REPORT AND RECOMMENDATION
JUDITH C. McCARTHY, Magistrate Judge.
Plaintiff Shamrock Power Sales, Inc. ("Plaintiff" or "Shamrock Power") seeks to recover damages from defendants John Scherer ("Defendant Scherer"), Patrice Tilearcio ("Defendant Tilearcio"), Scherer Utility Sales, LLC, and Storm King Power Sales, LLC (collectively "Defendants") for causes of action arising out of Defendant Scherer's employment with Plaintiff. (Docket No. 1). Plaintiff filed the instant complaint on December 10, 2012, alleging fourteen causes of action. (Id.). On September 30, 2015, the Honorable Kenneth M. Karas ("Judge Karas") entered summary judgment on five of Plaintiff's claims: breach of fiduciary duty; faithless servant; misappropriation of trade secrets; fraud in the inducement; and unjust enrichment. See Shamrock Power Sales, LLC v. Scherer, No. 12-CV-8959(KMK), 2015 WL 5730339 (S.D.N.Y. Sept. 30, 2015). Following entry of summary judgment, this matter was referred to the undersigned to oversee damages discovery and conduct an inquest on damages. (Docket No. 148). The undersigned oversaw limited discovery on damages, with the final discovery deadline of April 1, 2016.
Plaintiff is a seller of "high voltage power equipment" that serves as the exclusive representative for manufacturers of these products in sales deals with utility companies such as Con Edison, Long Island Power Authority, Orange and Rockland Utility, Central Hudson Gas and Electric, National Grid, Public Service Gas and Electric, New York Power Authority, Long Island Railroad, New Jersey Transit, Metro North Railroad, Wesco and Graybar. (Summary Judgment Order
In 2004, Plaintiff hired Defendant Scherer as a sales representative, providing him with confidential information regarding the industry, client and customer contacts, pricing lists, commission schedules, contracts and pricing histories to allow him to sell high voltage power equipment — made by Plaintiff's manufacturer clients — to Plaintiff's utility company customers. (Summary Judgment Order at 4, 6). Defendant Scherer mainly worked in the New York City, New Jersey and Long Island areas, although he also worked in Dutchess County, (Inquest Hr'g. Tr. at 116), and Mr. McMahon testified that, for a period of time, Defendant Scherer also covered for another sales representative in upstate New York, (id. at 27). During his employment with Plaintiff, Defendant Scherer's customers included Central Hudson Gas and Electric, Con Edison, National Grid, Orange and Rockland Utilities, and Public Service Electric and Gas. (Inquest Hr'g. Tr. at 116; Summary Judgment Order at 5). In addition to forming relationships with contacts at these utility company customers, Defendant Scherer attended trade shows on behalf of Plaintiff to call on potential customers in the market. (Inquest Hr'g. Tr. at 116).
Both Plaintiff and Defendant Scherer assert that Defendant Scherer was paid a base salary of $65,000 per annum. (Inquest Hr'g. Tr. at 129; OSC Hr'g. Tr. at 64). Additionally, Defendant Scherer earned a percentage of the commissions that he brought in for Plaintiff, portions of which were paid to him as bonus advances throughout the year. (Inquest Hr'g. Tr. at 77-78). For example, according to the records supplied by Defendant Scherer, in 2011 he received $65,000 in salary, two bonus advances of $35,000, IRA contributions of $1,200, medical expenses of $16,267.92 and a final bonus payment of $53,484.59.
On September 28, 2011, while still employed with Plaintiff, Defendant Scherer and his wife, Defendant Tilearcio, formed Scherer Utility and began conducting and soliciting business with at least one of Plaintiff's customers. (Summary Judgment Order at 14-18). In October 2011, on behalf of Scherer Utility, Defendant Scherer represented a manufacturer, Partner Technologies, Inc. ("PTI"), in a transaction with Plaintiff's customer, Con Edison. (Id. at 15-16). This transaction resulted in $271,806 in sales. (Id. at 16). In January 2012, Plaintiff paid for Defendant Scherer to attend a trade show on its behalf, where Defendant Scherer instead approached manufacturers to solicit their business for Scherer Utility sales. (Id. at 45). Finally, in September 2012, Defendant Scherer sought and received a $19,528.42 advance from Plaintiff in the form of a check that cleared on October 7, 2012. (Id. at 19). Defendant Scherer resigned from the company the following day. (Id. at 19-20).
Defendant Scherer notes that notwithstanding these activities, he continued to perform in his position with Plaintiff during this period. (Inquest Hr'g. Tr. at 95). In support of this, Defendant Scherer recounted a sales meeting for manufacturer Cooper Power, in which the sales manager commended Defendant Scherer for having one of the best project presentations among the ten to twelve sales representatives present. (Id. at 129).
When Plaintiff recovered its company-issued laptop and cellphone from Defendant Scherer when he left its employ, it found that client and customer information, license software, e-mail correspondence with proprietary price lists, invoices, orders, and contracts had been deleted. (Summary Judgment Order at 22). Defendant Scherer had copied and retained them for his own use. (Id. at 22). On the date Defendant Scherer resigned, he e-mailed several of Plaintiff's clients to inform them that he had resigned but wanted to continue representing them in the New York and New Jersey area through his new company. (Id. at 24). Within weeks, Defendant Scherer claimed to be representing five of Plaintiff's former manufacturer clients: Plymouth Rubber Europa, S.A. ("Plymouth Rubber"), Connector Products, Inc ("CPI"), Phoenix Wire and Cable Inc. ("Phoenix"), KoCos, Inc. ("KoCos") and Schonstedt Instrument Company ("Schonstedt"). (Summary Judgment Order at 23; OSC H'rg. Pl. Ex.
Prior to 2012, Plymouth Rubber had a "house account" with Con Edison, which Mr. McMahon explained to be an account with a customer from which Plaintiff did not earn commissions. (OSC Hr'g. Tr. at 48). Mr. McMahon testified that this house account resulted in one million dollars in sales annually, which he claimed to know because the manufacturer reported the sales figure to him directly. (Inquest Hr'g. Tr. at 85). On September 20, 2012, Plymouth Rubber sought to amend the existing contract with Plaintiff, such that Plaintiff would receive a five percent commission on those existing customer accounts. (Docket No. 141-4). Mr. McMahon asserted that, as a result of this transition from a house account to a commissioned account, Plaintiff anticipated $50,000 in annual commissions from its representation of Plymouth Rubber. (McMahon Supp. Decl.
Next, Mr. McMahon attested that prior to October 2012, Plaintiff represented and sold products for CPI, and its commissions from those sales in 2012 amounted to $44,270.82. (McMahon Supp. Decl. at ¶ 15). Mr. McMahon also received word that CPI was "leaving Shamrock [Power] and going to Scherer Utility," and as a result of this, "Shamrock [Power] lost business from CPI for a period of one year, resulting in lost commissions of approximately $44,000." (Id. at ¶¶ 16-17). In response, Defendant Scherer notes that his sales for CPI, while in the employ of Plaintiff, only resulted in $18,365.56 of commission for Plaintiff in 2010 and 2011. (Rones Decl. at Ex. M).
Prior to October 2012, Plaintiff represented and sold products for Phoenix and, in support of its claim for damages, submitted evidence of commissions in 2012 of $170.49.
Regarding KoCos, Plaintiff submitted evidence that Shamrock Power earned $3,935.90 from its KoCos sales in 2012, prior to the announcement that KoCos was "leaving Shamrock [Power] and going to Scherer Utility[.]"
Finally, Mr. McMahon attested that in 2012 Plaintiff earned $7,172.33 in commissions from its representation of Schonstedt prior to the manufacturer "leaving Shamrock [Power] and going to Scherer Utility[.]"
Defendant Scherer confirmed that he inquired as to whether these five manufacturers "would  be willing to change contracts with Shamrock [Power] and allow [Defendant Scherer] to represent [them] in the New York City area, and have Shamrock [Power] represent them in New England and upstate New York." (Inquest Hr'g. Tr. at 132). He also confirmed that Plymouth Rubber, CPI, KoCos, Phoenix and Schonstedt "came with [him]." (Inquest Hr'g. Tr. at 135).
In addition to Plaintiff's former clients, Defendant Scherer also claimed to be representing other manufacturers who competed directly with Plaintiff's clients within weeks of resigning from his position. (Summary Judgment Order at 23). Specifically, Plaintiff notes that Defendant Scherer has earned commissions in sales for manufacturers Bierer, Bridgeport Magnetic Group, Electrical Safety Products, Electroline, Elliott Industries, Evluma, Grid Sentry, Kortick, New England Ropes and Utility Composite Poles, all of whom Plaintiff asserts are direct competitors of manufacturers that Plaintiff represented while Defendant was in its employ. (Inquest Hr'g. Tr. at 18-34). Defendant Scherer disputes this assertion, stating that some of the competitors noted by Shamrock Power were not manufacturers with which he worked while employed by Shamrock Power, (id. at 146-47, 150, 151), and in other instances remarking on the differences in the products made by Shamrock Power's manufacturers and those made by his clients, (id. at 148, 151, 152, 159). Plaintiff also notes that Defendant Scherer earned the commissions with the above-listed manufacturers, as well as with Tiiger — another manufacturer represented by Defendant Scherer — through sales with utility companies with whom Defendant Scherer was able to make contact through his misappropriation of Plaintiff's trade secrets. (Id. at 25).
Plaintiff filed the instant complaint on December 10, 2012, alleging fourteen causes of action. (Docket No. 1). On December 11, 2012, Judge Karas entered a temporary restraining order ("TRO") enjoining Defendants Scherer and Scherer Utility Sales, LLC from using or disclosing Plaintiff's confidential, proprietary, or trade secret information, from soliciting or otherwise initiating any further contact or communication with any of Plaintiff's customers, and from using the e-mail address email@example.com for commercial purposes. (Docket No. 3 at 3). After the entry of the TRO, Defendants Scherer and Tilearcio contacted Plaintiff's clients and customers and instructed them to communicate with them using Defendant Tilearcio's e-mail address instead of that enjoined by the Court. (Summary Judgment Order at 25).
Plaintiff thereafter moved for a preliminary injunction, which was entered on December 27, 2012. (Docket No. 17). The preliminary injunction enjoined Defendants from, inter alia, using, disclosing or further converting Plaintiff's confidential proprietary or trade secret information, and soliciting or otherwise initiating any further contact or communications with any of Plaintiff's customers through the use of Plaintiff's trade secrets. (Id. at ¶ a). Less than one month later — on January 3, 2013 — Defendant Scherer formed a new business, Storm King Power Sales, LLC, and transferred contracts with manufacturers and accounts receivable to that entity. (Summary Judgment Order at 25).
On January 16, 2013, Plaintiff filed a proposed order to show cause why Defendants should not be held in contempt for violating the preliminary injunction. (Docket No. 23). At the show cause hearing on January 31, 2013, Defendants conceded that they violated the preliminary injunction and represented that they were "going out of business totally." (Summary Judgment Order at 27). The Court entered a Contempt Order, finding that Defendants were in contempt of the December 27, 2012 preliminary injunction order, and ordered Defendants to comply. (Docket No. 32). Specifically, the Court ordered Defendants to "immediately begin the process of canceling all current contracts with their manufacturers/clients. Those contracts [were] to be terminated as soon as practicable, taking into consideration any notice requirements." (Id. at ¶ 4). Additionally, Defendants were "directed to pay into an escrow account held by McCarter & English LLP, all commissions or other funds they ha[d] received from manufacturers/clients since October 1, 2012 or [would] receive in the future . . . until further order of this Court." (Id. at ¶ 5).
On September 30, 2015, Judge Karas granted Plaintiff's motion for summary judgment on five claims: breach of fiduciary duty, misappropriation of trade secrets, fraud in the inducement, faithless servant, and unjust enrichment. (See generally Summary Judgment Order). In recounting the facts of the case, Judge Karas held that Defendants violated the Contempt Order "by canceling and then reinstating contracts with the same entities with whose contracts the Court directed Defendants to terminate." (Id. at 28). Judge Karas noted that Defendants purported to dispute this violation by stating that Defendant Scherer's new entity Storm King Power Sales, LLC was reestablished "without any of Shamrock [Power]'s previous manufacturers." (Id. at 28 n.34). Judge Karas rejected that argument because "the Contempt Order required Defendants to `immediately begin the process of canceling all current contracts with their manufacturers/clients,' and did not specify that Defendants need only to cancel contracts with Shamrock [Power]'s previous manufacturers/clients." (Id.). Furthermore, Judge Karas found that Defendants violated the Contempt Order by receiving commissions and other funds from reinstated contracts and failing to pay those funds into escrow when the Contempt Order did "not limit this requirement to funds earned from Shamrock [Power]'s previous manufacturers/clients." (Id. at 28 n.35).
In its memorandum in support of its motion for damages, Plaintiff seeks lost profits for the breach of fiduciary duty claim, all compensation paid to Defendant Scherer during his period of disloyalty for the faithless servant claim, disgorgement of illicit gains for the misappropriation of trade secrets claim, actual pecuniary loss for the fraud in the inducement/unjust enrichment claims, prejudgment interest, punitive damages in the amount of Plaintiff's attorneys' fees, attorneys' fees for Plaintiff's contempt filings and a permanent injunction against Defendants. (Docket Nos. 116, 132).
A. Legal Standards
Where a federal court exercises diversity jurisdiction, state law provides the proper rule for calculating damages. See Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 437 (1996). On an inquest for damages, the Court must determine whether Plaintiff "has presented sufficient evidence to enable the Court to ascertain with reasonable certainty the amount of damages recoverable . . . ." Avalon Risk Management Insurance Agency, LLC v. Rossano, No. 12cv3934 (LGS) (DF), 2016 WL 2851435, at *3 (S.D.N.Y. March 31, 2016) (citing N.Y. Dist. Council of Carpenters Pension Fund v. Perimeter Interiors, Inc., 657 F.Supp.2d 410, 422 (S.D.N.Y. 2009)). "In New York, the damages recoverable in tort actions cannot be contingent, uncertain, or speculative; but if the fact is established that the plaintiff has sustained an actionable injury as the direct result of the defendant's wrongful act, [only] reasonable certainty as to the amount of that injury . . . is required." New York Youth Club v. Town of Harrison, No. 12-CV-7534 (CS), 2016 WL 3676690, at *2 (S.D.N.Y. July 6, 2016) (quoting Wallace v. Suffolk Cty. Police Dep't, 809 F.Supp.2d 73, 81 (E.D.N.Y.2011) (alterations in original)). Additionally, Plaintiff is "not obligated to offer a mathematically precise measure of [its] damages." Electro-Miniatures Corp. v. Wendon Co., Inc., 771 F.2d 23, 27 (2d Cir.1985). Where plaintiff's injury is "not susceptible to exact measurement because of the defendant's conduct, [there is] some latitude to `make a just a[nd] reasonable estimate of damages based on relevant date." Id. (citing Bigelow v. R.K.O. Radio Pictures, Inc., 327 U.S. 251, 264 (1946)).
B. Plaintiff's Motion to Strike
Plaintiff contends that Paragraphs 13-14, 22, 24, 26, 28 and 32 of the Scherer Declaration and Paragraph 4 of Defendant Tilearcio's Declaration (the "Tilearcio Declaration"
Under Rule 12(f) of the Federal Rules of Civil Procedure, courts may strike from a pleading any redundant, immaterial, impertinent, or scandalous matter. Fed. R. Civ. P. 12(f). In general, "[t]o prevail on a [Rule 12(f)] motion to strike, a party must demonstrate that (1) no evidence in support of the allegations would be admissible; (2) that the allegations have no bearing on the issues in the case; and (3) that to permit the allegations to stand would result in prejudice to the movant." In re Fannie Mae 2008 Sec. Litig., 891 F.Supp.2d 458, 471 (S.D.N.Y. 2012) (internal quotation and citation omitted); see also Lipsky v. Commonwealth United Corp., 551 F.2d 887, 893 (2d Cir.1976) ("In deciding whether to strike a Rule 12(f) motion on the ground that the matter is impertinent and immaterial, it is settled that the motion will be denied, unless it can be shown that no evidence in support of the allegation would be admissible.").
Rule 12(f) "allows a court to strike pleadings only." Granger v. Gill Abstract Corp., 566 F.Supp.2d 323, 334 (S.D.N.Y.2008) (emphasis added) (citations omitted). "Motions, declarations and affidavits are not pleadings," and therefore may not be the subject of a motion to strike. Id. at 335 (citing Fed. R. Civ. P 7(a) (defining pleadings as the complaint, answer, counter- and cross-claims)); see 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1380 (3d ed. 2004) ("Matter outside the pleadings normally is not considered on a Rule 12(f) motion; for example, affidavits in support of or in opposition to the motion typically may not be used."); Sierra v. United States, No. 97 Civ. 9329(RWS), 1998 WL 599715, at *9 (S.D.N.Y. Sept. 10, 1998) (denying plaintiff's motion to strike defendant's motion to dismiss because a motion is not a pleading). In sum, a motion to strike is only proper when directed at pleadings within the meaning of Fed. R. Civ. P. 7(a). The Scherer and Tilearcio Declarations are not pleadings, and are thus not properly subject to a Rule 12(f) motion to strike.
Furthermore, Plaintiff's Motion to Strike fails to the extent that it seeks to strike, among other assertions, inconsistent testimony in the Scherer and Tilearcio Declarations since "Rule 12(f) does not allow a document to be stricken because it is allegedly inconsistent with a previous position." Granger, 566 F.Supp.2d at 334 (S.D.N.Y. 2008); see Trinidad v. Pret A Manger (USA) Ltd., 962 F.Supp.2d 545, 554 (S.D.N.Y. 2013) citing Mueller v. Towers, 3:10-CV-1093 (WWE), 2010 WL 4365771, at *2 (D. Conn. Oct. 25, 2010) ("A motion to strike is not an appropriate vehicle through which to contest the credibility of a witness or to draw further attention to the fact that one piece of evidence is contradicted by another."). Moreover, Plaintiff fails to fashion any argument, as required under Rule 12(f), as to why the assertions sought to be stricken will result in even a scintilla of prejudice to the Plaintiff. Hochroth v. William Penn Life Ins. Co. of N.Y., No. 03CIV.7286 (RJH)(HBP), 2003 WL 22990105, at *2 (S.D.N.Y. Dec. 19, 2003) (denying a movant's 12(f) motion to strike for failing "to identify any prejudice that might result from the challenged language"). Finally, although Plaintiff cites to cases in which the Court has struck affidavits under its "inherent authority to strike any filed paper which it determines to be abusive or otherwise improper under the circumstances," see Nat. Res. Def. Council, Inc., v. U.S. Food & Drug Admin., 884 F.Supp.2d 108, 116 n.5 (S.D.N.Y. 2012) (citing In re Bear Stearns Cos., Inc., Sec., Derivative, and ERISA Litig., 763 F.Supp.2d 423, 581 (S.D.N.Y. 2011)), I do not find these statements to be abusive or improper. Plaintiff's arguments that the statements are false and contrary to law merely go to the weight the Court should give to them in light of all of the evidence submitted in this case. The drastic remedy of striking them is not warranted here.
Accordingly, I respectfully recommend that Plaintiff's Motion to Strike be denied.
C. Defendants' July 13, 2016 Letter
By way of a letter dated July 13, 2016, Defendants ask the Court to strike and disregard: (a) the Supplemental Declaration of Andrew McMahon; and (b) the excerpts of John Scherer's March 28, 2016 deposition testimony attached to Plaintiff's letter of July 8, 2016. (Docket No. 142; see generally McMahon Supp. Decl.; Docket No. 141-1). Defendants argue that they "do not believe that the Court had solicited from [ ] Plaintiff" the information adduced in the Supplemental Declaration of Andrew McMahon and that the deposition excerpts are "beyond the scope of the issue before the Court[.]" (Docket No. 142 at 1-2).
The Court directs Defendants to the June 30, 2016 inquest hearing transcript, wherein the undersigned explicitly requested that Plaintiff provide these materials to the Court. (Inquest Hr'g Tr. at 113, 195-196, 200). Accordingly, I respectfully recommend that the requests set forth in Defendants' letter of July 13, 2016 be denied.
D. Damages for Breach of Fiduciary Duty
Under New York law, where an employee breaches the common law duty of loyalty to an employer, the employer has a choice "to seek damages (1) through an accounting of the disloyal employee's gain (profit disgorgement) or (2) as a calculation of what the employer would have made had the employee not breached his or her duty of loyalty to the employer." Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC, 813 F.Supp.2d 489, 523 (S.D.N.Y. 2011) (citing Gomez v. Bicknell, 302 A.D.2d 107, 114 (2d Dep't 2002); Phansalkar v. Andersen Weinroth & Co., L.P., 344 F.3d 184, 211 n.23 (2d Cir. 2003)). The employer may also demonstrate "a usurpation of corporate opportunity in connection with a breach of the duty of loyalty." Pure Power, 813 F.Supp.2d at 523. Known as the corporate opportunity doctrine, this "prohibits a corporate employee from utilizing information obtained in a fiduciary capacity to appropriate a business opportunity belonging to the corporation." Am. Fed. Grp. Ltd v. Rothenberg, 136 F.3d 897, 906 (2d Cir. 1998). The doctrine applies to employees even after their employment period ends. Pure Power, 813 F.Supp.2d at 523. However, the doctrine is limited to "business opportunities in which a corporation has a `tangible expectancy,' which means `something much less tenable than ownership, but, on the other hand, more certain than a desire or a hope.'" Id. (citing Alexander & Alexander, Inc. v. Fritzen, 147 A.D.2d 241, 247-48 (1989)). In Pure Power, the Court found that the plaintiffs failed to show that the corporate opportunity of the plaintiffs was usurped when the clients that the defendants solicited "merely chose not to renew their subscriptions at [the plaintiffs' business]." 813 F.Supp.2d at 524.
Plaintiff has elected to seek lost commissions for the five manufacturing clients that Defendants retained in the immediate weeks following Defendant Scherer's termination of his employment with Shamrock Power: Plymouth Rubber, CPI, Phoenix, KoCos, and Schonstedt. Plaintiff asserts that it had a tangible expectancy in the commissions from its existing manufacturer clients, and it has provided its best estimates of what those commissions would have been for the period of time in which each client engaged Defendants in the place of Plaintiff. The Court will address each manufacturer in turn.
i. Plymouth Rubber
Mr. McMahon testified that Plaintiff had already been representing Plymouth Rubber in a "house account" with Con Edison, which, shortly before Defendant Scherer left Plaintiff's employment, had been converted to a commission account in which Shamrock Power would have received five-percent commission on all existing accounts, including the existing work with Con Edison. (Inquest Hr'g. Tr. at 84-85). This formal agreement between Plaintiff and Plymouth Rubber, along with Mr. McMahon's testimony that manufacturers rarely terminated contracts, (OSC Hr'g. Tr. at 109), indicates that Plaintiff did in fact have a tangible expectancy in these commissions. Additionally, I note that Plaintiff only lost this business with Plymouth Rubber for a period of one year, resulting in lost commissions of approximately $50,000. (McMahon Supp. Decl. at ¶ 10). The fact that Plymouth Rubber returned to working with Shamrock Power in the New York region is a further indication that, but for Defendants' actions, Shamrock Power would have retained this account with Plymouth Rubber. I, therefore, respectfully recommend that Plaintiff is entitled to any lost profits from the usurpation of this account.
Regarding quantity of commissions that Plaintiff could have expected, Mr. McMahon testified that he knew that the account would result in $1,000,000 of sales and $50,000 in commissions annually because this information was provided to him by the manufacturer. (Inquest Hr'g. Tr. at 85). I respectfully recommend that this is a sufficient degree of certainty in a damages calculation to award damages for these lost profits,
ii. CPI, KoCos, and Schonstedt
Mr. McMahon attested that Plaintiff had been representing manufacturer CPI, and earned $44,270.82 from sales in 2012, prior to CPI retaining Defendants in place of Shamrock Power. (McMahon Supp. Decl. at ¶ 15). With respect to KoCos, Mr. McMahon attested that Shamrock Power earned $3,935.90 in annual commissions from its representation of KoCos in 2012. (McMahon Supp. Decl. at ¶ 23). Finally, Mr. McMahon attested that Plaintiff earned $7,172.33 in annual commissions from sales for Schonstedt in 2012. (McMahon Supp. Decl. at ¶ 27). In response, Defendants provide Defendant Scherer's sales figures from his representation of these three manufacturers on behalf of Shamrock Power, dating back to 2009, which indicate that Defendant Scherer's sales resulted in Plaintiff earning commissions that were substantially lower in 2009, 2010 and 2011 than Plaintiff's figures for 2012. (Rones Decl. at Ex. L, M, N, O). These records, in addition to the factors considered above regarding Mr. McMahon's testimony on the nature of his business relationships and the fact that all three of these manufacturers also returned to Shamrock Power after a period of time, establish that Plaintiff had a long-standing relationship with CPI, KoCos and Schonstedt that resulted in a tangible expectancy in these commissions.
Regarding the calculation of the lost profits from these accounts, the Court credits Plaintiff's testimony that the commissions lost through the diversion of this business to Defendants amounted to $44,270.82 for CPI over a one-year period, $1,967.95 for KoCos over a six-month period, and $3,586.16 for Schonstedt over a six-month period. (McMahon Supp. Decl. at ¶¶ 17, 25, 29). The Court notes that Defendant Scherer testified that he only sought and obtained agreements to represent these manufacturers in the New York region, with the understanding that Plaintiff would continue to represent them in other regions, such as New England. (Inquest Hr'g. Tr. at 132). Plaintiff has asserted that these clients "left Shamrock [Power]" and that Plaintiff "lost business from" the manufacturers, but it is not clear whether the lost business was just in the New York region, or elsewhere as well. (McMahon Supp. Decl. at ¶¶ 10, 17, 21, 25, 29). Defendant Scherer's documentation showing that his sales in the New York region for Shamrock Power resulted in commissions that were less than half the annual commissions, as asserted by Plaintiff, give the Court pause as to whether Plaintiff is basing its calculation of past commissions earned on just the New York region or on all geographic regions in 2012. If Defendant Scherer is correct that Plaintiff merely lost the opportunity to represent these manufacturers in the New York region — and the commissions as reported by Plaintiff were for all regions — the figures provided by Plaintiff would not be an accurate estimation of Plaintiff's lost profits. However, Defendant Scherer has provided no support for his allegation that Plaintiff retained these manufacturers in other regions, (Inquest Hr'g. Tr. at 189), and although Defendants could have obtained documentation during the damages discovery to disprove Plaintiff's assertion that its lost commissions amounted to the figures asserted, they failed to do so. Accordingly, the Court credits Mr. McMahon's attestation that Plaintiff lost profits in the amount of $44,270.82 for the one year of lost business with CPI, $1,967.95 for six months of lost business with KoCos, and $3,586.16 for six months of lost business with Schonstedt. I respectfully recommend that Plaintiff be awarded $49,824.93 for the breach of fiduciary duty claim with respect to CPI, KoCos, and Schonstedt.
Finally, Mr. McMahon attested that Plaintiff earned $170.49 from sales in 2012 on behalf of Phoenix, prior to Phoenix "leaving Shamrock [Power] and going to Scherer Utility[.]" (McMahon Supp. Decl. at ¶¶ 19, 20). Unlike the other manufacturers, Phoenix never returned to work with Plaintiff. (McMahon Decl. at ¶ 13). Additionally, Defendant Scherer noted in his testimony that Plaintiff did not have a contract with Phoenix, and as a result Phoenix was able to sign up with Defendants more quickly than the other manufacturers. (Inquest Hr'g. Tr. at 133).
In this instance, I find that Plaintiff did not have a tangible expectancy in its commissions from Phoenix. Unlike in other instances, where Plaintiff had contracts with manufacturers that renewed automatically at the conclusion of their terms, Plaintiff had no contract with Phoenix, there is no assertion that the two companies had a long history of working together, and Defendant Scherer's testimony demonstrates how easily Phoenix was able to terminate its relationship with Plaintiff. As such, I find that Defendants did not usurp Plaintiff's corporate opportunity to continue business with Phoenix, where the manufacturer "merely chose not to renew" its dealings with Plaintiff. See Pure Power, 813 F.Supp.2d at 524. I respectfully recommend that Plaintiff not be award lost profits for the breach of fiduciary duty claim as it relates to Phoenix.
Accordingly, I respectfully recommend that Plaintiff be awarded $99,824.93 in total lost profits from Plymouth Rubber, CPI, KoCos and Schonstedt because of Defendant Scherer's breach of his fiduciary duty.
E. Damages for Faithless Servant
"A faithless servant forfeits all compensation earned during the period of his disloyalty even if his services benefited the principal in some part." Shamrock Power Sales, LLC, 2015 WL 5730339, at *24 (citing Tyco Int'l, 756 F. Supp. 2d at 562). "However, the Second Circuit has carved out a limited exception where compensation is expressly allocated among discrete tasks, such as commissions. In such cases, the employee may keep compensation derived from any transaction that were separate from and untainted by the disloyalty." Stanley v. Skowron, 989 F.Supp.2d 356, 360 (S.D.N.Y. 2013); see also Design Strategy, Inc. v. Davis, 469 F.3d 284, 301-02 (2d Cir. 2006) (apportioning compensation where employee was a sales representative paid partially through individual sales commissions); Sequa Corp. v. GBJ Corp., 156 F.3d 136, 146-47 (2d Cir. 1998) (apportioning compensation where employment contract provided that employee would receive fee for each leasing transaction completed). As Judge Karas noted in the Summary Judgment opinion:
(Summary Judgment Order at 52 (quoting Phansalkar, 344 F.3d at 205 (quotation marks and citations omitted))). Where an employee is paid a base salary as well as a performance bonus, which are linked to his performance but not "to separate and discrete transactions[,]" apportionment is not available. Stanley, 989 F. Supp.2d at 363. Whether a bonus is calculated monthly or yearly instead of by the transaction can be telling in determining whether it is a performance bonus or a task-by-task commission, subject to apportionment. Id. at 363.
Judge Karas concluded that Plaintiff was at least entitled to restitution of some or all of Defendant Scherer's salary for the period of employment during his disloyalty, but noted that the exact amount of compensation was to be determined at the inquest hearing, where the parties could propound evidence on whether apportionment was warranted. (Summary Judgment Order at 52-53). In finding that Defendant Scherer had been a faithless servant, Judge Karas relied on Defendant Scherer's activities beginning on September 28, 2011 through the date of his resignation: October 8, 2012. Accordingly, I find that Plaintiff's proposed period of disloyalty of October 1, 2011 to October 8, 2012, which Defendants do not contest, is appropriate.
All parties agree that Defendant Scherer was paid a base salary of $65,000 per annum, all of which must be forfeited. At the inquest hearing, Defendants put forth evidence that he continued to perform well in his position during this period, noting that he had one of the best project presentations at a sales meeting for manufacturer Cooper Power in 2012. (Inquest Hr'g. Tr. at 129). Defendants do not provide any evidence that Defendant Scherer engaged in no misconduct at all with respect to certain accounts or that his disloyalty neither tainted nor interfered with the completion of his tasks for specific accounts. See Stanley, 989 F.Supp.2d at 363 ("[The employee] is only entitled to retain some portion of his compensation if he was paid on a `task-by-task' basis and can demonstrate that certain transactions were wholly untainted by his disloyalty.").
Additionally, although Defendant Scherer received bonuses related to the commissions that he earned for Plaintiff, it does not appear that he was paid on a task-by-task basis. Defendant Scherer's bonus — which he appears to have received in multiple payments throughout the year, some of which were included in his monthly paycheck — was calculated using a mathematical formula that began with Defendant Scherer's overall commissions earned, deducted his salary twice, and then took twenty-five percent of the resulting figure. (Docket No. 128-2). Even if Defendants had put forth evidence that certain accounts were not tainted by his disloyalty, there would be no method for the Court to apportion commissions earned on those individual accounts because Defendant Scherer was not paid a bonus on each individual account; he was paid a performance bonus based on his commissions as a whole. As such, I respectfully recommend that Defendant Scherer's bonus payments be deemed performance bonuses and not task-by-task commissions and, therefore, they should not be apportioned.
Mr. McMahon attested that Plaintiff paid Defendant Scherer $131,864.89 in salary, commissions and advances against commissions from October 1, 2011 to October 8, 2012. (McMahon Decl. at ¶ 24). In support of this assertion, Plaintiff submitted Exhibit 8 at the Inquest Hearing, which shows net pay of $118,532.30 for the same period. (Inquest Hr'g. Pl. Ex.
Accordingly, I respectfully recommend that Plaintiff be awarded damages of $118,532.30 for its faithless servant claim.
F. Damages for Misappropriation of Trade Secrets
Under New York Law, a plaintiff may seek damages for misappropriation of trade secrets through one of three methods: "compensation for plaintiff's losses, an accounting of defendant's profits, or a reasonable royalty[.]" Topps Co., Inc. v. Cadbury Stani S.A.I.C., 380 F.Supp.2d 250, 268 (S.D.N.Y. 2005). Plaintiff seeks disgorgement of Defendant Scherer's unjust earnings
To calculate the total amount of unjust earnings, Plaintiff maintains that it is entitled to commissions that Defendant Scherer has earned by "selling products that directly compete with manufacturers represented by Shamrock [Power] to customers to whom [Defendant] Scherer was introduced while employed at Shamrock [Power]." (Docket No. 116 at 14-15). Based on documentation produced by Defendants in the damages discovery, Plaintiff asserts that the total commissions unjustly received by Defendants amount to $64,489.05. (Docket No. 116 at 15). Plaintiff bases this on commissions earned through sales of manufacturers PTI, Kortick Manufacturing ("Kortick"), New England Ropes ("NE Ropes"), Elliott Industries ("Elliott"), Tiiger, Bridgeport Magnetics ("BMG"), Electrical Safety Products, Grid Sentry, Bierer & Associates ("Bierer"), Electroline (also known as Jenny Tools), Evluma, Travis, and Utility Composite Poles, to customers that Defendant Scherer worked with while at Shamrock Power: Central Hudson, Con Edison, National Grid, Orange & Rockland, PSE&G, and Turtle & Hughes. (Docket No. 116 at 8-11). In response, Defendants allege that either the products made by the manufacturers that he represents are not comparable to, and therefore do not compete with, the products sold by Shamrock Power's manufacturers, or that he did not deal with the competing manufacturers while employed with Plaintiff.
As an initial matter, the Court has only included commissions that Defendants have actually earned, and not commissions that appear as only having been billed in Plaintiff's Inquest Exhibits. See Electro-Miniatures Corp. v. Wendon Co., 771 F.2d 23, 27 (2d Cir. 1985) (in misappropriation of trade secrets action, "damages encompass profits unjustly earned by the defendant.") (emphasis added). Additionally, Defendant Scherer admitted during the Inquest Hearing that Shamrock Power had similar products that competed with the manufacturers Kortick and NE Ropes. (Inquest Hr'g. Tr. at 153). Regarding the sales to Shamrock's customers Orange and Rockland and Central Hudson of products from manufacturers Elliott Industries and Tiiger, Defendant Scherer testified that he obtained this business through his connections with the customers, (Inquest Hr'g. Tr. at 150, 154), and there is no dispute that these connections were the result of his access to Plaintiff's trade secrets, (Summary Judgment Order at 55-56). Regarding Defendant Scherer's testimony that Shamrock Power's manufacturers' products were not comparable to those of the manufacturers that he represents, the Court does not find this argument to be persuasive. Defendant Scherer testified that his manufacturer BMG did not compete with Plaintiff's manufacturer Von because BMG's product weighed significantly less than Von's. (Inquest Hr'g. Tr. at 148). However, Defendant Scherer's intimate knowledge of the Von product line is the only reason that he is able to make these comparisons to his clients' benefit. Additionally, Defendant Scherer admitted during his deposition that Von was a competitor to BMG. (Scherer Depo. Tr.
With these findings in mind, the Court concludes that Plaintiff is entitled to Defendants' earned commissions from sales of Kortick, NE Ropes, Elliott, Tiiger, BMG, Electrical Safety Products, Grid Sentry, Bierer, Electroline, Evluma, Travis, and Utility Composite Poles, with customers Central Hudson, Con Edison, National Grid, Orange & Rockland, PSE&G, and Turtle & Hughes as follows
Finally, with respect to PTI, Judge Karas found that Shamrock Power was damaged "in the very least through the diversion of [PTI] sales from Shamrock to Scherer Utility." (Summary Judgment Order at 47). The Court acknowledges that Judge Karas made this finding in connection with Plaintiff's faithless servant claim, (id.), and that Plaintiff now seeks damages for the same conduct within the misappropriation of trade secrets context. The Court also notes that Defendant Scherer earned these commissions prior to his departure from Shamrock Power, and that nowhere in the record does Plaintiff indicate that PTI was a competitor of a Shamrock Power manufacturer. Nonetheless, Defendant fails to oppose Plaintiff's request for recovery of these commissions in the misappropriation of trade secrets context. See In re UBS AG Sec. Litig., No. 07 CIV. 11225 RJS, 2012 WL 4471265, at *11 (S.D.N.Y. Sept. 28, 2012), aff'd sub nom. City of Pontiac Policemen's & Firemen's Ret. Sys. v. UBS AG, 752 F.3d 173 (2d Cir. 2014) (recognizing that a party "concedes through silence" arguments by its opponent that it fails to address). Accordingly, the Court will permit recovery of the earned PTI commissions as follows
Accordingly, it is respectfully recommended that Plaintiff be awarded $51,557.80
G. Damages for Fraud in the Inducement and Unjust Enrichment
Judge Karas found that undisputed evidence showed that Plaintiff gave Defendant Scherer an advance in October 2012 of $19,528.43, the circumstances of which were sufficient to establish Plaintiff's claim for fraud in the inducement and unjust enrichment. (Summary Judgment Order at 63, 65). "It is well-settled that the measure of damages for an unjust enrichment claim is restricted to the `reasonable value' of the benefit conferred upon the defendants." Pure Power, 813 F. Supp. 2d at 534 (citing Giordano v. Thomson, 564 F.3d 163, 170 (2d Cir. 2009); Pereira v. Farace, 413 F.3d 330, 340 (2d Cir. 2005)). For a fraud in the inducement claim, "[t]he true measure of damage is indemnity for the actual pecuniary loss sustained as the direct result of the wrong or what is known as the out-of-pocket rule." Campers' World Intern., Inc. v. Perry Ellis Intern., Inc., No. 02 CIV.453 (RPP), 2002 WL 1870243, at *5 (S.D.N.Y. Aug. 13, 2002) (citing Lama Holding Co. v. Smith Barney, Inc., 668 N.E.2d 1370 (N.Y. 1996)).
In this instance, the reasonable value of the benefit conferred upon Defendant Scherer and the actual pecuniary loss sustained by Plaintiff is the same: $19,528.43. Damages for this loss, however, have already been awarded in connection with the Court's analysis of Plaintiff's faithless servant claim. To further award damages here for the same amount granted above would be redundant and excessive. See Softel, 891 F. Supp. at 943 (S.D.N.Y. 1995) ("Because defendants' profits from copyright infringement and trade secret misappropriation are coextensive in this case, plaintiff is entitled to only one recovery of defendants' profits."); Pure Power, 813 F. Supp. 2d at 537 (S.D.N.Y. 2011) (refusing to award damages for the same conduct twice, as doing so "would be redundant and excessive"). As such, I respectfully recommend that no damages for fraud in the inducement and unjust enrichment be awarded.
H. Prejudgment Interest
Plaintiff seeks pre-judgment interest on its damages for misappropriation of trade secrets. Under New York Civil Practice Law and Rules, prejudgment interest is "mandatory for a damage award, except when the action is equitable in nature." LinkCo, Inc. v. Fujitsu Ltd., 232 F.Supp.2d 182, 191 (S.D.N.Y. 2002) (citing N.Y. C.P.L.R. § 5001(a)). Where an action is equitable in nature, the Court may, in its discretion, award prejudgment interest. Id. A claim for misappropriation of trade secrets has been found to be both equitable and legal in nature, depending on the type of relief sought. See Speedry Chem. Prods., Inc. v. Carter's Ink Co., 306 F.2d 328, 330 (2d Cir. 1962) (finding a trade secret claim to be based on equitable principles); Softel, 891 F. Supp. at 943 (finding plaintiff's claim for damages in relation to a misappropriation of trade secrets claim to be "essentially legal in nature[.]"). Where prejudgment interest is awarded, the starting date from which the court computes interest is:
Softel, 891 F.Supp. at 944 (citing N.Y. Civ. Prac. L. & R. § 5001(b)). "The annual rate of interest on the compensatory damages for trade secret misappropriation is nine percent." Id. (citing N.Y. Civ. Prac. L. & R. § 5004).
Here, Plaintiff initially sought injunctive relief, and now seeks both money damages and a permanent injunction for its misappropriation of trade secrets claim. However, regardless of whether Plaintiff's claim is essentially equitable or legal in nature, I find that it would be a proper use of the Court's discretion to award prejudgment interest. Plaintiff proposes that the date to be used for interest calculation is October 1, 2011. However, although it is undisputed that Defendant Scherer began Scherer Utility Sales that month, the damages awarded to Plaintiff were not incurred until various dates in 2013 through 2015, when Defendants earned profits from the misappropriation of Plaintiff's trade secrets. Therefore, I respectfully recommend that Plaintiff be awarded prejudgment interest of nine percent on its misappropriation of trade secrets damages — calculated from the median date of the accrual of these damages, January 5, 2015, to the date judgment is entered.
I. Punitive Damages
Plaintiff seeks punitive damages in the form of attorneys' fees. (Docket No. 116 at 16). New York law allows the recovery of punitive damages in a trade secrets case if the defendant's conduct has been sufficiently "gross and wanton." See A.F.A. Tours, Inc. v. Whitchurch, 937 F.2d 82, 87 (2d Cir. 1991); Topps Co., 380 F.Supp.2d at 267 (S.D.N.Y. 2005) (finding that under New York law, punitive damages are available for misappropriation of trade secrets without proof of public harm, if the defendant's conduct is gross and wanton). Further, in New York, it has been held that "attorneys' fees  may indeed be considered on the issue of punitive damages." Jeffries Avlon, Inc. v. Gallagher, 567 N.Y.S.2d 339, 340 (Sup. Ct. 1991) (citing 36 N.Y. Jur.2d, Damages § 183).
Judge Karas found that undisputed evidence showed that Defendant Scherer took various confidential and proprietary data and documents from Shamrock Power, making copies of the data on his company-issued laptop and phone, which included price lists for Shamrock Power's clients. (See Summary Judgment Order at 57). Judge Karas also found the undisputed evidence showed that Scherer did not disclose the October 2011 transactions with PTI to Shamrock Power, and instead "specifically instructed both PTI and Con Edison to delete Shamrock Power's name from the purchase orders, and in several follow up emails reiterated that request and cautioned Con Edison ... `please do not send [purchase orders] to Shamrock.'" (Summary Judgment Order at 50). Such conduct, paired with Defendants repeated disregard of Court orders, (Summary Judgment Order at 28; Docket No. 32), is sufficiently gross and wanton to permit the recovery of punitive damages. See Paz Sys., Inc. v. Dakota Grp. Corp., 514 F.Supp.2d 402, 409 (E.D.N.Y. 2007) (awarding punitive damages where defendants misappropriated trade secrets in a particularly egregious manner, which included efforts to obscure evidence of their conduct); In re Cross Media Mktg. Corp., No. 06 CIV. 4228 (MBM), 2006 WL 2337177, at *7 (S.D.N.Y. Aug. 11, 2006) (affirming the imposition of punitive damages in a trade secrets case where defendant exhibited gross and wanton conduct by "taking [customer lists] without permission and then attempting to anonymously auction the[m]").
In their Opposition, Defendants do not contest an award of attorneys' fees, but argue that the total amount sought is excessive and ask the Court to "limit [the award] to an amount determined to be reasonable..." (Opposition
a) Reasonable Hourly Rate
Determination of the reasonable hourly rate "contemplates a case-specific inquiry into the prevailing market rates for counsel of similar experience and skill to the fee applicant's counsel [, which] may ... include judicial notice of the rates awarded in prior cases and the court's own familiarity with the rates prevailing in the district." Farbotko v. Clinton Cty. of N.Y., 433 F.3d 204, 209 (2d Cir. 2005) (citations omitted). Moreover, "the nature of representation and type of work involved in a case are critical ingredients in determining the `reasonable' hourly rate." Arbor Hill Concerned Citizens Neighborhood Ass'n, 522 F.3d at 184 n.2. The party seeking a fee award "has the burden of showing by satisfactory evidence — in addition to the attorney's own affidavits — that the requested hourly rates are the prevailing market rates." Farbotko, 433 F.3d at 209 (citations and internal quotation marks omitted). "The reasonable hourly rates should be based on `rates prevailing in the [relevant] community for similar services by lawyers of reasonably comparable skill, experience, and reputation.'" Id. at 208.
Plaintiff's counsel has submitted attorney affidavits in support of their requested rates. (Moore Aff.
b) Number of Hours Reasonably Expended
To determine the number of reasonable hours expended, contemporaneous time records, affidavits, and other materials must support the prevailing party's fee application. Chambless v. Masters, Mates & Pilots Pension Plan, 885 F.2d 1053, 1058 (2d Cir. 1989); N.Y. State Ass'n for Retarded Children, Inc., 711 F.2d at 1147-48. The number of hours should be reduced for excessive, redundant, vague, or otherwise unnecessary hours. Quarantino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999). "In so doing, the district court does not play the role of an uninformed arbiter but may look to its own familiarity with the case and its experience generally as well as to the evidentiary submissions and arguments of the parties." Bliven v. Hunt, 579 F.3d 204, 213 (2d Cir. 2009) (internal quotation marks and citation omitted). "The critical inquiry is `whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.'" Cesario v. BNI Constr., Inc., No. 07 Civ. 8545, 2008 WL 5210209, at *7 (S.D.N.Y. Dec. 15, 2008) (citing Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992)).
The Court has reviewed McCarter & English LLP's contemporaneous time records, along with the task descriptions set forth in the Affidavit of Pamela J. Moore and the Declaration of Kelly Burns Gallagher, and finds them to be reasonable.
J. Damages for Contempt
Plaintiff seeks damages comprising any and all fees associated with filing its contempt motion. (Docket No. 116 at 18). Judge Karas held Defendants in contempt of the December 27, 2012 Preliminary Injunction and reserved, for a later date, a determination of the appropriate sanctions to impose. (Docket No. 32).
"[A] court may assess attorneys' fees as a sanction for the `willful disobedience of a court order.'" Chambers v. NASCO, Inc., 501 U.S. 32, 45, quoting Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967); see also New York State Nat'l Org. for Women v. Terry, 159 F.3d 86, 96 (2d Cir. 1998) ("A finding that a contemnor's misconduct was willful strongly supports granting attorneys' fees and costs to the party prosecuting the contempt."), citing Weitzman v. Stein, 98 F.3d 717, 719 (2d Cir. 1996); Vuitton et Fils S.A. v. Carousel Handbags, 592 F.2d 126 126, 130 (2d Cir. 1979).
To establish willful contempt, it must be shown that the "contemnor had actual notice of the court's order, was able to comply with it, did not seek to have it modified, and did not make a good faith effort to comply." New York State Nat'l Org. for Women v. Terry, 952 F.Supp. 1033, 1043 (S.D.N.Y. 1997), aff'd, 159 F.3d 86 (2d Cir. 1998); see also Mingoia v. Crescent Wall Sys., 03 Civ. 7143(THK), 2005 WL 991773 at *5 n. 3 (S.D.N.Y. Apr. 26, 2005) (same), citing Bear U.S.A. Inc. v. William Kim, 71 F.Supp.2d 237, 249-250 (S.D.N.Y. 1999).
The record here contains clear and convincing evidence that Defendants had (1) actual notice of the temporary restraining order and repeatedly acknowledged its existence in his correspondence, (Docket Nos. 8, 11-12, 28); (2) never contested his ability to comply with it; (3) never sought to have the order modified; and (4) did not make a good faith effort to comply with it.
Damages for this conduct, however, have already been awarded in connection with the Court's finding that punitive damages in the form of attorneys' fees are appropriate. To further award contempt damages for the same attorneys' fees granted above would be redundant and excessive. Accordingly, I respectfully recommend that no damages for contempt be awarded.
K. Plaintiff's Request for a Permanent Injunction
Plaintiff renews its request for the imposition of a permanent injunction, arguing that Scherer should be permanently enjoined from (1) using Shamrock Power's trade secrets, and (2) competing against Shamrock Power in the geographic area that was his territory as a Shamrock Power employee. (Docket No. 116 at 15). Judge Karas found that Plaintiff, in its Motion for Partial Summary Judgment, "failed to make the showing required to warrant imposition of a permanent injunction," (Summary Judgment Order at 60), but provided Plaintiff the instant opportunity to submit additional evidence demonstrating irreparable harm.
A court may grant a permanent injunction if a plaintiff demonstrates the following three factors: (1) success on the merits; (2) the lack of an adequate remedy at law; and (3) irreparable harm if relief is not granted. SunTrust Banks, Inc. v. Turnberry Capital Mgmt. LP, 945 F.Supp.2d 415, 420 (S.D.N.Y. 2013) (internal quotation marks omitted), aff'd, 566 F.App'x 32 (2d Cir. 2014); see also J.P. Morgan Sec. LLC v. Quinnipiac Univ., No. 14-CV-429, 2015 WL 2452406, at *3 (S.D.N.Y. May 22, 2015) (same). While Plaintiff clarifies its reliance on Monovis v. Aquino, 905 F.Supp. 1205 (1994), it does not offer any additional evidence or argument to demonstrate satisfaction of the pleading requirements for a permanent injunction. Plaintiff's failure to propound any new facts to support its contention that monetary damages are inadequate and that irreparable harm will result if relief is not granted undermines its demand for a permanent injunction. Therefore, I respectfully recommend that Plaintiff's request for a permanent injunction be denied.
For the foregoing reasons, I respectfully recommend entry of a judgment awarding Plaintiff: (1) $99,824.93 for its breach of fiduciary duty claim, (2) $118,532.30 for its faithless servant claim, (3) $51,557.80 for its misappropriation of trade secrets claim, (4) $223,951.01 in punitive damages, and (5) prejudgment interest at 9% per annum from January 5, 2015 to the date judgment is entered. Additionally, I respectfully recommend that no fraud in the inducement/unjust enrichment or contempt damages be awarded. Finally, I respectfully recommend that Plaintiff's request for a permanent injunction and Motion to Strike be denied, and that Defendants' requests set forth in their July 13, 2016 letter be denied.
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b)(2) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from receipt of this Report and Recommendation to serve and file written objections. See Fed.R. Civ. P. 6(a) and (d) (rules for computing time). Objections and responses to objections, if any, shall be filed with the Clerk of the Court, with extra copies delivered to the chambers of the Honorable Kenneth M. Karas at the United States District Court, Southern District of New York, 300 Quarropas Street, White Plains, New York, 10601, and to the chambers of the undersigned at said Courthouse.
Requests for extensions of time to file objections must be made to the Honorable Kenneth M. Karas and not to the undersigned. Failure to file timely objections to this Report and Recommendation will preclude later appellate review of any order of judgment that will be rendered. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), 6(b), 6(d), 72(b); Caidor v. Onondaga Cnty., 517 F.3d 601, 604 (2d Cir. 2008).