Parallax Health Sciences, Inc. v. EMA Financial, LLC
- Lorna Schofield
- 1:20-cv-02375-LGS-RWL
- U.S. District Court · Southern District of New York
- 4
In Parallax Health Sciences v. EMA Financial, Judge Schofield adopted damages awards totaling specified amounts after Parallax’s default.
EMA Financial, LLC received damages, interest, attorneys’ fees, and costs from Parallax Health Sciences, Inc. following the default judgment on EMA’s counterclaims.
What happened
Parallax Health Sciences, Inc. v. EMA Financial, LLC followed Parallax’s failure to retain new counsel and the entry of a default judgment against it on EMA’s counterclaims. The court had already dismissed Parallax’s amended complaint with prejudice and denied Parallax’s motion to vacate the default judgment.
A magistrate judge recommended awarding EMA damages for notes, conversion notices, and warrants, plus interest, attorneys’ fees, and costs. No party timely objected to that recommendation.
Judge Lorna G. Schofield found no clear error and adopted the damages recommendation in full. The court awarded EMA $42,275.10 on the notes, $570,874.38 on the conversion notices, $175,263.20 for the warrants, specified interest, $41,692.21 in attorneys’ fees, and $717.74 in costs.
The detailed version
- Parallax Health Sciences, Inc. v. EMA Financial, LLC · No. 1:20-cv-02375-LGS-RWL
- Lorna Schofield
- June 30, 2022
Background
Parallax moved for preliminary injunctive relief in March 2020, but the court denied that motion. Parallax then filed an amended complaint, and EMA filed an answer denying Parallax’s claims, asserting affirmative defenses, and bringing counterclaims. Parallax answered the counterclaims.
Parallax’s counsel later obtained permission to withdraw, and Parallax did not retain new counsel. EMA then sought a default. In an August 10, 2021, default judgment order, the court entered judgment for EMA on its counterclaims and dismissed Parallax’s amended complaint with prejudice. The court referred EMA’s request for damages to Magistrate Judge Robert W. Lehrburger for a damages hearing and recommendation.
Parallax later moved to vacate the default judgment. Judge Lehrburger recommended denying that motion while allowing Parallax to contest the amount of damages. The district court adopted that recommendation as modified and denied the motion to vacate.
Damages recommendation and review
Judge Lehrburger’s June 13, 2022, damages report recommended that EMA receive:
- $42,275.10 in damages on the notes; - 24% annual interest on that amount from February 28, 2020, through the date of judgment; - $570,874.38 in damages on the conversion notices; - 24% annual interest on that amount from March 31, 2020, through the date of judgment; - $175,263.20 in damages relating to the warrants; - interest on the warrant damages at the rate provided by Nevada Revised Statutes § 99.040(1); - $41,692.21 in attorneys’ fees; and - $717.74 in costs.
The deadline for objections was fourteen days after service of the report. No timely objections were filed. Because there were no specific objections, the district court reviewed the report for clear error, meaning an obvious mistake apparent from the record. The court found no clear error concerning the recommendation to award damages.
Ruling
Judge Lorna G. Schofield adopted the damages report in full. The court awarded EMA all of the amounts and interest described above. This order resolved the amount of damages following the earlier default judgment; it did not revisit the denial of Parallax’s motion to vacate that judgment.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.