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Treasure Chest Themed Value Mail, Inc. v. David Morris International, Inc.

United States District Court, S.D. New York

June 26, 2018

TREASURE CHEST THEMED VALUE MAIL, INC., Plaintiff,
v.
DAVID MORRIS INTERNATIONAL, INC., Defendant.

          Counsel for plaintiff: Daniel Knox Knox Law Group, P.C.

          Counsel for defendant: Brian E. Lehman Julie R. Solarz Lehman LG LLC

          MEMORANDUM AND ORDER

          NAOMI REICE BUCHWALD UNITED STATES DISTRICT JUDGE

         Plaintiff Treasure Chest Themed Value Mail, Inc. (“Treasure Chest” or plaintiff) commenced this action against defendant David Morris International, Inc. (“David Morris” or defendant), seeking damages, interest thereon, and attorneys' fees for the latter's failure to perform under their “Vacation Travel Mailing Participation Agreement.” The parties proceeded to a June 5, 2018 bench trial before this Court, at the conclusion of which plaintiff's motion for a directed verdict was granted. This Memorandum and Order constitutes the Court's findings of fact and conclusions of law consistent with that ruling. See Fed.R.Civ.P. 52(a).

         BACKGROUND

         Two witnesses testified at trial. Plaintiff called Richard Shane, Treasure Chest's founder and chief executive officer. Affidavit of Richard Shane (“Shane Aff.”) ¶ 1, May 21, 2018, Dkt. No. 39. The direct testimony of Mr. Shane was by affidavit pursuant to court order. Defendant called David Morris himself solely as an impeachment witness.

         Treasure Chest is an advertising company that “primarily employs direct mailing and digital media to deliver advertising materials to consumers.” Id. ¶ 3. To that end, Treasure Chest “maintains a proprietary database comprised of the names and addresses” of 1.4 million “individuals in the United States who have expressed interest in vacation travel by requesting travel-related information directly from Treasure Chest and/or travel-related periodicals.” Id. ¶¶ 4-5; see Trial Transcript (“Tr.”) 26:4-14.

         In January 2016, David Morris contracted with Treasure Chest, pursuant to a “Vacation Travel and Mailing Participation Agreement” (the “Contract”), to include advertising materials for Arosa Cruises and AutoEurope in Treasure Chest's Spring 2016 mailing to the individuals in its database. See Shane Aff. ¶¶ 6-8 & Ex. A. Under the Contract, Treasure Chest was required to (1) “include [David Morris'] information on two sides of an insert in the Company's direct mail business campaign to at least 730, 000 vacation travelers nationwide . . . with two logos on [the] response card;” and (2) provide “greater than 300, 000 follow up weekly digital impressions . . . for two different products;” such that (3) David Morris was “guaranteed greater than 3, 000 total leads, ” otherwise “the following season['s]” mailing would be “free.” Contract §§ 2-3. David Morris was to compensate Treasure Chest for its services with (1) $45, 000 by July 1, 2016; along with (2) “up to $40, 000 in airfare and hotel accommodations at fair market value, ” and (3) “up to $10, 000 value in Arosa cruises.” Id. § 3.

         However, after Treasure Chest completed the mailing, David Morris refused to pay, citing the mailing's failure to generate business. See Shane Aff. ¶¶ 19, 22. Treasure Chest thereafter commenced this action, asserting a single claim for breach of contract, and seeking damages, interest thereon, and attorneys' fees. See Compl., Jan. 1, 2017, Dkt. No. 1. David Morris, in response, asserted counterclaims for fraud, unjust enrichment, and breach of contract. See Am. Answer & Countercls., June 28, 2017, Dkt. No. 13.

         Following multiple contentious discovery disputes, but before deposing plaintiff or serving targeted discovery requests, David Morris requested a bench trial, which this Court scheduled for June 5, 2018. See Letter from Brian Lehman, Lehman LG LLC, to Hon. Naomi Reice Buchwald, United States District Judge, Southern District of New York (Apr. 18, 2018), Dkt. No. 34. In advance of trial, the parties exchanged proposed findings of fact and conclusions of law. Treasure Chest offered the direct testimony, via affidavit, of Mr. Shane. See Shane Aff. ¶ 1. David Morris declined to produce any direct testimony and, in its submission, withdrew its fraud and breach of contract counterclaims. Def. David Morris International, Inc.'s Proposed Pre-Trial Statement Facts and Law (“Def.'s Mem. Law”) § 27, May 25, 2018, Dkt. No. 41.

         On the eve of trial, David Morris filed (1) motions in limine to exclude exhibits D, E, F, and G to Mr. Shane's affidavit as a discovery sanction under Federal Rule of Civil Procedure 37(c), and (2) a motion for judgment under Federal Rule of Civil Procedure 52(c) on plaintiff's breach of contract claim. See Letter from Brian Lehman, Lehman LG LLC, to Hon. Naomi Reice Buchwald, United States District Judge, Southern District of New York (June 1, 2018), Dkt. No. 45. At the outset of the trial, we granted in part and denied in part the former, and reserved decision on the latter. We explained the basis for each decision on the record, and do not repeat the reasoning here.[1], [2] See Tr. 3:23-9:5.

         We granted plaintiff's motion for a directed verdict at the conclusion of its case in chief.[3] Id. 38:14-15.

         DISCUSSION

         To recover for breach of contract under New York law, [4] a plaintiff must prove, by a preponderance of the evidence: “[1] the formation of a contract between the parties; [2] performance by the plaintiff; [3] failure of defendant to perform; and [4] damages.” Orchard Hill Master Fund Ltd. v. SBA Commc'ns Corp., 830 F.3d 152, 156 (2d Cir. 2016) (internal quotation marks omitted); accord JP Morgan Chase v. J.H. Elec. of N.Y., ...


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