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Capgemini U.S. LLC, Individually v. Ec Manage Inc. and Tpx Global Corporation

November 7, 2012

CAPGEMINI U.S. LLC, INDIVIDUALLY AND AS ASSIGNEE OF CLAIMS OF CERTAIN CONTRACTORS OF EC MANAGE INC., AND CAPGEMINI APPLICATIONS SERVICES LLC, PLAINTIFFS,
v.
EC MANAGE INC. AND TPX GLOBAL CORPORATION DEFENDANTS.



The opinion of the court was delivered by: Pitman, United States Magistrate Judge:

REPORT AND RECOMMENDATION

TO THE HONORABLE GEORGE B. DANIELS, United States District Judge,

I. Introduction

On October 13, 2010, the Honorable George B. Daniels, United States District Judge, referred this matter to me to conduct an inquest concerning plaintiffs' damages in connection with their claims against defendants EC Manage Inc. ("EC Manage") and TPX Global Corporation ("TPX Global") (Docket Item 12). The inquest was ordered as a result of Judge Daniels's Order dated October 13, 2010 noting defendants' default in this case (Docket Item 13).

Pursuant to the Order of Reference in this case, I issued a Scheduling Order on November 5, 2010 directing plaintiffs to serve and file proposed findings of fact and conclusions of law, along with evidentiary materials supporting their claim for damages, by January 11, 2011 (Docket Item 15 at ¶ 1). My November 5, 2010 Scheduling Order further directed defendant to submit responsive materials by February 11, 2011. Specifically, my Order provided:

Defendants shall submit their response to Plain-tiff's submission, if any, no later than February 11, 2011. IF DEFENDANTS (1) FAIL TO RESPOND TO PLAINTIFF'S SUBMISSIONS, OR (2) FAIL TO CONTACT MY CHAMBERS BY FEBRUARY 11, 2011 AND REQUEST AN IN-COURT HEARING, IT IS MY INTENTION TO ISSUE A REPORT AND RECOMMENDATION CONCERNING DAMAGES ON THE BASIS OF PLAINTIFF'S WRITTEN SUBMISSIONS ALONE WITHOUT AN IN-COURT HEARING. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997); Fustok v. ContiCommodity Services Inc., 873 F.2d 38, 40 (2d Cir. 1989) ("[I]t [is] not necessary for the District Court to hold a hearing, as long as it ensured that there was a basis for the damages specified in a default judgment."). (Docket Item 15 at ¶ 2) (emphasis in original).

On December 17, 2010, plaintiffs timely filed a document entitled "Plaintiff's Proposed Findings of Fact and Conclusions of Law for Damages on a Default Judgment" along with supporting evidentiary material (Plaintiff's Proposed Findings of Fact and Conclusions of Law for Damages on a Default Judgment, dated December 14, 2010 (undocketed)("Pls' Proposed Findings")). Defendants have not made any written submission to me, nor have they contacted my chambers in any way. Since all reasonable steps to provide notice to defendants have been taken, I make the following findings of fact and conclusions of law on the basis of plaintiffs' submissions alone.

II. Findings of Fact

A. The Parties

1. Plaintiff Capgemini U.S. is a Delaware limited liability company with its principal place of business located at 623 Fifth Avenue, New York, New York 10022 (Complaint, filed March 18, 2010 (Docket Item 1)("Compl."), at ¶ 2).*fn1

2. Plaintiff Capgemini Applications Services (collectively with Capgemini U.S., "Capgemini") is a Delaware limited liability company whose "sole member" is Capgemini U.S. (Compl. ¶ 3).

3. Defendant EC Manage is a California corporation with its principal place of business located at 3155 Kearney Street, Suite 170, Freemont, California 94538 (Compl. ¶ 4).

4. Defendant TPX Global is a California corporation with its principal place of business located at 3155 Kearney Street, Suite 170, Freemont, California 94538 (Compl. ¶ 5).

B. Facts Relating to the Agreement

5. In October 2007, Capgemini and EC Manage entered into an agreement ("Agreement"), under which EC Manage would provide consultants to Capgemini to perform services for Capgemini and its clients (Compl. ¶ 10; Agency Agreement, dated October 1, 2007 ("Agreement"), annexed as Exhibit A to Affidavit of Arvind Kumar, dated November 1, 2010 ("Kumar Aff.")).

6. Under the Agreement, Capgemini would pay EC Manage for the consultants' time and expenses, and EC Manage would then pay the wages of the consultants (Compl. ¶ 11; Agreement art. 3, 7).

7. The Agreement provided that EC Manage would "indemnify, defend, and hold harmless Capgemini and its affiliates from all claims, losses, liabilities, costs and expenses arising from breach of the foregoing obligations or which relate to the employment status of Consultants or any compensation or benefits due to Consultations," and also provided that EC Manage would indemnify Capgemini "against any and all suits, causes of action, proceedings, loss, damage, liability or expense, including defense costs and legal fees, and claims of any nature, arising out of or resulting from . . . any breach by [EC Manage] of any of the terms, obligations, representations or warranties contained in this Agreement" (Compl. ¶¶ 12-13; Agreement art. 11).

8. Plaintiffs paid EC Manage for the consultants' time and expenses (Compl. ¶ 14).

9. In October 2009, consultants provided by EC Manage began to complain to Capgemini and its clients that their wages were not being paid by EC Manage (Compl. ¶ 15).

10. EC Manage admitted to Capgemini that they were not paying the consultants' wages due to financial issues. Capgemini demanded that EC Manage release the consultants so that they could be transferred to another staffing agency, and to reaffirm its obligation to pay the consultants' wages for work that Capgemini had already paid EC Manage for. Capgemini and ...


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