Gold Kist, Inc. v. Laurinburg Oil Co., Inc., No. 84-1187

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Writing for the CourtBefore GARTH and SLOVITER, Circuit Judges, and BARRY; SLOVITER
Citation756 F.2d 14
PartiesGOLD KIST, INC. v. LAURINBURG OIL COMPANY, INC. and McNair Evans, Appellants.
Decision Date04 March 1985
Docket NumberNo. 84-1187

Page 14

756 F.2d 14
1 Fed.R.Serv.3d 1134
GOLD KIST, INC.
v.
LAURINBURG OIL COMPANY, INC. and McNair Evans, Appellants.
No. 84-1187.
United States Court of Appeals,
Third Circuit.
Argued Nov. 1, 1984.
Decided March 4, 1985.

Page 15

Guy A. Cellucci (argued), White & Williams, Philadelphia, Pa., for appellee.

John E. McKeever (argued), Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., for appellants.

Before GARTH and SLOVITER, Circuit Judges, and BARRY, District Judge. *

OPINION OF THE COURT

SLOVITER, Circuit Judge.

The district court denied defendants' motion to set aside a default judgment entered as to them on March 8, 1983. Because the entry of the default judgment was unauthorized and improper, the court erred in refusing to set it aside.

I.

The genesis of the dispute between the parties is the claim of plaintiff Gold Kist, Inc. that C.F. Simonin's Sons, Inc. owed it $114,707.65, the contract price for peanut oil sold by Gold Kist and delivered to Simonin. Gold Kist filed suit for breach of contract in the United States District Court for the Eastern District of Pennsylvania invoking diversity jurisdiction (the Simonin action). In August 1982, the parties agreed to settle the Simonin action for $115,000 to be paid in monthly installments, although they continued to negotiate about some aspects of the settlement. Under Gold Kist's version of the facts, it gave up its demand for a judgment to be entered against Simonin in the amount of the settlement and agreed to dismiss the complaint with prejudice in exchange for obtaining guarantee agreements from Laurinburg Oil, a parent company of Simonin, and McNair Evans, a principal officer and director of Simonin. Laurinburg Oil and Evans, on the other hand, maintain that it was Gold Kist which sought to add additional terms to the settlement, and that the only guarantee promised was a contingent guarantee of Laurinburg Oil.

The settlement agreement was executed by Simonin, but was returned to Gold Kist without the guarantee agreements of Laurinburg Oil and Evans. Despite repeated assurances by Simonin's counsel that they would be forthcoming, ultimately he informed

Page 16

Gold Kist that Evans would not provide a guarantee and that Laurinburg Oil would provide one only if it were accepted in lieu of receiving both guarantees.

Two days later, on November 5, 1982, Gold Kist filed this diversity action against Laurinburg Oil and Evans alleging breach of their agreement to guarantee Simonin's payment of the settlement. The complaint asserted breach of contract, promissory estoppel and common law fraud. The district court granted Gold Kist's motion for special appointment to serve process and ordered that proof of service be made by affidavit in accordance with Rule 4(g) of the Federal Rules of Civil Procedure.

At a conference with the district court on November 23, 1982, counsel in the Simonin action agreed that judgment would be entered against Simonin pursuant to the pay-out schedule previously agreed upon. They also agreed that simultaneously this action against Laurinburg Oil and Evans would be dismissed without prejudice, but that Gold Kist could reinstate it if Simonin defaulted. The following day, November 24, 1982, before the agreement of the parties had been reduced to writing and without advising the parties, the district court entered an order dismissing the case "pursuant to agreement of counsel." The parties then prepared a stipulation of dismissal in the Simonin action which the court entered on December 15, 1982. The stipulation provided that "neither counsel for C.F. Simonin's nor C.F. Simonin's itself in any way represents or controls McNair Evans or Laurinburg Oil...."

On February 17, 1983, counsel for Gold Kist requested reinstatement of this action pursuant to the terms of the December 15 stipulation of dismissal because Simonin failed to make the payment due January 31, 1983. The district court granted the request by order dated March 7, 1983. The next day the clerk, on the request of Gold Kist's attorney, entered a default against the defendants for failure to answer, move, or otherwise respond to the complaint. Also on March 8, the court, again at Gold Kist's request, entered default judgment in the sum of $90,000.

Laurinburg and Evans moved to set aside the default judgment pursuant to Fed.R.Civ.P. 55(c) and 60(b), arguing that the default was improperly entered because the requisite time to respond had not passed. In their proffered answer to the complaint, attached to the motion, the defendants asserted that the court lacked in personam jurisdiction, that they never guaranteed the obligations of Simonin, that counsel for Simonin lacked authority to make representations on their behalf, that Evans always stated that he would not personally guarantee the obligation of Simonin, that the entry of judgment against Simonin resulted in a failure of consideration for Laurinburg's promise to guarantee Simonin's obligation since that promise was contingent on no judgment being entered, that the claim was barred by the statute of frauds, and that service of process was insufficient. The district court denied the motion and this appeal followed.

II.

In support of their motion to set aside the default judgment, defendants contended that entry of the default judgment against them was improper because the twenty day period for filing the answer had not expired. The twenty-day period begins to run from the time the complaint is served....

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333 practice notes
  • Desposito v. Newjersey, Civil Action No. 14-1641
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • May 5, 2015
    ...the entry of default will be set aside when the Complaint has not been properly served. See Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d 14, 19 (3d Cir. 1985); Grand Entm't Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 493 (3d Cir. 1993) (holding that a default will be set aside i......
  • Polidoro v. Saluti, Civ. No. 09-6392 (KM)
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • December 4, 2015
    ...within the time provided by the Federal Rules, which is ordinarily twenty-one days. See Gold Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 18-19 (3d Cir. 1985); Fed. R. Civ. P. 12(a). Service of an individual may be made under the Federal Rules by doing any of the following:(A) deliv......
  • Miriam Kaller Family Irrevocable Trust v. Lincoln Benefit Life Co.,
    • United States
    • United States State Supreme Court (New York)
    • February 6, 2017
    ...A district court may not disregard these time periods because it is impatient with a party's behavior" (Gold Kist v. Laurinburg Oil Co., 756 F.2d 14, 17 [3rd Cir.1985] ; see also Correia v. Choice Point, 2008 WL 4951244, 2008 U.S. Dist. LEXIS 93680 [D.N.J.2008] [motion was denied where the ......
  • Longenette v. Krusing, No. 00-3690.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • March 7, 2003
    ...has no bearing." Id. We have adopted the majority view when there has been inadequate notice. In Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d 14, 19 (3d Cir.1985), we declared that "[a] default judgment entered when there has been no proper service of complaint is, a fortiori, void, and ......
  • Request a trial to view additional results
330 cases
  • Desposito v. Newjersey, Civil Action No. 14-1641
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • May 5, 2015
    ...the entry of default will be set aside when the Complaint has not been properly served. See Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d 14, 19 (3d Cir. 1985); Grand Entm't Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 493 (3d Cir. 1993) (holding that a default will be set aside i......
  • Polidoro v. Saluti, Civ. No. 09-6392 (KM)
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • December 4, 2015
    ...within the time provided by the Federal Rules, which is ordinarily twenty-one days. See Gold Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 18-19 (3d Cir. 1985); Fed. R. Civ. P. 12(a). Service of an individual may be made under the Federal Rules by doing any of the following:(A) deliv......
  • Miriam Kaller Family Irrevocable Trust v. Lincoln Benefit Life Co.,
    • United States
    • United States State Supreme Court (New York)
    • February 6, 2017
    ...A district court may not disregard these time periods because it is impatient with a party's behavior" (Gold Kist v. Laurinburg Oil Co., 756 F.2d 14, 17 [3rd Cir.1985] ; see also Correia v. Choice Point, 2008 WL 4951244, 2008 U.S. Dist. LEXIS 93680 [D.N.J.2008] [motion was denied where the ......
  • Longenette v. Krusing, No. 00-3690.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • March 7, 2003
    ...has no bearing." Id. We have adopted the majority view when there has been inadequate notice. In Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d 14, 19 (3d Cir.1985), we declared that "[a] default judgment entered when there has been no proper service of complaint is, a fortiori, void, and ......
  • Request a trial to view additional results

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