waste, breach of fiduciary duties and interference with business and investment objectives, were dismissed.
(emphasis added). Defendants rely on this single statement in the pre-trial order to argue the district court dismissed Plaintiff’s state law fraud and contract claims. The district court’s description of its prior ruling was an unfortunate misstatement. The February 4, 1998 order clearly did not dismiss Plaintiff’s fraud and breach of contract claims. Instead, the order noted that these claims were still viable but that, in the interest of judicial economy, "Plaintiff [would not be allowed] to put on evidence to prove a fraud claim when Plaintiff has already received a judgment in his favor entitling him to the same damages." The district court never dismissed Plaintiff’s fraud and breach of contract claims.
Reading the pre-trial order as a whole clarifies that "in the interest of efficiency and judicial economy” the district court “merged” these claims into the default order, in effect placing all substantive matters on hold pending resolution of the default order.[1]
- ↑ The district court "merged" Plaintiff’s state law claims into the prior default order rather than issuing a second order formally entering default on these claims. See Fed. R. Civ. P. 55(a). The court's failure to formally enter default is procedurally incorrect, but the court’s intent to resolve the accounting matter rather than try Plaintiff’s claims on the merits was evident. Although the court did not use the correct legal terminology, the court made its intention perfectly clear at every status conference, at the pre-trial conference, and during the set-off hearing. The set-off hearing was Defendants' final opportunity to comply with the court’s accounting orders. In the event Defendants complied, the court presumably intended to lift the default sanction and proceed to trial on the merits. See Fed. R. Civ. P. 55(c). When Defendants failed to comply, the court enforced the sanction by entering judgment. See Fed. R. Civ. P. 55(b).
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