American Empire Surplus Lines Insurance Company v. Iron, Inc.
2:15-cv-07048
E.D.N.YJan 10, 2017Background
- Plaintiff American Empire Surplus Lines Insurance Co. sued Iron, Inc. and Pre-Fab Construction Services, Inc. (the "Iron Entities") for breach of an insurance contract based on failure to pay an additional premium.
- The Iron Entities were properly served but did not appear or respond to the complaint.
- Plaintiff moved for default judgment; submitted affidavits and documentary evidence supporting damages and costs.
- The Court accepted well-pleaded allegations as true for liability but required proof of damages with reasonable certainty.
- The Court found the breach date was November 17, 2015, and calculated damages, prejudgment interest, and taxable costs; it denied a request for attorney’s fees for lack of a legal basis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants are liable for breach after default | Iron Entities breached by failing to pay required additional premium | No opposition (defendants defaulted) | Default establishes liability; breach proven |
| Whether damages are established with reasonable certainty | Affidavits and documents show $178,941.88 in damages + costs | No opposition | Damages proven by affidavits/documents; awarded $178,941.88 |
| Whether prejudgment interest is recoverable and amount | Entitled to 9% prejudgment interest from breach date | No opposition | Awarded prejudgment interest of $18,530.40 (9% from 11/17/2015) |
| Whether attorney’s fees are recoverable | Requested fees | No statutory or contractual basis identified | Denied attorney’s fees; awarded $590 in costs |
Key Cases Cited
- Finkel v. Romanowicz, 577 F.3d 79 (2d Cir. 2009) (court accepts well-pleaded allegations as true on default)
- Bricklayers & Allied Craftworkers Local 2 v. Moulton Masonry & Const., LLC, 779 F.3d 182 (2d Cir. 2015) (default does not constitute admission of damages)
- Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc., 699 F.3d 230 (2d Cir. 2012) (evidentiary basis for damages may be affidavits and documents)
- Credit Lyonnais Sec., Inc. v. Alcantara, 183 F.3d 151 (2d Cir. 1999) (court must ascertain damages with reasonable certainty)
- Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105 (2d Cir. 1997) (district court may enter default judgment on inquest by affidavit if basis for damages is ensured)