Treasure Chest Themed Value Mail, Inc. v. David Morris International, Inc.
MEMORANDUM AND ORDER: terminating 29 Letter Motion for Local Rule 37.2 Conference; terminating 30 Letter Motion for Conference ; terminating 45 Letter Motion for Oral Argument; terminating 18 Letter Motion for Leave to File Document. Base d upon the foregoing findings of fact and conclusions of law following trial in this matter, we find for plaintiff on its sole claim for breach of contract, and against defendant on its sole remaining counterclaim for unjust enrichment. We enter an a ward of $82,000, plus 1.5% prejudgment interest per month on $45,000 after August 1, 2016, and 9% prejudgment interest per annum on $37,000 after January 1, 2017. The Clerk of the Court is respectfully directed to enter judgment for plaintiff, terminate all pending docket entries (Nos. 18, 29, 30, 45), and close this case. (Signed by Judge Naomi R. Buchwald on 6/25/2018) (ama) Modified on 6/26/2018 (ama).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
TREASURE CHEST THEMED VALUE MAIL,
MEMORANDUM AND ORDER
- against -
17 Civ. 1 (NRB)
DAVID MORRIS INTERNATIONAL, INC.,
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
The parties proceeded to a June 5, 2018
plaintiff’s motion for a directed verdict was granted.
Memorandum and Order constitutes the Court’s findings of fact and
conclusions of law consistent with that ruling.
See Fed. R. Civ.
Two witnesses testified at trial.
Plaintiff called Richard
Affidavit of Richard Shane (“Shane Aff.”) ¶ 1, May 21, 2018, Dkt.
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 travelrelated information directly from Treasure Chest and/or travelrelated periodicals.”
Id. ¶¶ 4-5; see Trial Transcript (“Tr.”)
In January 2016, David Morris contracted with Treasure Chest,
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.
8 & Ex. A.
See Shane Aff. ¶¶ 6-
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
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
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’
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
conclusions of law.
Treasure Chest offered the direct testimony,
via affidavit, of Mr. Shane.
See Shane Aff. ¶ 1.
declined to produce any direct testimony and, in its submission,
withdrew its fraud and breach of contract counterclaims.
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
We explained the basis for each decision on the record,
and do not repeat the reasoning here.12
See Tr. 3:23-9:5.
1 It does, however, bear repeating, with respect to David Morris’ motions
in limine, that its argument at trial that plaintiff was somehow required to
support Mr. Shane’s sworn assertions with documentation not only reflects a
misconception of the rules of evidence, but is also a product of its own failure
to depose, or inquire of, Mr. Shane, or to serve targeted discovery requests as
this Court suggested. See Tr. 34:21-35:23. Instead, as its counsel candidly
explained at trial, defendant concluded that pretrial proceedings were becoming
too expensive and opted instead to forego additional discovery in favor of
trial, apparently believing that such approach had strategic advantages. See
On the morning of trial, David Morris advanced yet additional motions
in limine, this time to exclude (1) exhibits D, E, F, and G as hearsay, and (2)
exhibit D, a “Reconciliation Report” from the United States Postal Service
(“USPS”), as in contravention of the best evidence rule. See Tr. 3:1-21. We
denied both motions, finding the latter to be particularly ill-founded. The
best evidence rule generally requires the production of the original of a
document to prove its contents.
See Crawford v. Tribeca Lending Corp., 815
We granted plaintiff’s motion for a directed verdict at the
conclusion of its case in chief.3
To recover for breach of contract under New York law,4 a
plaintiff must prove, by a preponderance of the evidence: “ the
formation of a contract between the parties;  performance by
the plaintiff; 
failure of defendant to perform; and
Orchard Hill Master Fund Ltd. v. SBA Commc’ns Corp.,
omitted); accord JP Morgan Chase v. J.H. Elec. of N.Y., Inc., 69
A.D.3d 802, 803, 893 N.Y.S.2d 237, 239 (2d Dep’t 2010).
that Treasure Chest has satisfied this burden.
First, we find that a valid contract existed between the
F.3d 121, 126-27 (2d Cir. 2016) (citing Fed. R. Evid. 1002). However, Rule
1003 of the Federal Rules of Evidence “permits the admission of a duplicate
copy of a document unless the party seeking to oppose the admission of that
document raises a genuine question as to its authenticity or shows that the
circumstances make it unfair to admit the duplicate.” RCB Equities #3, LLC v.
Martin, 632 F. App’x 663, 665 (2d Cir. 2015) (summary order). David Morris
made no argument that admitting the duplicate would be “unfair,” and the
document offers strong indicia of authenticity. The exhibit is a printout of
a receipt from the USPS website bearing an initialed and dated seal from the
“Business Mail Entry Unit” in Chicago, Illinois. Shane Aff. Ex. D. The receipt
also reflects that Treasure Chest spent more than $325,000 on the mailing. See
id. Mr. Shane swore to the document’s authenticity both in his affidavit and
his trial testimony. See id. ¶ 11; Tr. 12:17-20. And Mr. Shane testified at
trial, consistent with the receipt, that the mailing was sent from Chicago.
See Tr. 14:4-8.
3 In doing so, we rendered moot defendant’s motion under Federal Rule of
Civil Procedure 52(c).
The Contract provides that it “shall be governed by, and construed in
accordance with, the laws of the State of New York.” Contract § 6.
“To form a valid contract under New York law, there must
be an offer, acceptance, consideration, mutual assent and intent
to be bound.”
Register.com, Inc. v. Verio, Inc., 356 F.3d 393,
427 (2d Cir. 2004).
The only element in dispute is the parties’
mutual assent, which David Morris argues is unsatisfied due to
maintains that (1) Treasure Chest’s obligation to provide “follow
up weekly digital impressions” is ambiguous, as it is unclear
emails, and (2) David Morris’ obligation to compensate Treasure
Chest with “up to” $40,000 in airfare and hotel accommodations and
$10,000 in Arosa cruises is ambiguous, as it does not provide a
Tr. 5:24-8:6; see Def.’s Mem. Law ¶ 7 (citing
Oswald v. Allen, 417 F.2d 43, 45 (2d Cir. 1969)).
“Whether or not a writing is ambiguous is a question of law
Giancontieri, 77 N.Y.2d 157, 162, 566 N.E.2d 639, 642 (1990).
Contractual language “is not ambiguous if it has a definite and
precise meaning . . . concerning which there is no reasonable basis
for a difference of opinion.”
Hunt Ltd. v. Lifeschultz Fast
Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989) (internal
quotation marks omitted) (quoting Breed v. Ins. Co. of N. Am., 46
N.Y.2d 351, 355, 385 N.E.2d 1280, 1282 (1978)).
The term “digital impression” unambiguously refers to the
display of an image to a viewer in an electronic or digital format.
https://www.investopedia.com/terms/i/impression.asp (last visited
June 19, 2018) (“An impression is a metric used to quantify the
display of an advertisement on a web page. . . .
not a measure of whether an advertisement has been clicked on,
only that it was displayed . . . .”).
Thus, a “digital impression”
would be accomplished each time David Morris’ advertisement was
displayed to a viewer in a website banner, on a social media
platform, or in an email.
Had the parties sought to limit “digital
impressions” to emails, they would have used the term “email.”
See Tr. 6:25-7:7. Regardless, as we describe infra, Treasure Chest
would have satisfied its obligation to provide follow up “digital
impressions” using email alone.
See also id. 7:8-10.
As to David Morris’ agreement to compensate Treasure Chest
with “up to” $40,000 in airfare and hotel accommodations and
$10,000 in Arosa cruises, that language (1) is irrelevant to
Contract, and (2) clearly (and simply) means that Treasure Chest
could not demand any more than the stated amounts.
See id. 7:20-
Put somewhat differently, David Morris may have come out
ahead under the Contract if Treasure Chest had demanded, for
whatever reason, less than those amounts.
existence of a valid contract between the parties.
The upshot is
not only that plaintiff has satisfied the first element of its
breach of contract claim, but also that defendant cannot maintain
its counterclaim for unjust enrichment.
See Beth Israel Med. Ctr.
v. Horizon Blue Cross & Blue Shield of N.J., Inc., 448 F.3d 573,
586-87 (2d Cir. 2006); Goldman v. Metro. Life Ins. Co., 5 N.Y.3d
561, 572, 841 N.E.2d 742, 746 (2005).
Second, we find that Treasure Chest adequately performed its
responsibilities under the Contract.
On March 28, 2016, Treasure Chest mailed David Morris’ insert
to 1,453,000 individuals, almost twice the number required under
See Shane Aff. ¶¶ 8, 11 & Exs. B, D.
created, and included in the mailing, a response card bearing both
Arosa Cruises and AutoEurope’s logos.
See id. ¶ 10 & Ex. C.
Treasure Chest also published “all of the additional materials
provided to it by [David Morris] in Treasure Chest’s weekly
electronic newsletters,” i.e., emails, “and posted [the] same on
its social media pages,” including Facebook (on which Treasure
Chest had 300,000 followers at the relevant time) and Instagram
(on which Treasure Chest had 10,000 followers).
& Ex. E.
See id. ¶¶ 12-13
“Although the Contract only provided for publishing
digital images for two products, Treasure Chest published digital
impressions for four products: Arosa Cruises, AutoEurope, Silver
Sea Cruises, and Ama Waterways.”
Id. ¶ 12.
customer leads; as of June 21, 2016, David Morris had received
6,118 total leads,5 far exceeding the 3,000 leads guaranteed under
Contract § 3.
See id. ¶ 15 & Ex. F; Tr. 29:11-17; see also
David Morris’ only defense, that it never received
any actual business from the campaign, is simply not an element of
Finally, David Morris’ non-performance under the Contract,
and Treasure Chest’s corresponding damages, are undisputed.
Morris “failed to pay $45,000 to Treasure Chest, provide any Arosa
Specifically, David Morris received 3,441 leads for Arosa Cruises and
2,677 leads for AutoEurope. Shane Aff. ¶ 15.
At an earlier stage of the litigation, we explained that it was
“plaintiff’s burden, in order to prevail on its claims, to establish the value
of the service it provided, i.e., the list to which the advertisements were
sent.” Order at 1, Apr. 10, 2018, Dkt. No. 33. We find that plaintiff has
satisfied this burden as well. The recipients of Treasure Chest’s mailing are
“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.” Shane Aff. ¶ 4; see Tr. 26:4-14. In other words,
Treasure Chest sent the advertisements to individuals who were proper targets
for David Morris’ travel products.
Moreover, Cunard Line, Royal Caribbean
International, The Breakers Palm Beach, and Starwood Resorts—all wellestablished brands in the travel industry—also participated in the mailing,
further bolstering the legitimacy of Treasure Chest’s advertising list. See
Shane Aff. Ex. C, at 1. Indeed, The Breakers Palm Beach and Cunard Lines are
repeat customers, having participated in twelve and fifteen mailings,
respectively, see Tr. 28:16-29:4, and Cunard Line “brought in their sister
cruise lines based on the success” of prior mailings, id. 29:5-8.
Treasure Chest offered to perform a “match back,” free of charge, to
ascertain whether any of David Morris’ bookings originated from the mailing.
See Shane Aff. ¶ 16; Tr. 23:10-25.
A “match back” is “the industry way of
tracking bookings,” by which the list of the advertising customer’s bookings
are compared to the recipients of an advertisement, with the overlap being
indicative of the success of the mailing. See Tr. 21:6-23:7. David Morris,
however, declined this invitation. Shane Aff. ¶ 24.
cruises, or . . . honor Treasure Chest’s requests for hotel
accommodations beyond an accumulation of $13,000.”
Thus, we find that plaintiff proved defendant’s failure to
satisfied all four elements of its breach of contract claim.
The only issue remaining is Treasure Chest’s entitlement to
damages for defendant’s breach.
In a contract action, a court
should leave the injured party in as good a position as he would
have been if the contract had been fully performed.
Moira Cent. Sch. Dist. v. Fred H. Thomas Assocs., P.C., 91 N.Y.2d
256, 261, 692 N.E.2d 551, 553 (1998).
Treasure Chest accordingly
seeks, and is entitled to, $82,000 in damages, i.e., the $95,000
due on the Contract less the $13,000 of in-kind accommodations
See Restatement (Second) of Contracts § 359(1)
(Am. Law Inst. 1981) (“Specific performance . . . will not be
ordered if damages would be adequate to protect the expectation
interest of the injured party.”).
In addition to damages, plaintiff seeks interest accrued on
the amount due under the Contract. Under New York law, “[i]nterest
shall be recovered upon a sum awarded because of a breach of
performance of a contract” and shall begin to run “from the
earliest ascertainable date the cause of action existed.”
C.P.L.R. § 5001(a)-(b); see id. § 5002; see also U.S. Naval Inst.
v. Charter Commc’ns, Inc., 936 F.2d 692, 698 (2d Cir. 1991) (“[A]
plaintiff who prevails on a claim for breach of contract is
entitled to prejudgment interest as a matter of right.”).
York’s statutory prejudgment interest rate is 9% per annum.
N.Y. C.P.L.R. § 5004.
But if the applicable contract “provides a
rate at which interest is to be calculated, then the contractual
rate, rather than the statutory rate . . . governs.”
Bank of Am.,
N.A. v. Brooklyn Carpet Exchange, Inc., No. 15cv5981 (LGS)(DF),
2016 WL 8674686, at *5 (S.D.N.Y. May 13, 2016) (quoting Nuera
Civ.9167(RMB)(FM), 2002 WL 31778796, at *3 (S.D.N.Y. Nov. 15,
(S.D.N.Y. June 27, 2016).
In such cases, “prejudgment interest is
calculated at the contract rate, until the amount owed under the
contract merges into a judgment.”
Id. (citing NML Capital v.
Republic of Argentina, 621 F.3d 230, 240 (2d Cir. 2010)). However,
“[i]n order to prevail at a rate higher than the statutory 9% per
annum, the contract itself must clearly specify the rate charged.”
Microban Prods. Co. v. API Indus., Inc., No. 14 Civ. 41(KPF), 2014
WL 1856471, at *19 (S.D.N.Y. May 8, 2014) (quoting Gates Rubber
Co. v. Vehicle Parts Warehouse Corp., 952 F. Supp. 132, 133
The Contract provides that Treasure Chest will tender a “1.5%
monthly finance fee” “[i]n the event
Contract § 4.
[of] monies past due.”
Thus, Treasure Chest is entitled to prejudgment
interest of 1.5% per month on the “monies past due”: $45,000,
accruing after August 1, 2016.8
See Hounddog Prods., L.L.C. v.
Empire Film Grp., Inc., 826 F. Supp. 2d 619, 630 (S.D.N.Y. 2011).
Treasure Chest is also entitled to prejudgment interest on the
remaining $37,000 due on the Contract.
However, the Contract does
not “clearly specify” that the 1.5% per month rate applies to these
in-kind payments, as opposed to solely “monies.”
Prods., 2014 WL 1856471, at *19.
Accordingly, the 9% per annum
Further, as the Contract does not specify a date on
which the remaining amounts were due, and in the absence of
evidence of when they were demanded, prejudgment interest on the
$37,000 amount began accruing after January 1, 2017, when Treasure
Chest commenced this litigation.
See Cyberchron Corp. v. Calldata
Sys. Dev., Inc., 831 F. Supp. 94, 118 (E.D.N.Y. 1993), aff’d in
part, vacated in part on other grounds, 47 F.3d 39 (2d Cir. 1995).
Finally, plaintiff seeks an award of attorneys’ fees and costs
incurred in bringing this action, citing language in the Contract
that “[i]n the event of monies past due . . . costs necessary to
collect past due balance [to be] paid by” David Morris.
Under New York law, a court “should not infer a party’s
intention to provide counsel fees as damages for a breach of
8 Although David Morris’ $45,000 payment was due on July 1, 2016, see
Contract § 3, Treasure Chest only seeks interest accruing after August 1, 2016,
see Shane Aff. at 4.
contract unless the intention to do so is unmistakably clear from
337 F. 3d 186,
(quoting Hopper Assocs., Ltd. v. AGS Comps.,
74 N.Y.2d 487, 492, 548 N.E.2d 903,
The language in
the Contract does not satisfy this high standard.
Based upon the foregoing findings of fact and conclusions of
law follow~ng trial in this matter, we find for plaintiff on its
sole claim for breach of contract,
and against defendant on its
sole remaining counterclaim for unjust enrichment.
We enter an
$45,000 after August 1, 2016, and 9% prejudgment interest per annum
respectfully directed to enter judgment for plaintiff,
all pending docket entries
and close this
New York, New York
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
Counsel for plaintiff:
Knox Law Group, P.C.
Counsel for defendant:
Brian E. Lehman
Julie R. Solarz
Lehman LG LLC
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