945 F. Supp. 2d 81
D.D.C.2013Background
- Embassy sues ECU Associates, P.C. and Ugwuonye for breach of contract, fiduciary duties, conversion, and unjust enrichment related to a $1.55 million IRS tax refund.
- ECU Associates, a Maryland professional corporation, acted as counsel; Embassy paid 3.5% of sale price for services; ECU failed to file paperwork to exempt foreign sovereign from taxes.
- IRS withheld $1.55 million tax lien; in 2007 Ugwuonye allegedly withdrew $550,000 and further funds were unavailable to Embassy.
- Default entered against ECU Associates for failure to defend; court later awarded default judgment framework and requested damages documentation.
- Court finds ECU Associates liable on all claims and grants in part the Embassy’s motion for default judgment, awarding damages and interest but denying punitive damages.
- Judgment awards: $1.55 million compensatory damages, $512,136.99 prejudgment interest, post-judgment interest to be calculated under 28 U.S.C. § 1961; punitive damages denied; attorneys’ fees to be separately requested.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment is proper on liability and damages | Embassy argues ECU liable for all counts. | ECU Associates contesting defense; Ugwuonye previously argued charter issues but default resolved liability. | Default judgment granted on liability and damages as supported by record. |
| Amount of compensatory damages | Damages equal $1.55 million refund not delivered to Embassy. | No separate defense to amount; potential offset unclear. | Compensatory damages set at $1.55 million. |
| Whether prejudgment interest is recoverable and at what rate | Interest from Nov. 20, 2007 at 6% to make Embassy whole. | Not opposed; no contrary calculation presented. | Prejudgment interest awarded at 6% per annum since Nov. 20, 2007. |
| Post-judgment interest | Interest on judgment under 28 U.S.C. § 1961. | Not relevant to liability. | Post-judgment interest awarded as provided by 28 U.S.C. § 1961. |
| Punitive damages | Request for double the compensatory damages. | Punitive damages appropriate for intent or willful misconduct. | Punitive damages denied; no showing of actual malice. |
Key Cases Cited
- Flynn v. Old World Plaster, LLC, 741 F. Supp. 2d 268 (D.D.C. 2010) (default judgment; damages must be supported by evidence)
- West Virginia v. United States, 479 U.S. 305 (U.S. 1987) (prejudgment interest concept; full compensation)
- Duggan v. Keto, 554 A.2d 1126 (D.C. 1989) (DC prejudgment interest availability for loss of use)
- Riggs Nat’l Bank v. District of Columbia, 581 A.2d 1229 (D.C. 1990) (prejudgment interest as compensation for loss of use)
- Pierce Assocs., Inc. v. District of Columbia, 527 A.2d 306 (D.C. 1987) (liquidated debt and prejudgment interest framework)
- Calvetti v. Antcliff, 346 F. Supp. 2d 92 (D.D.C. 2004) (punitive damages limits in DC breach of contract context)
- District of Columbia v. Pierce Assocs., Inc., 527 A.2d 306 (D.C. 1987) (application of DC law to damages and interest)