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awarding prejudgment interest on attorney's fees
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No. 04 Civ. 283 (KNF).
October 20, 2004
MEMORANDUM AND ORDER
The plaintiff, Victor P. Muskin, P.C. ("Muskin"), brought this action for, inter alia, breach of contract and account stated against Raymond E.B. Ketchum ("Ketchum") and CEA Financial Group, Inc. ("CEA"), alleging that the defendants failed to pay fees for legal services rendered by the plaintiff to Ketchum. Thereafter, Muskin and Ketchum consented to have this action assigned to the undersigned United States magistrate judge for all proceedings, including the entry of judgment, pursuant to 28 U.S.C. § 636(c). Upon the defendants' failure to answer or otherwise respond to the complaint, Muskin made an application that a default judgment be entered against the defendants, in the amount of $77,170.00, plus prejudgment interest.
Fed.R.Civ.P. 55 governs the entry of defaults and default judgments. It provides, in pertinent part:
(a) Entry.
When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party's default.
(b) Judgment.
* * *
(1) By the Clerk.
When the plaintiff's claim against a defendant is for a sum certain or for a sum which can by computation be made certain, the clerk upon request of the plaintiff and upon affidavit of the amount due shall enter judgment for that amount and costs against the defendant, if the defendant has been defaulted for failure to appear and is not an infant or incompetent person.
(2) By the Court.
In all other cases the party entitled to a judgment by default shall apply to the court therefor. . . . If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings . . . as it deems necessary and proper. . . .
Fed.R.Civ.P. 55(a), (b).
Accordingly, upon the entry of a party's default in an action, the amount of damages must be established by the plaintiff in a post-default inquest, "unless the amount is liquidated or susceptible of mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974).
In this action, Muskin seeks damages against Ketchum in the amount of $77,170.00, representing unpaid fees for legal services, plus prejudgment interest at the rate prescribed by New York law, nine per centum per annum. See New York Civil Practice Law and Rules § 5004. Since the amount of damages sought by Muskin is a sum which can, by mathematical computation, be made certain, there is no need for Muskin to prove the amount of damages at an inquest proceeding. Exhibit A to the declaration that Muskin submitted in support of his default judgment application contains a computation of interest on the unpaid fees that Ketchum owed to him during various periods of time between July 1, 2002 and July 31, 2004. The Court finds the computation to be accurate and adopts it. Therefore, Muskin is entitled to interest of $11,747.43 through July 31, 2004. Muskin is also entitled to prejudgment interest in the amount of $1,541.29, for the period beginning August 1, 2004, and ending on the date of this order, October 20, 2004. Accordingly, Muskin is entitled to a default judgment against Ketchum in the amount of $77,170.00 in damages, and a total of $13,288.72 in prejudgment interest.
Muskin has also made an application that the automatic stay of enforcement of the judgment, imposed by Fed.R.Civ.P. 62(a), be waived, so that he might record the judgment immediately. Fed.R.Civ.P. 62(a) provides, in pertinent part, that "no execution shall issue upon a judgment nor shall proceedings be taken for its enforcement until the expiration of 10 days after its entry." The recording of a judgment, however, "does not constitute a proceeding to enforce a judgment and therefore is not prohibited by [Fed.R.Civ.P. 62(a)]." See In re: Rainbow Trust, 216 B.R. 77, 86 (2d Cir. 1997). Accordingly, the plaintiff's application to waive the automatic stay is unnecessary and need not be entertained by the Court.
Since CEA did not consent to have this action assigned to the undersigned, pursuant to 28 U.S.C. § 636(c), jurisdiction to determine Muskin's application with respect to CEA remains with the district judge who was assigned to this action or, if appropriate, with the Clerk of Court, pursuant to Fed.R.Civ.P. 55(b)(1). Therefore, the Court takes no action on that part of the plaintiff's application that was directed at CEA.
For the reasons set forth above, Muskin's application for damages and prejudgment interest is granted with respect to Ketchum, and the Court takes no action with respect to the plaintiff's application for damages and prejudgment interest against CEA.
The Clerk of Court shall enter a judgment against Ketchum that reflects an award of: (a) damages in the amount of $77,170.00; and (b) prejudgment interest in the amount of $13,288.72.
The plaintiff is directed to serve a copy of this memorandum and order on the defendants and to submit proof of service to the court.
SO ORDERED.