Fr. Meyers Sohn Canada Inc. v. Resource Reutilization LLC

Background

Fr. Meyers Sohn Canada Inc. sued Resource Reutilization LLC and Kejriwal Paper USA, Ltd. It alleged that it transported the defendants’ cargo and provided other services, but the defendants failed to pay freight charges and additional demurrage, detention, storage, and other charges that accrued after consignees refused delivery. The complaint asserted breach of the FMS North America General Terms and Conditions, breach of the FMS Seaways Terms and Conditions, breach of the FMS Credit Agreement, open account, account stated, and quantum meruit or unjust enrichment.

The court entered default judgment against the defendants on May 13, 2021. A default judgment is a judgment entered after a party fails to defend the case. The court then referred the matter to a magistrate judge to determine damages. Magistrate Judge Robyn F. Tarnofsky issued a Report and Recommendation on January 30, 2024, recommending compensatory damages, prejudgment interest, attorneys’ fees, and costs. No party objected.

Court’s Review and Ruling

Because there were no objections, Judge George B. Daniels reviewed the recommendation for clear error, meaning whether the record left the court with a firm conviction that the magistrate judge made a mistake. The court adopted the recommendation in its entirety except for minor adjustments to attorneys’ fees and the date from which prejudgment interest would run.

The court agreed that the plaintiff was entitled to compensatory damages for the defendants’ failure to pay freight, demurrage, detention, storage, and other charges under the FMS North America General Terms and Conditions. It also agreed that the plaintiff’s other claims were duplicative of the breach-of-contract claim and that the General Terms and Conditions were sufficient to establish liability. The court limited damages to amounts requested in the complaint.

The court selected November 20, 2020—the complaint’s filing date—as the start date for prejudgment interest. It explained that this was a conservative date by which all recoverable charges had accrued, particularly because the contract’s 12% interest rate was relatively high. The court also applied the recommended 20% reduction to the attorneys’ fee request, but corrected the requested-fee figure from $27,657.50 to $27,627.50. Applying the reduction produced an award of $22,102.

Disposition

The court ordered Resource Reutilization LLC and Kejriwal Paper USA, Ltd. to be jointly and severally liable to Fr. Meyers Sohn Canada Inc. for $962,961 in compensatory damages; prejudgment interest at 12% per year from November 20, 2020, through the date of judgment, calculated by the Clerk of Court; $22,102 in attorneys’ fees; and $1,460.84 in costs. Joint and several liability means each defendant is responsible for the full amount, subject to the usual limitation that the plaintiff may recover the amount only once. The Clerk of Court was directed to close the case.