Kps & Associates, Inc. v. Designs By Fmc, Inc.

18 F.3d 1 (1st Cir. 2003)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P, a sales representative, is a Florida corporation registered to do business in Massachusetts, which is also its principal place of business. P is basically one person, Kenneth P. Sayles.' D is an importer, seller, and distributor of silver jewelry to retail and department stores throughout the United States. D is a New York corporation with its principal place of business in Brooklyn. Its president and sole shareholder is William Nussen. P and D entered into an oral agreement whereby P agreed to secure new accounts. for Designs. The parties dispute whether this relationship was to be exclusive. P alleges that it was free to represent other jewelry distributors. D stopped sending statements to P in November 1995. D fell behind in its payments to P. P began representing Jasco, Inc., another jewelry distributor. P made no effort to conceal its relationship with Jasco. D demanded that P terminate its relationship with Jasco. P refused, and D sent a letter terminating the relationship. D never provided a final accounting, nor did D pay P the commissions it was claiming. D filed a lawsuit in New York state court against P asserting eleven different causes of action, including breach of contract, fraud, breach of fiduciary duty, conversion, tortious interference, and 'prima facie tort.' The complaint sought over $5,000,000 in compensatory damages and $5,000,000 in punitive damages. P filed the instant lawsuit against D in the United States District Court for the District of Massachusetts. Litigation quickly bogged down in a messy motion practice. After close to three months P filed a motion on January 14, 2000, to compel D to retain local counsel. The court ordered D to retain local counsel within seven days. D's local counsel, Brian Banks, did not file his appearance until five days after the seven-day deadline had passed. The court denied D's motion to dismiss, and D had ten days to file an answer. Ten calendar days later, P submitted to the court a request for an entry of default since D had yet to file its answer. On March 10, 2000, the clerk entered a notice of default pursuant to Rule 55(a). On March 17, 2000, P filed a request for the entry of default judgment, which was likewise served on all counsel. On March 21, 2000, D asserted that he had sent a timely answer on March 1, 2000, by Federal Express. D filed a motion to set aside the default, and the district court conducted a hearing on May 17, 2000. The motion was denied for 'stonewalling,' and the court explicitly disbelieved D's proffered explanation with regard to the filing of the answer. One month later, D filed a motion for reconsideration -- styled as a motion pursuant to Rule 60(b). The court denied the request to set aside the entry of default. The court concluded damages were a sum certain established by P’s complaint. A magistrate judge was ordered to review for liability for double or treble damages under Chapter 93A. The Magistrate Judge found that D had willfully and knowingly engaged in conduct prohibited by Chapter 93A and P should be awarded double damages. Judgment was entered for $367,154 -- twice the $183,577 recited in the ad damnum clause of P's complaint. P appealed.