The opinion of the court was delivered by: S. Arthur Spiegel United States Senior District Judge
This matter is before the Court on the Magistrate Judge's May 5, 2006 Report and Recommendation (doc. 29), to which no party objected. For the reasons indicated herein, the Court ADOPTS the Report and Recommendation in its entirety.
This Court entered default judgment against Defendants Edward Hartley and Charles Cypert on March 23, 2006, and then requested the Magistrate Judge to conduct a hearing on attorney's fees and damages, if any, to be awarded (doc. 25). The Magistrate Judge held such hearing on April 27, 2006 (doc. 27). Defendants did not appear, but the Magistrate Judge considered their correspondence (doc. 29).
Subsequent to the hearing, the Magistrate Judge issued the present Report and Recommendation on the question of attorney's fees and damages (Id.). The Magistrate Judge recommended that compensatory damages be awarded according to a fifteen percent profit margin (Id.). Un-rebutted testimony suggests that Plaintiff's profit margin is fifty-six percent, thus resulting in lost profits attributable to Hartley of $202,140.00, and lost profits attributable to Cypert of $151,590.08 (Id.). The Magistrate Judge found that damages based on such a figure would be unreasonable under the circumstances (Id.). Thus, based on the fifteen percent figure, the Magistrate Judge calculated that Defendants Hartley and Cypert should be levied $54,135 and $33,238 respectively in compensatory damages (Id.). Though Plaintiff also seeks recovery of $27,500 from Defendant Hartley for the value of documents converted, the Magistrate Judge found insufficient evidence to prove such damages (Id.).
With regard to punitive damages, the Magistrate Judge recommended doubling the compensatory damage award in reference to each Defendant, rather than using a multiple of three (Id.). The Magistrate Judge acknowledged that while there is no specific test for determining proper punitive damages, a court should consider among other things, the relationship between the parties, their financial status, the harm that occurred and the probability of recurrence unless the conduct is deterred. Lashua v. Lakeside Title & Escrow Agency, 2005-Ohio-1728 (5th District Court of Appeals, 4/11/05). The Report and Recommendation notes that Plaintiff is still in business, the competitor company is apparently defunct and that both Defendants have moved on (Id.).
The Magistrate Judge also recommended that the Court hold Defendants jointly and severally liable for attorney fees (Id.). The Magistrate Judge noted that Ohio case law requires, absent a statutory basis, actual malice as a prerequisite to an award of attorney fees (Id.). Malice, according to the Magistrate Judge, is defined as "a conscious disregard for the rights of others that has a great probability of causing substantial harm" (Id.). In this case, the Magistrate Judge found the behavior of the Defendants deliberate and intentional, willful and malicious (Id.). The Magistrate Judge therefore recommends that attorney fees be awarded in a joint and several manner (Id.).
In conclusion, the Magistrate Judge recommends judgment against Defendant Edward Hartley in the amount of $108,270 plus costs, and judgment against Defendant Charles Cypert in the amount of $66,476 plus costs (Id.). The Magistrate Judge also recommends an award of attorney fees in the amount of $21,404.00 (Id.).
Having reviewed the Report and Recommendation, the Court finds it thorough and well-reasoned. The Court also notes that were no objections to the Report and Recommendation. Accordingly, the Court hereby ADOPTS IN ENTIRETY the Magistrate Judge's May 5, 2006 Report and Recommendation (doc. 29), AWARDS Plaintiff judgment against Defendant Edward Hartley in the amount of $54,135 plus punitive damages of $54,135 for a total of $108,270 plus costs, and AWARDS Plaintiff judgment against Defendant Charles Cypert in the amount of $33,238 plus punitive damages of $33,238 for a total of $66,476 plus costs. The Court further AWARDS attorney fees in the amount of $21,404, for which Defendants Hartley and Cypert share joint and several liability.
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