Opinion
17-CV-07454 (ALC)(SN)
03-14-2022
VISTA FOOD EXCHANGE, INC., Plaintiff, v. LAWSON FOODS, LLC, Defendant.
HONORABLE ANDREW L. CARTER, JR. JUDGE
REPORT AND RECOMMENDATION
SARAH NETBURN, UNITED STATES MAGISTRATE JUDGE
This case concerns a 2016 agreement between Plaintiff Vista Food Exchange, Inc. (“Vista”) and Defendant Lawson Foods, LLC (“Lawson”). The agreement provided that Lawson would not export to China pork purchased from Vista that was produced by a third-party supplier and that was certified for domestic consumption only. Weeks after signing the agreement, Lawson created a corporation to continue exporting such pork to China in violation of its contractual obligations.
On November 30, 2020, the Honorable Andrew L. Carter, Jr. adopted my report and recommendation that default judgment be entered against Lawson, due to Lawson's repeated failure to comply with the Court's discovery orders. ECF. No. 201. Judge Carter then remanded the matter to me to conduct an inquest on damages and to report and recommend concerning the damages due to Vista. ECF No. 209.
I recommend awarding Vista compensatory damages of $1,295,974, plus prejudgment interest under New York law, and punitive damages of $647,987. I also recommend awarding Vista attorneys' fees of $314,576.
BACKGROUND
The facts of this case were set out in detail in the Court's November 1, 2019 order holding Lawson in contempt. See ECF No. 172. I provide a brief summary of facts and procedural background relevant to the inquest on damages.
Vista is a wholesaler and distributor of various foods, including pork supplied by Smithfield Farmland Corp./Smithfield Foods (“Smithfield”). ECF No. 160 (“FAC”) ¶ 38. For decades, Smithfield had been one of Vista's most valuable suppliers. Id. ¶ 5. Vista regularly purchased significant quantities of pork from Smithfield for re-sale to Vista's customers, including Lawson. Id.
In May 2016, Smithfield learned that Lawson had purchased some of its pork from Vista, which was certified for domestic consumption only, and exported that pork to China. Id. The export of pork that was not certified for Chinese consumption potentially exposed Smithfield to penalties under Chinese law. See ECF No. 160-2. Smithfield promptly notified Vista that if any pork purchased and resold by Vista was again exported to China, it would stop selling its products to Vista. FAC ¶ 10. In response, Vista put all of Lawson's orders on hold and informed Lawson that Vista would not resume sales to Lawson unless Lawson promised not to export Vista-Smithfield pork to China. Id. ¶ 62.
On May 20, 2016, Simon Law, CEO of Lawson, sent a signed letter to Vista and Smithfield “promising not to ship Smithfield Farmland pork to PRC [the People's Republic of China], under any circumstance ....” ECF No. 160-15 (“May 20, 2016 Letter”) at 5. The parties then finalized an agreement between Smithfield, Vista, and Lawson to memorialize this promise. Id. at 1. Five days later, Law signed an agreement certifying that Lawson would not “export . . . non-certified Smithfield pork products directly or through any third party where there is any reason to believe such product is destined for export to the PRC.” ECF No. 160-2 (“May 25, 2016 Agreement”). Vista certified that it would not “knowingly sell Smithfield pork products to Lawson Foods that it believes Lawson intends to export to the PRC.” Id. For its part, Smithfield “acknowledge[d] that it values its relationship with Vista and does not believe that Vista knowingly sold product to a customer intended for export to the PRC.” Id.
On or about July 18, 2016, Law met with Vista representatives in two separate meetings. FAC ¶ 76. At each meeting, he reiterated Lawson's promise not to export Vista-Smithfield pork products to China. Id. ¶ 77. Law told Vista's representatives that he understood that Vista would continue to do business with Lawson only if it honored that promise. Id.
Within weeks of Lawson's signing the May 25, 2016 Agreement, however, a corporation called Fortress Foods had been registered with the New Jersey Secretary of State. ECF No. 1678. Fortress Foods continued to ship pork products to China. Based on an evidentiary hearing and other documentary evidence, the Court has concluded that “Lawson, through its managing member and president Simon Law, created Fortress Foods solely to evade its contractual obligations to Vista (and Smithfield).” ECF No. 172 at 8. Smithfield, upon discovering further unauthorized sales by Lawson to China, terminated its relationship with Vista. On October 11, 2018, Smithfield assigned its rights in the May 25, 2016 Agreement to Vista. ECF No. 160-14.
Vista's Fifth Amended Complaint was filed on June 7, 2019. ECF No. 160. Following an evidentiary hearing, the Court held Lawson in contempt of Court for repeatedly failing to comply with discovery orders. ECF No. 172. The Court imposed a fine of $100 per day, jointly and severally upon Lawson, Fortress Foods, and Simon Law, and allowed Lawson a 14-day period to cure its noncompliance and have the fine set aside. The Court warned Lawson that failure to comply with the Court's order could result in entry of default.
In October 2020, I recommended that default judgment be awarded against Lawson, that Vista be awarded attorneys' fees incurred because of Lawson's misconduct, and that any judgment and attorneys' fee award be held against Lawson, Fortress Foods, and Simon Law jointly and severally. ECF No. 197. That recommendation was adopted by Judge Carter on November 30, 2020. ECF No. 201. The only issue that remains before the Court is Vista's entitlement to damages and any other monetary relief from Lawson.
Vista seeks relief against Lawson for breach of the parties' implied terms of sale/export conditions, breach of the express terms of the May 25, 2016 Agreement, breach of the July 2016 oral agreement, and tortious interference with Vista's business relationship with Smithfield. In the alternative to its breach of contract claims, Vista seeks relief on a theory of promissory estoppel and fraud. As set forth in its proposed findings of fact and conclusions of law, Vista seeks “compensatory and consequential damages, restitution, pre-judgment and post-judgment interest, attorneys' fees, costs, and exemplary damages.” ECF No. 239 at 22.
Due to the format of Vista's submission, all citations to specific pages of its proposed findings of fact and conclusions of law refer to the page number indicated in the CM/ECF document stamp.
DISCUSSION
I. Legal Standard
The Court of Appeals set forth the procedural rules applicable to the entry of a default judgment in City of New York v. Mickalis Pawn Shop, LLC:
“Federal Rule of Civil Procedure 55 is the basic procedure to be followed when there is a default in the course of litigation.” Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004). Rule 55 provides a “two-step process” for the entry of
judgment against a party who fails to defend: first, the entry of a default, and second, the entry of a default judgment. New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). The first step, entry of a default, formalizes a judicial recognition that a defendant has, through its failure to defend the action, admitted liability to the plaintiff.... The second step, entry of a default judgment, converts the defendant's admission of liability into a final judgment that terminates the litigation and awards the plaintiff any relief to which the court decides it is entitled, to the extent permitted by Rule 54(c).645 F.3d 114, 128 (2d Cir. 2011).
Where default has been entered against a defendant, courts are to accept as true all of the well-pleaded facts alleged in the complaint, except those concerning the amount of damages. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105, 108 (2d Cir. 1997) (citing Greyhound Exhibit group, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). “Even after the default . . . it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” In re Industrial Diamonds Antitrust Litig., 119 F.Supp.2d 418, 420 (S.D.N.Y. 2000) (cleaned up). Where a plaintiff's well-pleaded facts are sufficient to state a claim on which relief can be granted, the only remaining issue in an inquest is if the plaintiff has provided adequate support for the requested relief. See Gucci Am., Inc. v. Tyrrell-Miller, 678 F.Supp.2d 117, 119 (S.D.N.Y. 2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)).
“[A] plaintiff seeking to recover damages against a defaulting defendant must prove its claim th[r]ough the submission of evidence . . . .” Malletier v. Carducci Leather Fashions, Inc., 648 F.Supp.2d. 501, 503 (S.D.N.Y. 2009). A court may determine the amount a plaintiff is entitled to recover without holding a hearing so long as (1) the court determines the proper rule for calculating damages, and (2) the evidence submitted by the plaintiff establishes “with reasonable certainty” the basis for the damages. Id. (first citing Credit Lyonnais Sec. (USA), Inc., 183 F.3d at 155, then citing Transatlantic Marine Claims Agency, Inc., 109 F.3d at 111).
A damages hearing, while authorized by Rule 55(b)(2), is not mandatory. See Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir. 1991) (Rule 55(b)(2) “allows but does not require . . . a hearing”). “Together, ‘Rule 55(b)(2) and relevant case law give district judges much discretion in determining when it is “necessary and proper” to hold an inquest on damages.'” Cement & Concrete Workers Dist. Council Welfare Fund, Pension Fund, Annuity Fund, Educ. & Training Fund & Other Funds v. Metro Found. Contractors Inc., 699 F.3d 230, 234 (2d Cir. 2012) (quoting Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 54 (2d Cir. 1993)). Although Lawson seeks an evidentiary hearing on damages and objects to the Court's issuing a decision based on the parties' submissions, ECF No. 247 at 5-6, “a hearing is not necessary, as documents submitted in this action provide a ‘sufficient basis from which to evaluate the fairness' of the damages requested.” Am. Jewish Comm. v. Berman, No. 15-cv-5983 (LAK) (JLC), 2016 WL 3365313, at *4 (S.D.N.Y. June 15, 2016) (quoting Fustok v. ContiCommodity Servs. Inc., 873 F.2d 38, 40 (2d Cir. 1989)), adopted by 2016 WL 4532201 (Aug. 29, 2016).
II. Liability
Vista and Lawson's relationship was governed by a Credit Agreement that Vista approved on or about February 15, 2007. FAC ¶¶ 40-42; ECF No. 160-1. The Credit Agreement, which established Lawson's account with Vista to purchase wholesale food products, provided that “litigation of all kinds arising from transactions subject of this guaranty shall be subject to venue in the state . . . of New York, [and] New York law shall apply.” ECF No. 160-1 at 2. This litigation is the result of Lawson's export of food products it purchased from Vista, precisely the kinds of transactions contemplated by the Credit Agreement. New York law therefore applies to Vista's claims against Lawson. The breach of contract claims under the May 25, 2016 Agreement that Smithfield assigned to Vista are discussed below.
A. Breach of Contract
Vista claims that Lawson is liable for breach of contract on three grounds: first, breach of the parties' implied terms of sale/export conditions; second, breach of the express terms of the May 25, 2016 Agreement; and third, breach of the July 2016 oral agreement. With respect to the May 25, 2016 Agreement, if the Court finds that Vista was not an actual party to that agreement, Vista argues in the alternative that Vista was a third party beneficiary.
The elements of a breach of contract claim are: “(1) a contract; (2) performance of the contract by one party; (3) breach by the other party; and (4) damages.” Arakelian v. Omnicare, Inc., 735 F.Supp.2d 22, 30-31 (S.D.N.Y. 2010) (quoting Terwilliger v. Terwilliger, 206 F.3d 240, 246 (2d Cir. 2000)).
1. Terms of Sale/Export Conditions
“[U]nless a contract provides otherwise, the law in force at the time the agreement is entered into becomes as much a part of the agreement as though it were expressed or referred to therein, for it is presumed that the parties had such law in contemplation when the contract was made and the contract will be construed in the light of such law.” Dolman v. U.S. Trust Co. of N.Y, 2 N.Y.2d 110, 116 (1956). The presumption applies to federal law as well. See Hugo Boss Fashions, Inc. v. Fed. Ins. Co., 252 F.3d 608, 618 (2d Cir. 2001); see also In re Currency Conversion Fee Antitrust Litig., 264 F.R.D. 100, 118 (S.D.N.Y. 2010).
U.S. and Chinese laws and regulations prohibit the export of food products to another country without valid export documentation,and Vista alleges that Lawson understood that Vista-Smithfield pork lacked export documentation and was therefore for domestic resale only. FAC ¶¶ 91-92. In the May 20, 2016 letter, the May 25, 2016 Agreement, and statements in July of 2016 to Vista representatives, Lawson reiterated that it would not ship Vista-Smithfield pork to China and would honor those terms of sale and export conditions. By exporting VistaSmithfield pork to China through Fortress Foods, Lawson violated U.S. and Chinese law and therefore breached the parties' implied terms of sale and export conditions. Vista performed its obligations by continuing to sell Vista-Smithfield pork to Lawson and suffered damages as a result of Lawson's breach. Vista has therefore pleaded Lawson's breach of the parties' implied terms of sale and export conditions.
See China, USDA Food Safety & Inspection Serv., https://www.fsis.usda.gov/inspection/import-export/import-export-library/china (last visited Feb. 24, 2022); Import Requirements and Documentation, Int'l Trade Admin., https://www.trade.gov/country-commercial-guides/china-import-requirements-and-documentation, (last visited Feb. 24, 2022).
2. May 25, 2016 Agreement
i. Vista's Claim
The Court previously concluded that Lawson violated its obligations to Vista under the May 25, 2016 Agreement by creating Fortress Foods and continuing to export Vista-Smithfield pork to China. Vista has also alleged on numerous occasions that Lawson's breach caused harm to its relationship with Smithfield and led to decreased profits. Vista has therefore adequately pleaded Lawson's breach of the May 25, 2016 Agreement as to Vista's claim under that contract.
ii. Claim Assigned to Vista by Smithfield
Because Smithfield assigned its rights in the May 25, 2016 Agreement to Vista, Vista also asserts Smithfield's breach of contract claim based on the May 25, 2016 Agreement.
The threshold question is which state's law governs this claim. Vista has muddled the issue, first stating that “the May 25, 2016 contract between Smithfield and Lawson is governed by Virginia Law,” then claiming in the next sentence that the lost profit damages arising “from the agreements between Smithfield, Vista, and Lawson” are recoverable “under New York law.” ECF No. 239 at 25. Upon request for clarification, Vista asserts that Virginia law applies to the “assigned Smithfield claims under the May 25, 2016 Agreement.” See ECF No. 251.
New York's choice of law rules apply in this diversity action. See Curley v. AMR Corp., 153 F.3d 5, 12 (2d Cir. 1998). In breach of contract cases, New York's “center of gravity” analysis applies “to determine which jurisdiction has ‘the most significant relationship to the transaction and the parties,' based on a consideration of several factors including: ‘the place of contracting,' ‘the places of negotiation and performance; the location of the subject matter; and the domicile or place of business of the contracting parties.'” Phoenix Light SF Ltd. v. Deutsche Bank Nat'l Tr. Co., No. 14-cv-10103 (JGK), 2022 WL 384748, at *12 (S.D.N.Y. Feb. 8, 2022) (quoting Zurich Ins. Co. v. Shearson Lehman Hutton, Inc., 84 N.Y.2d 309, 317 (1994)). Vista claims that Virginia has the most significant contacts with the May 25, 2016 Agreement because Smithfield (producer and seller of the pork in question) is incorporated in Virginia, “the injury” was suffered in Virginia at Smithfield's financial center of operations, the May 25, 2016 Agreement contains no choice of law provision that New York law applies, and Lawson was represented by independent counsel in negotiating the May 25, 2016 Agreement but never requested a choice of law provision.
All of these things are true. But, as Lawson points out, the contract “at the heart of the [assigned] claims”-and the reason for the May 25, 2016 Agreement's existence-is the Credit Agreement. LaSala v. Needham & Co., 399 F.Supp.2d 421, 423 n.7 (S.D.N.Y. 2005). That agreement does have a choice of law provision, and it specifies that New York law applies.I find that New York law also applies to the claims that Smithfield assigned to Vista.
Also persuasive: Smithfield's assignment of its claims under the May 25, 2016 Agreement contains a choice of law provision similarly specifying the application of New York law. Prior to this inquest on damages, there is no evidence that Smithfield-or Vista-ever argued that Virginia law applies.
“[T]he assignee of a claim has standing to assert the injury in fact suffered by the assignor.” Vt. Agency of Nat. Res. v. U.S. ex rel. Stevens, 529 U.S. 765, 773 (2000). Vista must therefore plead a breach of the May 25, 2016 Agreement between Smithfield and Lawson. There was clearly a contract by which Smithfield abided and which Lawson breached. The only remaining question is whether Smithfield suffered damages as result. Vista asserts that “Lawson's conduct in [exporting] tens of millions of pounds of Smithfield branded pork to China constituted unfair competition with Smithfield . . . in violation of the” May 25, 2016 Agreement. ECF No. 239 at 26. But in New York, damages based on unfair competition “must correspond to ‘the amount which the plaintiff would have made except for the defendant's wrong . . ., not the profits or revenues actually received or earned' by the defendant.” E.J. Brooks Co. v. Cambridge Sec. Seals, 31 N.Y.3d 441, 449 (2018) (quoting McRoberts Protective Agency v. Lansdell Protective Agency, 61 A.D.2d 652, 655 (1st Dep't 1978)). Vista has offered no evidence to show that Smithfield exported less pork to China because of Lawson's breach, would have exported more pork to China had Lawson not breached, or otherwise suffered any damages. I therefore recommend the Court find that Vista has not pleaded the breach of contract claim assigned by Smithfield.
3. July 2016 Oral Agreement
Vista also claims that the promises Law made to Vista representatives in July 2016 not to export Vista-Smithfield pork to China constituted separate oral contracts, and that Lawson's continued export of such pork breached those agreements. But formation of a valid contract requires “an offer, acceptance, consideration, mutual assent and intent to be bound.” Arakelian, 735 F.Supp.2d at 31 (citing Leibowitz v. Cornell Univ., 584 F.3d 487, 507 (2d Cir. 2009)) (emphasis added). Vista provides no evidence that the parties exchanged new consideration at the July 2016 meetings; indeed, it characterizes Law's statements as “reiteration” of Lawson's promise to abide by the May 25, 2016 Agreement. FAC ¶ 77. The July 2016 discussions between Law and Vista representatives did not constitute a contract separate from the May 25, 2016 Agreement. Therefore, I recommend that the Court find that Vista has not pleaded Lawson's liability for breach of any July 2016 oral agreement.
B. Tortious Interference
Vista argues that Lawson's export of Vista-Smithfield pork to China constituted tortious interference with Vista's business relations with Smithfield.
“To prevail on a claim for tortious interference with business relations . . . under New York law, a plaintiff must show that ‘(1) the plaintiff had business relations with a third party; (2) the defendant interfered with those business relations; (3) the defendant acted for a wrongful purpose or used dishonest, unfair, or improper means; and (4) the defendant's acts injured the relationship.'” 16 Casa Duse, LLC v. Merkin, 791 F.3d 247, 261 (2d Cir. 2015) (quoting Catskill Dev., L.L.C. v. Park Place Entm't Corp., 547 F.3d 115, 132 (2d Cir. 2008)). The defendant's conduct must be directed “not at the plaintiff itself, but at the party with which the plaintiff has or seeks to have a relationship.” Carvel Corp. v. Noonan, 3 N.Y.3d 182, 192 (2004). “When a defendant has acted with a permissible purpose, such as ‘normal economic self-interest,' wrongful means have not been shown, even if the defendant was ‘indifferent to the [plaintiff's] fate.'” Merkin, 791 F.3d at 262 (quoting Carvel, 3 N.Y.3d at 190) (alteration in Merkin). Wrongful means can, however, be established by “fraud or misrepresentation.” Carvel, 3 N.Y.3d at 191 (citation omitted).
All four elements are met. There was indisputably a business relationship between Vista and Smithfield. See, e.g., FAC ¶ 5. Lawson was aware of that relationship, and both Vista and Smithfield warned Lawson that exporting Vista-Smithfield pork to China would interfere with it. Id. ¶ 11; May 25, 2016 Agreement (“If we [Smithfield] find any evidence of shipment of [pork] products to the PRC by Lawson, . . . we will cancel all orders from Vista intended for Lawson.”). Lawson promised both Vista and Smithfield that it would not ship Vista-Smithfield pork to China, then created a company to continue doing just that. Moreover, Lawson's breach was directed at Smithfield, as it exposed Smithfield to penalties under Chinese law. Although Lawson arguably acted at least in part to advance its own economic interests, it acted dishonestly by misrepresenting its creation of Fortress Foods to facilitate its breach of the May 25, 2016 Agreement and, even after it had created Fortress Foods, reiterating to Vista representatives its promise not to ship Vista-Smithfield pork to China. Finally, Lawson's actions injured the relationship between Vista and Smithfield: the relationship was terminated for over nine months and had not been fully restored when Vista filed its Fifth Amended Complaint. FAC ¶ 133.
I therefore recommend the Court find that Vista has adequately pleaded Lawson's liability for tortious interference with Vista's relationship with Smithfield.
C. Promissory Estoppel
Should the Court find that Vista has not established Lawson's liability for breach of contract, Vista asserts in the alternative that it is entitled to damages from Lawson on a theory of promissory estoppel. See Goldberg v. Pace Univ., 535 F.Supp.3d 180, 199 (S.D.N.Y. 2021).
For a promissory estoppel claim, the plaintiff must establish: (1) the defendant's “clear and unambiguous promise,” (2) upon which the plaintiff reasonably relied, (3) to his or her detriment. NRP Holdings LLC v. City of Buffalo, 916 F.3d 177, 202 (2d Cir. 2019) (citation omitted).
Vista has clearly established a claim of promissory estoppel. Lawson promised not to ship Vista-Smithfield pork to China in the May 20, 2016 Letter and signed the May 25, 2016 Agreement certifying same. Law then reiterated that promise to Vista representatives in July 2016. It was foreseeable and reasonable that Vista would rely on Lawson's written and oral promises given the parties' relationship. And Vista's reliance was to its detriment: because of Lawson's breach of its promises, Vista's business relationship with Smithfield was damaged and Vista lost profits. I therefore recommend that, should the Court find that no breach of contract claim has been established, Vista has adequately pleaded Lawson's liability on a theory of promissory estoppel.
D. Fraud
Also in the alternative to its breach of contract claim, Vista argues that Lawson's exporting of Vista-Smithfield pork to China was “a scheme to work around the lack of [exportation] documentation” that constitutes fraud. FAC ¶ 156; see Ithaca Cap. Invs. I S.A. v. Trump Panama Hotel Mgmt. LLC, 450 F.Supp.3d 358, 369 (S.D.N.Y. 2020) (“[U]nder New York law, no fraud claim is cognizable if the facts underlying the fraud relate to the breach of contract.” (cleaned up)).
“To state a claim for common law fraud under New York law, a claimant must allege that ‘(1) [the other party] made a representation as to a material fact; (2) such representation was false; (3) [the other party] intended to deceive; (4) [claimant] believed and justifiably relied upon the statement and was induced by it to engage in a certain course of conduct; and (5) as a result of such reliance [claimant] sustained pecuniary loss[.]'” Id., 450 F.Supp.3d at 369 (quoting Stephenson v. PricewaterhouseCoopers, LLP, 482 Fed.Appx. 618, 622 (2d Cir. 2012)) (alternations in Ithaca Cap. Invs.).
With respect to the scienter requirement, because “it would be unrealistic to expect a plaintiff to plead a defendant's actual state of mind,” Drexel Burnham Lambert Group, Inc. v. Microgenesys, Inc., 775 F.Supp. 660, 664 (S.D.N.Y. 1991), Federal Rule of Civil Procedure 9(b) permits plaintiffs to “allege fraudulent intent generally while the circumstances amounting to fraud must be averred ‘with particularity.' Still, the plaintiff must ‘provide some minimal factual basis for conclusory allegations of scienter that give rise to a strong inference' of fraudulent intent,” Powers v. Brit. Vita, P.L.C., 57 F.3d 176, 184 (2d Cir. 1995) (quoting Polycast Tech. Corp. v. Uniroyal, Inc., 728 F.Supp. 926, 935 (S.D.N.Y. 1989)). Plaintiffs can satisfy this requirement by, for example, “identifying . . . conscious behavior by the [defendant.]” Raffaele v. Designers Break, Inc., 750 F.Supp. 611, 613 (S.D.N.Y. 1990) (quoting Beck v. Mfrs. Hanover Tr. Co., 820 F.2d 46, 50 (2d Cir. 1987), abrogated on other grounds by United States v. Indelicato, 865 F.2d 1370 (2d Cir. 1989)).
As previously discussed, Vista has established that Lawson represented that it would not export Vista-Smithfield pork to China, that this representation was false, that Vista believed and reasonably relied on the representation by continuing to sell pork to Lawson, and that Vista suffered pecuniary loss because of that reliance. Vista has also established Lawson's scienter by pleading “the factual basis which gives rise to a strong inference of fraudulent intent.” United States ex rel. Tessler v. City of New York, 712 Fed.Appx. 27, 29 (2d Cir. 2017) (quoting O'Brien v. Nat'l Prop. Analysts Partners, 936 F.2d 674, 676 (2d Cir. 1991)). Vista points to summary ledgers, export certificates, shipping labels, Lawson's contradicting declaration and testimony as to its role in exporting the pork, and Lawson's various attempts to withhold and conceal documents relevant to determining whether it had proper export documentation for the VistaSmithfield pork. FAC ¶¶ 153-74; see ECF Nos. 160-5, 160-7, 160-9, 160-12. Taken together, the facts are sufficient to infer Lawson's fraudulent intent in representing that it would not export Vista-Smithfield pork to China. I therefore recommend in the alternative that the Court find Vista has adequately pleaded Lawson's liability on a theory of fraud.
III. Damages
Because I find that Vista has demonstrated that Lawson is liable for breach of contract (or, in the alternative, for fraud or on a theory of promissory estoppel) and for tortious interference with Vista's business relations with Smithfield, it is appropriate to award damages as supported by the evidence submitted for this inquest. See ECF No. 239 at 36-62; Greyhound Exhibitgroup, Inc., 973 F.2d at 158 (damages following default must be established by the plaintiff). Determining appropriate damages “involves two tasks: determining the proper rule for calculating damages on such a claim, and assessing plaintiff's evidence supporting the damages to be determined under this rule.” Santana v. Latino Express Rests., Inc., 198 F.Supp.3d 285, 291 (S.D.N.Y. 2016) (quoting Credit Lyonnais Sec. (USA), Inc., 183 F.3d at 155). A court need not hold an evidentiary hearing to determine damages but “must ‘take the necessary steps to establish damages with reasonable certainty.'” Id. (citing Transatlantic Marine Claims Agency, Inc., 109 F.3d at 111); see, e.g., Fustok, 873 F.2d at 40 (holding that detailed affidavits, documentary evidence, and district judge's personal knowledge of the record provided sufficient basis for calculating damages).
Vista seeks compensatory, consequential, and punitive damages, restitution, and pre- and post-judgment interest. “The assessment of damages following entry of a default judgment in a diversity action is governed by state law standards.” Hinckley v. Westchester Rubbish, Inc., No. 04-CV-189 (SCR), 2006 WL 2849841, at *4 (S.D.N.Y. Oct. 2, 2006) (citing Consorti v. Armstrong World Indus., Inc., 103 F.3d 2, 4 (2d Cir. 1995)). As discussed above, New York law applies.
To support its damages calculations, Vista provides a report by Gerald Warshaw, a certified public accountant with over fifty years of experience in evaluating and quantifying damages. See ECF No. 239 at 54-55. Warshaw's opinion is based on his review of Vista's disclosures, a deposition transcript, and “recaps” of Smithfield sales for 2010 to 2018. Id. at 37. To establish Vista's damages, he reviewed its pre-loss history, established a pre-loss “normal,” compared that “normal” to post-loss profits, and calculated the difference. To validate his opinion about Vista's known losses, he compared invoices to the Smithfield recaps. A version of this report was previously submitted in May 2021 to support Vista's emergency motion for a bond sufficient to secure any judgment. See ECF No. 227.
Warshaw's report is “the only evidence Plaintiff has offered in support of [its] [damages] calculation, and it must still meet the reliability requirements of the Federal Rules of Evidence.” See Homkow v. Musika Recs., Inc., No. 04-cv-3587 (KMW)(THK), 2009 WL 721732, at *14 (S.D.N.Y. Mar. 18, 2009). The Federal Rules of Evidence are liberal, however, and exclusion of expert testimony is warranted only when the district court finds “serious flaws in reasoning or methodology.” In re Fosamax Prods. Liab. Litig., 645 F.Supp.2d 164, 173 (S.D.N.Y. 2009).
Lawson largely “defers to the Court” as to Warshaw's testimony but requests the opportunity to challenge Warshaw's credentials and conclusions. I recommend that request be denied. Lawson has failed to timely designate an expert witness as to damages, meet the Court's deadline for rebuttal evidence, or otherwise respond to Warshaw's report in any substantive way. Lawson could have articulated objections to Warshaw's testimony in response to Vista's May 2021 motion, or as part of its proposed findings of fact and conclusions of law; it did neither. Cursory protestations that the parties' papers “insufficiently” address certain issues are not enough. Warshaw has provided a complete statement of his opinions, the basis and reasons for those opinions, and the data or other information he considered in reaching them. See Fed.R.Civ.P. 26(a)(2)(B). As discussed below, I find Warshaw's report and affidavit reliable for purposes of calculating Vista's compensatory damages but not its consequential damages.
A. Compensatory Damages
Vista seeks compensatory damages in the form of the profits it lost as a result of Lawson's breach of the May 25, 2016 Contract, based on the actual losses that Vista experienced in 2017 and 2018 and on Vista's projected losses through 2028.
Compensatory damages “are the natural and probable consequence of the breach” of a contract. Am. List Corp. v. U.S. News & World Rep., 75 N.Y.2d 38, 43 (1989). They include “money that the breaching party agreed to pay under the contract.” Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 109 (2d Cir 2007) (citing Am. List Corp., 75 N.Y.2d at 44). In an action for tortious interference and breach of contract, “[w]hile damage verdicts may overlap, [the] plaintiff will only be afforded one complete recovery” of compensatory damages. Duke Media Sales, Inc. v. Jakel Corp., 215 A.D.2d 237, 238 (1st Dep't 1995); see Simon v. Royal Bus. Funds Corp., 34 A.D.2d 758, 758 (1st Dep't 1970), aff'd, 29 N.Y.2d 692 (1971) (holding same).
Lost profits may be either compensatory or consequential damages, depending on whether they are “the direct and immediate fruits of the contract.” Tractebel Energy Mktg., Inc., 487 F.3d at 109 n.20 (citing Masterton & Smith v. Mayor of Brooklyn, 7 Hill 61, 68-69 (N.Y. Sup. Ct. 1845)). Where the lost profits are “precisely what the non-breaching party bargained for, and only an award of damages equal to lost profits will put the non-breaching party in the same position [it] would have occupied had the contract been performed,” lost profits are recoverable as compensatory damages. Id. at 109-10; cf, Biotronik A.G. v. Conor Medsystems Ireland, Ltd., 22 N.Y.3d 799, 806-08 (2014) (lost profits consequential where plaintiff sought lost profits from sales to third parties not governed by the at-issue agreement).
Smithfield specified in the May 25, 2016 Agreement that it would “cancel all orders from Vista intended for Lawson” if Smithfield found evidence that Lawson persisted in exporting Vista-Smithfield pork to China. In June of 2017, after discovering that Lawson had continued to export pork, Smithfield terminated its business relationship with Vista and did not resume selling to Vista until mid-March of 2018. FAC ¶¶ 23-25. Warshaw reviewed Vista's historical purchases from and sales of Smithfield products and found a significant drop in volume of sales in 2017 and 2018. ECF No. 239 at 50. That drop is directly linked to Lawson's breach of the May 25, 2016 agreement: had Lawson not breached, Smithfield would have continued selling pork to Vista. The Smithfield profits that Vista lost in 2017 and 2018 due to Lawson's breach are therefore compensatory damages. On the other hand, the projected loss of gross profits that Warshaw measured through 2028 are consequential damages, as they represent Vista's “loss of profits” on its “collateral business arrangement[]” with Smithfield long after Vista had terminated its relationship with Lawson. Tractebel Energy Mktg., Inc., 487 F.3d at 109.
Using Vista's 2016 gross profit as a baseline and assuming Vista would have earned the same gross profit in 2017 and 2018, Warshaw concluded that Vista had a shortfall of $682,321 in 2017 and $613,653 in 2018. ECF No. 239 at 51. The total amount of Vista's known lost profits in 2017 and 2018 is $1,295,974. I recommend that Vista be awarded $1,295,974 in compensatory damages for the actual lost profits due to Lawson's breach of the May 25, 2016.
Warshaw's report states that the total known loss is $1,295,975. Given the single differing digit, the Court assumes this to be a typographic error.
B. Consequential Damages
Vista seeks over $5 million in projected losses based on Warshaw's analysis, all of which are consequential damages that do not “directly flow from the breach.” Am. List Corp., 75 N.Y.2d at 43.
Consequential damages for lost profits may be awarded only if “(1) it is demonstrated with certainty that the damages have been caused by the breach, (2) the extent of the loss is capable of proof with reasonable certainty, and (3) it is established that the damages were fairly within the contemplation of the parties.” Tractebel Energy Mktg., Inc., 487 F.3d at 109 (citing Kenford Co. v. County of Erie, 67 N.Y.2d 257, 261 (1986)).
To estimate Vista's lost gross profits through 2028, Warshaw first calculates the ratio of the total volume of Smithfield pork Vista sold in 2018 (3,728,721 pounds) to the volume it sold in 2016 (22,892,287 pounds) and finds that in 2018, Vista sold only 16.29% of its 2016 volume. He then assumes that, starting in 2019, every subsequent year, Vista would sell 8.144% more pounds of pork than it had the preceding year (that is, an additional 50% of the 2018 volume). In 2018, he assumes that Vista experienced an 83.71% loss; in 2019, a 75.57% loss; in 2020, a 67.42% loss; and so on. He then, with no explanation, multiplies each year's percentage loss in pork volume by Vista's gross profit in 2016 to estimate Vista's projected loss in profit for that year. Warshaw's calculations are opaque and unsubstantiated. He provides no reason for why he has used Vista's loss in pork volume rather than its loss in profit to calculate its projected loss in profit. There is also no evidence that Warshaw has accounted for year-to-year fluctuations in pork pricing, even though he notes them on the preceding page. See ECF No. 239 at 50. Relatedly, an increase in volume of pork sold does not necessarily correlate to an increase in profit: if pork prices drop, Vista could sell more pork but make less money. Finally, it is entirely unclear why, for instance, Warshaw assumes that in 2019, Vista would sell more pork than it did in 2018 but still have a higher estimated loss ($763,463 versus $613,653). All of these inconsistencies render Vista's proof of its consequential damages unreliable.
Because Vista has not proved its projected losses with any reasonable certainty and has also failed to demonstrate that Lawson's breach caused losses ten years into the future, or that the parties contemplated such losses, I recommend the Court find that Vista is not entitled to any consequential damages.
C. Punitive Damages
A plaintiff who establishes a valid claim for tortious interference with business relations may recover punitive damages “where the defendant's conduct and state of mind warrant punishment.” Int'l Mins. & Res., S.A. v. Pappas, 96 F.3d 586, 597 (2d Cir. 1996) (citation omitted). Under New York law, punitive damages are appropriate in cases involving “gross, wanton, or willful fraud, or other morally culpable conduct.” Action S.A., 951 F.2d at 509 (quoting Borkowski v. Borkowski, 39 N.Y.2d 982, 983 (1976) (mem.)). Conduct which justifies an award of punitive damages has “a high degree of moral culpability which manifests a conscious disregard of the rights of others or conduct so reckless as to amount to such disregard. Such conduct need not be intentionally harmful but may consist of actions which constitute willful or wanton negligence or recklessness.” Home Ins. Co. v. Am. Home Prods. Corp., 75 N.Y.2d 196, 203-04 (1990) (cleaned up).
Lawson's export of Vista-Smithfield pork to China was sufficiently willful and deliberate to merit punitive damages. After sending the May 20, 2016 Letter and signing the May 25, 2016 Agreement, Law created a shell corporation specifically to evade Lawson's contractual obligations. Law then made verbal assurances to Vista representatives that Lawson was not exporting Vista-Smithfield pork to China-while doing just that. Lawson has demonstrated the moral culpability described by New York and federal courts in this Circuit. See, e.g., Maxan Curtain Mfg. Corp. v. Chem. Bank, 230 A.D.2d 832, 832 (2d Dep't 1996) (permitting claim for punitive damages for tortious interference with contract where plaintiff alleged that defendant's vice-president “maliciously ordered a bank employee to dishonor the plaintiff's checks despite the fact that the plaintiff had sufficient funds in its checking account”; this “evince[d] a degree of moral culpability for which a fact-finder may consider the assessment of punitive damages”); Int'l Mins. & Res., S.A. v. Am. Gen. Res., Inc., No. 87-cv-3988 (HB), 2000 WL 97613, at *2 (S.D.N.Y. Jan. 27, 2000) (finding that “a reasonable jury could have found that the defendants . . . acted with the requisite state of mind” to justify punitive damages for tortious interference with contract where defendants back-dated documents and attempted to “pay off” a witness).
Because “[p]unitive damages are . . . to punish the tortfeasor and to deter this wrongdoer and others similarly situated from indulging in the same conduct in the future,” Ross v. Louise Wise Servs., Inc., 8 N.Y.3d 478, 489 (2007), they must therefore be “reasonably related to the harm done and the flagrancy of the conduct,” Liberman v. Riverside Mem'l Chapel, Inc., 225 A.D.2d 283, 292 (1st Dep't 1996) (citing I.H.P. Corp. v. 210 Cent. Park S. Corp., 16 A.D.2d 461, 467 (1st Dep't 1962), aff'd, 12 N.Y.2d 329 (1963)). In assessing the reasonableness of punitive damages, courts consider factors including: “(1) the degree of reprehensibility of the defendant's conduct; (2) the difference between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded and the civil penalties imposed in comparable cases.” DeCurtis v. Upward Bound Int'l, Inc., No. 09-cv-5378 (RJS), 2011 WL 4549412, at *5 (S.D.N.Y. Sept. 27, 2011) (citing BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575 (1996)).
Vista provides no support for its request for $20 million in punitive damages. Such an award, over 15 times Vista's compensatory damages, would plainly be excessive. See Int'l Mins. & Res., S.A. v. Bomar Res., Inc., 5 Fed.Appx. 5, 7, 9 (2d Cir. 2001) (punitive damages reduced from $37.5 million to $1.5 million for tortious interference with contract where plaintiff was awarded $19.5 million in compensatory damages); Purgess v. Sharrock, 33 F.3d 134, 143 (2d Cir. 1994) (punitive damages reduced from $4.6 million to $500,000 for tortious interference with business relations where plaintiff was awarded $4.6 million in compensatory damages); A. Terzi Prods., Inc. v. Theatrical Protective Union, No. 97-cv-3615 (RCC), 2000 WL 1234579, at *1, *6 (S.D.N.Y. Aug. 31, 2000) ($50,000 punitive damages award appropriate for tortious interference with business relations where plaintiffs were awarded $50,000 in compensatory damages). Generally, a punitive damage award must bear a “reasonable relationship” to the compensatory damages awarded. BMW of N. Am., Inc, 517 U.S. at 580.
In light of the compensatory damages awarded to Vista and the willful and deliberate nature of Lawson's conduct, and upon consideration of other comparable punitive damage awards in this Circuit, I recommend that Vista be awarded $647,987 in punitive damages (half the compensatory damages awarded).
D. Restitution
Vista seeks restitution and “restitutionary damages” in the amount of $15,000,000. FAC ¶ 182. Such relief is available under the doctrine of unjust enrichment, which Vista's complaint does not plead on its face. Even if Vista had pleaded unjust enrichment, however, “this doctrine is a narrow one.” E.J. Brooks Co., 31 N.Y.3d at 455. Unjust enrichment “is available only in unusual situations when, though the defendant has not breached a contract nor committed a recognized tort, circumstances create an equitable obligation running from the defendant to the plaintiff.... An unjust enrichment claim is not available where it simply duplicates, or replaces, a conventional contract or tort claim.” Corsello v. Verizon N.Y., Inc., 18 N.Y.3d 777, 790 (2012).
As Vista has pleaded both contract and tort claims, and any claim to restitution would be based on the same series of events at the heart of those other claims, I recommend that the Court find Vista is not entitled to restitution.
IV. Attorneys' Fees
The Court previously ordered Lawson to pay Vista's attorney's fees for the work performed in filing its February 4, 2019 motion and in connection with the July 16, 2019 evidentiary hearing, as well as other fees incurred because of Lawson's misconduct during litigation. ECF Nos. 172, 197. Vista renews its request that Lawson pay those fees.
A fee applicant bears the burden of establishing the hours expended and hourly rates. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The applicant must present “satisfactory evidence [of the hourly rates]-in addition to the attorney's own affidavits.” Chambless v. Masters, Mates & Pilots Pension Plan, 885 F.2d 1053, 1059 (2d Cir. 1989) (citation omitted). When “work is performed by multiple attorneys at the same firm, all of [the attorneys are] entitled to seek compensation . . ., even if some [are] not admitted here.” Cooper v. Sunshine Recoveries, Inc., No. 00-cv-8898 (JCF), 2001 WL 740765, at *2 (S.D.N.Y. June 27, 2001).
A “reasonable fee” is based on a “reasonable hourly rate” which is “the rate a paying client would be willing to pay.” Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2007). In determining a reasonable hourly rate, the Court should consider the prevailing rates of lawyers with comparable skill, experience, and reputation in the district in which the action was commenced and litigated. See Missouri v. Jenkins, 491 U.S. 274, 286 (1989); McDonald ex rel. Prendergast v. Pension Plan of NYSA-ILA Pension Tr. Fund, 450 F.3d 91, 96-97 (2d Cir. 2006).
To support its request for fees, Vista offers declarations by its counsel. See ECF No. 239 at 63-68, 69-71. Jonathan C. Scott, lead counsel for Vista and admitted to practice in this District, was admitted to the bar in 1987 and has over 34 years of complex business civil litigation and appellate representation experience. Id. at 63-64. His claimed “lodestar” billing rate is $595 per hour. Christina M. Lucio, co-counsel for Vista, was admitted to the California bar in 2007 and has over 14 years of business and employment litigation. Id. at 70. She is a name partner at Farnaes & Lucio, APC. Id. at 69. Her claimed “lodestar” billing rate is $500 per hour.
Courts in this District have found hourly rates in the range of $350 to $650 per hour to be reasonable for breach of contract cases. See HomeAway.com, Inc. v. City of New York, 523 F.Supp.3d 573, 597 (S.D.N.Y. Mar. 1, 2021) ($650 reasonable hourly rate for lead counsel with “significant experience in complex business and appellate litigation”); Hitachi Data Sys. Credit Corp. v. Precision Discovery, Inc., No. 17-cv-6851 (SHS), 2020 WL 5731953, at *2 (S.D.N.Y. Sept. 24, 2020) ($335 to $525 for three partners); Abraham v. Leigh, No. 17-cv-5429 (KPF), 2020 WL 5512718, at *10 (S.D.N.Y. Sept. 14, 2020) (approving rate of $435 in 2019 for junior partner in “complex commercial dispute[ ]”), reconsideration denied, 2020 WL 5836511 (Oct. 1, 2020); Precise Leads, Inc. v. Nat'l Brokers of Am., Inc., No. 18-cv-8661 (RA)(SLC), 2020 WL 736918, at *7 (S.D.N.Y. Jan. 21, 2020) (awarding partner rate of $512.50 in breach of contract action and noting that “other courts in this district awarding attorneys' fees in straightforward breach of contract actions have found partner rates in the range of $375 to $650 to be reasonable”), modified on other grounds by 2020 WL 729764 (Feb. 13, 2020); Carlton Grp., Ltd. v. Par-La-Ville Hotels & Residences Ltd., No. 14-cv-10139 (ALC), 2016 WL 3659922, at *3 (S.D.N.Y. June 30, 2016) ($450 reasonable for “experienced partners and senior attorneys”); 615 Bldg. Co. LLC v. Rudnick, No. 13-cv-215 (GBD)(RLE), 2015 WL 4605655, at *3 (S.D.N.Y. July 31, 2015) ($316 to $475 for partners characterized as the “mid-range of acceptable billing rates approved in this district” (internal quotation marks omitted)); Mazzei v. Money Store, No. 01-cv-5694 (JGK)(RLE), 2015 WL 2129675, at *3 (S.D.N.Y. May 6, 2015) ($450 for attorneys with fifteen to twenty years of experience in complex litigation).
While Mr. Scott's and Ms. Lucio's claimed rates are on the higher end of the range approved of in this District, the Court notes that Lawson does not oppose the rate sought by either attorney, arguing only that the fees are generally “excessive.” See generally HRB Pro. Res. LLC v. Bello, No. 17-cv-7443 (KMK), 2018 WL 4629124, at *8 (S.D.N.Y. Sept. 27, 2018) (“Notably, Respondent has not contested the propriety of these rates. Finding no reason to question the reasonableness of the requested rates in light of counsels' extensive experience and the prevailing rates in the Southern District of New York, the Court concludes the rates sought by the respective attorneys here are reasonable.”). Mr. Scott's and Ms. Lucio's claimed hourly rates are therefore reasonable.
To demonstrate the reasonable number of hours expended, Vista has submitted fee statements for the period between October 15, 2018 and December 15, 2020, when Judge Carter denied Lawson's motion for reconsideration of the Court's order entering default judgment against Lawson. ECF No. 239 at 72-131. According to the fee statements, Mr. Scott spent 410.8 hours working on this case during that time, and Ms. Lucio spent 140.3 hours. Some of the entries in the fee statements are for tasks clearly related to the work for which Vista is owed fees (e.g., “compile documents for hearing binder,” “prepare subpoena and rider to Fortress Foods,” “revise opposition to motion for Lawson stay”), and the Court finds no issue with awarding fees for those entries. The fee statements also include hundreds of “terse” and “nonspecific” entries for emails between Vista's attorneys or to/from others. De La Paz v. Rubin & Rothman, LLC, No. 11-cv-9625 (ER), 2013 WL 6184425, at *4 (S.D.N.Y. Nov. 25, 2013). On February 1, 2019, for instance, Mr. Scott and Ms. Lucio sent and received emails to each other and to Harrison Scott for a total of 4.7 hours. See ECF No. 239 at 84-85. Comparing the email entries to the docket, however, the Court notes that Vista's counsel emailed with far greater frequency in the days leading up to a filing or conference; otherwise, they sometimes went over a week without contacting each other. See, e.g., id. at 91. Such ebb and flow of communication is to be expected in the course of litigation, and given that “the time billed was necessitated by the push and pull” of Lawson's misconduct, I recommend the Court adopt the figure of 551.1 hours proffered by Vista (410.8 hours of work by Mr. Scott and 140.3 hours by Ms. Lucio). L.E.K. Consulting LLC v. Amicus Cap. Partners, LLC, No. 19-cv-10648 (KPF), 2021 WL 4198220, at *5 (S.D.N.Y. Sept. 13, 2021).
In sum, I recommend that Vista be awarded a total of $314,576 in attorneys' fees.
V. Pre- and Post-Judgment Interest
Vista is entitled to both pre- and post-judgment interest.
First, Vista is entitled to prejudgment interest on any “sum awarded because of a breach of performance of a contract.” N.Y. CPLR § 5001(a); see Days Inns Worldwide, Inc. v. Hosp. Corp. of the Carolinas, No. 13-cv-8941 (JPO), 2015 WL 5333847, at *5-6 (S.D.N.Y. Sept. 14, 2015) (awarding prejudgment interest on liquidated damages for breach of contract). The prejudgment interest rate is nine percent per year, N.Y. CPLR § 5004, and is computed “from the earliest ascertainable date the cause of action existed,” id. § 5001(b). Prejudgment interest for breach of contract is measured from the date of breach. Van Nostrand v. Froehlich, 44 A.D.3d 54, 56 (2d Dep't 2007) (citing De Long Corp. v. Morrison-Knudsen Co., 14 N.Y.2d 346, 348 (1964)). Here, the earliest ascertainable date of Lawson's breach is June 6, 2016, when Fortress Foods was registered with the New Jersey Secretary of State in order to evade Lawson's contractual obligations. See ECF No. 167-8. Vista is granted prejudgment interest on its award of $1,295,974 from June 6, 2016, until the date of entry of judgment, at the rate of nine percent per year.
Vista is also entitled to post-judgment interest “on any money judgment in a civil case recovered in a district court.” 28 U.S.C. § 1961(a). This interest rate is calculated “from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding[ ] the date of the judgment,” and “shall be computed daily to the date of payment except as provided in section 2516(b) of this title and section 1304(b) of title 31, and shall be compounded annually.” Id. (a)-(b). The amount upon which the post-judgment interest accrues “includes compensatory damages, punitive damages, and fee awards.” Koch v. Greenberg, 14 F.Supp.3d 247, 287 (S.D.N.Y. 2014) (citations omitted). Vista is therefore entitled to post-judgment interest on a total amount of $2,258,537, the sum of its compensatory damages of $1,295,974, punitive damages of $647,987, and attorneys' fees of $314,576.
CONCLUSION
I recommend that the Court find Lawson, Law, and Fortress Foods jointly and severally liable for $2,258,537, plus applicable interest, broken down as:
(1) $1,295,974 in compensatory damages, plus 9% prejudgment simple interest, calculated from June 6, 2016, to the date of judgment;
(2) $647,987 in punitive damages;
(3) $314,576 in attorneys' fees; and
(4) Post-judgment interest pursuant to 28 U.S.C. § 1961 on the amount of $2,258,537 calculated from the date of judgment until the date of Lawson's payment.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen days from the service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Andrew L. Carter, Jr. at the United States Courthouse, 40 Foley Square, New York, New York 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Carter. The failure to file these timely objections will result in a waiver of those objections for purposes of appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).