Diamond v. Calaway
- Katherine Failla
- 1:18-cv-03238
- U.S. District Court · Southern District of New York
- 6
In Diamond v. Calaway, Judge Failla granted $934,822.20 in loan damages and costs but denied consequential damages.
Todd Diamond received $934,822.20 in compensatory damages and costs; Thomas Calaway and Lisa Calaway were subject to the award, while Diamond’s request for consequential damages was denied.
What happened
Diamond v. Calaway concerned Todd Diamond’s request for damages after Thomas Calaway and Lisa Calaway failed to repay two loans and failed to meet related obligations. The court had already entered a default judgment against the defendants after repeated discovery failures.
A magistrate judge recommended awarding the principal, contractual interest, prejudgment interest, and litigation costs, while denying damages tied to Nima’s failure to repay a separate loan. Neither side objected to that recommendation.
Judge Katherine Polk Failla adopted the recommendation in full. The court granted compensatory damages and costs totaling $934,822.20 and denied Diamond’s request for consequential damages, then closed the case.
The detailed version
- Diamond v. Calaway · No. 1:18-cv-03238
- Katherine Failla
- Mar. 13, 2020
Background
Todd Diamond invested in Nima, a scrap-metal company. He provided Nima with $650,000 and personally guaranteed a separate $500,000 loan to Nima. Thomas Calaway was introduced to Diamond as a potential Nima investor. Diamond loaned Calaway $250,000 under a Guaranteed Promissory Note. Calaway promised to repay the principal with 15% interest and to invest $700,000 in Nima after gaining access to trust assets.
Calaway did not repay the first loan or make the promised investment. Diamond later extended a second $250,000 loan to Calaway on similar terms. Calaway also defaulted on that loan and never invested in Nima. The opinion states that both loans were deposited into an account owned by Lisa Calaway, and that Diamond claimed the arrangement was part of a scheme by both defendants to defraud him.
Diamond sued in 2018 and asserted claims concerning the two loans. He also sought damages based on Nima’s default on its separate loan, which allegedly left Diamond liable as guarantor. After the defendants repeatedly failed to comply with discovery obligations, the court entered a default judgment against them on April 29, 2019. The court then referred the issue of damages to Magistrate Judge Katherine H. Parker for an inquest. The defendants did not respond to Diamond’s damages motion or appear at the inquest hearing.
Report and Recommendation
Judge Parker recommended awarding Diamond the $500,000 principal owed under both loans, $75,000 in contractual interest, prejudgment interest through the date of final judgment, and $3,243.55 in litigation costs. She recommended denying Diamond’s request for consequential damages arising from Nima’s default.
Neither party objected to the Report and Recommendation. The district court therefore reviewed it for clear error, meaning a clear mistake in the factual or legal reasoning.
Ruling
Judge Failla found no clear error and adopted the Report and Recommendation in its entirety. The court granted Diamond’s request for compensatory damages and costs as follows:
- $500,000 in principal under the two loans; - $75,000 in contractual interest; - $181,692.12 in prejudgment interest on the First Loan; - $174,886.53 in prejudgment interest on the Second Loan; and - $3,243.55 in costs.
The total award was $934,822.20. The court denied Diamond’s request for consequential damages. It directed the Clerk of Court to terminate the pending motions, adjourn the remaining dates, and close the case.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.