United States District Court, S.D. New York
June 13, 2005.
JASON R. BADIAN, Plaintiff,
BRANDAID COMMUNICATIONS CORP. et al., Defendants.
The opinion of the court was delivered by: DENNY CHIN, District Judge
By Memorandum Decision filed August 30, 2004, this Court
granted plaintiff Jason R. Badian's request for an entry of
default judgment against defendants on Counts One and Two of the
complaint. Defendant Jay Elliott moved for relief from the
judgment, and on May 6, 2005 I denied the motion and requested
that Badian submit a proposed judgment and that defendants submit
any opposition or objections on or before May 26, 2005.
I have reviewed Badian's proposed judgment and defendant
Elliott's opposition. Judgment will be entered against defendants
in the amount set forth below. As an initial matter, Elliott argues that because Badian did
not submit an individual affidavit in support of his proposed
judgment, Badian did not establish a basis for damages. In my May
6, 2005 memorandum decision, I required Badian to "submit a
proposed judgment that sets forth proposed damages, together with
an affidavit that explains the bases for the proposed amounts."
Badian's counsel provided an affirmation and a statement of
damages explaining the proposed amounts. Because damages are
based on the Employment Agreement, the Stock Purchase Agreement,
and costs, counsel's affidavit was sufficient and provided an
adequate explanation of the proposed judgment.
A. Count One
As to Count One of the complaint, I find that Badian is
entitled to the following damages from defendants on a joint and
1. $194,500, representing the "lump sum payment equal to
Employee's base salary that would have been due from the date of
[the] termination (or deemed termination) to the end of the
remaining term of the Agreement" as set forth in the employment
agreement between BrandAid Communications Corporation ("BrandAid
Communications") and Badian (the "Employment Agreement"). (Compl.
Badian terminated his employment in accordance with the
Employment Agreement on January 3, 2002, and the Employment Agreement was valid through March 31, 2005. (Compl. ¶¶ 8, 16,
26). Thus payment equal to Badian's base salary was due from
January 4, 2002 through March 31, 2005, a total of three years,
two months, and twenty-seven days.
I find that Badian's salary was $60,000 at the time of his
resignation. Badian claims that his agreed upon salary was
$90,000 annually, but Elliott counters that at the time of
resignation, Badian's base salary was at most $60,000. (Compl. ¶
11; Elliott Opp'n at 9).*fn2 On July 22, 2002, an
administrative law judge with the New York Unemployment Insurance
Appeal Board found that "[i]n January 2001, [Badian] agreed to
take a salary cut from $90,000 to $60,000." (Id. Ex. C at
10).*fn3 Badian has put forth no evidence to support the
assertion that his salary was different than that determined by
the administrative law judge.
Accordingly, I find that Badian is entitled to a lump sum
payment of $194,500, which is equal to a salary of $60,000 for
three years plus $5,000 a month for two months plus $4500 for 27
2. $180,000, representing a lump sum payment equal to three
times Badian's annual base salary as of the date of termination, in accordance with the Employment Agreement. (Compl.
3. $113,406.84, representing interest on the two lump sum
payments mentioned above from February 2, 2002 (the due date for
the payments under the Employment Agreement) through today.
Interest is calculated at the legal rate of nine percent per year
for a total of 1226 days. Therefore, the total interest is
calculated by multiplying 0.000247 (the daily rate of interest)
times 1226 days times $374,500 (the total lump sum payments due).
4. $581, representing costs and disbursements. (Heimerl Aff. ¶
Badian is not entitled to reimbursement for his health
insurance premiums. The Employment Agreement requires that
BrandAid Communications shall "provide for the continuation of
any Company health insurance benefits which the Employee and his
family would be eligible but for [the] termination for a period
ending three (3) years from the date of such termination."
(Compl. ¶ 25). There is no indication that Badian was receiving
health insurance benefits at the time of his termination or, if
he was, that he requested their continuance. In fact, Badian has
provided no evidence in regard to health insurance. Moreover, the
Employment Agreement does not contemplate reimbursement for health insurance premiums unrelated to BrandAid Communications
Elliott argues that Badian is not entitled to damages from
Elliott on Count One, because Badian stated no actionable breach
of contract claim against Elliott. This issue was argued by
Elliott in his motion for reconsideration and will not be
considered again here. In the May 6, 2005 memorandum decision, I
found that "the complaint alleges that Elliott acted in bad faith
or committed a tort in connection with BAC's performance of its
obligations under the contract that is the subject of Count One."
Accordingly, for the reasons set forth in the May 6, 2005
memorandum decision, Badian is entitled to damages from Elliott
on Count One.
In sum, judgment is entered against defendants on a joint and
several basis for $488,487.84 on Count One of the complaint.
B. Count Two
I find that Badian is also entitled, on Count Two of the
complaint, to the following additional damages from Elliott:
1. $53,700, representing three payments of $17,900 each due in
exchange for the stock of BrandAid Communications, in accordance
with a December 5, 2001 stock purchase agreement between Elliott
and Badian (the "Stock Purchase Agreement"). (Compl. ¶ 36; id.
Elliott argues that Badian erroneously asserted in the complaint that the failure of Elliott to make the December 2,
2002 payment caused the remaining balance under the Stock
Purchase Agreement to become accelerated. (Elliott Opp'n at
11-12). Badian's claim in regard to acceleration is not a basis
for this judgment; instead, the plain language of the Stock
Purchase Agreement is the basis for the judgment. The Stock
Purchase Agreement provides that "[t]he remaining balance,
$53,700 to be paid for the Stock shall be made with three equal
payments ($17,900 each) payable to J.R. Badian from Jay Elliott
made on each successive one-year anniversary of the date of this
letter, until the complete consideration has been paid." (Compl.
Ex. B). The remaining balance of the Stock Purchase Agreement has
not been paid to Badian by Elliott, and the Stock Purchase
Agreement clearly indicates that the entire balance is past due.
2. $7,361.47, representing interest on the outstanding Stock
Purchase Agreement payments. The first installment was due
December 5, 2002, the second due December 5, 2003, and the third
due December 5, 2004, and interest is calculated at the legal
annual rate of nine percent through today. (See id. Ex. B).
Thus $4,067.60 is due for interest on the first installment,
which is 920 days past due; $2,453.82 is due for interest on the
second installment (555 days past due); and $840.05 is due for
interest on the third installment (190 days past due).
In sum, judgment is entered against defendant Elliott for
$61,061.47 on Count Two of the complaint. CONCLUSION
Default is hereby entered against defendants. Badian is
entitled to $488,487.84 from defendants on a joint and several
basis on Count One of the complaint and an additional $61,061.47
from defendant Elliott on Count Two of the complaint. Judgment
will be entered against (1) all defendants, on a joint and
several basis, in the amount of $488,487.84 on Count One, and (2)
defendant Elliott in the additional amount of $61,061.47 on Count