Opinion
Civil Action No: 02-1109 Section: "J" (2).
August 4, 2004
ORDER AND REASONS
Before the Court is plaintiff's Motion for Relief from Judgment pursuant to Federal Rule of Civil Procedure 60(b) (Rec. Doc. 31). Defendants oppose the motion (Rec. Doc. 35), and plaintiff filed a reply memorandum (Rec. Doc. 37). Having considered the evidence, memoranda, and applicable law, the Court concludes, for the reasons that follow, that plaintiff's Motion for Relief from Judgment pursuant to Federal Rule of Civil Procedure 60(b) (Rec. Doc. 31) should be DENIED.
BACKGROUND
Defendant, Virtual Point Development ("Virtual Point"), marketed a software program named "Softwheels" to sellers of tires and wheels. On May 15, 1997, plaintiff, Southern Tire Services ("STS"), and defendant entered into a software licensing agreement that granted plaintiff the right to market Softwheels for three years. Defendant later terminated the contract claiming plaintiff marked up the price of the software beyond the price agreed upon and kept the additional profit. Plaintiff then filed a demand for arbitration claiming that defendant improperly terminated the contact. On March 14, 2000, the arbitrator awarded plaintiff damages in the amount of $135,000. Plaintiff then filed a petition in state court to confirm the arbitration award that was eventually affirmed by the Louisiana Court of Appeal.Plaintiff executed on the judgment, and the Civil Sheriff for Orleans Parish conducted a public sale of the trademark "Softwheels," the copyright, and all licenses and contract rights to the software. On December 6, 2001, plaintiff purchased this property at the Sheriff's sale. However, following the sale, plaintiff discovered that on May 30, 2000, Virtual Point had transferred its rights in the "Softwheels" trademark to defendant, Autoware Technologies. Consequently, on April 15, 2002, plaintiff filed the present action seeking to nullify the transfer and for recognition of the state court judgment on the arbitration award. On February 27, 2003, defendants, Virtual Point Development ("Virtual Point") and Autoware Technologies, filed a motion to dismiss under Fed.R.Civ.Pro. 12(b)(2) and (6) (Rec. Doc. 27) that was granted by this Court on April 3, 2003. Plaintiff did not file any opposition to the motion and blames the failure to file on the neglect and misrepresentations of its former counsel, Miguel A. Elias. On March 21, 2004, plaintiff filed a Motion for Relief From Judgment Pursuant to Rule 60(b) (Rec. Doc. 31).
DISCUSSION
Rule 60(b)(1) and (6)
Determining whether relief should be granted to a party under Rule 60(b)(1) and (6) is within the discretion of the district court. Lavespere v. Niagra Mach. Tool Works, Inc. 910 F.2d 167, 173 (5th Cir. 1990), abrogated on other grounds, Little v. Liquid Air Corp., 37 F.3d 1069, 1075 n. 14 (5th Cir. 1994 ( en banc). Plaintiff seeks relief under 60(b)(1) and (6) which provide for relief upon a showing of "excusable neglect" or "manifest injustice." Id. Rule 60(b) allows for relief from a final judgment on a showing of "(1) mistake, inadvertence surprise or excusable neglect . . . or (6) any other reason justifying relief from the operation of the judgment." FED. R. CIV. P. 60(b). In exercising its discretion, a trial court must consider several factors in determining whether Rule 60(b) relief is proper: (1) final judgments should not be lightly disturbed; (2) a Rule 60(b) motion is not to be used as a substitute for appeal; (3) the rule should be construed liberally to achieve substantial justice, (4) whether the motion was made within a reasonable time, (5) if the judgment was one in default or a dismissal in which there was no consideration of the merits of the case — the interest in hearing the case on the merits outweighs the interest in the finality of judgments — and there is merit in the movants claim or defense; (6) whether the movant had a fair opportunity to present his claim or defense, if the judgment was rendered after a trial on the merits; (7) whether there are intervening equities that would make it inequitable to grant relief; and (8) any other factor that is relevant to the justice of the judgment under attack, bearing in mind that final judgments serves a useful purpose to the courts, society and the litigants. Crutcher v. Aetna Life Ins. Co., 746 F.2d 1076, 1082 (5th Cir. 1984) (citing United States v. Gould, 301 F.2d 353, 355-56 (5th Cir. 1962)).
Plaintiff's argument in support of its Motion for Relief is centered around the alleged neglect on the part of its previous counsel, Miguel Elias. Plaintiff claims that it was not informed by Elias that a motion to dismiss had been filed until August 2003, though plaintiff's claim was dismissed on April 3, 2003. Plaintiff alleges that Elias told plaintiff that he had filed an opposition to defendants' motion and that nothing further could be done until the court ruled on the motion. Plaintiff asserts that it called Elias every few weeks, and counsel assured plaintiff that he filed an opposition and was waiting for the court's decision. Plaintiff later reviewed the court record and discovered that Elias never filed an opposition to defendants' motion and that the suit had been dismissed. Plaintiff argues that the neglect and misrepresentations made by its former counsel are grounds for relief from this Court's judgment under Rule 60(b)(1) and (6).
The plaintiff asserts that Fifth Circuit Court of Appeals and Eastern District of Louisiana decisions have held that attorney neglect is a basis for relief under Rule 60(b). Specifically, plaintiff cites Kelly v. U.S., 805 F. Supp. 14 (E.D. La. 1992) and Seven Elves, Inc. v. Eskenazi, 635 F.2d 396 (5th Cir. 1981) in support of its argument. In Kelly, the court granted plaintiff's Rule 60(b) motion after plaintiff's counsel failed to respond to defendant's Motion for Summary Judgment. Kelly, 805 F. Supp at 16. The court concluded that the plaintiff should not bear the cost of her attorney's carelessness and reconsidered the defendant's Motion for Summary Judgment. Id.
In Seven Elves, because defendants' counsel withdrew without informing the defendants, defendants did not receive notice of the trial. Seven Elves, 635 F.2d at 403. As a result, defendants were not present for trial and default judgement was entered against them. Id. at 399. The Fifth Circuit vacated the default judgment against defendants on the basis of Rule 60(b).Id. at 403. The Court held that in some cases equity requires that Rule 60(b) be applied liberally in favor of trial on the full merits of a case. Id.
On the other hand, defendants argue that plaintiff has not presented sufficient evidence to support its Rule 60(b) motion for relief. Defendants claim that plaintiff's sole basis for its motion is the failure of plaintiff's counsel to file a memorandum in opposition to defendants' motion to dismiss. Defendants assert that plaintiff has offered no excuse for its counsel's neglect and has not claimed that its attorney did not receive notice of the hearing on the motion to dismiss. Therefore, defendants argue that plaintiff's motion does not meet the requirements of Rule 60(b) as recognized by the Fifth Circuit.
Further, defendants argue that although plaintiff's counsel may have concealed his failure to oppose defendants' motion to dismiss, the Fifth Circuit has held that clients are chargeable with their attorney's mistakes. Defendants cite Pryor v. U.S. Postal Service, 769 F.2d 281 (5th Cir. 1985) in support of this argument. In Pryor, the Court held that the mistakes of counsel are chargeable to the client and that the proper recourse for an aggrieved client is to file suit against his counsel. Id. at 288-89. In Pryor, the appellee moved to dismiss the complaint, and appellant's counsel did not respond. Id. at 283. Neither appellant nor his counsel appeared before the court at the motion hearing, nor did they request a continuance or notify the court that they would be absent. Id. Consequently, the court ordered dismissal with prejudice for want of prosecution. Id.
The Pryor court concluded that if it allowed an exception to be made to a final judgment each time a client faced a hardship due to a negligent attorney, the meaningful finality of final judgments would disappear. Id. at 288. Concerning the importance of the timeliness of filing post-judgment motions, the court in Pryor stated, "an objective line of finality needs to be drawn at some point in time." Id. The court also held that "appellant may not escape the deficiencies of its chosen legal counsel merely by urging that he was personally uninformed of the state of matters before the court." Id. Moreover, plaintiff has not lost its remedy as it may file a malpractice suit against its former counsel. Id. at 289 (citing Link v. Wabash R.R. Co., 370 U.S. 626, 82 S.Ct. 1336, 1390, n. 10 (1962)).
Similarly, in this case, defendants argue that plaintiff should have to bear the costs of its chosen counsel's mistakes. Further, plaintiff is not without a remedy as plaintiff's remedy lies in a malpractice action against its former counsel. Therefore, defendants assert that the mistakes by plaintiff's lawyer are not sufficient grounds for a Rule 60(b) relief from judgment.
On the other hand, the Fifth Circuit has found that a client should not lose a chance to present his claim due to his attorney's minor mistake absent a clear showing of serious misconduct or prejudice. Blois v. Friday, 612 F.2d 938, 940 (5th Cir. 1980). In Blois, the plaintiff's attorney forgot to file a notice of his change of address with the court, resulting in the plaintiff's attorney not receiving notice of defendant's motion for summary judgment until the date to respond had passed. Id. The court explained that the "plaintiff should not be punished for his attorney's mistake absent a clear record of delay, willful contempt or contumacious conduct." Id. (citing Hassenflu v. Pyke, 491 F.2d 1094, 1095 (5th Cir. 1974)). The court held that the plaintiff should not be punished for the minor mistakes of its counsel without clear proof of serious misconduct and prejudice. Id. Thus, the court granted plaintiff's motion for relief from judgment. Id.
However, "the greater the negligence involved, or the more willful the conduct, the less `excusable' it is; on the other hand, the more inexcusable it is, the greater the natural sympathy the court has with the client." Crutcher, 746 F.2d at 1083 (citing 7 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 60.27[2] at 283-85).
In the present case, while the Court has great sympathy for Plaintiff's predicament, Plaintiff has failed to present sufficient evidence that would justify relief from judgment under Rule 60(b)(1) or (6). Plaintiff has not presented a showing of "unique or unusual" circumstances that would warrant the disturbance of a final judgment, especially considering the amount of time that has elapsed since the final judgment and the filing of this motion. Although plaintiff claims it was unaware of the final judgment because of the misrepresentations by its former counsel, the final judgment in this case was entered on April 3, 2003, yet plaintiff's Rule 60(b) motion was not filed until March 31, 2004. Thus, almost a year has passed between the time of judgment and the time of plaintiff's motion.
As stated above, the Fifth Circuit has not punished clients for the minor mistakes of counsel. Blois, 612 F.2d at 940. However, in this case, assuming plaintiff's allegations to be true, its former counsel's action does not amount to a minor mistake. Instead, its former counsel was grossly negligent. Unlike the situation in Blois, former counsel did not deny receiving notice of the hearing, yet former counsel failed to respond to defendants' motion, failed to seek a rehearing or new trial after the case was dismissed, and then lied about the status of the litigation for nearly a year after the final judgment had been entered. As the Fifth Circuit observed inCrutcher, "the greater the negligence involved, or the more willful the conduct, the less `excusable' it is." Crutcher, 746 F.2d at 1083.
Further, the final judgment was not one in default or a dismissal in which there was no consideration of the merits of the case. On the contrary, this Court considered the merits and relevant law when ruling on the motion to dismiss. Therefore, plaintiff has not presented a sufficient showing of unusual or unique circumstances as to be granted relief under Rule 60(b). Accordingly, IT IS ORDERED that plaintiff's Motion for Relief from Judgment pursuant to Federal Rule of Civil Procedure 60(b) (Rec. Doc. 31) is DENIED.