General Contracting & Trading Co., LLC v. Interpole, Inc.
| Decision Date | 06 February 1990 |
| Docket Number | 90-1115,Nos. 89-1842,s. 89-1842 |
| Citation | 899 F.2d 109 |
| Parties | The GENERAL CONTRACTING & TRADING CO., LLC, Plaintiff, Appellee, v. INTERPOLE, INC., Defendant, Appellee, v. TRANSAMERICAN STEAMSHIP CORPORATION, Third-Party Defendant, Appellant. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Edward C. Radzik, New York City, with whom Gary S. Lenehan, Manchester, N.H., Donovan Maloof Walsh & Repetto, New York City, and Brennan & Caron, P.A., Manchester, N.H., were on brief, for third-party defendant, appellant.
Margaret H. Nelson, with whom Warren C. Nighswander, William M. Thomas, and Sulloway Hollis & Soden were on brief for defendant, appellee Interpole, Inc.
Richard W. Mable, with whom Powers & Hall, Professional Corp., Boston, Mass., was on brief for plaintiff, appellee General Contracting & Trading Co.
Before BREYER, ALDRICH and SELYA, Circuit Judges.
These appeals collectively constitute a legal motley, arising in an odd fact/law posture and presenting a crazyquilt assortment of issues. We try, first, to gather the litigatory strands into a workable sort of yarn, and then to weave our way through the pattern of appellate inquiry, stitching up the cases' ravelled sleeve.
In 1980, appellee General Contracting & Trading Co. (GCT), a firm organized under the laws of the Sultanate of Oman, ordered 4,500 wooden utility poles from appellee Interpole, Inc., a New Hampshire corporation. The parties negotiated a pair of modified cost-and-freight contracts covering transport of the goods to Oman. The poles, crafted from southern pine, were never intended to reach New Hampshire. Instead, Interpole arranged to ship them from Mobile, Alabama to Mina Qaboos, Oman, on board the IOANNIS MARTINOS, a freighter owned and operated by appellant Transamerican Steamship Corporation (Trastco). A bill of lading was issued on October 9, 1980, subject to the terms of the United States Carriage of Goods by Sea Act (COGSA), 46 U.S.C.App. Secs. 1300-1315 (1987). The record is clear, however, that GCT's contracts with Interpole were subject not to COGSA but to the provisions of New Hampshire law.
The ensuing voyage was stormy in every sense of the word. The particulars need not concern us; it suffices to say that the consignment of utility poles did not reach Oman until March 1981. GCT asserted a claim for delay damages against its vendor and Interpole asserted a ricochet claim against Trastco. Some tentative accommodations were made without resort to litigation: Interpole paid $13,500 to GCT and Trastco paid $40,000 to Interpole in partial satisfaction of certain claims inter sese. Eventually, however, the parties' negotiations proved no more successful than the voyage itself. And when the fabric of ongoing negotiations disintegrated, conciliatory ploughshares were traded for litigatory swords.
In our estimation, this decurtate summary of an admittedly convoluted collection of transactional facts is all that is necessary to put Trastco's appeals into proper perspective. We add it to a condensed chronology of certain critical events reflected by the docket entries and related records.
1. May 28, 1985. GCT sued Interpole in the United States District Court for the District of New Hampshire (Suit No. 1).
2. October 8, 1985. Having answered, Interpole moved for leave to file a third-party complaint for noncontractual indemnity against Trastco. The motion was granted.
3. December 5, 1985. The third-party summons and complaint was duly served on Trastco and received by Dennis Hamilton, a vice president. Trastco did nothing.
4. January 8, 1986. At Interpole's request, a default was entered against Trastco.
5. September 16, 1986. By this date at the latest, Trastco admits that it was fully aware of the entry of default.
6. December 30, 1986. Trastco moved for the first time to set aside the default. It also moved to dismiss the third-party complaint.
7. January 30, 1987. The district court denied both of the aforesaid motions.
8. March 6, 1987. The district court denied Trastco's motions for reconsideration.
9. August 19, 1987. Trastco sued Interpole for fraud and misappropriation (Suit No. 2).
10. May 20, 1988. By submission, Interpole confessed to a judgment in GCT's favor for $27,000 in Suit No. 1, contingent upon Interpole's enforcement of a default judgment against Trastco.
11. May 23, 1988. The district court approved the stipulation in Suit No. 1 and entered judgment on the primary complaint.
12. October 6, 1988. The court granted Interpole's motion for entry of a default judgment against Trastco in Suit No. 1, but deferred computation of the award and consolidated the two suits for a hearing on damages.
13. May 16, 1989. Interpole and Transamerican settled Suit No. 2 for $30,000 and so informed the district court.
14. June 27, 1989. The focus reverted to Suit No. 1. The district court assessed damages against Trastco on the third-party complaint in the sum of $43,276, including $16,276 in attorneys' fees. The court denied Trastco's motion to set off the $30,000 settlement (see supra entry # 13) against this award.
15. July 27, 1989. Trastco, filed its initial notice of appeal. 1
Trastco's appeals are loomed from four threads of assigned error, viz., (1) that the district court abused its discretion in refusing to set aside the default in Suit No. 1; (2) that the judgments should have been offset against each other; (3) that there was no basis for an award of attorneys' fees to Interpole on its third-party complaint; and (4) that, in any event, the district court lacked in personam jurisdiction over Trastco and should have dismissed the third-party complaint out of hand. Because there is no perfectly satisfactory way sequentially to arrange the disparate components of this asseverational array, we address the issues in the order in which appellant chose to present them.
We have no occasion to linger over Trastco's first imprecation. Being late may be fashionable in certain social circles, but law and high society are worlds apart. In legal matters, punctuality is a paramount virtue. Disregarding time constraints can, as these appeals illustrate, produce unfortunate consequences.
Under the Civil Rules, an entry of default may be set aside only "[f]or good cause shown." Fed.R.Civ.P. 55(c). We have recently visited the compendium of factors which a district court should consider in "analyz[ing] the quantum and quality of [a defaulted party's] 'cause' to see if it was 'good,' that is, if it warranted removal of an entry of default," Coon v. Grenier, 867 F.2d 73, 76 (1st Cir.1989), and it would be pleonastic to rehearse that discussion here. It is enough to reemphasize that, while certain recurrent elements should be probed--the proffered explanation for the default; whether the default was willful, innocent, or somewhere in between; whether setting it aside would prejudice the movant's adversary; whether the movant possesses a meritorious defense; and the timing of the motion, see id.; United States v. One Urban Lot, Etc., 865 F.2d 427, 429 (1st Cir.1989)--Rule 55(c) determinations are case-specific. They must, therefore, be made in a practical, commonsense manner, without rigid adherence to, or undue reliance upon, a mechanical formula. When all is said and done, " 'good cause' is a mutable standard, varying from situation to situation." Coon, 867 F.2d at 76.
In this instance, the district court observed that, once served, Trastco did nothing, the vice-president having simply "misplaced" the suit papers. It found that Trastco's default was the product of "negligence com[ing] perilously close" to willfulness and that, given the duration of the action and the "extensive discovery ... undertaken," Interpole would be "substantially prejudiced if the entry of default [were to be] vacated." The court also noted that appellant "waited approximately three and one-half months" between discovery of the default and asking the court for relief, characterizing the delay as exhibiting a "lack of due diligence." For these reasons, and notwithstanding the presence of arguably meritorious defenses, the district judge refused to set aside the default.
In the absence of legal error, we review the trial court's denial of a Rule 55(c) motion solely for abuse of discretion. See Coon, 867 F.2d at 75 (collecting cases). We discern no such abuse in the case at bar. To the exact contrary, the district court demonstrated complete fidelity to the Coon standard. The court appears to have considered and weighed the full panoply of relevant circumstances and to have derived its findings from permissible, if not ineluctable, views of the record. Given particularly the lack of any tenable excuse for appellant's failure to answer, the length of time it dawdled after the problem surfaced, and the court's supportable finding of prejudice, the decision to leave Trastco smarting from self-inflicted wounds was well within the province of the court's discretion.
Trastco polemicizes the district court's refusal to offset the judgment it obtained against Interpole in Suit No. 2 against the judgment Interpole won in Suit No. 1. 2 The parties agree that New Hampshire law provides the rule of decision on the question of setoff and we are free to accept that agreement uncritically. See Fashion House, Inc. v. K mart Corp., 892 F.2d 1076, 1079 (1st Cir.1989); Moores v. Greenberg, 834 F.2d 1105, 1107 n. 2 (1st Cir.1987). Scrutinizing the circumstances in light of New Hampshire's jurisprudence, we find no cognizable error.
For one thing, appellant too blithely treats the judgments as if they arose in the same action. While the lower court consolidated the suits for the purpose of assessing damages, Fed.R.Civ.P. 42(a), consolidation is merely a procedural device that does not merge separate suits...
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