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Companion Health Services, Inc v. George Kurtz and Mary Kay Reid

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Before Selya, Boudin and Stahl, Circuit Judges.

After three years of drawn-out proceedings in this contract dispute between plaintiff-appellee Companion Health Services, Inc. (Companion) and defendants-appellants George Kurtz and Mary Kay Reid and their various business entities, the district judge imposed a default as to all counts based on discovery violations by the defendants. The district court eventually lifted the default except as to Companion’s veil piercing claim, allowing the substantive claims to go to trial. After a jury found for Companion and awarded over $1 million in damages, Kurtz and Reid, who were personally liable, appealed the district court’s various orders pertaining to the default on the veil piercing claim. In this close case, because the district court imposed such a severe sanction based on a very limited slice of the relevant facts, we vacate the sanction and remand for further proceedings. We, however, deny Companion’s cross-appeal for prejudgment interest.

I. Facts & Background

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