United States District Court, S.D. New York
OPINION & ORDER
WILLIAM H. PAULEY III, UNITED STATES DISTRICT JUDGE
October 24, 2017, this Court issued an Opinion and Order
partially granting Victory Foodservice Distributors
Corporation's (“Victory”) motion for default
judgment. In that Opinion and Order, Victory was afforded
another opportunity to prove “consequential and
expectation damages arising from [Defendant] Flegga's
failure to properly store the cheese products” that
Victory purchased from Flegga. (ECF No. 21, at 3.)
October 30, 2017, Victory submitted a supplemental attorney
affidavit with two exhibits in support of its request for
additional damages. The first exhibit is a copy of an invoice
reflecting the various shipping, freight, custom, trucking,
and courier costs associated with the shipment of cheese at
issue in this action. Victory notes that one of the itemized
charges, categorized as an “Air/Ocean Freight
Charge” in the amount of $3, 095.00, had “already
been accounted for” in this Court's previous Order.
(Supplemental Affirmation in Support of Motion for Default
Judgment (“Supplemental Aff.”), ECF No. 22, at
¶ 3.) The remainder of the charges relate to the
specific shipment of defective cheese that Victory could not
sell. Accordingly, $8, 011.48 (the total invoice amount less
the Air/Ocean Freight Charge) is granted as additional
damages related to Flegga's failure to deliver fresh
second exhibit appears to be a communication between
Victory's counsel and a lawyer in Greece-where Flegga is
headquartered-detailing the estimated costs of enforcing a
default judgment in a Greek court of law against Flegga.
Victory characterizes these costs as “consequential,
incidental, and reasonable damages, which may be awarded
pursuant to the [United Nations Convention on Contracts for
the International Sale of Goods (“CISG”)].”
(Supplemental Aff. ¶ 4.) While such costs are estimated
at a range between $15, 000 to $25, 000, Victory seeks a
middle ground, requesting $20, 000 “for the enforcement
of this judgment in Greece.” (Supplemental Aff. ¶
5 and Ex. B.) The costs largely represent attorneys' fees
in connection with petitioning a court in Greece to recognize
and enforce the default judgment.
Victory does not cite to any specific provisions in the CISG
pertaining to attorney's fees expended in connection with
enforcing a default judgment, other courts have analyzed the
issue as one encompassed by Article 74 of the CISG. That
provision states, in relevant part, that “[d]amages for
breach of contract by one party consist of a sum equal to the
loss, including loss of profit, suffered by the other party
as a consequence of the breach.” Whether the term
“loss” encompasses attorney's fees is an
issue that has not been widely discussed. See Pupille v.
Nickolas Imports, LLC, 2013 WL 2152633, at *1 (E.D. Va.
May 15, 2013) (“The court has found minimal case law
regarding entitlement to attorneys' fees under
CISG.”). Further, there is an added layer of complexity
to this request because Victory seeks prospective, estimated
fees arising from the enforcement of a default judgment in
Greece, not the attorneys' fees expended in connection
with this action.
the scant authority on this issue holds that attorneys'
fees are not a recoverable “loss” under CISG
Article 74. Zapata Hermanos Sucesores S.A. v. Hearthside
Banking Co., 313 F.3d 385, 389 (7th Cir. 2002). Absent
any statutory authority from which attorneys' fees may be
requested, courts have held that “attorneys' fees
are an issue outside the substantive law of contracts
governed by the CISG. Instead, they are left open to domestic
law and the rules governing choice of law in international
disputes.” Granjas Aquanova S.A. de C.V. v. House
Mfg. Co. Inc., 2010 WL 4809342, at *1 (E.D. Ark. Nov.
19, 2010); San Lucio, S.r.l. v. Import & Storage
Servs., LLC, 2009 WL 1010981, at *3 (D.N.J. Apr. 15,
2009); Zapata, 313 F.3d at 388. “In the United
States, that means attorneys' fees are governed by the
law of the forum state, ” which in this case is New
York. Granjas Aquanova, 2010 WL 4809342, at *2.
New York law, “it is well settled that absent a statute
or contractual provision, attorneys' fees and the legal
expenses necessarily incurred in carrying on a lawsuit are
not generally considered items of expense recoverable as
general or special damages.” Amusement Indus., Inc.
v. Stern, 786 F.Supp.2d 742, 756 (S.D.N.Y. 2011)
(internal citations omitted). The exception to this rule,
however, is that where “through the wrongful act of
[its] present adversary, a person is involved in earlier
litigation with a third person in bringing or defending an
action to protect [its] interest, [it] is entitled to recover
the reasonable value of attorneys' fees and other
expenses thereby suffered or incurred.” Amusement
Indus., 786 F.Supp.2d at 756 (collecting cases). This
exception is not applicable here-the claims over which
Victory obtained a default judgment do not pertain to an
earlier litigation against a third party that arose from
Flegga's wrongful actions. And although the
attorneys' fees incurred in obtaining the default
judgment are not the subject of Victory's latest motion,
Victory seeks an advance on prospective attorneys' fees
likely to be incurred to enforce the default judgment. The
request is remote and falls outside the narrow exception to
the rule that each party must bear its own costs.
Accordingly, this portion of Victory's request is denied.
foregoing reasons, Victory's motion for additional
damages in connection with its default judgment is granted in
part and denied in part. The Clerk of Court is directed to
issue an Amended Final Judgment in the amount of $80, 100.48
plus post-judgment ...