PRC Harris, Inc. v. Boeing Co., 595

• Decision Date: 18 February 1983
• Docket Number: No. 595,D,595
• Citation: 700 F.2d 894
• Parties: PRC HARRIS, INC., Plaintiff-Appellant, v. The BOEING COMPANY, Defendant-Appellee. ocket 82-7658.
• Court: U.S. Court of Appeals — Second Circuit

Page 894

700 F.2d 894

PRC HARRIS, INC., Plaintiff-Appellant, v. The BOEING COMPANY, Defendant-Appellee.

No. 595, Docket 82-7658.

United States Court of Appeals, Second Circuit.

Argued Jan. 7, 1983.

Decided Feb. 18, 1983.

Harry H. Wise, III, New York City (Gadsby & Hannah, New York City, of counsel), for plaintiff-appellant.

Melvin A. Schwarz, New York City (Dechert, Price & Rhoads, New York City, of counsel), for defendant-appellee.

Before KAUFMAN, TIMBERS and NEWMAN, Circuit Judges.

IRVING R. KAUFMAN, Circuit Judge:

This appeal from a judgment entered on Judge Duffy's order, 545 F.Supp. 438, raises an unusual issue concerning the application of res judicata. That doctrine is rooted, of course, in considerations of finality and repose, and bars relitigation of issues which were or could have been adjudicated in an initial proceeding.

I

The facts underlying this dispute may be recounted briefly. PRC Harris, Inc. ("Harris"), an engineering firm, filed an action against The Boeing Company in the District of Columbia district court in April 1980, alleging failure to pay for services rendered. In October 1980 the case was transferred to the Western District of Washington on Boeing's motion. Chief Judge McGovern granted Boeing's motion for dismissal on September 21, 1981, holding the action time-barred pursuant to the applicable three year District of Columbia statute of limitations. Harris did not appeal this determination.

In May 1982 Harris filed a complaint in New York State Supreme Court, which it concedes is virtually identical to that filed in the initial action. Boeing responded by filing a petition pursuant to 28 U.S.C. Sec. 1441, seeking to have the cause removed to the Southern District of New York. After removal Boeing petitioned for summary judgment, asserting that the dismissal in Washington operated as an adjudication on the merits, and that consideration of the subsequent suit was therefore prohibited by res judicata. Judge Duffy granted Boeing's motion, dismissed the action, and awarded Boeing attorney's fees in the amount of $2,135. Harris filed a timely notice of appeal to this court.

After its action had been dismissed by Judge Duffy and the notice of appeal was filed, Harris returned to the Western District of Washington and petitioned Chief Judge McGovern to amend the judgment entered on his order. The district judge granted the motion, and pursuant to Fed.R.Civ.P. 60(b)(6) amended the judgment to specify that the dismissal was without prejudice.

Harris raises a number of claims on this appeal. It contends, first, that Judge Duffy improperly held the initial Washington judgment to be an adjudication on the merits to which res judicata attached. Alternatively, Harris asserts that the subsequent modification of the Washington judgment undercuts the basis for Judge Duffy's holding. Finally, appellant challenges the award of fees to Boeing's counsel.

II

Fed.R.Civ.P. 41(b) governs the effect given involuntary dismissals. In relevant part, the Rule states, "Unless the court in its order for dismissal otherwise specifies, a dismissal ... other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits." In such a situation, res judicata would preclude a subsequent action on the same claim. See Elfenbein v. Gulf & Western Industries, Inc., 590 F.2d 445, 449 (2d Cir.1978) (per curiam); La Societe Anonyme des Parfums Le Galion v. Jean Patou, Inc., 495 F.2d 1265, 1275 (2d Cir.1974).

In the instant dispute the initial dismissal of Harris's complaint did not entail a consideration of the substantive issues raised, because Chief Judge McGovern's action was based upon his conclusion that the contract claims were barred by the statute of limitations. The longstanding rule in this Circuit, however, is that a dismissal for failure to comply with the statute of limitations will operate as an adjudication on the merits, unless it is specifically stated to be without prejudice. ¹ See Bertha Building Corp. v. National Theatres Corp., 248 F.2d 833, 840 (2d Cir.1957); Sack v. Low, 478 F.2d 360 (2d Cir.1973). See also Murphy v. A/S Sobral, 187 F.Supp. 163 (S.D.N.Y.1960) (concerning a dismissal for laches); Wachovia Bank & Trust Co. N.A. v. Randell, 485 F.Supp. 39 (S.D.N.Y.1979). Moreover, Rule 41(b) dictates that all but certain enumerated dismissals will be considered "on the merits," and the Rule does not exempt a dismissal on statute of limitations grounds from its general operation. ² Appellant has advanced no persuasive grounds for departing from the clear terms of 41(b), and accordingly, we reject its assertion that the September 21, 1981 judgment allowed relitigation of the issues raised in that proceeding.

The unusual aspect of this case arises as a consequence of Chief Judge McGovern's amendment of his judgment after Judge Duffy had already granted Boeing's motion for summary judgment and dismissed Harris's claims. It is clear that if, at the time of entry, the Washington judgment had been denominated "without prejudice," Rule 41(b) would have been inapplicable, and Harris could legitimately have reasserted its allegations in another jurisdiction. See Elfenbein v. Gulf & Western Industries, Inc., supra. The issue before us is not presented in such pristine form, however. The original Washington decision did not purport to dismiss the claims without prejudice, and Harris successfully amended that judgment only after the completion of the action in the Southern District of New York.

Harris moved to amend the Washington judgment pursuant to Federal Rule 60, which provides that a party may petition for "relief from [a] judgment or order" on a series of enumerated grounds, or "for any other reason justifying relief from the operation of the judgment." Fed.R.Civ.P. 60(b)(6). This provision does not impose a particular time limit, but only requires that the motion be made within "a reasonable time." In considering whether a Rule 60(b)(6) motion is timely, we must scrutinize the particular circumstances of the case, and balance the interest in finality with the reasons for delay. Amoco Overseas Oil Co. v. Compagnie Nationale Algerienne De Navigation, 605 F.2d 648 (2d Cir.1979); Ashford v. Steuart, 657 F.2d 1053 (9th Cir.1981) (per curiam).

Harris has presented no persuasive reasons to justify the delay of almost one year in moving for amendment of the Washington judgment. The clear terms of Rule 41(b) should have made it apparent that some clarification of Chief Judge McGovern's order would have been necessary if Harris intended to raise its contract claims in some other forum. Harris, however, filed a second complaint, saw the case removed to a federal court, opposed a motion for summary judgment, and even proceeded to appeal by filing a notice before it ultimately decided to return to Washington and seek clarification of the September 21 judgment. Moreover, after obtaining an amendment of the judgment, Harris did not return to the Southern District of New York to attempt to present this new evidence to the district judge, but chose to raise the issue for the first time before this court. It is difficult, therefore, to view Harris as having complied with the reasonable time requirement of Rule 60(b)(6).

In previous situations in which we have had the opportunity to elaborate on the requirements of 60(b)(6), we have noted that because of the potentially broad scope of that provision, relief should only be granted where the moving party has demonstrated "extraordinary circumstances" or "extreme hardship." See, e.g., United States v. Cirami, 563 F.2d 26, 32 (2d Cir.1977); see also Klapprott v. United States, 335 U.S. 601, 613, 69 S.Ct. 384, 389, 93 L.Ed. 266 (1949); Ackermann v. United States, 340 U.S. 193, 197, 71 S.Ct. 209, 211, 95 L.Ed. 207 (1950). Harris has not presented us with any special circumstances which would justify the extraordinary relief provided for by Rule 60. It appears that Harris's delay in moving for amendment resulted from its failure to understand the effect of Rule 41(b). This is an insufficient basis for relief from a judgment pursuant to Rule 60. See United States v. Erdoss, 440 F.2d 1221, 1223 (2d Cir.), cert. denied, 404 U.S. 849, 92 S.Ct. 83, 30 L.Ed.2d 88 (1971).

We are also doubtful of the propriety of Harris's motion for amendment of the judgment pursuant to Rule 60. Rule 60(b)(6) is a broadly drafted "umbrella provision," which must be read in conjunction with the other sections of that Rule, and is applicable only where the more specific provisions do not apply. See Amoco Overseas Oil Co. v. Compagnie Nationale Algerienne De Navigation, supra, 605 F.2d at 656 n. 8; United States v. Cirami, supra, 563 F.2d at 32; Corex Corp. v. United States, 638 F.2d 119, 121 (9th Cir.1981). It is also reasonable to view 60(b)(6) together with Rule 59, which specifically addresses the issue of amending a judgment. United States v. Hall, 463 F.Supp. 787, 791 n. 1 (W.D.Mo.) (on motion for review of judgment), aff'd, 588 F.2d 1214 (8th Cir.1978). Rule 59(e), which imposes a strict ten-day time limit, would more appropriately have been employed in the present case to amend the Washington judgment. Sack v. Low, supra, 478 F.2d at 362-63 n. 1. ³ Of course, a motion pursuant to Rule 59 would not have been timely because Harris did not seek clarification of Chief Judge McGovern's judgment within ten days. Harris, however, should not be able to circumvent the time requirement of Rule 59 by relying on Rule 60 which, in any event, would not save the action. See Hahn v. Becker, 551 F.2d 741, 745 (7th Cir.1977).

Accordingly, it is our view that Chief Judge McGovern improperly granted Harris's motion to amend the Washington judgment. If the motion was properly made pursuant to Rule 60, Harris has failed to demonstrate extraordinary circumstances which would have justified the relief sought,...