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

Citation. 318 F.3d 1 (1st Cir. 2003)

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Citation318 F.3d 1 (1st Cir. 2003)

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.

Points of Law - Legal Principles in this Case for Law Students.

While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation.

View Full Point of Law

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.