LG Capital Funding, LLC v. Blue Sphere Corp.
- P. Castel
- 1:20-cv-04882
- U.S. District Court · Southern District of New York
- 4
In LG Capital Funding v. Blue Sphere, Judge Castel entered default judgment for $128,160.77, including damages, interest, attorneys’ fees, and expenses.
LG Capital Funding, LLC received a default judgment against Blue Sphere Corp. for $128,160.77. Blue Sphere was held liable for the note-related damages, attorneys’ fees, and expenses.
What happened
LG Capital Funding, LLC v. Blue Sphere Corp. involved a $78,750 convertible note that LG said Blue Sphere failed to repay after default. Blue Sphere did not respond to the lawsuit.
The court accepted LG’s well-supported allegations for purposes of liability and awarded $120,112.97 in damages, including principal, regular interest, and default interest. It also awarded $7,550 in attorneys’ fees and $497.80 in expenses.
Judge Castel granted LG’s motion for default judgment and directed the Clerk to enter judgment for LG totaling $128,160.77.
The detailed version
- LG Capital Funding, LLC v. Blue Sphere Corp. · No. 1:20-cv-04882
- P. Castel
- Dec. 8, 2020
Background
LG Capital Funding, LLC sued Blue Sphere Corp. for breach of contract, unjust enrichment, and contractual attorneys’ fees and costs. LG alleged that Blue Sphere issued a $78,750 convertible redeemable note bearing 12% annual interest, with a maturity date of May 11, 2019. LG alleged that it sent the $78,750 to Blue Sphere and its counsel, but Blue Sphere failed to pay the note at maturity and failed to pay the outstanding principal and interest.
LG alleged that an event of default occurred when Blue Sphere filed to delist its common stock and that the note required default interest at 24% annually. The opinion states in one place that the delisting-related default occurred on April 1, 2019, but later states that default interest began on April 1, 2020. The opinion does not explain this discrepancy.
Blue Sphere was personally served through its registered agent on June 30, 2020. It did not answer or appear, and the Clerk issued a Certificate of Default on September 9, 2020. The court’s jurisdiction was based on diversity of citizenship as alleged in the complaint.
Liability and damages
The court granted default judgment as to liability. When a defendant defaults, well-pleaded allegations in the complaint are treated as admitted for purposes of liability. The court concluded that LG adequately alleged that the parties agreed to the note, LG performed by disbursing the funds, events of default occurred, and Blue Sphere failed to pay.
The court also granted default judgment as to damages. It found that the damages could be calculated from the note and the complaint, so a separate damages hearing was unnecessary. As of October 30, 2020, LG calculated its damages as follows:
- $78,750 in principal; - $8,284.93 in regular interest at 12% annually; and - $33,078.04 in default interest at 24% annually.
The damages total was $120,112.97.
Attorneys’ fees, expenses, and disposition
The note required Blue Sphere to pay reasonable attorneys’ fees and expenses incurred in collecting amounts due and enforcing the note if LG prevailed. The court found that the parties expressly agreed to this reimbursement. It also found reasonable LG’s request for $7,550 in attorneys’ fees, based on 30.2 hours at $250 per hour, and $497.80 in expenses, consisting of a $400 filing fee and $97.80 for service of process.
Judge P. Castel granted the motion for entry of default judgment. The Clerk was directed to enter judgment for LG in the total amount of $128,160.77, consisting of $120,112.97 in damages, $7,550 in attorneys’ fees, and $497.80 in expenses.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.