L.E.K. Consulting LLC v. Amicus Capital Partners, LLC
- Katherine Failla
- 1:19-cv-10648
- U.S. District Court · Southern District of New York
- 4
In L.E.K. Consulting v. Amicus Capital, Judge Failla awarded $475,000 under the settlement agreement, plus 18% annual interest, after Defendant’s default.
L.E.K. Consulting LLC received an award of $475,000 plus 18% annual interest against Amicus Capital Partners, LLC following Amicus’s default; the order also addressed potential attorney’s fees and enforcement costs.
What happened
L.E.K. Consulting LLC sued Amicus Capital Partners, LLC, and Amicus agreed that an entry of default was warranted. The parties disagreed about whether damages should be based on their original agreement or a later settlement agreement.
Judge Failla held that the settlement agreement replaced the original contract. Because it released claims from the original dispute and specified a remedy for nonpayment, the court used the settlement’s amount to calculate the default judgment. The court also declined to cancel the settlement because L.E.K. had not shown that a legal remedy was inadequate.
Judge Failla ordered Amicus to pay $475,000 in damages, with interest accruing at 18% per year from September 15, 2020. The court also set an October 14, 2020 deadline for any motion by L.E.K. seeking attorney’s fees and costs related to enforcing the judgment.
The detailed version
- L.E.K. Consulting LLC v. Amicus Capital Partners, LLC · No. 1:19-cv-10648
- Katherine Failla
- Sept. 15, 2020
Background
The court held a hearing on August 14, 2020, concerning Amicus Capital Partners, LLC’s default. At that hearing, Amicus agreed that an entry of default was warranted. The parties nevertheless disputed how to calculate the resulting default judgment: L.E.K. Consulting LLC argued about the amount based on the agreement underlying its complaint, while the parties addressed whether the later settlement agreement controlled.
The court ordered letter briefs on that issue. The parties submitted them on September 4, 2020.
Settlement Agreement
The court treated the controlling legal question as whether the settlement agreement was an executory accord or a substitute agreement. An executory accord would leave L.E.K.’s original claims in place, while a substitute agreement would mean that L.E.K. could seek relief only under the settlement agreement. The court explained that the parties’ intent ordinarily presents a factual question, but that a court may decide the issue as a matter of law when the document clearly expresses that intent.
The court found that the settlement agreement was intended to replace the original contract. It provided a complete release of claims arising from the original dispute and specified a remedy if Amicus failed to make the required payment. The agreement did not say that L.E.K.’s original claims would remain actionable while payment was pending. Although it stated that L.E.K. would have the lawsuit dismissed after receiving payment, the court found that this did not preserve the original claims before payment.
Rescission
The court also declined to grant L.E.K. the equitable remedy of rescission, which would cancel the settlement agreement. The court held that L.E.K. had not shown that it lacked an adequate legal remedy. The fact that the settlement amount was lower than the amount L.E.K. might have received under the original contract did not make the legal remedy inadequate.
Disposition
The court ordered that L.E.K. be awarded $475,000 in damages. It further ordered that interest accrue on that amount at 18% per year beginning on the date of the order. The court also ordered that any motion by L.E.K. for attorney’s fees and costs related to enforcement of the judgment be filed by October 14, 2020, with any opposition due by October 28, 2020.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.