Court Opinion

ID: 2965606
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:42:34.661325+00
Date Added: 2024-06-11T15:01:15.445586
License: Public Domain

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<pre>                   United States Court of Appeals <br>                        For the First Circuit <br>                                   <br>                          ________________ <br> <br> <br>No. 98-1182 <br> <br>                        SEA-LAND SERVICE, INC., <br> <br>                         Plaintiff, Appellee, <br> <br>                                  v. <br> <br>                     CERAMICA EUROPA II, INC. and <br>                   CERAMICA EUROPA HATO REY, INC. <br>                                   <br>                       Defendants, Appellants, <br>                                   <br>                        ____________________ <br> <br>No. 98-1207 <br> <br>                      TAG/ICIB SERVICES, INC., <br>                                   <br>                         Plaintiff, Appellee <br>                                   <br>                                 v. <br>                                   <br>                   CERAMICA EUROPA HATO REY, INC., <br>                                   <br>                        Defendant, Appellant, <br>                                   <br>                                 and <br>                                   <br>                      CERAMICA EUROPA II, INC., <br>                                   <br>                              Defendant <br>                                   <br>                          ________________ <br>                                   <br>                                   <br>            APPEAL FROM THE UNITED STATES DISTRICT COURT <br>                                   <br>                   FOR THE DISTRICT OF PUERTO RICO <br>                                   <br>        [Hon. Jaime Pieras, Jr., Senior U.S. District Judge] <br>                                   <br>                        ____________________ <br>                                   <br>                               Before <br>                                   <br>                        Lynch, Circuit Judge <br>                                   <br>Hall,   Senior Circuit Judge <br>     <br>    and Lipez, Circuit Judge. <br>     <br>    _____________________ <br>     <br>     <br>       Manuel R. Suarez for appellants. <br>     <br>       Enrique Peral, with whom Muoz, Boneta, Gonzalez, Arbona, Benitez <br>    & Peral were on brief, for appellees. <br>     <br>                       ___________________  <br>                                 <br>                                 <br>                        December 1, 1998 <br>                                 <br>  ___________________     

    LYNCH, Circuit Judge.  In these consolidated cases, two <br>    Puerto Rico corporations, Ceramica Europa II, Inc. and Ceramica <br>    Europa Hato Rey, Inc. (collectively "defendants"), appeal from <br>    the denial of their motions to set aside default judgments <br>    under Rules 55(c) and 60(b)(4) of the Federal Rules of Civil <br>  Procedure.    We affirm, finding no abuse of discretion in the <br>    court's denial of the Rule 55(c) motion and no error in the <br>    court's denial of the Rule 60(b)(4) motions. <br>       In the spring of 1996, Sea-Land Service, Inc. and <br>    TAG/ICIB Services, Inc. (collectively "Sea-Land") filed two <br>    suits against the defendants seeking to recover freight charges <br>    (the "freight case") and demurrage charges (the "demurrage <br>    case").  Professional process servers hired by Sea-Land first <br>    attempted to deliver summons to Marco Barbarossa, the president <br>    of both defendant corporations, at his place of business.  When <br>    that proved unsuccessful, the servers examined records filed <br>    with the Puerto Rico Department of State and determined that <br>    the resident agent for both corporations was Barbarossa's wife, <br>    Myrna Ortiz.  They then served Myrna Ortiz at her home on July <br>    19, 1996.   <br>       On August 23, 1996, after default had been entered in <br>    both cases, the defendants moved to quash the summons, arguing <br>    that service was improper because the summons had been left at <br>  Barbarossa's home rather than delivered personally to him.    On <br>    September 17, 1996, the defendants made the same argument in a <br>    Rule 60(b)(4) motion to set aside a default judgment that had <br>    been entered in the demurrage case.  The court found the <br>    affidavits of the process servers to be worthy of credence and <br>    denied the motions to quash and the Rule 60(b)(4) motion.  On <br>    January 3, 1997, after default judgment had also been entered <br>    in the freight case, the defendants filed two additional Rule <br>    60(b)(4) motions, this time arguing in both the freight and <br>    demurrage cases that Ortiz was not served and that in any case <br>    Ortiz was not the resident agent for one of the corporations, <br>    Ceramica Europa Hato Rey, Inc.  The district court, addressing <br>    only the first argument, rejected the motions because it found <br>    the affidavits of the process servers to be more believable <br>    than Ortiz's sworn statement.  The defendants did not appeal <br>    from that order. <br>         In August and September 1997, the defendants attempted <br>    once again to have the default judgments set aside.  They filed <br>    a motion under Rule 55(c) to set aside the default judgment in <br>    the freight case because Sea-Land had failed to provide notice <br>    of its application for a default judgment.  Ceramica Europa <br>    Hato Rey, Inc. also filed motions under Rule 60(b)(4) in both <br>    cases, arguing once again that it had not been properly served <br>    because Ortiz was not its resident agent.  The district court <br>    denied both the Rule 55(c) motion and the Rule 60(b)(4) motions <br>    on various grounds, and this appeal ensued. <br>         We address first the denial of the defendants' motion <br>    under Rule 55(c).  District courts enjoy broad discretion in <br>    deciding motions to set aside a judgment under this rule, seeUnited States v. One Urban Lot Located at 1 Street A-1, <br>    Valparaiso, Bayamon, Puerto Rico, 885 F.2d 994, 997 (1st Cir. <br>    1989), and we review such rulings only for abuse of discretion,  <br>    see Key Bank of Maine v. Tablecloth Textile Co., 74 F.3d 349, <br>    352 (1st Cir. 1996).  We find no abuse of discretion here.  The <br>    district court acknowledged that the defendants did not receive <br>  the notice required by Rule 55(b)(2),   but concluded that there <br>    was nonetheless no "good cause" to set aside the judgment under <br>  Rule 55(c).     The purpose of the notice requirement in Rule <br>    55(b)(2) is to permit a party to show cause for its failure to <br>    timely appear.  Since the defendants had already tried, and <br>    failed, to effectively explain their failure to timely appear <br>    in their earlier motion to set aside the judgment, it would <br>    have been senseless for the court to vacate the default <br>    judgment in order to give the defendants yet another <br>    opportunity.  The court's refusal to engage in such a fruitless <br>    exercise can hardly be considered an abuse of discretion. <br>       Our review of the denial of the Rule 60(b)(4) motions <br>    proceeds along slightly different lines.  Normally the decision <br>    to grant or deny a Rule 60(b) motion lies within the discretion <br>    of the district court, and review is for abuse of discretion <br>    only.  See Cotto v. United States, 993 F.2d 274, 277 (1st Cir. <br>    1993).  However, the First Circuit has held that the district <br>    court does not have discretion to deny a Rule 60(b)(4) motion <br>    if the challenged judgment was void for lack of personal <br>    jurisdiction.  See Echevarria-Gonzalez v. Gonzalez-Chapel, 849 <br>    F.2d 24, 28 (1st Cir. 1988) ("If the judgment is void, the <br>    district court has no discretion but to set aside the entry of <br>    default judgment.").  This suggests that denial of such a <br>    motion should be given de novo review.  Although the First <br>    Circuit has not expressly adopted this standard of review for <br>    the denial of Rule 60(b)(4) motions, a number of other circuits <br>    have.  See Carter v. Fenner, 136 F.3d 1000, 1005 (5th Cir. <br>    1998), petition for cert. filed, 67 U.S.L.W. 3271 (U.S. July <br>    21, 1998) (No. 98-571) (adopting de novo standard); Wilmer v. <br>    Board of County Comm'rs, 69 F.3d 406, 409 (10th Cir. 1995) <br>    (same); United States v. Indoor Cultivation Equip. from High <br>    Tech Indoor Garden Supply, 55 F.3d 1311, 1317 (7th Cir. 1995) <br>    (same); Export Group v. Reef Industries, Inc., 54 F.3d 1466, <br>    1469 (9th Cir. 1995) (same); Page v. Schweiker, 786 F.2d 150, <br>    152 (3rd Cir. 1986) (same).  Because the parties did not <br>    address the question of standard of review, we will not decide <br>    the question here.  Rather, we will assume arguendo that the <br>    stricter de novo standard applies, while noting that our <br>    affirmance under that standard necessarily entails that there <br>    was no abuse of discretion.  <br>       As an initial matter, our precedent establishes that <br>    Rule 60(b)(4) motions cannot be denied on the procedural ground <br>    that they were not brought within a "reasonable time" as <br>    required under Rule 60(b).  Although the language of Rule 60(b) <br>    literally applies even to motions alleging lack of personal <br>    jurisdiction, this court has held that motions to set aside a <br>    judgment for lack of personal jurisdiction under Rule 60(b)(4) <br>    may be made at any time.  See United States v. Boch Oldsmobile, <br>    Inc., 909 F.2d 657, 661 (1st Cir. 1990); Precision Etchings & <br>    Findings, Inc. v. LGP Gem, Ltd., 953 F.2d 21, 23 (1st Cir. <br>    1992). See generally 11 C. Wright & A. Miller, Federal Practice <br>    & Procedure  2862, 2866 (1995) (explaining exception).  Thus, <br>    the defendant's unreasonable delay in bringing the instant Rule <br>    60(b)(4) motions nearly one year after the entry of default <br>    judgments and nearly nine months after filing the second set of <br>  Rule 60(b) motions does not alone provide a basis for denial.    <br>       This delay does, though, lend support to the district <br>    court's rejection on the merits of the claim that Ortiz was not <br>    the resident agent for one of the two defendant corporations.  <br>    If Ortiz were truly not the resident agent for Ceramica Europa <br>    Hato Rey, Inc., it was reasonable to think the defendant would <br>    have made this argument in its motions to quash the summons and <br>    in its first Rule 60(b) motion.  It appears in any event that <br>    Sea-Land properly served both defendants under Section 12.01 of <br>    the Puerto Rico Corporations Law of 1995, P. R. Laws Ann. Tit. <br>    14, Section 3126, which permits service of process on <br>    corporations by leaving copies of the summons and complaint at <br>    the dwelling of any officer, director, or registered agent of <br>    the corporation -- in this case, the dwelling of the president <br>    of both corporations, Marco Barbarossa.  Thus, we find that the <br>    court correctly denied the Rule 60(b)(4) motions because <br>    Ceramica Europa Hato Rey, Inc. was properly served under <br>    either, or both, Rule 4(h)(1) and Rule 4(e)(1). <br>       But even if service were not proper, we would affirm <br>    for a separate reason: the fact that the defendant had already <br>    raised this issue in the second set of Rule 60(b)(4) motions <br>    (filed January 3, 1997) and did not appeal the denial.  It is <br>    well settled that Rule 60(b) motions may not be used as a <br>    substitute for timely appeal.  See Cotto, 993 F.2d at 278.  The <br>    same principle applies here: if Ceramica Europa Hato Rey, Inc. <br>    wished to challenge the district court's rejection of (or the <br>    court's failure to consider) the argument that Ortiz was not <br>    its resident agent, it should have appealed the denial of the <br>    motions in which it first made those arguments.  Having chosen <br>    not to appeal (or even to move for reconsideration), it cannot <br>    expect to be able to reopen this issue in a successive Rule <br>    60(b) motion. <br>       Affirmed.  See 1st Cir. Loc. R. 27.1.</pre>

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