New York Life Ins. Co. v. Brown
| Decision Date | 15 May 1996 |
| Docket Number | Nos. 95-30455,95-30786,s. 95-30455 |
| Citation | 84 F.3d 137 |
| Parties | NEW YORK LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. Alvin J. BROWN, Defendant-Appellant, v. Leslie A. BROWN, Defendant-Appellee. NEW YORK LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. Alvin J. BROWN, Defendant, and Leslie A. Brown, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Virginia N. Roddy, Eugene R. Preaus, Preaus, Roddy & Krebs, New Orleans, LA, for New York Life Ins. Co. in both cases.
Thomas D. Travis, Howard W. Bushey, Baton Rouge, LA, for Alvin J. Brown.
Ronnie Lynn Leaf, San Mateo, CA, for Leslie A. Brown in both cases.
Appeals from the United States District Court for the Middle District of Louisiana.
Before SMITH, DUHE and DeMOSS, Circuit Judges.
This case involves two separate appeals from the same district court case. Both appeals arise out of an interpleader action brought by New York Life Insurance Company ("New York Life") against Alvin Brown and his ex-wife Leslie Brown seeking to determine who owned several life insurance policies. The district court (1) found that Leslie owned the policies, (2) released New York Life from liability and (3) enjoined both Alvin and Leslie from re-litigating the ownership of the policies in any court. In 95-30455, Alvin appeals the district court's denial of his motion to vacate the judgment. He claims that the judgment against him is void because it was entered without notice. He argues that even though he had defaulted, he was still entitled to notice before summary judgment was granted against him. In 95-30786, Leslie appeals the district court order enjoining her from pursuing the California small claims court actions and a California superior court action against New York Life. We hold that the failure to provide Alvin notice before the summary judgment denied him due process of law. Thus, the district court erred in refusing to vacate the judgment against him. We vacate 95-30455 and remand for further proceedings. Because the summary judgment was inappropriate, we also vacate and remand 95-30786, Leslie's appeal.
In March 1971, Plaintiff-Appellee New York Life issued the first of several whole life insurance policies to Defendant-Appellant Alvin Brown. The policy provided for a waiver of premiums if Alvin became disabled. In January 1972, Alvin was found to be totally and permanently disabled because of his war injuries (he lost his left arm in Vietnam), so the premium waiver clause went into effect. Alvin married Defendant-Appellee Leslie Brown in February 1971. In 1980, Alvin and Leslie divorced. On July 4, 1981, ownership of the policies was transferred to Leslie. (Alvin argues that his signature on the change of ownership form was forged).
Leslie claimed ownership of the policies and sought to have New York Life issue two option policies to her. New York Life refused, because it was not sure whether Alvin or Leslie owned the policies. On April 7, 1992, New York Life filed an interpleader action under 28 U.S.C. § 1335 in federal district court in Louisiana, seeking to establish the ownership of the policy. The defendants in the interpleader action were Alvin Brown and his ex-wife Leslie Brown. The federal district court enjoined the defendants from instituting any suits against New York Life concerning the ownership of the policies. The next day, April 8, Leslie filed suit against New York Life in California state small claims court, seeking the issuance of the option policies. 1 In May, New York Life filed a notice of the federal injunction in the small claims court and sought to stay the proceedings. The small claims court apparently ignored that order. In July, two judgments were entered against New York Life in the small claims cases; New York Life has appealed those judgments. Leslie stipulated to a stay of the appeals.
When Alvin was sued, two unsuccessful attempts to serve him were made before he was properly served. On April 15, 1992, the first try was made at "5101 Nicholson A-16" in Baton Rouge, Louisiana. The remarks on the marshal's return said "Invalid Address According To Current Resident ... No Phone Directory Listing ... Return Unexecuted." The second attempt was on May 12, 1992, at "3539 Clayton Street" in Baton Rouge. The remarks on the marshal's return said "Current Resident Advises That Subject Moved--No Forward ... No Directory Asst. Listing." The third attempt was successfully made on June 29, 1992 at "4944 Castlebrook Apts # 326" in Baton Rouge.
On July 9, 1992, before either defendant answered, Alvin, Leslie and New York Life attended a telephone settlement conference before a magistrate judge. On August 12, Alvin phoned New York Life's attorney and told her that he had not responded because he had been out of town. He told her that he was unwilling to stipulate to Leslie's ownership and that he would attempt to retain counsel. New York Life's attorney notified the court of this conversation by letter. A status conference was set for September 10, but Alvin declined to participate in it.
On October 13, Alvin still had not answered, so New York Life had a default entered against him. 2 In October 1992, Leslie filed a motion for summary judgment. In November, the magistrate ordered the clerk to mail a copy of the motion to Alvin. The motion was mailed to the Clayton address, which the second marshal's return showed to be invalid. The letter was returned undelivered. Summary judgment was granted in January 1993. The judgment held that Leslie owned the policies and both Leslie and Alvin were permanently enjoined from suing New York Life in any court for a determination of the ownership of the policies.
In February 1994, Leslie, this time represented by counsel, sued New York Life in California state court, alleging that the interpleader was a sham and seeking damages. In April 1995, the federal district court denied New York Life's motion to enforce the injunction and stop the suits. In July 1995, however, the court reconsidered that ruling and granted the motion. Leslie was specifically enjoined from pursuing the California In April 1994, Alvin phoned New York Life's attorney to check the status of his case. He then learned that judgment had been entered over a year earlier recognizing Leslie as the owner of the policies and absolving New York Life of further liability. In October 1994, Alvin obtained counsel and filed a motion to vacate the judgment. That motion was denied in April 1995. Alvin filed a timely notice of appeal.
small claims court actions and the California superior court action against New York Life.
Because it is important to keep straight default language, a review of the terms regarding defaults is appropriate. A default occurs when a defendant has failed to plead or otherwise respond to the complaint within the time required by the Federal Rules. An entry of default is what the clerk enters when the default is established by affidavit or otherwise. Fed.R.Civ.P. 55(a). 3 After defendant's default has been entered, plaintiff may apply for a judgment based on such default. This is a default judgment.
In the instant case, Alvin defaulted because he did not file an answer within the allowed time. On New York Life's motion, an entry of default was entered against Alvin; a default judgment was never entered. Instead, Leslie moved for summary judgment, which was granted.
Alvin complains that he never received notice of the summary judgment. Leslie contends that because Alvin defaulted, he was not entitled to notice. We conclude that Alvin appeared in the lawsuit and was thus entitled to notice before the granting of the summary judgment.
Rule 5 requires that (Emphasis added). "[B]y appearing at any time in the action, a party becomes entitled to have his attorney notified of all subsequent proceedings and receive copies of all papers, even if he later chooses to default." 4A CHARLES ALAN WRIGHT AND ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1144 (2d ed. 1987) (emphasis added).
In order to determine whether Alvin was entitled to service of the motion for summary judgment, we must first determine whether Alvin's actions rose to the level of an appearance. 4 An appearance "involves some presentation or submission to the court." 5 10 WRIGHT AND MILLER, FEDERAL PRACTICE AND PROCEDURE § 2686 (2d ed. 1987) (internal quotation omitted). What constitutes an appearance is not "confined to physical appearances in court or the actual filing of a document in the record." Sun Bank of Ocala v. Pelican Homestead and Savings Assoc., 874 F.2d 274, 276 (5th Cir.1989). Appearances "include a variety of informal acts on defendant's part which are responsive to Alvin took two actions which could be considered appearances: (1) he participated in a telephone conference with the other parties before the magistrate judge and (2) he spoke with counsel for New York Life, informing her that he would not sign a stipulation and that he was attempting to retain counsel to contest the suit. We conclude that Alvin's attendance at the phone conference before the magistrate judge is an appearance, because he actually appeared in court (albeit by phone). Likewise, his phone call to New York Life's counsel, informing him that he would contest the suit, is also an appearance. Charlton L. Davis & Co. v. Fedder Data Center, Inc., 556 F.2d 308, 309 (5th Cir.1977) (). Therefore, because Alvin had appeared in the suit, he was entitled under Rule 5(a) to service of all papers in the suit, including the motion for summary judgment. 6
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