Stancil v. United States

• Decision Date: 08 December 1961
• Docket Number: Civ. A. No. 2497.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Rosa L. STANCIL, Administratrix of the Estate of George Ben Stancil, deceased, Plaintiff, v. UNITED STATES of America, Defendant and Third-Party Plaintiff, v. J. R. HOUSKA COMPANY, Inc. and Shaw Paint & Wallpaper Company, Inc., Third-Party Defendants.

200 F. Supp. 36

Rosa L. STANCIL, Administratrix of the Estate of George Ben Stancil, deceased, Plaintiff, v. UNITED STATES of America, Defendant and Third-Party Plaintiff, v. J. R. HOUSKA COMPANY, Inc. and Shaw Paint & Wallpaper Company, Inc., Third-Party Defendants.

Civ. A. No. 2497.

United States District Court E. D. Virginia, Norfolk Division.

December 8, 1961.

Fine, Fine, Legum & Schwan, Howard I. Legum, Norfolk, Va., for plaintiff.

C. V. Spratley, Jr., U. S. Atty., Norfolk, Va., Breeden, Howard & MacMillan, R. R. MacMillan, Williams, Cocke, Worrell & Kelly, Jack E. Greer, Rixey & Rixey, Wm. B. Eley, Norfolk, Va., for defendant.

WALTER E. HOFFMAN, Chief Judge.

In this action seeking a recovery under the Federal Tort Claims Act, 28 U.S.C.A. §§ 1346, 2671 et seq. for the wrongful death of Ben Stancil who was electrocuted on April 30, 1957, while engaged in painting in the vicinity of high tension wires on property of the United States, there are essentially three questions remaining for consideration. They may be stated as follows:

(1) Where a defendant seeks the benefit of a third-party action and sues as a third-party plaintiff against third-party defendants, and a final judgment is entered in favor of the defendant with a resultant dismissal of the third-party action without specific reservation, and no appeal is taken by the third-party plaintiff but the plaintiff appeals and the judgment of the district court is vacated and, on re-trial, judgment is entered for plaintiff, may the third-party plaintiff further prosecute the third-party action against the third-party defendants where the original judgment order dismissed this third-party action and no appeal was taken as to this phase of the case?

(2) Irrespective of the dismissal of the third-party action, may the third-party plaintiff seek relief under Rule 60(b) of the Federal Rules of Civil Procedure?

(3) In an action under the Federal Tort Claims Act, should the Court properly charge any portion of the fee allowed to counsel for the plaintiff to the compensation insurance carrier who benefits by the recovery to the extent of the death benefits paid to the widow under the Virginia Workmen's Compensation Act?

This is a sequel to Stancil v. United States, D.C., 165 F.Supp. 656, judgment vacated, 4 Cir., 267 F.2d 268, and Stancil v. United States, D.C., 196 F.Supp. 478. The history of the case is fully stated in these opinions and will not be repeated.

Stancil was employed by Shaw Paint & Wallpaper Company, a sub-contractor under J. R. Houska Company, at the time of his death. The compensation insurance carrier for Shaw Paint & Wallpaper Company has filed a petition seeking reimbursement to the extent of the benefits paid under the Virginia Workmen's Compensation Act, Code 1950, § 65-1 et seq. The parties are in agreement with respect to the right of reimbursement, but counsel for the plaintiff argue that the proportionate attorney's fee allowed should be deducted from the recovery by way of reimbursement, as well as from the excess amount recovered by the plaintiff for the benefit of Stancil's widow. The compensation insurance carrier, Massachusetts Bonding and Insurance Company, urges that the recovery by way of reimbursement is vested and not subject to deduction for attorney's fees to counsel who were successful in their efforts. For the purpose of protecting the rights of all parties on appeal, the compensation insurance carrier should be made a party to this action, and the final judgment order shall so note.

The complaint was filed on July 18, 1957, against the United States of America. Thereafter, on February 24, 1958, shortly prior to the trial on the merits, the United States filed its third-party action against Houska and Shaw. The third-party defendants responded in due time but, due to delay in filing this third-party action and the proximity of the trial date, the case was heard on June 19-20, 1958, with counsel for Shaw participating by invitation of the Court, and counsel for Houska attending as a spectator only. On September 25, 1958, the Court filed its opinion dismissing the original action as instituted by the plaintiff and directing counsel for the defendant to prepare a final judgment order.

On September 26, 1958, a final judgment order, prepared by counsel for the United States, was submitted for entry; the order bearing the endorsement of all counsel. The third-party complaint of the United States against Houska and Shaw was ordered dismissed in the following language:

"Further, that in view of the opinion of the Court rendering unnecessary a decision as to the issues between the United States of America, defendant and third-party plaintiff, and J. R. Houska Company, Inc. and Shaw Paint and Wallpaper Company, Inc., third-party defendants, it is accordingly

"Adjudged, Ordered and Decreed that this third-party action be, and the same is, hereby dismissed."

Thereafter, on November 3, 1958, the original plaintiff appealed from that portion of the judgment order which dismissed the original claim. No appeal was noted by the United States as to the dismissal of the third-party complaint. As the third-party defendants were not parties to the appeal, they neither filed a brief nor argued the case before the court of appeals.

While substantially affirming the findings of the district court, both as to law and fact, the court of appeals nevertheless vacated the "judgment appealed from" and remanded the case to the district court for a new trial on a point not apparently clear from the record and not briefed nor argued before the appellate court.

At the time of the further hearing the third-party defendants took the position that they were no longer parties to the action in light of the final judgment of September 26, 1958. When the point upon which the court of appeals grounded its action was further explored by additional evidence, it then became apparent that plaintiff was entitled to a judgment on her original claim. The court directed that a judgment be entered in favor of the plaintiff against the United States but, because of the three questions stated above, the final order has not been entered as the court insisted that if an appeal is perfected, the court of appeals should act on all matters to bring to a conclusion this protracted litigation.

When the three questions referred to herein were argued by counsel, the Assistant United States Attorney conceded that the authorities supported the views of the third-party defendants to the effect that the judgment of dismissal of the third-party action entered on September 26, 1958, was final and, since no appeal was taken by the third-party plaintiff, the third-party defendants were no longer legally before the court. It should be noted that there has never been any determination of the merits of the third-party complaint and, from what appears in the record, it is at least suggestive that Houska's agent was the ultimate party responsible for the death of Stancil. Anticipating that the third-party plaintiff might thereafter file a motion for relief from the judgment under Rule 60(b) of the Federal Rules of Civil Procedure, the court suggested that this matter be considered and argued. While the motion as filed hardly meets the requirements, counsel have argued the matter as though a proper motion under Rule 60(b) had been filed and, in view of the conclusions herein stated, it is essentially immaterial in any event.

Under the circumstances of this case, assuming arguendo that the dismissal of the third-party action constituted a final judgment, may the third-party plaintiff seek relief under Rule 60(b) with particular reference to Rule 60(b) (5)? The United States argues that relief from a final judgment may be granted where a prior judgment, upon which the final judgment was predicated, has been reversed or otherwise vacated. In re Cremidas' Estate, D.C.Alaska, 14 F.R.D. 15; United States v. Williams, D.C.Ark., 109 F.Supp. 456; Patopoff v. Vollstedt's Inc., 9 Cir., 267 F.2d 863. The United States further states that the judgment dismissing the third-party complaint was based on a prior judgment — perhaps not prior in time but prior in the point of legal significance in that it became unnecessary to try the third-party action as the principal complaint had resulted in a judgment in favor of the United States. Conceding that Rule 60(b) should be liberally construed and applied to prevent a manifest miscarriage of justice, Michigan Surety Company v. Service Machinery Corp., 5 Cir., 277 F.2d 531, we do not believe that the interpretation of the Rule should be expanded to the point of now permitting an appeal from the dismissal order of September 26, 1958, by the filing of a motion under Rule 60(b) on June 23, 1961, nearly 32 months later. Rule 60(b) (1) providing for relief from final judgments entered by "mistake, inadvertence, surprise, or excusable neglect" requires the filing of an appropriate motion within one year, and it is clear that this was the remedy available to the United States. Even though the decision of the court of appeals was handed down on May 26, 1959, no motion was filed until approximately two years later. If we are to place the errors of all attorneys under Rule 60(b) (5), there would be no need for Rule 60(b) (1). While the court recognizes that the offices of the United States Attorney and the Department of Justice are subject to frequent changes in personnel, yet the United States is the most frequent litigant in our federal courts and instructions should be furnished to its attorneys in such matters. Moreover, the United States Attorney undoubtedly forwarded a copy of the judgment order to the Department of Justice and ample time remained for the more experienced attorneys to request a modification of the judgment.

Before approaching the discussion of Rule 41(b, c), we should examine the third-party complaint filed by the United States of...