Liberty Synergistics Inc. v. Microflo Ltd.

Liberty Synergistics, Inc., Plaintiffv.Microflo, Ltd., Edward Malkin, Ecotech Limited, a Cayman Islands Company, and Does 1 through 20, inclusive, Defendants

REPORT AND RECOMMENDATION Presently before the Court, on referral from the Honorable Margo K. Brodie for Report and Recommendation in this diversity action, is Defendants’ Microflo, Ltd., Edward Malkin, and Ecotech Limited (collectively, “Defendants”) motion for default judgment against Plaintiff Liberty Synergistics, Inc., (“Plaintiff” or “Liberty”) on their counterclaims. See Docket Entry (“DE”) [167]. For the reasons set forth below, the Court respectfully recommends that a default judgment be entered against Liberty in favor of Defendants in the amount of $271,363.20.I. BackgroundThis litigation has an extensive history, familiarity with which is presumed. See Liberty Synergistics, Inc. v. Microflo Ltd., 50 F. Supp. 3d 267 (E.D.N.Y. 2014), DE [140]; DE [166] (detailing the facts and procedural history of this case). Thus, the Court only provides a summary of the facts and procedural history relevant to the disposition of the instant motion.On September 17, 2010, Liberty commenced this action against Defendants in California state court, alleging malicious prosecution for bringing an underlying litigation in Microflo, Ltd. v. Liberty Bearing Corp., No. 08-cv-3907 (E.D.N.Y., filed Sept 24, 2008) (the “Underlying Litigation”). See DE [1], Ex. A (Notice of Removal). This action was then removed to the Central District of California by Defendants on the basis of diversity, and transferred to the Eastern District of New York pursuant to 28 U.S.C. §1404(a). See DE [15].In their August 6, 2012 Answer to Plaintiff’s First Amended Complaint with Counterclaims (the “AWC”), DE [82], Defendants asserted counterclaims for breach of contract and violation of a Court order, claiming that bringing this action violated the terms of the parties’ settlement agreement in the Underlying Litigation, which included a Stipulation of Dismissal with prejudice pursuant to Fed. R. Civ. P. 41(a)(1)(A)(ii) (the “Stipulation of Dismissal”), that was So Ordered by the Court. The Stipulation of Dismissal provided that each party would bear its own costs in connection with the Underlying Litigation. See AWC, First Count,