Rienzi & Sons, Inc. v. N. Puglisi & F. Industria Paste Alimentari S.P.A. et al

Filing 97

ORDER re 90 Letter filed by Francesco Pulejo, N. Puglisi & F. Industria Paste Alimentari S.P.A. -- For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, Puglisi's motion for the entry of judgment on the remaining claim a nd dispensing with trial is granted. At the pretrial conference held on February 13, 2015, the Court directed the parties to submit a proposed judgment to the Court for its endorsement on February 17, 2015, which was done. Said judgment was entered on February 17, 2015 and the case closed. SO ORDERED by Judge Dora Lizette Irizarry on 2/18/2015. (Irizarry, Dora)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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RIENZI & SONS, INC.,
:
:
Plaintiff, Counterclaim-Defendant,
:
:
-against:
:
N. PUGLISI & F. INDUSTRIA PASTE
:
ALIMENTARI S.P.A. and FRANCESCO PULEJO,
:
:
Defendants, Counterclaim-Plaintiffs.
:
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MEMORANDUM AND ORDER
08-CV-2540 (DLI) (RLM)

DORA L. IRIZARRY, United States District Judge:
The issue before the Court is whether entry of judgment is appropriate where a defendant
has consented to judgment for all the relief the plaintiff seeks at trial, but the plaintiff insists
upon a trial. This opinion is issued for the benefit of the parties. As such, familiarity with the
underlying facts and procedural posture of the case is assumed. 1
BACKGROUND
On May 27, 2008, Rienzi & Sons, Inc. (“Rienzi” or “Plaintiff”) filed the instant action
against defendants N. Puglisi & F. Industria Paste Alimentari S.p.A. (“Puglisi”) and Francesco
Pulejo (“Pulejo”) (collectively, “Defendants”) by filing a summons and complaint in New York
State Supreme Court, Queens County. On June 25, 2008, Defendants removed the action to this
Court. Defendants filed an answer and asserted a counterclaim against Rienzi for breach of
contract. Rienzi amended its complaint to assert one claim for breach of fiduciary duty, three
claims for breach of contract, and one claim for breach of joint venture. Defendants’ answer to
the Amended Complaint denied Plaintiff’s claims and re-asserted Puglisi’s counterclaim against
Rienzi for breach of contract (“Counterclaim”).
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The facts and circumstances of this case are described in greater detail in the Court’s Opinion and Order dated
May 16, 2013 granting defendants’ motion for partial summary judgment. See Docket Entry No. 75.
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In September 2011, Defendants moved for summary judgment as to the First, Second,
Fourth and Fifth Causes of Action asserted by Rienzi, and for summary judgment as to Puglisi’s
Counterclaim for payment of €898,410.06 for unpaid pasta invoices. Rienzi’s Third Claim was
not at issue in Defendants’ motion for summary judgment. On May 16, 2013, the Court issued
an Opinion and Order (“Order”) granting Defendants’ motion in its entirety. Rienzi moved for
reconsideration, and, on March 27, 2014, the Court issued a summary order denying Rienzi’s
motion for reconsideration.
Parties’ Claims and Summary Judgment (“SJ”)
Rienzi’s Claims

Defendants’ Counterclaims

(1) Breach of fiduciary duty (against (1) Breach of contract (for unpaid pasta
Defendants for delaying and ultimately
invoices) – SJ granted to Defendant
ceasing pasta shipments) – SJ granted to
Defendant
(2) Breach of contract (against Puglisi for
delaying and ultimately ceasing pasta
shipments) – SJ granted to Defendant
(3) Breach of contract (against Puglisi for
shipping spoiled pasta products) –
Defendants did not move for SJ (this is the
claim set for trial)
(4) Breach of contract (against Puglisi for
failure to repay Rienzi the full amount of
legal fees Rienzi advanced once their
relationship ended) – SJ granted to
Defendant
(5) Breach of joint venture (against Puglisi for
failing to reimburse those same legal fees)
– SJ granted to Defendant
On September 3, 2014, Puglisi wrote to the Court noting that, in light of the Order, the
only claim remaining to be tried in this matter is Rienzi’s Third Cause of Action, which alleges
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that Rienzi suffered $126,200 in damages when Puglisi allegedly delivered spoiled pasta.
Puglisi, to avoid the time and expense of a trial on that lone claim, is willing to stipulate to the
entry of a judgment (“Proposed Judgment”) in which Puglisi’s damages on its Counterclaim are
offset by the full amount of the damages that Rienzi seeks in its Third Cause of Action. (See
Letter from Puglisi (“Puglisi Letter”), Docket Entry No. 90.) In other words, Puglisi desires to
stipulate to all of the relief that Rienzi seeks in its Third Cause of Action.
Rienzi opposes the Proposed Judgment because: (1) Puglisi’s letter is procedurally
defective, because Puglisi should have formulated it as a Fed. R. Civ. P. 68 offer, 2 or some other
formal motion, as opposed to a stipulation; (2) the Proposed Judgment provides Puglisi the right
to withdraw its participation; (3) Puglisi is not entitled to any interest; (4) Puglisi uses an
improper conversion rate; and (5) Puglisi ignores the judgment day rule. (See Letter from Rienzi
(“Rienzi Letter”), Docket Entry No. 91.) The Court does not find any of these arguments to be
persuasive. Puglisi’s reply asserts that there is no formal procedure necessary in order for the
Court to enter judgment in this context and Rienzi’s additional arguments are wholly without
merit. (See Puglisi Reply Letter (“Puglisi Reply”), Docket Entry No. 92.) Oral argument on
Puglisi’s motion was held before the Court on February 13, 2015.
DISCUSSION
I.

Puglisi’s Proposed Judgment is Not Procedurally Improper
There is no requirement that Puglisi make its motion pursuant to Rule 68 or any other

Federal Rule of Civil Procedure. In ABN Amro Verzekeringen BV v. Geologistics Americas, Inc.,
the Second Circuit held that, where a defendant consents to the entry of judgment awarding
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Fed. R. Civ. P. 68 provides, “Making an Offer; Judgment on an Accepted Offer. At least 14 days before the date
set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on
specified terms, with the costs then accrued. If, within 14 days after being served, the opposing party serves written
notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service. The
clerk must then enter judgment.”
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plaintiff the entirety of the relief that the plaintiff could win at trial, it is appropriate for the court
to enter judgment in that amount against the defendant, even where the plaintiff insists upon a
trial. See 485 F.3d 85, 93-94 (2d Cir. 2007) (“Where a defendant has consented to judgment for
all the relief the plaintiff can win at trial (according to the trial court’s determination), the
defendant’s refusal to admit fault does not justify a trial to settle questions which can have no
effect on the judgment.”). In ABN Amro, the plaintiff’s suit was only for money damages and the
district court had ruled as a matter of law that the plaintiff could not recover more than a certain
amount from each defendant. When each defendant tendered that amount, the district court held
that nothing of significance remained to adjudicate. The Second Circuit thus found that the
district court had correctly rejected plaintiff’s claim that the court should have mandated trial on
an issue that had no practical consequence. Similarly, in Husain v. Springer, 691 F. Supp. 2d
339, 341-43 (E.D.N.Y. 2009), the court applied ABN Amro and granted the defendant’s motion
for entry of judgment against herself. The district court agreed with defendant’s argument that
entry of judgment was appropriate, even without a concession of liability on her part, as her
payment of nominal damages would satisfy the single remaining claim of every plaintiff in its
entirety.
Moreover, the Husain court concluded that a party stipulating to a judgment need not use
any specific procedure. The court noted that, “the issue is academic; when a defendant has
clearly given formal consent to the entry of judgment against herself, the precise form of her
request is irrelevant. There is no dispute here that defendant consents to a court order awarding
plaintiffs’' nominal damages.” Id. at 341 (internal citation and quotation marks omitted). Here,
Rienzi does not identify any monetary or equitable relief that is seeks from this Court beyond the
$126,200 to which Puglisi has stipulated in the Proposed Judgment. Consequently, there is no

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dispute that Puglisi has consented to the entry of a judgment that awards Rienzi all of the relief
that Rienzi seeks, and the procedural approach is not determinative. Accordingly, Puglisi’s
request for entry of the Proposed Judgment is proper.
II.

Puglisi’s Proposed Judgment Appropriately Retains the Right to Withdraw
Rienzi objects to the Proposed Judgment’s reservation of Puglisi’s right to withdraw the

stipulation in the unlikely event there is a trial in this matter. (Rienzi Letter at 1.) The Proposed
Judgment provides: “That, if this court or any appellate court subsequently determines that
Plaintiff/Counterclaim-Defendant Rienzi & Sons, Inc. is entitled to adjudication by trial of any
issue in this action, Defendant/ Counterclaim-Plaintiff N. Puglisi & F. Industria Paste Alimentari
S.p.A. retains and preserves any and all rights to contest liability and damages.” (Proposed
Judgment at 3.) Puglisi took this language directly from the judgment entered in Husain and
Rienzi has provided no reason why it is improper.

See Husain, 691 F. Supp. 2d at 344.

Accordingly, this language is permissible. Moreover, as Puglisi properly does not admit liability
in the Proposed Judgment (nor does it have to (see section I above)), it would be unfair to Puglisi
to prevent it from contesting liability and damages if ordered to trial by some other tribunal on
the remaining claim, while permitting Plaintiff to prosecute it fully.
III.

Puglisi is Entitled to Interest
Rienzi’s argument that Puglisi is not entitled to any interest lacks merit and borders on

frivolous.

(See Rienzi Letter at 2.)

For context, the Proposed Judgment awards Puglisi

€898,410.06, the amount that the Court awarded to Puglisi in the Order, and also awards Puglisi
interest through September 5, 2014. 3 (Proposed Judgment at 2.) Puglisi contends that the first
sixty invoices underlying the Counterclaim provide for payment within sixty days; the final six

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The Court assumes Puglisi selected this date as the anticipated date of judgment. The appropriate amount of
interest shall be calculated from the date the judgment is entered.
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invoices provide for payment within ninety days. (Puglisi Letter at 2.) Therefore, interest on the
amount of each of the first sixty unpaid invoices is calculated from a date sixty days after the
date of the invoice, and interest on the final six invoices is calculated from a date ninety days
after the date of the invoice, all at the New York statutory rate of 9% per annum. (Proposed
Judgment at 2.) The Proposed Judgment also awards Rienzi $126,200, the amount claimed in its
amended complaint, and interest through September 5, 2014, calculated to run from the first day
on which Rienzi informed Puglisi of allegedly spoiled and/or infested pasta, October 8, 2007, at
the New York statutory rate of 9% per annum. (See id. at 3; Puglisi Letter at 2-3.)
In defense of its argument that Puglisi is not entitled to any interest, Rienzi points to a
May 25, 2007 Agreement (“Settlement”) the companies signed concerning the legal fees
incurred as a result of various customs investigations. (Rienzi Letter at 2.) This agreement was
executed to resolve Rienzi’s claim against Puglisi for attorney fees incurred as a result of these
customs investigations. (See Order at 7.) In the Settlement, Puglisi excused $1,005,000 of
outstanding pasta invoices that previously had been issued to Rienzi and, in exchange, Rienzi
waived Rienzi’s claims against Puglisi for legal fees incurred in connection with the
investigations. (See Rienzi Letter, Exhibit A.) In its Order, the Court held that the release clause
in the Settlement barred Rienzi’s Fourth Claim for breach of contract regarding legal fees.
(Order at 23.) Now, Rienzi argues that the language in the Settlement stating that the parties
waive claims “regarding all the related or resulting financial charges or those which in any case
can make reference to the facts stated above” constitutes a waiver of Puglisi’s right to
prejudgment interest. (Rienzi Letter at 2.)
As Puglisi notes, this argument is meritless both legally and factually. (Puglisi Reply at
2-3.) First, it is black letter law that a release’s “meaning and coverage necessarily depend . . .

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upon the controversy being settled and upon the purpose for which the release was actually
given” and that “a release may not be read to cover matters which the parties did not desire or
intend to dispose of.” Cahill v. Regan, 5 N.Y.2d 292, 299 (1959). Second, it would not make
sense for the Settlement to have any impact on future invoices or interest incurred in connection
with future invoices: the Settlement explicitly states that Puglisi is paying Rienzi only
$1,005,000, and then proceeds to identify precisely $1,005,000 of Rienzi pasta invoices that were
excused by Rienzi. (See Rienzi Letter, Exhibit A.) Lastly, none of the invoices identified in the
Settlement are at issue here. In fact, all of the invoices at issue in this case post-date the
Settlement, with the earliest dated July 26, 2007, almost two months after the Settlement was
signed. (See Puglisi Letter, Exhibit B.) There is no basis for reading the Settlement as a waiver
of prejudgment interest on all future disputes between the parties.

Accordingly, Puglisi’s

formulation of prejudgment interest in the Proposed Judgment is reasonable and supported by
both the facts and the law.
IV.

The Applicable Conversion Rate is Subject to the Judgment Day Rule
Rienzi argues that the Settlement constitutes an agreement by the parties to use a fixed

exchange rate of $1.05 to €1.00 in all of their future dealings. As Puglisi accurately states, this
argument is clearly incorrect, as the exchange rate utilized in the Settlement was limited to the
invoices being paid and excused in the Settlement. (Puglisi Reply at 3.) Puglisi further clarified
at oral argument on the instant motion, that the exchange rate applies only to the amount of
damages this Court ruled Puglisi is entitled to, and is the rate in effect as of May 16, 2013, the
date of this Court’s Order. Puglisi further clarified that the $126,200 in damages to be paid to
Plaintiff under Claim Three is already in U.S. currency and is not subject to the exchange rate.

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Rienzi argues, in the alternative, that the Court should apply the “judgment-day rule” and
use the Euro-Dollar exchange rate on the date that the judgment is issued in order to convert the
Euro-denominated debt into a Dollar-denominated judgment. (Rienzi Letter at 3.) In doing so, a
judgment is entered in a foreign currency, here Euros, and then converted on the date that
judgment is entered. See La Suisse, Societe D’Assurances Sur La Vie v. Kraus, 2014 WL
3610890, at *11 (S.D.N.Y. July 21, 2014). Oddly enough, Rienzi contends that this presents
issues given the parties’ use of different currencies, and that, in order to resolve this discrepancy,
Rienzi’s claim first must be liquidated, at trial, and then converted to Euros, then subtracted from
the amounts found to be owing to Puglisi, if any, and then the judgment rendered in Euros.
(Rienzi Letter at 3.) Rienzi provides no case law to support this position. As Puglisi argues,
Rienzi’s conclusion is incorrect and the applicable law requires that the Court use the applicable
exchange rate on the day provided for in the judgment to wit May 16, 2013.
More specifically, “[i]t is well settled that a money judgment by an American court must
be in American currency.” La Suisee, Societe D'Assurances Sur La Vie, 2014 WL 3610890 at
*11 (internal quotation marks omitted). This Court has already held that New York law governs
Puglisi’s counterclaim. (Order at 29.) Where the claim is governed by New York law, currency
conversion is also governed by New York law. See Society of Lloyd’s v. Edelman, 2004 U.S.
Dist. LEXIS 15577, at *2 (S.D.N.Y. Aug. 9, 2004) (“As a federal court sitting in diversity, we
must apply the currency-conversion rule employed by the courts of New York.”). Under New
York law, the Court must use the applicable exchange rate that is “prevailing on the date of entry
of the judgment or decree.” N.Y. Judiciary Law§ 27(b); see also Society of Lloyd’s, 2004 U.S.
Dist. LEXIS 15577, at *2. The Court may take judicial notice of the prevailing exchange rates
listed in daily news publications. See Fed. R. Evid. 201(b)(2) (“The court may judicially notice a

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fact that is not subject to reasonable dispute because it . . . (2) can be accurately and readily
determined from sources whose accuracy cannot reasonably be questioned.”); see, e.g., Cagan v.
Gadman, 2012 WL 5422270, at *7 n.3 (E.D.N.Y. Oct. 31, 2012).
Accordingly, Puglisi’s request that the Court enter judgment in which Puglisi’s damages
on its Counterclaim are offset by the full amount of the damages that Rienzi seeks in its Third
Cause of Action is both reasonable, an efficient use of judicial and party resources, and
supported by governing law.
CONCLUSION
For the foregoing reasons, Puglisi’s motion for the entry of judgment on the remaining
claim and dispensing with trial is granted. At the pretrial conference held on February 13, 2015,
the Court directed the parties to submit a proposed judgment to the Court for its endorsement on
February 17, 2015, which was done.

SO ORDERED.
DATED: Brooklyn, New York
February 18, 2015
____________/s/_____________
DORA L. IRIZARRY
United States District Judge

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