Asesoral Business Partners, LLC v. Seatech Worldwide Corporation

Background

Asesoral Business Partners, LLC, a food broker, sued Seatech Worldwide Corporation, Alliance Fisheries, Inc., and Jesus Delgado. The dispute arose from a settlement agreement under which Seatech was to deliver three containers of products, make wire-transfer payments totaling $123,908.00, and provide monthly accounting and payments concerning the Van Ecuador brand. Asesoral alleged that Seatech failed to perform those obligations.

Asesoral also alleged that it continued selling goods to Seatech on credit, that Seatech accepted the goods and did not pay invoices totaling an additional $185,053 plus interest, and that Alliance Fisheries and Delgado issued a $28,000 check that was returned for insufficient funds. Asesoral asserted ten claims, including breach of contract, goods sold and delivered, account stated, dishonored check, unauthorized signature, fraud, unjust enrichment, breach of the implied covenant of good faith and fair dealing, promissory estoppel, and accounting.

The defendants did not respond to the amended complaint or appear in the action. The court had already entered defaults, and Asesoral moved for a default judgment. A default judgment is a judgment entered against a party that failed to defend, but the court still had to determine whether the pleaded facts established legal liability and whether the requested relief was supported.

Liability

The court granted default judgment against Seatech on Counts 1, 2, and 3. Count 1 alleged breach of the settlement agreement. The court found that Asesoral adequately pleaded a valid agreement, its own performance, Seatech’s breach, and resulting damages. Counts 2 and 3 alleged goods sold and delivered and account stated based on unpaid invoices. The court found that Asesoral adequately pleaded and supported those claims through allegations and invoices showing that Seatech ordered or accepted goods, owed payment, and did not timely object to the accounts.

The court did not grant default judgment against Delgado on Counts 1 through 3. It found that the amended complaint did not establish that Delgado personally became a party to the settlement agreement or otherwise had personal contractual liability.

The court denied default judgment on Count 4, involving the dishonored check under New York General Obligations Law § 11-104. Although Asesoral alleged that it sent two letters demanding payment, it did not allege that the second demand was sent on or after the fifteenth day after receipt of the first demand, as the statute required.

The court denied default judgment on Count 5, which sought to hold Delgado personally liable under Uniform Commercial Code § 3-403. Asesoral conceded that Delgado was an authorized representative of Alliance Fisheries, and the check identified Alliance Fisheries. The court also found that Asesoral had not adequately developed or supported its argument that Delgado’s signature was unauthorized.

The court denied default judgment on Count 6, alleging fraud and fraudulent inducement. Applying the heightened pleading requirement for fraud, the court found that Asesoral had not identified the specific statements, their speaker, or sufficiently specific information about when and where they were made.

The court denied default judgment on Counts 7, 8, and 9 as duplicative. Count 7, unjust enrichment, duplicated the contract claims because the court found the contracts valid. Count 8, breach of the implied covenant of good faith and fair dealing, relied on the same conduct as the contract claims. Count 9, promissory estoppel, likewise rested on the same alleged promises and conduct as the breach-of-contract, goods-sold-and-delivered, and account-stated claims.

The court granted default judgment against Seatech on Count 10, the accounting claim. It found that the alleged transfer of a 30% interest in the Van Ecuador brand provided a sufficient basis to require Seatech to account for revenues associated with that brand so Asesoral could determine what it was owed under the settlement agreement.

Damages and Other Relief

The court stated that allegations about damages are not automatically accepted as true after a default. Asesoral therefore had to support the amount of damages with admissible evidence. The court found that the settlement agreement, invoices, trademark-assignment document, check, and bank notice submitted with the motion had not otherwise been authenticated sufficiently.

By separate order, the court referred the matter to Magistrate Judge Sarah L. Cave for an inquest to determine damages. The court denied Asesoral’s request for punitive damages because the request was undeveloped and unsupported by authority. It also denied attorney’s costs and fees because Asesoral identified no applicable statute or other basis for departing from the general rule that each side ordinarily pays its own fees.

Disposition

The court’s conclusion states that Asesoral’s motion for default judgment was granted as to Seatech on Counts 1, 2, 3, and 10, and denied as to the rest. The order resolved the default-judgment motion and sent the damages issue for an inquest.