Solaroll Shade and Shutter Corp., Inc. v. Bio-Energy Systems, Inc.

• Decision Date: 10 November 1986
• Docket Number: No. 85-5496,BIO-ENERGY,85-5496
• Parties: SOLAROLL SHADE AND SHUTTER CORP., INC., Plaintiff-Appellee, v.SYSTEMS, INC., Defendant-Appellant, Broward Solar Center, Inc., Defendant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1130

803 F.2d 1130

6 Fed.R.Serv.3d 266

SOLAROLL SHADE AND SHUTTER CORP., INC., Plaintiff-Appellee, v. BIO-ENERGY SYSTEMS, INC., Defendant-Appellant Broward Solar Center, Inc., Defendant.

No. 85-5496.

United States Court of Appeals, Eleventh Circuit.

Nov. 10, 1986.

Fowler, White, Gillen, Boggs, Villareal & Banker, P.A., Thomas T. Steele, Tampa, Fla., for defendant-appellant.

Eugene F. Malin, Edward McHale, Fort Lauderdale, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before FAY and JOHNSON, Circuit Judges, and HOFFMAN ^*, Senior District Judge.

JOHNSON, Circuit Judge:

This case involves an appeal from the district court's denial of a motion to vacate a judgment enforcing a settlement agreement. We affirm, and because the issues presented in this appeal are frivolous, we award double costs to the appellee. Fed.R.App.P. 38.

I BACKGROUND

In September 1980, appellee, Solaroll Shade and Shutter Corporation, Inc. ("Solaroll"), instituted a trademark infringement action against appellant, Bio-Energy Systems, Inc. ("Bio-Energy"), in the United States District Court for the Southern District of Florida. The parties eventually agreed to a settlement, and on August 16, 1982, the district court dismissed the suit with prejudice in accordance with the settlement agreement. The court, however, retained jurisdiction to enforce the settlement agreement.

On January 25, 1985, Solaroll, alleging that Bio-Energy was in violation of the settlement agreement, filed a motion to reinstate the action and to enforce the stipulation. Bio-Energy's Tampa counsel received service copy of the motion three days later and promptly forwarded copies to Bio-Energy and to Bio-Energy's New York counsel. Shortly thereafter, Bio-Energy's Tampa counsel spoke with Solaroll's counsel and promised to forward a proposed stipulation and joint motion for extension of time. Bio-Energy's counsel, however, never communicated again with Solaroll's counsel, never sent either document, and never responded to Solaroll's motion.

Consequently, on February 28, 1985, the district court granted Solaroll's unopposed reinstatement motion and, without further notice, entered the order submitted with the motion. The clerk entered the order on March 4, 1985.

Seven days later Bio-Energy served a motion to vacate the judgment pursuant to Fed.R.Civ.P. 60(b) and supporting affidavits. It also requested oral argument. After receiving briefs from both sides but without responding explicitly to the motion for oral argument, the court entered a minute order on May 16, 1985, denying Bio-Energy's motion to vacate judgment.

This appeal followed.

II DISCUSSION

Fed.R.Civ.P. 60(b) provides in part, "On motion and upon such terms as are just, the court may relieve a party ... from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; ... or (6) any other reason justifying relief from the operation of the judgment." A final judgment under Rule 60(b) is any judgment that is an appealable order. Mullins v. Nickel Plate Mining Co., 691 F.2d 971, 974 (11th Cir.1982). There is no question that the order of February 28 enforcing the settlement agreement satisfies that definition. See, e.g., id. (order granting summary judgment on motion to reinstate action due to breach of settlement agreement final for purposes of Rule 60(b)); United States v. One Hundred Nineteen Thousand Nine Hundred Eighty Dollars, 680 F.2d 106, 107 (11th Cir.1982) (order approving stipulation of settlement and dismissing action final for purposes of Rule 60(b)).

However, this Court will set aside the district court's refusal to vacate that order only if such refusal constitutes an abuse of discretion. Villareal v. Braswell Motor Freight Lines, Inc., 545 F.2d 978, 979 (5th Cir.1977) (per curiam); Hand v. United States, 441 F.2d 529, 531 (5th Cir.1971) (per curiam). To demonstrate an abuse of discretion, appellant must prove some justification for relief. However, appellant cannot prevail simply because the district court properly could have vacated its order. Instead, appellant must demonstrate a justification so compelling that the court was required to vacate its order. Fackelman v. Bell, 564 F.2d 734, 736 (5th Cir.1977).

A. Attorney Mistake

Appellant first argues that the "oversight" of its counsel in failing to respond to the motion constitutes excusable neglect within the meaning of 60(b)(1). However, an attorney's negligent failure to respond to a motion does not constitute excusable neglect, even if that attorney is preoccupied with other litigation. United States v. One 1978 Piper Navajo PA-31, Aircraft, 748 F.2d 316, 318-19 (5th Cir.1984); Jackson v. Seaboard Coast Line Railroad Co., 678 F.2d 992, 1020 (11th Cir.1982); Davis v. Safeway Stores, Inc., 532 F.2d 489, 490 (5th Cir.1976) (per curiam).

Admittedly, this result appears to penalize innocent clients for the forgetfulness of their attorneys. However, a court possesses the inherent authority to enter a default judgment in response to an attorney's dilatory tactics. Link v. Wabash Railroad Co., 370 U.S. 626, 633-34, 82 S.Ct. 1386, 1390, 8 L.Ed.2d 734 (1962). Accordingly, a court's refusal to vacate a default judgment entered to penalize the repeated failure to produce documents does not amount to an abuse of discretion. Griffin v. Swim-Tech Corp., 722 F.2d 677, 680 (11th Cir.1984). Thus the district court's refusal to vacate the order is not an abuse of discretion merely because appellant was not directly responsible for the failure to respond.

Nonetheless, courts are chary of dismissing actions on account of attorney inadvertence in non-abusive situations. Thus, in Silas v. Sears, Roebuck & Co., 586 F.2d 382, 385-86 (5th Cir.1978), the former Fifth Circuit held that the district court had abused its discretion in denying appellant's 60(b) motion where the district court had dismissed his action in order to sanction his attorney's failure to appear at a pretrial conference and to respond to interrogatories within a month. In so doing, the court emphasized that the district court should have undertaken less drastic measures to obtain compliance. See also Jackson v. Beech, 636 F.2d 831, 837 (D.C.Cir.1980) (improper to impute attorney's negligence to client on motion to reconsider default judgment); Pond v. Braniff Airways, Inc., 453 F.2d 347 (5th Cir.1972) (abuse of discretion to dismiss action sua sponte absent "clear record of repeated willful delay").

Furthermore, courts are supposed to construe liberally the requirements of Rule 60(b) when reviewing default judgments. Gulf Coast Fans, Inc. v. Midwest Electronics Importers, Inc., 740 F.2d 1499, 1510-11 (11th Cir.1984); Fackelman, 564 F.2d at 735-36. This solicitude exists when reviewing any order which "abridged the adversary process," whether or not it is a default judgment. Burton v. G.A.C. Finance Co., 525 F.2d 961, 962 (5th Cir.1976). For example, in Seven Elves, Inc. v. Eskenazi, 635 F.2d 396 (5th Cir. Unit A 1981), the district court refused to vacate a judgment it had entered against the defendant when he failed to appear at trial. The court, observing both the defendant's reliance on counsel and the good faith misunderstandings that caused counsel's failure to appear, reversed the district court, stating that "the equities in such cases will militate strongly in favor of relief." Id. at 403.

In this case Bio-Energy's counsel did not exhibit a hostile antagonism to the adjudicatory process or engage in abusive, dilatory maneuvers. Nor is there any allegation that Bio-Energy conspired with counsel to delay the proceedings. Bio-Energy's counsel simply forgot to respond. In addition, only 34 days had lapsed from the time Solaroll filed its motion until the court entered its order. Furthermore, the court failed to inquire into appellant's silence. Unlike the order in Silas and Eskenazi, however, the February 28 order was not an extraordinary sanction entered to penalize counsel's failure to comply with a discovery request or some other pretrial order. Instead, the court was duly deciding a motion before it to which appellant's counsel had failed to respond. Such an order does not abbreviate the adversary process. Rather, it prevents a party's negligence from unduly extending that process. Although the situation here in some respects parallels that in Seven Elves, we do not find the equities so compelling that the district court's denial constitutes an abuse of discretion.

Furthermore, Bio-Energy has failed to establish a meritorious defense. To obtain relief under 60(b), a party must demonstrate a defense that probably would have been successful, in addition to showing excusable neglect. Seaboard Coast Line, 678 F.2d at 1020; Gulf Coast Fans, 740 F.2d at 1510-11. Even the court in Seven Elves, 635 F.2d at 403, required the showing of a meritorious defense. Bio-Energy cannot satisfy this burden by asserting a general denial to Solaroll's claim. Nor can Bio-Energy satisfy this burden by showing that Solaroll would not suffer unfair prejudice if the judgment were vacated. Fackelman, 564 F.2d at 736. Instead it must make an affirmative showing of a defense that is likely to be successful. One 1978 Piper Navajo, 748 F.2d at 319. Bio-Energy has failed to make any such showing. Therefore, relief is unavailable under 60(b)(1).

Some courts have held that attorney error comes within the scope of 60(b)(6) even though it does not constitute excusable neglect under 60(b)(1). See, e.g., Boughner v. Secretary of H.E.W., 572 F.2d 976 (3d Cir.1978); L.P. Steuart, Inc. v. Matthews, 329 F.2d 234 (D.C.Cir.), cert. denied, 379 U.S. 824, 85 S.Ct. 50, 13 L.Ed.2d 35 (1964); Transport Pool Division of Container Leasing, Inc. v. Joe Jones Trucking Co., 319 F.Supp. 1308 (N.D.Ga.1970). However, these cases specifically require gross neglect or other exceptional...