Lenard v. Design Studio

• Decision Date: 24 August 2012
• Docket Number: No. 08 Civ. 10560(JPO).,08 Civ. 10560(JPO).
• Citation: 889 F.Supp.2d 518
• Parties: Dena LENARD, Plaintiff, v. DESIGN STUDIO and Rose C. Christo, Defendants.
• Court: U.S. District Court — Southern District of New York

889 F.Supp.2d 518

Dena LENARD, Plaintiff,

v.DESIGN STUDIO and Rose C. Christo, Defendants.

No. 08 Civ. 10560(JPO).

United States District Court,

S.D. New York.

Aug. 24, 2012.

Andrew C. Laufer, Law Office of Andrew C. Laufer, New York, NY, for Plaintiff.

ORDER ADOPTING REPORT AND RECOMMENDATION

J. PAUL OETKEN, District Judge.

Dena Lenard (“Plaintiff”) brought claims for breach of contract, negligence, fraud, deceptive trade practices, and conversion of property against Design Studio Inc. and Rose C. Christo (“Defendants”). Defendants failed to respond to the Complaint, and Judge Richard J. Holwell. to whom this case was previously assigned, entered a default judgment against Defendants on November 17, 2009, for an amount that was to be determined by an inquest.

Magistrate Judge Debra Freeman issued a Report and Recommendation (“R & R”) on June 21, 2012, in which she recommended that no damages be awarded to Plaintiff because Plaintiff's submissions were inadequate to support her damages claims. Magistrate Judge Freeman further recommended that the Court vacate the default judgment that had been entered with respect to the negligence, fraud, deceptive trade practices, and conversion of property claims because these claims were inadequately pleaded. She also recommended granting leave to replead the claim for conversion of property. No party has filed any objections to the R & R and the time for filing such objections has passed.

This Court “may accept, reject, or modify, in whole or in part, the findings or recommendations” of a magistrate judge. The Court reviews de novo those parts of the R & R to which objections are made and reviews the remainder for clear error. 28 U.S.C. § 636(b)(1); see alsoFed.R.Civ.P. 72.

After reviewing Magistrate Judge Freeman's thorough and thoughtful R & R, to which no objections were filed, this Court concludes that there is no clear error and, accordingly, adopts the R & R in its entirety. For the reasons set forth in the R & R, it is hereby

ORDERED that no damages are awarded to Plaintiff as a result of Defendants' breach of contract; and it is further

ORDERED that the default judgment entered against Defendants with respect to the claims for negligence, fraud, deceptive trade practices, and conversion of property is hereby-vacated; and it is further ORDERED that Plaintiff's claims for negligence, fraud, and deceptive trade practices are hereby dismissed with prejudice; and it is further

ORDERED that Plaintiff's claim for conversion of property is hereby dismissed without prejudice. Plaintiff is granted leave to file an amended complaint only with respect to the claim for conversion of property. Any such amended complaint shall be filed no later than September 24, 2012. If Plaintiff does not file an amended complaint on or before September 24, 2012, this claim will also be dismissed with prejudice.

SO ORDERED.

REPORT AND RECOMMENDATION

DEBRA FREEMAN, United States Magistrate Judge.

TO THE HONORABLE J. PAUL OETKEN, U.S.D.J.:

This matter is before this Court for a damages inquest on a default judgment entered in favor of plaintiff Dena Lenard (“Plaintiff”) against defendants Design Studio Inc. (“Design”) and Rose C. Christo a/k/a Roseda Desborder (“Christo”) (collectively, “Defendants”), on Plaintiff's claims for breach of contract, negligence, fraud, deceptive trade practices, and conversion of property. ( See Dkt. 8.) For the reasons set forth below, this Court finds that, regardless of any liability established by Defendants' default, Plaintiff's submissions to this Court are wholly inadequate to support her damages claims, and I therefore recommend that no damages be awarded.

BACKGROUND

A. Factual Background¹

Plaintiff resides in New York, in a cooperative apartment that she owns (Apt. 22–D, or the “Apartment”), located at 504 Grand Street, New York, New York 10002 (the “Building”). (Compl. ¶¶ 1, 9; see also Plaintiff's Proposed Findings of Fact, dated June 7, 2010 (“Proposed Findings”), at 1 ² (stating that Plaintiff resides at 504 Grand Street, Apt. 22–D).) Defendant Design is a New Jersey corporation. ( Id. at ¶ 2.) Defendant Christo is a resident of New Jersey and is the majority shareholder of Design. ( Id. at ¶ 3.)

Plaintiff alleges that, on or about November 20, 2006, she received a proposal from Defendants offering to provide general contractor services for a project to renovate the Apartment (the “Renovation Project”). ( Id. at ¶ 7.) At all relevant times, Defendants represented to Plaintiff that they were “licensed to act as a general contractor to install heating, air-conditioning, plumbing, electrical systems, and to perform general contractor work,” including the full renovation of the Apartment. ( Id. at ¶ 6.) Plaintiff accepted Defendants' proposal, purportedly entering into a contract with Defendants (the “Contract”), on or about November 20, 2006. ( Id. at ¶ 8.) As described by Plaintiff, the Contract required Defendants

to install, supervise, and manage the installation of an electrical, heating, plumbing, and/or air-conditioning system and engage in the renovation of the [Apartment] subject to stock certificate, proprietary lease, house rules, and the City of New York's Building Code Rules and Regulations that would be suitable for the operation of the [Apartment].

( Id. at ¶ 9.)

Plaintiff claims that she fully performed all promises and conditions under the Contract ( id. at ¶ 10), but that Defendants negligently failed to exercise ordinary and reasonable care and skill in planning, designing, supervising, and managing the Renovation Project, and thereby breached the Contract ( id. at ¶ 21). Further, Plaintiff alleges that, after negligently executing the Renovation Project, Defendants abandoned the project and returned none of the money that Plaintiff had paid to them under the Contract. ( Id. at ¶ 11.) Plaintiff describes the work performed by Defendants on the Apartment as “grossly inadequate.” ( Id. at ¶ 21.) She also claims that Defendants intentionally misrepresented their ability to renovate the Apartment, their ability to perform the requisite construction and electrical tasks, and their willingness to complete these tasks. ( Id. at ¶¶ 28, 31.) Although she provides no details, Plaintiff also asserts that Defendants have misrepresented their abilities as general contractors to other property owners and have failed to complete other construction projects. ( Id. at ¶ 32.)

The Complaint alleges that the Building's Cooperative Board (the “Board”) cited Plaintiff for “several violations” that were the result of Defendants' negligent execution of the Renovation Project, and also required her to hire a contractor and electrician to repair Defendants' work and complete the Renovation Project. ( Id. at ¶¶ 12, 13.) Plaintiff claims that she paid the substitute contractor and electrician a total of $50,000 to complete the necessary work, and that she also paid an attorney $10,000 in legal fees to resolve issues with the Board that were related to the violations. ( Id. at ¶¶ 13, 14.) Plaintiff further claims that, as a result of Defendants' negligent execution of the Renovation Project, she was constructively evicted from the Apartment for 21 months. ( Id. at ¶ 15.) During that period, Plaintiff could not sublet the Apartment ( id. at ¶ 19), and, although she does not break down these figures, she claims, in her Complaint, that she spent a total of $105,000 ($5000 per month for 21 months) on “carrying costs” for the Apartment and “alternate housing” ( id. at ¶¶ 16–18). Finally, Plaintiff alleges that Defendants failed to return cabinet hardware to her, including “original latches and catches circa 1929,” all of which, she claims, had been “professionally re-chromed.” ( Id. at ¶ 35.)

In her Complaint, Plaintiff asserts claims against Defendants for: (1) breach of contract, (2) negligence, (3) fraud, (4) deceptive trade practices, and (5) conversion of property.³ In her Proposed Findings, Plaintiff states that she is entitled to the following damages:

(1) $54,000 in fees that she paid to Defendants under the Contract, plus interest at a rate of 9% per year;

(2) $62,259.14 in fines that the Board levied against her for building code violations;

(3) $84,000 in lost rental income for the 21 months that she was constructively evicted from the Apartment, a sum that she states is “inclusive” of the mortgage and maintenance payments that she made for the Apartment during that time period;

(4) $88,000 in lost rental income for a period of an “additional” 22 months, during which Plaintiff was allegedly prohibited by the Board from subletting the Apartment;

(5) $10,000 for Defendants' conversion of 10 pieces of antique cabinet hardware;

(6) $7,500 in legal fees that she paid to an attorney to prosecute this case; and

(7) $1,984 in fees that she paid to an attorney “for negotiations with the Board of Directors.”

(Proposed Findings at 4–5.)

B. Procedural History

Plaintiff commenced this action by filing her Complaint in December 2008. (Dkt. 1.) When, after being served with process, Defendants failed to respond to the Complaint, the Court (Holwell, J.) entered a default judgment against them, as to liability, and referred the matter to this Court to determine the appropriate amount of damages and attorneys' fees, if any, to be awarded. (Dkt. 8.) This Court then issued a Scheduling Order for submissions for a damages inquest (Dkt 11), and, upon Plaintiff request for an extension of time, the Court issued an Amended Scheduling Order (Dkt. 11). In both the Court's original and amended Scheduling Orders, the Court expressly informed Plaintiff that she should submit proposed findings of fact and conclusions of law, which

should specifically tie the proposed damages figure(s) to the legal claim(s) on which liability has now been established; should demonstrate how [P]laintiff has arrived at the proposed damages figure(s); and should be supported by an affidavit...