The MRCP 60(b) Appeal

May 26, 2015 § Leave a comment

The COA’s decision in Crossley, et al. v. Moore, et al., decided April 21, 2015, addresses an important distinction between an appeal on the merits and what is reviewable in an appeal from a court’s MRCP 60(b) ruling.

In that case, the chancellor had stricken Crossley’s (the collective name for the defendants that this post will apply) answer and counterclaim due to a prolonged and obstinate refusal to cooperate and obey court orders for discovery. The judge entered a default judgment against the defendants, and set a hearing on damages. At that hearing, he heard testimony and entered a judgment against the defendants for more than $760,000 in damages, which included $26,000 in attorney’s fees. Crossley did not appeal.

Five months after entry of the judgment, Crossley filed a motion pursuant to MRCP 60(b) to set aside the judgments, claiming (1) that they never received notice of the hearing on sanctions for discovery violations, and (2) that they never received notice of hearing on the damages issue. At hearing, however, the defendants admitted that they did receive notice of the sanctions hearing, but insisted that they had not as to the damages hearing. The chancellor overruled the motion as to the sanctions hearing, leaving the default judgment intact, but granted a rehearing on the issue of damages.

Crossley appealed, arguing that the trial judge was in error in dismissing their answer and counterclaim based on sanctions.

The COA affirmed. Judge Maxwell wrote for the majority:

¶13. We begin with the discovery sanction. And the first order of business is to determine just exactly what Crossley and Templet are appealing. From their brief, they seem to argue they are appealing the merits of the August 2009 decision to strike their answer. But that decision led to a default judgment—a judgment that became final in March 2010. And this final judgment was not appealed. Nor was this judgment set aside. While the chancellor did order a new hearing on damages, Crossley and Templet acknowledge in their brief that the chancellor “refused to set aside the judgment itself.”

¶14. With the underlying default judgment left undisturbed, what Crossley and Templet are in fact appealing is the denial of their Rule 60(b) motion to set aside. See Blackmon v. W.S. Badcock Corp., Inc., 342 So. 2d 367, 371 (Ala. Civ. App. 1977) (holding that a Rule 60(b) ruling to vacate a damages award and conduct a new hearing did not confer on the movant the right to address the merits of the underlying default judgment). As we recently reiterated, this court’s “review of the denial of a Rule 60(b) motion is extremely limited.” Davis v. Vance, 138 So. 3d 961, 963 (¶1) (Miss. Ct. App. 2014). We are “not allowed to inquire into the actual merits of the underlying judgment.” Id. This is because Rule 60(b) is not a vehicle to relitigate the merits of a trial judge’s decision. Woods v. Victory Mktg., LLC, 111 So. 3d 1234, 1237 (¶13) (Miss. Ct. App. 2013). So even if the chancellor had done something that may have been reversible error had Crossley and Templet timely appealed, the fact remains that they did not appeal. And Rule 60(b) cannot be used to get around this. See Williams v. New Orleans Pub. Serv., Inc., 728 F.2d 730, 736 (5th Cir. 1984).

¶15. This court reviews the denial of their Rule 60(b) motion for abuse of discretion. Stringfellow v. Stringfellow, 451 So. 2d 219, 221 (Miss. 1984).

That’s a critical point to grasp. You can not use R60(b) as a vehicle to open the merits of the underlying judgment to appellate review. Once the deadline for appeal has past, the judgment itself is final and not reviewable on the merits. The only issue on appeal is whether the trial judge abused his or her discretion in ruling on the R60(b) motion. In this particular case, the COA ruled that the chancellor had not abused his discretion.

Another take-away from this case is that continued obstinate evasion of discovery and failure to abide by court orders for discovery have painful consequences that can radically alter the landscape of a lawsuit.

 

 

Fraud on the Court and MRCP 60(b)

January 28, 2014 § 1 Comment

What does it take to trigger relief from fraud on the court?

That’s the question I posed in a previous post dealing with the COA’s October 2, 2012, decision in the case of Rosemary Finch v. Stewart Finch.

The answer based on the COA decision was that one need merely suggest that a fraud on the court was committed, and the chancellor can take it from there. So that settles that, right? Well, not exactly. The MSSC granted cert and took another look.

In Finch v. Finch, handed down January 16, 2014, the high court affirmed the COA’s decision on the chancellor’s handling of the fraud-on-the-court issue, but remanded for further findings of fact by the trial court on other issues.

The MSSC decison, penned by Justice Pierce, is worth your time to read, because it sheds further light on the dimensions of fraud on the court, how it affects judgments, how the trial court should address it, and how you should deal with it.

What is most strking to me about this opinion, however, is how the court divided on the decision:

LAMAR, KITCHENS AND CHANDLER, JJ., CONCUR. RANDOLPH, P.J., CONCURS IN PART AND IN RESULT WITHOUT SEPARATE WRITTEN OPINION. DICKINSON, P.J., CONCURS IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN OPINION JOINED BY WALLER, C.J., KING AND COLEMAN, JJ.; CHANDLER, J., JOINS IN PART.

Four justices joined entirely in the opinion: Pierce, Lamar, Kitchens, and Chandler. Randolph added a fifth concurrence “in part and in result.” The dissent garnered five votes also: Dickinson, Waller, King, and Coleman. Chandler added a fifth vote, “in part.” Neither Justice Randolph nor Justice Chandler wrote an opinion explaining their concurrence or dissent in part, so we do not know enough to understand their rationales. Apparently, under the MSSC internal procedures, a tie vote goes in favor of the justice who wrote the original opinion. In his dissent, Justice Dickinson referred to this as a “plurality opinion.”

I found Justice Dickinson’s dissent to be forceful and persuasive. He questioned whether due process had been violated, and he found the proof of actual fraud lacking. He was not successful, though, in selling his opinion to a majority. So the law of Mississippi in cases involving fraud on the court remains as I described it in that previous post:

… all that was necessary in this case was to give the chancellor a suggestion that there may have been a fraud on the court, and she picked it up and ran with it. The chancellor has broad, equitable power when it comes to relief under MRCP 60(b), which the court can exercise on its own motion. In this particular case the problem was fraud, but 60(b) vests the court with the same equitable powers to address mistake, “or any other reason justifying relief from judgment …”

Relief Pending an Appeal

November 6, 2013 § 2 Comments

We’ve talked here before about the concept that the trial court loses jurisdiction during an appeal to amend, modify or even reconsider its judgment.

That rule, however, is not absolute.

In the case of McNeese v. Grant, decided by the MSSC on October 10, 2013, the appellate court was called upon to decide whether the chancellor had erred when he ruled that a R60(b) motion was untimely filed, and that the trial court had no jurisdiction, because the movant, Kenton McNeese, had perfected an appeal from the judgment that was the subject of the motion. Here’s what the MSSC said in its opinion written by Chief Justice Waller:

¶7. Ordinarily, once a notice of appeal is filed, jurisdiction transfers from the trial court to the appellate court, thereby removing the trial court’s authority to amend, modify, or reconsider its judgment. Corporate Mgmt., Inc. v. Greene County, 23 So. 3d 454, 460 (Miss. 2009) (citations omitted). However, Kenton requested relief under Rule 60(b) of the Mississippi Rules of Civil Procedure.

¶8. This Court has explained that “the adoption of Miss. R. Civ. P. 60 conferred ‘limited concurrent jurisdiction on the trial court to grant relief from a judgment even though an appeal has been perfected.’” Griffin v. Armana, 679 So. 2d 1049, 1050 (Miss. 1996) (citing In re Estate of Moreland v. Riley, 537 So. 2d 1345, 1347 (Miss. 1989) (citation omitted)). Rule 60(b) allows a party to seek relief from a judgment or order in instances of “mistake, inadvertence, newly discovered evidence, fraud, etc.” M.R.C.P. 60(b). “So long as [Kenton] complied with the requirements of Rule 60(b), perfection of his appeal did not divest the trial judge of authority to vacate [his] judgment.” Griffin, 679 So. 2d at 1050. A party may file his Rule 60(b) motion directly with the trial court not more than six months after the judgment[;] however, once “the record has been transmitted to the appellate court and the action remains pending therein,” leave to make the motion must be obtained from the appellate court. M.R.C.P. 60(b).

The judge had ruled that Kenton’s motion was untimely filed, based on the language of MRAP 4(d), which reads, in part:

If any party files a timely motion of a type specified immediately below the time for appeal for all parties runs from the entry of the order disposing of the last such motion outstanding. This provision applies to a timely motion under the Mississippi Rules of Civil Procedure. . . (5) for relief under Rule 60 if the motion is filed no later than 10 days after the entry of judgment. A notice of appeal filed after announcement or entry of the judgment but before disposition of any of the above motions is ineffective to appeal from the judgment or order, or part hereof, specified in the notice of appeal, until the entry of the order disposing of the last such motion outstanding. Notwithstanding the provisions of Appellate Rule 3(c), a valid notice of appeal is effective to appeal from an order disposing of any of the above motions. [Emphasis added]

The italicized language would seem to impose a 10-day limitation on the filling of the motion, as the chancellor ruled. The Supreme Court, however, disagreed, saying at ¶9, “This Court finds that Rule 4(d) applies to the suspension of the deadline by which to file a Notice of Appeal and does not create a deadline by which to file a Rule 60(b) motion.”

I recommend that you read the opinion, because there are some other aspects of interest in this pro se appeal. If you handle any appeals, you need to be familiar with this case.

This is, by the way, Kenton’s second pro se appeal. You can read about his first effort here.

 

 

WHAT DOES IT TAKE TO TRIGGER RELIEF FROM FRAUD ON THE COURT?

October 10, 2012 § 4 Comments

Basically, all you have to do is bring it to the court’s attention, and the judge can do the rest. That’s what the COA decision in Finch v. Finch, handed down October 2, 2012, says.

But before we talk about Finch, let me remind you of the MSSC decision in Trim v. Trim, which held that “the intentional filing of a substantially false Rule 8.05 statement is misconduct that rises above mere nondisclosure of material facts to an adverse party,” and constitutes fraud upon the court. There is no time limit to when that issue can be raised. So to allow your client to submit a false 8.05 is to allow the judgment always and forever to be vulnerable to possibly fatal attack, as was the case in Trim.

Only two months ago the COA held in Rogers v. Rogers that if you are going to claim fraud on the court, you will have to prove all of the classic elements of fraud, or you will fall short.

Now we have Finch, further defining the scope of fraud on the court. In Finch, Rosemary and Stewart, no longer love birds, got an irreconcilable differences divorce in which the special chancellor awarded Rosemary alimony based on financial proof submitted by the parties, including Rosemary’s claim that she was paying certain marital debts that she claimed she had been paying throughout the marriage.

The special chancellor’s appointment expired, and a newly-elected chancellor took the bench and assumed responsibility for the case.

In post-divorce litigation, Stewart asked the court to find Rosemary in contempt and to modify the alimony to take into consideration that Rosemary had “falsely represented” to the court that she had been paying the marital bills. He claimed and proved that she had failed to pay an American Express account, forcing Stewart to borrow some $38,000 to pay it. Also, she had not disclosed other family debt in the divorce that affected Stewart.

The chancellor found that Rosemary’s actions were a fraud on the court, and she decided that the fraud permitted her to reduce the alimony under MRCP 60(b). Stewart had not filed a 60(b) motion, had not specifically requested any 60(b) relief, and did not specifically plead or charge fraud. Rosemary appealed, claiming that it was error for the chancellor to grant 60(b) relief sua sponte, which had the effect of setting aside and doing away with issues to which the parties had agreed and settled before the original trial.

Judge Ishee’s opinion for the court states:

¶18. While Stewart did not file a Rule 60(b) motion, he did allege fraud in the petition for contempt and modification. Furthermore, “[t]he chancery court is vested with broad equitable powers with which it is able to decide if the original order was entered by mistake, fraud of a party, or for another reason justifying relief from the judgment under Rule 60(b) and may do so upon its own motion.” Tirouda v. State, 919 So. 2d 211, 214 (¶7) (Miss. Ct. App. 2005) (citing Edwards v. Roberts, 771 So. 2d 378, 386 (¶28) (Miss. Ct. App. 2000)).

Rule 60(b) even states: “This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to set aside a judgment for fraud upon the court.” Accordingly, the chancery court did not err by finding fraud upon the court and altering the final divorce decree without Stewart filing a Rule 60(b) motion.

Rosemary also tried to claim that the fraud, if any, was on Stewart and not on the court, which argument the COA rejected, based on Trim. She argued in addition that there was inadequate proof in the record of the elements of fraud, which the COA likewise rejected, based on the proof in the record and the findings of the chancellor.

To return to my initial point: all that was necessary in this case was to give the chancellor a suggestion that there may have been a fraud on the court, and she picked it up and ran with it. The chancellor has broad, equitable power when it comes to relief under MRCP 60(b), which the court can exercise on its own motion. In this particular case the problem was fraud, but 60(b) vests the court with the same equitable powers to address mistake, “or any other reason justifying relief from judgment …”

SETTING ASIDE A DEFAULT JUDGMENT

August 2, 2012 § Leave a comment

MRCP 55(c) allows the trial judge to set aside a default judgment “for good cause shown.” MRCP 60(b) authorizes the judge to set aside a default for “mistake, newly discovered evidence, fraud, void judgment, satisfaction, or other reasons the court finds to justify setting it aside.”

In the case of American States Insurance Co. v. Rogilio, 10 So.3d 463, 467 (Miss. 2009), the court established a three-prong test for trial courts to apply in determining whether to set aside a judgment:

(1) the nature and legitimacy of a defendant’s reasons for default (i.e., whether a defendant has good cause for default), (2) whether the defendant has a colorable defense to the merits of the claim, and (3) the nature and extent of prejudice that a plaintiff would suffer if default is set aside.

In the COA case of Olive v. Malouf, decided July 24, 2012, the trial judge had denied Olive’s motion to set aside the default judgment entered against him. Judge Roberts, writing for the COA, addressed each of the American Standard elements:

  1. The nature and legitimacy of a defendant’s reasons for default. In support of his motion, Olive argued only that he did not know where to file or send a copy of a responsive pleading, despite the fact that the name and address of opposing counsel was clearly stated on the complaint. Olive offered nothing else to explain his failure to file an answer. “¶11. The Mississippi Supreme Court has declined to set aside a default judgment where ‘[n]othing in the record suggests that [a defendant] was confused about the meaning and effect of the papers served upon him,’ and there was no indication that the defendant was ‘confused about the fact that he had been sued and should respond.’ Guar. Nat’l Ins. Co. v. Pittman, 501 So. 2d 377, 388 (Miss. 1987).”
  2. Whether the defendant has a colorable defense to the merits of the claim. Olive presented nothing by way of affidavit or other sworn form of evidence that he had any meritorious defense. A party does not meet the burden of MRCP 60(b) by relying on unsubstantiated allegations that a meritorious defense exists. American Cable Corp. v. Trilogy Communications, Inc., 754 So.2d 545, 554 (Miss.App. 2000). “Despite the general preference that litigants have a trial on the merits, a defendant must still ‘set forth[,] in affidavit form[,] the nature and substance of [his] defense.” Olive at ¶14, citing H & W Transfer & Cartage Service v. Griffin, 511 So.2d 895, 899 (Miss. 1987). This is the prong that the appellate courts have held to carry the most weight.
  3. The nature and extent of prejudice that a plaintiff would suffer if default is set aside. Olive presented nothing in support of this element, and the court found that Malouf would suffer prejuddice, especially considering that he had prevailed on the other two prongs.

To prevail on a Rule 55(c) or 60(b) argument, then, you will have to do some groundwork to support your claim. Mere allegations will not carry the day. You will have to file affidavits and address each prong of the American Standard test. If you fail to do so, you won’t prevail on appeal.

MORE PROOF THAT CUTTING CORNERS DOES NOT PAY

March 8, 2011 § 1 Comment

Tangela Berry and Ricky Banks were guardians of their son Ryheim Banks.  In June, 2004, they filed suit in circuit court against several medical defendants alleging negligence.

They reached a settlement with one of the defendants, Laura Carpenter, for $25,000, to be apportioned 1/3 each to Berry, Banks and Ryheim, after deduction of a $10,000 attorney’s fee.

When the settlement was presented to the chancellor, the guardians’ attorney did not call any witnesses.  Instead, he made an announcement to the court that Carpenter’s involvement was “negligible,” and that the settlement was “appropriate.”  He did, apparently, question Berry and Banks about whether they understood they were releasing their claims against the defendant, which they did, and whether the were following the advice of their attorneys in settling Ryheim’s claim, which they also did.  There was no testimony regarding the nature or extent of the injuries, or the substance of the claims, or the damages incurred.  The chancellor signed a judgment approving the settlement on August 5, 2005, including the language that the settlement was a “fair and reasonable settlement of a doubtful claim and it is in the best interest of the minor and all others.”

In July 2008, the guardians again appeared in court with new counsel asking the chancellor to set aside the prior settlement because the former attorney had not prosecuted the claim and had done no discovery.  They said that they had learned that Carpenter had a $1,000,000 insurance policy that would have afforded coverage that was not disclosed to them at the time of the settlement.  Their motion was brought under MRCP 60(b).

The chancellor did set aside the 2005 judgment pursuant to MRCP 60(b), finding that there was insufficient evidence at the 2005 hearing to establish that the settlement was fair and reasonable and in the best interest of the minor.

Carpenter appealed, charging that the trial court erred:  in not including specific findings of fact and conclusions of law in his order; and that it was an abuse of discretion to set aside a judgment under MRCP 60 after three years had elapsed from the date of the judgment.

In the case of Carpenter v. Berry, et al., decided February 10, 2011, the Mississippi Supreme Court upheld the chancellor’s ruling.

As for the claim that the conclusions were unsupported, the appellate court found that the chancellor’s findings were sufficient, considering that the matter was not complex.

With respect to the abuse of discretion claim, the court noted that the chancellor did not specify that part of MRCP 60 under which he proceeded.  The court found MRCP 60(b)(5) applicable since that rule allows a judgment to be set aside where “it is no longer equitable that the judgment have prospective application.”

The court also found MRCP 60(b)(6) applicable, since it provides that the chancellor may grant relief “for any other reason justifying relief from the judgment.”  MRCP 60(b)(6) “is reserved for extraordinary circumstances,” and is “a grand reservoir of equitable power to do justice in a particular case.  Briney v. USF & G, 714 So.2d 962, 966 (Miss. 1998).

The Supreme Court noted that the trial judge must consider several factors in determining whether to grant 60(b)(6) relief:

  1. That final judgments should not lightly be disturbed;
  2. That a 60(b)(6) motion is not to be used as a substitute for an appeal;
  3. That the rule should be liberally construed so as to achieve substantial justice;
  4. Whether the motion was made within a reasonable time;
  5. Whether the movant had been afforded a fair opportunity to present claims or defenses, if the judgment was rendered after a trial on the merits;
  6. Whether there are any intervening equities that would make it inequitable to grant relief; and
  7. Any other factors relevant to the justice of the judgment under attack.

[Note:  one factor relating solely to dafault judgments was omitted by the court, with a reference]  M.A.S. v. Miss. Department of Human Services, 842 So.2d 527, 530 (Miss. 2003).

In this particular case, the Supreme Court found that this was no ordinary 60(b) case because it involved the rights of a minor under a guardianship.  The court said:

“It is the inescapable duty of [chancery] court and or the chancellor to act with constant care and solicitude towards the preservation and protection of the rights of infants and persons non compos mentis.  The court will take nothing as confessed against them; will make for them every valuable election; will rescue them from faithless guardians, designing strangers and even unnatrual parents, and in general will and must take all necessary steps to conserve and protect the best interest of these wards of the court.  The court will not and can not permit the rights of an infant to be prejudiced by a waiver, or omission or neglect or design of a guardian, or of any other person, so far as within the to prevent or correct.  Griffin, Chancery Practice, §§ 45, 360, 530, 533.  All persons who deal with guardians or with courts in respect to the rights of infants are charged with the knowledge of the above principles, and to act contrary thereof at their peril.”

The court also noted that the procedures prescribed for settling a minor’s claims as set out in MCA § 93-13-59 and UCCR 6.10 had not been followed in the original proceeding before the court.

The timeliness claim was disposed of by finding that timeliness under 60(b)(6) depends on the facts of the case, and that the chancellor did not abuse his diecretion in this one.

Finally the Supreme Court at ¶ 22 held that “The chancellor properly exercised the discretion afforded by Rule 60(b)(6) by finding that the need to fairly protect the ward’s interests outweighed the need for finality.”

Moral of the story:  Don’t take shortcuts; faithfully follow the rules and the statutes.  It only takes a little more effort and time to do it right.  If a proper record had been made originally, that order might have been a lot more difficult to attack.  You can find an outline for how to handle a minor’s settlement here.

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