U.S. Election Corp. v. Microvote Corp.
| Decision Date | 11 August 1995 |
| Docket Number | No. 94-2532,94-2532 |
| Citation | 51 F.3d 276 |
| Parties | NOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit. UNITED STATES ELECTION CORPORATION, Plaintiff-Counterclaim Defendant-Appellee, v. MICROVOTE CORPORATION, Defendant-Counterclaim Plaintiff-Appellant, v. Donald EVONS, Counterclaim Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Before COFFEY and KANNE, Circuit Judges, and MORAN, Chief District Judge 1.
Underlying this diversity case is a contract dispute between plaintiff United States Election Corporation (USEC), a Pennsylvania corporation, and defendant MicroVote Corporation (MicroVote), an Indiana corporation. 2 The case went before a jury in May 1994 and the jury found in favor of USEC. MicroVote now appeals on the basis of eleven errors allegedly committed by the district court before and during trial. We affirm.
In 1987 and 1988 USEC and MicroVote negotiated and signed a contract under which USEC was to act as the exclusive sales agent for MicroVote's electronic voting machine in eleven eastern states and the District of Columbia. USEC claims that it began pursuing sales opportunities, then learned that MicroVote was looking for someone to represent it in many of the states for which USEC was responsible. USEC considered this action a breach of the contract and attempted to persuade MicroVote to abide by the agreement. When that failed, USEC filed suit, asserting that MicroVote's breach cost it $320,000 in commissions from sales it had arranged and $20 million in future compensatory income. The complaint included a claim for loss of business reputation.
USEC filed its complaint in the Eastern District of Pennsylvania, and MicroVote responded with an answer and a request for trial by jury. In early 1991 the case was transferred to the Southern District of Indiana, and soon thereafter MicroVote filed a motion to dismiss and a counterclaim. The counterclaim asserted that MicroVote terminated the agreement in May 1989 because (a) contrary to its representations, USEC did not have sales connections in all twelve territories, (b) USEC failed to make any sales efforts in any state other than Pennsylvania, and (c) USEC failed even to try to acquire the expertise necessary to sell MicroVote machines properly. MicroVote sought compensation for lost sales, alleging counts of breach of contract, fraud, and conversion.
MicroVote filed its first amended counterclaim in July 1991. In November of that year it filed an amended motion to dismiss, which included additional claims for sanctions, fees, and costs and sought to hold USEC and its attorney in contempt of court. MicroVote also requested a ruling on its pending motions. On December 20, 1991, the court ordered USEC to show cause why MicroVote's motions should not be granted. USEC did not do so, but instead filed an answer to the counterclaim. In March 1992 the district court granted MicroVote's motion to dismiss and denied its motion for default judgment.
On April 14, 1992, USEC (represented by new counsel) filed a motion to vacate the dismissal order and reinstate its complaint and a motion in opposition to MicroVote's motion for sanctions. On April 20, MicroVote filed a response to USEC's motion to vacate and reinstate. Ten days later Evons and USEC answered MicroVote's first amended counterclaim. In July, the court granted USEC's motion to vacate dismissal and reinstate its complaint, and stayed its ruling on MicroVote's motion for sanctions.
USEC filed its first amended complaint in December 1992, and MicroVote answered in March 1993. As the case moved toward trial both sides submitted trial briefs and motions in limine. On May 23, 1994, the day the trial began, the court granted USEC and Evons' motion in limine.
The four-day trial opened with USEC's case and MicroVote's defense. MicroVote then presented its case in support of its counterclaim. MicroVote's motions for mistrial on May 24 and 26, 1994, were denied. On May 26 the jury returned a $350,000 verdict for USEC and directed that MicroVote recover nothing on its counterclaim. The court entered judgment on that verdict on May 27, 1994, and MicroVote now appeals.
MicroVote challenges many aspects of the proceedings in the trial court. We examine each in turn. Where an inquiry into the substance of the decision below is necessary, we note the appropriate standard of review.
Chronologically, the first of MicroVote's arguments is that the district court erred when it denied its motion for default judgment. MicroVote says that the court should have entered a default judgment against USEC in March 1992 because USEC did not answer MicroVote's counterclaim or respond to the order to show cause why default judgment should not be entered.
A district court's decision to deny a motion for default judgment will be reversed only if it amounted to an abuse of discretion. Swink v. City of Pagedale, 810 F.2d 791, 792 (8th Cir.), cert. denied, 483 U.S. 1025 (1987); see also Merrill Lynch Mortgage Corp. v. Narayan, 908 F.2d 246, 250 (7th Cir.1990) (). We find that the March 10, 1992 order was well within the court's discretion. The court held that because USEC had answered the counterclaim in January 1992, MicroVote's motion for default was moot. USEC should have responded sooner, but at the time the district court made its decision it would have been senseless to enter a default judgment.
MicroVote points out that because Evons and USEC's attorney received service of the counterclaim by certified mail in early 1991, and because the show cause order was entered in December 1991, USEC and Evons had notice that a response was due. But this fact does not alter the underlying posture of the case. At the time the district court ruled the answer had been filed, so MicroVote stood to suffer no prejudice that would justify entering a default judgment.
MicroVote next argues that the district court erred on July 1, 1992, when it vacated its March 10, 1992 dismissal of USEC's complaint. The dismissal order noted that the personal problems of USEC's original attorney, and the slim possibility that the case would be returned to the Eastern District of Pennsylvania, were inadequate reasons to justify USEC's failure to respond to MicroVote's motion to dismiss. Because USEC failed to show cause why the motion should not be granted, the court dismissed the complaint.
In July, acting on a motion from USEC's new attorneys, the court vacated its earlier order for two reasons: it found reason to believe that USEC and Evons had never received notice of the order to show cause or the motion to dismiss, and it found that because MicroVote's counterclaim (on which litigation was proceeding) involved the same subject matter as USEC's complaint, MicroVote would not be prejudiced by the reinstatement of the complaint. The court held that because "justice would be best served by a full adjudication on the merits of all claims and counterclaims," USEC's complaint should be reinstated. United States Election Corp. v. MicroVote Corp., No. IP 91-73-C, slip op. at 3 (S.D.Ind. July 1, 1992).
A district court has considerable discretion to decide whether to vacate an earlier order. Cameo Convalescent Center, Inc. v. Percy, 800 F.2d 108, 110 (7th Cir.1986) ( ). MicroVote does not contest the findings that support the district court's decision, and we believe the decision was reasonable under the circumstances. It certainly was not an abuse of discretion.
MicroVote's only other argument on this point is that the court never ruled on its Rule 12(b)(6) motion to dismiss USEC's original complaint. MicroVote is correct in a sense: the court below based its March order of dismissal on USEC's failure to show cause, not on its failure to state a claim, and never considered the 12(b)(6) motion, even after USEC asked for reinstatement of its claims. But MicroVote does not say that it renewed its motion in the spring of 1992. If it expected the court to consider its Rule 12(b)(6) argument along with USEC's motion for reinstatement, it should have once again brought its position to the court's attention. Its failure to do so cannot be remedied by presenting the argument for the first time on appeal. Citizens Insurance Co. of America v. Barton, 39 F.3d 826, 828 (7th Cir.1994) ().
Just before trial MicroVote moved the court for permission to take the depositions of Evons and four other men, some of whom it had already deposed. It represented that the depositions, which it agreed to confine to matters not covered in earlier depositions, would yield admissible evidence that USEC and Evons were associated with criminal activity. MicroVote purportedly had discovered that R. Bruce Downing, the former director of the Delaware County (Pennsylvania) Board of Elections, and John F. McNichols, a former director and officer of USEC, were involved in some underhanded dealings that resulted in Downing's indictment on over 300 counts of misuse of public office. MicroVote needed to depose Evons, Downing, McNichols, and two others to support an argument that one of the reasons it terminated its contract with USEC was the...
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In re Watts Coordinated Pretrial Proceedings
...the questions seek irrelevant information. Plaintiffs' reliance on an inapposite and unpublished case, U.S. Election Corp. v. Microvote Corp., 51 F.3d 276, 1995 WL 156561 (7th Cir. 1995), does not merit a different conclusion. Plaintiffs cite Microvote for the proposition that a Court does ......