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Default Judgment Blocks Arguments About Liability in Florida Contract Dispute Case

UFC_162.A UFC mixed martial arts bout and commercial litigation may not have much in common, but they do share this much. Each is governed by a specific set of rules that controls how each contest will be carried out. In one recent case involving two management firms who sought to represent the same UFC fighter, the 4th District Court of Appeal threw out a directed verdict in favor of one firm on the issue of its liability for tortious interference because the trial was supposed to resolve only the extent of damages, not liability.

The dispute emerged after Thiago Alves, a UFC mixed martial arts fighter, signed a contract with First Round Management, LLC in 2008, setting the terms of First Round’s marketing and management representation of Alves. The problem with this arrangement was that, just one month earlier, Alves had signed a one-year contract with DG Sports Agency LLC for the same services, and the fighter never terminated the first contract in writing (as required under the agreement) before signing with First Round.

DG sued in 2010, alleging that Alves breached the parties’ contract and that First Round committed tortious interference with the contract, costing DG a commission in the process. According to the Daily Business Review, that commission was “a 30 percent commission negotiating sponsorship and endorsement deals for Alves.” First Round did not respond to DG’s lawsuit within the time period allowed, so DG sought and obtained a default judgment against First Round. First Round subsequently made several legal maneuvers, including seeking to have the default judgment set aside. None of First Round’s maneuvers worked, and the default judgment stood.

After DG and the fighter settled, the only issue remaining to be decided at trial was the amount of damages that First Round owed DG. At the end of the trial, however, the judge issued a directed judgment in favor of First Round.

DG appealed and won. First Round should not have been allowed even to argue about liability. The default judgment addressed the issue of liability, granting judgment in favor of DG. After the trial court refused to set aside the judgment and rejected all of First Round’s steps that might have re-opened the issue of liability, DG was entitled to rely on that judgment and rely upon the notion that First Round was precluded from challenging liability. In fact, both DG and First Round stipulated before the trial started that the only issue was the extent of DG’s damages.

Instead of evidence and arguments focusing solely on damages, DG’s counsel told the Review that something very different happened at the trial. “There were a lot of arguments about liability, about who’s at fault, and that should not have come in. It was supposed to be a trial only on damages,” DG attorney Vincent Schindeler stated.

Successful commercial litigation can involve many steps, including putting on the strongest case possible, defending against the other side’s valid counter-arguments, and blocking items that should never come in at all. For representation you can count on, reach out to the Florida commercial litigation attorneys at Stok Folk + Kon.

Contact us online or by calling (305) 935-4440 to schedule your consultation.

More blog posts:

Dealing with Non-Florida Defendants in Your Florida Commercial Litigation, Florida Business Lawyers Blog, July 10, 2015

Company’s Lack of Bad Intent Allows It to Escape Contempt in Florida Breach of Contract Case, Florida Business Lawyers Blog, May 27, 2015