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Conceria Vignola SRL v. AXA Holdings

August 3, 2010

CONCERIA VIGNOLA SRL, PLAINTIFF,
v.
AXA HOLDINGS, LLC, DEFENDANT.



The opinion of the court was delivered by: Honorable George B. Daniels

REPORT AND RECOMMENDATION

INTRODUCTION

On July 28, 2009, Plaintiff Conceria Vignola SRL ("Plaintiff") filed a breach of contract action against defendant AXA Holdings, LLC ("Defendant") based on Defendant's alleged failure to pay for goods delivered. (See Complaint, dated July 28, 2009 ("Compl.") (Dkt. 1).) After Defendant failed to answer or otherwise respond to the Complaint, the Honorable George B. Daniels ordered that a default be entered against Defendant and referred the matter to me to conduct an inquest and to report and recommend concerning damages. (See Dkts. 10, 11.)

On November 18, 2009, I issued a Scheduling Order requiring Plaintiff to serve and file Proposed Findings of Fact and Conclusions of Law ("Proposed Findings") no later than December 18, 2009. (See Dkt. 12.) In that Order, I cautioned Defendant that if, by January 19, 2010, it did not respond to Plaintiff's submissions or contact my chambers in writing to request an in-court hearing, it would be my intention to issue a report and recommendation on the basis of Plaintiff's written submissions alone. (See id.)

Plaintiff filed its Proposed Findings and supporting papers on December 15, 2009. (See Proposed Findings, dated Dec. 15, 2009 (Dkt. 13); see also Declaration of Francesco Di Pietro, dated Sept. 15, 2009 ("Di Pietro Decl.") (Dkt. 14); Declaration of Umberto Vignola, dated Dec. 14, 2009 ("Vignola Decl.") (Dkt. 15).) To date, Defendant has not filed a response to any of Plaintiff's submissions, nor has it contacted my chambers to request a hearing.

For the reasons that follow, I recommend that Plaintiff be awarded damages, interest, and costs, as calculated below.

BACKGROUND

As alleged in the Complaint, and as supported by the documentation submitted by Plaintiff on this inquest, the relevant facts are as follows:

Plaintiff, a leather goods manufacturer, is organized under the laws of Italy. (Compl., ¶ 3.) Defendant is a New York limited liability company which conducts business as an importer and distributor of leather goods. (See id., ¶ 4.) From October 2006 to February 2007, Plaintiff allegedly sold and delivered to Defendant 24 separate shipments of leather goods for a cumulative purchase price of $270,101.16. (See id., ¶ 6; Vignola Decl., ¶¶ 2, 5.) Plaintiff issued an invoice for each shipment. (Vignola Decl., Ex. A.) Defendant allegedly received and accepted each of the shipments and agreed to pay the invoiced prices. (Compl., ¶ 7; Vignola Decl., ¶ 4.) Indeed, Plaintiff asserts that Defendant admitted, on several occasions, to owing the amounts reflected on the invoices. (Compl., ¶ 9; Vignola Decl., ¶ 4.) Nonetheless, despite numerous demands by Plaintiff, Defendant has not, to date, remitted payment and the total purchase price thus remains unpaid and overdue. (Compl., ¶ 9; Vignola Decl., ¶ 2.)

On July 28, 2009, Plaintiff filed a Complaint for breach of contract against Defendant to recover the purchase price. (See Dkt. 1.) Plaintiff incurred a filing fee of $350 paid to the Clerk of the Court and fees of $60 paid in connection with service of process upon Defendant through the New York Secretary of State. (Di Pietro Decl., ¶ 7.)

Accordingly, Plaintiff seeks damages in the amount of $270,101.16 (see Proposed Findings ¶ 10), plus prejudgment interest on that amount (id., ¶¶ 11-13), and litigation costs in the amount of $410 (id., ¶¶ 14-15).

DISCUSSION

"A default judgment entered on well-pleaded allegations in a complaint establishes a defendant's liability," but it does not reach the issue of damages. Bambu Sales, Inc. v. Ozak Trading, Inc., 58 F.3d 849, 854 (2d Cir. 1995) (quoting Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 69 (2d Cir. 1971), rev'd on other grounds, 409 U.S. 363 (1973)). In conducting an inquest, the Court accepts as true all of the factual allegations of the Complaint, except those relating to damages. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). A plaintiff must therefore substantiate a claim with evidence to prove the extent of damages. See Trehan v. Von Tarkanyi, 63 B.R. 1001, 1008 n.12 (S.D.N.Y. 1986) (plaintiff must introduce evidence to prove damages suffered and the court will then determine whether the relief flows from the facts) (citing Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974)).

Without a response from Defendant, this Court must assess whether Plaintiff has provided a sufficient basis for the Court to determine damages. See Transatl. Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (noting that the Court "should take the necessary steps to establish damages with reasonable certainty"). Although the Court may hold a hearing to assess damages, a hearing is not required where a sufficient basis on which to make a calculation exists. See Fed. R. Civ. P. 55(b)(2) (court may conduct hearings on damages as necessary); see also Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 54 (2d Cir. 1993) (judges are given much discretion to determine whether an inquest need be held); Action S.A. v. Marc Rich & Co.,951 F.2d 504, 508 (2d Cir. 1991) (Fed. R. Civ. P. 55(b)(2) "allows but does not require . . . a hearing"). In this case, a hearing is unnecessary; Plaintiff's written submissions provide an adequate basis for calculating the amount of damages.

A. Choice of Law

Under New York choice of law principles, which apply in this diversity action, see Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496-97 (1941), the choice of law for contract claims is determined by a "center of gravity" analysis. See Globalnet Financial.com, Inc. v. Frank Crystal & Co., 449 F.3d 377, 383 (2d Cir. 2006); Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386, 394 (2d Cir. 2001). This analysis determines the contract's "center of gravity" by examining "'the place of contracting, negotiation and performance; the location of the ...


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