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SALES v. REPUBLIC OF UGANDA

July 9, 1993

CHRISTOPHER SALES AND CAROL SALES, Plaintiff,
v.
REPUBLIC OF UGANDA and APPLO K. KIRONDE, as AMBASSADOR and PERMANENT REPRESENTATIVE of UGANDA to the UNITED NATIONS, Defendants.


HAIGHT, JR.


The opinion of the court was delivered by: CHARLES S. HAIGHT, JR.

MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

 In a Memorandum Opinion and Order dated December 28, 1992, familiarity with which is assumed, the Court granted defendants' motion to vacate a default judgment previously obtained by plaintiffs, on condition that defendants post security in the amount of damages found by Magistrate Judge Grubin after an inquest, together with interest.

 On April 5, 1993 Judge Grubin filed her Report and Recommendation. The inquest into damages had commenced within the context of the default judgment previously entered by this Court. Judge Grubin's initial responsibility was to conduct an evidentiary hearing and report on the amount of the plaintiffs' damages, so that judgment in a sum certain could enter in plaintiff's favor. That mission was altered by this Court's December 28, 1992 opinion conditionally setting aside the default judgment. Following that opinion, the function of Judge Grubin's recommendation was to fix the amount of the security upon which vacatur of the default judgment would be conditioned.

 In a comprehensive opinion Judge Grubin has calculated plaintiffs' damages, and accordingly the amount of security defendants would be required to post, at $ 2,137,245.26. Judge Grubin reviewed the factual and expert opinion testimony, accepted some of that testimony, but rejected other aspects of the plaintiffs' proof. It is apparent that plaintiff Christopher Sales, injured in a fall from a ladder while working at the Ugandan Mission in New York, suffered grievous, crippling, painful and permanent injuries.

 The case is now before the Court on defendants' objections to Judge Grubin's Report and Recommendation; and on defendants' motion for reconsideration of this Court's December 28, 1992 opinion, insofar as it required defendants to post security. Defendants revert to that subject again in their objections to Judge Grubin's report.

 Plaintiffs' defend Judge Grubin's Report and Recommendation, and contend that defendants must give security in the amount of the damages which she calculated.

 Judge Grubin's Report and Recommendation does not furnish an appropriate vehicle for defendants to revisit the propriety of this Court's direction that defendants post security to vacate the default. That was not an issue which I referred to the Magistrate Judge, and she perforce accepted my ruling as the law of the case.

 However, the defendants did file a timely motion for reconsideration on the security issue following this Court's December 28, 1992 opinion, the time for briefing and filing of formal papers having been extended by stipulation of the parties.

 It is also fair to say that, the giving of security having been first raised by this Court sua sponte in the December 28, 1992 Opinion at slip op. 10, the present procedural posture of the case is that of cross-motions: defendants moving by way of reargument to do away with the requirement of posting security, and plaintiffs cross-moving for the posting of security in the amount of $ 2,137,245.26, determined by Judge Grubin to represent plaintiffs' recoverable damages.

 With respect to defendants' objections to the amount of damages determined by Judge Grubin, I reject the objections and approve the amount, substantially for the reasons set forth in Judge Grubin's careful analysis. Defendants' objections are for the most part conclusory and without support in any authority.

 While I reject certain objections defendants make to Judge Grubin's calculations, I agree with defendants that interest should not run from September 30, 1991, the date of entry of default against the defendants. The default related to liability only, with the amount of damages (upon which interest may then be calculated) to be determined subsequently. Since federal jurisdiction in this case is premised on diversity and the right to interest on a cause of action qualifies as a substantive right, the question is governed by New York law. See Adams v. Lindblad Travel, Inc., 730 F.2d 89, 93 (2d Cir. 1984). The New York rule on personal injury claims is that "no interest at all may be awarded until at least a verdict (in a jury trial) or a decision (in a bench trial) is rendered." Siegal, Practice Commentaries, N.Y.CPLR § 5002 (McKinney's 1992). In the case at bar, Judge Grubin's Report and Recommendation following inquest is the functional equivalent of a verdict or decision setting forth the amount of plaintiffs' damages. The awarding of interest prior to that time is contrary to New York law. The amount involved is approximately $ 266,000. Accordingly, the calculation of plaintiffs' damages for the purpose of posting of security will be reduced by that amount, from $ 2,137,245.26 to $ 1,871,245.26.

 I now turn to defendants' motion to be relieved of the necessity of posting security. Because this Court added that condition sua sponte, the parties had not briefed the issue prior to the December 28, 1992 opinion. Accordingly the usual strictures on motions for reargument contained in Civil Rule ...


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