Paravas v. Long Tran

TRISHA PARAVAS, Plaintiff, v. LONG TRAN, Defendant.

No. 21-CV-807 (AJN) (KHP)

United States District Court, S.D. New York

February 22, 2022

TO THE HONORABLE ALISON J. NATHAN, UNITED STATES DISTRICT JUDGE

REPORT AND RECOMMENDATION

KATHARINE H. PARKER, UNITED STATES MAGISTRATE JUDGE

Plaintiff Trisha Paravas commenced this action on January 29, 2021 against Defendant Long Tran alleging defamation of character under New York law, libel per se, tortious interference, intentional infliction of emotional distress breach of contract, and violation of the Computer Fraud and Abuse Act (“CFAA”). (Complaint, ECF No. 1.)

Presently before this Court is Plaintiff's order to show cause and motion for default judgment pursuant to Federal Rule of Civil Procedure (“FRCP”) 55, following Defendant's failure to appear after being properly served as required by FRCP 4. On January 21, 2022, the Plaintiff appeared at the court-ordered inquest hearing. The Defendant did not appear, despite being served notice of the hearing. At the hearing, I granted Plaintiff until February 10, 2022, to submit medical treatment records and other relevant information as to the damages she sustained. Plaintiff submitted relevant documentation including Plaintiff's sworn affidavit, which were reviewed by the Court and incorporated herein as necessary. Accordingly, for the reasons set forth below, I respectfully recommend that Plaintiff's motion for default judgment be granted in part and denied in part and Plaintiff be awarded damages as outlined below.

BACKGROUND

Plaintiff alleges she began working with Defendant in 2013 and helped Defendant launch a career in fashion.^[1] On December 8, 2016, FW Investors, Inc., (hereinafter “FW Investors”) a company founded and operated by Plaintiff, negotiated and entered into a profit sharing agreement with Defendant. However, shortly after the execution, Defendant terminated the agreement, leading FW Investors to sue Defendant for breach of contract in New York state court. They settled the case after mediation on October 2, 2017, which included a non-disparagement clause.

Plaintiff alleges that during the time she worked with the Defendant, he became aware of and gained direct knowledge of a trademark infringement lawsuit (filed in 2019 in this District) between Plaintiff and a third party regarding the ownership of disputed trademarks. On February 14, 2020, three years after the settlement between FW Investors and Defendant, Defendant created an email account (trishaparavas@gmail.com) and sent an email to Plaintiff's adversary in the trademark infringement lawsuit purporting to be Plaintiff. Specifically, Defendant wrote:

I planned to created (sic) the [Disputed Trademark] years ago to sue people who use it. Sue (sic) IMG and CFDA is in my plan to earn money or at least I will get my name out there. Finally, you can google me “Trisha Paravas”, then you can see now I am on Wikipedia. Thank you so much for this opportunity. P.S. I filed my lawsuit to sue you guys on Fashion Week a few years back so you cannot prepare and lost (sic). You can look up my history to see how many people I sued. I am really good at it by the way[.]

Plaintiff believes the email was intended to provide her adversary with evidence to use against her in the trademark infringement lawsuit. After receiving the email, Plaintiff's adversary forwarded the email to Plaintiff's trademark counsel to ask that Plaintiff not contact it directly, but rather, communicate through counsel. Plaintiff's counsel responded that the email was fraudulent and not sent by Plaintiff.

Plaintiff then retained a forensic expert at a cost of $150 to determine the origin of the email. She also sent subpoenas to Google (at a cost of $125) and to Comcast (at a cost of $110). Through the subpoena responses, she learned that the email came from an IP address registered to the Defendant at his address in New Jersey. Plaintiff also retained a communication expert at a cost of $300 to analyze and compare the language of the fake email to sample emails actually written by Plaintiff to further demonstrate the email was fake and not sent by Paravas. Plaintiff's trademark counsel assisted Plaintiff in the above-described efforts, resulting in approximately $8, 000 in legal fees.^[2] Thus, the total cost of mitigating the potential impact of the fake email and identifying the Defendant was $8, 000 in legal fees and $685 in related costs.

Plaintiff alleges the email also caused her severe emotional harm that negatively impacted her health during the investigation and before the Defendant was identified as the sender. Plaintiff alleges she feared she was being stalked and would be assaulted. This fear led Plaintiff to temporarily move from her New York City apartment to an undisclosed location of one of her personal investment properties where she incurred costs totaling over $150, 000 from the lost rental value of the property and transportation to and from the location as well as car expenses. Plaintiff also suffered hair loss and skin irritation as a result of the added stress and fear caused by the fraudulent email.

As to the causes of action, Plaintiff alleges defamation of character under N.Y.P.L. § 190.25 because the false statements contained in the email defamed her personally and were published via the act of sending the email to Plaintiff's adversary in the trademark infringement lawsuit. She also claims libel per se because the content of the email targeted her business and her in a professional capacity with an intent to harm her and her business in that litigation. For each claim, she asserts actual damages of at least $175, 000, emotional damages of at least $1, 000, 000, and seeks punitive damages of at least $1, 000, 000. As for a third cause of action, Plaintiff alleges tortious interference with prospective economic advantage because Defendant's email allegedly interfered with the ongoing trademark litigation. Plaintiff asserts she was damaged to the tune of $1, 000, 000 in the litigation. As a fourth cause of action, Plaintiff alleges intentional infliction of emotional distress, contending that Defendant's conduct was extreme, outrageous, and malicious, and that she suffered headaches, anxiety, nausea, hair loss, hives, and sleeplessness as a result. She requests damages of at least $1, 000, 000 for this cause of action. As a fifth cause of action, Plaintiff alleges breach of contract because Defendant violated the non-disparagement clause contained in the settlement agreement between FW Investors and Defendant. She seeks $1, 000, 000 in damages for the breach. Finally, Plaintiff alleges Defendant violated the CFAA by creating a fraudulent email account through which he attempted to impersonate Plaintiff by sending the email. In addition to monetary damages, Plaintiff asks the Court to issue a restraining order or permanent injunction enjoining the Defendant from contacting Plaintiff, to stay at least 1000 feet away from Plaintiff and to cease impersonating and harassing Plaintiff. Plaintiff anticipates that she will have difficulty collecting the judgment against Defendant, and in anticipation of that, seeks and award of 25% of the “standard New York collection agency fee” of the total amount of the judgment amount. (Mot. for Default, ECF No. 12.).

DISCUSSION

1. Legal Standard

Federal Rule of Civil Procedure 55 governs judgments against a party that has failed to plead or otherwise defend itself in an action. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 64 (2d Cir. 1981) (defendant's ongoing failure to appear supported failure to plead for the purpose of entry of default). After default has been entered and the defendant fails to appear or move to set aside the default under Rule 55(c), the Court may, on plaintiff's motion, enter a default judgment against that defendant. Fed.R.Civ.P. 55(b)(2).

A default constitutes an admission of all well pleaded factual allegations in the complaint, and the allegations as they pertain to liability are deemed true. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). However, a plaintiff still bears the burden of establishing entitlement to recovery and thus must substantiate her claims with evidence to prove the extent of their damages. Id. Even when a defendant has defaulted, a substantive analysis of the alleged claims is required to determine whether the plaintiff may be awarded damages. Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). Thus, if “the complaint fails to state a cognizable claim, a plaintiff may not recover even upon defendant's default.” Bolivar v. FIT Int'l Grp. Corp., 2017 WL 11473766, at *13 (S.D.N.Y. Mar. 16, 2017), adopted by 2019 WL 4565067 (Sept. 20, 2019) (internal quotation marks omitted).

Further, “when entry of a default judgment is sought against a party who has failed to plead or otherwise defend, the district court has an affirmative duty to look into its jurisdiction both over the subject matter and the parties.” Bracken v. MH Pillars Inc., 290 F.Supp.3d 258, 262 (S.D.N.Y. 2017) (internal citation omitted). A district court may first assure itself that it has personal jurisdiction over the defendant before granting a default judgment. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 133 (2d Cir. 2011) (internal citation omitted). A default judgment is “void” if it is rendered by a court that lacks jurisdiction over the parties. Id. (citing “R" Best Produce, Inc. v. DiSapio, 540 F.3d 115, 123 (2d Cir. 2008)). Thus, to promote judicial economy, many courts undertake an analysis of jurisdiction before entering default judgment. CKR L. LLP v. Anderson Invs. Int'l, LLC, 2021 WL 2519500, at *3 (S.D.N.Y. June 21, 2021).

2. CFAA Claim...