Overbey v. Murray

• Decision Date: 17 October 1990
• Docket Number: No. 07-CA-59083,07-CA-59083
• Citation: 569 So.2d 303
• Parties: Monty Lynn OVERBEY v. Alexander H. MURRAY.
• Court: Mississippi Supreme Court

Page 303

569 So.2d 303

Monty Lynn OVERBEY v. Alexander H. MURRAY.

No. 07-CA-59083.

Supreme Court of Mississippi.

Oct. 17, 1990.

Claire Mavar Porter, Upshaw Williams Biggers Page & Kruger, Jackson, for appellant.

Gail D. Nicholson, Chester D. Nicholson, Nicholson & Nicholson, Gulfport, for appellee.

Before HAWKINS, P.J., and SULLIVAN and PITTMAN, JJ.

PITTMAN, Justice, for the Court:

Alexander Murray filed suit against Monty Overbey, alleging breach of contract. A default judgment was granted in favor of Murray, along with damages. Fifteen months later, Overbey moved to set aside the default judgment under Miss.R.Civ.P. 60(b). The motion to set aside was denied. Overbey appeals, assigning as error the lower court's granting of the default judgment, and the failure of the lower court to set aside the judgment. Because the chancery court erred in failing to set aside the default judgment, we reverse.

Murray filed his complaint against Overbey in Harrison County Chancery Court, First Judicial District, on February 4, 1986. Murray alleged that he and Overbey had entered into an oral agreement, whereby Murray would solicit insurance policies to be issued by Continental Bankers Life Insurance Company of the South, and would receive in return a portion of commissions and renewals. Overbey, as general agent, would also receive a portion of the commissions. Murray alleged breach of the contract and asked for an accounting and damages. Overbey answered, admitting the oral contract, but denying any liability. On May 15, 1986, Murray filed a motion to compel, alleging that Overbey, even with an agreed-upon extension of fifteen days, had failed to timely comply with discovery. The chancery court ordered that Overbey comply with discovery, and also awarded Murray $150.00 for the expenses of the motion.

On August 27, 1986, the cause was set for trial on October 6, 1986. On October 3, 1986, Overbey received an automatic stay in bankruptcy in the U.S. Bankruptcy Court for the Southern District of Mississippi, pursuant to 11 U.S.C. Sec. 362(a). Trial counsel for Overbey attempted to notify counsel for Murray of the stay, via a letter postmarked October 6, 1986. Because neither Overbey nor his attorney were present for trial on October 6, a default judgment for $4,830.59 plus costs was entered by the chancery court in favor of Murray.

On October 13, 1986, Murray moved for sanctions against Overbey's attorney, alleging that counsel had been dilatory and uncooperative throughout the litigation, and asking for attorney's fees in the amount of $780.00. The chancery court eventually awarded $350.00.

On October 28, 1987, Murray was granted summary judgment by the U.S. Bankruptcy Court against Overbey. No bankruptcy court document is available to show what debt was involved in this summary judgment ruling, although a letter from Chester Nicholson to Overbey's attorney, dated November 23, 1987, mentioned that the summary judgment proceeding resulted in a finding that the judgment taken by Murray against Overbey was not dischargeable in bankruptcy. The letter also mentioned that Nicholson intended to conduct a judgment debtor examination of Overbey, and proposed methods and dates to accomplish this. On December 2, 1987, a deposition was set for December 6. Apparently Overbey refused to appear. On December 11, 1987, Murray moved to compel discovery and for sanctions against Overbey. Murray also asked for the court to order Overbey to appear, and for an award of $510.00 in attorney's fees.

On January 26, 1988, Overbey, represented by new counsel, filed a motion to set aside the default judgment under Miss.R.Civ.P. 60(b). The motion was denied by the chancery court. Overbey appeals from the denial of this motion and from the merits of the default judgment.

Miss.R.Civ.P. 60(b) states:

(b) Mistakes; Inadvertence; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons:

(1) fraud, misrepresentation, or other misconduct of an adverse party;

(2) accident or mistake;

(3) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application;

(6) any other reason justifying relief from the judgment.

The motion shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than six months after the judgment, order, or proceeding was entered or taken. A motion under this subdivision does not affect the finality of a judgment or suspend its operation. Leave to make the motion need not be obtained from the appellate court unless the record has been transmitted to the appellate court and the action remains pending therein. This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to set aside a judgment for fraud upon the court. Writs of coram nobis, coram nobis, audita querela, and bills of review and bills in the nature of a bill of review, are abolished. The procedure for obtaining any relief from a judgment shall be by motion as prescribed in these rules or by an independent action and not otherwise.

This Court has often looked to federal authority when construing similar rules of state civil procedure. According to federal authority, "[a]n order denying a motion under Rule 60(b) is final and appealable. Even if the motion is denied as untimely this would be a ground for affirming the denial but not for dismissing the appeal. But an appeal from a denial of the motion brings up for review only the order of denial itself and not the underlying judgment." 11 C. Wright & A. Miller, Federal Practice and Procedure Sec. 2871 at 258-259 (1973); see also 7 J. Moore & J. Lucas, Moore's Federal Practice p 60.30 2d ed.1987 (same); Godwin v. Federal Savings and Loan Insurance Corp., 806 F.2d 1290 (5th Cir.1987) (60(b) motion can not be used in place of appeal from merits of district court's dismissal). Two errors alleged by Overbey involve the default judgment taken against him. Because Overbey never appealed from that judgment, those issues are not properly before this Court and will not be considered. The only issue we consider is whether the denial of the Rule 60(b) motion was proper.

Overbey alleged first in his motion to set aside the default judgment that the default judgment had been entered as a result of a mistake. As stated earlier, the trial court "may relieve a party or his legal representative from a final judgment, order, or proceeding for ... accident or mistake...." Miss.R.Civ.P. 60(b)(2). Rule 60(b) goes on to state that "[t]he motion shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than six months after the judgment, order, or proceeding was entered or taken." This Court has stated that "[w]here the grounds of [Rule 60(b)(1), (2) and (3) ] are the basis for action, the court is without authority if the motion is not made within the six-month time period." Burkett v. Burkett, 537 So.2d 443, 445 (Miss.1989); see also Central Operating Co. v. Utility Workers of America, 491 F.2d 245 (4th Cir.1974) (one year time limit for analogous federal rule is not absolute allowance; motion may be rejected as not filed within reasonable time under circumstances even if filed less than one year from judgment). The grant or denial of a Rule 60(b) motion is within the trial court's discretion. Burkett, 537 So.2d at 445. The trial court did not abuse its discretion in denying the 60(b)(2) motion, filed nine months after the six-month period had expired.

Overbey included in his motion to set aside default judgment the assertion that the default judgment taken on October 6, 1986, was void because of the bankruptcy stay issued three days earlier. There is no six-month time limit on a 60(b)(4) motion. The only limitation is that the motion be made "within a reasonable time...." Miss.R.Civ.P. 60. Federal authority has interpreted this to mean that there is no effective time limit, with the rationale being that no amount of time or delay may cure a void judgment. 7 J. Moore & J. Lucas, Moore's Federal Practice p 60.25 2d ed. 1987; 11 C. Wright & A. Miller, Federal Practice and Procedure Sec. 2862 (1973); In re Whitney-Forbes, Inc., 770 F.2d 692 (7th Cir.1985); Triad Energy Corp. v. McNell, 110 F.R.D. 382 (S.D.N.Y.1986).

In defining a void judgment, this Court has repeated the federal rule, which states that "a judgment is void only if the court that rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process of law." Bryant, Inc. v. Walters, 493 So.2d 933, 938 (Miss.1986). The trial court has no discretion in dealing with a void judgment. If the judgment is void, it must be set aside. Walters, 493 So.2d at 937.

11 U.S.C. Sec. 362 states in part:

(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78(a)(3)), operates as a stay, applicable to all entities, of

(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title....

The purpose of the automatic stay is as follows:

First, it prevents the diminution or...