KPS & Associates, Inc. v. Designs by FMC, Inc.

Brief Fact Summary.

KPS & Associates, Inc. (KPS) sought a default judgment against Designs by FMC, Inc. (FMC) because FMC failed to file an answer to the complaint.

Synopsis of Rule of Law.

A district court can deny a default judgment if the denying party does not provide good cause.

Facts.

KPS & Associates, Inc. (KPS) sued Designs by FMC, Inc. (FMC) for outstanding commissions. KPS sought a default judgment against FMC because FMC failed to answer. The court subsequently entered a default judgment against FMC. FMC’s lawyer, Schrader, blamed the default judgment on a temporary secretary, and sought to move aside the default judgment. The district judge deemed Schrader’s explanation a fabrication and entered a default judgment against FMC.

Issue.

Whether a district court can deny a default judgment if the denying party does not provide good cause?

Held.

The case is remanded for reconsideration of damages.It was an abuse of discretion for the district judge to enter damages as a sum certain.

Discussion.

According to Federal Rules of Civil Procedure 55(c), a district court can deny a default judgment if the denying party does not provide good cause.