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INTER-OCEAN INDUSTRIES, INC. v. NASSER

July 2, 2003

INTER-OCEAN INDUSTRIES, INC., PLAINTIFF,
v.
NABIL B. NASSER D/B/A NABIL CENTER S.R.L. AND NABIL CENTER S.R.L., DEFENDANTS.



The opinion of the court was delivered by: Ronald Ellis, United States District Magistrate Judge

REPORT AND RECOMMENDATION

I. INTRODUCTION

This matter was referred for an inquest on damages on April 29, 2003, following a motion for judgment by default as to Nabil Center S.R.L. ("Nabil") filed on March 3, 2003. Based on the following facts presented to the Court by plaintiff Inter-Ocean Industries, Inc. ("Inter-Ocean"), the Court recommends Inter-Ocean be awarded $457,958.40 against Nabil through July 1, 2003, plus interest of $93.70 per day until the entry of judgment. Inter-Ocean should also receive interest of nine percent on the amount of the judgment until the judgment is satisfied.

II. BACKGROUND

On or about March 21, 2001, Inter-Ocean, at the special instance and request of defendants, sold and delivered goods to Nabil, all in good order and condition. The cumulative value of the goods was in excess of $380,000. See Motion for Judgment by Default ("Pl. Mot.") at ¶ 9. Nabil B. Nasser ("Nasser") of Nabil Center S.R.L. personally guaranteed payment jointly and severally to induce the extension of credit. Id. at ¶ 10. The guaranty explicitly stipulates that New York law shall govern any contract disputes. See Pl. Mot. at Exhibit A ("Exh."). Only a portion of the amount owed has been remitted, leaving a balance of $380,000. Id.

Inter-Ocean made oral and written demands for payment of the outstanding balance from Nasser and Nabil, but no payment has been made, nor has the amount been disputed. See id. at ¶ 12. On May 13, 2002, Nasser acknowledged in writing via e-mail that he owed Inter-Ocean $380,000. See id. On October 24, 2002, Inter-Ocean filed a complaint alleging breach of contract. Specifically, Inter-Ocean alleged that Nabil failed to pay for goods sold and delivered, and owes Inter-Ocean $380,000 plus interest and costs. See Complaint ("Compl.") at ¶¶ 5-11. Pursuant to Federal Rule of Civil Procedure 4(h)(2), Nabil was served with the summons and complaint by registered mail with return receipt requested on November 8, 2002, but failed to file an answer. See Clerk's Certificate at 1. On March 3, 2003, Inter-Ocean filed an affidavit for judgment by default, and Nabil was served notice of this motion by mail on March 19, 2003. See Pl. Mot.

III. DISCUSSION

A. Standard of Default Judgments

Following a default judgment, all well-pled factual allegations of the complaint, except those relating to damages, are accepted as true. See Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). A factual allegation will be deemed not well-pled only in "very narrow, exceptional circumstances." Trans World Airlines, Inc. V. Hughes, 308 F. Supp. 679, 683 (S.D.N.Y. 1969), modified on other grounds, 449 F.2d 51 (2d Cir. 1971), rev'd on other grounds, 409 U.S. 363 (1973).

Except for the formal entry of judgment, Nabil has been adjudged in default and the case has been referred for a determination of damages.

B. Breach of Contract

Inter-Ocean seeks to recover monies from a breach of contract for the sale of goods. Under New York law, to prove a claim for breach of contract, a party must show: "`(1) a contract; (2) performance of the contract by one party; (3) breach by the other party; (4) damages.'" Banda v. Haro, 2001 WL 1702205 *2 (S.D.N.Y. 2001) (quoting Rexnord Holdings, Inc., v. Biderman, 21 F.3d 522, 525 (2d Cir. 1994)). According to Inter-Ocean's uncontested complaint, and the guaranty whereby "Nabil B. Nasser of Nabil Center S.R.L." absolutely and unconditionally promised prompt payment of all sums due, a contract existed between Inter-Ocean and Nabil, Nabil was a guarantor of the contract, Inter-Ocean duly performed, and Nabil breached when it failed to remit full payment upon delivery of goods, and upon subsequent demand by Inter-Ocean. See Compl. at ¶¶ 5-11; Exh. A.

C. Damages for Non-payment of Goods Received

Damages for breach of contract are measured by the "amount necessary to put the plaintiff in the same economic position he would have been in had the defendant fulfilled his contract." Adams v. Lindblad Travel, Inc., 730 F.2d 89, 92 (2d Cir. 1984). Under New York law, a seller may recover the contract price of goods in the event of a default in payment by showing that they were ordered, received, and accepted by a purchaser who did not subsequently reject them ...


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