United States District Court,
E.D. New York.
APEX MARITIME CO., INC. d/b/a/ Apex Shipping Co. and Apex Shipping Co. (N.Y.C), Inc., Plaintiff,
v.
FURNITURE, INC. and Thomas Corrales, Defendants.
No. 11–cv–5365 (ENV)(RER).
June 5, 2013.
Nicholas E. Pantelopoulos, Kaplan, Massamillo & Andrews LLC, New York, NY, Jennifer Huang, Kaplan, Massamillo & Andrews, LLC, New York, NY, for Plaintiff.
MEMORANDUM & ORDER
VITALIANO, District Judge.
*1 Plaintiff Apex Maritime Co., Inc. d/b/a Apex Shipping Co. and Apex Shipping Co. (N.Y.C), Inc. (“Apex”) filed this action on November 2, 2011 against defendants Furniture, Inc. and Thomas Corrales for breach of a maritime contract. Defendants failed to answer the complaint, the Clerk of Court noted defendants’ default, and Apex moved for default judgment. On May 31, 2012, the Court granted the motion with referral to Magistrate Judge Ramon E. Reyes for a report and recommendation (“R & R”) as to appropriate relief. In an R & R issued on April 11, 2013, Judge Reyes recommended that Apex be awarded a default judgment in the amount of $115,431.70, plus additional prejudgment interest of $12.10 per diem until the entry of final judgment.
In reviewing a report and recommendation of a magistrate judge, a district judge “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1). Further, a district judge is required to “determine de novo any part of the magistrate judge’s disposition that has been properly objected to.” Fed.R.Civ.P. 72(b)(3); see also Arista Records. LLC v. Doe 3, 604 F.3d 110, 116 (2d Cir.2010). But, where no timely objection has been made, the “district court need only satisfy itself that there is no clear error on the face of the record” to accept a magistrate judge’s report and recommendation. Urena v. New York, 160 F.Supp.2d 606, 609–10 (S.D.N.Y.2001) (quoting Nelson v. Smith, 618 F.Supp. 1186, 1189 (S.D.N.Y.1985)).
No objections have been filed. After careful review of the record, the Court finds the R & R to be correct, well-reasoned, and free of any clear error. The Court, therefore, adopts the R & R in its entirety as the opinion of the Court. Judgment shall enter in favor of Apex and against defendants Furniture, Inc. and Thomas Corrales, jointly and severally, as follows: (1) $96,634.24 in damages; (2) $11,409.10 in prejudgment interest through April 11, 2013, plus $12.10 per diem until the entry of judgment; (3) $6,528.00 in attorneys’ fees; and (4) post-judgment interest pursuant 28 U.S.C. § 1961. In addition, default judgment shall be entered against defendant Thomas Corrales, individually, in the amount of $860.33 for costs.
The Clerk of Court is directed to enter judgment and to close this case.
SO ORDERED.
REPORT & RECOMMENDATION
TO THE HONORABLE ERIC N. VITALIANO, UNITED STATES DISTRICT JUDGE
Plaintiffs Apex Maritime Co., Inc. d/b/a Apex Shipping Co. and Apex Shipping Co. (N.Y.C), Inc. (collectively, “Plaintiffs”) initiated this action on November 2, 2011 against Furniture, Inc. and Thomas Corrales (collectively, “Defendants”), for breach of a maritime contract. Due to Defendants’ failure to answer or otherwise respond to the complaint, the Clerk of the Court noted Defendants’ default on April 20, 2012. (Clerk’s ENTRY OF DEFAULT, dated 04/20/2012.) Plaintiffs subsequently moved for default judgment (Dkt .Nos.6–8), but Your Honor denied the motion for failure to comply with certain requirements (Dkt. No. 9). Plaintiffs cured the deficiencies and renewed their motion for default judgment. (Dkt.Nos.10–11.) On May 31, 2012, Your Honor granted Plaintiffs’ motion for default judgment and referred the matter to me for a report and recommendation on the issue of damages. (Dkt. No. 12.) For the reasons that follow, I respectfully recommends that Plaintiffs be awarded a default judgment in the amount of $115,431.70, plus $12.10 per diem until the entry of final judgment.
BACKGROUND
*2 Apex Maritime Co., Inc. d/b/a Apex Shipping Co. and Apex Shipping Co. (N.Y.C), Inc. bring this admiralty and maritime action to recover contract damages against Furniture, Inc., a New York corporation, and Thomas Corrales, as personal guarantor of Furniture, Inc. (Compl .¶ 3, 26.)
Plaintiffs contracted with Furniture, Inc. to provide shipping and related freight services for cargo traveling from Asia to the United States between June 30, 2010 and September 7, 2010. (Id. ¶ 11.) Plaintiffs delivered the subject goods and issued an ocean bill of lading for each of the twelve shipments in dispute. (Id. ¶ 10; see Dkt. No. 8, Aff. of Wei Sun in Supp. of Default J. (“Wei Aff”), Exhs. 1 (“Bills of Lading”).) Additionally, pursuant to the parties’ agreement, Plaintiffs advanced monies for duties, taxes, fees, storage, transportation, and other associated costs. (Compl.¶ 12.) Plaintiffs subsequently issued invoices to Furniture, Inc. reflecting the amount due for each shipment. (See Wei Aff., Exh. 3 (“Invoices”).) Furniture, Inc. has failed to remit payment of the invoiced amounts despite Plaintiffs’ demand that it do so. (Compl.¶ 15.)
On November 2, 2011, Plaintiffs commenced this lawsuit to recover the amounts due for the shipping of the subject goods and associated expenses, interest, and attorneys’ fees and costs. (Id. ¶ 16.) Plaintiffs seek to recover from Thomas Corrales pursuant to the Continuing Commercial Guarantee (“Guarantee”), dated September 10, 2010, by which Corrales personally guaranteed satisfaction of Furniture, Inc.’s indebtedness to Plaintiffs. (Id. ¶ 20.)
DISCUSSION
I. Applicable Standards
“While a party’s default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages.” Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir.1992). “[I]n lieu of a damages inquest hearing, the movant need only show by affidavit adequate support for the relief it seeks.” Coated Fabrics Co. v. Mirle Corp., No. 06–CV–5415 (SJ), 2008 WL 163598, at *7 (E.D.N.Y. Jan.16, 2008) (citing Greyhound Exhibitgroup, Inc., 973 F.2d at 158–59)). Here, Plaintiffs have submitted detailed affidavits and documentary evidence to establish their damages while Defendants have not submitted any opposition. The Court therefore finds an adequate basis on which to award damages.
II. Choice of Law
The Complaint invokes this Court’s admiralty or maritime subject matter jurisdiction. (Compl.¶ 5.) The Bills of Lading at issue are maritime contracts because their primary objective is to provide for the transportation of the subject goods from Asia to the United States. ( Id. ¶ 10); see Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 27, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004) ( “Conceptually, so long as a bill of lading requires substantial carriage of goods by sea, its purpose is to effectuate maritime commerce-and thus it is a maritime contract.”). Such contracts are interpreted according to the ordinary principles of maritime contract law. See Asoma Corp. v. SK Shipping Co., Ltd. ., 467 F.3d 817, 823 (2d Cir.2006). Accordingly, courts look to “common law principles of contract formation and interpretation” to assess defendants’ liability. In re M/V Rickmers Genoa Litig., 622 F.Supp.2d 56, 71 (S.D.N.Y.2009) (citing Norfolk S Ry. Co. v. Kirby, 543 U.S. at 31 (“[C]ontracts for carriage of goods by sea must be construed like any other contracts: by their terms and consistent with the intent of the parties.”)). Insofar that federal law does not govern, the Bills of Lading and Guarantee provide for the application of California law. (See Wei Aff, Exh. 2 (“Terms and Conditions”) ¶ 17; Guarantee at 4.) Applying federal choice-of-law principles, see State Trading Corp. of India, Ltd. v. Assuranceforeningen Skuld, 921 F.2d 409, 414 (2d Cir.1990), the Court finds the parties’ choice of California law valid, because Apex Shipping Co. has a “substantial relationship” to that state as a California corporation, and the application of California law absent a federal rule does not “conflict [ ] with the fundamental purposes of maritime law.” Farrell Lines Inc. v. Columbus Cello–Poly Corp., 32 F.Supp.2d 118, 127 (S.D.N.Y.1997) (quoting Perzy v. Intercargo Corp., 827 F.Supp. 1365, 1370 (N.D.Ill.1993)).
III. Damages
*3 Plaintiffs seek $96,634.24 in contract damages. (See Compl. in passim.) Defendants agreed to pay not only the freight costs but also the ancillary charges related to the ocean transportation of the subject goods. (Wei Aff. ¶ 6; see also Compl. ¶ 11.) Plaintiffs submitted copies of the Bills of Lading and corresponding invoices to substantiate their damages. (See Bills of Lading; Wei Aff, Exh. 3 (“Invoices”).) Plaintiffs have thus established $96,634.24 in recoverable damages and are entitled to an award of this amount.
IV. Interest
Plaintiffs seek pre—and post-judgment interest. (Compl. at 7.) Plaintiffs request simple interest at a rate of 9% from September 7, 2010 through May 2, 2012. (See Dkt. No. 8, Aff. in Supp. of Default J. (“Huang Aff”), Exh. 5 (“Statement of Damages”).) Whereas here the Court exercises federal question jurisdiction under 28 U.S.C. § 1331, prejudgment interest is a matter of federal law. See Nipponkoa Ins. Co., Ltd. v. Watkins Motor Lines, Inc., 431 F.Supp.2d 411, 419–20 (S.D.N.Y.2006) (citations omitted). “In admiralty cases prejudgment interest ‘should be granted in the absence of exceptional circumstances.’ ” Ingersoll Mill. Mach. Co. v. M/V Bodena, 829 F.2d 293, 310 (2d Cir.1987) (citation and quotation marks omitted) “The rate of interest to be applied is a matter within this Court’s discretion, as is the date when interest accrues, and whether interest is to be compounded.” Great Lakes Bus. Trust v. M/T ORANGE SUN, 855 F.Supp.2d 131, 155 (S.D.N.Y.2012) (citing Mentor Ins. Co. v. Brannkasse, 996 F.2d 506, 520 (2d Cir.1993)).
Turning to the accrual date, Plaintiffs seek interest from September 7, 2010, the date of the last Bill of Lading. Pursuant to the terms and conditions of the Bills of Lading, Plaintiffs earned the freight and other charges “on receipt of the goods” by Defendant. (Terms and Conditions ¶ 8A.) Plaintiff submitted Invoices, however, that provide a due date for payment. (See Invoices.) Unlike the Bills of Lading, the Invoices reflect the actual amount due. As Plaintiffs offer no argument to establish the date of the last Bill of Lading as the relevant accrual date, the Court finds it more appropriate to award interest from the day after the invoiced amount was due.
As for the interest rate, Plaintiffs seeks 9%, presumably pursuant to sections 5001 and 5004 of the New York Civil Practice Law and Rules. See, e.g., Int’l Harvester Co. v. TFL Jefferson, 695 F.Supp. 735, 740 (S.D.N.Y.1988) (exercising its discretion to award 9% interest for breach of a contract of carriage). This Court has recognized, however, that the “interest rate of United States Treasury Bills is a good baseline for pre-judgment interest” in admiralty cases. See CMA CGM (America) L.L.C. v. Peekay Intern., Inc., No. 08–CV–1854 (DLI)(RER), 2008 WL 4876853, at *2 (E.D.N.Y. Nov. 12, 2008) (citing N.Y. Marine & Gen. Ins. Co. v. Tradeline (L .L.C), 266 F.3d 112, 131 (2d Cir.2001)). The average six-month United States Treasury Bills for the relevant period was approximately .13%. See Federal Reserve Statistical Release, http://www.federalreserve.gov/releases/h15/data.htm (last visited April 10, 2013). To reconcile these disparate rates, the Court recommends, in its discretion, splitting the difference between the .13% average six-month United States Treasury Bill rate and Plaintiffs’ requested 9% interest rate. This calculation yields a final interest rate of 4.57%. See CMA CGM (America) L.L.C, 2008 WL 4876853, at *2 (using the same method to calculate prejudgment interest). The Court further recommends an award of simple interest as requested by Plaintiffs.
*4 The Courts’ recommendation as to the prejudgment interest award is summarized in the following schedule:
PREJUDGMENT INTEREST
Last 3 Digits of Invoice
Balance Due
Date of Breach
Per Diem Interest
Days to 4/11/2013
Interest Due
989
$2,835.30
8/15/2010
0.35
971
$344.70
367
$14,913.40
8/26/2010
1.87
960
$1,792.55
570
$5,520.84
8/26/2010
0.69
960
$663.59
788
$180.00
8/26/2010
0.02
960
$21.64
806
$265.00
8/26/2010
0.03
960
$31.85
368
$9,996.48
8/29/2010
1.25
957
$1,197.79
730
$4,753.74
9/4/2010
0.60
951
$566.03
848
$4,766.90
9/8/2010
0.60
947
$565.21
897
$18,858.02
9/11/2010
2.36
944
$2,228.90
370
$1,190.00
9/13/2010
0.15
942
$140.35
167
$4,870.41
9/15/2010
0.61
940
$573.21
770
$5,722.39
9/16/2010
0.72
939
$672.77
197
$205.00
9/16/2010
0.03
939
$24.10
771
$5,120.41
9/28/2010
0.64
927
$594.30
081
$6,078.40
10/1/2010
0.76
924
$703.21
583
$6,000.22
10/10/2010
0.75
915
$687.40
893
$185.00
10/10/2010
0.02
915
$21.19
315
$5,052.73
10/29/2010
0.63
896
$566.84
641
$60.00
10/29/2010
0.01
896
$6.72
693
$60.00
10/29/2010
0.01
896
$6.73
TOTAL
$11,409.10
Thus, the Court recommends $11,409.10 in prejudgment interest through the date of this report and recommendation, plus $12.10 per diem FN1 until the entry of judgment, as well as post-judgment interest pursuant to 28 U.S.C. § 1961.
FN1. The Court calculates prejudgment interest after issuance of this report and recommendation on the entire $96,634.24 (i.e. $96,634.24*4.57% / 365.)
V. Attorneys’ Fees and Costs
(a) Attorneys’ Fees
Plaintiffs seek $7,493.33 in attorneys’ fees and $370.00 in costs and disbursements. (See Statement of Damages.) The Court notes that the amount requested for attorneys’ fees includes reimbursement for expenses such as mailings, photocopying, a transcript, service of process fees, transportation, and court filing fee. (See Huang Aff, Exh. 5 (“Contemporaneous Billing Records”).)
“[T]he general rule is that the award of fees and expenses in admiralty actions is discretionary with the district judge upon a finding of bad faith.” Ingersoll, 829 F.2d at 301. Courts may also award fees pursuant to an applicable statute or contract between the parties. See CMA CGM (America) L.L.C., 2008 WL 4876853, at *2 (citation omitted); see also Eurosteel Corp. v. M/V KOGGEGRACHT, No. 01–CV–7731 (DLC)(FM), 2003 WL 470575, at *4 (S.D .N.Y. Jan. 20, 2003) (“It is the normal rule both within and outside maritime law that in the absence of statute or contractual authorization, attorney’s fees are not generally recoverable either as part of costs or of damages.”) (citation and quotation marks omitted), adopted by, 2003 WL 1872652 (S.D.N.Y. Apr.11, 2003). Here, the Bills of Lading provide that “[i]n the event suit is brought to enforce the terms and conditions of this bill of lading or any rights arising thereunder, the prevailing party shall be entitled to recover its reasonable attorneys’ fees.” (Terms and Conditions ¶ 11.) Additionally, the Guarantee states “[i]f any proceeding is brought for the enforcement of this [Guarantee], or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this [Guarantee], the successful or prevailing party shall be entitled to recover reasonable attorneys’ fees [ ] and other costs….” (Guarantee at 4.) Thus, the Court finds a contractual basis to hold defendants liable for attorneys’ fees. See Gateway Bank, F.S.B. v. Ideal Mortg. Bankers, Ltd., No. 10–CV–334 (JS)(ETB) 2010 WL 3199746, at *3 (E.D.N.Y. June 8, 2010). Further, the Court finds a basis for Plaintiffs to recover costs from Thomas Corrales under the Guarantee.
*5 Courts in the Second Circuit apply a “presumptively reasonable fee” standard, defined as “a reasonable hourly rate multiplied by a reasonable number of expended hours.” Heartland Payment Sys., Inc. v. Island Pride Homes, Inc., No. 10–CV–1739 (ADS)(AKT), 2011 WL 4458988, at *5 (E.D.N.Y. Aug. 31, 2011) (citation omitted), adopted by, 2011 WL 4440380 (E.D.N.Y. Sept.23, 2011). In determining the presumptively reasonable fee, courts have considerable discretion to evaluate factors such as time and labor involved, the level of skill required, and fee awards in similar cases. See Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cnty. of Albany, 522 F.3d 182, 186 n. 3, 190 (2d Cir.2008); Century 21 Real Estate LLC v. Bercosa Corp., 666 F.Supp.2d 274, 298–99 (E.D.N.Y.2009). Still, the reasonable hourly rate should be based on the prevailing rates of “ ‘lawyers of reasonably comparable skill, experience, and reputation’ ”. Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir.1998) (quoting Blum v. Stenson, 465 U.S. 886, 896 n. 11, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984)), in the district where the reviewing court sits, Simmons v. New York City Transit Auth., 575 F.3d 170, 174 (2d Cir.2009).
“The party seeking reimbursement of attorneys’ fees must demonstrate the reasonableness and necessity of hours spent and rates charged.” Coated Fabrics Co. v. Mirle Corp., 2008 WL 163598, at *7 (citation and quotation marks omitted). Additionally, the moving party must submit contemporaneous billing records documenting the date, hours expended, and the nature of the work performed by each attorney. See N.Y. State Ass’n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1147–48, 1154 (2d Cir.1983). “Where adequate records are not submitted, the court may deny fees altogether or reduce the award.” Janus v. Regalis Const., Inc., No. 11–CV–5788 (ARR)(WP), 2012 WL 3878113, at *11 (July 23, 2012) (citing Carey, 711 F.2d at 1148), adopted by, 2012 WL 3877963 (E.D.N.Y. Sep 04, 2012).
Here, Plaintiffs seek an hourly rate of $265 for partner Nicholas E. Pantelopoulos (“Pantelopoulos”), $220 for associate Jennifer Huang (“Huang”), and $130 for a paralegal, presumably Sabrina J. Wenkowsky (“Wenkowsky”). (Huang Aff. ¶ 17.) Plaintiffs provide no pedigree information, however, for any of its attorneys, except to say that Huang has been admitted to practice in New York since 2004, and is also admitted in New Jersey, and various districts in these states. (Id.) But as Plaintiffs have not submitted contemporaneous billing records for Huang, the Court need not assess the reasonableness of the requested hourly rate for this attorney.
As for Pantelopoulos, his firm’s website FN2 states that he graduated from Albany Law School of Union University in 1990 and earned his LL.M in International Business and Trade Law from Fordham University School of Law in 1991. See KAPLAN, MASSAMILLO & ANDREWS, LLC, http://www.kmalawfirm.com (last visited April 10, 2013). Pantelopoulos appears to have extensive experience in maritime litigation and related engagements, and as such, the Court finds the requested $265 per hour falls within a reasonable range for this district. See, e.g. JP Morgan Chase Bank, N.A. v. M/Y FORTUNA, No. 11–CV–2514 (JS)(GRB), 2013 WL 1148920, at *9 (E.D.N.Y. Feb. 12, 2013) (approving hourly rates ranging from $190–260 on default judgment in a maritime foreclosure action), adopted by, 2013 WL 1195420 (E.D.N.Y. Mar.20, 2013); ADP, Inc. v. Planet Automall, Inc., No. 09–CV–0185 (ILG)(RER), 2012 WL 4793509, at *5 (E.D.N.Y. Sept. 17, 2012) (awarding $325–385 per hour for partners on summary judgment in a breach of contract action), adopted by, 2012 WL 4798287 (E.D.N.Y. Oct.9, 2012); Descartes Systems (USA) LLC v. Consumer Products Servs., Inc., 2012 WL 4364513, at *5 (E.D.N.Y. Aug.31, 2012) (awarding between $150–300 per hour for attorneys on default judgment in a breach of contract action), adopted by, 2012 WL 4364580 (E.D.N.Y. Sep 24, 2012).
FN2. Courts have examined a firm’s website for attorney pedigree information. See, e.g., Ortho Sleep Products, LLC v. Dreamy Mattress Corp., No. 11–CV–6049 (CBA), 2012 WL 6621288, at *12 (E.D.N.Y. Aug.29, 2012); Santiago v. Coco Nail HB, Inc., No. 10–CV–3373 (ILG)(MDG) 2012 WL 1117961, at *3 (E.D.N.Y. Mar. 16, 2012), adopted by, 2012 WL 1118853 (E.D.N.Y. Apr.03, 2012); Heartland Payment Systems, Inc. v. Island Pride Homes, Inc., 2011 WL 4458988, at *6.
*6 Wenkowsky’s hourly rate, however, is higher than that typically approved for a paralegal. Plaintiffs provide no information regarding Wenkowsky, much less any considerations that might justify a rate above this Court’s usual practice. Given this dearth of information, the Court recommends a reduction of Wenkowsky’s rate to $80 per hour. See, e.g., Heartland Payment Sys., 2011 WL 4458988, at *6–7 (reducing the hourly rate for a paralegal from $100 to $80 in a breach of contract action).
Turning to the hours, the Court does not identify any unreasonable, excessive or unnecessary time that should be excluded. Accordingly, the Court concludes that Pantelopoulos and Wenkowsky reasonably expended 24 hours and 2.1 hours, respectively, to litigate this matter. Thus, the total attorneys’ fee award should be $6,528.00 (i.e. $265*24 + $80*2.1).
(b) Costs
Plaintiffs seeks to recover the costs associated with litigating this case. As evidence of their expenses, Plaintiffs submitted Contemporaneous Billing Records, which reflect expenses amounting to $860.33.FN3 The Court has reviewed these costs and recommends that they be granted pursuant to the terms of the Guarantee against Thomas Corrales only.
FN3. As noted above, Plaintiffs included these costs in their request for $7,493.33 in attorneys’ fees. In addition to this amount, the Statement of Damages lists “Costs and Disbursements,” including a $350 “Clerk’s fee” and $20 “Statutory fee.” The Court notes that the Contemporaneous Billing Records include the $350 filing fee as an expense, so Plaintiffs should not be awarded this additional $350 “Clerk’s Fee.” Furthermore, as the Court is unable to identify either evidence or origin of the $20 “Statutory fee,” it is recommended that this amount be denied. See Pacific Westeel Inc. v.D & R Installation, No. 01–CV–0293 (RCC) (AJP), 2003 WL 22359512 at *4 (S.D.N.Y. Oct. 17, 2003).
CONCLUSION
For the reasons set forth above, I respectfully recommend that default judgment be entered against defendants Furniture, Inc. and Thomas Corrales, jointly and severally, as follows: (1) $96,634.24 in damages; (2) $11,409.10 in prejudgment through the date of this report and recommendation, plus $12.10 per diem until the entry of judgment; and (3) $6,528.00 in attorneys’ fees. I further recommend that default judgment be entered against defendant Thomas Corrales, individually, in the amount of $860.33 for costs. Finally, I recommend that defendants Furniture, Inc. and Thomas Corrales be held liable for post-judgment interest pursuant to 28 U.S.C. § 1961.
Any objections to the recommendations made in this report must be filed with the Clerk of the Court and the Honorable Eric N. Vitaliano within fourteen days of receipt hereof. Failure to file timely objections may waive the right to appeal the District Court’s Order. See 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 6(a), 6(e), 72; Small v. Sec’y of Health & Human Servs., 892 F.2d 15, 16 (2d Cir.1989).
Plaintiffs are hereby directed to serve copies of this report and recommendation upon Furniture, Inc. and Thomas Corrales, and to promptly file proof of service with the Clerk of the Court.
SO ORDERED.
