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KPS & Associates, Inc. v. Designs by FMC, Inc.
United States Court of Appeals for the First Circuit
318 F.3d 1 (1st Cir. 2003)
KPS & Associates, Inc. (KPS) (plaintiff) sued Designs by FMC, Inc. (FMC) (defendant) in September 1999 for outstanding commissions. The complaint body described damages of $131,033, but $183,577 was claimed in the ad damnum clause. After a contentious motion practice, KPS requested entry of default against FMC for failure to file an answer on March 1, 2000. The clerk entered notice of default on March 10, as permitted by Federal Rule of Civil Procedure (FRCP) 55(a). FMC’s lawyer, Schrader, responded on March 21, blaming the default on a temporary secretary’s mistake. Schrader moved to set aside the default a week later. The district judge concluded Schrader’s explanation was a fabrication, based on his previous “stonewalling” and duplicitous behavior. The district judge entered default against FMC and concluded damages were a sum certain established by KPS’s complaint. A magistrate judge reviewed the case for the limited purpose of determining whether damages should be double or treble under state law. The magistrate concluded double damages were warranted, and the district judge awarded $367,154. FMC appealed, arguing the default should be vacated because: (1) it was not willful, (2) FMC had a valid defense, and (3) KPS was not prejudiced.
Rule of Law
Holding and Reasoning (Lipez, J.)
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