Akers v. Bonifasi

• Decision Date: 14 November 1985
• Docket Number: Civ. A. No. 3:84-0924.
• Citation: 629 F. Supp. 1212
• Parties: William P. AKERS, Plaintiff, v. Shirley BONIFASI, et al., Defendants.
• Court: U.S. District Court — Middle District of Tennessee

629 F. Supp. 1212

William P. AKERS, Plaintiff, v. Shirley BONIFASI, et al., Defendants.

Civ. A. No. 3:84-0924.

United States District Court, M.D. Tennessee, Nashville Division.

Memorandum September 24, 1984.

On Motion for Default Judgment November 2, 1984.

On Motion to Set Aside Default January 14, 1985.

On Motion for Leave to Withdraw August 8, 1985.

On Motion to Dismiss September 23, 1985.

Memorandum Opinion November 14, 1985.

Nader Baydoun, Nashville, Tenn., and David Begley, Omaha, Neb., for plaintiff.

Charles McElroy and M. Clark Spoden, Nashville, Tenn., for defendants.

MEMORANDUM

NEESE, Senior District Judge, Sitting by Designation and Assignment.

The filing by the defendant Mobile Telephone of America, Inc. (Mobile Telephone) of a petition in the United States Bankruptcy Court for the District of Arizona on February 9, 1984 operated automatically to stay the commencement of this action as to that debtor, but not as to the other persons named defendants herein. 11 U.S.C. § 362(a)(1); Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-11971 (6th Cir.1983).

Accordingly, the Court will proceed herein as if Mobile Telephone had not been named a party defendant. See in Re Thacker, 24 B.R. 835, 8371 (Bkrtcy.S.D. Ohio 1982) (any action taken in violation of the automatic stay is void ab initio even if there were no knowledge of the stay); In Re Florida Dairy, Inc., 22 B.R. 197, 1992 (Bkrtcy.M.D.Fla.1982) (same).

ON MOTION FOR DEFAULT JUDGMENT

The motion of the plaintiff for a judgment by default against the defendant Mr. Friedman hereby is

DENIED for the following reasons:

(1) the movant has not sought and received from our clerk entry of such defendant's default in accordance with the provisions of Rule 55(a), F.R.Civ.P.;¹

(2) an acknowledgment by the defaulted-defendant of service-of-process upon him has not been filed with the Court in accordance with Rule 4(g), F.R.Civ.P.;² and,

(3) the motion was not accompanied by the required affidavit, 50 U.S.C. App. § 520(1).³

ON MOTION TO SET ASIDE DEFAULT

The clerk entered the default of the defendant Mr. Morris S. Friedman (a/k/a Robert Powers) on November 9, 1984 for his failure to plead or otherwise defend as provided by the Federal Rules of Civil Procedure. Rule 55(a), F.R.Civ.P. On the first business day thereafter, the defaulted-defendant served his pro se answer to the complaint, and, on December 5, 1984, Mr. Friedman moved the Court, through counsel, to set aside such entry of default. Rule 55(c), F.R.Civ.P. Such motion has merit.

"For good cause shown the court may set aside an entry of default * * *." Rule 55(c), supra. The criteria which must guide this Court in its determination of whether good cause has been shown by the movant were set-forth by the Court of Appeals for this Circuit in United Coin Meter v. Seaboard Coastline RR., 705 F.2d 839 (6th Cir.1983), as follows:

1. Defaults are not favored since they run counter to the view of our system of jurisprudence that the interests of justice are best served when lawsuits are resolved on their merits after trial, ib., 705 F.2d at 8469.

2. Any doubt should be resolved in favor of setting-aside a default so that the case can be decided on its merits, id.

3. Whether the entry of a default should be set-aside is a matter committed to the discretion of the trial judge, but the exercise of that discretion entails a consideration of three factors:

a. whether the default was the result of wilful conduct on the part of the defaulting-defendant;

b. whether the plaintiff would be prejudiced if the entry of default were set-aside; and,

c. whether the defendant has asserted a meritorious defense.

Ib., 705 F.2d at 844.

4. Mere delay in satisfying a plaintiff's claim, if the latter should prevail at trial, is not sufficient prejudice to require denial of a motion to set-aside a default, ib., 705 F.2d at 8457.

5. In determining whether a defaulted-defendant has a meritorious defense, the likelihood of its success on such defense is not the measure; rather, if any defense relied upon states a defense good at law, then a meritorious defense has been advanced, ib., 705 F.2d at 8458.

6. Resolution of an action by default "* * * is a drastic step which should be resorted to only in the most extreme cases," ib., 705 F.2d at 8453.

The record herein does not demonstrate that Mr. Friedman's default was the result of his wilfulness. This is not a situation where a defendant has totally ignored the Court's process; instead, Mr. Friedman's failure to plead or otherwise defend in a timely fashion appears to have resulted from his notion that the service of process was legally insufficient because it was delivered by postal-authorities to his 14-year old son; shortly after he had received the process from his son, Mr. Friedman spoke with a deputy clerk of this Court and expressed to her his desire to defend herein and his contention that he had not been properly served with process.

The plaintiff does not claim he will suffer any prejudice if the entry of default is set-aside, and none is apparent to the Court. Requiring the plaintiff to prove his case on the merits, rather than winning by default, is not prejudicial.

Finally, the defaulted-defendant has set-forth in his answer numerous defenses which, if established at trial or otherwise, would bar any recovery by the plaintiff. Thus, Mr. Friedman has asserted a meritorious defense.

The Court does not in any way condone the failure of Mr. Friedman to have responded to the complaint within the time provided in the Federal Rules of Civil Procedure. If he believed service-of-process upon him was insufficient, then Mr. Friedman should have filed a timely motion to dismiss the action in accordance with the provisions of Rule 12(b)(5), F.R.Civ.P. Litigants who make private determinations of the law, and act (or omit to act) accordingly, assume generally the risk of the consequences in the event their determination proves incorrect. See Maness v. Myers, 419 U.S. 449, 458, 95 S.Ct. 584, 5912, 42 L.Ed.2d 574 (1975) ("Persons who make private determinations of the law and refuse to obey an order generally risk criminal contempt even if the order is ultimately ruled incorrect.").

Nevertheless, the basic purpose of the Federal Rules of Civil Procedure is to administer justice through fair trials, and those Rules were designed in large part to depart from some of the old procedural booby-traps which prevented unsophisticated litigants from ever having their day in court and to guarantee, as nearly as possible, that lawsuits are decided on their merits. Surowitz v. Hilton Hotels Corp., 383 U.S. 363, 373, 86 S.Ct. 845, 8513-7, 15 L.Ed.2d 807 (1966). The built-in flexibility of the Rules reflect the enlightened view, that decisions on the merits should not be avoided on the basis of technicalities or one misstep by a litigant. Foman v. Davis, 371 U.S. 178, 181-182, 83 S.Ct. 227, 2303, 9 L.Ed.2d 222 (1962).

It being the opinion of the Court that good cause exists for setting-aside the entry of default herein, the motion of the defendant Mr. Friedman hereby is GRANTED and the entry of default herein of November 9, 1984 hereby is

SET ASIDE. Rule 55(c), F.R.Civ.P.

ON MOTION FOR LEAVE TO WITHDRAW

"Ordinarily counsel will not be allowed to withdraw if such withdrawal will delay the trial of the case." Local Rule 1(g). The Court is not satisfied that withdrawal of counsel for the defendant Mr. Friedman would not delay the trial of this action on September 19, 1985. Accordingly, the motion of such counsel for leave to withdraw hereby is

DENIED in the absence of the entry of an appearance by substitute-counsel or the assertion by Mr. Friedman of his right of self-representation, see 28 U.S.C. § 1654.

ON MOTION TO DISMISS

On the second day of trial, the defendants moved the Court to dismiss this action for the failure of the plaintiff to have joined an "indispensible" party under Rule 19, F.R.Civ.P. Rule 12(b)(7), F.R.Civ.P.^* In support of their motion, the defendants argue that the plaintiff should have joined Mobile Telephone of Middle Tennessee, Inc. (MTMT) as a party-defendant herein and, that in the absence of such joinder, they will remain subject to a substantial risk of incurring double liability. Rule 19(a)(2)(ii), F.R.Civ.P.

The movants appear to fear that, hereafter, the plaintiff may attempt to bring another civil action against them seeking to recover from them (as agents of MTMT) under the promissory note involved herein. They overlook, however, the preclusive effect of the judgment that will be rendered in this action.

"Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 4142, 66 L.Ed.2d 308 (1980). Thus, where two successive lawsuits seek recovery for the same injury, a judgment on the merits operates to bar the later suit, even though a different legal theory of recovery is advanced in the second suit, Cemer v. Marathon Oil Co., 583 F.2d 830, 8326 (6th Cir.1978); the result is that a plaintiff must join in a single lawsuit all his rights to remedies against the defendant "`with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.'" James v. Gerber Products Co., 587 F.2d 324, 328 n. 5 (6th Cir.1978), quoting Restatement (Second) of Judgments, § 48, comment a, at 36 (Tent. Draft no. 1, 1973).

Rule 19(a)(2)(ii), supra, "* * * requires a substantial emphasis original risk of double liability." Morgan Guaranty Trust Company of New York v. Martin, 466 F.2d 593, 598 (7th Cir.1972). The res-judicata effect of the final judgment to be entered herein negates any substantial risk that the defendants might be subjected to double liability.

The motion hereby is

DENIED.

MEMORANDUM OPINION

This, inter alia, is a diversity...