Federal Sav. and Loan Ins. Corp. v. Kroenke, 87-3860

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Citation858 F.2d 1067
Docket NumberNo. 87-3860,87-3860
PartiesFEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, as Receiver for Sun Belt Federal Bank, F.S.B., Plaintiff-Appellee, v. Frederick H. KROENKE, Jr., Defendant-Appellant. Summary Calendar.
Decision Date28 October 1988

Page 1067

858 F.2d 1067
12 Fed.R.Serv.3d 1223
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, as Receiver
for Sun Belt Federal Bank, F.S.B., Plaintiff-Appellee,
v.
Frederick H. KROENKE, Jr., Defendant-Appellant.
No. 87-3860
Summary Calendar.
United States Court of Appeals,
Fifth Circuit.
Oct. 28, 1988.

Page 1068

Frederick H. Kroenke, Jr., Baton Rouge, La., pro se.

Bruce Schewe, New Orleans, La., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Louisiana.

Before CLARK, Chief Judge, JOHNSON and JOLLY, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

Frederick H. Kroenke, Jr. appeals the denial of his Motion to Alter or Amend Judgment Denying Motion for Relief from Entry of Default. We affirm.

I

In February 1987, the Federal Savings & Loan Insurance Company ("FSLIC"), as receiver for Sun Belt Federal Bank, F.S.B. ("Sun Belt"), filed a complaint against Kroenke, seeking (1) a money judgment; (2) the recognition and maintenance of its mortgage and lien rights in and to certain immovable property; (3) the issuance of a Writ of Sequestration, causing the seizure of the mortgaged property pending the outcome of the litigation; (4) the appointment of FSLIC as the keeper of the mortgaged property; and (5) all other general and equitable relief to which it might be entitled.

On May 8, 1987, a copy of the summons and a copy of the complaint were served on Kroenke. Late in May, counsel for Kroenke made contact with counsel for FSLIC to request an informal extension of time in which to plead. FSLIC acknowledged on May 28, 1987 that it would take no action adverse to Kroenke for fifteen days thereafter.

In a letter dated June 26, 1987, Kroenke sent FSLIC a settlement proposal which concluded: "As we have agreed, I will not take any action in the above referenced matter while we are attempting to settle this matter without the necessity of litigation." Counsel for FSLIC denies by affidavit dated August 24, 1987, that any "agreement" in the form of an indefinite extension of time to plead was ever reached.

The parties differ on whether counsel for FSLIC made attempts to contact Kroenke's counsel to notify him that he should file a responsive pleading to FSLIC's complaint. Counsel for FSLIC states that on at least two occasions he attempted unsuccessfully to contact counsel for Kroenke by telephone to inform him that he would not agree to any period of inaction by Kroenke, but those calls were never returned. Counsel for Kroenke, also by affidavit, insists that no calls were received. At any rate, on July 6, 1987, the district court, sua sponte, directed Kroenke, himself an attorney, to file an answer or other pleading within ten days. If no answer were filed, the order stated, a default would be entered against him. On July 23, 1987, FSLIC moved for entry of default. The clerk of the court entered a preliminary default, and on July 27, 1987, the default judgment was confirmed.

On July 28, 1987, Kroenke filed a motion for relief from the default judgment, supported by an affidavit and memorandum setting forth his version of the facts. On September 11, the court denied the motion, and on September 18, Kroenke moved to alter or amend the September 11 judgment.

On October 14, 1987, the district court granted FSLIC's motion to correct the default judgment. The corrected judgment recognized FSLIC's mortgage and lien

Page 1069

rights in the property at issue and provided for judgment "in the amount of $133,296.29 plus interest ... and reasonable attorneys' fees to be fixed at a later date" rather than "the sum of $166,620.36 dollars with interest" as provided in the original default judgment.

On October 20, 1987, the district court denied Kroenke's motion to alter or amend its September 11 judgment. Kroenke filed this timely appeal, arguing that the district court abused its discretion in denying his motion to alter or amend.

II

Because Kroenke raises the question, we first note that under Budinich v. Becton Dickinson and Co., a judgment on the merits is a "final decision" for purposes of section 1291, even though a claim for attorneys' fees is still pending, and regardless of whether attorneys' fees are deemed part of the merits. --- U.S. ----, 108 S.Ct. 1717, 1720-22, 100 L.Ed.2d 178 (1988). See generally Cobb v. Miller, 818 F.2d 1227 (5th Cir.1987). This court therefore has jurisdiction to decide this appeal.

III

A.

Kroenke argues that the district court abused its discretion in denying his motion for relief from both entry of default and from judgment of default under Fed.R.Civ.P. 55(c) and/or 60(b). Fed.R.Civ.P. 55(c) provides that "For good cause shown the court may set aside an entry of default and, if a judgment of default has been entered, may likewise set it aside in accordance with Rule 60(b)." Fed.R.Civ.P. 60(b) provides in relevant part that "the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered...

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