Joseph et al v. Gorodetsky
Filing
12
DECISION AND ORDER GRANTING Plaintiffs' 9 Motion for Default Judgment; AWARDING Plaintiff Linda H. Joseph $20,000 against Defendant; AWARDING Plaintiff Jeremy A. Joseph $39,000 against Defendant; DIRECTING Plaintiffs serve a copy of this decision on Defendant by electronic mail to rgorodetsky@yahoo.com; DIRECTING the Clerk of Court to enter judgment consistent with this decision; DIRECTING the Clerk of Court to CLOSE this case. Signed by William M. Skretny, Chief Judge on 7/31/2014. (MEAL) - CLERK TO FOLLOW UP -
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
LINDA H. JOSEPH and JEREMY A. JOSEPH,
Plaintiffs,
v.
DECISION AND ORDER
13-CV-243S
ROBERT GORODETSKY,
Defendant.
1.
On December 4, 2013, Plaintiffs filed a Motion for Default Judgment against
Defendant. (Docket No. 9.) For the reasons discussed below, this Court will grant
Plaintiffs’ motion and award $20,000 in favor of Plaintiff Linda Joseph, and $39,000 in favor
of Plaintiff Jeremy Joseph.
2.
Plaintiffs filed their complaint in this action on March 5, 2013. (Docket No.
1.) Therein, Plaintiffs allege that Defendant violated federal securities laws, breached the
contract between the parties, and converted Plaintiffs’ funds when he invested Plaintiffs’
funds without authorization and failed to return Plaintiffs’ funds on demand.
3.
Plaintiffs specifically allege that they entered into an investment agreement
with Defendant in Fall 2012 whereby they would provide him a combined amount of
$61,000 to invest on their behalf and pursuant to their instructions.1 (Complaint, Docket
No. 1, ¶¶ 11,13-15.) The agreement required Defendant to provide sound investment
advice, follow Plaintiffs’ investment instructions, and return Plaintiffs’ funds on demand.
(Complaint at ¶¶ 11, 13.) Approximately two months into the agreement, Plaintiffs’
combined investment had grown to approximately $100,000.
1
(Complaint, at ¶ 16.)
Linda Joseph allegedly gave Defendant $20,000; Jeremy Joseph allegedly gave Defendant
$41,000. (Complaint at ¶¶ 14, 15.)
Defendant thereafter made unauthorized investments with Plaintiffs’ funds, resulting in
losses. (Complaint, at ¶ 17.) Plaintiffs subsequently demanded the return of their principal
and proceeds, which Defendant failed to return. (Complaint, at ¶ 18.) Plaintiffs allege that
they have been damaged in excess of $95,000. (Complaint, at ¶ 19.)
4.
Before obtaining default judgment, a party must secure a Clerk’s Entry of
Default by demonstrating, through affidavit or otherwise, that the opposing party is in
default. FED. R. CIV. P. 55(a). Once default has been entered, the allegations of the
complaint that establish the defendant’s liability are accepted as true.
Greyhound
Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); FED. R. CIV.
P. 8(b)(6). Damages, however, must be established by proof, unless the damages are
liquidated or “susceptible of mathematical computation.” Flaks v. Koegel, 504 F.2d 702,
707 (2d Cir. 1974). All reasonable inferences from the evidence presented are drawn in
the moving party’s favor. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir.
1981).
5.
Before entering default judgment, the court must determine whether the facts
alleged in the complaint are sufficient to state a claim for relief as to each cause of action
for which the plaintiff seeks default judgment. Further, where the damages sought are not
for a sum certain, the court must determine the propriety and amount of default judgment.
FED. R. CIV. P. 55(b)(2). “In determining damages not susceptible to simple mathematical
calculation, a court has the discretion to rely on detailed affidavits or documentary evidence
in lieu of an evidentiary hearing.” DirecTV, Inc. v. Hamilton, 215 F.R.D. 460, 462 (S.D.N.Y.
2003) (citing Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504, 508 (2d Cir. 1992)). A
2
hearing is not required as long as the court ensures that there is a basis for the damages
awarded. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d
105, 111 (2d Cir. 1997) (quoting Fustok v. Conticommodity Servs., Inc., 873 F.2d 38, 40
(2d Cir. 1989)).
6.
The Clerk of the Court entered default against Defendant on December 23,
2013. (Docket No. 11.) As such, this Court views the factual allegations in the complaint
that establish Defendant’s liability as true. Plaintiffs seek default judgment on their breach
of contract claim.2 To establish a claim for breach of contract, a plaintiff must demonstrate
(1) that a contract between the parties existed, (2) that the plaintiff performed its obligations
under the contract, (3) that the defendant breached its obligations under the contract, and
(4) that the plaintiff suffered damages. Terwilliger v. Terwilliger, 206 F.3d 240, 245-46 (2d
Cir. 2000); Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525 (2d Cir. 1994); W.B.
David & Co., Inc. v. DWA Commc’ns, Inc., No. 02 Civ. 8479, 2004 WL 369147, at *2
(S.D.N.Y. Feb. 6, 2004).
7.
Here, Plaintiffs have alleged the existence of a contract (Complaint at ¶¶ 11,
13), performance of their obligations (Complaint at ¶¶ 14, 15), breach by defendant
(Complaint at ¶¶ 17-18, 21-22), and damages (Complaint, ¶¶ 19, 23). Defendant’s liability
is therefore established. As to damages, the evidence establishes that Plaintiff Linda
Joseph gave Defendant $20,000 (see Affidavit of Linda Joseph, Docket No. 9-1, ¶ 4 and
Exhibit A) and that Plaintiff Jeremy Joseph gave Defendant $39,000 (see Affidavit of
2
Although Plaintiffs do not specifically identify the claim on which they seek default judgment, they
focus almost entirely on their breach of contract claim in their motion.
3
Jeremy Joseph, Docket No. 9-2, ¶¶ 5, 6 and Exhibits A and B).3
8.
Based on the above, this Court finds that Plaintiffs are entitled to default
judgment against Defendant on their breach of contract claim. Linda Joseph is entitled to
$20,000; Jeremy Joseph is entitled to $39,000. Plaintiffs’ Motion for Default Judgment will
therefore be granted and judgment against Defendant will be entered accordingly.
IT HEREBY IS ORDERED, that Plaintiffs’ Motion for Default Judgment (Docket No.
9) is GRANTED.
FURTHER, that Plaintiff Linda H. Joseph is awarded $20,000 against Defendant.
FURTHER, that Plaintiff Jeremy A. Joseph is awarded $39,000 against Defendant.
FURTHER, that Plaintiffs are directed to serve a copy of this decision on Defendant
by electronic mail to rgorodetsky@yahoo.com.
FURTHER, that the Clerk of Court is directed to enter judgment consistent with this
decision.
FURTHER, that the Clerk of Court is directed to CLOSE this case.
SO ORDERED.
Dated: July 31, 2014
Buffalo, New York
/s/William M. Skretny
WILLIAM M. SKRETNY
Chief Judge
United States District Court
3
Plaintiffs have not submitted any evidence concerning investment gains, nor do they seek
recovery of any investment gains in their motion.
4
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