## Facts

- Profi-Parkiet Sp. Zoo (“Profi-Parkiet”), a Polish wood-trading company, agreed to buy walnut flooring from Seneca Hardwoods LLC (“Seneca”), a New York manufacturer of unfinished solid hardwood floors.
- The agreement was formed through email communications and called for approximately 5,100 square feet of “Walnut Select and Better” grade, 5¼" tongue-and-groove flooring, at about $3.87 per square foot, for a total price of $20,487.98.
- On May 12, 2011, Profi-Parkiet wired Seneca $16,390.38 as an 80% down payment to reserve the lumber, with the remaining 20% to be paid after receipt and inspection.
- Profi-Parkiet also paid shipping and related charges; its down payment and shipping costs together totaled $23,211.58.
- Seneca delayed shipment for about five months. During the delay, Profi-Parkiet sourced walnut flooring from another supplier.
- When Seneca’s shipment arrived in Poland, Profi-Parkiet asserted the goods did not match the order: boards were short, split, discolored, below grade, largely not tongue-and-groove, and the shipment was short by several hundred square feet.
- Profi-Parkiet rejected the shipment and asked Seneca to collect it. Seneca did not retrieve the goods.
- Profi-Parkiet stored the shipment and sought storage charges of about $8 per day.
- Profi-Parkiet claimed customers cancelled walnut-flooring orders due to the delay and defects.
- Within about three months, Profi-Parkiet purchased replacement walnut flooring for $37,396.45—about $21,006.07 more than the Seneca contract price.
- Profi-Parkiet sued in the Eastern District of New York for breach of contract under the United Nations Convention on Contracts for the International Sale of Goods (CISG). Seneca was served but did not appear; default was entered, and the court referred the damages request to a magistrate judge for a report and recommendation.

## Issues

1. Whether Profi-Parkiet’s well-pleaded allegations established Seneca’s liability under the CISG for delivering late and supplying nonconforming goods in a short quantity.
2. What damages Profi-Parkiet could recover on default, including down payment and shipping, storage, cover (replacement purchase) damages, and claimed losses tied to cancelled customer orders.
3. Whether, and from what date, prejudgment interest should be awarded under the CISG, and what rate should apply.
4. Whether attorneys’ fees and litigation costs were recoverable on this record.

## Decision

- The magistrate judge recommended granting default judgment on Profi-Parkiet’s CISG breach-of-contract claim, but limiting recovery to proven losses.
- The court recommended (and the district judge later adopted) a damages award totaling $52,537.07, reflecting losses sufficiently supported by the submissions, including amounts paid and the documented price differential for replacement goods, along with supported related expenses.
- The court declined to award lost profits tied to cancelled customer orders on the existing record because the proof did not provide a reliable basis to calculate profit (including the needed cost breakdown), while permitting supplementation.
- The court denied Profi-Parkiet’s request for attorneys’ fees and costs.
- The court awarded prejudgment interest starting in February 2012 at the average one-year U.S. Treasury bill rate, compounded annually.

## Legal Principles

- On default judgment, the court may accept well-pleaded allegations as true for liability, but it must independently determine that the requested damages are supported by competent evidence and are not speculative.
- The CISG applies to contracts for the international sale of goods between parties located in different Contracting States (such as the United States and Poland).
- Delivery of goods that fail to conform to contractual specifications, and delivery of a short quantity, constitutes breach under the CISG and triggers buyer remedies, including damages.
- CISG Article 74 permits recovery of losses caused by the breach that were foreseeable at contract formation; in principle this can include lost profits, but profit-based awards require a reliable showing of revenues and costs.
- CISG Articles 75–77 support recovery of cover-type damages where the buyer makes a substitute purchase within a reasonable time, and require reasonable efforts to limit loss.
- Reasonable post-breach expenses (such as storage of rejected goods) may be recovered when shown with documentation and when connected to the breach.
- CISG Article 78 authorizes interest on sums in arrears; because the CISG does not set a rate, courts may select a reasonable benchmark rate to compensate the claimant.

## Conclusion

In Profi-Parkiet Sp. Zoo v. Seneca Hardwoods LLC, the court entered default judgment for a Polish buyer under the CISG after a New York seller delivered walnut flooring late and in nonconforming condition and quantity, awarding $52,537.07 in proven damages (including amounts paid and cover-related losses) plus prejudgment interest from February 2012 at the average one-year Treasury bill rate compounded annually, while denying attorneys’ fees and declining to award claimed lost profits without further proof.


Profi-Parkiet Sp. Zoo v. Seneca Hardwoods LLC, 2014 WL 2169769 (2014)