Travelers Casualty & Surety Company of America v. Thorington Electrical & Construction Company et al

Filing 54

MEMORANDUM OPINION AND ORDER construing 43 and 46 as post-judgment motions under Rules 60 (b) and 59 (e) of the FRCP; and that the motions are DENIED as further set out. Signed by Honorable William Keith Watkins on 3/1/2010. (cb, )

IN THE DISTRICT COURT OF THE UNITED STATES F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION T R A V E L E R S CASUALTY AND SURETY ) C O M P A N Y OF AMERICA, ) ) P la in tiff, ) ) v. ) ) T H O R IN G T O N ELECTRICAL & ) C O N S T R U C T IO N COMPANY, et al., ) ) D e f e n d a n ts. )

C A S E NO. 2:09-CV-37-WKW [WO]

M E M O R A N D U M OPINION AND ORDER D e f e n d a n ts Thorington Electrical & Construction Company, Kelvin Thorington, and D ia n e Thorington move for relief from this court's order granting summary judgment in f a v o r of Plaintiff Travelers Casualty and Surety Company of America ("Travelers"). This c a u s e is before the court on Defendants' motion to alter, amend, or vacate the judgment (D o c s. # 43, 46, 49), and Travelers' responses (Docs. # 45, 48, 53). Upon consideration of c o u n s e l's arguments, the relevant law, and the record as a whole, the court finds that D e f e n d a n ts ' motion is due to be denied. I . BACKGROUND T rav e le rs filed a "Verified Complaint for Exoneration of Surety" on January 15, 2009, s e e k in g damages incurred as a result of issuing performance and payment bonds on behalf o f Thorington Electrical for certain construction projects to be performed by Thorington E le c tric a l as general contractor. (Doc. # 1.) After the parties filed their report of their Rule

26(f) planning meeting (Doc. # 19), the court issued a Uniform Scheduling Order ("USO" (D o c . # 22)) and a General Briefing Order ("GBO" (Doc. # 23)) on April 6, 2009. The USO s ta te d that all dispositive motions "shall be filed no later than August 17, 2009" (USO, ¶ 3), a n d the GBO required that all responsive briefs be filed "21 days after the date the motion is filed" (GBO, ¶ 2). Travelers filed its motion for summary judgment and accompanying b rie f on August 14, 2009. (Docs. # 29, 30.) Thus, in accordance with the GBO, Defendants h a d until September 4, 2009, to file a response. Defendants, however, failed to respond or o t h e r w i s e request an extension to respond, and on November 9, 2009, this court granted T ra v e le rs' motion for summary judgment. (Doc. # 39.) Judgment was entered on behalf of T ra v e le rs on December 8, 2009, in the amount of $1,086,487.25. (Doc. # 42.) Defendants subsequently filed three post-judgment briefs. (Docs. # 43, 46, 49.) As d is c u s se d below, the court construes the first two briefs as post-judgment motions under R u le s 60 and 59, respectively. Travelers timely responded to all three briefs. (Docs. # 45, 4 8 , 53.) I I. DISCUSSION " A post-judgment motion may be treated as made pursuant to either [Rule] 59 or 60 ­ regardless of how the motion is styled by the movant ­ depending on the type of relief s o u g h t." Mays v. U.S. Postal Serv., 122 F.3d 43, 46 (11th Cir. 1997). Because a motion b ro u g h t under Rule 59 tolls the filing period for appeals, this distinction is significant. See F in c h v. City of Vernon, 845 F.2d 256, 258 (11th Cir. 1988); Livernois v. Med. Disposables,

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Inc., 837 F.2d 1018, 1020 (11th Cir. 1988); Burnam v. Amoco Container Co., 738 F.2d 1230, 1 2 3 2 (11th Cir. 1988) (noting that "[a] Rule 60 motion . . . does not affect the finality of a ju d g m e n t or suspend its operation for purposes of appeal"). Where a party seeks to amend a substantive aspect of the judgment, Rule 59 is the appropriate vehicle; however, where a p a r ty raises collateral issues, Rule 60 is the appropriate vehicle. Finch, 845 F.2d at 258. Typically, post-judgment motions brought within twenty-eight days of the judgment, and that " c a ll[ ] into question the correctness of that judgment[,]" are construed under Rule 59. See id . at 258-59 (quoting Dove v. Codesco, 569 F.2d 807, 809 (4th Cir. 1978)).1 H e re , Defendants filed their initial post-judgment brief ­ styled as a "Motion to Grant R e lie f From Order Under Rule 60(b) F.R.C.P" ­ on December 15, 2009 (Doc. # 43), well w ith in the time allotted under Rule 59. Their second brief, which was also filed within the tw e n ty-e ig h t-d a y period, was styled as a "Brief in Support of Defendants' Motion to Alter, A m e n d or Vacate Judgment." (Doc. # 46.) Although the titles of the briefs are not d is p o s itiv e , Defendants appear to argue substantive (e.g., manifest error of fact) and c o lla te ra l issues (e.g., excusable neglect in missing a deadline and fraudulent conduct on the p a rt of Travelers). Thus, although the parties only brief Rule 60(b), the court will address b o th Rule 60(b) and 59(e).

As of December 1, 2009, the time period to bring a Rule 59 motion was expanded from ten days to twenty-eight days. Fed. R. Civ. P 50(e).

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A.

R u le 60(b) D e f e n d a n ts present three arguments in support of their motion for relief under Rule

6 0 (b ). Briefly, they contend: (1) that their failure to respond to Travelers' motion for s u m m a ry judgment was "excusable neglect" under subsection 60(b)(1); (2) that the evidence o f damages submitted in support of Travelers' motion constituted a "fraud on the court" u n d e r subsection 60(b)(3); and (3) that the interests of justice require relief from final ju d g m e n t under subsection 60(b)(6). Each argument is addressed in turn. 1. " E x c u s a b le Neglect" Under Rule 60(b)(1)

R u le 60(b)(1) provides that the court may relieve a party from a final judgment or o rd e r for "mistake, inadvertence, surprise, or excusable neglect." Fed. R. Civ. P. 60(b)(1). Whether a party's neglect is "excusable" is, at bottom, an equitable determination, which ta k e s "account of all relevant circumstances surrounding the party's omission." Pioneer Inv. S e r v . Co. v. Brunswick Assoc. Ltd. P'ship, 507 U.S. 380, 395 (1993). In making that d e te rm in a tio n , a court considers the following factors: "the danger of prejudice to the [ o p p o s in g party], the length of the delay and its potential impact on judicial proceedings, the re a s o n for the delay, including whether it was within the reasonable control of the movant, a n d whether the movant acted in good faith." Id.; see also Cheney v. Anchor Class C o n ta in e r Corp., 71 F.3d 848, 850 (11th Cir. 1996). Defendants provide scant factual or legal bases for relief under subsection (b)(1). They cite the First and Seventh Circuits for the proposition that "[t]he attorney's negligent

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and inadvertent failure to meet a deadline is an argument for modifying the judgment." (Doc. # 49, at 2.) While it is true that Rule 60(b)(1) encompasses situations attributable to n e g lig e n c e and inadvertence, the mere fact of "negligent or inadvertent failure to meet a d e a d lin e " is not, without more, a basis for granting relief under Rule 60(b)(1). The moving p a r t y must demonstrate, through the factors articulated above, that the neglect was " e x c u s a b le ." According to the First Circuit opinion upon which Defendants rely, this is a " d e m a n d in g standard." United States v. $23,000 in U.S. Currency, 356 F.3d 157, 164 (1st C ir. 2004). Of the four factors listed above, the length and reason for delay weigh heavily against D e f e n d a n ts in this case. Almost three months transpired between the time the motion for s u m m a ry judgment was filed and the time the motion was granted, and another one month tra n s p ire d between the order granting the motion and the judgment itself. It was not until a lm o s t seven weeks after the judgment was entered that Defendants filed their final brief in s u p p o rt of their 60(b) motion. (Doc. # 49.) Most importantly, however, is Defendants' a p p a re n t lack of justification for the delay. See, e.g., $23,000 in U.S. Currency, 356 F.3d at 1 6 4 (stating that the reason for the delay "will always be critical to the inquiry"); Demint v. N a tio n s b a n k Corp., 208 F.R.D. 639, 642 (M.D. Fla. 2002) ("[T]he starting point and c o m m o n denominator (indeed, the sine qua non) in every case employing an analysis of e x c u s a b le neglect is an explanation of the reason for the delay."). Here, Defendants contend th a t their failure to respond to the motion for summary judgment was based on a

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"misunderstanding." (Doc. # 49, at 2.) Apparently, Defendants either misunderstood the c o u rt's previous orders (Doc. # 43, ¶ 1), misunderstood representations from opposing c o u n s e l (Doc. # 43, ¶ 2), and/or misunderstood whether another case was dispositive of the is su e s at hand (Doc. # 43, ¶ 3). However, to the extent Defendants were unsure of whether o r when to respond to the motion for summary judgment, they sought no clarification during th e three months between the filing and the granting of the motion. At a minimum, the v a rio u s filings, including the motion itself (Doc. # 30) and the order granting the motion (D o c . # 39), should have alerted Defendants of the need to review the record and act a c c o r d i n g l y. Further, as Travelers notes, Defendants' blatantly inaccurate statement in their initial b r i e f that "[t]he Court never set a date for Defendants to respond" (Doc. # 43, ¶ 1) d e m o n s tra te s a lack of good faith. (See GBO, filed Apr. 6, 2009 (Doc. # 23) (stating that all re s p o n s i v e briefs shall be filed "21 days after the date the motion is filed").) This is not a c a s e where an "innocent oversight" or "slight mistake" caused the failure to respond. Compare Cheney, 71 F.3d at 850 (finding that a miscommunication between lawyers re s u ltin g in a six-day late filing, where there was no indication of bad faith or prejudice, c o n s titu te d "excusable neglect"); Walter v. Blue Cross & Blue Shield United of Wis., 181 F .3 d 1198, 1201-02 (11th Cir. 1999) (finding that a secretary's filing mistake resulting in a la te response, where there was no indication of bad faith or prejudice, constituted "excusable n e g le c t" ). Thus, on balance, the court finds that Defendants have not demonstrated that their

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failure to respond to the motion for summary judgment constituted "excusable neglect" under R u le 60(b)(1).2 2. F r a u d Under Rule 60(b)(3)

D e f e n d a n ts next contend that Travelers "committed a fraud on the court" justifying re lie f under Rule 60(b)(3). Subsection (b)(3) provides that the court may relieve a party from a final judgment or order for "fraud . . . , misrepresentation, or misconduct by an opposing p a rty." Fed. R. Civ. P. 60(b)(3). The moving party bears the burden of proving by clear and c o n v in c in g evidence that the judgment was obtained through fraud, misrepresentation, or m i s c o n d u c t. Waddell v. Hendry County Sheriff's Office, 329 F.3d 1300, 1309 (11th Cir. 2 0 0 3 ). "The moving party must also demonstrate that the conduct prevented [him] from fully p re s e n tin g his case." Id. "This subsection of the Rule is aimed at judgments which were u n f a irly obtained, not at those which are factually incorrect." Rozier v. Ford Motor Co., 573 F .2 d 1332, 1339 (5th Cir. 1978).3 It appears that the bulk of Defendants' arguments relates either to the merits of T ra v e le rs' claims or the amount of damages awarded. Specifically, Defendants assert in their

The court notes that "the proper focus is upon whether the neglect of [the movants] and their counsel was excusable." Pioneer Inv. Serv. Co., 507 U.S. at 397. "[C]lients must be held accountable for the acts and omissions of their attorneys . . . . Any other notion would be wholly inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyeragent and is considered to have notice of all facts, notice of which can be charged upon the attorney." Id. at 396-97 (internal quotations omitted). There is no indication that the actions of counsel in this case were not "within the reasonable control of the movant[s]." Id. at 395. In Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions handed down by the former Fifth Circuit prior to October 1, 1981.
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initial brief that "[what] the Plaintiff claims is owed by the Defendants show[s] a gross o v e rp a ym e n t and speculative damages." (Doc. # 43, ¶ 4.) Defendants expand upon this n o tio n in their second brief, asserting that the affidavit submitted with Travelers' motion for s u m m a ry judgment (Doc. # 31, Ex. 1) "is believed to be a fraud on the Court" (Doc. # 46, ¶ 2), and contending that Travelers (1) interfered with Defendants' attempts to satisfy unpaid c la im s (Doc. # 46, ¶ 3); (2) filed the instant suit despite having knowledge that "the process o f formalizing complaints against the government" was ongoing (Doc. # 46, ¶ 4); and (3) m isre p re s e n te d the amount of damages it had incurred and would incur on Defendants' b e h a lf (Doc. # 46, ¶¶ 5-7). However, any allegation of fraud on the part of Travelers "in d is c h a rg in g its obligations under the bond" is an affirmative defense, Frontier Ins. Co. v. In t'l Inc., 124 F. Supp. 2d 1211 (N.D. Ala. 2000), that cannot now be raised for the first time p o s t-ju d g m e n t. Likewise, to the extent factual disputes exist as to the amount Travelers was o w e d under the contract, Defendants should have raised those arguments and presented that e v id e n c e in response to Travelers' motion for summary judgment. Moreover, subsection 6 0 (b )(3 ) is not the vehicle for challenging factually incorrect judgments ­ Rule 60(b)(2) is. See Rozier, 573 F.2d at 1339 n.4 (noting that "factually incorrect judgments are the subject o f Rule 60(b)(2), which provides for relief from a judgment on grounds of `newly discovered e v id e n c e which by due diligence could not have been discovered in time to move for a new tria l under Rule 59(b)'").

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Furthermore, Defendants have made no showing that any alleged fraud on the part of T ra v e le rs "prevented them from fully presenting [their] case." Waddell, 329 F.3d at 1309; s e e also Murphy v. Mo. Dep't of Corr., 506 F.3d 1111, 1117 (8th Cir. 2007). As the court h e ld in Murphy, the mere fact that an affidavit submitted in support of a motion for summary ju d g m e n t may have been fraudulent is not sufficient grounds for granting relief under Rule 6 0 (b )(3 ). Id. The moving party still has the burden of showing how the allegedly fraudulent a f f id a v it prevented the full and fair presentation of its case at the summary judgment stage. Id. Here, Defendants do not contend that their failure to respond at the summary judgment s ta g e had anything to do with Travelers' conduct or representations. Accordingly, the court finds that Defendants have not shown by clear and convincing e v id e n c e that the judgment was obtained through fraud; nor have Defendants demonstrated th a t any alleged fraud on the part of Travelers prevented them from fully defending their in te re s ts . 3. I n the Interests of Justice Under Rule 60(b)(6)

D e f e n d a n ts make a passing reference to Rule 60(b)(6), which provides that a court m a y relieve a party from a final judgment or order for "any other reason that justifies relief." (Doc. # 49, at 2.) "It is well established . . . that relief under this clause is an extraordinary re m e d y which may be invoked only upon a showing of exceptional circumstances." Griffin v . Swim-Tech Corp., 722 F.2d 677, 680 (11th Cir. 1984) (citing Ackermann v. United States, 3 4 0 U.S. 193, 202 (1950)). "The party seeking relief has the burden of showing that absent

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such relief, an `extreme' and `unexpected' hardship will result." Id. (quoting United States v . Swift & Co., 286 U.S. 106, 119 (1932)). Defendants' "argument" in this regard amounts to the following: "Defendants also a rg u e . . . Reason 6, In the Interests of Justice." (Doc. # 49, at 2.) They make no attempt to s u p p o rt this contention. However, to the extent Defendants meant to incorporate arguments f ro m their previous two briefs ­ that attorney negligence constitutes an extraordinary c irc u m s ta n c e warranting relief under Rule 60(b)(6) ­ this argument has been foreclosed by E le v e n th Circuit precedent. See Solaroll Shade & Shutter Corp. Inc. v. Bio-Energy Sys., Inc., 8 0 3 F.2d 1130, 1133 (11th Cir. 1986) (holding that Rule 60(b)(1) and Rule 60(b)(6) are m u tu a lly exclusive). Because the court cannot discern any other arguments justifying relief u n d e r this provision, Defendants' motion is due to be denied on this basis. B. R u le 59(e) B e c a u s e the specific grounds for a motion to amend or alter under Rule 59(e) are not lis te d in the Rule itself, the court "has considerable discretion in reconsidering an issue." Sussman v. Salem, Saxon & Nelson, 153 F.R.D. 689, 694 (M.D. Fla. 1994). Although a rg u a b ly broader than Rule 60(b), Rule 59 "is an extraordinary remedy to be employed s p a rin g ly." Id. "`The only grounds for granting [a Rule 59] motion are newly-discovered e v id e n c e or manifest errors of law or fact,'" Arthur v. King, 500 F.3d 1335, 1343 (11th Cir. 2 0 0 7 ) (quoting In re Kellogg, 197 F.3d 1116, 1119 (11th Cir.1999)), each of which is d is c u s se d below.

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1.

N e w ly -D is c o v e r e d Evidence

D e f e n d a n ts submit several pieces of previously unsubmitted evidence with their s e c o n d brief in an apparent attempt to show that the amount of damages should be altered or a m e n d e d . (See Doc. # 46, Exs. 1-13.) However, "where a party attempts to introduce p re v io u s l y unsubmitted evidence on a motion to reconsider, the court should not grant the m o tio n absent some showing that the evidence was not available during the pendency of the m o tio n ." Mays, 122 F.3d at 46. There is no indication that the evidence submitted in support o f Defendants' motion was not available during the pendency of Travelers' motion for s u m m a ry judgment. In fact, upon review of the evidence submitted with Defendants' second b rie f , it appears that all of the letters, emails, etc., that could have potentially undermined T ra v e le r's evidence of damages were available prior to the time Travelers filed its motion f o r summary judgment. Thus, Defendants' Rule 59(e) motion is due to be denied on this b a s is . 2. M a n ife s t Error of Law or Fact

D e f e n d a n ts do not contend that the court committed a manifest error of law in g ra n tin g Traveler's motion for summary judgment. To the extent they argue that the court c o m m itte d a manifest error of fact, that argument is clearly meritless. Although "the district c o u rt cannot base the entry of summary judgment on the mere fact that the motion was u n o p p o s e d ," the court "need not sua sponte review all of the evidentiary materials on file at th e time the motion is granted." United States v. One Piece of Real Prop., 5800 S.W. 4th

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Ave., Miami, Fla., 363 F.3d 1099, 1101 (11th Cir. 2004). Instead, the court need only " e n s u re that the motion itself is supported by evidentiary materials." Id. The evidence s u b m itte d in support of Traveler's motion for summary judgment ­ the affidavit of Michael F . Burkhardt and the General Agreement of Indemnity ­ was the only evidence before the c o u rt when it granted the motion. (Doc. # 31, Exs. 1-2.) To the extent Defendants argue that th e amount of damages was factually incorrect, rather than calculated in error, their time for d o in g so has passed. "`[A] Rule 59(e) motion [cannot be used] to relitigate old matters, raise a rg u m e n t or present evidence that could have been raised prior to the entry of judgment.'" One Piece of Real Prop., 5800 S.W. 4th Ave., Miami, Fla., 363 F.3d at 1101 (quoting M ic h a e l Linet, Inc. v. Village of Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005)). Thus, D e f e n d a n ts ' Rule 59(e) motion to alter or amend the judgment is due to be denied on this b a s is . III. CONCLUSION Based on the foregoing, it is ORDERED that Defendants' motions for relief under R u le s 60(b) and 59(e) of the Federal Rules of Civil Procedure (Docs. # 43, 46) are DENIED. D O N E this 1st day of March, 2010. /s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE

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