Bell v. Pham et al
| Renzer Bell |
| John Pham and Trung Pham |
| 1:2009cv01699 |
| February 24, 2009 |
| US District Court for the Southern District of New York |
| Civil Rights: Other Office |
| XX Out of State |
| Paul A. Crotty |
| Ronald L. Ellis |
| Plaintiff |
| Federal Question |
| 28:1331 Fed. Question |
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Filing
66
ORDER:...Since liquidated damages are the basis for satisfying the jurisdictional amount requirement, and there is no basis for damages in this amount, Bell has failed to satisfy the requirements for diversity jurisdiction. Accordingly, the action must be, and is, DISMISSED. The Clerk of the Court is directed to close this case. SO ORDERED. (Signed by Judge Paul A. Crotty on January 4, 2012) Copies Mailed By Chambers. (mov)
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Filing
60
ORDER: October 17, 2011, pro se Plaintiff Renzer Bell ("Plaintiff") requested a continuance of the pre-trial conference and trial, scheduled for October 18, and 24, 2011, respectively, in his contract dispute action. Having already granted Plaintiff an adjournment, the Court denied Plaintiff's request. On October 18, 2011, Plaintiff submitted his Pre-Trial Order and his objections to Defendants John Pham and Trung Pham's ("Defendants") Pre-Trial Order, submitted o n October 6, 2011. In their pre-trial submissions, the parties discuss the validity of the liquidated damages provision. Under New York law, "[a] contractual provision fixing damages in the event of breach will be sustained if the amount liqui dated bears a reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation... If, however, the amount fixed is plainly or grossly disproportionate to the probable loss, the provision calls f or a penalty and will not be enforced." Truck Rent-A-Center, Inc. v. Puritan Farms 2nd, Inc., 41 N.Y.2d 420, 425 (N.Y. 1977). Defendants argue that the alleged loss in this case, of $4,080, bears no reasonable relationship to the "par tial liquidated damages" figure of $88,380.00. (Def. Oct. 6, 2011 Pre-Trial Order 9.) Plaintiff argues that the Defendants waived their ability to challenge the enforceability of the liquidated damages provision by failing to raise this ar gument on a motion to dismiss or a motion for summary judgment. (Pl. Oct. 18, 2011 Ltr.) Plaintiff's argument fails, however, because a defendant cannot waive an objection to a liquidated damages clause. See Wells Fargo Bank Northwest, N.A. v. Energy Ammonia Transp. Corp., No. 01 Civ. 5861(JSR), 2002 WL 31368264, at *1-2 (S.D.N.Y. Oct. 21, 2002) ("[T]he 'invalidity of a contract offensive to public policy cannot be waived by the parties... as it is a barrier which the court itse lf is bound to raise in the interests of the due administration of justice.'")(quoting Ins. Co. of N. Am. v. S/S Cape Charles, No. 92 Civ. 6184, 1994 WL 263592, at *2 (S.D.N.Y. June 3, 1994)). Accordingly, the Court finds that a question r egarding the enforceability of the liquidated damages provision exists. If the Court were to find that the liquidated damages provision is not enforceable, then the Court will not have subject matter jurisdiction over this diversity action because t he amount in controversy will be less than the $75,000 jurisdictional amount required under 28. U.S.C. § 1332(a)(1). See Nwanza v. Time, Inc., 125 Fed.Appx. 346, 347-48 (2d. Cir. 2005). The Court has the authority to examine issues regard ing "subject matter jurisdiction, sua sponte, at any stage of the proceeding." Id. (quoting Cap Gemini Ernst & Young, U.S., L.L.C. v. Nackel, 346 F.3d 360, 362 (2d Cir.2003)). To resolve this subject matter jurisdiction issue, the Plaintif f is directed to provide the Court with a submission on the liquidated damages provision no later than October 28, 2011. This submission must contain a calculation of any probable loss the Plaintiff anticipated, and any actual damage incurred. This submission may also include any affidavits, documents, or legal authority that the Plaintiff wishes to bring to the Courts attention. The trial is adjourned pending Plaintiff's submission. CONCLUSION: Plaintiff is directed to submit his liquidated damages calculations to the Court by October 28, 2011. SO ORDERED. (Signed by Judge Paul A. Crotty on October 18, 2011) Copies Mailed By Chambers. (mov)
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Filing
50
ORDER on R&R adopts 44 Report and Recommendations. Pham's motion and Bell's cross-motion for summary judgment are therefore DENIED. The Clerk of Court is directed to close the motions at docket numbers 24 and 34. The Order of Reference dated 3/5/09 remains in effect. (Signed by Judge Paul A. Crotty on 3/24/11) Copies Mailed By Chambers.
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