Opinion
00 Civ. 5011 (BSJ) (AJP)
February 28, 2003
REPORT AND RECOMMENDATION
To the Honorable Barbara S. Jones, United States District Judge:
By Order dated December 24, 2002, Judge Jones granted plaintiff Joy Lud Distributors, Inc. a default judgment and referred the matter to me for an inquest. (Dkt. No. 25: 12/24/02 Order; see also Dkt. No. 26: Order of Reference.) The complaint in this action (Dkt. No. 1) actually is for an amount certain — $1.5 million that plaintiff Joy Lud Distributors lent to defendant Contini. For the reasons set forth below, the Court recommends that judgment be entered for plaintiff Joy Lud Distributors against defendant Contini for $1.5 million.
FACTS
"Where, as here, 'the court determines that defendant is in default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.'" Chen v. Jenna Lane, Inc., 30 F. Supp.2d 622, 623 (S.D.N.Y. 1998) (Carter, D.J. Peck, M.J.) (quoting 10A C. Wright, A. Miller M. Kane, Federal Practice Procedure: Civil 3d § 2688 at 58-59 (3d ed. 1998)).
Accord, e.g., Rolex Watch U.S.A., Inc. v. Brown, 01 Civ. 9155, 2002 WL 1226863 at *1 (S.D.N.Y. June 5, 2002) (Peck, M.J.); King Vision Pay-Per-View Corp. v. Drencia Rest. Corp., 01 Civ. 9777, 2002 WL 1000284 at *1 (S.D.N.Y. May 15, 2002) (Peck, M.J.); Ainbinder v. Bernice Mining Contracting, Inc., 01 Civ. 2492, 2002 WL 461576 at *2 (S.D.N.Y. Mar. 26, 2002) (Peck, M.J.); Sterling Nat'l Bank v. A-1 Hotels Int'l, Inc., 00 Civ. 7352, 2002 WL 461574 at *3 (S.D.N.Y. Mar. 26, 2002) (Peck, M.J.); King Vision Pay-Per-View Corp. v. Papacito Lidia Luncheonette, Inc., 01 Civ. 7575, 2001 WL 1558269 at *1 (S.D.N.Y. Dec. 6, 2001) (Peck, M.J.); Trustees of the Pension Welfare Funds of the Moving Picture Mach. Operators Union, Local 306 v. Gordon's Film Co. (New York) Int'l Inc., 00 Civ. 8452, 2001 WL 1415145 at *1 (S.D.N.Y. Nov. 13, 2001) (Peck, M.J.); Coast To Coast Fabrics, Inc. v. Tracy Evans, Ltd., 00 Civ. 4417, 2001 WL 5037 at *1 (S.D.N.Y. Jan. 2, 2001) (Peck, M.J.); Starbucks Corp. v. Morgan, 99 Civ. 1404, 2000 WL 949665 at *1 (S.D.N.Y. July 11, 2000) (Peck, M.J.); King Vision Pay-Per-View, Ltd. v. New Paradise Rest., 99 Civ. 10020, 2000 WL 378053 at *1 (S.D.N.Y. Apr. 11, 2000) (Peck, M.J.); Independent Nat'l Distrib., Inc. v. Black Rain Communications, Inc., 94 Civ. 8464, 1996 WL 238401 at *2 (S.D.N.Y. Apr. 4, 1996) (Keenan, D.J. Peck, M.J.).
The complaint here alleges that Joy Lud Distributors lent $1.5 million to defendant in three installments (on June 24, 1997, May 12, 1998 and August 3, 1998) which defendant Contini promised to repay, but did not repay. (Dkt. No. 1: Notice of Removal: Compl. ¶¶ 3-8.)
ANALYSIS
The Second Circuit has approved the holding of an inquest by affidavit, without an in-person court hearing, "'as long as [the Court has] ensured that there was a basis for the damages specified in the default judgment.'" Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)).
Accord, e.g., Rolex Watch U.S.A., Inc. v. Brown, 01 Civ. 9155, 2002 WL 1226863 at *2 (S.D.N.Y. June 5, 2002) (Peck, M.J.); King Vision Pay-Per-View Corp. v. Drencia Rest. Corp., 01 Civ. 9777, 2002 WL 1000284 at *1 (S.D.N.Y. May 15, 2002) (Peck, M.J.); Ainbinder v. Bernice Mining Contracting, Inc., 01 Civ. 2492, 2002 WL 461576 at *2 (S.D.N.Y. Mar. 26, 2002) (Peck, M.J.); Sterling Nat'l Bank v. A-1 Hotels Int'l, Inc., 00 Civ. 7352, 2002 WL 461574 at *3 (S.D.N.Y. Mar. 26, 2002) (Peck, M.J.); King Vision Pay-Per-View Corp. v. Papacito Lidia Luncheonette, Inc., 01 Civ. 7575, 2001 WL 1558269 at *1 (S.D.N.Y. Dec. 6, 2001) (Peck, M.J.); Trustees of the Pension Welfare Funds of the Moving Pictures Mach. Operators Union, Local 306 v. Gordon's Film Co. (New York) Int'l Inc., 00 Civ. 8452, 2001 WL 1415145 at *1 (S.D.N.Y. Nov. 13, 2001) (Peck, M.J.); Coast To Coast Fabrics, Inc. v. Tracy Evans, Ltd., 00 Civ. 4417, 2001 WL 5037 at *1 (S.D.N.Y. Jan. 2, 2001) (Peck, M.J.); Starbucks Corp. v. Morgan, 99 Civ. 1404, 2000 WL 949665 at *2 (S.D.N.Y. July 11, 2000) (Peck, M.J.); King Vision Pay-Per-View, Ltd. v. New Paradise Rest., 99 Civ. 10020, 2000 WL 378053 at *1 (S.D.N.Y. Apr. 11, 2000) (Peck, M.J.); Chen v. Jenna Lane, Inc., 30 F. Supp.2d 622, 624 (S.D.N.Y. 1998) (Carter, D.J. Peck, M.J.); see also, e.g., Semi Conductor Materials, Inc. v. Agriculture Inputs Corp., 96 Civ. 7902, 1998 WL 388503 at *8 (S.D.N.Y. June 23, 1998) (Kaplan, D.J. Peck, M.J.).
By Order dated December 24, 2002, I directed the parties to submit affidavits and briefs on the inquest by specific dates. (Dkt. No. 24:12/24/02 Order.) In response, Joy Lud submitted the affidavit of Nita Shah, the paymaster of Joy Lud. (See Shah 1/15/03 Aff. Ex. 1.) Shah's affidavit attached documents evidencing three financial transactions totaling $1.5 million, which Shah said represented loans to defendant Contini. (Shah Aff. ¶¶ 3-8 Exs. A-C.) Because the Court was not satisfied with these papers, the Court directed Joy Lud to submit "an affidavit from Mr. Sapir or such other officer of Joy Lud as actually authorized loans to Mr. Contini (as opposed to Ms. Shah, whose role essentially was ministerial)." (Dkt. No. 29:1/22/03 Order.) In response, Joy Lud submitted an affidavit from Mr. Sapir, Joy Lud's President and principal shareholder. (Dkt. No. 31: Sapir Aff. ¶ 1.) Mr. Sapir unequivocally stated that during the course of defendant Contini's employment by Joy Lud, Sapir agreed to have Joy Lud loan Contini $1.5 million to purchase a home. (Id. ¶ 8.) Sapir further explained when and to whom each of the three payments totaling the $1.5 million loan were made. (Id. ¶¶ 9-12; see also id. ¶¶ 13-14.)
Contini retained new counsel to represent him on the inquest (see Dkt. Nos. 27-28), but because Contini did not pay them, counsel were permitted to withdraw (Dkt. Nos. 32-34; see also 2/25/03 Conf. Transcript.) Neither Contini nor his counsel submitted any papers on the inquest.
Accordingly, plaintiff Joy Lud is entitled to judgment of $1.5 million against Contini. To the extent Joy Lud seeks interest, the Court recommends that the request for interest be denied since Joy Lud has presented no evidence as to what rate of interest (if any) was agreed upon between Joy Lud and Contini.
CONCLUSION
For the reasons set forth above, the Court should award Joy Lud damages of $1.5 million against Contini, but not award prejudgment interest.
FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from service of this Report to file written objections. See also Fed.R.Civ.P. 6. Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Barbara S. Jones, 40 Centre Street, Room 2103, and to my chambers, 500 Pearl Street, Room 1370. Any requests for an extension of time for filing objections must be directed to Judge Jones. Failure to file objections will result in a waiver of those objections for purposes of appeal. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466 (1985); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993), cert. denied, 513 U.S. 822, 115 S.Ct. 86 (1994); Roldan v. Racette, 984 F.2d 85, 89 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir.), cert. denied, 506 U.S. 1038, 113 S.Ct. 825 (1992); Small v. Secretary of Health Human Servs., 892 F.2d 15, 16 (2d Cir. 1989); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983); 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72, 6(a), 6(e).
Respectfully submitted