Vorcom Internet Services, Inc. v. L&H Engineering & Design LLC
7:12-cv-02049
S.D.N.Y.Jan 26, 2015Background
- Vorcom (NY) contracted with L&H (Indiana LLC) to buy two vans outfitted with fiber-optic splicing equipment for $60,000 each; Vorcom paid $60,000 (Nov 28, 2011) and $30,000 (Dec 12, 2011).
- L&H delivered one van but failed to provide proper title paperwork or the contracted equipment; the second van and equipment were never delivered and payments were not returned.
- Ford Motor Credit obtained a summary replevin judgment in Indiana against LeDonne (individual) for possession of the delivered van (estimated value $23,200).
- L&H and LeDonne transferred assets to a newly formed LG; LG later filed bankruptcy and default judgment proceedings proceeded only against L&H.
- Plaintiff sought $90,000 in damages (contract claim), fraud in the inducement, violation of N.Y. Gen. Bus. Law § 396-p, declaratory relief (title to delivered van), attorneys’ fees and punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — entitlement and amount | Vorcom paid $90,000 for two specially outfitted vans; L&H breached by failing to deliver equipment/second van and by not providing title paperwork; seeks $90,000 + interest | L&H defaulted (no opposition in inquest) | Judgment recommended for Vorcom on breach: $90,000 plus prejudgment interest at 9% from Mar 20, 2012, and post-judgment interest under 28 U.S.C. §1961 |
| Fraud in the inducement | LeDonne knowingly misrepresented intent to deliver vans/equipment to induce payment | Alleged fraud arises from same facts as the breach | Claim dismissed: fraud cannot stand where it merely duplicates breach of contract (no independent misrepresentation beyond contractual promise) |
| Violation of N.Y. Gen. Bus. Law § 396-p | L&H failed to provide statutory notice; Vorcom seeks full refund | Statute is a dealer notice requirement; remedies are limited to small civil penalties | Claim dismissed: statute does not provide the remedy Vorcom seeks (refund) |
| Declaratory judgment re: title/registration to delivered van | Vorcom seeks declaration it owns the van and right to title/registration | Ford holds a replevin judgment in Indiana; no record that L&H had good title to transfer; factual disputes exist | Claim dismissed: Vorcom failed to show entitlement to declaratory relief or to overcome the Indiana replevin judgment; ownership requires resolution of facts |
Key Cases Cited
- Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61 (2d Cir. 1981) (default judgment — accept well‑pleaded allegations as true)
- Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105 (2d Cir. 1997) (district court need not hold hearing if record supports damages)
- Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38 (2d Cir. 1989) (procedural standards for default judgment and damages inquiry)
- Trinity Biotech, Inc. v. Reidy, 665 F. Supp. 2d 377 (S.D.N.Y. 2009) (default establishes liability; damages must be shown with reasonable certainty)
- Conway v. Icahn & Co., Inc., 16 F.3d 504 (2d Cir. 1994) (prejudgment interest in diversity cases — computation from appropriate date)
- Westinghouse Credit Corp. v. D'Urso, 371 F.3d 96 (2d Cir. 2004) (post-judgment interest under federal law is mandatory)
- Cappiello v. ICD Publ'ns, Inc., 720 F.3d 109 (2d Cir. 2013) (post-judgment interest governed by 28 U.S.C. § 1961 in diversity actions)