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Pyramid Walden Company, L.P. v. Diversifoods

February 15, 2008

PYRAMID WALDEN COMPANY, L.P.; LANESBOROUGH ENTERPRISES NEWCO, LLC; AND POUGHKEEPSIE GALLERIA, LLC, PLAINTIFFS,
v.
DIVERSIFOODS, INC. D/B/A TROPIK SUN, DEFENDANT.



The opinion of the court was delivered by: Scullin, Senior Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Currently before the Court is Plaintiffs' motion for entry of a default judgment pursuant to Rule 55 of the Federal Rules of Civil Procedure.

II. BACKGROUND

Plaintiffs filed their complaint in this action on September 13, 2007. See Dkt. No. 1. Plaintiffs served Defendant with the summons and complaint on September 19, 2007, through the New York State Secretary of State pursuant to New York Corporation Law § 306. See Affidavit of Mitchell J. Katz, sworn to November 26, 2007 ("Katz Aff."), at ¶ 5 & Exhibit "B." Plaintiffs completed compliance with New York Civil Law and Rules § 3215(g)(4)(i) and (ii) on September 21, 2007. See id. at ¶ 6 & Exhibit "C." Defendant, a foreign corporation, has failed to submit an answer or otherwise appear in this action within the required time period. See id. at ¶ 8.

III. DISCUSSION

Rule 55 of the Federal Rules of Civil Procedure provides that when a party fails to defend itself the Clerk of the Court shall enter that party's default. See Fed. R. Civ. P. 55(a). The plaintiff may then seek a default judgment. See Fed. R. Civ. P. 55(b).

When a court considers a motion for the entry of a default judgment, it must "accept[] as true all of the factual allegations of the complaint . . . ." Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981) (citations omitted). However, the court cannot construe the damages alleged in the complaint as true. See Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (citations omitted). Rather, the court must "conduct an inquiry in order to ascertain the amount of damages with reasonable certainty." Id. (citation omitted).

In their complaint, to which they have attached the "Amended Plan of Reorganization," Plaintiffs allege that, "[p]ursuant to the Plan, the Defendant was and is required to pay general unsecured creditors the pro rata distribution for their claims in consecutive quarterly payments on February 16, May 16, August 16 and November 16 in each year over a five-year period commencing ninety (90) days from November 16, 2001 . . . [and that,] [p]ursuant to the Plan, Diversifoods was to pay a total of $301,500.00 to the general unsecured creditors." See Complaint at ¶¶ 10-11. Plaintiffs also assert that "Pyramid Walden holds a general unsecured claim against Defendant in the amount of $44,808.83 . . . [and that,] [p]ursuant to the Plan, Pyramid Walden is to receive 1.3% of the total distribution of $301,500.00 over the five-year period in the amount of $3,919.50." See id. at ¶¶ 13-14. Furthermore, Plaintiffs contend that Pyramid Walden . . . received two payments from Defendant . . . on May 30, 2002 for the February 16 and May 16, 2002 due dates in the amounts of $124.44 and $332.50, respectively[;] . . . Pyramid Walden has received no further payments as required under the Plan[;] . . . Defendant has breached the terms of the Plan . . . [and,] [a]s a result of the breach, Pyramid Walden is entitled to damages in the amount of $3,462.56.

See id. at ¶¶ 15-17.

Likewise, Plaintiff Lanesborough contends that Defendant has breached the terms of the Plan. Specifically, Plaintiff Lanesborough asserts that it "holds a general unsecured claim against Defendant in the amount of $330,279.91 . . . [and that it] is to receive 9.8% of the total distribution of $301,500.00 over the five-year period in the amount of $29,547.00." See id. at ¶¶ 19-20. Plaintiff Lanesborough claims that it received two payments from Defendant . . . on May 30, 2002 for the February 16 and May 16, 2002 due dates in the amounts of $917.24 and $2,440.00, respectively[;] . . . Lanesborough has received no further payments as required under the Plan[;] . . . Defendant has breached the terms of the Plan; . . . [and,] [a]s a result of the breach, Lanesborough is entitled to damages in the amount of $26,189.76.

See id. at ¶¶ 21-23.

Finally, Plaintiff Poughkeepsie alleges that it "holds a general unsecured claim against Defendant in the amount of $1,004,459.92 . . . [and that it] is to receive 29.8% of the total distribution of $301,500.00 over the five-year period in the amount of $89,847.00." See id. at ¶¶ 25-26. Furthermore, Plaintiff Poughkeepsie asserts that it "received two payments from Defendant . . . on May 30, 2002 for the February 16 and May 16, 2002 due dates in the amounts of $2,789.56 and $7,440.00, respectively . . . [and that it] has received no further payments as required under the Plan." See id. at ¶¶ 27-28. Plaintiff Poughkeepsie therefore contends that "Defendant has breached the terms of the Plan . . . [and,] [a]s a result of the breach, Poughkeepsie is entitled to damages in the amount of $79,617.44." See id. at 29.

In their motion for entry of a default judgment, Plaintiffs seek the following damages as a ...


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