Meadows v. Dominican Republic
| Decision Date | 14 May 1987 |
| Docket Number | Nos. 86-1785 and 86-1843,s. 86-1785 and 86-1843 |
| Citation | 817 F.2d 517 |
| Parties | Charles V. MEADOWS, George Harris, Plaintiffs-Appellees/Cross-Appellants, v. The DOMINICAN REPUBLIC; and Instituto, De Auxilios Y Viviendas, Defendants- Appellants/Cross-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
E.O.C. Ord, San Francisco, Cal., for plaintiffs-appellees/cross-appellants.
Sanford Jay Rosen, San Francisco, Cal., for defendants-appellants/cross-appellees.
Appeal from the United States District Court for the Northern District of California.
Before HUG and ALARCON, Circuit Judges, and STEPHENS, * District Judge.
The Dominican Republic (hereinafter Republic) and the Instituto De Auxilios Y Viviendas (hereinafter Instituto or, collectively, appellants) appeal from the denial of their motion to vacate the entry of the default judgment entered against them and the denial of their motion for reconsideration. Appellants contend that the district court lacked subject matter jurisdiction to enter a default judgment in this matter because the Republic was improperly named as a defendant. They also argue that the court lacked personal jurisdiction over the Instituto. Finally, appellants assert that the court erred in concluding their default was not the result of excusable neglect. We reject each of these contentions.
The district court entered a default judgment based on a showing by the plaintiff Charles V. Meadows (hereinafter Meadows) that he was not paid a two percent commission owed to him for obtaining a $12 million loan for the Instituto. Meadows was requested to obtain the loan commitment by Dr. Marion A. Fernandez Mena (hereinafter Mena), the Secretary of the Republic and the General Administrator of the Instituto. Subsequently, plaintiff George Harris (hereinafter Harris or, collectively, appellees) contacted Sir Thomas Buxton, a lender in London, to obtain the money sought by Mena. Buxton advised Meadows and Harris that funding in the amount requested was available. Meadows then informed Mena of the terms and conditions for the loan.
Mena issued a mandate for the loan application to Meadows on September 6, 1976. The mandate was recorded in the Office of the Consulate of the United States. The letter referred to a two percent commission, although it did not specify to whom the commission was to be paid. The letter also did not indicate that any action other than performance was required of plaintiffs. In December 1976, the Instituto received a loan commitment for $12 million from Citibank Nassau's Santo Domingo branch on terms similar to those specified in the September mandate.
In February of 1977, Mena advised Meadows that the loan proceeds had arrived. Mena thanked Meadows for the arrangements and acknowledged that Meadows' commission of $240,000 was due and owing. Meadows and Harris then engaged in a series of attempts by telephone to secure the commission. They received only evasions and excuses.
Thereafter Meadows received a letter from Mena stating that the money had been received on February 14, 1977, and that the Republic wanted Meadows' assistance in securing another loan of $20,000,000 on behalf of the Instituto. No reference was made to the commission due on the previous loan.
During a later telephone conversation, Mena told Meadows that he would get a larger commission if he would obtain a second loan. Meadows told Mena he would not assist in procuring a second loan until his original commission was paid. Meadows and Harris were subsequently refused payment by Citibank of New York and by the Instituto.
Meadows attempted to obtain counsel in the Republic, but was told that it would be politically unwise for a Dominican lawyer to represent him. Meadows then retained On February 11, 1981, Meadows and Harris attempted to serve the Republic and the Instituto with summons and a copy of the complaint by mail addressed to the Secretary of State of the Republic and to Mena, with return receipt requested. No return receipts were received.
American counsel, who traveled to the Republic in 1980 in order to discuss payment of the commission with counsel for the Instituto. Payment was refused without explanation. Meadows and Harris filed an action for breach of contract in the District Court for the Northern District of California on December 19, 1980.
On April 28, 1981, they followed the same procedure and mailed the summons and a copy of the complaint to the Head of the Ministry of Foreign Affairs of the Republic and to Mena in his capacity as the Administrator General of the Instituto. Again, no return receipts were received.
On June 17, 1981, Meadows and Harris sent a letter to the United States Department of State, witnessed by the clerk of the district court, as required by 28 U.S.C. Sec. 1608(a)(4), requesting service on the Republic. On October 1, 1981, the United States Department of State informed the clerk of the court in writing that service had been effected on the Foreign Ministry of the Republic on September 10, 1981. The clerk was also advised that the Republic had been given detailed warnings of the legal consequences that would result from a failure to respond to the complaint.
The Republic and the Instituto did not respond. Default was entered November 16, 1981. Thereafter, the court dismissed the complaint sua sponte for failure to allege facts sufficient to establish personal jurisdiction over the defendants. Meadows and Harris appealed to this court. We remanded the action to the district court with instructions to permit the filing of an amended complaint. Meadows v. Dominican Republic, 720 F.2d 684 (9th Cir.1983).
Meadows and Harris filed affidavits in the district court on the jurisdictional issue. On June 1, 1984, a second default judgment was entered against the Republic and the Instituto in the amount of $240,000 plus interest.
On September 4, 1984, Meadows and Harris mailed copies of the default judgment to the Republic. The Republic's Undersecretary of Foreign Affairs forwarded a copy to the Instituto. No return receipt, however, was sent back to the plaintiffs. Meadows and Harris again served notice of the judgment on the Republic and the Instituto by mail in February 1985. The United States Department of State finally served notice of the judgment on the Secretary of Foreign Services of the Republic in March 1985. A return receipt of the February 1985 mailing was eventually received from the Instituto in April 1985.
The Republic and the Instituto filed a motion to set aside the default judgment and a motion for reconsideration. The district court found both motions to be timely, but denied them. Meadows v. Dominican Republic, 628 F.Supp. 599 (N.D.Cal.1986). The Republic and the Instituto appealed those denials, and Meadows and Harris cross-appealed the finding of timeliness.
In their cross-appeal, Meadows and Harris contend that the motion to set aside the default judgment for excusable neglect under Rule 60(b)(1) 1 should have been denied because it was untimely. A motion to vacate a default judgment for excusable neglect pursuant to Fed.R.Civ.P. 60(b)(1) must be made within one year. Fed.R.Civ.P. 60(b). Such a motion may be denied, although it was filed within the one year period, if the district court finds that the defendant was guilty of laches or unreasonable delay. 7 J. Moore & J.D. Lucas, Moore's Federal Practice, p 60.22 (2d ed. 1985); Amoco Overseas Oil v. Compagnie Nationale Algerienne de Navigation, 605 F.2d 648, 656 (2d Cir.1979); Mayfair Extension, Inc. v. Magee, 241 F.2d 453, 454 (D.C.Cir.1957). There is no time limit on a Rule 60(b)(4) motion to set aside a judgment as void. 11 C. Wright & A. Miller, Federal Practice and Procedure, Sec. 2862, Rule 60 (1973); Bookout v. Beck, 354 F.2d 823, 825 (9th Cir.1965).
The district court concluded that the motion to set aside the default under Rule 60(b)(1) was timely filed because less than one year had elapsed from the entry of the judgment, and no attempt had been made to execute on the judgment. While reasonable minds might differ in ruling on the timeliness of the motion, based on all the facts and circumstances in the record, the court's ruling was not unreasonable. The district court did not abuse its discretion in ruling that the motion was timely filed.
Factual findings of the district court with respect to Rule 60(b) motions are reviewed for clear error. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 541, 92 L.Ed. 746 (1948); Dollar Rent A Car of Washington, Inc. v. Travelers Indemnity Co., 774 F.2d 1371, 1374 (9th Cir.1985). If findings are undisputed or are not clearly erroneous, then the court's determination is reviewed for abuse of discretion. Rodgers v. Watt, 722 F.2d 456, 460 (9th Cir.1983) (en banc) ().
We have held that we will reverse such a ruling "only upon a clear showing of abuse of discretion." Pena v. Seguros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir.1985) (). This discretion is limited by three considerations. First, since Rule 60(b) is remedial in nature, it must be liberally applied. Schwab v. Bullock's Inc., 508 F.2d 353, 355 (9th Cir.1974). Second, default judgments are generally disfavored and cases should be decided on their merits. Id. Third, where defendant seeks timely relief from the judgment and has a meritorious defense, doubt, if any, should be resolved in favor of the motion to set aside...
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