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Crum & Forster Insurance Co. v. Goodmark Industries

July 17, 2008

CRUM & FORSTER INSURANCE COMPANY, PLAINTIFF,
v.
GOODMARK INDUSTRIES, INC. AND NAT SCHLESINGER, DEFENDANTS/THIRD-PARTY PLAINTIFFS,
v.
HORIZON INTERNATIONAL GROUP LTD., CAMBRIDGE HORIZON CONSULTANTS, INC., JOHN MORRONGIELLO, AND NORMAN BENET, THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Spatt, District Judge.

MEMORANDUM OF DECISION AND ORDER

On August 2, 2005, Crum & Forster Insurance Company (the "Plaintiff" or "Crum & Forster") filed a complaint against Goodmark Industries, Inc. ("Goodmark") and Nat Schlesinger ("Schlesinger") (collectively the "Defendents").

Currently pending before the Court is a motion by the Plaintiff for: (1) prejudgment interest, pursuant to New York Civil Practice Law and Rules ("C.P.L.R.") 5001(b); (2) attorneys' fees, pursuant to Federal Rule of Civil Procedure ("Fed. R. Civ. P.") 54(d)(2); (3) post-judgment interest, pursuant to 28 U.S.C. § 1961; and (4) costs and disbursements, pursuant to 28 U.S.C. § 1920 and Local Rule 54.1.

I. BACKGROUND

A. Factual Background

The background of this case is set forth in the Court's Memoranda of Decision and Order of May 22, 2007 and September 29, 2007. Familiarity with those decisions is assumed.

B. Procedural History

On August 2, 2005, Crum & Forster filed a complaint against Goodmark and Schlesinger alleging that they defrauded the Plaintiff. In the complaint, the Plaintiff alleges that the Defendants committed fraud; made intentional misrepresentations; breached a contract; and engaged in a conspiracy to defraud the Plaintiff. Specifically, the Plaintiff contends that it unknowingly made payments on fraudulent insurance claims submitted by Goodmark and Schlesinger.

On November 10, 2005, the Defendants filed a third-party complaint against Horizon Investment Group Ltd. ("Horizon"), Cambridge Horizon Consultants, Inc. ("Cambridge"), John Morrongiello ("Morrongiello"), and Norman Benet ("Benet") (collectively the "Third-Party Defendants"). The Defendants alleged that the Third-Party Defendants, who were insurance adjusters, actually defrauded the Plaintiff; breached a contract; breached the convenient of good faith; and were negligent.

On May 22, 2007, this Court dismissed the third party complaint. Crum & Forster Ins. Co. v. Goodmark Indust. Inc., 488 F. Supp. 2d 241 (E.D.N.Y. 2007). The Court determined that the Defendants sought to relitigate the same issues decided in the prior criminal case by denying their liability and alternatively, claiming that if fraudulent claims were submitted to Crum & Forster, any fraud was committed by the Third-Party Defendants. As such, the Court found that the doctrine of collateral estoppel barred the interposition of the third-party complaint and granted the Third-Party Defendants' motion to dismiss the third-party complaint.

On August 7, 2007, the Plaintiff filed a motion for summary judgment based on the doctrine of collateral estoppel. The Plaintiff contended that the Defendants were collaterally estopped from litigating the issues raised in the complaint because the issues were previously addressed during the criminal trial and were resolved by the Defendants' criminal convictions. The Defendants did not oppose the motion.

On September 29, 2007, this Court granted the Plaintiff's motion for summary judgment. The Court determined that the Defendants were collaterally estopped from re-litigating the issues that were litigated during their criminal trial and decided by their criminal convictions. The Court found that the Plaintiff's claims involved the same issues that were determined adversely to the Defendants in the criminal proceeding. The Court referred the issue of damages to United States Magistrate Judge E. Thomas Boyle for an inquest and a Report and Recommendation.

On December 4, 2007, the parties stipulated to an award of actual damages in the amount of $934,319.00. The parties also agreed that the Plaintiff would file a motion for prejudgment interest and attorneys' fees.

On December 17, 2007, the Plaintiff filed the present motion for prejudgment interest; attorneys' fees; post-judgment interest; and costs. The Plaintiff contends that it is entitled to prejudgment interest as a matter of right under New York law and that under Federal law, post-judgment interest can be awarded on money judgments in civil cases. The Plaintiff also contends that, in the interests of justice, this Court should exercise its inherent equitable power to award attorneys' fees. Finally, the Plaintiff claims that under Federal law, the prevailing party enjoys a strong presumption that costs will be awarded in full measure.

On January 13, 2008, the Defendants filed a memorandum in opposition to the Plaintiff's motion. However, the Defendants only oppose an award of attorneys' fees and do ...


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