Bon Worth, Inc. v. Runway 7 Fashions, Inc.
- Paul Engelmayer
- 1:17-cv-09712-PAE-BCM
- U.S. District Court · Southern District of New York
- 5
In Bon Worth v. Runway 7, Judge Engelmayer awarded $170,852.90 plus interest on one counterclaim and dismissed another.
Runway 7 Fashions, Inc. received an award of $170,852.90 plus post-judgment interest on its first counterclaim, while its second counterclaim was dismissed. Bon Worth, Inc. was subject to the judgment and the dismissal of its claims and defenses.
What happened
Bon Worth, Inc. sued Runway 7 Fashions, Inc. over a clothing-purchase agreement, and Runway brought two counterclaims seeking payment for delivered goods and damages for goods it did not deliver. After Bon Worth lost its legal representation and did not obtain replacement counsel, the court entered a default judgment against it on Runway’s counterclaims as to liability.
A magistrate judge then reviewed the damages. She recommended awarding Runway $170,852.90 for the delivered goods but dismissing the counterclaim concerning the undelivered goods because Runway had not adequately shown that it made the required demand before suspending performance. Neither party objected.
Judge Engelmayer adopted the recommendation in full. The court awarded Runway $170,852.90 plus post-judgment interest on the first counterclaim, dismissed the second counterclaim, corrected Bon Worth’s name in the judgment and caption, and closed the case.
The detailed version
- Bon Worth, Inc. v. Runway 7 Fashions, Inc. · No. 1:17-cv-09712-PAE-BCM
- Paul Engelmayer
- July 10, 2023
Background
Bon Worth, Inc. brought a breach-of-contract claim against Runway 7 Fashions, Inc., alleging that Runway failed to timely deliver acceptable and conforming garments under a purchasing agreement. Runway asserted two counterclaims against Bon Worth. The first sought payment for goods that Runway delivered and Bon Worth accepted. The second sought damages for goods Runway manufactured but did not deliver, based on Runway’s position that it was entitled to suspend delivery after Bon Worth repudiated the agreement.
The court initially granted Runway summary judgment on liability for the first counterclaim but found factual disputes concerning Bon Worth’s claim and the second counterclaim. Later, after Bon Worth’s bankruptcy case and the resulting stay ended, Bon Worth did not obtain replacement counsel after its lawyers withdrew. The court then dismissed Bon Worth’s claims and defenses and entered a default judgment for Runway on liability for both counterclaims. A damages inquiry followed.
Magistrate Judge’s Report and Recommendation
Magistrate Judge Barbara Moses recommended awarding Runway $170,852.90 on the first counterclaim, plus post-judgment interest. She recommended dismissing the second counterclaim rather than awarding damages because Runway had not adequately pleaded or shown that it made the required demand before suspending performance under the relevant purchase agreements. As a result, Runway had not established that its refusal to deliver the goods was justified or that Bon Worth had repudiated the agreement.
No party objected to the Report and Recommendation. The district court therefore reviewed it for clear error, meaning an obvious error in the record.
Ruling
Judge Engelmayer adopted the Report and Recommendation in its entirety. The court awarded Runway $170,852.90, together with post-judgment interest, on the first counterclaim. The court dismissed Runway’s second counterclaim. It also directed the Clerk to correct the spelling of “Bon Worth, Inc.” in the judgment and case caption, enter judgment for Runway for the awarded damages, terminate pending motions, and close the case. The opinion states that the parties’ failure to object waived objections and precluded appellate review.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.