Weil v. Markowitz

• Decision Date: 16 March 1990
• Docket Number: No. 88-5289,88-5289
• Citation: 898 F.2d 198
• Parties: Donald WEIL, General Partner, TMG, II, a New York Limited Partnership, Appellant, v. Edward A. MARKOWITZ, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 198

898 F.2d 198

283 U.S.App.D.C. 184

Donald WEIL, General Partner, TMG, II, a New York Limited Partnership, Appellant, v. Edward A. MARKOWITZ, et al.

No. 88-5289.

United States Court of Appeals, District of Columbia Circuit.

Argued Dec. 11, 1989.

Decided March 16, 1990.

Appeal from the United States District Court for the District of Columbia (CA 83-03865).

Marvin L. Syzmkowicz, with whom Allan I. Mendelsohn was on the brief for appellant.

Joan I. Oppenheimer, Attorney, Dept. of Justice, of the bar of the Appellate Division of the Supreme Court of the State of New York, Second Judicial Department, pro hac vice, by special leave of Court, with whom Jay B. Stephens, U.S. Atty., Shirley D. Peterson, Assistant U.S. Atty., and Gary R. Allen, Attorney, Dept. of Justice, were on the brief for appellees. William S. Rose, Atty., Dept. of Justice, also entered an appearance.

Before EDWARDS, BUCKLEY and D. H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge D. H. GINSBURG.

D.H. GINSBURG, Circuit Judge:

Before us for the second time is the settlement between TMG II, a limited partnership the sole remaining general partner of which is appellant Donald Weil, and appellee Edward Markowitz, a former general partner of TMG II. The background of this dispute is more fully described in our earlier decision, Weil v. Markowitz, 829 F.2d 166, 167-70 (D.C.Cir.1987) (Weil I ), in which we remanded to the district court "the question of whether the settlement order should be entered nunc pro tunc." We recount here only what is necessary in order to explain our affirmance of the district court's decision answering that question in the negative.

I. BACKGROUND

In Weil I, we affirmed the district court's decision approving the settlement agreement. We declined, however, to address the merits of Weil's claim that the district court had earlier "erred in granting the government's motion to stay [civil discovery] proceedings [in] apparent reliance on ex parte materials" relating to a criminal investigation into the same parties and affairs that were involved in this litigation. According to Weil, "the ex parte materials and the stays had significant and deleterious effects, because they resulted in a one year delay of trial that permitted the IRS to file tax liens against Markowitz [et al. ] before appellants could secure a final decree and enforce a judgment lien against them." Id. at 174. We found that it was unnecessary, however, to "attempt to unravel the complex web of facts concerning the propriety of the stays and ex parte communications when the only real relief available to the appellants is nunc pro tunc entry of the settlement order." Id. at 174 n. 17.

With respect to that relief, we noted that "the principle underlying entry of a judgment or an order nunc pro tunc is that of fairness to the parties," and we adduced two considerations that might make such relief appropriate in this case. Id. at 174-75. First, because the Government had been granted nunc pro tunc relief in a related proceeding (rescinding its intervention as of the date it had been granted), we thought that in fairness "an opportunity for similar relief" should be available to Weil. Second, because "the government's intervention was intended to protect a criminal investigation[, we found it] unclear why the District Court's acquiescence for this narrow purpose should confer an advantage to the government in enforcing its civil tax lien." Id. at 175.

We declined to resolve the issue of whether to grant nunc pro tunc relief, however, because we were concerned that the Government, "which stands to lose its tax lien priority if judgment is entered nunc pro tunc [and is therefore] the real party in interest, ... [was] not a party to [that] appeal and therefore [could not] defend its interests." The determination of what "justice may require" must rest upon a "proper factual basis," but that could not be assured "without the participation of the real party in interest." Id.

On remand, immediately after hearing the parties' arguments but without conducting an evidentiary hearing, the district court delivered a bench opinion denying appellant nunc pro tunc relief. The court stated:

[T]he plaintiff has failed to prove by a preponderance of the evidence ... that there is a causal connection between the four-month stay and the priority which the Government now has for its lien.... [I]f the case had been settled in October, as [appellant] hypothesized, and there had been a controversy about it thereafter, as the Government hypothesized, ... the judgment on the settlement would not have been enterable[ ] until after the Government lien had attached.

I am further persuaded by the arguments of both parties ... that the imminence of the trial date and/or the entry of settlement would have concentrated the Government's mind to where it would have effected its assessment and accompanying lien before the judgment was entered.

On this appeal, Weil contends as an initial matter that the district court should have found that, because the Government declined to participate in the earlier appeal to this court, it is estopped from challenging TMG II's right to nunc pro tunc relief. On the merits, Weil argues that the district court erroneously applied a "technical, tort-type standard of proximate cause" that in effect required him to prove that, if the court had not stayed the civil proceedings, TMG II would have filed its lien before the Government filed its tax lien. Instead, Weil suggests the district court should have considered a number of "equitable factors" in order to arrive at a "just" solution, which would of course mean granting him relief nunc pro tunc. Weil asks this court not only to order the entry of such relief, but also "to clarify and restate the law in favor of communications on the record and against ex parte contacts."

II. ANALYSIS

We need not address at any length Weil's initial argument that the Government is estopped by its prior nonparticipation from disputing the priority of TMG II's judgment. Our earlier opinion clearly indicates that we intended that the Government have an opportunity to address whether the court should grant nunc pro tunc relief; that is the law of the case, and it precludes the present argument for estoppel.

With respect to the principal issue before us, we hold that the district court did not err in concluding that Weil has failed to demonstrate that the stay resulted in the Government's lien gaining priority; nor did it abuse its discretion, therefore, in determining that nunc pro tunc relief would not serve the interests of justice. Consequently, we affirm the decision of the district court without need to address the other issues that the parties have raised.

In our earlier opinion, we stated that the issue of whether to grant nunc pro tunc relief is "best left to the discretion of the District Court." Id. As that court correctly understood, our explanation that nunc pro tunc relief is available in order to promote "fairness to the parties," and " 'as justice may require,' " id. (quoting Mitchell v. Overman, 103 U.S. (13 Otto) 62, 65, 26 L.Ed. 369 (1881)), neither directed nor authorized it to engage in a boundless consideration of "equitable factors."

Nunc pro tunc relief has been granted only in a limited number of circumstances, where its entry is necessary to avoid, and does not create, an injustice at the hands of the court itself. The paradigm case involves a party who has died after his case has been submitted to the court, but before the court has entered judgment. See, e.g., Mitchell, 103 U.S. at 65 (affirming state court's entry of judgment for deceased plaintiff as of time case was submitted, in order "to see that the parties shall not suffer by the [court's] delay" in deciding case). Cases in which a party would otherwise be prejudiced by the clerk's delay in entering the judgment stand upon the same footing. See, e.g., United States v. Chicago & A.R. Co., 250 F. 101, 102 (7th Cir.1918). Nunc pro tunc relief may also be available, in some jurisdictions, "under...