DocketNumber: No. 04-CV-2609 NG SMG
Citation Numbers: 968 F. Supp. 2d 480
Judges: Gershon
Filed Date: 5/8/2013
Status: Precedential
Modified Date: 11/26/2022
OPINION & ORDER
On January 3, 2013, 2013 WL 1911301, the Honorable Steven M. Gold, Chief Magistrate Judge, filed a comprehensive Report and Recommendation (the “Report”) regarding the amount of damages to be awarded to plaintiff State Farm Automobile Insurance Company from various defaulting defendants. Most of the defaulting defendants neither participated in the proceedings before Judge Gold, nor filed objections to the Report. Defendant Jacob Kagan and his corporation, defendant Mirka United, Inc. (“Mirka”), appeared through counsel at the hearing before Judge Gold, and defendant Igor Vetoukh filed a letter in opposition to plaintiffs request for damages. Of these three defendants, only Kagan and Mirka have filed timely objections to Judge Gold’s Report.
In reviewing the Report, the court “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C). “To accept the report and recommendation of a magistrate, to which no timely objection has been made, a district court need only satisfy itself that there is no clear error on the face of the record.” Urena v. People of State of New York, 160 F.Supp.2d 606, 609-10 (S.D.N.Y.2001) (quoting Nelson v. Smith, 618 F.Supp. 1186, 1189 (S.D.N.Y.1985)); see also Pizarra v. Bartlett, 776 F.Supp. 815, 817 (S.D.N.Y.1991) (adoption permitted where the un-objected to sections are “not facially erroneous”).
Under 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, however, the review of portions of the Report to which timely objections
The recommended awards, here, are based upon claims of RICO violations and violations of the New York State common law of fraud. Plaintiff has sought only “single,” and not treble, damages and has represented that it will not seek attorneys’ fees under the RICO statute, notwithstanding its entitlement to them.
Overall, I find that Judge Gold’s conclusions are fully supported by the facts and law. With one modification, I therefore adopt Judge Gold’s thoughtful and well-reasoned Report and Recommendation, and I reject the objections proffered.
The question of set-offs for Kagan and Mirka based on the settlements of the other, non-defaulting defendants forms the primary basis of Kagan and Mirka’s objection, and so I review Judge Gold’s analysis of this point de novo. While I agree with the conclusion that application of Judge Gold’s recommendation would ultimately compel, I would have reached it in a different manner. I therefore modify the Report to include the following.
In discussing whether or not to offset the damages award, Judge Gold concluded that, “as a general matter, any relevant settlement amounts should be taken into account when assessing damages.” (Report at 20.) Noting that only certain settlements should be considered, and that plaintiff waived its right to attorneys’ fees, Judge Gold directed plaintiff to submit a letter setting forth additional information relating to the relevant settlements, in-eluding their amounts, and an approximation of the amounts incurred by plaintiff in reasonable attorneys’ fees. (Id.) He then wrote, “If, but only if, the properly attributed amounts received from other defendants in settlements exceed the reasonable attorney’s fees incurred, should the amount of any final judgments against the defaulted defendants be reduced.” (Id. at 20-21.)
Plaintiffs subsequent submissions show that the sum of reasonable attorneys’ fees incurred greatly exceeds the amount of the settlements reached with the other defendants, and so, pursuant to Judge Gold’s recommendation, the set-off sought by Kagan and Mirka would not be applied. While I agree that this is the correct result, I disagree with respect to Kagan and Mirka’s entitlement to set-offs as an initial matter.
Federal common law controls on the question of whether a defendant in a federal action “is entitled to a credit against judgment for the settlement by another party to the dispute.” Singer v. Olympia Brewing Co., 878 F.2d 596, 600 (2d Cir.1989). The Supreme Court has held that, where a plaintiff has settled “with one of several joint tortfeasors, the nonsettling defendants are entitled to a credit for that settlement” and that the amount of such credit should be determined using what the Court refers to as the “proportionate share approach.” McDermott, Inc. v. AmClyde, 511 U.S. 202, 208-10, 114 S.Ct. 1461, 128 L.Ed.2d 148 (1994).
Where courts in this Circuit have granted a set-off to a defaulting defendant, it has been under easily distinguishable circumstances. See, e.g., Koon Chun Hing Kee Soy & Sauce Factory, Ltd. v. Kun Fung USA Trading Co. Inc., 2012 WL 1414872, at *9 (E.D.N.Y., Jan. 20, 2012) (recommending a set-off, notwithstanding defendant’s default, in part, because of the recommendation to award plaintiff damages based on gross revenues, without a deduction for defendants’ costs, and in part because the award, without the deduction for the set-off, would be “excessive”), Report and Recommendation adopted, No. 07-cv-2568 (E.D.N.Y., May 7, 2012). And, in other cases involving defaulted defendants, the plaintiffs have agreed to a set-off. See State Farm Mutual Automobile Insurance Co. v. Kalika, 2007 WL 4326920, at *9 (E.D.N.Y., Dec. 7, 2007) (the award requested by plaintiff on RICO, fraud and unjust enrichment claims “was calculated by trebling the total amount
In this case, defendants Kagan and Mirka have engaged in well-documented conduct which was so disrespectful of the judicial process as to result in the entry of default judgments against them. Moreover, they offered no evidence whatsoever at the damages inquest. See Report, at 2.) From the spoliation of evidence to the concealment and improper disposition of assets, and from willful refusal to comply with court orders to deliberate efforts to mislead the court and frustrate the discovery process, Kagan and Mirka have squandered their opportunities to convince the court that they should be held liable to plaintiff for anything less than the total amount of damages sought by plaintiff. Far from satisfying their burden of establishing that the failure to apply a set-off will result in a double-recovery or be unjust, the arguments now advanced by these defendants amount to too little, too late.
Accordingly, with the slight modification as set forth above, I adopt the Report and Recommendations of Judge Gold as the opinion of the court. The Clerk of Court is directed to enter judgment against the defaulting defendants in the amounts set forth on pages 22-23 of the Report and in the Supplement to Report & Recommendation, dated Jan. 18, 2013 (ECF Document # 1164), and to close this case.
SO ORDERED.
. Under 18 U.S.C. § 1964(c), a person injured by way of violation of the RICO statute (18 U.S.C. § 1962) "shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.”
. In McDermott, the Supreme Court concluded that the proportionate share approach
. The only discussion relating to the propriety of the set-off is as to whether or not it should be applied before or after trebling of damages. See State Farm, 2007 WL 4326920, at 9.
. The factual record before Judge Gold amply supported his conclusion that the attorneys’ fees expended greatly exceeded the amount of the settlements and that the absence of a set-off would not result in a double recovery for plaintiff. Indeed, plaintiff has not only foregone attorneys’ fees but also treble damages to which it is clearly entitled under 18 U.S.C. 1964(c). In light of my conclusion, in the text, that no set-offs for Kagan and Mirka are warranted, it is unnecessary to address their requests for further factual support as to either the amount of the fees or the amount of the settlements.