United States Court of Appeals
For the First Circuit
No. 02-1885
THE FARM CREDIT BANK OF BALTIMORE,
Plaintiff, Appellee,
v.
ANGEL FERRERA-GOITIA ET AL.,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Raymond L. Acosta, Senior U.S. District Judge]
Before
Selya, Circuit Judge,
Coffin, Senior Circuit Judge,
and Lynch, Circuit Judge.
Carlos A. Piovanetti Rivera on brief for appellants.
Igor I. Dominguez Perez, Johnny Rivera, and Igor I. Dominguez
Law Offices on brief for appellee.
January 17, 2003
SELYA, Circuit Judge. The Farm Credit Bank of Baltimore
(the Bank) sued Angel Ferrera-Goitia, his wife Annie Bosch-Velez,
and their conjugal partnership (collectively, the appellants) to
foreclose a mortgage and satisfy an ancillary debt. Nearly six and
one-half years after the district court entered a default judgment
against them and two and one-half years after the court confirmed
the foreclosure sale, the appellants appeared for the first time
and sought relief under Fed. R. Civ. P. 60(b)(4). The district
court denied the appellants' motion as untimely and unjustified.
We affirm the district court's order.
The Bank commenced the underlying action on April 12,
1994, alleging that the appellants had failed to make timely
mortgage payments. The Bank filed an amended complaint as of right
on July 12, 1994. See Fed. R. Civ. P. 15(a). The appellants did
not respond, but, rather, sought the protection of the bankruptcy
court. Their first bankruptcy petition, filed on July 26, 1994,
resulted in an automatic stay of the district court proceeding.
See 11 U.S.C. § 362. The Bank moved for relief from the stay. The
appellants neither opposed the motion nor attended the hearing
thereon. The bankruptcy court, ruling ore sponte, lifted the stay
on January 12, 1995. Approximately three weeks later, the court
dismissed the bankruptcy petition as filed in bad faith and barred
the appellants from refiling for a period of one year. In re
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Ferrera-Goitia & Bosch-Velez, No. 94-03895 (Bankr. D.P.R. Feb. 7,
1995) (unpublished order).
The scene shifted back to the district court. On August
9, 1995, that court, at the Bank's instance, issued summonses to
the appellants. Despite the effectuation of service of process,
the appellants still did not respond to the amended complaint.
On December 19, 1995 — long after the answer to the
amended complaint was due — the district court entered a default
judgment against the appellants. See Fed. R. Civ. P. 55(b)(2).
Approximately two months later, the court granted the Bank's motion
for execution of judgment. A writ of execution issued on March 8,
1996, authorizing a sale of the mortgaged premises at public
auction. A special master appointed by the district court
scheduled an auction sale for April 20, 1996.
On March 29, 1996, the appellants filed a second
bankruptcy petition, thus halting the planned auction. The
bankruptcy case lingered for roughly twenty-one months (i.e., until
December 24, 1997) before the appellants voluntarily dismissed it.
See Fed. R. Bankr. P. 1017. At that point, the Bank successfully
petitioned the district court for leave to resume the proceedings.
The court obliged, and a new auction was set for March 18, 1998.
On that date, the appellants filed a third bankruptcy petition,
once again halting the scheduled sale. Three months later, the
appellants voluntarily dismissed that petition.
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The Bank remained resolute. It repaired to the district
court and arranged to reschedule the public auction for October 13,
1999. The auction was twice postponed (the reasons are extraneous)
and eventually went forward on October 27, 1999. The Bank
thereafter presented evidence that it had satisfied the requisite
formalities (including the publication requirements of P.R. R. Civ.
P. 51.8 and the requirement for sending notice to the appellants
and the junior lienholder) and, on November 15, 1999, the district
court confirmed the sale.
Nothing of moment occurred for two and one-half years.1
At that juncture, the appellants filed a motion under Fed. R. Civ.
P. 60(b)(4) to set aside the order confirming the sale. The
district court promptly denied the motion as "untimely and
unjustified." This appeal ensued.
District courts enjoy considerable discretion in
resolving motions brought under Rule 60(b) of the Federal Rules of
Civil Procedure. We typically review decisions of that sort only
for abuse of discretion.2 Cotto v. United States, 993 F.2d 274,
1
On January 27, 2000, the successor in interest to the junior
lienholder brought a collection action against the appellants in
the federal district court. On July 12 of that year, the
appellants served a third-party complaint against the Bank alleging
that the sale of the mortgaged property was null and void. This
third-party complaint ultimately was dismissed for lack of subject
matter jurisdiction. The details of that disposition are
immaterial for present purposes.
2
There is some basis in the case law for employing a less
deferential standard of review as to decisions made under Rule
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277 (1st Cir. 1993); Teamsters, Chauffeurs, Warehousemen & Helpers
Union v. Superline Transp. Co., 953 F.2d 17, 19 (1st Cir. 1992).
We will find an abuse of discretion when we are convinced that the
district court has made an error of law or has reached a plainly
erroneous decision.
As a general matter, Rule 60(b), the text of which is
reprinted in the margin,3 seeks to balance the importance of
60(b)(4). See, e.g., Sea-Land Serv., Inc. v. Ceramica Europa II,
Inc., 160 F.3d 849, 852 (1st Cir. 1998) (applying de novo standard
of review although not expressly adopting it). But see United
States v. Boch Oldsmobile, Inc., 909 F.2d 657, 660 (1st Cir. 1990)
(applying abuse of discretion standard in the Rule 60(b)(4)
context); Limerick v. Greenwald, 749 F.2d 97, 99 (1st Cir. 1984)
(same). The answer ultimately may depend on the nature of the
question presented. Here, however, the appellants argue in terms
of abuse of discretion and thereby forfeit any entitlement to a
less deferential standard of review. See United States v. Zannino,
895 F.2d 1, 17 (1st Cir. 1990). We add, moreover, that we would
reach the same result in this case regardless of which standard
governed.
3
The rule states:
On motion and upon such terms as are just, the court may
relieve a party or a party's legal representative from a
final judgment, order, or proceeding for the following
reasons:
(1) mistake, inadvertence, surprise, or excusable
neglect;
(2) newly discovered evidence which by due diligence
could not have been discovered in time to move for a new
trial under Rule 59(b);
(3) fraud (whether heretofore denominated intrinsic or
extrinsic), misrepresentation, or other misconduct of an
adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or
discharged, or a prior judgment upon which it is based
has been reversed or otherwise vacated, or it is no
longer equitable that the judgment should have
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finality against the desirability of resolving disputes on the
merits. Teamsters, 953 F.2d at 19. The rule encompasses six bases
for potential relief. Motions made under clauses (1)-(3) must be
made within one year following the entry of the challenged order or
judgment. Motions made under clauses (4)-(6), however, are not so
strictly cabined; such motions need only be made within a
reasonable time. What is "reasonable" depends upon the
circumstances of the particular case. Cotto, 993 F.2d at 280; cf.
Sierra Club v. Sec'y of Army, 820 F.2d 513, 517 (1st Cir. 1987)
(paraphrasing Emerson and ruminating that "reasonableness is a
mutable cloud, which is always and never the same"). The
circumstances to be considered include the length of the delay, the
justification for it, and the prejudice (if any) associated with
the granting of relief. See United States v. Boch Oldsmobile,
Inc., 909 F.2d 657, 661 (1st Cir. 1990); In re Pac. Far East Lines,
Inc., 889 F.2d 242, 249 (9th Cir. 1989).
In this case, the length of the delay is extreme. Cf.
Cotto, 993 F.2d at 280 (indicating that a motion filed sixteen
months after the entry of judgment was not filed within a
prospective application; or
(6) any other reason justifying relief from the operation
of judgment.
The motion shall be made within a reasonable time, and
for reasons (1), (2), and (3) not more than one year
after the judgment, order, or proceeding was entered or
taken.
Fed. R. Civ. P. 60(b).
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reasonable time). The district court entered a default judgment
against the appellants on December 19, 1995, and confirmed the sale
of the mortgaged premises on November 15, 1999 — but the appellants
did not file their Rule 60(b)(4) motion until May 24, 2002. By any
measure, that motion was untimely. Moreover, the delay did not
stem from ignorance of what had transpired. After all, the
appellants brought a third-party complaint against the Bank on July
12, 2000, in which they recited the pertinent facts and asserted
that the auction sale was null and void. See supra note 1.
Indeed, the appellants attempt to use that third-party
complaint to circumvent Rule 60(b)(4)'s temporal requirement. As
a general rule, however, actions taken in a wholly separate
proceeding cannot effectively substitute for the actions required
by the express terms of Rule 60(b). Cf. Torre v. Cont'l Ins. Co.,
15 F.3d 12, 15 (1st Cir. 1994) ("The fact that settlement
negotiations are in progress does not excuse a litigant from making
required court filings."). And in all events, the appellants
served the third-party complaint some fifty-seven months after the
entry of the default judgment and some eight months after the entry
of the order confirming the sale of the mortgaged premises. Even
if that pleading was entitled to credit in this proceeding — and we
emphasize that it is not — it can hardly be viewed as having been
filed within a reasonable time.
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If more were needed — and we do not think that it is — we
note that the appellants offer no plausible justification for their
dilatoriness. The record establishes beyond hope of contradiction
that the appellants were personally served with process and — as
their machinations in the bankruptcy court eloquently attest — they
were aware of the Bank's suit from the outset. The inference is
inescapable that their decision not to defend was fully calculated.
Litigants who embark on a course of conduct designed to evade legal
responsibility are poorly positioned to ask for discretionary
relief when their tactics backfire.
We note, too, that the Bank would be severely prejudiced
if we were to reopen the case. The Bank has spent over eight years
litigating what should have been a routine mortgage foreclosure
action. It has chased the appellants from court to court — and
back again. It obviously has expended considerable time and
resources, due in large part to the appellants' maneuverings. To
grant relief to the appellants now would be tantamount to
penalizing the Bank for its diligence and, in the bargain, would
threaten the rights of an innocent third party.4 These
considerations argue persuasively for denial of the appellants'
Rule 60(b)(4) motion.
4
Although the Bank purchased the mortgaged premises at the
foreclosure sale, it then resold the property to an unrelated
person.
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The appellants make a last-ditch attempt to seize the
day. They asseverate that the district court failed properly to
acquire personal jurisdiction over them, and, accordingly, the
judgment is utterly void and no time limit can be applied to
pretermit their challenge.
This argument has a patina of plausibility. Since a void
judgment is a legal nullity, there is ordinarily no need to request
relief from it (and, thus, no time limit within which to request
relief). See United States v. Berenguer, 821 F.2d 19, 22 (1st Cir.
1987). A judgment is not void, however, simply because it may be
technically defective or incorrect in some respect. Boch
Oldsmobile, 909 F.2d at 661; Lubben v. Selective Serv. Sys. Local
Bd. No. 27, 453 F.2d 645, 649 (1st Cir. 1972). There are only two
sets of circumstances in which a judgment is void (as opposed to
voidable). The first is when the rendering court lacked either
subject matter jurisdiction or jurisdiction over the defendant's
person. Boch Oldsmobile, 909 F.2d at 661. The second is when the
rendering court's actions so far exceeded a proper exercise of
judicial power that a violation of the Due Process Clause results.
Id.
Subject matter jurisdiction is not in issue here; the
record unambiguously reflects both diversity of citizenship and the
existence of the requisite amount in controversy. See 28 U.S.C. §
1332(a). We turn, therefore, to the remaining possibilities.
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Personal jurisdiction usually is obtained over a
defendant by service of process. Jardines Bacata, Ltd. v. Diaz-
Marquez, 878 F.2d 1555, 1559 (1st Cir. 1989) (explaining that "[i]n
the ordinary course, the district court acquires jurisdiction over
a defendant only by service of process"). A defendant may,
however, waive service — and waiver can form a valid basis for
personal jurisdiction. See, e.g., Gen. Contr. & Trading Co. v.
Interpole, Inc., 940 F.2d 20, 22 (1st Cir. 1991). Such a waiver
may be either express or implied. See Neirbo Co. v. Bethlehem
Shipbldg. Corp., 308 U.S. 165, 168 (1939); Marcial Ucin, S.A. v. SS
Galicia, 723 F.2d 994, 996 (1st Cir. 1983). The Civil Rules
incorporate the principle of implied waiver. They provide that a
defense based on personal jurisdiction will be deemed waived if not
made by a party's first-filed motion or included in her initial
responsive pleading. See Fed. R. Civ. P. 12(h)(1).
Here, the appellants insist that personal jurisdiction is
wanting because the summonses of record are deficient in that they
do not indicate the time or place of service,5 and, moreover, that
a copy of the complaint was not delivered along with them. But the
appellants failed to make an argument based on lack of personal
jurisdiction in the district court proceeding. The first and only
pleading that they filed in the district court was their Rule
5
The appellants also allege that the summonses do not state
the date of service. The record belies this allegation.
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60(b)(4) motion. In it, the appellants contested the validity of
the district court's confirmation order based upon the Bank's
alleged failures (1) properly to give notice of the public sale,
and (2) properly to name the junior lienholder as a party. The
appellants did not suggest an absence of jurisdiction over their
persons, nor did they raise that issue at any subsequent time in
the district court.
This omission bars the appellants from asserting, in this
venue, a supposed lack of personal jurisdiction. See Teamsters,
935 F.2d at 21 ("If any principle is settled in this circuit, it is
that absent the most extraordinary circumstances, legal theories
not raised squarely in the lower court cannot be broached for the
first time on appeal."); Clauson v. Smith, 823 F.2d 660, 666 (1st
Cir. 1987) (collecting cases).6 Thus, we need not determine
whether the relatively minor departures from the requirements of
D.P.R. L.R. 4 alleged by the appellants were sufficient to deprive
the district court of in personam jurisdiction.
The appellants also suggest that the district court's
actions patently exceeded its power. To support this extravagant
suggestion, the appellants charge that the foreclosure proceedings
were fraught with material defects. The defects that they cite —
6
While extraordinary circumstances occasionally may justify an
exception to the raise-or-waive rule, see, e.g., United States v.
LaGuardia, 902 F.2d 1010, 1012-13 (1st Cir. 1990), there are none
here. The appellants plainly had actual notice of the case against
them from the very outset.
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if defects at all — are technical in nature and do not evince any
usurpation of power.7 In short, the appellant received all the
process that was due.
We need go no further. "In our adversary system of
justice, each litigant remains under an abiding duty to take the
legal steps that are necessary to protect his or her own
interests." Cotto, 993 F.2d at 278. The appellants breached this
duty. They were thus the authors of their own misfortune, and the
district court did not err in refusing to extricate them from their
self-contrived predicament.
The order of the district court denying relief under Rule
60(b)(4) is affirmed. Costs are taxed in favor of the appellee.
7
To illustrate, these "material defects" include the Bank's
failure to name the junior lienholder as a party to its suit and
its ostensible failure to give notice of the auction in strict
accordance with Puerto Rico law.
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