United States District Court, S.D. New York
James A. DeFelice, SARNO & DeFELICE, LLC, New York, NY, for Plaintiff.
OPINION & ORDER
DENISE COTE, District Judge.
On February 3, 2014, a default was entered against defendant Darryl Miller ("Miller") and the above-captioned action was referred to Magistrate Judge Netburn for an inquest concerning damages. On July 3, 2014, Judge Netburn issued a Report and Recommendation ("Report") recommending that plaintiff be awarded no damages. For the following reasons, the plaintiff is awarded compensatory and punitive damages.
The facts that follow are drawn from the complaint and plaintiff's submissions in support of its request for damages and injunctive relief. Plaintiff Renaissance Search Partners ("Renaissance Search") is an executive search firm founded by three principals, Andrea Henderson ("Henderson"), Tony Brown ("Brown"), and Miller, that was to be managed in accordance with an operating agreement executed on July 15, 2010. Each principal took a one-third ownership interest in Renaissance Search. Plaintiff alleges that Miller violated that agreement by creating a new executive search firm, Renaissance Limited LLC ("Renaissance Limited"), in May 2011, with defendants Colin Cumberbatch ("Cumberbatch") and Robert McCloud ("McCloud").
In July 2010, Renaissance Search had business relationships and placement contracts with 16 clients, including PriceWaterhouseCoopers LLC, Deutsche Bank, and Revlon. In 2011, Miller appropriated Renaissance Search's private client list for Renaissance Limited and misrepresented to certain current and potential clients that Renaissance Search was now doing business as Renaissance Limited.
In particular, Renaissance Search had a contract with Pershing, a division of Bank of New York, Mellon. Purporting to act under that contract, Miller placed an executive with Pershing and instructed Pershing to pay the commission to Renaissance Limited (the "Pershing Commission"). Pershing did so. On September 8, 2011, Renaissance Search was in the process of placing two executives with Pershing and its corporate parent. On September 22, 2011, Henderson informed Pershing of Miller's misrepresentations, and on November 14, 2011, advised Pershing that payment of the Pershing Commission was still due to Renaissance Search. Renaissance Search's relationship with Bank of New York, Mellon was damaged and Renaissance Search has not performed further work for that client.
The amount of the Pershing Commission is uncertain. In the Complaint, plaintiff alleges the Pershing Commission was "at least $25, 000." In Henderson's affidavit submitted in support of plaintiff's proposed damages findings, however, Henderson states that "Miller earned a commission of $30, 000.00 for placing an employee with Pershing." Henderson's affidavit does not reveal the source of this information, or aver that its statements are made on the basis of personal knowledge.
According to its income tax returns, Renaissance Search earned $94, 750 in gross income its 2010 tax year and $91, 062 in net income. In 2011, the year in which the Pershing Commission was paid to Miller, Renaissance Search earned $77, 475 in gross income and $60, 912 in net income. Renaissance Search earned no income in 2012.
On behalf of Renaissance Search, Miller had contracted with third-party Go Daddy to host Renaissance Search's website and email. When the Go Daddy contract expired on June 1, 2012, Miller refused to renew it, leading to a suspension of Renaissance Search's website and email.
On May 25, 2011, Renaissance Limited launched a website that is similar in many respects to Renaissance Search's website, both in its appearance and in the verbatim copying of certain text. That afternoon, Renaissance Limited's website designer, Dianna Rogers ("Rogers"), sent an email to Miller and McCloud stating that "the home page is up along with the other pages that say Under Construction." Rogers writes, "let's discuss content for the rest of the site so we can get it finished. Would you like me to take the info from the other Renaissance site and change it a little, or take bits and pieces from similar sites and reword?"
On September 8, 2011, Henderson sent McCloud a cease and desist letter concerning the use of the name "Renaissance Limited" and Renaissance Limited's website. The letter advises of Miller's conduct, and it charges that Renaissance Limited's name was chosen to lead clients to confuse it with Renaissance Search and that its website makes "unauthorized use of [Henderson's] copyrightable work" in Renaissance Search's website. Henderson demanded that Renaissance Limited's "[c]opyright and [t]rademark [i]nfringement" cease within one week. Renaissance Limited continued operating under that name and its website remained up.
Plaintiff consequently filed this action on July 24, 2012. Plaintiff's complaint (the "Complaint") includes claims against Miller, among others, for tortious interference with contract, copyright infringement, trademark infringement, unjust enrichment, breach of contract, and breach of fiduciary duty.
On November 27, 2012, Judge Netburn held a settlement conference, where plaintiff and defendants other than Miller reached an agreement to settle this case requiring defendants to pay plaintiff $75, 000, dissolve Renaissance Limited, and henceforth conduct business under a new name (the "Settlement Agreement"). Counsel for defendants, including Miller, was present at the conference, and McCloud and Cumberbatch appeared by telephone. On August 5, 2013, plaintiff filed a motion to enforce that agreement against all defendants, including Miller. Plaintiff's motion was referred to Judge Netburn, and on October 15, 2013 she issued a Report and Recommendation advising that the motion be granted as to the other defendants and denied as to Miller. As to Miller, Judge Netburn recommended that default be entered against him for failure to defend this action, as he had failed to comply with a court order directing him to attend the settlement conference and failed to oppose plaintiff's motion to enforce the Settlement Agreement. On December 13, 2013, this Court entered an Order that enforced the Settlement Agreement against defendants other than Miller and ...