Stradley v. Cortez

• Decision Date: 26 June 1975
• Docket Number: No. 74-1695,No. 74-1693,No. 74-1694,Nos. 74-1693,74-1693,74-1694,74-1695,s. 74-1693
• Parties: Kenneth STRADLEY, Appellee, v. Frederick CORTEZ, Jr., a minor by his father and natural guardian of the Estate of Frederick Cortez, Jr., and Frederick Cortez, Sr., Appellant inAppeal of AETNA CASUALTY & SURETY COMPANY, inAppeal of PROFESSIONAL INSURANCE BROKERS, INC., into 74-1695.
• Court: U.S. Court of Appeals — Third Circuit

Page 488

518 F.2d 488

Kenneth STRADLEY, Appellee, v. Frederick CORTEZ, Jr., a minor by his father and natural

guardian of the Estate of Frederick Cortez, Jr.,

and Frederick Cortez, Sr., Appellant in

No. 74-1693.

Appeal of AETNA CASUALTY & SURETY COMPANY, in No. 74-1694.

Appeal of PROFESSIONAL INSURANCE BROKERS, INC., in No. 74-1695.

Nos. 74-1693 to 74-1695.

United States Court of Appeals,

Third Circuit.

Argued April 28, 1975.

Decided June 5, 1975.

As Amended June 26, 1975.

James E. Colleran, Beasley, Hewson, Casey, Kraft & Colleran, Philadelphia, Pa., for appellee.

William B. Allen, Levittown, Pa., for appellant Cortez.

Edward B. Joseph, Kaliner & Joseph, Philadelphia, Pa., for appellant Aetna Cas. & Sur. Co.

Jonathan Wheeler, Frank & Margolis, Philadelphia, Pa., for appellant Professional Ins. Brokers, Inc.

Before VAN DUSEN, ADAMS and GARTH, Circuit Judges.

OPINION OF THE COURT

GARTH, Circuit Judge.

On this consolidated appeal by defendant Cortez, Sr. and his two insurance carriers, we are obliged to review the district court's exercise of discretion in granting a new trial, limited to the negligence of Frederick Cortez, Sr., four years after a jury verdict was recorded against only a co-defendant, Frederick Cortez, Jr. We hold that the district court lacked jurisdiction to grant a new trial under Fed.R.Civ.P. 59 and 60(b)(1) and abused its discretion in granting a new trial under Rule 60(b)(6).

I. FACTS

The incident giving rise to this action was an automobile collision on October 16, 1965. Plaintiff Kenneth Stradley's car was struck in the rear by a vehicle operated by Frederick Cortez, Jr. (Junior) and owned by Frederick Cortez, Sr. (Senior). Stradley sustained various injuries and commenced suit, based on diversity jurisdiction, to recover damages in the district court for the Eastern District of Pennsylvania on October 13, 1967. The complaint named as defendants "Frederick Cortez, Jr., a Minor by Frederick Cortez, Sr., . . . and Frederick Cortez, Sr." Paragraph Five of the complaint specifically alleged that at the time of the accident Cortez, Jr. was acting as the "agent, servant, or employee of" and "under the direct and exclusive control of" Cortez, Sr.

An answer was filed on behalf of both defendants which denied plaintiff's allegations of agency. Trial was scheduled on March 19, 1970. Shortly before trial was to commence, defendants' counsel requested leave to withdraw from the case, as he was unable to communicate with either of his clients. On March 19, 1970, leave to withdraw was granted and trial was held in the absence of defendants and without their being represented by counsel. ¹ The jury returned a verdict for plaintiff in the amount of $150,000.00 and judgment was entered on the verdict.

The trial transcript reveals the following colloquy between the jury foreman and the deputy clerk:

THE DEPUTY CLERK: Have you agreed upon a verdict?

THE FOREMAN: Yes, we have.

THE DEPUTY CLERK: How do you find? In favor of the plaintiff or in favor of the defendant?

THE FOREMAN: In favor of the plaintiff.

THE DEPUTY CLERK: And what amount do you assess damages?

THE FOREMAN: $150,000.

THE DEPUTY CLERK: Members of the jury, hearken unto your verdict as the Court hath recorded it: In this issue joined wherein S. Kenneth Stradley is plaintiff and Frederick Cortez, Jr. is defendant, you find for the plaintiff $150,000. and so say you all?

THE JURY: Yes.

On the basis of this verdict, judgment was entered as follows:

In accordance with the verdict by the Jury, it is ordered that Judgment be and is hereby entered in favor of Plaintiff Kenneth Stradley and against Defendant Frederick Cortiz (sic), Jr. in the sum of $150,000.

Almost four years after this judgment was entered on March 19, 1970, the plaintiff, on March 14, 1974, moved in the district court to "Change the Docket and Enter Judgment Against Defendants." In his motion papers, plaintiff claimed that the reason the verdict was recorded only against one rather than both defendants was due to the manner in which the deputy clerk questioned the jury ("How do you find? In favor of the plaintiff or in favor of the defendant ?"). Plaintiff argued that: "The jury never exonerated Frederick Cortez, Sr. from liability in this action . . . (and) never in any way indicated that the finding of liability should relate only to Frederick Cortez, Jr." Therefore, plaintiff asked the district court " . . . to amend the record to do exactly what the jury did and that is to find both defendants legally responsible to the plaintiff in the form of a judgment against them." ²

The district court refused to treat the alleged mistake in the recording of the verdict as a clerical error, correctable by amending the docket. The court explained this decision as follows:

We do not believe that the Court has the authority to amend the docket entries so that judgment may be entered against a defendant whom the jury had not stated in their verdict . . . (citation omitted). We cannot now enter the minds of the jurors to answer a question that was never posed to them . . . We therefore believe that in the interest of justice another trial is warranted limited to the issue of the liability of Frederick Cortez, Sr.

We agree with the district court that the alleged error in the judgment could not be corrected by amending the docket. However, the district court abused its discretion when it sua sponte awarded a new trial. ³

II. APPEALABILITY

We turn first to Stradley's argument that this Court lacks jurisdiction over this appeal because an order granting a new trial is not a final (hence, an appealable) order. ⁴ An order granting a new trial is usually not appealable as a final judgment. Wright & Miller, Federal Practice and Procedure: Civil § 2818. However, when the trial court's power to grant a new trial is challenged, what would otherwise be an interlocutory order is treated as an appealable final order. We analyzed this limited exception to the non-appealability of final orders in Demeretz v. Daniels Motor Freight, Inc., 307 F.2d 469 (3d Cir. 1962):

We have concluded that this case presents the extraordinary situation in which an order granting a new trial, which normally would be interlocutory, is treated as an appealable final order. The controlling precedent is Phillips v. Negley, 1886, 117 U.S. 665, 6 S.Ct. 901, 29 L.Ed. 1013. There a defendant had filed a motion for a new trial after the expiration of the term at which a judgment had been recovered against him. He showed that without fault on his part he had remained unaware that the case had been calendared for trial, although notice had been mailed to his counsel of record. The court granted a new trial and an immediate appeal was taken on the ground that the court's power to disturb its own final judgment by further proceedings in that action had expired with the term at which the judgment had been entered. When the matter was brought to the Supreme Court on writ of error, the Court ruled that an order granting a new trial is itself reviewable as a final judgment when the challenge goes to the judicial power of the court to take that action. Apparently the Supreme Court viewed the immediate appeal as appropriate because the inquiry was in essence whether the original judgment remained in legal contemplation an effective and enforceable final order. But however doubtful the rationale of Phillips v. Negley may be, courts of appeals have repeatedly recognized its authority and applied its holding in reviewing new trial orders challenged as beyond the trial court's jurisdiction. Jackson v. Wilson Trucking Corp., 1957, 100 U.S.App.D.C. 106, 243 F.2d 212; Untersinger v. United States, 2d Cir. 1950, 181 F.2d 953; Tsai v. Rosenthal, 8th Cir. 1961, 297 F.2d 614; Gilliland v. Lyons, 9th Cir. 1960, 278 F.2d 56; see Kanatzer v. Chrysler Corp., 10th Cir. 1952, 199 F.2d 610, 615-16, cert. denied, 1953, 344 U.S. 921, 73 S.Ct. 388, 97 L.Ed. 710.

Accordingly, we are constrained to hold that we have authority under Section 1291 at this time to inquire into the power of the court below to issue its order granting a new trial. We have no doubt that the rule which generally denies an immediate appeal from an order granting a new trial is salutary. We merely recognize that Phillips v. Negley has created one narrow, perhaps anomalous, exception to this rule.

307 F.2d at 471-72. Accord, Harkins v. Ford Motor Co., 437 F.2d 276 (3d Cir. 1970). See Peterman v. Chicago, Rock Island and Pacific Railroad Co., 493 F.2d 88 (8th Cir.), cert. denied, 417 U.S. 947 94 S.Ct. 3072, 41 L.Ed.2d 667 (1974), Wiggs v. Courshon, 485 F.2d 1281 (5th Cir. 1973). Since the thrust of Cortez's argument is that the district court had no jurisdiction to grant a new trial under the circumstances of this case, we are satisfied that we have appellate jurisdiction to review the May 10, 1974 order which granted Stradley a new trial. ⁵

Unfortunately, as we indicated, note 2 supra, the plaintiff did not designate the particular Federal Rule of Civil Procedure under which he sought relief. His delinquency in this regard requires us to analyze the propriety of the district court's order under all sections of Fed.R.Civ.P. 59 and 60. While we have decided to undertake such additional labors in this case, our decision to do so should not be construed as either approving or condoning this practice. We make no commitment as to our actions in the future when faced with such ambiguity regarding the Rule upon which a motion is based.

III. RULE 59

Fed.R.Civ.P. 59 governs the grant of a new trial, either on the motion of a party or on the initiative of the court. Rule 59 provides in relevant part:

Rule 59. New Trials; Amendments of Judgments

(b) Time for Motion. A motion for a new trial shall be served not later than 10 days after the entry of the judgment.

(d) On Initiative of Court. Not later than 10 days after entry of judgment the court of its own initiative may order a...