killilea, in violation of the U.S. Bankruptcy
Code, Irish law, and Connecticut law, and it awarded
the Trustee total damages of €17,765,706 and
$278,297.18 against Killilea for those transfers. But the
jury also found that the Trustee had not proven various
other claims, including fraudulent transfers with
respect to certain assets and veil-piercing claims
against certain corporate entities.
Following the jury trial, the parties engaged in
extended settlement negotiations that have ultimately
not succeeded. As a result, this ruling will resolve a
number of post-trial issues that have arisen while those
settlement negotiations have been taking place over
the past two years. For the reasons set forth below, I
will deny Sean Dunne’s motion for post-verdict relief
including a new trial. I will grant in part and deny in
part the Trustee’s motion for prejudgment interest, and
I conclude that the Trustee is entitled to prejudgment
interest against Killilea in the total amount of
€1,407,229.60. I will deny the Trustee the equitable
relief that he seeks on certain issues were reserved for
the Court’s determination.
I further conclude that, after resolution of these
motions, there are no further substantive issues to take
up in this long-drawn-out action. Accordingly, final
App. 3a
judgment shall enter against Killilea in the total
amount of €19,172,935.60 and $278,297.18.
Because the entry of judgment obviates the need for
a prejudgment remedy, I will also overrule as moot
Killilea and other defendants’ objection to Judge
Garfinkel’s ruling on the Trustee’s motion for
post-verdict, prejudgment remedies. Additionally, I will
grant Killilea and defendant Wahl, LLC’s motion to
discharge the lis pendens on a property located at 22
Stillman Lane in Greenwich, Connecticut subject to
their proposed stipulation and representations that the
proceeds of any sale of the property will be provided to
the Trustee to secure and/or satisfy the judgment in
this case. Any motion for reconsideration or to re-open
the judgment must be filed within 14 days from the
entry of judgment.
Background
Sean Dunne was a prominent real estate developer
in Ireland with a reported net worth of more than $900
million in 2007. See Coan v. Dunne, 2019 WL 302674,
at *1 (D. Conn. 2019). But Dunne soon suffered
devastating financial reversals after the global
financial crisis struck in 2008, and this has set in
motion more than a decade of efforts by creditors and
bankruptcy trustees in the United States and Ireland
to recover from him. Ibid.
In 2010 the government of Ireland created the
National Asset Management Agency (“NAMA”) to
acquire troubled bank assets and other obligations.
Ibid. In the meantime, Dunne and his then-spouse
—defendant Gayle Killilea—moved to Greenwich,
App. 4a
Connecticut in 2010. Ibid. In 2012 Dunne consented to
a stipulated judgment against him and in favor of a
NAMA-related entity known as National Asset Loan
Management, Ltd. (“NALM”) for about $235 million
stemming from personal guarantees that Dunne had
given to secure debt for his companies. Ibid.
NALM, however, suspected that Dunne had
concealed assets from his creditors, and so NALM filed
an action in 2012 in the Connecticut Superior Court
claiming that Dunne had fraudulently transferred
various assets to others including Killilea. Ibid. Among
the defendants named in NALM’s action were Dunne,
Killilea, and several corporate entities. Ibid.
While the state court action was pending, Dunne
filed for bankruptcy in March 2013 in the U.S.
Bankruptcy Court in the District of Connecticut, and
his creditors soon commenced a bankruptcy action
against him as well in Ireland. Id. at *2. In January
2015, Dunne waived his discharge in the U.S.
bankruptcy action, and the bankruptcy Trustee—
plaintiff Richard Coan—moved to intervene in the state
court action and to remove it to this Court. Ibid. The
Court granted the Trustee’s motion to intervene and
denied defendants’ motion to remand. Ibid.
About two months later, the Trustee commenced a
separate but somewhat duplicative adversary
proceeding in the Bankruptcy Court against Killilea
and others in March 2015. See Coan v. Killilea, Adv.
Proc. No. 15-05019 (D. Conn.). The Trustee alleged 35
causes of action based on alleged fraudulent transfer of
assets or money to Killilea from 2005 to 2008. See Coan
v. Dunne, 2019 WL 302674, at *2.
App. 5a
In 2018, the removed state court action and the
adversary proceeding that had been proceeding on a
separate track in the Bankruptcy Court were
consolidated before this Court.1 In April 2019, the
Trustee was substituted for NALM as the plaintiff in
the state court action as well.2 In addition to Sean
Dunne, several other defendants in the consolidated
case are represented by the same counsel—Killilea,
John Dunne, Mountbrook USA, LLC, Wahl, LLC, and
TJD21, LLC (together, the “Killilea defendants”).
Parallel and related proceedings have also taken place
in Ireland, led by the Irish Official Assignee (“OA”),
who is the equivalent of the Trustee in the parallel
Irish proceedings. See Coan v. Dunne, 2019 WL 276203,
at *1 (D. Conn. 2019).
Shortly before trial, I limited the claims in this case
to only those expressly alleged in the complaints in the
removed state court proceeding and the bankruptcy
adversary proceeding, and I denied the Trustee leave to
file a second amended complaint including additional
claims.3
The case proceeded to trial in May 2019. The parties
presented extensive evidence through 14 trial days.
The jury was instructed on 18 counts involving
allegedly fraudulent transfers under the U.S.
1
Doc. #52.
2
Doc. #416.
3
Doc. #442 at 29-31 (pretrial conference transcript); see also Coan
v. Dunne, 2019 WL 1976146, at *1-*2 (D. Conn. 2019) (describing
ruling on motion to limit evidence to claims in the complaints).
App. 6a
Bankruptcy Code, Irish law, and Connecticut law.4 For
these counts, the jury was instructed that, if it found a
fraudulent transfer took place, it should determine
which, if any, of the Killilea defendants to hold liable
for damages and to provide the amount of damages
that each liable defendant should owe.5 Additionally,
the jury was charged with determining whether the
Trustee had proven that the corporate veil should be
pierced with respect to four corporate entities on either
identity or instrumentality theories, and whether the
Trustee had proven a fraudulent transfer for which he
was entitled to the return of a property located at 22
Stillman Lane in Greenwich, Connecticut.6 As agreed
by the parties, other counts involving equitable claims
—including claims for unjust enrichment, an
accounting, constructive trust, and declaratory
judgments—were reserved for my determination based
on the evidence submitted at trial.7
After five days of deliberations, the jury returned a
split verdict. Specifically, the jury found that Sean
Dunne engaged in fraudulent transfers under nine of
the counts submitted to it:
4
See Doc. #509; Doc. #511.
5
Ibid.
6
Id. at 27-29, 31. The jury verdict sheet inadvertently states 22
Stillman Road, but the relevant property is located at 22 Stillman
Lane in Greenwich, Connecticut. See Doc. #629-1 at 4.
7
See Doc. #604 at 6 (charge conference transcript).
App. 7a
• In Count 1, the jury found that Dunne engaged
in an intentionally fraudulent transfer of an
Irish property known as Walford in violation of
the U.S. Bankruptcy Code. It found that only
Killilea was liable for the transfer and that
Killilea was liable for €14,000,000 in damages.8
• In Count 2, the jury found that Dunne engaged
in a constructively fraudulent transfer of
Walford in violation of the U.S. Bankruptcy
Code, though it did not hold any of the
defendants liable for the transfer.9
• In Count 3, the jury found that Dunne engaged
in an intentionally fraudulent transfer of an
Irish property located at 81 North Wall Quay in
violation of the U.S. Bankruptcy Code. It found
that only Killilea was liable for the transfer and
that Killilea was liable for €100,000 in
damages.10
• In Count 4, the jury found that Dunne engaged
in a constructively fraudulent transfer of the
North Wall Quay property in violation of the
U.S. Bankruptcy Code. It found that only
Killilea was liable for the transfer and that
Killilea was liable for €200,000 in damages.11
8
Doc. #509 at 1.
9
Id. at 1-2.
10
Id. at 2.
11
Id. at 2-3.
App. 8a
• In Count 10, the jury found that Dunne engaged
in three constructively fraudulent transfers
between August 2011 and April 2012 of a stream
of payments known as the Lucy Partnership
payments in violation of the U.S. Bankruptcy
Code. It found that only Killilea was liable for
the transfers and that Killilea was liable for
€258,000 in total damages for the transfers.12
• In Count 11, the jury found that Dunne engaged
in two intentionally fraudulent transfers of other
Lucy Partnership payments between October
2010 and March 2011 in violation of Irish law. It
found that only Killilea was liable for the
transfers and that Killilea was liable for
€192,706 in total damages for the transfers. The
jury also found that three other transfers
charged in Count 11 were not intentionally
fraudulent under Irish law.13
• In Count 21, the jury found that Dunne engaged
in an intentionally fraudulent transfer of
€3,015,000 from his joint Credit Suisse account
with Killilea to her individual account in
violation of Irish law. It found that only Killilea
was liable for the transfer and that Killilea was
liable for damages in the full €3,015,000 amount
of the transfer.14
12
Id. at 4-5.
13
Id. at 5-6.
14
Id. at 8.
App. 9a
• In Count 25, the jury found that Dunne engaged
in an intentionally fraudulent transfer of his
50% interest in the IGB Lands to Killilea in
violation of Irish law, though it did not hold any
of the defendants liable for the transfer.15
• In Count 27, the jury found that Dunne engaged
in intentionally fraudulent transfers of
approximately $278,297.18 to Killilea on various
dates between July 2010 and November 2010 in
violation of Connecticut law. It found that only
Killilea was liable for the transfers and that
Killilea was liable for damages in the full
$278,297.18 amount of the transfers.16
In total, the jury awarded the Trustee total
damages of €17,765,706 and $278,297.18 against
Killilea.
The jury otherwise found that the Trustee had not
proven his claims with respect to the remaining counts,
including fraudulent transfer claims related to other
Lucy Partnership payments; the transfer of certain
rents known as the Ouragh rents as well as certain
furniture and fixtures of the Ouragh property; transfer
of Dunne’s membership interest in Mountbrook USA to
Killilea; transfer of Dunne’s interest in Swiss
Condominiums to Killilea; and transfer of Dunne’s
interest in Beara Properties Director’s loans to
15
Id. at 9.
16
Ibid.
App. 10a
Killilea.17 The jury also found that Dunne had not
engaged in a preferential transfer of Ouragh rents to
Killilea.18 And it found that the Trustee had not proven
his veil-piercing claims under either identity or
instrumentality theories and that the Trustee was not
entitled to the return of the property at 22 Stillman
Lane.19
Following the jury’s verdict, I temporarily stayed
briefing on post-trial issues for 45 days and otherwise
deferred consideration of post-trial motions to allow the
parties to engage in global settlement talks with U.S.
Magistrate Judge Robert M. Spector.20 Because the
parties were ultimately unable to reach a settlement,
they have asked me to adjudicate post-trial motions. In
particular, Sean Dunne has moved for post-verdict
relief.21 The Trustee has moved for prejudgment
interest on the jury verdict as well as for entry of
judgment on his equitable claims.22 The Killilea
defendants have objected to a ruling by U.S. Magistrate
Judge Garfinkel granting the Trustee’s motion for
post-verdict, prejudgment remedies, and Killilea and
Wahl have moved to discharge the lis pendens on 22
17
Id. at 3-8.
18
Id. at 9-10.
19
Id. at 10.
20
See Doc. #518; Doc. #520 (status conference transcript).
21
Doc. #570.
22
Doc. #627; Doc. #524.
App. 11a
Stillman Lane.23 I heard oral argument on these issues
on July 7, 2021, and this ruling now follows.
Discussion
I will address each of the pending post-trial issues
in turn.
I.
Sean Dunne’s motion for post-verdict relief
I will first address the argument that Dunne does
not have standing to bring this post-trial motion, and
then I will address each of Dunne’s arguments for
post-verdict relief in turn.
A. Standing
The Trustee argues that Sean Dunne lacks standing
to seek post-verdict relief because “he was not found
liable for any claims in the jury verdict” and because he
should not be able “to seek post-verdict relief on behalf
of his co-defendants against whom the jury found
liability.”24 At oral argument, the Killilea defendants
for the first time also made a conclusory argument that
Dunne lacks standing to bring his motion.
The argument is not persuasive. Dunne is a party
defendant in this action. The Trustee opposed Dunne’s
motion to be dismissed as a defendant in this action.25
Dunne participated in the trial through counsel.
Although the jury was not asked whether to assign
23
Doc. #647; Doc. #629.
24
Doc. #655 at 1-2 n.1.
25
Doc. #204.
App. 12a
Dunne liability, it still found that he engaged in
fraudulent transfers—a finding that is against his legal
interests. As I explained when I denied Dunne’s motion
to be dropped as a defendant in this action, “[i]t is clear
to me that Dunne was properly joined as a defendant
in accordance with Rule 20’s requirements of common
questions of law and fact among the defendants.” Coan
v. Dunne, 2019 WL 1513461, at *2 (D. Conn. 2019). I
further explained that, because the Trustee’s complaint
included an equitable claim against Dunne for an
accounting, it was important that Dunne also be bound
by any judgment against his co-defendants so that
he—as a prime participant in all that allegedly
happened—would be required to participate in an
accounting, if the Court determined that an accounting
was warranted. See ibid.
Based on the same reasoning, the jury’s verdict
binds Dunne and affects his legal rights, including
whether he should be liable to render an accounting
under the remaining equitable claim against him.
Indeed, as discussed below, the Trustee is currently
seeking an accounting from Dunne on the basis of the
jury’s verdict. To the extent that post-verdict relief is
warranted, I conclude that Dunne has standing to seek
it.26
26
Relatedly, I also reject the Killilea defendants’ untimely request
at oral argument that I defer consideration of Dunne’s motion until
they have filed their own motion for post-trial relief. To the extent
that the Killilea defendants believe that they are prejudiced by
Dunne’s motion because they could have raised stronger
arguments than Dunne, they could have filed an objection or other
response to Dunne’s motion in the nearly two years since it was
filed. See Henkel of America, Inc. v. ReliaStar Life Ins. Co. et al.,
App. 13a
B. Inconsistent verdicts
Dunne first argues that a new trial must be ordered
pursuant to Federal Rule of Civil Procedure 49 because
the jury’s verdict is “irreconcilably inconsistent.” In
particular, Dunne argues that the jury’s verdict with
respect to Walford in Counts 1 and 2 is irreconcilably
inconsistent; the jury’s verdict regarding North Wall
Quay in Counts 3 and 4 is irreconcilably inconsistent;
and the jury’s verdict finding against corporate veil
piercing is irreconcilably inconsistent with the jury’s
verdict in Counts 1 through 4 finding fraud in the
transfers involving Walford and North Wall Quay.27
Under Rule 49, “[w]hen the answers are
inconsistent with each other and one or more is also
inconsistent with the general verdict, judgment must
not be entered; instead, the court must direct the jury
to further consider its answers and verdict, or must
order a new trial.” Fed. R. Civ. P. 49(b)(4). “To justify
setting aside an otherwise valid jury verdict, the
special verdict answers must be ineluctably
inconsistent. In cases where the special verdict
answers appear to be inconsistent but there is a view
2021 WL 2857503, at *6 (D. Conn. 2021) (explaining the
“better-reasoned view ... that any party to litigation may oppose
another party’s motion for relief if the party can make some
showing of likely harm if the relief is granted”). Of course, the
Killilea defendants also could have raised their purportedly
stronger arguments against the jury verdict through their own
post-trial motion in the two years since the jury verdict. They have
not done so, and I will not further delay consideration of Dunne’s
motion to allow the Killilea defendants to file untimely briefing.
27
Doc. #571 at 21-23.
App. 14a
of the case that makes the jury’s answers consistent,
they must be resolved that way.” Munafo v. Metro.
Transp. Auth., 381 F.3d 99, 105 (2d Cir. 2004)
(emphasis in original). “If the jury’s answers cannot be
harmonized rationally, the judgment must be vacated
and a new trial ordered.” Kosmynka v. Polaris Indus.,
Inc., 462 F.3d 74, 82 (2d Cir. 2006).
“It is well established that a party waives its
objection to any inconsistency in a jury verdict if it fails
to object to the verdict prior to the excusing of the jury.
The timely objection requirement is not merely a
technicality—it serves to give the court and the
opposing party the opportunity to correct an error in
the conduct of the trial.” Anderson Grp., LLC v. City of
Saratoga Springs, 805 F.3d 34, 46 (2d Cir. 2015).28 “[I]t
is all the more essential in complicated cases for a
litigant to timely notify the court of a perceived verdict
inconsistency so as to permit an opportunity for
correction of the error while the jury remains
empanelled, thereby possibly heading off a second
lengthy trial such as the one that occurred in this
case.” Id. at 47.
Some courts have recognized that “[w]aiver may be
excused if a verdict constitutes ‘fundamental error.’ ”
Am. Tech. Ceramics Corp. v. Presidio Components, Inc.,
490 F. Supp. 3d 593, 624 (E.D.N.Y. 2020); see also
Anderson Grp., 805 F.3d at 49-50 (discussing whether
inconsistent verdict constituted fundamental error).
28
Unless otherwise indicated, this ruling omits internal quotation
marks, alterations, citations, and footnotes in text quoted from
court decisions.
App. 15a
“Fundamental error is more egregious than the plain
error that can excuse a procedural default in a criminal
trial, and is so serious and flagrant that it goes to the
very integrity of the trial.” Anderson Grp., 805 F.3d at
49.
Dunne did not object to the alleged inconsistencies
in the jury verdict at trial before the Court discharged
the jury. After the jury returned a verdict on June 4,
2019, I observed the potential issue with the verdict
that Dunne now raises related to damages for North
Wall Quay.29 In a sidebar, the Trustee’s counsel stated
“[t]here seems to be a mistake,” and absent objection,
I requested that the jury reconsider its verdict only
with respect to Counts 3 and 4.30 I instructed the jury:
[J]ust for clarity’s sake, in light of the Court’s
instruction to ensure against any kind of
possible double recovery or an inconsistent
recovery, there is with respect to the jury’s
verdict as to Count 3 and Count 4, there is a
different amount that the jury has filled in
there. ... I’m simply going to ask you to actually
go back, consider whether there’s a basis in your
deliberations for that. There may well be, in
which case you would adhere to that. But we
want to make sure, in the event that there’s any
kind of a further consideration of the jury’s
verdict in the case, that it is not the result of any
kind of a misapprehension of anything. So what
29
Id. at 7-8 (Tr. 2921-22).
30
Id. at 7-9 (Tr. 2921-23).
App. 16a
we’ll do is just ask you to go back into the jury
room. If indeed this is correct, then come on back
and we’ll be ready and waiting for you. ... All
we’re going to do is ask you to go back, and if
indeed it is absolutely correct, that you wish the
verdict form just as it is, come on back and we’ll
enter the verdict as is. If it’s not, then we just
ask you to reconsider that issue and solely with
respect to Counts 3 and 4, okay?31
The jury deliberated again, and then stated, “[w]e
have reviewed our evidence and will continue with our
original decision.”32
After the verdict was read, I asked all counsel for
another sidebar and allowed them to review the verdict
form.33 I specifically noted that “with relation to the
intentional fraud count, Count #1, the jury did not
answer ‘yes’ or ‘no’ as to the other defendants other
than Ms. Killilea. My assumption is that the jury
meant to say ‘no’ for the other defendants. If you wish
me to make a query, I’ll make a query on that.”34 After
counsel reviewed the verdict and no counsel objected
with regard to the issue flagged on Count 1 or anything
else related to the verdict more generally, I excused the
31
Id. at 8-9 (Tr. 2922-23).
32
Id. at 9 (Tr. 2923).
33
Id. at 22 (Tr. 2936).
34
Id. at 22-23 (Tr. 2936-37).
App. 17a
jury.35 At no point during the examination of the
verdict did Dunne—as distinct from the Killilea
defendants—raise any objection related to the jury
verdict being inconsistent.
Dunne argues that he nonetheless has not waived
arguments related to the inconsistency of the jury
verdict because defendants moved for judgment as a
matter of law, and because I stated that such motions
as well as post-trial briefing were stayed for 45 days
after trial pending the parties’ settlement discussions.36
But it was the Killilea defendants who moved for
judgment as a matter of law; Sean Dunne did not join
the motion.37 Moreover, the Second Circuit has
“rejected the argument that a litigant may rely on a
motion for judgment as a matter of law to preserve an
inconsistency argument.” Anderson Grp., 805 F.3d at
47. And while I reserved the parties’ rights to file
post-trial motions such as this motion for a new trial,
that does not preserve Dunne’s right to object to the
verdict as irreconcilably inconsistent under Rule 49
because Dunne “fail[ed] to object to the verdict prior to
the excusing of the jury.” Id. at 46.
With respect to the Walford property, Dunne also
argues that the issue raised in the sidebar “is not the
basis of this challenge” and that “Dunne asserts an
35
Id. at 22-23, 26 (Tr. 2936-37, 2940).
36
Doc. #685 at 6; see also Doc. #518; Doc. #520 (status conference
transcript).
37
See Doc. #491 at 10.
App. 18a
altogether other issue.”38 This point only underscores
that Dunne did not timely raise the challenge.
Dunne further argues that his objections to
Counts 3 and 4 related to North Wall Quay are
preserved because the “inconsistency was preserved by
the jury’s own redeliberations.”39 According to Dunne,
“[t]here was no need for further objection as the issue
was preserved” and he “did not need to lodge a
duplicate and unnecessary objection in order to further
preserve the issue.”40 But Dunne’s briefing cites no
caselaw in support of his general preservation theory.
To the contrary, the Second Circuit has expressly held
that the party must object to preserve the issue of
whether the verdict is inconsistent. See Anderson Grp.,
805 F.3d at 47.
The case that Dunne emphasized at oral argument,
Kosmynka v. Polaris Indus., Inc., 462 F.3d 74 (2d Cir.
2006), does not support his argument against waiver.
Dunne highlights the Second Circuit’s statement that
“[o]nce the court is on notice of the inconsistency, each
party has the choice of what to advocate and the court
has the choice of what to do.” Id. at 83. But that
statement came in the context of an appeal in which
the dissatisfied party—unlike Dunne—“brought the
inconsistency to the court’s attention at the earliest
possible moment.” Id. at 82. As a result, the Second
Circuit rejected the argument that “when faced with an
38
Doc. #685 at 6, 8.
39
Id. at 12.
40
Id. at 12-13.
App. 19a
inconsistent verdict, the onus is on the dissatisfied
party to ensure that the court keep the jury, or that by
requesting a mistrial, a dissatisfied party waives
appellate review of the inconsistent verdict.” Id. at 83.
As the Second Circuit explained, “[a] litigant preserves
the issue for appeal by exposing the inconsistency
before the jury is dismissed.” Ibid.
But that is not what Dunne did. His inconsistency
arguments are not preserved by the jury’s
redeliberation because he did not timely object to the
jury’s verdict. “In short, by raising [his] inconsistency
argument for the first time in [his] post-trial motion
papers filed long after the jury was excused, [Dunne]
waived [his] objection.” Anderson Grp., 805 F.3d at 47.
In any event, Dunne has not shown that the jury’s
verdict is “ineluctably inconsistent” or that it
constitutes “fundamental error” that undermines the
integrity of the trial. Dunne’s arguments with respect
to Counts 1-4 imply that the jury must have found the
exact same amount of liability for both an intentionally
and a constructively fraudulent transfer.41 But as the
jury instructions stated, a transfer can be both
intentionally and constructively fraudulent, and double
41
See, e.g., id. at 12 (“The finding for Count 2 fatally undermines
and is irreconcilably inconsistent with the finding in Count 1 for
the same transaction, on the same day, for the same property”); id.
at 13 (“under Verdict Questions 3 and 4 the jury returned a verdict
that valued the same property at the same time (date of the
transfer) at two wholly inconstant amounts ... there is no way to
harmonize these two inconsistent liability amounts”).
App. 20a
recovery was not permitted for the same transaction.42
As a result, in cases in which the jury found Dunne
engaged in both intentionally and constructively
fraudulent transfers, it is appropriate to view the
liability amounts for the same transaction together, in
which case any perceived inconsistencies in the
damages awarded can be logically explained.
With respect to Walford, there is a view of the case
that makes the verdict in Counts 1 and 2 consistent:
the jury found that Dunne engaged in intentional and
constructive fraud in transferring Walford, but only
assigned liability and damages with respect to
intentional fraud to avoid a double recovery. The jury
awarded €14,000,000 in damages against Killilea for
Count 1, which is equal to the amount that the
property was worth at the time of its disposition
according to Killilea’s schedule of transfers.43 The jury
did not award any damages with respect to Count 2,
which, if the jury accepted a €14,000,000 valuation,
would have resulted in a double recovery.
Despite Dunne’s protestations, the jury’s checking
of “no” for liability in Count 2 does not necessarily
42
See Doc. #511 at 6-7 (“Keep this distinction in mind between an
intentionally fraudulent transfer and a constructively fraudulent
transfer because, for many of the transactions at issue in this case,
you will be asked to consider whether the transaction is either
intentionally fraudulent or constructively fraudulent or both”)
(emphasis added); id. at 32 (the jury may not “award double
recovery or duplicative damage awards arising from the same loss
or injury”).
43
Pl. Ex. 625 at 2; see also Doc. #582 at 121 (Tr. 121) (admitting
exhibit).
App. 21a
mean that it found that Dunne transferred Walford to
an unnamed “third party” in a way that renders the
entire verdict inconsistent. It could, for example, mean
that the jury did not assign liability for the constructive
fraud count because it had already assigned full
liability to Killilea for the intentional fraud count.44
Because this reasonable view of the case
harmonizes the jury verdict, it is readily
distinguishable from the case that Dunne raised at oral
argument, United States v. Pierce, 940 F.3d 817 (2d
Cir. 2019). In that criminal case, the Second Circuit
held that acquittal was warranted because the jury
returned a verdict that was “metaphysically impossible
to reconcile” by finding the defendant guilty of
conspiracy to possess with intent to distribute various
narcotics, but also finding that the allegation that the
defendant had conspired to distribute each of the
relevant drugs was “not proven.” Id. at 824. Those
circumstances are simply inapplicable in this case.
Similarly, with respect to North Wall Quay, the
jury’s verdict can be reconciled by combining the
€100,000 awarded in Count 3 and the €200,000
awarded in Count 4 for a total damages award of
€300,000 related to the transaction. That total amount
equals the value of North Wall Quay at the time of its
disposition according to Killilea’s schedule of transfers,
just like the jury’s total damages award with respect to
44
The remainder of Dunne’s challenge to the Walford verdict in
the Rule 49 section of his brief is with regard to the Irish High
Court’s recent ruling to be discussed below—not with any internal
inconsistency in the jury’s verdict. See Doc. #685 at 7-11.
App. 22a
Walford.45 Dunne argues that this total award would be
improper because the jury was instructed to “value the
property at the time of the transfer not at the time of a
subsequent transfer.”46 But he ignores that the
instructions provide an exception that “[i]f the asset
has appreciated since the transfer, then you should, in
general, award damages for the appreciated value of
the asset as it is today.”47 The jury’s verdict could be
read to find that the value of North Wall Quay
appreciated after the fraudulent transfer, and therefore
the jury awarded the Trustee damages for an
intentionally and constructively fraudulent transfer
based on the increased value pursuant to the jury
instructions.
Although the Trustee stated that “[t]here seems to
be a mistake” and the Court instructed the jury to
redeliberate with respect to Counts 3 and 4, that does
not mean the jury’s verdict is ineluctably inconsistent.
The Trustee made that remark before seeing the
amounts on the jury verdict form. The jury
redeliberated with respect to this exact issue, with the
instruction to “consider whether there’s a basis in your
deliberations for that. There may well be, in which case
45
Pl. Ex. 625 at 2.
46
Doc. #685 at 13-14.
47
Doc. #511 at 31. Notably, Dunne implicitly endorses the opposite
approach with respect to Walford, which he does not argue should
be valued at €57,950,000 when transferred rather than
€14,000,000 at the date of disposal. See Pl. Ex. 625 at 2.
App. 23a
you would adhere to that.”48 The jury then reaffirmed
its verdict. No party, including Dunne, objected to the
verdict as inconsistent or requested that the Court
inquire with more precision as to the jury’s decision
once they reviewed the verdict. Because there is an
interpretation that harmonizes the jury’s verdict with
respect to each of these counts, it is not ineluctably
inconsistent.
Finally, Dunne argues that the jury’s findings
related to corporate veil piercing and Counts 1-4 are
irreconcilably inconsistent.49 But as the Trustee argues,
this is not a proper Rule 49 challenge because the jury
was not asked to determine whether to pierce the veil
for any of the entities Dunne argues were involved in
the Walford or North Wall Quay transactions.50 Under
Dunne’s theory, the jury could not have rendered any
verdict that found Dunne fraudulently transferred
these properties; therefore, his challenge is at most a
challenge to the jury instructions and the verdict form.
“Objection to an inconsistency between two general
verdicts that is traced to an alleged error in the jury
instruction or verdict sheet is properly made under
Fed. R. Civ. P. 51. Yet to avail itself of relief under this
Rule, a party must object before the jury retires to
deliberate.” Jarvis v. Ford Motor Co., 283 F.3d 33, 56
(2d Cir. 2002) (Sotomayor, J.). Even a timely Rule 49
objection “cannot, as a matter of law, provide any relief
48
Doc. #610 at 8 (Tr. 2922).
49
Doc. #571 at 23; Doc. #685 at 14-15.
50
See Doc. #655 at 8-9
App. 24a
for a party challenging a conflict between general
verdicts based on an instruction given in the jury
charge and repeated on the verdict sheet.” Ibid. Dunne
did not challenge the jury instructions and verdict
sheet on these grounds, and therefore waived this
challenge to the verdict.51
Moreover, Dunne’s arguments do not even
demonstrate that corporate veil piercing has any
bearing on these transfers. With respect to North Wall
Quay, the transfer document was signed by both
Dunne and Killilea and does not indicate the capacity
in which they signed it.52 And as detailed below, the
trial evidence was sufficient to sustain the jury’s
verdict that Dunne engaged in intentional and
constructive fraud when he transferred North Wall
Quay regardless of any involvement of corporate
entities; there is no flaw or internal inconsistency
within the verdict. For the Walford property, Dunne
does not actually point to an entity that allegedly
owned the property rather than himself. Therefore,
veil-piercing has no bearing on Walford, and his
argument is simply a restatement of his core claim that
he was not the actual owner of Walford.
Accordingly, I will deny Dunne’s motion to the
extent that he seeks relief from inconsistent verdicts
under Rule 49. He has waived these challenges to the
jury verdict and the challenges also fail on the merits.
51
52
See Doc. #604 (charge conference transcript).
Pl. Ex. 503; see also Doc. #592 at 68 (Tr. 1309) (admitting
exhibit).
App. 25a
C. Dunne’s motion
remittitur
for
new
trial
or
Dunne next argues that the Court should grant a
new trial or remittitur pursuant to Rule 59 because the
jury’s verdict is contrary to law, because the Court
improperly precluded Dunne’s expert from testifying on
material issues, and because the jury verdict is against
the weight of the evidence for each of the counts that
the jury found that Dunne engaged in a fraudulent
transfer.53
Rule 59(a) of the Federal Rules of Civil Procedure
allows a court to grant a new trial “for any reason for
which a new trial has heretofore been granted in an
action at law in federal court.” Fed. R. Civ. P. 59(a)
(1)(A). When evaluating a Rule 59 motion for new trial,
a judge “may weigh the evidence and the credibility of
witnesses and need not view the evidence in the light
most favorable to the verdict winner.” Raedle v. Credit
Agricole Indosuez, 670 F.3d 411, 418 (2d Cir. 2012).
Dunne errantly argues that a new trial is warranted
if the jury’s verdict is “against the weight of the
evidence,” which he argues is simply a “preponderance”
or “greater weight of the evidence.”54 But the cases that
he relies on for that definition are from contexts
unrelated to a motion for a new trial. See De La Rosa v.
Holder, 598 F.3d 103, 108 (2d Cir. 2010) (discussing
standard of review for Board of Immigration Appeals
review of decisions by immigration judges); Haltmier v.
53
Doc. #571 at 23-31; Doc. #685 at 15-20.
54
Doc. #571 at 23-24; Doc. #685 at 19.
App. 26a
Commodity Futures Trading Comm’n, 554 F.2d 556,
560 (2d Cir. 1977) (judicial review of agency decisions
under the Commodity Exchange Act). As the Second
Circuit explained in one of those cases, the term
“ ‘weight of the evidence’ is often equated across
circuits with a de novo inquiry into the preponderance
of the evidence.” De La Rosa, 598 F.3d at 108. That
standard is plainly incompatible with the deferential
standard applied to Rule 59 motions for a new trial.
Rather, the Second Circuit has emphasized that
“trial judges must exercise their ability to weigh
credibility with caution and great restraint, as a judge
should rarely disturb a jury’s evaluation of a witness’s
credibility, and may not freely substitute his or her
assessment of the credibility of witnesses for that of the
jury simply because the judge disagrees with the jury.”
Raedle, 670 F.3d at 418. “A trial court should not grant
a motion for a new trial unless it is convinced that the
jury reached a seriously erroneous result or that the
verdict is a miscarriage of justice,” Ali v. Kipp, 891 F.3d
59, 64 (2d Cir. 2018), or “if substantial errors were
made in admitting or excluding evidence.” Stampf v.
Long Island R.R. Co., 761 F.3d 192, 202 (2d Cir. 2014).
“It is well-settled that Rule 59 is not a vehicle for
relitigating old issues, presenting the case under new
theories, securing a rehearing on the merits, or
otherwise taking a ‘second bite at the apple.’ ” Sequa
Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998).
I will address Dunne’s arguments with respect to
each of the transfers for which he seeks a new trial in
turn.
App. 27a
1. Walford
Dunne first argues that a new trial is needed for
Counts 1 and 2 regarding the Walford property because
the jury’s verdict finding that Dunne fraudulently
transferred Walford is contrary to Irish law and
because his expert, Professor John Wylie, was
improperly precluded from testifying on material
issues.55
In order to prove Count 1—that Dunne engaged in
intentional fraud in transferring Walford—the Trustee
needed to show by a preponderance of the evidence that
Dunne 1) transferred it to a defendant or other third
party no more than two years before he filed for
bankruptcy; and 2) made the transfer with the actual
intent to hinder, delay, or defraud his creditors.56 In
order to prove Count 2—that Dunne engaged in
constructive fraud in transferring Walford—the Trustee
needed to show by a preponderance of the evidence that
1) Dunne transferred it to a defendant or other third
party no more than two years before he filed for
bankruptcy; 2) that Dunne did not receive reasonably
equivalent value for the transfer; and 3) when Dunne
transferred Walford, he either was already insolvent or
would become insolvent as a result of the transfer; was
engaging in—or was about to start engaging
in—business or a transaction for which he would have
an unreasonably small amount of capital after the
transfer; or intended to incur or believed that he would
55
Doc. #571 at 24-29.
56
See Doc. #511 at 7-10.
App. 28a
incur debts that would be beyond his ability to pay as
they became due.57
Dunne focuses on the first prong of both the
intentional and constructive fraud counts—that he
must have made the transfer within two years of filing
for bankruptcy—because he argues that he did not own
Walford at all and therefore could not have transferred
it. Dunne contends that the jury’s verdict with respect
to Walford was contrary to law because “under Irish
law, [Dunne] was never the owner of that property and
had no legal right or title in the property to effectuate
the transfer,” and “the weight of the evidence showed
unequivocally that Dunne did not own the Walford
property.”58
Under Dunne’s theory, he and Killilea entered into
a postnuptial agreement in March 2005 “whereby
Killilea as consideration for their marriage would
receive from Dunne a portion of assets in Dunne’s
estate.”59 Dunne “contracted to purchase [the] Walford
property for his wife” and “Killilea was the sole
beneficial owner of Walford from the date of
purchase.”60 “Walford was held in trust on behalf of
Killilea subject to a Declaration of Trust,” with Dunne
initially as the trustee for Killilea as the beneficial
57
Id. at 14-17.
58
Doc. #571 at 24-29.
59
Id. at 11 (¶ 17).
60
Id. at 11-12 (¶ 17).
App. 29a
owner.61 In 2006, Matsack Nominees Limited replaced
Dunne as the trustee of Walford, “relegating Dunne to
third party status as to Walford.”62 Dunne argues that
“the overwhelming evidence elicited at trial was that
Killilea was the beneficial owner since 2005 and no
evidence to the contrary was elicited or presented by
the Trustee,” and that the “unchallenged 2005
transaction renders the Jury’s Verdict contrary to
law.”63
But Dunne ignores the extensive evidence that the
Trustee offered at trial to show that Dunne actually
purchased Walford in his individual capacity in 2005,
that the “Declaration of Trust” was fabricated, and that
Dunne was the beneficial owner of Walford in his
individual capacity until he transferred it to Killilea on
March 29, 2013—the very same day he filed for
bankruptcy in the District of Connecticut.64 In
particular, the Trustee showed that on July 1, 2005,
the contract for the sale of Walford identified Sean
Dunne as the “purchaser” and was signed by Paul
Donnelly “as lawful attorney for Sean Dunne,” without
any reference to the purchase being in trust or in
61
Id. at 12 (¶ 17).
62
Ibid.
63
Id. at 24, 26.
64
See Doc. #655 at 11-16 (summarizing trial evidence). Many of
these communications refer to “Queenstown,” which was another
name for the Walford property. See, e.g., Doc. #588 at 174 (Tr.
1032).
App. 30a
Dunne’s capacity as trustee for Killilea.65 Killilea
agreed in trial testimony that “pursuant to this
contract, Mr. Dunne was ... committed to spending the
full 57,950,000 euros whether [she] wanted to go
through the deal or not” “because he didn’t take it in or
enter the contract in [her] name.”66 Dunne testified
that he entered into the contract so that the sellers
would “know that the purchaser had the capacity to
complete the sale,” and though he claimed that he was
purchasing it in trust for Killilea, he was keeping that
information from the sellers.67
The Trustee also details a number of
communications between Dunne and his then-attorney,
Patrick Sweetman, that took place after the
“Declaration of Trust” was purportedly signed but that
conspicuously omit mention of the Declaration of Trust
or Killilea.68 For example, in a letter of June 7, 2006
from Sweetman to Dunne, Sweetman stated that it
could be possible to “provide a nominee company,
Matsack Nominees Limited, which would acquire all of
the site ... that company having previously entered into
a nominee agreement with you whereby it will
acknowledge and agree that it holds the property as
65
Def. Ex. 5596 at 3; see also Doc. #592 at 164 (Tr. 1405)
(admitting exhibit); Doc. #594 at 155 (Tr. 1602) (Killilea admitting
that Dunne is identified as the purchaser on the contract).
66
Doc. #594 at 156 (Tr. 1603); Doc. #596 at 36 (Tr. 1698) (Dunne
stating “I gave Paul power of attorney to sign on my behalf”).
67
Doc. #596 at 176-77 (Tr. 1838-39).
68
Doc. #655 at 12-13.
App. 31a
nominee for you. The nominee agreement would also
require you to indemnify that company in respect of
any public liability claims or other losses it might
suffer by reason of acting as nominee.”69 The letter
addressed Dunne as the party to enter into the
nominee agreement, and it did not mention or copy
Killilea.
In another example two years later, in an email
exchange between Dunne and Sweetman on June 4,
2008, Dunne told Sweetman that legal fees for Walford
work are “for my account.”70 In Sweetman’s reply, he
stated that “the Vendor’s solicitor has been in touch
with me yet again enquiring when you might call for a
deed,” and that he was “also very conscious that you
have no protection as to your priority over the property,
as we cannot register the contract without disclosing
the owner, or register a deed until you call for one.”71
Again, the communications did not mention the
Declaration of Trust or Killilea, even though at this
point according to Dunne he was simply “a third party
without any ownership or connection to Walford.”72
In October 2011, Dunne’s new attorney, Donal T.
McAuliffe, requested background from Sweetman,
69
Pl. Ex. 998 at 1; see also Doc. #598 at 87 (Tr. 1979) (admitting
exhibit).
70
Pl. Ex. 987 at 2; see also Doc. #598 at 133 (Tr. 2025) (admitting
exhibit).
71
Pl. Ex. 987 at 1.
72
Doc. #571 at 28.
App. 32a
stating “[f]or the avoidance of doubt, we wish to clarify
that the Contract dated 1/7/2005 was not signed by the
Purchaser in trust but was signed beneficially by him
by his duly appointed Attorney.”73 McAuliffe also
requested that Sweetman “clearly set out the chain
between the original Purchaser and Matsack Nominees
Limited as this will, obviously, arise and I need to
know the situation now.”74 In a letter response,
Sweetman stated “[t]here is no chain between the
original purchaser and Matsack Nominees Limited.
The original purchaser is and remains the beneficial
owner. Matsack Nominees Limited is simply acting as
nominee and I hold a Nominee Agreement signed by
the beneficial owner confirming the position.”75 Again,
Sweetman did not reference any Declaration of Trust
or Killilea.
In a follow-up letter of October 24, 2011, Sweetman
told McAuliffe that “I confirm that the Contract was
executed by Paul Donnelly on behalf of the principal as
stated on the Contract.”76 Dunne admits that he was
the principal referred to on that contract.77 That same
73
Pl. Ex. 1534 (emphasis in original); see also Doc. #598 at 146 (Tr.
2038) (admitting exhibit).
74
Pl. Ex. 1534.
75
Pl. Ex. 1539; see also Doc. #598 at 149 (Tr. 2041) (admitting
exhibit).
76
Pl. Ex. 1547; see also Doc. #598 at 151 (Tr. 2043) (admitting
exhibit).
77
Doc. #598 at 151-52 (Tr. 2043-44).
App. 33a
day, in an email to a potential purchaser of Walford,
McAuliffe stated “Matsack Limited is acting as a
Nominee for the original Purchaser who is and remains
the beneficial owner of the above property. The original
Contract was executed, on behalf of the beneficial
owner, under Power of Attorney.”78
In November 2011, in separate communications,
McAuliffe stated “[a]s far as I know there is no
Declaration of Trust by S.D. in favour of G.D,”79 and “to
the best of my knowledge and information there is no
written Declaration of Trust.”80 In February 2012, in
response to a request from McAuliffe about the
Declaration of Trust, Dunne responded “Gayle is
looking for it as we moved so many times since it must
be misfiled.”81
In an April 2018 letter, Sweetman’s prior law firm,
Matheson, stated—in response to a request from
Killilea to “confirm that Matheson always understood
and acted on the basis that I was the beneficial owner
of Walford from 1 July 2005 up until the date of its sale
to Yesreb Holding Limited in March 2013”—that “Mr
Sean Dunne was our client in respect of Walford ... for
78
Pl. Ex. 1546; see also Doc. #598 at 152 (Tr. 2044) (admitting
exhibit).
79
Pl. Ex. 1468; see also Doc. #598 at 159 (Tr. 2051) (admitting
exhibit).
80
Pl. Ex. 1419; see also Doc. #598 at 164 (Tr. 2056) (admitting
exhibit).
81
Pl. Ex. 531; see also Doc. #598 at 167 (Tr. 2059) (admitting
exhibit).
App. 34a
the period prior to 4 October 2006. On that date we
were instructed by Mr Dunne to ‘forward new
agreements on the basis that the property has been
purchased in the name of Gayle Dunne and not [Sean]
and Gayle as [joint] tenants.’”82
The letter from Matheson also stated that it was not
in a position to confirm “that Sean Dunne did not
transfer Walford to [Killilea], that it is Matheson’s
belief that [Killilea] was the original purchaser of
Walford from the Duggan Estate and that Sean Dunne
was the person who provided [her] with the funds (via
Matheson) for the purchase.”83 It further stated “Mr.
Sweetman was at no time advised of the existence of
the Declaration of Trust of 23 July 2005 and only
learned of its existence during the relevant interview
[on January 30, 2017] with the Official Assignee
notwithstanding its recital in the Deed of
Conveyance.”84
This evidence casts grave doubt on Dunne and
Killilea’s claims that Dunne purchased Walford as a
trustee for Killilea pursuant to a Declaration of Trust
and that he ceased to have any interest in the property
by 2006, at the latest. If Dunne was the actual
beneficial owner of Walford and did not purchase it as
a trustee for Killilea, then Killilea would not have had
82
Pl. Ex. 1227 at 6 (emphasis omitted); see also Doc. #594 at 158
(Tr. 1605) (admitting exhibit).
83
Pl. Ex. 1227 at 7.
84
Id. at 9.
App. 35a
a property interest that she could have transferred to
Matsack Nominees Limited in 2006.
As Professor Wylie testified at trial, any assignment
of Dunne’s beneficial interest would have required a
formal assignment in writing.85 Dunne did not show
evidence of any formal assignment of the interest.
Accordingly, the jury reasonably could have decided
that Dunne became the beneficial owner of Walford
when he purchased it in 2005, and that he retained
that interest until he transferred it to Killilea—or to
Yesreb for the benefit of Killilea—on the same day as
his bankruptcy petition in March 2013.
The Trustee also introduced evidence that showed
that Dunne continued to be deeply involved in the
management and potential sale of Walford leading up
to and after he declared bankruptcy, despite his claims
that he had been relegated to “third party” status in
October 2006. In addition, the Trustee showed that
Dunne expressed concerns on a number of occasions
about his creditors finding out about Walford, and that
the completion of the deed of conveyance and transfer
of Walford to Yesreb closely coincided with his filing of
his bankruptcy petition.
Communications from December 2012 and January
2013 show that Dunne was concerned about his failure
to disclose the Walford purchase to NAMA in his
statement of affairs. In December 2012, in response to
a statement from Dunne that “[w]e need certainty on
what if anything NAMA could achieve in a claim,” Ross
85
Doc. #598 at 70 (Tr. 1962).
App. 36a
Connolly explained “the issue of what NAMA would or
would not do is also complicated. In the worst case
scenario NAMA could go to court seeking a garnishee
order on the sales proceeds supported by the fact that
substantially all of the proceeds on the acquisition were
paid in 2006 and therefore the statement of affairs
sworn in December 2010 was incorrect as it did not
disclose this fact in its five year look back on transfers.
... ultimately the only way to be sure of being safe is to
close quietly and move the money out immediately.”86
In a January 2013 email chain, Dunne recounted
negotiations he was engaging in with a potential
purchaser of Walford to McAuliffe, Connolly, and
James Ryan, with Killilea not mentioned or copied.87 In
one email, Dunne instructed McAuliffe to “[a]dd the
Nama clause that if Nama make[s] any claim on the
contract once signed by GK, then GK reserves the right
to rescind the contract. This covers the possibility of
anybody on the purchasers side tipping off Nama once
a contract is signed, as at that stage they will end up
with the property anyway.”88
On March 19, 2013, James Ryan emailed Totalserve
Management Ltd., a Cyprus company that provided
trustee services, stating in part that he “urgently”
needed “a new standalone Cyprus company,” which
86
Pl. Ex. 394; see also Doc. #588 at 173 (Tr. 1031) (admitting
exhibit).
87
Pl. Ex. 392; see also Doc. #588 at 175 (Tr. 1033) (admitting
exhibit).
88
Pl. Ex. 392 at 1.
App. 37a
became Yesreb Holding Limited.89 Ryan stated that
“shares should be held in trust for Gayle Killilea
Dunne,” that “[t]he company will be acquiring an Irish
property,” and he identified Killilea as the “ultimate
beneficial owner.”90 Shortly thereafter, Ryan amended
the paperwork to name John Dunne—the son of Sean
Dunne—as the sole shareholder and ultimate beneficial
owner of Yesreb.91
On March 29, 2013, the deed of conveyance was
signed by Dunne, identified as the “original trustee,”
and Killilea, identified as the “beneficial owner,”
conveying the property to Yesreb.92 Killilea admitted
that no money changed hands in the transaction, but
rather that the property was sold for €14,000,000 “by
way of a loan note” which provided that Killilea would
be paid back if and when Yesreb sold the property.93
That same day, Sean Dunne filed his bankruptcy
petition in Connecticut. On May 3, 2013, Dunne filed
under penalty of perjury a bankruptcy schedule with
89
Pl. Ex. 1215 at 2, 4; see also Doc. #588 at 161 (Tr. 1019)
(admitting exhibit).
90
Pl. Ex. 1215 at 3, 6.
91
Pl. Ex. 1214 at 9-10; see also Doc. #588 at 164 (Tr. 1022)
(admitting exhibit).
92
Pl. Ex. 1183 at 2; see also Doc. #588 at 156 (Tr. 1014) (admitting
exhibit).
93
Doc. #588 at 166 (Tr. 1024); Doc. #594 at 47 (Tr. 1494).
App. 38a
his assets and liabilities as of March 29, 2013.94 The
filing did not mention Walford at all, including when
required to “list all real property in which the debtor
has any legal, equitable, or future interest,” “any
property in which the debtor holds rights and powers
exercisable for the debtor’s own benefit,” “all other
property, other than property transferred in the
ordinary course of the business or financial affairs of
the debtor, transferred either absolutely or as security
within two years immediately preceding the
commencement of this case.”95 Dunne also admitted
that he “never disclosed to NAMA that [he] had any
involvement with Walford,”96 and that he was
concerned about disclosure to NAMA because “[he]
never wanted [his] creditors to attach the proceeds of
[his] wife or children.”97
On May 16, 2013, Dunne emailed Seamus Reddan,
the property manager for Walford, requesting in part
that Reddan prepare materials for Ryan to bring to the
United States so that “I can review,” that Reddan
deliver other records to McAuliffe, and that Reddan
“[b]e available to deal with mad McKenzie at some
94
Pl. Ex. 1234; see also Doc. #582 at 112 (Tr. 112) (admitting
exhibit).
95
Pl. Ex. 1234 at 6, 43 (emphasis in original).
96
Doc. #598 at 200 (Tr. 2092).
97
Doc. #598 at 182 (Tr. 2074).
App. 39a
stage down the road.”98 In his trial testimony, Dunne
admitted that McAuliffe forwarded him an offer
regarding the purchase of Walford in August 2016.99
In light of this evidence, there was an ample
evidentiary basis for the jury’s finding that Dunne
engaged in intentional and constructive fraud when he
transferred Walford on March 29, 2013. There was a
strong evidentiary basis for the jury to conclude that
Dunne was in fact the beneficial owner of Walford
within two years of his bankruptcy petition because he
had not actually signed a Declaration of Trust in 2005
transferring his interest to Killilea, and because he did
not actually transfer his interest until the eve of the
bankruptcy petition.
Additionally, there was a strong evidentiary basis to
show that Dunne intended to hinder, delay, or defraud
his bankruptcy creditors because of (1) the lack of
actual payment involved in transferring Walford in
2013; (2) the close relationship between all parties
involved in the transaction; (3) Dunne’s continuous
involvement in the management of Walford and efforts
to sell it despite his claim that he was “out of the game”
since 2006;100 (4) Dunne’s efforts to hide his
involvement with Walford from NAMA and his
creditors; and (5) the extremely close temporal
98
Pl. Ex. 1312 at 1; see also Doc. #598 at 197 (Tr. 2089) (admitting
exhibit).
99
Doc. #598 at 200 (Tr. 2092).
100
Doc. #598 at 156 (Tr. 2048).
App. 40a
proximity between signing of the deed of conveyance
transferring Walford and Dunne’s bankruptcy petition.
For substantially the same reasons, it was entirely
reasonable for the jury to conclude that Dunne
constructively defrauded his creditors because he did
not receive a reasonably equivalent value when he
transferred Walford to Killilea and because he was
already insolvent and filed his bankruptcy petition
practically simultaneously with the transfer.
To be sure, Dunne and Killilea marshaled evidence
and made the case to the jury that “Gayle sold the
property. And that property should be free and clear of
any claim by the trustee.”101 They maintained that the
Declaration of Trust was legitimately executed in July
2005, that Killilea was the beneficial owner of Walford
all along, and that Dunne simply acted as Killilea’s
trustee until he was replaced by Matsack in October
2006. Dunne argued that his attorneys were incorrect
when they stated that there was not a Declaration of
Trust, and stated that there was only one copy which
was kept by Killilea and that he had not needed it,
which was why his attorneys did not have copies of
it.102 In response to the letter from Matheson, Killilea
and Dunne claimed a “conspiracy” because, by the time
that letter was written, Matheson was representing
one of Dunne’s creditors.103
101
Doc. #605 at 114 (Tr. 2810).
102
See, e.g., Doc. #598 at 161, 166-67 (Tr. 2053, 2058-59).
103
Doc. #594 at 160 (Tr. 1607) (related to April 2018 Matheson
letter, Killilea stating “Matheson are acting for Ulster Bank at this
App. 41a
But the verdict demonstrates that the jury simply
did not believe the account advanced by Dunne and the
Killilea defendants. And in light of the Trustee’s
extensive evidentiary showing, the jury had more than
sufficient evidence to sustain its verdict with respect to
Walford. The jury’s verdict on Counts 1 and 2 was not
seriously erroneous and will not result in a miscarriage
of justice, and therefore I decline to disturb the jury’s
credibility determinations that are implicit in that
verdict.
Dunne also argues that the jury was “confused”
about Irish property law because the Court improperly
precluded his expert, Professor Wylie, from referencing
the facts or evidence of the case in his testimony.104 I
ruled on this precise issue when I granted in part and
denied in part the Trustee’s motion to preclude Wylie’s
testimony altogether. See Coan v. Dunne, 2019 WL
2169879 (D. Conn. 2019). For reasons detailed in that
ruling and consistent with the principles in Federal
Rule of Evidence 702, I allowed Wylie to “testify to the
general background principles of Irish property, trust,
and conveyancing law,” but precluded him from
“offer[ing] testimony that refers to or comments on the
stage, so I’m beginning to wonder if there’s some kind of conspiracy
going on between Matheson and the Official Assignee”); Doc. #598
at 173 (Tr. 2065) (in response to April 2018 Matheson letter,
Dunne stating “[t]he way I read it, at this stage Matheson are
acting for Ulster Bank. I don’t know how they can or could, and
they’re in conflict with Gayle and they’re representing a creditor
of mine. Mr. Sweetman, it seems somebody on his behalf is trying
to put a different slant on it.”).
104
Doc. #571 at 26-27; Doc. #685 at 18.
App. 42a
evidence in this case.” Id. at *3. I explained that “if
Wylie were permitted to base his testimony by
reference to the particular documents and other
evidence in this case, this would create an unnecessary
risk of intrusion on both this Court’s instructional role
and the jury’s fact-finding role.” Ibid. Wylie did testify
at trial, and his testimony informed the jury
instructions on Irish law related to the Walford
transaction.105
Dunne protests that the jury reached a different
result than Wylie would have on the same facts, but he
does not explain how allowing Wylie to testify to the
particular facts in this case would not have intruded
into the Court and the jury’s roles, and he does not
offer a serious argument for why the ruling limiting
Wylie’s testimony was a “substantial error.” Therefore,
Dunne’s argument related to the scope of Wylie’s
testimony does not provide a basis for granting a new
trial with respect to Walford.
Dunne’s reply brief raises an additional argument
for a new trial with respect to Walford: that the jury’s
verdict finding that Dunne fraudulently transferred
Walford is precluded by a later judgment dated May 6,
2021 entered by Judge O’Connor on the Irish High
Court.106 That case involved a tax dispute between
Yesreb and the Irish Revenue Commissioners related
105
See Doc. #604 at 27, 32, 34, 36.
106
Doc. #685 at 5, 8-12, 15-18.
App. 43a
to the collection of Irish stamp duties on property
transfers.107
Judge O’Connor found, inter alia, that “Mr Dunne
ceased to have any interest in Walford for Ms Dunne as
of 9 October 2006” and “that the Commissioner was not
in error in finding that Mr Dunne did not hold an
interest in March 2013, whether for Ms Dunne or
otherwise, in Walford. It is not necessary to investigate
the motivation for including his name in the contract
and the deed of conveyance.”108 Judge O’Connor also
explained that “no interest in Walford passed to Mr
Dunne in 2005. I accept that Mr Dunne simply
undertook to transfer the interests which he had in the
2005 contract into the name of Ms Dunne ‘or her
nominee when called upon to do so’. Therefore, given
the state of the evidence it is true that Mr Dunne’s
interest in the 2005 contract following the payment of
a balance of the agreed sale price was held in trust for
Ms Dunne.”109
Dunne seizes on this ruling and argues that “[f]or
this Court to now honor a jury verdict that is based
upon the factually inaccurate premise that Dunne
owned Walford in 2013 and then transferred that
Property on the same day, at the same time, to two
different persons (one unidentified) would pit the Court
of the United States against the Law and Courts of
Ireland, which is inappropriate and dangerous,” and
107
See Doc. #686-4.
108
Id. at 26 (¶¶ 62-63).
109
Id. at 22 (¶ 49).
App. 44a
that “[c]omity requires this Court to respect the final
decision of the Irish Courts and, accordingly, the jury
verdict cannot stand.”110 He further argues that “[t]he
Court should rule ... that the Irish High Court Order
has preclusive effect because the Trustee asked the
jury to make a finding of fact on the issue of whether or
not Dunne transferred ownership of Walford in 2013
notwithstanding evidence, testimony and Irish Court
rulings that Dunne had previously alienated any
ownership interests in that property in 2005.”111
Although Dunne’s briefing frames his argument as
involving comity, that doctrine is inapplicable here for
substantially the reasons stated by the Trustee.112
Comity is “the recognition which one nation allows
within its territory to the legislative, executive or
judicial acts of another nation, having due regard both
to international duty and convenience, and to the
rights of its own citizens, or of other persons who are
under the protection of its laws.” Gucci Am., Inc. v.
Weixing Li, 768 F.3d 122, 139 (2d Cir. 2014). “At the
threshold, international comity comes into play only
when there is a true conflict between American law and
that of a foreign jurisdiction. A true conflict exists if
compliance with the regulatory laws of both countries
would be impossible.” In re Picard, Tr. for Liquidation
of Bernard L. Madoff Inv. Sec. LLC, 917 F.3d 85, 102
(2d Cir. 2019).
110
Doc. #685 at 5.
111
Id. at 10.
112
Doc. #692 at 4-5.
App. 45a
Dunne has not identified a true or actual conflict
between American and Irish law. Rather, Dunne has
simply identified a difference in factual determinations
between this proceeding and a later Irish proceeding
involving different legal issues and different parties. As
the Trustee puts it, “the fact that the Irish High Court
reached a conclusion that differs from the Jury, based
on different evidence, involving different parties and
concerning different legal issues does not evidence a
conflict between Irish and U.S. law or implicate
comity.”113
Moreover, it would be one thing if comity were
invoked as a reason for a U.S. court to defer to a foreign
court’s finding that has entered before the U.S. court
has rendered a finding on the same issue. But here the
jury has already rendered a verdict during the course
of a fully contested trial at which Dunne was
represented at all times by counsel and had a full
opportunity to contest the Trustee’s allegations. The
principles of comity do not require U.S. courts to negate
their own findings or judgments simply because an
unhappy litigant is able to secure a later conflicting
finding or judgment from a tribunal somewhere else in
the world.
The cases that Dunne relies on are not to the
contrary. In Royal & Sun All. Ins. Co. of Canada v.
Century Int’l Arms, Inc., 466 F.3d 88 (2d Cir. 2006), the
Second Circuit explained that “[i]n the context of
parallel proceedings in a foreign court, a district court
should be guided by the principles upon which
113
Id. at 5.
App. 46a
international comity is based: the proper respect for
litigation in and the courts of a sovereign nation,
fairness to litigants, and judicial efficiency.” Id. at 94.
But it noted that “[f]or two actions to be considered
parallel, the parties in the actions need not be the
same, but they must be substantially the same,
litigating substantially the same issues in both
actions.” Ibid. And Finanz AG Zurich v. Banco
Economico S.A., 192 F.3d 240 (2d Cir. 1999), and In re
Maxwell Commc’n Corp. plc by Homan, 93 F.3d 1036
(2d Cir. 1996), specifically invoked comity in the
context of parallel foreign bankruptcy or liquidation
proceedings.
Here, the Irish litigation was not a bankruptcy
proceeding, and it involved completely different legal
issues. It also involved different parties, and there was
no party even superficially representing the Trustee’s
interests in that action. Therefore, the Irish litigation
is not a “parallel proceeding,” and the comity analysis
Dunne urges is inapplicable.
Dunne framed the issue differently at oral
argument, asserting that the Irish High Court ruling
represents a change in Irish law with respect to
Dunne’s ownership interest in Walford and that,
because it is an issue of law, the Court rather than the
jury can decide the issue pursuant to Federal Rule of
Civil Procedure 44.1. Under Dunne’s theory, the
“change” in law from the Irish High Court’s opinion
invalidates the jury’s verdict in Counts 1 and 2 related
to the Walford transaction.
Dunne’s argument misunderstands the differences
between issues of law, issues of fact, and mixed
App. 47a
questions of law and fact. For the Walford-related
counts, the jury was instructed to determine whether
a fraudulent transfer took place under the U.S.
Bankruptcy Code. As part of that determination, the
jury had to consider a predicate issue of whether
Dunne had a genuine ownership interest in Walford
under principles of Irish law. This issue was raised well
before trial, when the Trustee filed a notice pursuant
to Federal Rule of Civil Procedure 44.1 that it “intends
to raise issues of foreign law” including “the law of the
Republic of Ireland in support of Plaintiff’s claim
alleged in the Complaint, with respect to Counts I and
II (Avoidance of Fraudulent Transfer of Proceeds of
Sale of Walford Property).”114 The parties then
submitted materials from experts and the Court heard
expert testimony from Professor Wylie on principles of
Irish law that could have bearing on the jury’s
determination of whether a fraudulent transfer
occurred. I allowed Wylie to “testify to the general
background principles of Irish property, trust, and
conveyancing law” because “[i]f Wylie testifies about
background legal concepts and practices, then the jury
can decide how these concepts and practices apply, if at
all, to the documents and fact testimony in this case.”
Coan v. Dunne, 2019 WL 2169879, at *3.
I instructed the jury that “[a]s to the Walford
property, defendants contend that it was not the
property of Sean Dunne because it was held by him as
a trustee,” and then—based on the parties’ submissions
as well as Wylie’s testimony—detailed legal principles
to inform the jury’s factual determination of whether
114
Doc. #133 at 1.
App. 48a
Dunne in fact owned Walford and whether he
fraudulently transferred it.115 That is the appropriate
division of responsibility: pursuant to Rule 44.1, I
determined the foreign law that could apply to the case
and instructed the jury on it, but left any factual
determinations related to the transaction under that
law to the jury.
Dunne does not cite any legal flaw in those
instructions or change in those underlying legal
principles of Irish law. He simply disputes the jury’s
implicit factual finding that he had an ownership
interest in Walford until within two years of March 29,
2013. That issue is a factual finding, not a pure issue of
law, just as the Irish High Court’s ruling includes a
different factual determination. Because Dunne
challenges an implicit factual finding in the jury’s
verdict, not a controlling change in the governing law,
there is no basis for me to reject the jury’s verdict on
Walford as a matter of law as Dunne urges. See New
Windsor Volunteer Ambulance Corps, Inc. v. Meyers,
442 F.3d 101, 111-12 (2d Cir. 2006) (explaining how
“[t]he question of who owns a given item of personal
property is a mixed question of law and fact” and that
“[v]arious sets of legal principles may govern the
determination of ownership under an established set of
facts”).
Dunne’s argument is also flawed because it appears
that the parties before the Irish High Court—Yesreb
and the Irish Revenue Commissioners—essentially
stipulated that Sean Dunne held Walford in trust for
115
Doc. #511 at 8-9.
App. 49a
Killilea and then was fully divested of his interest prior
to 2013, with support of an affidavit from Dunne.
Specifically, Judge O’Connor noted that “[t]he parties
in this appeal do not take issue now with the existence
of the trust, whereby Mr Dunne held Walford in trust
for Ms Dunne, despite the belief expressed by the
Commissioner in her determination that insufficient
evidence ‘was adduced in support of the existence of a
trust between Mr Dunne and his wife from 1 July
2005.’ ”116 Judge O’Connor also stated “[i]ncluding Mr
Dunne as a party to the 2013 conveyance does not
rectify the factual situation accepted by him on an
affidavit and all interested parties that his interest had
ceased.”117
There is no support for the argument that a
stipulated fact accepted by foreign court represents a
controlling change in law. Moreover, I am particularly
troubled by the implication of Dunne’s argument that
suggests that a losing litigant is free after trial to seek
a contrary finding in a different forum—without any
involvement of the opposing party and on an
uncontested record—and to use that finding to
invalidate or undermine a prior federal court jury
verdict.
Regardless of Dunne’s framing, his fundamental
argument that the jury’s verdict with respect to
Walford should be precluded is properly viewed as a
collateral estoppel argument. To apply collateral
116
Doc. #686-4 at 16 (¶ 28).
117
Id. at 27 (¶ 64).
App. 50a
estoppel offensively to preclude a party from
relitigating an issue that has been previously decided,
“(1) the issues in both proceedings must be identical,
(2) the issue in the prior proceeding must have been
actually litigated and actually decided, (3) there must
have been a full and fair opportunity for litigation in
the prior proceeding, and (4) the issue previously
litigated must have been necessary to support a valid
and final judgment on the merits.” Coan v. Dunne,
2019 WL 2137459, at *1 (D. Conn. 2019). “In addition
to these four factors, a court must also satisfy itself
that application of offensive collateral estoppel is fair.”
Ibid.
Collateral estoppel is plainly inappropriate in this
case. For the reasons I have just described related to
the parties’ stipulation before the Irish High Court, the
issue of Dunne’s ownership of Walford was not fully or
fairly litigated in the Irish action. Additionally, the
Trustee was not a party in the Irish action, nor was
there any party in privity with the Trustee. It would
also be unfair to apply this factual finding to preclude
the jury’s verdict two years after it was entered, even
though the jury in this case was presented with
extensive evidence related to the transaction and while
it was essentially uncontested in the Irish proceeding.
For all these reasons, I reject Dunne’s argument that
the jury’s verdict should be negated by the recent Irish
High Court decision.
Finally, Dunne’s reply also suggests that the
Trustee relies on “hearsay emails,” but he does not
reference any particular evidence or explain why it was
App. 51a
improperly admitted.118 “Generally speaking, specific
reliance upon the trial transcript is necessary to
demonstrate one’s entitlement to relief on a Rule 59
motion based upon determinations made at trial.” Jo v.
JPMC Specialty Mortg., LLC, 369 F. Supp. 3d 511, 515
(W.D.N.Y. 2019) (collecting cases), aff’d, 818 F. App’x
103 (2d Cir. 2020). Dunne’s vague and unsubstantiated
argument cannot provide the basis for a “substantial
error” in the Court’s admission of evidence at trial.
Moreover, all of the exhibits I have referenced were
admitted without objection. As I explained during trial:
I really do count on attorneys to let me know if
you do have a hearsay objection. I otherwise
assume that you all may have discussed or have
discussed essentially those issues in terms of
that. ... I want to put on the record my view that
if a hearsay objection is not specifically called to
my attention and if there is hearsay in a
particular document, I consider the issue to have
been waived, affirmatively waived by the
counsel who is consenting to the admission of
the document or who has not raised a specific
objection on hearsay grounds to that exhibit.119
Because Dunne did not raise a hearsay objection to
the admission of the exhibits supporting the Trustee’s
arguments and the jury’s verdict, he has waived any
such objection.
118
Doc. #685 at 18.
119
Doc. #594 at 212-13 (Tr. 1659-60).
App. 52a
In sum, I will deny Dunne’s motion for a new trial
on Counts 1 and 2 related to Walford property.
2. North Wall Quay
Dunne argues that the jury’s verdict on Counts 3
and 4 regarding North Wall Quay were against the
weight of the evidence because he did not own North
Wall Quay at the time of the transfer, but rather it was
owned through his company Page Inns Limited, which
is not a party in this proceeding.120 But under the U.S.
Bankruptcy Code, “[t]he trustee may avoid any transfer
... of an interest of the debtor in property ... that was
made or incurred on or within 2 years before the date
of the filing of the petition” if the debtor engaged in
intentional or constructive fraud in making the
transfer. 11 U.S.C. § 548(a). Dunne undisputedly had
an interest in North Wall Quay, even if it was formally
owned by Page Inns Limited, because Dunne’s
bankruptcy schedule filed on May 3, 2013 listed a 100
percent holding in Page Inns Limited.121
Dunne also argues that the jury could not have
found he engaged in a fraudulent transfer to Killilea
because the transfer actually occurred between his
company and Killilea’s company, Amrakbo. But Dunne
and Killilea each signed the transfer document, which
does not indicate the capacity in which they signed it.122
Killilea listed the transfer on her personal schedule of
120
Doc. #571 at 29-30.
121
Pl. Ex. 1234 at 13, 50.
122
Doc. #655 at 9-10 (citing Pl. Ex. 503).
App. 53a
transfers “from S Dunne or related entities to his wife
G Dunne.”123 The jury could have reasonably concluded
that Killilea was liable for damages for the transfer
because Dunne transferred the property to her
company, supporting an inference that Dunne did so
for her benefit, and she in fact realized the benefit by
claiming the property on her schedule of assets.124
Moreover, the trial evidence was sufficient overall
to sustain the verdict that Dunne engaged in
intentional and constructive fraud when he transferred
North Wall Quay to Killilea. In addition to the evidence
noted above, the transaction between spouses occurred
when Dunne was already insolvent in February 2012,
about two weeks before Dunne consented to a
€185,000,000 judgment in favor of NAMA, and less
than two years before Dunne filed for bankruptcy. The
transfer was for €100,000, but that consideration was
never paid because the check was never cashed.125 Even
that €100,000 may have been a sharp undervaluation,
as Killilea’s schedule of transfers provided a €300,000
valuation,126 and Killilea testified at trial that she later
123
Pl. Ex. 625 at 2.
124
See Doc. #511 at 29 (instructing the jury that “[i]f—and only
if—you conclude that the Trustee has proven that Sean Dunne
engaged in a fraudulent transfer, the Trustee is then entitled to
recover from the initial transferee or the person or entity for whose
benefit such transfer was made”) (emphasis added).
125
Doc. #594 at 125-126 (Tr. 1572-73) (Killilea testimony).
126
Pl. Ex. 625 at 2.
App. 54a
sold the property for €600,000.127 In light of this
evidence, the jury could have reasonably concluded that
Dunne transferred North Wall Quay from his wholly
owned company for the benefit of Killilea with the
intent to hinder, delay, or defraud his creditors.
Dunne also argues that the jury verdict was flawed
because the jury did not follow the jury instructions for
calculating damages for North Wall Quay.128 But as
noted above, the jury’s total damages award for North
Wall Quay equals its value at the time of its disposition
according to Killilea’s schedule of transfers.129 That is
consistent with the jury instruction’s guidance that “[i]f
the asset has appreciated since the transfer, then you
should, in general, award damages for the appreciated
value of the asset as it is today.”130
In sum, I conclude that the jury’s verdict on Counts
3 and 4 was not seriously erroneous and would not
result in a miscarriage of justice. Accordingly, I will
deny Dunne’s motion for a new trial on Counts 3 and 4
related to the North Wall Quay property.
3. Lucy Partnership payments
Dunne argues that part of the jury’s verdict
regarding a stream of payments and money transfers
127
Doc. #592 at 69-70 (Tr. 1310-11).
128
Doc. #571 at 29-30.
129
Pl. Ex. 625 at 2.
130
Doc. #511 at 31.
App. 55a
related to the “Lucy Partnership” were against the
weight of the evidence.131
The jury’s verdict addressed four counts related to
the Lucy Partnership. In Count 9, the jury found that
the Trustee had not proven that three transfers from
Dunne to Killilea in August 2011, October 2011, and
April 2012 were intentionally fraudulent in violation of
the U.S. Bankruptcy Code.132 However, in Count 10,
the jury found that those same three transfers were
constructively fraudulent in violation of the U.S.
Bankruptcy Code, and it held Killilea liable for
damages for the full amount of each of those transfers,
totaling €258,000.133 In Count 11, the jury found that
the Trustee had not proven that three transfers from
Dunne to Killilea in January 2010, May 2010, and July
2010 were intentionally fraudulent under Irish law.134
But it found that two transfers in October 2010 and
March 2011 were intentionally fraudulent under Irish
law, and the jury held Killilea liable for damages for
the full amount of each of those transfers, totaling
€192,706.135 And in Count 27, the jury found that, on
various dates between July 2010 and November 2010,
Dunne intentionally fraudulently transferred
$278,297.18 to Killilea in violation of Connecticut law,
131
Doc. #571 at 30.
132
Doc. #509 at 3-4.
133
Id. at 4-5.
134
Id. at 5.
135
Id. at 5-6.
App. 56a
and it held Killilea liable for damages in that full
amount.136
Dunne argues that the jury “misconstrued the
evidence regarding the Lucy Partnership Payments
and transfer of money in 2010” because “[t]he evidence
adduced at trial demonstrated that the Lucy
Partnership payments and money transfers were under
the obligations of a Swiss Court Order and Settlement
in which Dunne was required to make payments to
Killilea for alimony,” and therefore they could not be
fraudulent transfers.137 Similarly, in his disclosures to
NAMA in March 2011, Dunne had stated “Assignment
of Lucy Partnership income stream. This asset was
assigned to comply with a Family Law maintenance
Court order and cannot be reviewed or reversed.”138
However, the Trustee introduced substantial
evidence at trial to show that the Swiss court order
that Dunne relied on was not binding and that Dunne
in fact had begun making payments to Killilea related
to the Lucy Partnership well before the Swiss family
court entered its judgment. The Swiss judgment was
entered on August 30, 2010 and “received” on
October 5, 2010.139 By its express terms, the agreement
136
Id. at 9.
137
Doc. #571 at 30.
138
Pl. Ex. 1196 at 6; see also Doc. #600 at 45 (Tr. 2162) (admitting
exhibit).
139
Pl. Ex. 235 at 1; see also Doc. #589 at 111 (sealed Tr. 969)
(admitting exhibit). To the extent that this ruling refers to limited
App. 57a
was nonbinding because it concerns “aspects regarding
equity planning and settlement of the marital property
with regard to which the Court cannot rule within
these proceedings; Consequently, the agreements
reached in this respect will simply be acknowledged to
the spouses, without any enforceable judgment being
issued.”140 Rather, the judgment simply ratified an
agreement that Dunne and Killilea had formulated and
presented to the Swiss court in 2010.
The Trustee also introduced evidence showing that
the Lucy Partnership payments to Killilea began in
2009—before the settlement agreement and Swiss
court judgment came into effect.141 And the Trustee
introduced evidence that Dunne transferred his
interest in the Lucy Partnerships to Killilea for no
consideration in March 2010.142 Dunne admitted at
trial that he did not list the Lucy Partnership transfers
on his disclosures to NAMA because “we didn’t list any
portions of testimony that occurred during sealed proceedings or
other evidence filed under seal, the Court concludes that there is
not a compelling reason that warrants sealing or redacting those
references in this ruling.
140
Pl. Ex. 235 at 3.
141
Pl. Ex. 625 (Killilea’s schedule of transfers showing partnership
cash distributions beginning in December 2009); Pl. Ex. 71-A
(Killilea statement in April 2010 that she received disbursements
from the Lucy Partnership in December 2009); see also Doc. #589
at 117 (sealed Tr. 975) (admitting exhibit).
142
Pl. Ex. 1192; see also Doc. #591 at 134 (sealed Tr. 1179)
(admitting exhibit).
App. 58a
cash transfers at that stage.”143 Killilea testified that
she put the income stream in as a condition of the
separation agreement in the Swiss family court to
make it binding.144
This evidence cast doubt on Dunne’s claim that he
was simply making the payments required by a court
order. It also controverted the statement in the family
court judgment that Killilea “does not have personal
income”145 and Killilea’s similar representations at trial
that “I don’t recall coming into an income position until
late 2010.”146
Instead, the record reveals a strong evidentiary
basis for the jury’s findings that certain of Dunne’s
transfers of the Lucy Partnership income stream were
fraudulent. The evidence supports the inference that
the separation agreement was devised to protect assets
from Dunne’s creditors, that the Lucy Partnership
payments were not actually pursuant to a court order,
and that Dunne and/or Killilea sought the Swiss court
judgment in order to be able to argue to creditors—as
Dunne eventually did—that the assignment of the
income stream was irreversible.
Notably, the jury’s verdict principally found
transfers after the August 2010 Swiss court order to be
143
Doc. #600 at 40-41 (Tr. 2157-58).
144
Doc. #593 at 49 (sealed Tr. 1290).
145
Pl. Ex. 235 at 2, 8.
146
Doc. #589 at 118 (sealed Tr. 976).
App. 59a
fraudulent, even though the Trustee argued that all
transfers of the income stream were fraudulent. The
verdict strongly suggests that the jury found Dunne
and Killilea’s actions pursuing and securing the
non-binding Swiss court judgment to be a decisive
factor that made the transfers fraudulent. It also
reflects a careful weighing of the evidence and a
discerning verdict. See Jennings v. Town of Stratford,
263 F. Supp. 3d 391, 406 n.4 (D. Conn. 2017) (“[a]s the
jury’s verdict form reflects, it did not rule in plaintiff’s
favor with respect to all of his claims ... This is
consistent with the Court’s conclusion that the jury
carefully weighed and discerned its judgment from the
mix of evidence.”).
All in all, Dunne has not demonstrated that the
jury’s verdict with respect to the Lucy Partnership
payments and money transfers is seriously erroneous
or will result in a miscarriage of justice, and I will deny
his motion for a new trial on those counts.
4. Credit Suisse transfers
In Count 21, the jury found that Dunne engaged in
an intentionally fraudulent money transfer under Irish
law when €3,015,000 was transferred from his joint
account with Killilea to her individual account on
October 28, 2008, and held Killilea liable for €3,015,000
in damages for that transfer.147
Dunne argues that the jury’s verdict related to
transfers from Dunne’s Credit Suisse account with
Killilea to Killilea’s individual account was against the
147
Doc. #509 at 8.
App. 60a
weight of the evidence because “Dunne had no claim to
the funds.”148 But Dunne does not offer any evidence to
support that statement beyond Killilea’s testimony that
Dunne “treated it as [her] account” and “didn’t treat
the account as his own.”149 The jury may have simply
not credited Killilea’s testimony that the €3,015,000
was only hers—notwithstanding that she also
acknowledged that it was in a joint account. And if
Dunne indeed did not treat the account as his own, the
jury had reason to doubt why it would have been
necessary for Killilea to transfer the funds to her
individual Credit Suisse account in October 2008.
The jury’s verdict finding that the ultimate transfer
to Killilea’s individual account was fraudulent is also
bolstered by the Trustee’s evidence that the money
flowing into the joint account, and then to the
individual account, was derived from Dunne’s assets.
Specifically, the €3,015,000 that was transferred on
October 28, 2008 originated from transfers by Dunne
from Mountbrook Homes Limited into Dunne and
Killilea’s joint Credit Suisse account between June
2008 and July 2008.150 Dunne admitted at trial that he
did not list the cash transfers on his disclosures to
148
Doc. #571 at 30.
149
Doc. #590 at 158 (Tr. 1203).
150
Pl. Ex. 1752; see also Doc. #590 at 157 (Tr. 1202) (admitting
exhibit); id. at 159-60 (Tr. 1204-05) (Killilea agreeing that Dunne
transferred the money from Mountbrook to the joint account); id.
at 161 (Tr. 1206) (Killilea testifying “[t]hat’s the same 3 million”
that was “coming in from the joint account to [her] personal
account”).
App. 61a
NAMA because he viewed them as cash transfers that
somehow did not need to be reported.151 Dunne now
states that “Killilea owned Mountbrook Homes
Limited.”152 But Killilea listed the transfers on her
personal schedule of transfers “from S Dunne or related
entities to his wife G Dunne.”153 And at trial, Killilea
testified that she did not receive her ownership interest
in Mountbrook until October 2008—after the transfers
from Mountbrook into the joint account.154 The jury
reasonably could have concluded that the funds sent to
the joint account were Dunne’s, and that the series of
transfers—culminating in the €3,015,000 transfer to
Killilea’s individual account—were intended to hinder,
delay, or defraud Dunne’s creditors.
Dunne also argues that “[a]t the very least, because
the account was a joint account, Killilea and Dunne
shared ownership of the funds in the Credit Suisse
account and the maximum that could be enforced
against Dunne would be 50% of the account
transfer.”155 Not only is that at odds with the evidence
that the funds transferred into the joint Credit Suisse
account were Dunne’s to begin with, but Dunne does
not cite any caselaw to support his argument. In
reality, transferring assets into joint accounts does not
151
Doc. #600 at 40-41 (Tr. 2157-58).
152
Doc. #571 at 14 (¶ 23).
153
Pl. Ex. 625 at 2.
154
Doc. #596 at 199 (Tr. 1861)
155
Doc. #571 at 30.
App. 62a
cleanse the transaction of any fraud or reduce the
amount of liability for a fraudulent transfer. See, e.g.,
In re Titus, 916 F.3d 293, 300 (3d Cir. 2019) (“When a
spouse conveys individual property to a tenancy by the
entireties in fraud of creditors, the creditor may
nevertheless execute against the property so conveyed.
Numerous courts have applied this rule to hold an
insolvent debtor’s spouse personally liable for a
fraudulent transfer.”).
Overall, Dunne has not made a showing that the
jury’s verdict with respect to the Credit Suisse
transfers was seriously erroneous or would result in a
miscarriage of justice. Accordingly, I will deny his
motion for a new trial with respect to Count 21 related
to the Credit Suisse transfers.
5. IGB Lands
In Count 25, the jury found that Dunne engaged in
an intentionally fraudulent transfer under Irish law
when he transferred his 50% interest in IGB Lands to
Killilea in October 2008, but the jury did not hold any
defendants liable for the transfer.156
Dunne argues that the jury’s verdict with respect to
IGB Lands was against the weight of the evidence
because “the Jury ignored Dunne’s 2005 Postnuptial
Agreement” pursuant to which Dunne transferred his
interests in the IGB Lands.157 But there was no
evidence at trial that such a postnuptial agreement is
156
Doc. #509 at 9.
157
Doc. #571 at 31.
App. 63a
binding in any way under Irish law. Indeed, in the
context of prenuptial agreements, evidence submitted
at trial showed one of Dunne’s own lawyers advising
that there is “absolutely no Law or Act in existence in
Ireland at present which states that such a document
has any legal force or impact on a Court in the event of
a separation or divorce.”158
Moreover, the three-page, handwritten postnuptial
agreement is not even binding by its own terms, in
which Dunne stated in part: “I reserve the right to
retain ownership of all these properties and transfer
the value as cash or alternatively properties at values
to be agreed between us.”159 Dunne testified that he
was “endeavoring in this document to give [Killilea]
gifts.”160
Other trial evidence also suggested that Dunne’s
interest in IGB Lands was not transferred in 2005
pursuant to the postnuptial agreement. For example,
defendants’ solvency expert, Craig Jacobson, testified
that IGB Lands “was owned by Mr. Dunne. But at
some point in 2008 the ownership changed.”161 Killilea’s
personal schedule of transfers “from S Dunne or related
entities to his wife G Dunne” listed a €2,700,000
158
Def. Ex. 5501; see also Doc. #596 at 10 (Tr. 1672) (admitting
exhibit).
159
Def. Ex. 5502; see also Doc. #584 at 154 (Tr. 370) (admitting
exhibit).
160
Doc. #596 at 167 (Tr. 1829).
161
Doc. #602 at 25 (Tr. 2315).
App. 64a
transfer of IGB Lands as occurring on December 9,
2008.162
In short, the 2005 postnuptial agreement—which
was discussed extensively at trial and the jury had
ample opportunity to consider—does not demonstrate
that the jury’s verdict is seriously erroneous or
resulting in a miscarriage of justice.163 Accordingly, I
will deny Dunne’s motion for a new trial on Count 25
related to IGB Lands.
6. Remittitur
Dunne also makes a cursory argument that the
Court should grant remittitur pursuant to Rule 59.164
But Dunne does not make any particularized request
for why or in what amount remittitur is warranted. In
any event, because I conclude that the jury’s verdict is
well-supported and not excessive for the reasons
discussed above, there is no basis for remittitur.
162
Pl. Ex. 625 at 2.
163
To the extent that Dunne argues in reply that the jury’s verdict
on the counts related to IGB Lands are inconsistent, see Doc. #685,
he has waived that argument—both by not raising it as an
inconsistent verdict prior to the Court excusing the jury and by
failing to include the argument in his motion. The trial evidence
and the Trustee’s briefing do suggest that the IGB Lands transfer
may have taken place in December 2008 rather than in or around
October 2008 as indicated on the verdict sheet. But there is no
occasion to consider any prejudice or error that could have resulted
from a potential typographical error on the verdict form because
Dunne has waived any such challenge.
164
Doc. #571 at 6, 19, 31; Doc. #685 at 23.
App. 65a
Accordingly, for all the reasons set forth above, I will
deny Dunne’s motion for a new trial under Rule 59.
D. Dunne’s
motion
for
judgment
notwithstanding the verdict
Alternatively,
Dunne
seeks
judgment
notwithstanding the verdict pursuant to Federal Rule
of Civil Procedure 50, which he appears to confuse with
a judgment as a matter of law.165 “A party may only
assert a renewed claim for judgment as a matter of law
under Rule 50(b) if it previously raised that specific
issue during trial in a Rule 50(a) motion.” Munn v.
Hotchkiss Sch., 24 F. Supp. 3d 155, 182 (D. Conn.
2014), aff’d, 724 F. App’x 25 (2d Cir. 2018). Dunne did
not file a Rule 50(a) motion during trial, nor did he join
the Killilea defendants’ Rule 50(a) motion.166 Therefore,
he cannot pursue a post-trial Rule 50 motion for
judgment as a matter of law. Even if Dunne had
preserved a Rule 50 challenge, he would not meet the
“heavy burden” it requires for the reasons already
discussed in the context of the more generous standard
for a Rule 59 motion. See generally Jennings v. Town of
Stratford, 263 F. Supp. 3d at 402-03, 405.
Accordingly, I will deny Dunne’s motion to the
extent it seeks relief under Rule 50. Because Dunne
has not demonstrated any grounds for post-verdict
relief, I will deny his motion in its entirety.
165
Doc. #571 at 20, 31; Doc. #685 at 23.
166
See Doc. #491 at 10.
App. 66a
II.
Trustee’s motion for prejudgment interest
The Trustee moves for an award of prejudgment
interest on the transfers that the jury found to be
fraudulent under federal bankruptcy law and Irish
law.167 “The decision whether to grant prejudgment
interest and the rate used if such interest is granted
are matters confided to the district court’s broad
discretion.” In re Palermo, 739 F.3d 99, 106 (2d Cir.
2014). The Second Circuit has explained that “the
question of whether prejudgment interest should be
awarded in an avoidance and recovery action brought
under federal bankruptcy law is an open one in our
Court. Many of the courts in this Circuit look to the
source of the law underlying plaintiff’s claims: claims
that arise out of federal law are governed by federal
rules, claims arising out of state law are governed by
state rules.” Id. at 107.
Starting with the federal law claims, the jury held
Killilea liable for damages for six transfers for which it
found that Dunne engaged in intentionally or
constructively fraudulent transfers under the U.S.
167
Doc. #627. Although the Trustee initially also sought an award
of prejudgment interest on the damages for Count 27, for which
the jury held that Sean Dunne engaged in a money transfer that
was intentionally fraudulent under Connecticut law, the Trustee
conceded at oral argument that he had abandoned that claim
because the Killilea defendants correctly argued that such claims
for prejudgment interest under Conn. Gen. Stat. § 37–3a are
treated as compensatory damages claims that must be submitted
to the trial jury. See, e.g., Ferguson v. Fairfield Caterers, Inc., 2015
WL 2406156, at *11 (D. Conn. 2015).
App. 67a
Bankruptcy Code.168 “Although there is no specific
reference to prejudgment interest in the Bankruptcy
Code, courts have typically relied on the word ‘value’ in
section 550(a) as authorizing an award of interest.” In
re 1031 Tax Grp., LLC, 439 B.R. 84, 87 (Bankr.
S.D.N.Y. 2010) (collecting cases). “Courts in the Second
Circuit ... have recognized that the award of
prejudgment interest is discretionary, and absent a
sound reason to deny prejudgment interest, such
interest should be awarded.” Ibid. (same).
The Second Circuit has explained that a
discretionary award of prejudgment interest “should be
a function of (i) the need to fully compensate the
wronged party for actual damages suffered,
(ii) considerations of fairness and the relative equities
of the award, (iii) the remedial purpose of the statute
involved, and/or (iv) such other general principles as
are deemed relevant by the court.” Wickham
Contracting Co. v. Loc. Union No. 3, Int’l Bhd. of Elec.
Workers, AFL-CIO, 955 F.2d 831, 833-34 (2d Cir. 1992).
“The purpose of prejudgment interest is not to punish
Defendants or to provide Plaintiff with a windfall,
rather prejudgment interest is an element of the
plaintiff’s complete compensation that aims to make
the plaintiff whole.” In re FKF 3, LLC, 2018 WL
5292131, at *12 (S.D.N.Y. 2018).
168
Specifically, the jury’s verdict on Counts 1, 3, 4, and 10 found
that a total of six of Dunne’s transfers were intentionally or
constructively fraudulent in violation of the U.S. Bankruptcy Code,
and it awarded the Trustee €14,558,000 in damages against
Killilea for those counts. See Doc. #509.
App. 68a
As an initial matter, I will decline to award
prejudgment interest for the Walford transfer because,
as the Killilea defendants argue, additional claims
related to that transfer were settled in February 2020
after the jury’s verdict.169 Although the Trustee was not
an official party to the settlement agreement, the OA
was, and the settlement agreement provided for the
vast majority of the settlement funds—more than €11.5
million—to go toward a global settlement or toward
securing the judgment in this
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