Storage Computer Corp. v. Worldwide Domination Corp.

2002 DNH 134, 208 F.R.D. 474, 2002 U.S. Dist. LEXIS 13558, 2002 WL 1676292
CourtDistrict Court, D. New Hampshire
DecidedJuly 17, 2002
DocketCiv. No. 02-100-JM
StatusPublished
Cited by2 cases

This text of 2002 DNH 134 (Storage Computer Corp. v. Worldwide Domination Corp.) is published on Counsel Stack Legal Research, covering District Court, D. New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Storage Computer Corp. v. Worldwide Domination Corp., 2002 DNH 134, 208 F.R.D. 474, 2002 U.S. Dist. LEXIS 13558, 2002 WL 1676292 (D.N.H. 2002).

Opinion

ORDER

MUIRHEAD, United States Magistrate Judge.

On April 24, 2002, the Court entered a default for Defendants Worldwide Domination Corporation (“Worldwide”), Crimson Media Group, LLC (“Crimson”) and Alejandro Mascardi (“Mascardi”) who had failed to appear in this action. The Court scheduled an evidentiary hearing for July 9, 2002 on Plaintiff Storage Computer Corporation’s (“Storage Computer” or “Plaintiff’) request for a permanent injunction and damages. [475]*475Prior to the hearing, on April 30, 2002, Mas-cardi moved for leave to file late motions to dismiss. Pursuant to the Court’s order, Mascardi later filed a Motion to Strike Default. At the July 9, 2002 hearing, the Court granted Maseardi’s Motion to Strike Default and granted Mascardi’s Motion for Leave to file a late motion to dismiss based on Mascar-di’s contention that the Court lacks personal jurisdiction over him.1 Plaintiff then made an oral motion under Rule 54(b) of the Federal Rules of Civil Procedure to enter final judgment against Defendants Worldwide and Crimson, who are still in default, and the Court held an evidentiary hearing. For the reasons set for herein, Plaintiffs Rule 54(b) motion is granted.

BACKGROUND

Storage Computer is in the business of developing and custom creating certain software and hardware connected with video productions and internet operation. Worldwide engaged in the business of digital video broadcasting and internet operations.

On May 2, 2001, Storage Computer entered into a purchase agreement (the “Purchase Agreement”) with Worldwide. Mas-cardi executed the Purchase Agreement on Worldwide’s behalf. The Purchase Agreement provided, among other things, that Storage Computer would sell certain products, software and hardware to Worldwide, install and train Worldwide to operate the products and software, license Worldwide to use the products and software, and provide Worldwide with consulting, maintenance and warranty services. In return, Worldwide agreed to pay Storage Computer a total purchase price of $1,350,000. The payments were to be made in installments. The Purchase Agreement also provided that Storage Computer could terminate the Agreement in the event of a default and could accelerate the payments owed to it so that all monies owed to Storage Computer would become due immediately.

On August 16, 2001, the parties executed an Amendment No. 1 to Agreement Between Storage Computer Corporation and Worldwide Domination Company, LLC (“Amendment No. 1”). Crimson executed Amendment No. 1 on behalf of Worldwide. Amendment No. 1 altered the payment schedule that Worldwide was obligated to follow, but the total purchase price remained the same.

Pursuant to the terms of the Purchase Agreement and Amendment No. 1, Storage Computer provided customized products and services to Defendants. Defendants, however, failed to make payments that were due on November 30, 2001 and December 30, 2001. Pursuant to the Purchase Agreement, Storage Computer notified Worldwide on about January 3, 2002 that Worldwide had failed to make the necessary payments. As provided for in the Purchase Agreement, Storage Computer accelerated the remaining payments and declared the balance of $560,000 due immediately.

Defendants have not paid any of the balance due. Instead, on January 31, 2002, Worldwide notified Storage Computer by letter that “due to the financial crisis in Argentina”, Defendants would “not be able to pay off the outstanding debts and credit lines until this matter is resolved.”

Subsequently, Storage Computer learned that Worldwide lost its financial backing, was unable to meet payroll and ceased operations. Storage Computer also learned that Defendants’ employees left the company and took computer equipment with them. The products that Storage Computer provided to Defendants under the terms of the Purchase Agreement are easily removable, and Plaintiff is concerned that it will not be able to recover them.

Storage Computer sought immediate relief in this Court in the form of a temporary restraining order prohibiting Defendants from transferring or otherwise removing the products and equipment that Plaintiff supplied to them under the Purchase Agreement. In an Order dated April 5, 2002, the Court granted Storage Computer’s request for an ex parte temporary restraining order against the Defendants enjoining them from selling, transferring or assigning computer [476]*476hardware and software described in a May 2, 2001 Purchase Agreement and in an August 16, 2001 Amendment No. 1 to Agreement Between Storage Computer Corporation and Worldwide Domination Company, LLC.

Having failed to ever appear or otherwise plead, the clerk entered a default as to Worldwide, Crimson and Mascardi on April 24, 2002 and scheduled an evidentiary hearing to determine Plaintiffs damages. Since that time, only Mascardi moved to have the entry of default set aside.2

At the evidentiary hearing held on July 9, 2002, Storage Computer put forth evidence in the form of exhibits, a declaration, and live testimony by Joseph Bamford, Storage Computer’s corporate general counsel, establishing its damages for breach of contract. The evidence shows that Worldwide failed to make the following three payments pursuant to the parties’ agreement: $280,000.00 due on November 20, 2001, $140,000.00 due on December 30, 2001, and $140,000.00 due on January 15, 2002. The evidence further shows that the contract provides that interest on overdue payments accrues at a rate of one percent (1%) per month.

DISCUSSION

Rule 54(b) permits “the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.” Fed. R.Civ.P. 54(b). Plaintiff moves for the entry of final judgment under Rule 54(b) against Worldwide and Crimson only.

Plaintiff put forth evidence at the July 9, 2002 hearing that established that there is a pressing, exceptional need to relax the general prohibition against interim dispositions throughout an action. See Spiegel v. Trustees of Tufts College, 843 F.2d 38, 43 (1st Cir.1988) (the district court must determine whether the equities require relaxing the usual prohibition against piecemeal dispositions); Consolidated Rail Corp. v. Fore River Ry., 861 F.2d 322, 325 (1st Cir.1988) (Rule 54(b) authorizes the district court to exercise discretionary power to afford a remedy in the infrequent harsh case). Based on the record before me, I find that the two corporate Defendants are not active corporations and that they are holding and have custody of assets that, which given their defaulted status, will ultimately belong to Plaintiff. Absent a permanent injunction against Worldwide and Crimson, the equipment provided by Storage Computer to Defendants is at risk of being damaged or removed. Approximately fifteen percent of the equipment provided by Storage Computer is in Worldwide’s Miami, Florida, offices.

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Bluebook (online)
2002 DNH 134, 208 F.R.D. 474, 2002 U.S. Dist. LEXIS 13558, 2002 WL 1676292, Counsel Stack Legal Research, https://law.counselstack.com/opinion/storage-computer-corp-v-worldwide-domination-corp-nhd-2002.