Lagemann v. Spence
- George Daniels
- 1:18-cv-12218
- U.S. District Court · Southern District of New York
- 8
In Lagemann v. Spence, Judge Daniels granted investors summary judgment, awarding $2,989,200 plus interest and costs but no attorneys’ fees.
The ruling directly affected the twenty-two cryptocurrency investors and Jeremy Spence. It awarded the investors damages, interest, and costs, while denying attorneys’ fees; the opinion also states that Jaime Cruz-Herrera had defaulted and that John Doe No. 1’s identity remained unknown.
What happened
Lagemann v. Spence involved twenty-two cryptocurrency investors who said Jeremy Spence persuaded them to transfer about $3 million in cryptocurrency by promising large returns, then withheld their funds and misrepresented their value.
The investors asked for summary judgment on nine causes of action. Spence, who was representing himself after his lawyer withdrew, filed no opposition. The court reviewed the evidence and concluded that the undisputed facts supported the investors on all nine causes of action, rather than granting judgment solely because Spence failed to respond.
Judge George B. Daniels adopted the magistrate judge’s recommendation, granted summary judgment against Spence, and ordered him to pay $2,989,200 in damages, 9% yearly interest from June 1, 2018, and costs. The court denied attorneys’ fees.
The detailed version
- Lagemann v. Spence · No. 1:18-cv-12218
- George Daniels
- Dec. 16, 2020
Background
Twenty-two cryptocurrency investors sued Jeremy Spence, Jaime Cruz-Herrera, and John Doe No. 1, also identified as Blackxantus. The investors alleged that Spence fraudulently induced them to invest cryptocurrency and then wrongfully withheld their funds. Cruz-Herrera had defaulted, and the identity of John Doe No. 1 remained unknown. Spence proceeded without a lawyer after his counsel withdrew.
The investors alleged that Spence contacted them through social media and online cryptocurrency-investing platforms in December 2017. They said he represented that he operated investment funds, used proprietary trading methods, and could produce profitable returns, including at least “20x” portfolio growth in the first year. They transferred cryptocurrency worth approximately $3 million into pooled trading accounts. After the investments lost value, Spence allegedly blamed hacks and market forces, provided fabricated account statements, made unauthorized payments to himself, and stopped all withdrawals in December 2018.
Motion and Review of the Magistrate Judge’s Report
The investors moved under Federal Rule of Civil Procedure 56 for summary judgment—a decision without a trial when there is no genuine dispute over a fact important to the outcome—on nine of the eleven causes of action in their amended complaint: fraudulent inducement, breach of fiduciary duty, fraudulent misrepresentation, negligent misrepresentation, rescission, unjust enrichment, conversion, conspiracy, and commodity pool fraud.
Magistrate Judge Robert W. Lehrburger issued a Report and Recommendation recommending that the motion be granted. Spence filed no opposition papers after being notified that the court would decide the motion based on the investors’ submissions. Because no party objected, Judge Daniels reviewed the report for clear error, found none, and adopted it in full.
Merits Ruling
The court emphasized that an unopposed summary-judgment motion is not automatically granted. The moving party must still show that the evidence establishes the claims as a matter of law. The court concluded that Magistrate Judge Lehrburger had examined the factual record—not merely the investors’ statement of undisputed facts—and correctly determined that the undisputed facts established all nine causes of action asserted against Spence.
Damages, Interest, Costs, and Attorneys’ Fees
The court adopted the recommended damages and costs from the Report and Recommendation. It ordered Spence to pay the investors a principal sum of $2,989,200. It also directed the Clerk to calculate prejudgment interest at 9% per year from June 1, 2018, through the date judgment was entered. The court stated that post-judgment interest was mandatory under federal law. The investors were awarded costs but not attorneys’ fees because they had not established a statutory or other basis for shifting those fees.
Disposition
Judge Daniels adopted the Report and Recommendation, granted summary judgment against Spence on the nine causes of action at issue, awarded $2,989,200 in damages and costs, directed calculation of prejudgment interest, and denied attorneys’ fees.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.