Barta v. Long
| Decision Date | 08 February 1982 |
| Docket Number | No. 80-1037,80-1037 |
| Citation | 670 F.2d 907 |
| Parties | Wesley J. BARTA and Rita I. Barta, Plaintiffs-Appellees, v. Carl F. LONG, Christopher C. Long, Caddo Western Development Corporation and Frontier Pipeline Co., Inc., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Tenth Circuit |
John B. Rathmel of Render & Kamas, Wichita, Kan., for defendants-appellants.
James D. Oliver of Foulston, Siefkin, Powers & Eberhardt, Wichita, Kan., for plaintiffs-appellees.
Before SETH, Chief Judge, BREITENSTEIN, Circuit Judge, and KUNZIG, Judge *.
This is an appeal taken from a default judgment entered for the plaintiffs in an action alleging common law fraud and securities fraud arising from an oil well drilling venture. The individual defendants are husband and wife and the corporate defendants are corporations they control. Defendants answered and filed a counterclaim. Some discovery was had including depositions of the individual defendants.
The defendants failed to answer several questions in a set of interrogatories served on them and failed to answer a set of interrogatories so served. The magistrate entered an order as a sanction for defendants' failure which struck defendants' pleadings. The district court thereafter entered a default judgment. The defendants filed a motion under Rules 60(b) and 55(c) to set aside the default. This was denied and the defendants took an appeal from the default judgment and from the denial of their 60(b) motion.
The appeal was taken about two and one-half months after the entry of judgment but within 30 days of the order denying the 60(b) motion.
As mentioned, there had been discovery by way of depositions and the production of records and documents. The depositions of both individual defendants had been taken. Other discovery was sought by way of interrogatories.
The plaintiffs served a set of interrogatories on the defendants on December 1. There were no answers filed and on January 23 plaintiffs moved to compel answers. An order was entered on February 20 directing that answers be made. This was done at a pretrial conference. At another pretrial conference on April 23 it was brought to the court's attention that two interrogatories directed to the Longs and two to the defendant corporations had not been answered pursuant to the court's order of February 20. The court then ordered that defendants answer by May 7.
Another pretrial conference was held on July 6 at which time the court was advised that the questions had not been answered, and no objection or contest had been filed. The court by letter to counsel of July 9 advised defendants that action had to be taken by September 11. At this pretrial conference the court considered another failure by the defendants to answer. This was to a set of interrogatories served on defendants on April 11. Also, no objections had been filed to these interrogatories.
On July 9 plaintiffs filed a motion that sanctions be imposed for the failure of defendants to comply with the court's order of April 23 and for an order that defendants answer and sanctions be imposed for the failure to answer the second set of interrogatories. By September 11 defendants had not complied with the court's orders to answer and had filed no responses or objections to the interrogatories. The magistrate thereupon by way of sanctions entered an order at the September 11 pretrial conference striking defendants' pleadings. On October 4 plaintiffs moved for a default judgment and the court set it down for hearing on October 15. By October 15 the defendants had filed no answers to the interrogatories nor advanced any reasons why they had not been answered and had filed no motions to set aside the order of the magistrate. Arguments were had before the district judge on October 15. The depositions and proof of damages were admitted. At the conclusion the default judgments were entered for fraud and breach of contract. The dollar figures were derived from the proof of money advanced. Thus compensatory damages were in the amount of $234,360.00. Fifty thousand dollars was added as punitive damages.
On November 13 defendants filed Rule 60(b) motions seeking to set aside the default judgment on the ground of excusable neglect and to permit answers and counterclaims to be filed. Defendants did not offer to answer the interrogatories. The motion was denied without further hearing by order of November 29. The defendants filed a notice of appeal on December 28 or about two and one-half months after the default judgment (October 15). The appeal is sought to be taken from the default judgment and from the denial of the 60(b) motion.
The authorities now generally hold that the filing of a motion under Rule 60(b) does not toll the time in which an appeal may be taken from the judgment. The defendants rely on United States v. Schlotfeldt, 136 F.2d 935 (7th Cir.), which was an early case on the point but now is not considered to state the applicable rule. See 7 Moore's Federal Practice P 60.29 (2d ed.), and the comments of the Advisory Committee in 1946. Wright and Miller in their Federal Practice and Procedure § 2871 also comment that Schlotfeldt cannot be considered as authority on the point. Thus we must hold that the time for taking an appeal from the judgment as such had expired before this appeal was taken.
We will therefore consider this appeal as directed to the trial court's denial of defendants' Rule 60(b) motion seeking to set aside the default judgment entered as a sanction for failure to follow the court's orders directed to the interrogatories. It needs no citation of authority to state that defaults are not favored. The standards to be applied when motions are made under Rules 55(c) and 60(b) have been set out by this court in Gomes v. Williams, 420 F.2d 1364 (10th Cir.), and in In Re Stone, 588 F.2d 1316 (10th Cir.). See also Marshall v. Monroe & Sons, Inc., 615 F.2d 1156 (6th Cir.). The requirements include a diligent effort by the movant to seek relief under Rule 60(b) with the filing of the motion within a reasonable time, a demonstration that there was a good or acceptable reason for the default, and a defendant must show that he had a meritorious defense.
The defendants argue that good cause was shown for the default. They state:
"Defendants contend that the withdrawal of their counsel and...
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