EXP Grp. v. CKF Produce Corp.

EXP GROUP LLC, Plaintiff, v. CKF PRODUCE CORP., KOJI UENO, and KATHERYN DE LA ROSA, Defendants.

No. 19 CV 5083 (LDH)(RML)

United States District Court, E.D. New York

May 17, 2021

REPORT AND RECOMMENDATION

ROBERT M. LEVY, UNITED STATES MAGISTRATE JUDGE

By order dated March 24, 2021, the Honorable LaShann DeArcy Hall, United States District Judge, referred the outstanding determination of damages, attorney's fees, and costs to me. For the reasons explained below, I respectfully recommend that plaintiff's requested damages be awarded in part.

BACKGROUND AND FACTS

The court assumes familiarity with the facts of this action and the original litigation from which it arose. Briefly plaintiff EXP Group LLC (“plaintiff ” or “EXP Group”) commenced this action against defendants CKF Produce Corp. (“CKF Produce”) Katheryn De La Rosa, and Koji Ueno on September 6, 2019. (Complaint, dated Sept. 5, 2019 (“Compl.”), Dkt No. 1.) Plaintiff sought to enforce statutory trust rights under the Perishable Agricultural Commodities Act, 7 U.S.C §499a (“PACA”), and collect PACA trust assets belonging to plaintiff. (Id. ¶¶ 7-12.) On April 3, 2020, plaintiff filed a motion for default judgment against defendants CKF Produce and Kenji Ueno. (Motion for Default Judgment, dated Apr. 3, 2020, Dkt. No. 32.) I issued a Report and Recommendation on February 8, 2021 recommending that a default judgment be entered against those defendants with respect to liability and that the determination as to damages, attorney's fees, and costs be deferred pending a determination of liability and relief with respect to defendant Katherine De La Rosa. (Report and Recommendation, dated Feb. 8, 2021, Dkt. No. 47.) Subsequently, plaintiff filed a stipulation under Federal Rule of Civil Procedure 41(a)(1)(A)(ii) dismissing this action as to Katheryn De La Rosa. (Stipulation of Dismissal, dated Mar. 1, 2021, Dkt. No. 51.) Katheryn De La Rosa was dismissed from this matter on March 12, 2021 and a default judgment as to liability was entered against defendants CKF Produce and Koji Ueno on March 24, 2021. (See Stipulation and Order of Dismissal Solely as to Katheryn De La Rosa, dated Mar. 12, 2021, Dkt. No. 54; Order Adopting Report and Recommendation, dated Mar. 23, 2021.)

Plaintiff now seeks an award of damages against CKF Produce and Koji Ueno in the amount of $494, 527, 60, comprised of $425, 129.50 in principal; pre-judgment interest through March 1, 2020 of $46, 105.37; attorney's fees through February 2020 of $21, 665; $1, 627.73 in costs; and post-judgment interest at the default federal statutory rate. (Letter Motion, dated Mar. 12, 2020, Dkt. No. 52; see also Declaration of Paul T. Gentile, Esq., dated Apr. 3, 2020 (“Gentile Decl.”), Dkt. No. 32-1, ¶¶ 8-13; Declaration of Emil Serafino, dated Sept. 5, 2019 (“Serafino Decl.”), attached as Ex. C to Gentile Decl., Dkt. No. 32-4; Memorandum of Law in Support of EXP's Motion for Default Judgment, dated Apr. 3, 2020 (“Pl.'s Mem.”), Dkt. No. 32-10, at 9-11.) Plaintiff has waived its claims for additional interest and attorney's fees that accrued subsequent to the periods set forth in its Motion for Default Judgment. (See Letter Motion.)

DISCUSSION

I. Damages

On a motion for default judgment, “[w] hile a party's default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages.” Greyhound Exhibitgroup, Inc v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). “[A]lthough the default establishes a defendant's liability, unless the amount of damages is certain, the court is required to make an independent determination of the sum to be awarded.” Griffiths v. Francillon, No. 10 CV 3101, 2012 WL 1341077, at *1 (E.D.N.Y. Jan. 30, 2012) (citations and quotations omitted). “The court must conduct an inquiry to ascertain the amount of damages with reasonable certainty.” Joe Hand Promotions, Inc. v. El Norteno Rest. Corp., No. 06 CV 1878, 2007 WL 2891016, at *2 (E.D.N.Y. Sept. 28, 2007) (citing Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1992)). A district court has the discretion to determine if there is sufficient evidence for the damages sought based upon either an evidentiary hearing or a review of detailed affidavits and documentary evidence. See 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). See also McLean v. Wayside Outreach Dev. Inc., 624 Fed.Appx. 44, 45 (2d Cir. 2015) (“Even when the court determined damages with the aid of a single affidavit only partially based upon real numbers, we have not found an abuse of discretion in the district court's failure to hold an evidentiary hearing.”)

A. Principal Amount

Plaintiff seeks damages in the principal amount of $425, 129.50. (Pl.'s Mem. at 9.) As alleged in the Complaint and as set forth in the Serafino Declaration, no amount of the principal has been paid. (Compl. ¶ 28; Serafino Decl. ¶ 7.) In support of this claim, plaintiff submitted copies of invoices for the goods sold to defendants between June 29, 2019 and August 6, 2019. (See Invoices, annexed as Ex. A to the Serafino Decl., Dkt. Nos. 32-4, 32-5, 32-6.) My own calculation of the sums of the invoices totals $425, 129.50. Thus, I respectfully recommend awarding plaintiff the sought $425, 129.50 for unpaid principal. See Double Green Produce, Inc. v. Forum Supermarket Inc., 387 F.Supp.3d 260, 272 (E.D.N.Y. 2019) (relying on invoices submitted as exhibits to determine damages); Hop Hing Produces Inc. v. X & L Supermarket, Inc., No. 12 CV 1401, 2013 WL 1232919, at *8 (E.D.N.Y. Mar. 4, 2013) (same), report and recommendation adopted, 2013 WL 1232948 (E.D.N.Y. Mar. 26, 2013).

B. Pre-Judgment Interest

In addition to the outstanding balance on the invoices, plaintiff seeks pre-judgment interest on the principal beginning on the date each invoice became past due. (Pl.'s Mem. at 9; Calculations of Interest Chart, attached as Ex. E to the Gentile Decl., Dkt. No. 32-8.) “District courts routinely enforce contractual pre-judgment interest provisions under PACA.” Double Green Produce, Inc., 387 F.Supp.3d at 272 (collecting cases). “In determining whether a plaintiff may recover pre-judgment interest, the pivotal question is whether the parties' contract provides for an award of interest and collection costs in favor of [plaintiff].” G & P Warehouse, Inc. v. Cho's Church Ave Fruit Mkt. Inc., No. 15 CV 6174, 2016 WL 5802747, at *7 (E.D.N.Y. Aug. 12, 2016) (quotations and citation omitted), report and recommendation adopted, 2016 WL 5716819 (E.D.N.Y. Sept. 30, 2016). Courts have construed “standard-form provisions contained in invoices to constitute additional terms of the purchase agreement between the parties governed by N.Y. U.C.C. § 2-207(2)(b).” Tomato Mgmt., Corp. v. CM Produce LLC, No. 14 CV 3522, 2014 WL 2893368, at *1 (S.D.N.Y. June 26, 2014) (citation omitted); see also Taylor & Fulton Packing, LLC v. Marco Int'l Foods, LLC, No. 09 CV 2614, 2011 WL 6329194, at *8 (E.D.N.Y. Dec. 16, 2011) (“Courts typically look to the contractual terms contained in the invoices when determining the appropriate award.”).

Plaintiff included a standard-form provision in each of its invoices to CKF Produce stating that “[a] finance charge of 1-1/2% per month (18 annual percent rate) will be added to all balances over 30 days old.” (Invoices, annexed as Ex. A to the Serafino Decl., Dkt. No. 32-4.) A 1.5 percent interest rate per month and an eighteen percent interest rate per annum are reasonable and consistent with awards in this Circuit. See, e.g., S. Katzman Produce, Inc. v. JAT Beverage Inc., No. 17 CV 7930, 2018 WL 6437058, at *5 (S.D.N.Y. Dec. 7, 2018) (finding an eighteen percent annual interest rate reasonable). This standard provision, which gave notice to CKF Produce that interest would accrue on any past-due balance at an annual rate of eighteen percent, is a sufficient basis to award plaintiff pre-judgment interest. See, e.g., Higueral Produce, Inc. v. CKF Produce Corp., No. 18 CV 6760, 2019 WL 5694079, at *10 (E.D.N.Y. Aug. 16, 2019), report and recommendation adopted as modified, 2019 WL 5693798 (E.D.N.Y. Sept. 30, 2019); G & P Warehouse, Inc., 2016 WL 5802747, at *7; S. Katzman Produce, Inc. v. Won, No. 08 CV 2403, 2009 WL 2448408, at *6 (E.D.N.Y. Aug. 7, 2009).

Also included on the top of each invoice is a line: “Pay Terms: P[ACA] 10 Days.” (See Invoices.) Thus, it is reasonable to infer that the interest on unpaid balances accrues ten days after the date of the invoice. This is consistent with plaintiff's interest chart, which notes the payment due dates as ten days after the invoice date. (See Calculations of Interest Chart.) A ten-day due date is in accordance with PACA, see 7 C.F.R. § 46.2(aa), “unless the parties have agreed, in writing and before entering into the transaction, to different payment terms.” Havana Potatoes of N.Y. Corp. v. United States, 136 F.3d 89, 91 (2d Cir. 1997) (citing 7 C.F.R. § 46.22(aa)(11)).

Here, there is no documentary evidence to suggest that the parties agreed to a different payment term.

Upon examining the chart plaintiff submitted to support its calculations, there are some discrepancies based on the documents provided. First, there appear to have been some transcription errors when entering data into the chart; some of the invoice amounts were incorrectly inputted. Additionally, it appears an annual interest rate of 18.25 percent is being used to calculate the interest owed on each invoice, not the agreed-upon eighteen percent. I have based my calculations on the below chart. Accordingly, I respectfully recommend that plaintif...