Edelman Arts, Inc. v. Spoelstra
- John Koeltl
- 1:17-cv-04789
- U.S. District Court · Southern District of New York
- 4
In Edelman Arts v. Spoelstra, Judge Netburn denied Edelman Arts’s motion to amend a damages recommendation after defendants’ default.
Edelman Arts, Inc.’s motion to reopen the damages inquiry and amend the Report and Recommendation was denied. The opinion states that Judge John G. Koeltl would separately review the plaintiff’s timely objections to that recommendation.
What happened
In Edelman Arts, Inc. v. Spoelstra, defendants had defaulted, and the court conducted an inquiry into damages. Magistrate Judge Sarah Netburn recommended that the plaintiff had not shown it was entitled to the damages it requested. Edelman Arts objected to that recommendation and asked the court to reopen the damages inquiry and change its conclusions.
Edelman Arts argued that the damages calculation should have put it in the same financial position it would have occupied if the contract had been completed. It resubmitted much of its earlier evidence and offered new evidence about industry commission practices. The court concluded that the plaintiff had already received two opportunities to support its damages calculation and had not shown the damages with the required reasonable certainty.
Magistrate Judge Sarah Netburn denied the motion to amend. She also concluded that the plaintiff had not identified overlooked controlling law or previously submitted information that could change the recommendation. The court directed the Clerk to terminate the motion; the opinion states that Judge John G. Koeltl would separately review the plaintiff’s objections to the recommendation.
The detailed version
- Edelman Arts, Inc. v. Spoelstra · No. 1:17-cv-04789
- John Koeltl
- Mar. 13, 2020
Background
After the defendants’ default, Magistrate Judge Sarah Netburn issued a Report and Recommendation concerning damages. A Report and Recommendation is a magistrate judge’s proposed decision for review by the assigned district judge. Netburn concluded that Edelman Arts, Inc. had not established its entitlement to the damages it sought. The plaintiff filed objections with Judge John G. Koeltl and moved to reopen the damages inquiry and amend the conclusions in the Report and Recommendation.
Plaintiff’s arguments
The plaintiff argued that the damages calculation should have placed it in the economic position it would have occupied had the contract been performed. It resubmitted substantially the same evidence used in its original damages briefing, including signed invoices and an amended affidavit from its owner. It also submitted new evidence concerning purported industry standards for commissions on art sales by brokers.
The court had previously given the plaintiff two opportunities to support its damages calculations. It reviewed the plaintiff’s proposed findings and conclusions and requested additional briefing concerning damages based on potential commissions and the difference between the asking price and sale price of one artwork. The earlier Report and Recommendation concluded that the plaintiff had not proved its damages, including alleged lost commissions, with reasonable certainty.
Legal standard and ruling
The court explained that Rule 52(b) permits a court to amend factual findings or make additional findings after a judgment, but a Report and Recommendation is not a judgment. The court therefore stated that the plaintiff had not shown Rule 52(b) to be the proper procedure for challenging the recommendation. The court also applied the strict standard used for motions to amend findings, motions to alter or amend a judgment, and motions for reconsideration. Under that standard, the moving party must identify controlling decisions or information that the court overlooked and that could reasonably change its conclusion. A reconsideration motion may not be used to present new theories or evidence after the court’s ruling.
Judge Sarah Netburn concluded that the plaintiff had not met that standard. The plaintiff’s new submissions improperly attempted to add facts, issues, and arguments that had not previously been presented, particularly concerning commissions. The court also found no overlooked controlling law or previously submitted information that could change its conclusions concerning either the plaintiff’s legal basis for damages related to the piece sold by Artemis USA, LLC, or its claim for $7,585,000 rather than $5,185,000.
The motion to amend was DENIED. The Clerk of Court was directed to terminate the motion at ECF No. 98. The opinion states that, because the plaintiff timely objected to the Report and Recommendation, Judge Koeltl would review the properly objected-to portions and could accept, reject, or modify the recommended disposition, receive additional evidence, or return the matter to Magistrate Judge Netburn for further instructions.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.