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Mediterranean Shipping Company Inc. v. Tjd International Inc.

United States District Court, S.D. New York

February 10, 2015

MEDITERRANEAN SHIPPING COMPANY (USA) INC., Plaintiff,
v.
TJD INTERNATIONAL INC., Defendant.

REPORT AND RECOMMENDATION

GABRIEL W. GORENSTEIN, Magistrate Judge.

Plaintiff Mediterranean Shipping Company (USA), Inc. ("Mediterranean Shipping") seeks a default judgment against defendant TJD International Inc. ("TJD"). Mediterranean Shipping's application should be granted as set forth below.

I. BACKGROUND

Mediterranean Shipping filed a complaint on September 13, 2013 (Docket # 1), and an amended complaint on October 21, 2013 (Docket # 2) ("Am. Compl."). Jurisdiction was based on admiralty. See id. ¶ 1; 28 U.S.C. § 1333. The amended complaint alleged that TJD breached two shipping contracts it entered into with Mediterranean Shipping. See id. ¶¶ 15, 22. After TJD failed to respond to the complaint, Mediterranean Shipping obtained a Clerk's Certificate of Default on February 18, 2014 (Docket # 6). Mediterranean Shipping moved for a default judgment against TJD, see Motion for Entry of a Default Judgment, filed Apr. 25, 2014 (Docket # 7), and submitted a declaration and documentary evidence supporting its request for an award of damages, see Declaration of Lindsay A. Sakal in Support of Plaintiff's Motion for Default Judgment Against TJD International Inc., filed Apr. 25, 2014 (Docket # 8) ("First Sakal Decl.").

On May 15, 2014, Judge Oetken entered an Order directing that Mediterranean Shipping shall have judgment against TJD and referring the case to the undersigned for an inquest. (Docket # 9); see also Order of Reference, dated May 15, 2014 (Docket # 10). On May 19, 2014, this Court issued an Order giving TJD until June 30, 2014, to oppose the damages claimed by Mediterranean Shipping in its submissions. See Scheduling Order (Docket # 11), ¶ 2. The May 19 Order also notified the parties that the Court would conduct the damages inquest based solely on the written submissions of parties, unless a party sought an evidentiary hearing. Id. ¶ 3. The May 19 Order set June 30, 2014, as the deadline for the parties to write a letter to the Court requesting such a hearing. Id. TJD did not oppose Mediterranean Shipping's claim for damages or make any other submission to the Court, and neither party has requested an evidentiary hearing.

To support its claim for damages, Mediterranean Shipping offered the declaration of Lindsay A. Sakal. See Motion for Entry of a Default Judgment, filed Apr. 25, 2014 (Docket # 7). However, this declaration did not contain all of the information necessary to conduct the damages inquest. Therefore, by Order dated November 6, 2014 (Docket # 14), the Court directed Mediterranean Shipping to provide additional information. In response, Mediterranean Shipping provided some of this information, see Declaration of Lindsay A. Sakal in Response to November 6, 2014 Order, filed Dec. 1, 2014 (Docket # 16) ("Second Sakal Decl."), and waived its claim for damages that related to other information that had been sought by the Court, see Letter from Lindsay A. Sakal, filed Jan. 8, 2015 (Docket # 19) ("Sakal Letter").

The default entered in this case establishes TJD's liability. See Bambu Sales, Inc. v. Ozak Trading Inc., 58 F.3d 849, 854 (2d Cir. 1995) (citation omitted). Thus, the only issue that remains is whether Mediterranean Shipping has provided adequate support for the relief it seeks. See Kuruwa v. Meyers, 823 F.Supp.2d 253, 256 (S.D.N.Y. 2011); see also GAKM Res. LLC v. Jaylyn Sales Inc., 2009 WL 2150891, at *2 (S.D.N.Y. July 20, 2009) ("A default judgment that is entered on the well-pleaded allegations in a complaint establishes defendant's liability... and the sole issue that remains before the court is whether the plaintiff has provided adequate support for the relief it seeks.") (citations omitted).

However, "[e]ven when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true." Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (citation omitted). Rather, "the district court must... conduct an inquiry in order to ascertain the amount of damages with reasonable certainty." Id. (citation omitted). Any damages award must be based on admissible evidence. See, e.g., Braccia v. D'Blass Corp., 2011 WL 2848146, at *3 (S.D.N.Y. June 13, 2011). Specifically, "the plaintiff bears the burden of proof and must introduce admissible evidence to establish, with reasonable certainty, a basis for the amount of damages it seeks." E.g., U.S. ex rel. Nat'l Dev. & Constr. Corp. v. U.S. Envtl. Universal Servs., Inc., 2014 WL 4652712, at *3 (S.D.N.Y. Sept. 2, 2014) (citing House v. Kent Worldwide Mach. Works, Inc., 359 F.Appx. 206, 207 (2d Cir. 2010)); see Prince of Peace Enters., Inc. v. Top Quality Food Mkt., LLC, 2014 WL 793084, at *3 (S.D.N.Y. Feb. 28, 2014) (damages must be "established through admissible evidence, not simply the assertions of those seeking damages") (citations omitted).

Neither party has requested an evidentiary hearing, and TJD has not made any submission to the Court. Therefore, no hearing was required.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

In light of TJD's default, all of Mediterranean Shipping's properly pleaded allegations, except for those relating to damages, are accepted as true. See, e.g., City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) ("It is an ancient common law axiom' that a defendant who defaults thereby admits all well-pleaded' factual allegations contained in the complaint.") (quoting Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004)); Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) ("In light of [defendant's] default, a court is required to accept all... factual allegations as true and draw all reasonable inferences in [plaintiff's] favor.") (citation omitted).

A. Facts Related to Liability

1. Facts Common to Both Contracts

Mediterranean Shipping is a common carrier of commercial cargo by ocean vessel, operating in foreign commerce of the United States. Am. Compl. ¶ 5. It is a corporation organized under the laws of New York, which also has its principal place of business in New York. Id. ¶ 3. TJD is a corporation organized and operating ...


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