Court Opinion

ID: 4216044
Source: CourtListenerOpinion
Date Created: 2017-10-30 20:01:51.181195+00
Date Added: 2024-06-11T14:42:02.214120
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                            FILED
                            FOR THE NINTH CIRCUIT
                                                                            OCT 30 2017
                                                                         MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS
BAYARDO RENO SANDY, a single                     No. 16-16031
man,
                                                 D.C. No. 3:15-cv-08084-SMM
              Plaintiff - Appellee,

  v.
                                                 MEMORANDUM*
SUNMOON FREIGHT, INC., a foreign
corporation and ZURICH AMERICAN
INSURANCE COMPANY,

              Defendants - Appellants.

                   Appeal from the United States District Court
                            for the District of Arizona
              Stephen M. McNamee, Senior District Judge, Presiding

                     Argued and Submitted October 18, 2017
                            San Francisco, California

Before: IKUTA and HURWITZ, Circuit Judges, and MOLLOY,** District Judge.

       Plaintiff Bayardo Reno Sandy was rear-ended by a semi-truck owned by

Defendant Sunmoon Freight, Inc. He filed suit against Sunmoon and was

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The Honorable Donald W. Molloy, Senior District Judge for the U.S.
District Court for the District of Montana, sitting by designation.
subsequently awarded default judgment in the amount of $1.5 million. Sunmoon

was insured by Zurich American Insurance Company. Zurich, a nonparty, was

given permission by the district court for its counsel to defend on behalf of

Sunmoon below. Neither Zurich nor Sunmoon filed an answer. Forty-five days

after default judgment was entered, Zurich moved to set aside or vacate the

judgment. The district court denied Zurich’s request; Zurich and Sunmoon

appealed. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

      As a nonparty, Zurich only has standing to appeal in “exceptional

circumstances.” Citibank Int’l v. Collier-Traino, Inc., 809 F.2d 1438, 1441 (9th

Cir. 1987). Zurich’s limited participation below and its strategic decision not to

intervene raise serious questions as to whether such circumstances exist here. See

id. Zurich is joined in its appeal by Sunmoon, the named defendant. However,

Sunmoon did not join Zurich’s motion to set aside or vacate the judgment such that

Sunmoon does not have standing to bring this appeal. See Canada Life Assurance

Co. v. LaPeter, 563 F.3d 837, 846 (9th Cir. 2009). Even assuming Zurich meets

the requirements for a nonparty to appeal an adverse ruling, the district court did

not abuse its discretion in denying the Rule 60 motion.

      Litigants are not permitted to use Rule 60(b) to circumvent the appeals

process. Plotkin v. Pac. Tel. & Tel. Co., 688 F.2d 1291, 1293 (9th Cir. 1982). Nor

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can they use an appeal of a Rule 60 decision to challenge the original judgment.

Casey v. Albertson’s Inc., 362 F.3d 1254, 1257 (9th Cir. 2004). Appellants seek to

do both. We review the district court’s denial of Zurich’s motion to set aside or

vacate the default judgment under Rule 60(b) for abuse of discretion. Bateman v.

U.S. Postal Serv., 231 F.3d 1220, 1223 (9th Cir. 2000). “A district court abuses its

discretion if it does not apply the correct law or if it rests its decision on a clearly

erroneous finding of material fact.” Id.

       A final judgment is “void” for the purposes of Rule 60(b)(4) “only in the

rare instance where [it] is premised either on a certain type of jurisdictional error or

on a violation of due process that deprives a party of notice or the opportunity to be

heard.” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 271 (2010). “A

judgment is not void merely because it is erroneous.” United States v. Berke, 170
F.3d 882, 883 (9th Cir. 1999) (quoting In re Ctr. Wholesale, Inc., 759 F.2d 1440,

1448 (9th Cir. 1985)). The only issue here is whether the entry of the default

judgment fell short of the constitutional requirements of due process.

       First, the district court ruled on the motion for default judgment prior to the

expiration of the 14-day response period provided under Rule 7.2(c) of the Local

Rules of Practice for the District of Arizona. However, Zurich stated in its motion

to set aside that it “did not know of the second motion seeking a default judgment .

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. . until after the Court had entered its default judgment” because it was filed

incorrectly at counsel’s office. Even assuming, without deciding, that the district

court’s swift action implicated due process concerns, there is no prejudice. There

is no indication—nor is it argued on appeal—that either Zurich or Sunmoon would

have timely responded to the motion.

      Second, the district court did not hold a Rule 55 hearing on damages. While

a procedural challenge to that decision may have succeeded on direct appeal from

the judgment, see Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981), the lack

of a Rule 55 hearing here does not amount to a constitutional due process violation

making the judgment void under Rule 60(b)(4). Zurich and Sunmoon had notice

of the proceedings and ample opportunity to be heard. The lack of a hearing in

light of their strategic decision to not get involved was not a denial of the process

due under the circumstances. Moreover, given that Zurich had ample notice of the

entry of default and still failed to appeal, the failure to hold a hearing did not so

deprive Zurich of constitutional due process as to render the judgment void. See

Mathews v. Eldridge, 424 U.S. 319, 334 (1976) (“Due process is flexible and calls

for such procedural protections as the particular situation demands.” (quoting

Morrissey v. Brewer, 408 U.S. 471, 481 (1972) (alteration omitted)).

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      Nor was the denial of relief under Rule 60(b)(1) an abuse of discretion. “To

determine whether a party’s failure to meet a deadline constitutes ‘excusable

neglect,’ courts must apply a four-factor equitable test, examining: (1) the danger

of prejudice to the opposing party; (2) the length of delay and its potential impact

on the proceedings; (3) the reason for the delay; and (4) whether the movant acted

in good faith.” Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253, 1261 (9th Cir.

2010) (citing Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S.
380, 395 (1993); Briones v. Riviera Hotel & Casino, 116 F.3d 379, 381 (9th Cir.

1997)). Although it could have been more specific, the district court considered

this equitable analysis in its denial of Zurich’s Rule 60(b) motion. See Bateman,
231 F.3d at 1224 (“We would not ordinarily reverse a court simply for failing to

articulate the Pioneer and Briones test, as long as it actually engaged in the

equitable analysis those cases mandate.”).

      Finally, the district court did not abuse its discretion in declining to

reconsider the Eitel1 factors on Zurich’s motion, as it was not required to do so

under Rule 60(b), and the underlying judgment is not on review. See Casey, 362
F.3d at 1257.

AFFIRMED.

      1
          Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986).

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