Indian Head Nat. Bank of Nashua v. Brunelle

• Decision Date: 09 September 1982
• Docket Number: No. 82-1098,82-1098
• Citation: 689 F.2d 245
• Parties: INDIAN HEAD NATIONAL BANK OF NASHUA, Plaintiff, Appellee, v. Richard BRUNELLE, U.S. Marshal for the District of New Hampshire, and Conproco Corporation, Defendants, Appellees, IPA Systems, Inc., Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 245

689 F.2d 245

INDIAN HEAD NATIONAL BANK OF NASHUA, Plaintiff, Appellee, v. Richard BRUNELLE, U.S. Marshal for the District of New

Hampshire, and Conproco Corporation, Defendants, Appellees,

IPA Systems, Inc., Defendant, Appellant.

No. 82-1098.

United States Court of Appeals, First Circuit.

Argued June 11, 1982.

Decided Sept. 9, 1982.

Thomas D. Rath, with whom Orr & Reno, P.A., Concord, N.H., was on brief, for defendant, appellant.

John W. Mitchell, with whom Sulloway, Hollis & Soden, Concord, N.H., was on brief, for plaintiff, appellee.

Before CAMPBELL and BREYER, Circuit Judges, ROSENN, Senior Circuit Judge ^*.

ROSENN, Circuit Judge.

This appeal raises an important question of judicial administration. Where a federal court, having personal jurisdiction of the parties, entered a default judgment, never appealed, which was then registered in another federal jurisdiction for enforcement purposes, should the registration court have deferred to the court of rendition on an application for relief from the judgment under Fed. R. Civ. P. 60(b)? Although it acknowledged that usually the court of rendition is the preferable forum to determine whether relief should be granted, the United States District Court for the District of New Hampshire, the registration court in these proceedings, held that because there was currently litigation in that court between the parties on related issues, it was a convenient forum to entertain the motion for relief and, in the exercise of its discretion, it granted relief and took "full jurisdiction" of the underlying action. ¹ We reverse.

I.

Conproco Corporation (Conproco) incorporated in Delaware with its principal place of business in New Hampshire, had for several years served as a major distributor of IPA Systems, Inc. (IPA), a Pennsylvania corporation. On March 23, 1981, IPA brought a diversity action against Conproco in the United States District Court for the Eastern District of Pennsylvania to recover $67,919.78 for goods sold to Conproco between October 1980 and March 1981. On April 7, 1981, Conproco's Boston counsel telephoned Philadelphia attorney Ronald Sklar and engaged him to represent Conproco in this action. The next day Sklar obtained a ten-day extension from IPA's counsel and, according to Sklar's deposition testimony, he made a number of unsuccessful attempts by letter and telephone in the remaining weeks of April to obtain documents and information from Conproco's Boston counsel which he considered necessary for an appropriate response. Sklar testified that he prepared a stipulation for a further extension of thirty days which counsel for IPA would not accept.

On May 1, 1981, Sklar entered his appearance in behalf of Conproco and filed a motion for change of venue, supported by a memorandum of law, alleging that the Eastern District of Pennsylvania was not a convenient forum because defendants' necessary witnesses resided in New Hampshire. On May 5 the clerk entered default against Conproco for failure to answer and on the next day Sklar wrote the court, requesting a conference. Sklar conferred with the judge on May 8 on the motion for change of venue and the default judgment, and testified that when the judge asked him if he were prepared to file an answer, he replied that he could not because he did not have sufficient information. Immediately after the conference, Sklar wrote to Conproco's Boston counsel again complaining and warning that the judge might soon rule on the motion for default judgment. Sklar testified that on May 13 Boston counsel finally sent him a draft answer which Sklar maintained was insufficient for filing. On May 19, IPA filed its motion for judgment on the default.

On May 27 the court denied Conproco's forum non conveniens motion and on May 29 entered judgment on the default in the amount of $67,919.78, with interest and costs. During the course of these developments, Conproco's Boston counsel had been in direct communication with IPA's counsel and learned of these events before receiving Sklar's report of them. Conproco's Boston counsel wrote to Sklar insisting that steps be taken immediately to prevent execution of the judgment before any hearing on the merits.

On June 11, 1981, Sklar timely filed a motion to reconsider with the Pennsylvania district court which was denied without hearing on July 6. The motion for reconsideration alleged, inter alia, that defendant had a good defense to plaintiff's claim, that monies were due and owing to defendant from plaintiff, and attached a copy of a proposed answer and counterclaim. The motion requested opening of the default judgment and permission to enter into a defense of plaintiff's claim. By letter of July 10, Boston counsel informed Sklar that they had been advised by IPA's counsel that the judge had refused to vacate the default judgment. This letter repeated that it was essential that the judgment not be executed without an opportunity for Conproco to litigate the merits and asked that Boston counsel be advised immediately of steps Sklar intended to take "to ensure that an execution not issue."

On July 21, 1981, IPA registered the judgment with the United States District Court for the District of New Hampshire pursuant to 28 U.S.C. § 1963 (1976) and attempted to attach Conproco's account at the Indian Head National Bank of Nashua. On August 17, 1981, the Bank filed an interpleader action in the New Hampshire district court naming Conproco and IPA as defendants, paid the money into court, and requested the court to rule on the proper distribution of the funds.

During the pendency of the interpleader action, Conproco moved the New Hampshire district court for relief from the default judgment pursuant to Fed. R. Civ. P. 60(b)(6). The motion averred that although Conproco attempted to defend the action in Pennsylvania and had entered an appearance, an answer was never filed and it "(was) without explanation as to why the default judgment was entered and no appeal filed"; that no hearing on the merits had ever been held and that new counsel "(was) being retained in Philadelphia to have the case reopened." The motion concluded with an assertion that "it would be a gross injustice to enforce a judgment obtained against Conproco in a distant state through the negligence of its counsel there." Several weeks later Conproco amended its prayer for relief to request relief under 60(b)(1) as well as 60(b)(6) averring that the default judgment was due to inadvertence and neglect. ²

After a hearing ³ the New Hampshire court found that Conproco had a valid defense and that the default judgment was not the fault of Conproco or its Massachusetts counsel. The court further found that it was a convenient forum for the determination of the merits of the dispute which resulted in the judgment of the Eastern District of Pennsylvania because there was other litigation in the District Court for the District of New Hampshire between the parties. ⁴ The court, therefore, granted Conproco Rule 60(b) relief and took jurisdiction of the underlying action.

II.

The question presented by this appeal is whether the registration court ⁵ properly exercised its authority in granting Rule 60(b) relief and taking jurisdiction of the underlying action.

Rule 60(b) sets out various grounds on which relief from judgment may be obtained by motion. Although the Rule by its terms does not limit motion practice to the court which rendered the judgment, ⁶ 60(b) motions have generally been brought in the rendering court. Fuhrman v. Livaditis, 611 F.2d 203, 204 (7th Cir. 1979). And there are indications that the drafters of the Rule intended to restrict motion practice under 60(b) to the court which rendered judgment. As Professor Moore notes, Rule 60(b) motion practice was a substitute for the writs and bills of review which the Rule expressly abolishes. "These remedies were commonly termed ancillary for they were available only in the court which had rendered judgment and, in a real sense, were but a continuation of the litigation which had terminated in the final judgment at law or decree in equity." 6A J. Moore, Moore's Federal Practice P 60.04(1) at 4043 (2d ed. 1982). The advisory committee notes to the 1946 amendment reflect an understanding that Rule 60(b) motion practice would be made in the court rendering judgment.

Two types of procedure to obtain relief from judgments are specified in the rules as it is proposed to amend them. One procedure is by motion in the court and in the action in which the judgment was rendered. The other procedure is by a new or independent action to obtain relief from a judgment, which action may or may not be begun in the court which rendered the judgment.

Fed. R. Civ. P. 60 advisory committee note.

As the advisory committee comment indicates, the Rule expressly preserves independent equitable actions, ⁷ which had been available in both the rendering court and in other federal courts prior to the Rule's enactment. The comment reflects an understanding, however, that the simpler procedure for obtaining relief under the Rule would continue to be available only in the rendering court where the motion was considered "a continuation of the litigation." Rule 60(b) motion practice, then, contemplates an exercise of supervisory power by the rendering court over the judgment it issued.

When a court grants relief from a judgment or decree by a new trial or rehearing, or by one of the ancillary common law or equitable remedies or their modern substitute, a motion, it is exercising a supervisory power of that court over its judgment; but the original bill, or independent action, to impeach for fraud, accident, mistake, or other equitable ground is founded upon an independent and substantive equitable jurisdiction.

Bankers Mortgage Co. v. United States, 423 F.2d 73, 78-79 (5th Cir.), cert. denied, 399 U.S. 927, 90 S.Ct. 2242, 26 L.Ed.2d 793 (1970) (quoting 7 J. Moore, Moore's...