United States Court of Appeals
For the First Circuit
No. 98-1182
SEA-LAND SERVICE, INC.,
Plaintiff, Appellee,
v.
CERAMICA EUROPA II, INC. and
CERAMICA EUROPA HATO REY, INC.
Defendants, Appellants,
No. 98-1207
TAG/ICIB SERVICES, INC.,
Plaintiff, Appellee
v.
CERAMICA EUROPA HATO REY, INC.,
Defendant, Appellant,
and
CERAMICA EUROPA II, INC.,
Defendant
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jaime Pieras, Jr., Senior U.S. District Judge]
Before
Lynch, Circuit Judge
Hall, Senior Circuit Judge
and Lipez, Circuit Judge.
Manuel R. Suarez for appellants.
Enrique Peral, with whom Muoz, Boneta, Gonzalez, Arbona, Benitez
& Peral were on brief, for appellees.
December 1, 1998
LYNCH, Circuit Judge. In these consolidated cases, two
Puerto Rico corporations, Ceramica Europa II, Inc. and Ceramica
Europa Hato Rey, Inc. (collectively "defendants"), appeal from
the denial of their motions to set aside default judgments
under Rules 55(c) and 60(b)(4) of the Federal Rules of Civil
Procedure. We affirm, finding no abuse of discretion in the
court's denial of the Rule 55(c) motion and no error in the
court's denial of the Rule 60(b)(4) motions.
In the spring of 1996, Sea-Land Service, Inc. and
TAG/ICIB Services, Inc. (collectively "Sea-Land") filed two
suits against the defendants seeking to recover freight charges
(the "freight case") and demurrage charges (the "demurrage
case"). Professional process servers hired by Sea-Land first
attempted to deliver summons to Marco Barbarossa, the president
of both defendant corporations, at his place of business. When
that proved unsuccessful, the servers examined records filed
with the Puerto Rico Department of State and determined that
the resident agent for both corporations was Barbarossa's wife,
Myrna Ortiz. They then served Myrna Ortiz at her home on July
19, 1996.
On August 23, 1996, after default had been entered in
both cases, the defendants moved to quash the summons, arguing
that service was improper because the summons had been left at
Barbarossa's home rather than delivered personally to him. On
September 17, 1996, the defendants made the same argument in a
Rule 60(b)(4) motion to set aside a default judgment that had
been entered in the demurrage case. The court found the
affidavits of the process servers to be worthy of credence and
denied the motions to quash and the Rule 60(b)(4) motion. On
January 3, 1997, after default judgment had also been entered
in the freight case, the defendants filed two additional Rule
60(b)(4) motions, this time arguing in both the freight and
demurrage cases that Ortiz was not served and that in any case
Ortiz was not the resident agent for one of the corporations,
Ceramica Europa Hato Rey, Inc. The district court, addressing
only the first argument, rejected the motions because it found
the affidavits of the process servers to be more believable
than Ortiz's sworn statement. The defendants did not appeal
from that order.
In August and September 1997, the defendants attempted
once again to have the default judgments set aside. They filed
a motion under Rule 55(c) to set aside the default judgment in
the freight case because Sea-Land had failed to provide notice
of its application for a default judgment. Ceramica Europa
Hato Rey, Inc. also filed motions under Rule 60(b)(4) in both
cases, arguing once again that it had not been properly served
because Ortiz was not its resident agent. The district court
denied both the Rule 55(c) motion and the Rule 60(b)(4) motions
on various grounds, and this appeal ensued.
We address first the denial of the defendants' motion
under Rule 55(c). District courts enjoy broad discretion in
deciding motions to set aside a judgment under this rule, seeUnited States v. One Urban Lot Located at 1 Street A-1,
Valparaiso, Bayamon, Puerto Rico, 885 F.2d 994, 997 (1st Cir.
1989), and we review such rulings only for abuse of discretion,
see Key Bank of Maine v. Tablecloth Textile Co., 74 F.3d 349,
352 (1st Cir. 1996). We find no abuse of discretion here. The
district court acknowledged that the defendants did not receive
the notice required by Rule 55(b)(2), but concluded that there
was nonetheless no "good cause" to set aside the judgment under
Rule 55(c). The purpose of the notice requirement in Rule
55(b)(2) is to permit a party to show cause for its failure to
timely appear. Since the defendants had already tried, and
failed, to effectively explain their failure to timely appear
in their earlier motion to set aside the judgment, it would
have been senseless for the court to vacate the default
judgment in order to give the defendants yet another
opportunity. The court's refusal to engage in such a fruitless
exercise can hardly be considered an abuse of discretion.
Our review of the denial of the Rule 60(b)(4) motions
proceeds along slightly different lines. Normally the decision
to grant or deny a Rule 60(b) motion lies within the discretion
of the district court, and review is for abuse of discretion
only. See Cotto v. United States, 993 F.2d 274, 277 (1st Cir.
1993). However, the First Circuit has held that the district
court does not have discretion to deny a Rule 60(b)(4) motion
if the challenged judgment was void for lack of personal
jurisdiction. See Echevarria-Gonzalez v. Gonzalez-Chapel, 849
F.2d 24, 28 (1st Cir. 1988) ("If the judgment is void, the
district court has no discretion but to set aside the entry of
default judgment."). This suggests that denial of such a
motion should be given de novo review. Although the First
Circuit has not expressly adopted this standard of review for
the denial of Rule 60(b)(4) motions, a number of other circuits
have. See Carter v. Fenner, 136 F.3d 1000, 1005 (5th Cir.
1998), petition for cert. filed, 67 U.S.L.W. 3271 (U.S. July
21, 1998) (No. 98-571) (adopting de novo standard); Wilmer v.
Board of County Comm'rs, 69 F.3d 406, 409 (10th Cir. 1995)
(same); United States v. Indoor Cultivation Equip. from High
Tech Indoor Garden Supply, 55 F.3d 1311, 1317 (7th Cir. 1995)
(same); Export Group v. Reef Industries, Inc., 54 F.3d 1466,
1469 (9th Cir. 1995) (same); Page v. Schweiker, 786 F.2d 150,
152 (3rd Cir. 1986) (same). Because the parties did not
address the question of standard of review, we will not decide
the question here. Rather, we will assume arguendo that the
stricter de novo standard applies, while noting that our
affirmance under that standard necessarily entails that there
was no abuse of discretion.
As an initial matter, our precedent establishes that
Rule 60(b)(4) motions cannot be denied on the procedural ground
that they were not brought within a "reasonable time" as
required under Rule 60(b). Although the language of Rule 60(b)
literally applies even to motions alleging lack of personal
jurisdiction, this court has held that motions to set aside a
judgment for lack of personal jurisdiction under Rule 60(b)(4)
may be made at any time. See United States v. Boch Oldsmobile,
Inc., 909 F.2d 657, 661 (1st Cir. 1990); Precision Etchings &
Findings, Inc. v. LGP Gem, Ltd., 953 F.2d 21, 23 (1st Cir.
1992). See generally 11 C. Wright & A. Miller, Federal Practice
& Procedure 2862, 2866 (1995) (explaining exception). Thus,
the defendant's unreasonable delay in bringing the instant Rule
60(b)(4) motions nearly one year after the entry of default
judgments and nearly nine months after filing the second set of
Rule 60(b) motions does not alone provide a basis for denial.
This delay does, though, lend support to the district
court's rejection on the merits of the claim that Ortiz was not
the resident agent for one of the two defendant corporations.
If Ortiz were truly not the resident agent for Ceramica Europa
Hato Rey, Inc., it was reasonable to think the defendant would
have made this argument in its motions to quash the summons and
in its first Rule 60(b) motion. It appears in any event that
Sea-Land properly served both defendants under Section 12.01 of
the Puerto Rico Corporations Law of 1995, P. R. Laws Ann. Tit.
14, Section 3126, which permits service of process on
corporations by leaving copies of the summons and complaint at
the dwelling of any officer, director, or registered agent of
the corporation -- in this case, the dwelling of the president
of both corporations, Marco Barbarossa. Thus, we find that the
court correctly denied the Rule 60(b)(4) motions because
Ceramica Europa Hato Rey, Inc. was properly served under
either, or both, Rule 4(h)(1) and Rule 4(e)(1).
But even if service were not proper, we would affirm
for a separate reason: the fact that the defendant had already
raised this issue in the second set of Rule 60(b)(4) motions
(filed January 3, 1997) and did not appeal the denial. It is
well settled that Rule 60(b) motions may not be used as a
substitute for timely appeal. See Cotto, 993 F.2d at 278. The
same principle applies here: if Ceramica Europa Hato Rey, Inc.
wished to challenge the district court's rejection of (or the
court's failure to consider) the argument that Ortiz was not
its resident agent, it should have appealed the denial of the
motions in which it first made those arguments. Having chosen
not to appeal (or even to move for reconsideration), it cannot
expect to be able to reopen this issue in a successive Rule
60(b) motion.
Affirmed. See 1st Cir. Loc. R. 27.1.