United States District Court, S.D. New York
September 14, 2004.
STS CARGO SERVICES CO., LTD., Plaintiff,
FORTUNE FABRICS INTERNATIONAL, LTD., Defendant.
The opinion of the court was delivered by: KEVIN FOX, Magistrate Judge
MEMORANDUM AND ORDER
The plaintiff, STS Cargo Services Company, Ltd. ("STS" or
"plaintiff"), brought this action for breach of contract and
account stated against Fortune Fabrics International, Ltd.
("Fortune" or "defendant"). Upon the defendant's failure to: (i)
appear for deposition; or (ii) serve a written response to the
plaintiff's request for inspection, the Clerk of Court was
directed to enter a default against Fortune, pursuant to
Fed.R.Civ. P. 37(d) and Fed.R. Civ. P. 37(b)(2)(C).
Thereafter, the Court directed STS to serve and file proposed
findings of fact and conclusions of law, and an inquest
memorandum setting forth its proof of damages, costs of this
action, and attorneys fees. The defendant was directed to file
and serve any opposing memoranda, affidavits and exhibits, as
well as any alternative findings of fact and conclusions of law
it deemed appropriate. In support of its request for damages, STS submitted the
declaration of Kenneth Lin ("Lin Declaration"), the president of
STS. Attached to the Lin Declaration were, inter alia, copies
of: 1) a purchase order documenting the defendant's purchase of
fabric from Jiangyin Hongxing Group Import/Export Company, Ltd.
("Jiangyin") in China; 2) an undated e-mail sent by Ravi
Malhotra, an employee of Fortune, to Wu Yan, an employee of
Jiangyin, acknowledging that Fortune was aware of unpaid air
freight charges of $128,658.55; and 3) seven invoices, which,
according to the Lin Declaration, were all sent to the defendant,
in the amounts of: $7,184.60; $37,863.00; $14,185.00; $40,871.00;
$10,049.10; $14,264.25; and $4,346.60 ("invoices").
The plaintiff's submissions aver that it is entitled to damages
of $128,763.45, as well as interest from June 4, 2002, attorney
fees, and costs. Fortune has made no submission in opposition to
the plaintiff's application for damages.
For the reasons set forth below, STS is awarded damages in the
amount of $128,763.55, with prejudgment interest to be computed
in the manner described below. The plaintiff's application for
attorney fees and costs is denied.
II. BACKGROUND AND FACTS
Based on the submissions by the plaintiff the factual
allegations of which, perforce of the defendant's default, must
be accepted as true, except as they relate to damages, see
Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Greyhound
Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158
(2d Cir. 1992) and this Court's review of the entire court file
in this action, the following findings of fact are made:
STS is a corporation organized and existing under the laws of
China, with an office and place of business in Shanghai, China.
STS is engaged in the business of international freight forwarding. Fortune is a New York corporation with a place of
business located within this judicial district. Fortune is
engaged in the business of importing, exporting and trading
In May and June of 2002, Fortune retained STS to arrange for
the air transportation, from China to El Salvador and Guatemala,
of seven shipments of fabric that the defendant had purchased
from Jiangyin. Thereafter, STS invoiced the defendant for each of
the seven shipments. The aggregate air freight and other charges
reflected on the invoices is $128,763.55.*fn1 According to
the complaint, Fortune has not paid any of these charges.
STS filed this action on September 16, 2003, seeking to recover
the unpaid freight and other charges, as well as prejudgment
interest, attorney fees, and the costs it incurred in bringing
III. CONCLUSIONS OF LAW
As noted above, upon the entry of a defendant's default in an
action, that defendant is deemed to have admitted all factual
allegations in the complaint, except as they relate to damages.
See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d
Cir. 1981). However, a court has discretion to determine whether
the facts alleged in a complaint state a legally sufficient cause
of action. See, e.g., In re Crazy Eddie Sec. Litig.,
948 F. Supp. 1154, 1160 (E.D.N.Y. 1996). Additionally, the amount of
damages must be established by the plaintiff in a post-default
inquest, "unless the amount is liquidated or susceptible of
mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707
(2d Cir. 1974). In conducting an inquest, a court need not hold a
hearing "as long as it [has] ensured that there was a basis for
the damages specified in the default judgment." Transatlantic Marine Claims Agency, Inc. v. Ace
Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997). The court may
rely on affidavits or documentary evidence in evaluating the
fairness of the sum requested. See Tamarin v. Adam Caterers,
Inc., 13 F.3d 51, 54 (2d Cir. 1993).
The general measure of damages for a breach of contract is "the
amount necessary to put the plaintiff in the same economic
position he would have been in had the defendant fulfilled his
contract." Indu Craft, Inc. v. Bank of Baroda, 47 F.3d 490, 495
(2d Cir. 1995). The Court finds that the plaintiff's claim for
breach of contract is sufficiently well supported to allow an
award of damages. Specifically, based on the Lin Declaration and
the invoices submitted by the plaintiff, the Court finds that STS
is entitled to an award of damages in the amount of $128,763.55,
the aggregate of unpaid freight and other charges reflected on
Under New York law, "a plaintiff who prevails on a claim for
breach of contract is entitled to prejudgment interest as a
matter of right." United States Naval Institute v. Charter
Communications, Inc., 936 F.2d 692, 698 (2d Cir. 1991) (citing
New York Civil Practice Law and Rules ("CPLR") §§ 5001 & 5002).
The pertinent New York statute provides:
Interest shall be computed from the earliest
ascertainable date the cause of action existed,
except that interest upon damages incurred thereafter
shall be computed from the date incurred. Where such
damages were incurred at various times, interest
shall be computed upon each item from the date it was
incurred or upon all of the damages from a single
reasonable intermediate date.
CPLR § 5001(b). Interest accrues at a statutory rate of 9% per year. See CPLR
§ 5004. In this action, the earliest ascertainable date on which
the cause of action existed was May 14, 2002, the date of the
earliest invoice. The other invoices are variously dated May 17,
2002, May 29, 2002, or June 4, 2002. The Court finds that May 29,
2002, is a reasonable intermediate date from which to compute
prejudgment interest in this action. Accordingly, the plaintiff
is entitled to prejudgment interest at a rate of 9% per year on
the amount of $128,763.55, accruing on May 29, 2002.
Attorney Fees, Costs
In the Second Circuit, a party seeking an award of attorney
fees must support its request with contemporaneous time records
that show "for each attorney, the date, the hours expended, and
the nature of the work done." See New York State Ass'n for
Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1154 (2d Cir.
1983). Attorney fee applications that do not contain such
supporting data "should normally be disallowed." Id. In this
action, the plaintiff has not submitted any evidence to support
its request for attorney fees. Therefore, that request is denied.
In addition, the plaintiff has not submitted evidence of any
costs it incurred in bringing this action. Consequently, the
plaintiff's request for costs is denied.
For the reasons set forth above, the plaintiff's application
for damages and prejudgment interest is granted, and the
plaintiff's application for attorney fees and costs is denied. The Clerk of Court shall enter a judgment that reflects an
award of: (a) damages in the amount of $128,763.55; and (b)
interest computed on that amount at a rate of 9% per annum,
beginning on May 29, 2002.