Associates Discount Corp. v. Goldman, 75-1144
| Decision Date | 30 October 1975 |
| Docket Number | No. 75-1144,75-1144 |
| Citation | 524 F.2d 1051 |
| Parties | ASSOCIATES DISCOUNT CORPORATION v. Sophie GOLDMAN, Administratrix of the Estate of Maurice Goldman, Deceased, and Sophie Goldman, Individually, Appellant. |
| Court | U.S. Court of Appeals — Third Circuit |
Paul H. Titus, Gordon David Fisher, Kaufman & Harris, Pittsburgh, Pa., for appellant.
Reed J. Davis, Stephen D. Prendergast, Davis & Mazzotta, Pittsburgh, Pa., for appellee.
Before ALDISERT, GIBBONS and WEIS, Circuit Judges.
The defendant Sophie Goldman appeals from the denial of her motion to vacate a consent judgment against her in a suit based upon a written guaranty. She alleged, and plaintiff Associates Discount Corporation did not controvert, that her signature on the agreement was a forgery. The district court concluded that this fact was not "newly discovered evidence" under Fed.R. Civ.P. 60(b) (2) and that there was no basis for a finding of inadvertence or excusable neglect on the part of defendant's counsel under Rule 60(b)(1). 1 We remand for a consideration of the existence of counsel's authority to consent to the entry of judgment.
Defendant's husband Maurice and his brother Max Goldman were partners in M & M Auto Sales for some time prior to April, 1966, and on several occasions borrowed money from Associates. Disputes arose, and in 1967 suit was filed in the district court against Associates by M & M, alleging destruction of its business. Associates counterclaimed against the Goldman brothers individually for sums allegedly then due and owing.
On May 20, 1968, two legal actions were instituted by Associates, one against Max Goldman and his wife Helen, the other against defendant Sophie and her husband Maurice. The complaints asserted that the Goldmans were liable to Associates as a result of written guaranties dated April 6, 1966. Samuel Rosenzweig, the attorney who represented M & M, filed answers for husband and wife in each suit. At that time no claim of forgery was made on Sophie's behalf. Later, the three suits were consolidated for final disposition.
On May 6, 1968, a few days before suit was filed against her, Sophie received a registered letter from Associates. It advised that Maurice and his brother were indebted to Associates by virtue of a judgment recorded in the state court. The letter continued, "(y)ou, as guarantor of this obligation, are liable for this amount . . . ." Attorney Rosenzweig acknowledged receipt by sending a letter four days later which began, "(y)our letters of May 4 and May 6, addressed to the Mrs. Goldmans above named, have been referred by them to the writer for reply." The correspondence made no reference to any defect in the guaranty agreement.
During the course of the litigation, Sophie's husband, Maurice, was deposed and stated that the signature on the guaranty was hers.
Maurice died on February 6, 1969, and in due course Mr. Rosenzweig prepared a motion to substitute Sophie as administratrix of her husband's estate. This document was mailed to her in August of 1970, and on receipt she telephoned the lawyer. During the course of the conversation Mr. Rosenzweig advised her that the litigation was not going well. Apparently this was the first time that Sophie and the lawyer had discussed the case in any manner. In fact, at no time prior to the scheduled date of the trial did they meet face-to-face to review the cases.
With the death of Maurice and another important witness, Mr. Rosenzweig realized that M & M's case against Associates had little chance of success. He advised Max, the surviving brother, to consult another lawyer, Alan Garfinkel, Esquire. During August of 1970, Rosenzweig met with Max, his wife Helen, and Mr. Garfinkel, to discuss the unfavorable developments in the litigation. Sophie was not present at this meeting, so Rosenzweig asked the others to advise her of what had transpired. Helen did get in touch with Sophie; however, just what was discussed is not clear from the record.
The cases were set for trial on September 21, 1970, and on that date the attorneys discussed a settlement. Four days later, they signed a stipulation providing for the dismissal of M & M's case against Associates and for the entry of a judgment in its favor against the Goldmans individually in the amount of $36,000.00. The judgment was duly docketed on September 28. 2
That same day Sophie called her brother, who in turn contacted Mr. Rosenzweig for an explanation of the situation. Mr. Garfinkel was also consulted about the matter. Soon thereafter present counsel were retained, and a petition to vacate the judgment was filed on December 21, 1970. After an evidentiary hearing, the district court denied the motion.
There is a dispute in the testimony as to whether Mr. Rosenzweig had advised Sophie of his proposed action before the stipulation was filed. He insists that he telephoned her prior to the event and:
Sophie's testimony, on the other hand, indicated some confusion arising out of the overlapping of the cases involved the one filed by M & M and the other in which she was a defendant. Additionally, she expressed a lack of understanding that a judgment would be entered against her personally.
The district court's findings do not establish whether Mr. Rosenzweig's discussion with Sophie about the stipulation took place before or after it was signed. If the conversation occurred before the critical date, findings are necessary to determine Sophie's comprehension of the situation. Whether she understood that she was consenting to a judgment being entered against her personally, solely in her capacity of administratrix, or only with...
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