Marcus Food Co. v. DiPanfilo
671 F.3d 1159
| 10th Cir. | 2011Background
- Marcus Food and DiPanfilo formed a 1999 oral agency relationship; DiPanfilo, based in Toronto, acted as independent sales/purchasing agent outside the US, with Marcus Food funding and retaining title to products.
- The agreement charged DiPanfilo with 45% of net losses on his accounts; relationship lasted about 10 years with regular, substantial communications and coordination with Marcus Food in Kansas.
- Marcus Food reimbursed DiPanfilo for office and business expenses; DiPanfilo traveled to Kansas at least twice; communications occurred monthly or more; records show activity through open/closed sales and currency transactions.
- In February 2009 Marcus Food terminated the relationship and sought 45% of net losses, totaling $280,112; May 19, 2009 letter itemized categories of losses.
- Marcus Food filed suit in the U.S. District Court for the District of Kansas on August 28, 2009; service of process on DiPanfilo occurred in Toronto on September 9, 2009; default entered October 9, 2009; default judgment for $207,585 entered October 14, 2009.
- DiPanfilo moved to set aside the default judgment March 23, 2010, arguing lack of personal jurisdiction and lack of subject matter jurisdiction, and, alternatively, excusable neglect; district court denied the motion after a hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the district court have personal jurisdiction over DiPanfilo? | DiPanfilo's contacts with Kansas through ongoing agency relationship and benefits establish minimum contacts. | Contacts were insufficient or not purposeful, rendering jurisdiction improper. | Yes; specific jurisdiction supported by DiPanfilo's continuing Kansas-related relationship and benefits. |
| Is there subject-matter jurisdiction, and does the amount in controversy exceed $75,000? | Damages exceed $75,000 given 45% share of net losses totaling $280,112; complaint asserts liquidated sum. | Amount in controversy not proven with certainty; potential deficiencies in damages. | Yes; damages exceed $75,000; amount-in-controversy satisfied. |
| Was an evidentiary damages hearing required before entry of default judgment? | Damages are capable of mathematical calculation; no hearing necessary under Rule 55. | Venable requires a hearing when damages are not liquidated. | No; no hearing required because damages are calculable. |
| Did the district court abuse its discretion in denying relief for excusable neglect? | Delays stem from counsel difficulties; movant acted with meritorious intent and no prejudice to plaintiff. | Delay was excessive and not excusable; lack of diligence outweighed other factors. | No; district court did not abuse discretion; neglect not excusable. |
| Did the district court correctly apply jurisdictional principles to DiPanfilo's challenge on appeal? | Record supported jurisdiction; no need for explicit prior declaration of jurisdiction. | Garberg requires explicit acknowledgment of jurisdiction before default judgment. | Yes; district court properly exercised jurisdiction; Garberg not controlling under these facts. |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (continuing relationships and foreseeability for minimum contacts)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (due process; fair play and substantial justice)
- TH Agric. & Nutrition, LLC v. Ace Eur. Grp. Ltd., 488 F.3d 1282 (10th Cir. 2007) (five-factor reasonableness test for jurisdiction)
- Emp'rs Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153 (10th Cir. 2010) (two-step due process analysis for specific jurisdiction)
- Equifax Servs., Inc. v. Hitz, 905 F.2d 1355 (10th Cir. 1990) (employee with cross-border relations and jurisdictional implications)
- Garberg v. Pack-Tech Int'l Corp., 115 F.3d 767 (10th Cir. 1997) (district court must determine jurisdiction before entering default judgment)
- Venable v. Haislip, 721 F.2d 297 (10th Cir. 1983) (due process: need hearing if damages not liquidated)
- Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc., 715 F.2d 1442 (10th Cir. 1983) (excusable neglect; merits not reached without excusable neglect)
- Pioneer Commercial Ins. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380 (1993) (equitable considerations in excusable neglect)
- Adams v. Reliance Standard Life Ins. Co., 225 F.3d 1179 (10th Cir. 2000) (amount in controversy and jurisdictional threshold guidance)
- McPhail v. Deere & Co., 529 F.3d 947 (10th Cir. 2008) (describing the amount-in-controversy standard)
- Woodmen of World Life Ins. Soc. v. Manganaro, 342 F.3d 1213 (10th Cir. 2003) (legal certainty standard for jurisdictional amount)