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Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 

---

FILED 

Utdftai at11t11 Court of A ppeala 

Tenth Circi.11~ 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

M Y 3 1990 

&OBERT L. HOECKER 

Clerk 

JACK M. STEVENS and GERALDINE S. ) 

STEVENS, husband & wife, ) 

) 

Plaintiffs-Appellees, ) 

) 

v. ) 

) 

ALVIN PETROLEUM, INC., an Oklahoma ) 

corporation, OIL & GAS ASSOCIATES, ) 

a partnership, ENERGY FUNDING GROUP, ) 

a partnership, CHESTER C. HALL, ) 

an individual, and Vice President ) 

of Alvin Petroleum, Inc., ALVIN R. ) 

BROERMAN, an individual, and President ) 

of Alvin Petroleum, Inc., WILLIAM O. ) 

FIELDS, an individual, DON ROTHMAN, ) 

an individual, and LIBERTY OIL AND ) 

GAS CORPORATION, } 

} 

Defendants, } 

} 

and } 

} 

HERMAN T. ISIS, an individual, ) 

) 

Defendant-Appellant. } 

ORDER AND JUDGMENT* 

No. 89-4004 

(D.C. No. 85-C-1310G} 

(D. Utah} 

Before LOGAN, JONES,** and SEYMOUR, Circuit Judges. 

**Honorable Nathaniel R. Jones, Circuit Judge, United States Court 

of Appeals for the Sixth Circuit, sitting by designation. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 89-4004 Document: 01019969773 Date Filed: 05/03/1990 Page: 1 
After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The case is -therefore ordered 

submitted without oral argument. 

Defendant Herman T. Isis, 1 legal counsel for defendant Alvin 

Petroleum, appeals from an order of the district court denying his 

motion to set aside a default judgment entered against him. 

Plaintiffs commenced this action in district court alleging 

violations of the Securities Act of 1933, 15 U.S.C. § 77q; the 

Securities Exchange Act of 1934, 15 U.S.C. § 78j; Rule lOb-5, 17 

C.F.R. § 240.lOb-5; 18 u.s.c. § 1964; and common and statutory law 

violations in connection with the sale of allegedly fictitious and 

nonproducing oil leases. 

Isis filed an answer and appeared by telephone in defense of 

thi s action. In late 1987, prior to being imprisoned in Florida, 

he apparently orally stipulated that he would withdraw his answer 

1 All defendants except Alvin Petroleum were either dismissed 

or have had default judgments entered against them. The status of 

Alvin Petroleum is unclear. The district court's docket sheet 

does not show service of process on Alvin Petroleum. Plaintiffs 

told the district court service was made, and Alvin Petroleum was 

in bankruptcy. If service was made, no final judgment can be 

entered as to Alvin Petroleum due to the automatic bankruptcy 

stay. 11 u.s.c. § 362. "The language of the statute [11 u.s.c. 

§ 362] extends stay proceedings only to actions 'against the 

debtor.' There is nothing in the statute which purports to extend 

the stay to causes of action against solvent co-defendants of the 

debtor." Fortier v. Dona Anna Plaza Partners, 747 F.2d 1324, 1330 

(10th Cir. 1984). Therefore, neither the entry of judgment 

against the nonbankrupt defendants nor this appeal is affected by 

the stay. See Ellis v. Consolidated Diesel Elec. Corp., 894 F.2d 

371, 373 n.4 (10th Cir. 1990). 

2 

Appellate Case: 89-4004 Document: 01019969773 Date Filed: 05/03/1990 Page: 2 
and permit the entry of default. He did not sign the stipulation, 

and plaintiffs moved for either enforcement of the stipulation or 

the entry of default. Isis did not appear at the hearing on that 

motion. Another hearing was scheduled. He again failed to appear 

and default was entered. Default judgment was entered two months 

later on June 14, 1988 . On July 7, Isis filed a motion to vacate. 

On December 20, the court denied the motion after a hearing. Isis 

filed a notice of appeal January 13, 1989. 

On appeal, Isis argues that the district court erred because 

it entered judgment without giving him notice and without 

ob ta ining pr oo f o f damages from plaintiffs. The record shows Isis 

was sent notice of both hearings. ROA, Vol. II, tabs 58, 61, 62. 

The record also shows that the court held a hearing regarding 

damages and attorney's fees and 1 received an affidavit and evidence 

in support . ROA Supp. Vol. V; ROA Vol. II, tab 56. 

Isis also argues that the entry of default was not a proper 

sanction because he actively defended. However, Isis did not 

appeal from the entry of the default judgment and, therefore, we 

may not review that order . We may review only the court's denial 

of Isis ' motion to vacate judgment which we construe as a denial 

of a Fed. R. Civ. P. 60(b) motion. 2 

2 

A motion for relief from judgment under Rule 60(b) 

. does not toll the time for appeal from, or affect 

Isis did not state under which rule his motion was made. 

However, Fed. R. Civ. P. 55(c) provides that "[f]or good cause 

shown the court may set aside an entry of default and, if a 

judgment by default has been entered, may likewise set it aside in 

accordance with Rule 60(b)." Here, default judgment was entered. 

We do not construe Isis' motion as a tolling motion because it was 

not made within ten days after the entry of judgment. See 

Fed. R. App. P. 4(a)(4). 

3 

Appellate Case: 89-4004 Document: 01019969773 Date Filed: 05/03/1990 Page: 3 
the finality of, the original judgment .... A timely 

appeal may be taken under Fed. Rule App. Proc. 4(a) from 

a ruling on a Rule 60(b) motion. The Court of Appeals 

may review the ruling only for abuse of discretion, 

however, and an appeal from denial of Rule 60(b) does 

not bring up the underlying judgment for review. 

Br owde r v . Director, Dep't of Corrections, 434 U.S. 257, 263 n.7 

(1 978 ). 

A movant se e king relief under Rule 60(b) must file the motion 

within a reasonable time and show a good or acceptable reason for 

the default and a meritorious defense. Barta v. Long, 670 F.2d 

907, 909 (10th Cir. 1982). See United States v. Di Mucci, 879 

F. 2d 1488, 1495 (7th Cir. 1989); see also Pelican Prod. Corp. v. 

Mar ino , 893 F.2d 114 3 , 1147 n.5 (10th Cir. 1990)(one seeking to 

se t aside a default judgment must show merit in his case). 

While he may have filed his motion within a reasonable time, 

Isis did not show a good or acceptable reason for his default. He 

has not explained why he did not attend the first hearing. He 

all eged he did no t receive notice of the second hearing until 

after it was held. At the hearing on his motion to vacate the 

judgment, Isis stated that if he had had prior notice "I would 

have been here as I am today. There was nothing to keep me from 

being here." However, Isis did not contact the court until almost 

three weeks after the default judgment was entered. 

Isis also failed to show a meritorious defense. He cannot 

rely on a conclusory statement that he had such a defense. 

Such a bald all e gation, without the support of facts 

underlying the defense, will not sustain the burden of 

the defaulting party under Rule 60(b). In an attempt to 

determine the meritorious nature of a defense, the trial 

court must have before it more than mere allegations 

that a defense exists. 

4 

Appellate Case: 89-4004 Document: 01019969773 Date Filed: 05/03/1990 Page: 4 
Gomes v. Williams, 420 F.2d 1364, 1366 (10th Cir. 1970)(footnote 

omitted). 

Under the abuse of discretion standard, we may reverse "only 

if we find a complete absence of a reasonable basis and are 

ce rta in that the district court's decision is wrong." 

Prod ., 893 F.2d at 1147. We find no such error here. 

Pelican 

The judgment of the United States District Court for the 

District of Utah is AFFIRMED. 

ENTERED FOR THE COURT 

PER CURIAM 

5 

Appellate Case: 89-4004 Document: 01019969773 Date Filed: 05/03/1990 Page: 5