K mart Fine Raised by $5 Million

A federal judge has increased a breach of contract fine against K mart Corp., the nation’s second-largest retailer, to more than $78 million.

Attorneys for the Troy, Mich.-based retailer asked U.S. District Judge Ronald R. Lagueux to reduce a $73.3-million award granted last month when a jury found K mart in breach of contract with a now-defunct Pawtucket clothing buyer.

Instead, Lagueux denied the motion late last week and ruled that 12% interest on the basic damages of $59.3 million could be calculated over 19 more months than originally included, increasing the award by about $5 million.

He also upheld a magistrate’s order that K mart must pay $80,870 for refusing to supply pretrial information to the plaintiff, Fashion House.

Fashion House charged that K mart ignored an 1983 agreement requiring the retailer to purchase 85% of its name brand and designer clothes from the wholesaler. The retailer maintained that Fashion House was not supplying the styles, sizes and colors it ordered.

After a 56-day trial, Fashion House won a $73.3-million verdict, including interest. The jury found that K mart, a $28-billion-a-year retailer, had terminated the contract in 1986 without just cause.