Kforce Inc. v. ThomasRiley Strategies, LLC
1:19-cv-00656
E.D. Va.Aug 23, 2019Background
- Kforce (FL corp.) and ThomasRiley (MD LLC) executed a Settlement Agreement (July 2018) resolving an earlier suit; agreement required 12 installment payments totaling $1,317,158.33 and allowed confession of judgment for $1,400,879.18 upon default.
- ThomasRiley made four timely payments and sent a late partial check ($40,500) with a restrictive notation; it failed to reissue payment and missed the fifth payment due Oct. 15, 2018.
- Kforce gave written notice of default Oct. 22, 2018; ThomasRiley did not cure within the 10 business days required by the Agreement.
- Kforce could not file the contract-prescribed confession of judgment in Fairfax Circuit Court because ThomasRiley did not retain the original ink-signed signature page.
- Kforce sued in E.D. Va.; ThomasRiley was served via Maryland SDAT after unsuccessful personal attempts, failed to respond, and default was entered.
- Magistrate judge recommends default judgment for Kforce: $1,042,479.18 (principal), $66,261.69 (8% interest to hearing), and $88,699.27 (8% contractual fees/costs), total $1,197,440.14, with 8% interest to accrue until paid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Service of process | Service on MD Dept. of Assessments and Taxation after good-faith attempts on agent was proper under Md. R. 2-124 | No responsive pleading/argument (default) | Service was proper; ThomasRiley had notice and default entered |
| Jurisdiction & venue | Diversity jurisdiction (FL v. MD; amount > $75,000) and parties agreed to E.D. Va. exclusive enforcement | No opposition (default) | Court has subject-matter and personal jurisdiction; venue proper per forum-selection clause |
| Breach of contract | ThomasRiley breached by failing to make required installment payments and failing to keep original signed agreement | No opposition (default) | Breach established; facts in complaint deemed admitted |
| Damages, interest, and fees | Entitled to confessed-judgment amount less installments ($1,042,479.18), 8% interest from cure deadline, and contractual 8% attorneys’ fees/costs; alternatively seek additional fees under §13 | No opposition (default) | Awarded $1,042,479.18 damages; $66,261.69 interest (to hearing); $88,699.27 (8% of total) under §4; no additional award under §13; total $1,197,440.14, interest at 8% to accrue until paid |
Key Cases Cited
- Erie R. Co. v. Tompkins, 304 U.S. 64 (federal courts apply state substantive law in diversity cases)
- Sunrise Continuing Care, LLC v. Wright, 671 S.E.2d 132 (Va. 2009) (elements of breach of contract under Virginia law)
- Filak v. George, 594 S.E.2d 610 (Va. 2004) (contract breach damages standard)
- Ulloa v. QSP, Inc., 624 S.E.2d 43 (Va. 2006) (Virginia enforces contractual fee-shifting provisions)
- Airlines Reporting Corp. v. Sarrion Travel, Inc., 846 F. Supp. 2d 533 (E.D. Va. 2012) (enforcement of contractual attorneys’ fee provisions)
- Signature Flight Support Corp. v. Landow Aviation Ltd Partnership, 730 F. Supp. 2d 513 (E.D. Va. 2010) (same)
- GlobalSantaFe Corp. v. Globalsantafe.com, 250 F. Supp. 2d 610 (E.D. Va. 2003) (default admits factual allegations)