Beller & Keller v. Tyler

• Citation: 120 F.3d 21
• Decision Date: 21 July 1997
• Docket Number: D,No. 1000,1000
• Parties: BELLER & KELLER, Plaintiff-Appellee, v. Joseph TYLER, Defendant, and Tyrone Kindor, Defendant-Appellant. ocket 96-7943.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 21

120 F.3d 21

38 Fed.R.Serv.3d 524

BELLER & KELLER, Plaintiff-Appellee, v. Joseph TYLER, Defendant, and Tyrone Kindor, Defendant-Appellant.

No. 1000, Docket 96-7943.

United States Court of Appeals, Second Circuit.

Argued March 4, 1997.

Decided July 21, 1997.

Roy H. Carlin, New York City, for Plaintiff-Appellee.

David O. Wright, Shrub Oak, NY, for Defendant-Appellant.

Before: WALKER, McLAUGHLIN, Circuit Judges, and CHIN, District Judge. ^*

McLAUGHLIN, Circuit Judge:

Defendant appeals from an order entered July 3, 1996 in the United States District Court for the Southern District of New York (Patterson, J.). The order denied defendant's motion, pursuant to Federal Rule of Civil Procedure 60(b)(4), to vacate, as void, the default judgment entered against him on December 19, 1994.

Background

On October 21, 1994, Beller & Keller ("B & K"), a New York law firm, brought this breach of contract action against Arizona residents Tyrone Kindor ("Kindor") and Joseph Tyler ("Tyler"). Jurisdiction rested upon diversity of citizenship. 28 U.S.C. § 1332. The action seeks to recover legal fees and expenses the defendants allegedly owe the firm.

B & K had Tyler served with a summons and complaint on October 25, 1994. After several unsuccessful attempts to have Kindor served personally, B & K opted to serve him under New York's "nail and mail" provision, CPLR § 308(4), an option available under Federal Rule of Civil Procedure 4(e)(1) ("[S]ervice ... may be effected in any judicial district of the United States: (1) pursuant to the law of the state in which the district court is located...."). On November 2, 1994, B & K had the summons and a copy of the complaint "nailed" to Kindor's door, and mailed him copies.

Both defendants failed to respond. On December 6, 1994, B & K filed an ex parte application for a default judgment, which the district court granted. Judgment was entered against the defendants, jointly and severally, for $94,028.84. ¹

On December 21, 1994, the defendants, invoking Federal Rules of Civil Procedure 55(c) and 60(b)(1), filed a motion to vacate the default judgment. Both Kindor and Tyler filed affidavits stating that they had a "meritorious defense" to B & K's claim. They also asserted that their failure to respond was due to "excusable neglect."

Following a hearing on December 23, 1994, the district court denied the defendants' motion to vacate the default judgment. The defendants never filed a notice of appeal from that order.

Over a year later, on March 15, 1996, defendant Kindor filed a second motion to vacate the default judgment. ² Kindor cited Federal Rule of Civil Procedure 60(b)(4), which states that "the court may relieve a party or a party's legal representative from a final judgment ... [if] the judgment is void."

Kindor maintains that the default judgment is void because it was entered before the time to answer had expired, and, therefore, his argument runs, its entry violated his right to due process. More specifically, Kindor argues that since B & K elected to serve him under the CPLR's "nail and mail" method of service, the time to answer must be calculated by reference to the CPLR, not the Federal Rules of Civil Procedure.

The district court determined that the default judgment was not entered prematurely, and denied Kindor's motion. Kindor now appeals.

Discussion

I. Procedural Quirks

We first consider whether the district court should even have entertained Kindor's second motion to vacate the default judgment.

1. Is the Instant Motion Properly Brought Under Rule 60(b)(4) ?

Rule 60(b) lists six grounds for "reliev[ing]" a party from a final judgment: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment on which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.

Plaintiff contends that Kindor's motion, while styled a Rule 60(b)(4) motion, is actually a Rule 60(b)(1) claim of "mistake." Although most motions to declare a judgment void rest on claims that the court lacked jurisdiction over the parties, the subject matter, or both, a judgment is equally void if a court with jurisdiction has "acted in a manner inconsistent with due process of law." Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 39 (2d Cir.1989) (citations omitted); O'Brien v. Nat'l Property Analysts Partners, 739 F.Supp. 896, 900 (S.D.N.Y.1990); 12 Moore's Federal Practice § 60.44 (3d ed.1997). There is case law support for the proposition that a default judgment entered before the time to answer expires violates due process. See Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d 14, 19 (3d Cir.1985) (default judgment was improperly entered where twenty-day period for filing answer had not expired and there was no evidence that complaint was properly served); Red Creek Nat'l Bank v. Blue Star Ranch, Ltd., 58 A.D.2d 983, 396 N.Y.S.2d 936, 937 (4th Dep't 1977) ("Since here the default judgment was entered before the expiration of the 30-day statutory period in which defendant could appear and answer ..., it was a nullity and was required to be vacated upon proper motion...."). We will assume, therefore, for purposes of this appeal, that Kindor's motion was properly brought under Rule 60(b)(4).

2. Waiver.

Kindor filed his first Rule 60(b) motion (claiming "excusable neglect" under subdivision (1) of the Rule) within a few days after the default judgment was entered. The motion was denied, and Kindor failed to file an appeal. He then waited over a year from the denial of his initial motion before filing his Rule 60(b)(4) motion.

We recognize that "a void judgment cannot acquire validity because of laches on the part of the judgment debtor." 11 Wright & Miller, Federal Practice and Procedure § 2862; Ruddies v. Auburn Spark Plug Co., 261 F.Supp. 648, 657 (S.D.N.Y.1966). In this case, however, Kindor did not merely delay advancing his claim that the judgment is void. Kindor raised the voidness challenge for the first time in his second motion to vacate. Kindor had every opportunity to raise the voidness argument in his first motion to vacate, and he failed to do so. There is nothing in the record to explain this lapse. Kindor, having foregone that initial opportunity, could reasonably be held to have waived his right to raise the argument in his subsequent motion to vacate. See Locklin v. Switzer Bros., Inc., 335 F.2d 331, 332 (7th Cir.1964); Morgan Consultants v. American Telephone & Telegraph Co., 546 F.Supp. 844, 847 (S.D.N.Y.1982); 12 Moore's Federal Practice § 60.69 ("Because Rule 60(b) rulings that are final are appealable, a party who is aggrieved by an adverse ruling on a Rule 60(b) motion must appeal it or waive any complaints about the ruling.").

3. Timeliness.

Furthermore, a Rule 60(b)(4) motion must be made "within a reasonable time" after entry of the judgment. Courts have been exceedingly lenient in defining the term "reasonable time," with regard to voidness challenges. In fact, it has been oft-stated that, for all intents and purposes, a motion to vacate a default judgment as void "may be made at any time." 12 Moore's Federal Practice § 60.44[c]; McLearn v. Cowen & Co., 660 F.2d 845, 848 (2d Cir.1981); Crosby v. The Bradstreet Co., 312 F.2d 483, 485 (2d Cir.1963) (judgment vacated as void thirty years after entry).

Under these circumstances, however, where Kindor previously filed a motion to vacate and failed to raise the voidness argument, we could easily be persuaded that Kindor's Rule 60(b)(4) motion was not made within a "reasonable time." See Planet Corp. v. Sullivan, 702 F.2d 123, 125 (7th Cir.1983) (second motion to vacate filed a year after judgment was entered, and raising, inter alia, voidness argument, was not filed in a "reasonable time").

The district court probably should have just denied the motion as untimely. The court, however, decided the motion on the merits and the parties have briefed the merits on appeal. We believe, therefore, that we should reach the merits.

II. The Merits

1. Calculating the Time to Answer When Service in a Federal Suit is Made Pursuant to State Law.

Federal Rule of Civil Procedure 4(e), in relevant part, states that:

... [S]ervice upon an individual from whom a waiver has not been obtained and filed, other than an infant or an incompetent person, may be effected in any judicial district of the United States:

(1) pursuant to the law of the state in which the district court is located ... for the service of a summons upon the defendant in an action brought in the courts of general jurisdiction of the State.

As authorized by this provision, B & K chose to serve Kindor pursuant to CPLR § 308(4), which delineates what is commonly referred to as "nail and mail" service. Section 308(4) states that service can be effected by

affixing the summons to the door of either the actual place of business, dwelling place or usual place of abode within the state of the person to be served and by either mailing the summons to such person at his or her last known residence or by mailing the summons ... [to] his or her actual place of business.

...

[P]roof of such service shall be filed with the clerk of the court designated in the summons within twenty days of either such affixing or mailing, whichever is effected later; service shall be complete ten days after such filing.

Thus, "nail and mail" service requires three steps: (1) affixing the summons to the defendant's door; (2) mailing the defendant a copy of the summons; and (...