Kevin M. Brandt v. P. Kevin Smith

Summary

The United States District Court for the Eastern District of Virginia considers Plaintiff Kevin M. Brandt’s motion for default judgment arising from Defendant P. Kevin Smith’s alleged failure to pay $1.2 million under a Membership Interest Transfer Agreement. The Court grants default judgment on liability for breach of contract and breach of the implied covenant of good faith and fair dealing, and orders specific performance requiring payment in exchange for a 10% membership interest. The Court denies prejudgment interest, awards post-judgment interest under 28 U.S.C. § 1961, and addresses attorneys’ fees and costs.

Holdings

1. The entry of default should not be set aside because Defendant failed to show good cause and had not responded to the complaint despite notice.
2. The Court had specific personal jurisdiction over Defendant under Virginia's long-arm statute and the Due Process Clause.
3. Default judgment was warranted on Plaintiff's breach-of-contract claim because the Agreement was valid, Defendant materially breached it by failing to pay $1.2 million, and Plaintiff was damaged by the breach.
4. Default judgment was warranted on Plaintiff's implied-covenant claim, which arose from Defendant's failure to perform his contractual obligations.
5. Specific performance was appropriate, and Defendant was ordered to pay Plaintiff $1.2 million in exchange for a 10% ownership interest in Dover Hall Enterprises, LLC.
6. Prejudgment interest was denied because, although Plaintiff requested it in the complaint, the equities did not favor an award.
7. Plaintiff was entitled to post-judgment interest on the $1.2 million payment calculated under 28 U.S.C. § 1961.
8. The contractual fee-shifting provision required Defendant to reimburse Plaintiff $24,465.00, consisting of $23,910.00 in reasonable attorneys' fees and $555.00 in costs.

Questions Presented

1. Whether the Clerk's entry of default should be set aside for good cause.
2. Whether the Court had personal jurisdiction over Defendant.
3. Whether the well-pleaded allegations established Defendant's liability for breach of contract.
4. Whether the well-pleaded allegations established liability for breach of the implied covenant of good faith and fair dealing.
5. Whether Plaintiff was entitled to specific performance requiring Defendant to pay $1.2 million in exchange for a 10% membership interest.
6. Whether Plaintiff was entitled to prejudgment interest.
7. Whether Plaintiff was entitled to post-judgment interest.
8. Whether Plaintiff was entitled to contractual attorneys' fees and costs, and what amount was reasonable.

Disposition

other