Pac. M. Int'l Corp. v. Raman Int'l Gems, Ltd.

• Decision Date: 07 August 2012
• Docket Number: No. 10 Civ. 9250 (DAB).,10 Civ. 9250 (DAB).
• Citation: 888 F.Supp.2d 385
• Parties: PACIFIC M. INTERNATIONAL CORP., Plaintiff, v. RAMAN INTERNATIONAL GEMS, LTD., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

888 F.Supp.2d 385

PACIFIC M. INTERNATIONAL CORP., Plaintiff,

v.RAMAN INTERNATIONAL GEMS, LTD., et al., Defendants.

No. 10 Civ. 9250 (DAB).

United States District Court, S.D. New York.

Aug. 7, 2012.

John David Lovi, Steptoe & Johnson, LLP, New York, NY, for Plaintiff.

Raman Yosupov, New York, NY, pro se.

ADOPTION OF REPORT AND RECOMMENDATION

DEBORAH A. BATTS, District Judge.

This matter is before the Court upon the July 20, 2012 Report and Recommendation of United States Magistrate Judge Henry B. Pitman (“Report”). Judge Pitman's Report recommends that (1) Plaintiff's Motion for a Default Judgment against Raman International be granted in part and denied in part; and (2) Plaintiff's Motion for Summary Judgment against Yosupov be Specifically, Judge Pitman's Report recommends that Default Judgment in the amount of $500,000.00 be entered against Raman International only as to Plaintiff's conversion claim and a Default Judgment entered only as to Plaintiff's breach of contract claim. Judge Pitman further recommends that Summary Judgment be granted against Defendant Yosupov only as to Plaintiff's conversion claim and that Judgment be entered against him in the amount of $602,760.42. (Report at 2.)

Pursuant to 28 U.S.C. § 636(b)(1)(C), “[w]ithin fourteen days after being served with a copy [of a Magistrate Judge's Report and Recommendation], any party may serve and file written objections to such proposed findings and recommendations ...” 28 U.S.C. § 636(b)(1)(C); see alsoFed.R.Civ.P. 72(b)(2). The district court may adopt those portions of the report to which no timely objection has been made, so long as there is no clear error on the face of the record. See28 U.S.C. § 636(b)(1)(A); Wilds v. United Parcel Serv., Inc., 262 F.Supp.2d 163, 169 (S.D.N.Y.2003). To date, no objections to said Report and Recommendation have been filed.

Having reviewed the Report and Recommendation and finding no clear error on the face of the record, it is hereby ORDERED AND ADJUDGED as follows:

1. The Report and Recommendation of United States Magistrate Judge Henry B. Pitman dated July 20, 2012 be and the same hereby is APPROVED, ADOPTED, and RATIFIED by the Court in its entirety;

2. Pursuant to Magistrate Judge Pitman's recommendation, Default Judgment in the amount of $500,000.00 is hereby entered against Raman International only as to Plaintiff's conversion claim; Default Judgment only is hereby entered as to Plaintiff's breach of contract claim; Summary Judgment is hereby granted against Defendant Yosupov only as to Plaintiff's conversion claim; and Judgment is hereby entered against Defendant Yosupov in the amount of $602,760.42.

SO ORDERED.

REPORT AND RECOMMENDATION

PITMAN, United States Magistrate Judge:

TO THE HONORABLE DEBORAH A. BATTS, United States District Judge,

I. Introduction

This is an action for breach of contract, conversion and fraud arising out of a putative agreement among plaintiff Pacific M. International Corp. (“Pacific Int'l”), defendant Raman International Gems, Ltd. (“Raman Int'l”) and defendant Raman Yosupov concerning a 12.24 carat diamond (the “Diamond”).

By notices of motion dated September 30, 2011 (Docket Items 12, 13 and 15), plaintiff moves for (1) the entry of a default judgment against Raman Int'l on its breach of contract, conversion and fraud claims and (2) summary judgment against Yosupov on the same claims. Raman Int'l has neither retained counsel in this action nor responded to the Complaint. Yosupov has filed an Answer to the Complaint (Docket Item 6), but has not submitted any opposition to plaintiff's motion for summary judgment.

For the reasons set forth below, I respectfully recommend that (1) plaintiff's motion for a default judgment against Raman Int'l be granted in part and denied in part and (2) plaintiff's motion for summary judgment against Yosupov be granted in part and denied in part. Specifically, I recommend that a default judgment in the amount of $500,000.00 be entered against Raman Int'l only as to plaintiff's conversion claim and a default entered only as to plaintiff's breach of contract claim. I further recommend that summary judgment be granted against Yosupov only as to plaintiff's conversion claim and that judgment be entered against him in the amount of $602,760.42.

II. FactsA. Plaintiff's Allegations

Plaintiff's complaint alleges the following facts. Plaintiff, a wholesale seller of diamonds, is a California corporation with its principal place of business located in Los Angeles, California (Complaint, dated Dec. 10, 2010 (“Compl.”) (Docket Item 1), ¶ 2). Plaintiff alleges that it owns the Diamond at issue in this action, i.e., a “12.24 ct. diamond (grade: I–VVS2) with GIA Report No. 14174122” (Compl. ¶ 7).

Yosupov, a New York resident, is the owner and principal of Raman Int'l, a New York company with its principal place of business also located in New York, New York (Compl. ¶¶ 3–4). Raman Int'l is a wholesale and retail seller of diamonds and jewelry (Compl. ¶ 3).

In July 2009, Raman Int'l and Yosupov (collectively, the “Defendants”) allegedly contacted plaintiff about the Diamond (Compl. ¶ 8). The Defendants informed plaintiff that they had a customer who was interested in purchasing the Diamond; however, the customer wanted to view the Diamond in New York (Compl. ¶ 8). On or about July 29, 2009, in order to accommodate this request, plaintiff shipped the Diamond to the Defendants “pursuant to a Memorandum that memorialized the transaction, described the Diamond, and indicated its value at $525,320.00” (Compl. ¶ 9). The Memorandum also “made clear that the Diamond remained the property of [plaintiff] and ‘shall be returned on demand in full in its original form’ ” (Compl. ¶ 10). Plaintiff alleges that it is “quite common” within the diamond trade for a dealer to consign a diamond to another dealer in this manner and that the Defendants “accepted and agreed to the terms of the Memorandum” (Compl. ¶¶ 9–10).

Finally, plaintiff alleges that (1) despite repeated demands, the Defendants have not returned the Diamond and (2) the Defendants' statements in July 2009 that they (a) “wanted the Diamond to show to a Russian diplomat customer who was interested in purchasing the Diamond” and (b) “were willing and able to return the Diamond to [plaintiff] immediately upon demand” were false and misleading and made for the purpose of inducing plaintiff to lend the Diamond to the Defendants (Compl. ¶¶ 11, 24–25).

Based on the above facts, plaintiff seeks: (1) an Order of the Court directing the Defendants to immediately return the Diamond to plaintiff; (2) compensatory damages in an amount to be determined; (3) punitive damages in the amount of $500,000.00 and (4) legal fees and costs incurred in connection with this action (Compl. at 5).

B. Facts Plaintiff Claims Are Established by Discovery

Plaintiff has submitted a statement pursuant to Local Civil Rule 56.1 and contends that the facts contained therein have been established either through discovery or by the declaration that it has submitted in connection with the pending motion for summary judgment (Docket Items 16 and 17). However, because both plaintiff's Rule 56.1 statement and corresponding declaration primarily set forth an abbreviated version of the facts alleged in the Complaint, I do not recite them again here. Instead, I set forth below only the additional material facts contained in these documents.

First, plaintiff contends that Yosupov concedes the following facts in his Answer: (1) he received the Diamond from plaintiff; (2) plaintiff requested that he return the Diamond and (3) he has not returned the Diamond (Declaration of Issac Musighi, dated Sept. 30, 2011 (“Musighi Decl.”) (Docket Item 17), ¶ 7, citing Ex. C to Musighi Decl.).

Second, plaintiff contends that, during a pre-trial conference which I held on March 24, 2011 (the “March 24 Conference”), “Yosupov told [this] Court that he was responsible for the diamond, but that he had given it to a customer who lives outside the United States and has not been able to get [it] back ....” ¹ (Musighi Decl. ¶ 8).

Finally, plaintiff contends that “[t]he agreed upon value of the diamond is $43,000 per carat weight, for a total value of $526,320.00” ² (Musighi Decl. ¶ 11).

C. Relevant Procedural History

Plaintiff filed its summary judgment motion on September 30, 2011 and served Yosupov with the motion and the notice to pro se litigants required by Local Civil Rule 56.2. In pertinent part, this notice informed Yosupov that:

THE CLAIMS ASSERTED IN THE PLAINTIFF'S COMPLAINT MAY BE GRANTED WITHOUT A TRIAL IF YOU DO NOT RESPOND TO THIS MOTION by filing sworn affidavits and other papers as required by Rule 56(e) of the Federal Rules of Civil Procedure and by Local Civil Rule 56.1.

* * *

In short, Rule 56 provides that you MAY NOT oppose summary judgment simply by relying upon the allegations in your answer. Rather, you must submit evidence, such as witness statements or documents, countering the facts asserted by the plaintiff and raising material issues of fact for trial.

* * *

If you do not respond to the motion for summary judgment on time with affidavits or documentary evidence contradicting the material facts asserted by the plaintiff, the court may accept plaintiff's factual allegations as true. Judgment may then be entered into plaintiff's favor without trial.

(Ex. A to Docket Item 15). Despite having been advised of what he must do to respond to plaintiff's motion, Yosupov has not submitted any opposition papers. Accordingly, I consider plaintiff's motion for summary judgment to be ripe for decision.

III. AnalysisA. Default Judgment Standards

The Court of Appeals for the Second Circuit succinctly set forth the procedural rules applicable to the entry of a default judgment in City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128–29 (2d Cir.2011):

“Federal Rule of Civil Procedure 55 is the basic procedure to be followed when there is a default in...