Court Opinion

ID: 8911930
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:21:00.809898+00
Date Added: 2024-06-11T17:08:36.270206
License: Public Domain

HARLINGTON WOOD, Jr., Circuit Judge,
dissenting.
It is only on the issue of “abuse of discretion” with which I disagree with the majority analysis, and would reverse on that basis.
My view of this case, however, in these circumstances is somewhat self-defeating since our standard of review permits us to find an abuse of discretion only where no reasonable person would adopt the view of the trial court. Beshear v. Weinzapfel, 474 F.2d 127, 134 (7th Cir. 1973). Giving ourselves the benefit of being considered reasonable persons, which some may question, it is obvious that our opposing views about the issue dictate that no abuse of discretion can be found. Nevertheless, I prefer to express in part a contrary view.
As Judge Pell makes clear in Beshear, 474 F.2d at 134, it is not our function on appeal to merely take the position we would have taken had we been the trial judge. In applying our abuse of discretion standard, however, I see nothing wrong in starting at that point, but more is required.
I am concerned with this case for the precedent which it establishes which permits the sacrifice of finality because of an alleged misunderstanding between co-counsel when there are significant gaps left in the record. I prefer to remain free to argue in the future that though Rule 60(b) is to be liberally applied when all the circumstances are known and fairly considered, it is not to be loosely applied. I believe loose application will permit Monday morning quarterbacking and will only breed indifference to careful handling of litigation if there is always to be an easy available way out after final judgment. I do not disagree in general with the majority about the law, only with its application.
Caplan’s motion to set aside the original judgment was a verified motion by his principal counsel from St. Louis. Nowhere in this record is there any affidavit by Caplan himself, the client, stating what he had authorized his attorneys to do or not to do in his behalf. We are passing judgment on this matter without a single word from the client, only his agents. Did Caplan himself for some reason originally authorize the stipulated judgment or didn’t he? If, however, it is to be only Caplan’s two counsel, his principal counsel and local counsel, to whom we are to look for an explanation, then we should carefully examine what they say about it.
In the motion of Caplan’s principal counsel concerning the alleged misunderstanding between himself and Caplan’s local counsel in Springfield, he alleges only that he “believes” that in an initial telephone call in November 1978 he outlined to Springfield counsel the position of Caplan with regard to his relationship with the Small Business Administration. He does not allege that he did in fact inform Springfield counsel. He equivocates. That motion was prepared within about four months of that initial telephone call. If the issue is so important as to justify setting final judgment aside, I believe it only fair to ask for something more definite from Caplan’s principal counsel, particularly when his client is totally silent. On the other hand, Caplan’s local counsel’s affidavit states that during that telephone call principal counsel only gave him the “general background” of the case, the necessity of entering an appearance in the Springfield interpleader suit, and further that the original attorney’s lien was not to be contested. Lacking in that affidavit is any mention that the details of the SBA relationship were discussed or what was to be done about it. In fact, after that November telephone call the local counsel, after attending a preliminary hearing before the trial judge, wrote to the principal counsel in early December *802stating that the “only question to be resolved was whether or not the SBA was to receive the balance of funds after the payment of claims. I would appreciate your letting me know what Mr. Caplan’s agreement was with the SBA.” (emphasis added). That letter, inquiring about the SBA agreement, strongly suggests why principal counsel was equivocal in his 60(b) motion. In response to that letter we are informed only that local counsel was then furnished with the SBA documents. The record is silent as to any correspondence accompanying those documents which might shed some light on how the SBA matter was to be handled. It appears local counsel was left without explanation of a most important consideration and given no, or at least inadequate, instructions.
The November letter of local counsel also mentions not just one claim, but claims, which were to be resolved before any balance was to be distributed to SBA. It is clear that principal counsel was aware of the other outstanding claims including the two in question on this appeal. Those two claims were both supported by prior judgments of courts of record. Yet Caplan’s principal counsel alleges that for some reason he believed only the uncontested attorney’s lien would be considered at the “final disposition of the claims” on December 21, 1977.
The following sequence of events is also interesting. The original “final judgment” was entered on December 22, 1977. On January 11, 1978 local counsel advised St. Louis counsel by letter about the distribution authorized to be made to all claimants. After receiving that letter principal counsel alleges he called the local counsel on January 13,1978 and ascertained that local counsel mistakenly believed that Caplan had had no objection to the payment of the other claimants. If local counsel was mistaken, it appears the fault, if any, may lie elsewhere. Again, we note we are not told what Caplan himself had nor had not authorized his attorneys to do. No explanation is given for this total failure to hear what the client has to say about any of this.
In the meantime, on February 3, 1978, several weeks after the alleged misunderstanding between co-counsel comes to light, no 60(b) motion having yet been filed, Caplan receives a strong letter from the SBA about the balance due on the indebtedness. That letter reminded Caplan in no uncertain terms that under his prior financing arrangements he was personally liable to SBA for the unpaid balance. Caplan was given 15 days to resolve the matter along with the warning that “there can no longer be a procrastination.” The SBA letter concluded that SBA was aware of the equity in Mr. Caplan’s residence and that SBA would look to that equity for recovery of the balance due. Thereafter, on March 2, 1978 Caplan’s counsel filed the 60(b) motion. SBA, incidentally, opposed the allowance of the motion even though it would be beneficial. Those circumstances suggest to me a strong desire on Caplan’s part to somehow avoid the stipulation for final judgment which on retrospect appeared unfavorable. Perhaps Caplan had forgotten the possibility of his being personally liable for the corporate debt. Some similar concern with hindsight is evidenced in my dissent in Bradford Exchange v. Trein’s Exchange, 600 F.2d 99 (7th Cir. 1979). Again, I think we deserve to hear from Caplan himself. The majority recognizes that there is evidence in the record supporting the characterization that the true motivation for Caplan’s motion was not a misunderstanding between attorneys but an after the fact realization that the judgment left Caplan personally liable to SBA for a substantial sum. I agree with that comment, only I agree with it more than the majority does.
The 60(b) motion seeks relief on the grounds only of “mistake, inadvertence, and surprise.” Excusable neglect is not mentioned. Perhaps what happened may be considered some form of mistake, but I am not sure exactly what mistake is being referred to or who made it. At least, I have some reservation about whether the word “mistake” as used in the rule was intended to cover the alleged circumstances. Also, what or whose “inadvertence” is intended is likewise not identified. As far as “sur*803prise” is concerned, the surprise was Ca-plan’s when he read the straightforward letter from SBA. Based on a record leaving significant questions unanswered, I do not believe the trial court should then have so easily “surprised” the successful claimants by holding that their stipulated final judgment was not final after all. The money had long since been distributed in accordance with the original order.
Perhaps the relief granted may be correct, but I do not believe we have the whole story and do not believe finality should so easily be upset without at least a more satisfying explanation.
I therefore respectfully dissent.