Sicom S.P.A. v. TRS Inc.

• Decision Date: 10 March 2016
• Docket Number: 14–CV–02085 (BCM)
• Citation: 168 F.Supp.3d 698
• Parties: Sicom S.P.A., Plaintiff, v. TRS Inc., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

168 F.Supp.3d 698

Sicom S.P.A., Plaintiff,

v.TRS Inc., et al., Defendants.

14–CV–02085 (BCM)

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

Signed March 10, 2016

Enrico A. Pellegrini, Pellegrini & Mendoza LLP, New York, NY, for Plaintiff.

Shawn Anthony Turck, Popescu, Iosepovici, LLP, New York, NY, for Defendants.

MEMORANDUM AND ORDER

BARBARA MOSES, United States Magistrate Judge

INTRODUCTION

Plaintiff Sicom S.P.A. (Sicom) filed this breach of contract action against defendants TRS, Inc. (TRS) and Ted S. Sobel (Sobel) on March 25, 2014. Sicom now moves for partial summary judgment on the Second and Fourth Claims of the Amended Complaint. The parties have consented to this Court's jurisdiction for all purposes in accordance with 28 U.S.C. § 636(c). For the reasons set forth below, plaintiff s motion is GRANTED IN PART, as to liability, and DENIED IN PART, as to damages.

BACKGROUND

I. Factual Background

The factual background of this dispute is set forth in plaintiff s statement of undisputed material facts, filed pursuant to Local Civil Rule 56.1 (Pl.'s 56.1 Stmt.) (Dkt. No. 51), defendants' response (Defs.' 56.1 Stmt.) (Dkt. No. 57), and the parties' declarations and attached exhibits submitted in support of and in opposition to the motion for summary judgment. Because this is a motion for summary judgment, the Court makes all inferences and views all evidence in the light most favorable to the non-moving parties. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). The following facts are undisputed, unless otherwise noted.

a. The 2012 Lawsuit and Settlement

Plaintiff Sicom is a corporation organized under the laws of Italy, with offices in Cherasco, Italy. Sicom sells goods including shipping containers. Pl.'s 56.1 Stmt. ¶¶ 1, 5. Defendant TRS is a corporation organized under the laws of New Jersey, with offices in Avenel, New Jersey. Pl.'s 56.1 Stmt. ¶ 2. Defendant Sobel is the President of TRS and resides in Woodcliff Lake, New Jersey. Pl.'s 56.1 Stmt. ¶ 3; Sobel Decl. ¶ 2 (Dkt. No. 53).

In 2012, Sicom filed an action against TRS in the United States District Court for the Southern District of New York, alleging that TRS agreed to purchase 670 ISO Dry Box shipping containers from Sicom, but after receiving the containers failed to pay for them in full. Pl.'s 56.1 Stmt. ¶ 5. The parties ultimately settled that lawsuit by means of several agreements executed on May 14, 2012, including a Settlement Agreement, a Security Agreement, and an “Agreement Extending Time for Payment Third Party Guarantee” (Guarantee), which was signed by Sicom, TRS, and Sobel. Pl.'s 56.1 Stmt. ¶¶ 6–12; Sobel Dep. 11:9–14 (Dkt. No. 48–4). On March 6, 2013, the Hon. George B. Daniels so-ordered a stipulation of dismissal with prejudice pursuant to Fed.R.Civ.P. 41(a). Pl.'s 56.1 Stmt. ¶ 4; Pellegrini Decl. Ex. 15 (Dkt. No. 48–16); Stip. of Sett. & Order of Dismissal, Sicom S.P.A. v. TRS, Inc., No. 12 Civ. 5023 (S.D.N.Y. Mar. 6, 2013).

b. The 2012 Settlement Agreement

The Settlement Agreement required TRS to pay Sicom 44,850.00 by May 25, 2012, and thereafter to pay a total of $2,763,202.64 in specified monthly installments, due on the first business day of each month, from July 2012 until the full amount was paid in 2019. Sett. Agr. ¶¶ 2.1, 2.2, 2.4 (Dkt. No. 48–5); Pl.'s 56.1 Stmt. ¶ 14; Defs.' 56.1 Stmt. ¶ 14.¹

“Fail[ure] to pay in full when due any Monthly Payment” would constitute an event of default. Sett. Agr. ¶¶ 2.4, 3.1(b). Upon occurrence of an event of default, Sicom was required to provide notice to TRS of the default. Id. ¶ 3.1(f). If TRS failed to cure the default within five days after notice, the Settlement Agreement allowed Sicom a number of remedies, including acceleration of the Amount of Unit payments:

Upon occurrence of any Event of Default, Plaintiff may declare any payment due hereunder, including all of the Amount of Unit Payments and all of the [44,850.00], to be immediately due and payable, whereupon the same shall become and be immediately due and payable, without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which are expressly waived by the Defendant.

Id. ¶ 4.1(b).

The Settlement Agreement also allowed Sicom to “submit a certification of such default to the United States District Court, Southern District of New York, setting forth TRS's failure to cure the [default], together with a Judgment by Consent in favor of plaintiff .... for all amounts due [under the Settlement Agreement], less any payments made by [TRS].” The Judgment by Consent would become effective “upon entry by the court.” Id. ¶ 4.1(a). Pursuant to this provision, the presidents of Sicom and TRS signed a “Consent to Judgment,” and the parties' attorneys signed a “Judgment by Consent,” with the date and the dollar amount of the judgment left blank. Pl.'s 56.1 Stmt. ¶ 9; Pellegrini Deck Exs. 7–8 (Dkt. Nos. 48–8, 48–9). These documents, which bore the docket number of the 2012 action, were intended to “allow Sicom to obtain judgment quickly in the event of a default.” Sobel Dep. 20:2–5.

c. The 2012 Guarantee

In the Guarantee, signed at the same time as the other settlement documents, Pl.'s 56.1 Stmt. ¶ 8, Sobel personally “guarantee[d] to [Sicom] ... the prompt, punctual, and full payment on demand, of the Indebtedness, in the event that TRS fail[ed] to pay in full and when due any amount owed ... or other Event of Default, whether at maturity, by acceleration, or otherwise ...” Guar. ¶ 3.1 (Dkt. No. 48–7).² Sobel would “not have the right to require that [Sicom] ... first resort or proceed against [TRS] or any collateral security .... and nothing except cash payment in full of the Indebtedness [would] release [Sobel] from liability.” Id. ¶ 3.4. The Guarantee also stated, “In the event payments due under this Agreement are not punctually and fully made upon demand, then the undersigned shall pay all reasonable costs and attorney's fees necessary for collection, and enforcement of this guaranty.” Id. ¶ 3.5.

d. Breaches of the Settlement Agreement and Third Party Guarantee

It is undisputed that TRS failed to make its monthly payments in accordance with the schedule laid out in the Settlement Agreement. Sobel, the President of TRS, acknowledges that during the course of the payment period “TRS was unable to make installment payments as they became due.” Sobel Decl. ¶ 6. By letter dated February 4, 2014, plaintiff notified Sobel and TRS that an event of default had occurred, in that TRS failed to pay the $30,000 due on January 2, 2014, or at any time during the month that followed. Pellegrini Decl. Ex. 9 (Dkt. No. 48–10). Sicom then invoked the Settlement Agreement's acceleration clause and “declared that all of the Amount of Unit Payments ... were immediately due and payable.” Sobel Decl. ¶ 6.

It is likewise undisputed that Sobel himself did not make any payments to Sicom, whether before or after the Event of Default. Pl.'s 56.1 Stmt. ¶ 23; Defs.' 56.1 Stmt. ¶ 23. Sobel confirmed, at deposition, that despite the Guarantee he did not make any payments to Sicom as guarantor. Sobel Dep. 31:12–14.

II. Procedural Background

Faced with nonpayment by both TRS and Sobel, Sicom attempted to utilize the previously-executed consent judgment forms, but on March 13, 2014, Judge Daniels denied plaintiff s motion, filed in the 2012 case, seeking entry of consent judgment and related relief. Order, Sicom S.P.A. v. TRS, Inc., No. 12 Civ. 5023 (S.D.N.Y. Mar. 13, 2014). Sicom then filed this separate action against TRS and Sobel.

Sicom's Amended Complaint, filed on April 17, 2014 (Dkt. No. 9), sets out four claims: (1) against TRS, for a declaratory judgment that Sicom is entitled to entry of a consent judgment; (2) against TRS, for breach of the payment provisions of the Settlement Agreement; (3) against TRS, for breach of separate provisions of the Settlement Agreement and Security Agreement prohibiting it from selling or transferring the ISO Dry Box Containers without Sicom's consent; and (4) against Sobel, for breach of the Settlement Agreement and the Guarantee.

Shortly after Sicom filed the Amended Complaint, Sobel, as president of TRS, and Roberto Marengo, the president of Sicom, signed a second “Consent to Judgment,” this time on the caption of the current action. Sobel Dep. 12:7–23; Pellegrini Deck Ex. 14 (Dkt. No. 48–15). Similarly, counsel for defendants signed a new “Judgment by Consent,” also on the caption of the current action, but with the dollar amount of the judgment still left blank. Pellegrini Decl. Ex. 13 (Dkt. No. 48–14). However, it does not appear that counsel for Sicom signed the second Judgment by Consent. Nor does plaintiff address these documents in its 56.1 Statement.

On July 6, 2015, after the close of discovery, Sicom moved for summary judgment. A party moving for summary judgment should identify “each claim or defense—or the part of each claim or defense—on which summary judgment is sought.” Fed.R.Civ.P. 56(a). In this case, Sicom's notice of motion does not clearly identify on which claims, or parts of claims, it seeks summary judgment. However, the Court is able to glean—from a footnote in Sicom's memorandum of law— that the motion seeks partial summary judgment on two claims: breach of the payment provisions of the Settlement Agreement by TRS, and breach of the Guarantee by Sobel.³ Sicom does not ask for judgment regarding the provisions prohibiting the sale of the ISO Dry Box Containers, and does not even mention its request for a declaratory judgment.⁴ Nor has plaintiff moved for entry of final judgment under Fed.R.Civ.P. 54(b).⁵

In support of its motion, Sicom submitted, among other things, a declaration by its president, Marengo (First Marengo Declaration) (Dkt. No. 49), executed in Cherasco, Italy and written in English. The declaration concluded: “This declaration has been translated into the Italian language for me. I declare under penalty of perjury that the foregoing is...