MediaCo Holding Inc. v. DCN Studios Inc.

Background

MediaCo Holding Inc. brought claims for breach of contract and unjust enrichment against DCN Studios Inc. concerning a sponsorship agreement. The court stated that subject-matter jurisdiction was based on diversity of citizenship. The agreement concerned DCN’s sponsorship of the Artist Lounge at MediaCo’s HOT 97 Summer Jam 2022 event.

MediaCo alleged that the parties entered the Sponsorship Agreement on April 29, 2022. DCN was to be the event’s “Title Sponsor of the Artist Lounge” and was to pay a $350,000 sponsorship fee in exchange for advertising rights and the ability to create and distribute marketing materials identifying DCN as an official sponsor. After MediaCo determined that it could not extend DCN credit, the parties agreed to a payment plan requiring four weekly installments beginning May 13, 2022.

Default and Liability

MediaCo served process on Charlotte Banice, who was designated by law to accept service for DCN’s registered agent. DCN did not answer or otherwise appear. The Clerk of Court issued a certificate of default, and DCN did not respond to MediaCo’s motion for default judgment.

For a default judgment, the well-pleaded allegations of the complaint are treated as admitted for purposes of liability. The court concluded that MediaCo’s allegations plausibly established that DCN failed to make any payment under the Sponsorship Agreement while using HOT 97’s name and logo in its advertising. The court also found that MediaCo performed its obligations by preparing the promised advertising deliverables, except for performance excused or prevented by DCN. The court therefore concluded that DCN was liable.

Damages, Interest, and Costs

MediaCo sought the unpaid $350,000 sponsorship fee, prejudgment interest at 9% annually from May 13, 2022, and $673.90 in costs. The court found a reasonable basis for these amounts in the Sponsorship Agreement, which required payment of the sponsorship fee, allowed interest on late payments at the highest amount permitted by law, and provided for reimbursement of collection costs.

The court found that MediaCo supported the costs with documentation showing a $402.00 Clerk’s fee and $271.90 in process-server fees. MediaCo did not seek attorney’s fees.

Disposition

The court concluded that MediaCo was entitled to a default judgment, damages, prejudgment interest, and costs. MediaCo’s motion for default judgment was GRANTED. The Clerk was directed to enter judgment for $379,584.86, consisting of $350,000 in damages, $28,910.96 in prejudgment interest for the period from May 13, 2022, to the date of judgment, and $673.90 in costs.