United States Court of Appeals
For the First Circuit
No. 05-2489
JO ELLEN BLANCHARD,
Plaintiff, Appellee,
v.
CARLOS A. CORTÉS-MOLINA,
Defendant, Appellant,
JANE DOE; CONJUGAL PARTNERSHIP CORTÉS-DOE;
RELIANCE INSURANCE COMPANY; INSURANCE CARRIER ABC AND/OR XYZ;
RICHARD ROE; JOHN SMITH,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Boudin, Chief Judge,
Torruella, Circuit Judge,
and Cyr, Senior Circuit Judge.
Eugene F. Hestres, with whom Alicia M. Santos-Irizarry and
Bird Bird & Hestres, P.S.C., were on brief, for appellant.
Juan R. Requena-Dávila, with whom Álvaro R. Calderón, Jr.
L.L.P., was on brief, for appellee.
June 29, 2006
TORRUELLA, Circuit Judge. This case concerns the
collision of two boats and arises under our admiralty jurisdiction.
See 28 U.S.C. § 1333. Plaintiff Jo Ellen Blanchard sued Defendants
Carlos A. Cortés-Molina, his wife Ivonne Ortiz, and their conjugal
partnership in tort.1 Defendants failed to appear, and the court
below granted a default judgment of $265,000 in favor of Plaintiff.
Defendant Cortés made his first appearance after the U.S. Marshals
arrested his boat, the M/V Bramela, to satisfy the default
judgment. Following several motions by Defendants, the court below
reduced the amount of the default judgment to $135,000 but refused
to set aside the default judgment or vacate the judicial sale and
transfer of title of the M/V Bramela. Defendants now appeal,
arguing that the default judgment is void and that the default
judgment cannot be executed against the M/V Bramela. We affirm.
I. Background
In her complaint, Plaintiff alleges the following
sequence of events. On July 29, 2001, Plaintiff and her eight-
year-old daughter were aboard her boat, a nine-meter catamaran
called the Quick Step, moored off the coast of Culebra, an island
near the east coast of Puerto Rico. A squall hit the bay where the
boat was moored. The M/V Bramela, a forty-foot motor vessel owned
1
Plaintiff did not know Ortiz's name at the time she filed suit
and used the name Jane Doe in her complaint. Plaintiff voluntarily
dismissed the suit against Reliance Insurance Co., an insurer of
Defendants' boat.
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by one or more of the Defendants, lost its anchor and began to
drift in the bay. The M/V Bramela drifted toward the Quick Step,
and because the captain of the M/V Bramela was not paying
attention, the M/V Bramela collided with the Quick Step. From the
impact, Plaintiff was "thrown down the stairs while hanging on to
the rail above." The M/V Bramela continued to drift towards the
rocky shore, and one of its crew threw a line to the Quick Step to
prevent a collision with the shore. The crew of the M/V Bramela
started the engine and departed without returning to the scene of
the accident.
On July 8, 2002, Plaintiff filed suit against Defendants
for negligence. She requested physical and emotional damages for
herself, estimated to be not less than $300,000; emotional damages
for her daughter, estimated to be not less than $50,000; and
damages to the Quick Step of $35,000. Plaintiff served Cortés but
did not serve Ortiz, and Defendants did not respond to the
complaint. Plaintiff consented to proceeding before a magistrate
judge. On September 3, 2002, the clerk entered Cortés's default
but did not enter a default against the other Defendants. On
March 30, 2004, the court held a hearing on damages in which
Plaintiff and Plaintiff's physician testified. The court granted
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a default judgment of $265,000 against Cortés, Ortiz, and their
conjugal partnership.2
Plaintiff obtained a certified copy of the M/V Bramela's
registration from the Puerto Rico Department of Natural Resources,
which listed Cortés as the sole owner. On September 8, 2004, the
court granted an order to execute the judgment against the M/V
Bramela. After U.S. Marshals arrested the M/V Bramela, Defendants
made their first appearance in this case. On April 15, 2005,
Defendants submitted a motion in opposition to the arrest of the
M/V Bramela and the default judgment. This motion was on behalf of
Cortés, Ortiz, and their conjugal partnership, and it explicitly
stated that they were not submitting themselves to the court's
jurisdiction.3 The court denied Defendants' motion.
On August 5, 2005, with new counsel, Defendants moved to
vacate the default judgment. The court denied the motion but
amended the judgment to deduct the award of $100,000 for lost
future income because Plaintiff had not requested damages for lost
future income in her complaint. On August 19, 2005, Defendants
moved for reconsideration of the denial of their motion to set
2
The court granted $75,000 for physical damages, $25,000 for
emotional damages, $100,000 for lost future income, $35,000 for
damages to the Quick Step, and $30,000 for past and future medical
care.
3
We do not consider whether this motion gave the court personal
jurisdiction over Ortiz, as it is not necessary for the outcome of
this case.
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aside the default judgment. The court also denied this motion but
again amended the judgment to deduct the award of $30,000 for
future medical care (although the $30,000 was originally granted
for past and future medical care). The court found that this was
an award of special damage and that Plaintiff had failed to comply
with the pleading requirements of Federal Rule of Civil Procedure
9(g).4 The court also found that the application of the default
judgment against Ortiz and the conjugal partnership was a clerical
mistake as they had never been entered in default. The court thus
amended the default judgment to apply against only Cortés.5
Defendants persisted and submitted another motion for
reconsideration on September 9, 2005, which the court again denied.
On September 13, 2005, Ortiz filed a counterclaim for wrongful
attachment and deprivation of proprietary rights over the M/V
Bramela. The court denied the counterclaim, stating that such a
claim must be brought in a new civil action. Defendants are not
appealing the dismissal of their counterclaim.
II. Validity of the Default Judgment
Defendants concede that Plaintiff properly served Cortés
with process by July 30, 2002; that the district court had personal
jurisdiction over Cortés and subject matter jurisdiction over the
4
Rule 9(g) requires that "[w]hen items of special damage are
claimed, they shall be specifically stated."
5
Plaintiff does not contest these three amendments to the
original default judgment.
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case; that the district court clerk entered Cortés's default on
September 3, 2002; that the district court granted a default
judgment against Cortés on March 30, 2004; and that Cortés made no
appearance during this time. Nevertheless, Defendants argue that
the district court erred in refusing to vacate the default judgment
against Cortés.
A. Failure to Serve Ortiz
Defendants first argue that Plaintiff's failure to serve
Ortiz renders the judgment against Cortés void. According to
Defendants, the default judgment against Cortés will necessarily
affect community property owned jointly by Cortés and Ortiz, and
thus Ortiz is an indispensable party to this case under Puerto Rico
law. In a case arising under our federal question jurisdiction, we
considered "whether an otherwise valid default judgment entered
against [one spouse] is rendered void due to the failure of the
United States to join [the other spouse] and the conjugal
partnership" and determined that "[i]t is not." See United States
v. Berenguer, 821 F.2d 19, 22 (1st Cir. 1987).6 While in this case
the Plaintiff is a person rather than the United States, we do not
see this as a relevant distinction.
Further, "federal courts have consistently held that in
diversity cases the question of joinder under Rule 19 of the
6
For some unexplained reason, Defendants fail to mention this
case.
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Federal Rules of Civil Procedure is governed by federal law."
Shetter v. Amerada Hess Corp., 14 F.3d 934, 937 (3d Cir. 1994)
(internal quotation marks omitted). Although, "state law may
provide assistance in determining the interests of the party in
question[,] ultimately the court's decision as to whether the party
should be joined is a matter of federal law." Id. Nevertheless,
Defendants have not made any argument under Rule 19.
Of course, this case arises under our admiralty
jurisdiction. The Federal Rules of Procedure, however, govern
actions in admiralty as well as other federal civil actions. Fed.
R. Civ. P. 1. We thus decline to hold that Ortiz is an
indispensable party in this suit.
B. Motion to Vacate
Under Rule 60(b)(6) of the Federal Rules of Civil
Procedure, a district court "may relieve a party . . . from a final
judgment" for any "reason justifying relief from the operation of
the judgment." Defendants contend that the district court erred in
denying Defendants' request for relief from the default judgment
under Rule 60(b)(6). We review for abuse of discretion. Claremont
Flock Corp. v. Alm, 281 F.3d 297, 299 (1st Cir. 2002).
Other grounds for relief from judgment, such as Rule
60(b)(1), which allows relief from judgment for reasons of
"mistake, inadvertence, surprise, or excusable neglect," must be
sought within one year of the judgment. Fed. R. Civ. P. 60(b). By
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contrast, relief under Rule 60(b)(6) includes no such time limit.
Id. "These provisions are mutually exclusive, and thus a party who
failed to take timely action due to 'excusable neglect' may not
seek relief more than a year after the judgment by resorting to
subsection (6)." Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.
P'ship, 507 U.S. 380, 393 (1993). "To justify relief under
subsection (6), a party must show extraordinary circumstances
suggesting that the party is faultless in the delay." Id.
(internal quotation marks omitted). "If a party is 'partly to
blame,' Rule 60(b)(6) relief is not available to that party;
instead, 'relief must be sought within one year under subsection
(1) and the party's neglect must be excusable.'"7 Claremont, 281
F.3d at 299 (quoting Pioneer, 507 U.S. at 393).
In an attempt to show that he was not at fault, Cortés
states that "he was under the incorrect belief that his insurance
company was taking care of the proceedings." This is clearly
insufficient. Cortés had the obligation to confirm with his
insurance company that it was defending him, and his failure to do
so is "attributable to [his] own negligence and not to
extraordinary circumstances beyond [his] control." Id. at 300.
7
Rule 60(b)(1) allows for relief for "mistake, inadvertence,
surprise, or excusable neglect." Defendants cannot seek relief
under Rule 60(b)(1) since they did not act within one year of the
default judgment.
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C. Due Process
After granting a default judgment in favor of Plaintiff,
the district court made three separate amendments to the original
default judgment entered on March 30, 2004 against Cortés, Ortiz,
and their conjugal partnership for $265,000. First, on August 17,
2005, the court amended the judgment by deducting the $100,000
award for Plaintiff's lost future income. Plaintiff had not
requested such damages in her complaint and was thus prevented from
receiving such damages by Rule 54(c) of the Federal Rules of Civil
Procedure.8 Second, on September 8, 2005, the court further
deducted from the judgment $30,000 awarded for past and future
medical care. The court found that the Plaintiff had failed to
specifically state this special damage as required by Federal Rule
of Civil Procedure 9(g). Third, also on September 8, 2005, the
court vacated the default judgment against Ortiz and the conjugal
partnership. The court noted that no default was entered for these
two parties as required by Federal Rule of Civil Procedure 55(a).
All three of these amendments were in Defendants' favor,
and Defendants are not asking that we vacate these amendments.
Rather, Defendants argue that their due process rights were
violated by the errors in the original judgment and that the only
solution is to render the entire default judgment null and void.
8
Rule 54(c) states that "[a] judgment by default shall not be
different in kind from or exceed in amount that prayed for in the
demand for judgment."
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Other circuits have noted that "although most motions to declare a
judgment void rest on claims that the court lacked jurisdiction
over the parties, the subject matter, or both, a judgment is
equally void if a court with jurisdiction has acted in a manner
inconsistent with due process of law." See Beller & Keller v.
Tyler, 120 F.3d 21, 23 (2d Cir. 1997) (internal quotation marks
omitted). Even if we were to follow Beller & Keller, a matter we
leave open for another time, Defendants have not shown a violation
of their due process rights.
Defendants contend that the initial award of damages
violated their due process rights even though the district court
corrected the error. The magistrate judge heard evidence of
Plaintiff's damages for past and future medical care and for lost
future income. Defendants claim they were prejudiced because the
magistrate judge considered "evidence of damages that were not even
supposed to be admitted at the hearing, and which may have affected
the amount awarded for other kind[s] of damages requested by
plaintiff." We find any such prejudice unlikely and highly
speculative.
In vacating the default judgment against Ortiz and the
conjugal partnership, the court below stated that the inclusion of
these two parties in the original judgment was a clerical mistake.
See Fed. R. Civ. P. 60(a). Defendants argue that the original
default judgment was a "clear substantive error" that does not
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qualify as a clerical mistake and therefore requires vacation of
the entire default judgment. Defendants have not indicated any
prejudice from this now corrected mistake. Because Defendants are
in the exact same position as they would have been in the absence
of this mistake, their due process rights have not been violated,
and we need not address whether the mistake was clerical.9
D. Local Rule 311(3)
"We have recognized that district courts enjoy broad
latitude in adopting and administering such local rules." NEPSK,
Inc. v. Town of Houlton, 283 F.3d 1, 6 (1st Cir. 2002) (internal
quotation marks omitted). District courts may "demand adherence to
specific mandates contained in the [local] rules," id. (internal
quotation marks omitted), but cannot apply local rules
"inconsistent with applicable provisions of the Federal Rules of
Civil Procedure," Jaroma v. Massey, 873 F.2d 17, 20 (1st Cir.
1989).
At the time of the default judgment, District of Puerto
Rico Local Rule 311(3) required a person moving for an entry of
default or a default judgment to serve the defaulting party:10
9
As we discuss below, Defendants have not shown that Ortiz was
part owner of the M/V Bramela. Thus, the initial default judgment
against her has no bearing on the validity of the execution of the
judgment against the M/V Bramela.
10
The District of Puerto Rico has since rewritten the Local Rules.
The relevant portions of former Local Rule 311(3) are now embodied
in Local Rule 55:
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The movant and respondent shall serve copies
of their respective papers upon all parties on
or before the date that they are filed with
the Clerk, and such papers must indicate the
date and method of service.
By contrast, Rule 5(a) of the Federal Rules of Civil Procedure
explicitly does not require service of such motions to the
defaulting party:11
No service need be made on parties in default
for failure to appear except that pleadings
(a) Entry by Clerk
Upon motion made by a party, the Clerk shall enter a
default against any party who fails to respond to a
complaint, cross-claim, or counter-claim within the time
and in the manner provided by Fed. R. Civ. P. 12. The
moving party shall give notice of the entry of default to
the defaulting party by regular mail sent to the last
known address of the defaulted party and shall certify to
the Court that notice has been sent.
(b) Damages
Any motion for a default judgment pursuant to Fed. R.
Civ. P. 55(b) shall contain a statement that a copy of
the motion has been mailed to the last known address of
the party from whom such damages are sought. If the
moving party knows, or reasonably should know, the
identity of any attorney thought to represent the
defaulted party, the motion shall also state that a copy
has been mailed to that attorney.
11
In addition, Rule 55(b)(2) of the Federal Rules of Civil
Procedure requires service only where the opposing party has
appeared:
If the party against whom judgment by default is sought
has appeared in the action, the party . . . shall be
served with written notice of the application for
judgment at least 3 days prior to the hearing on such
application.
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asserting new or additional claims for relief
against them shall be served upon them . . . .
Plaintiff did not serve Defendants with the motion for entry of
default or with the motion for default judgment. Defendants
contend that Plaintiff's failure to comply with the local rule
renders the default judgment void.
Below, the magistrate judge found that Local Rule 311(3)
conflicted with Federal Rule 5(a) and thus refused to apply the
local rule. Defendants argue that Local Rule 311(3) adds an
additional requirement but does not actually conflict with the
Federal Rule 5(a) and that the magistrate judge should have applied
it.
We need not determine whether Local Rule 311(3) is
consistent with the Federal Rules because it does not affect the
validity of the default judgment. Presuming that Local Rule 311(3)
is valid and that Plaintiff violated it, Defendants must still meet
the requirements of Rule 60(b)(6). As we described above,
Defendants "must show extraordinary circumstances suggesting that
[they] are faultless in the delay" in seeking relief from the
default judgment. Pioneer, 507 U.S. at 393. Defendants have not
done so and thus cannot obtain relief from the default judgment
even if Plaintiff did not comply with the local rule.
III. Execution of the Default Judgment
Under Rule 69(a) of the Federal Rules of Civil Procedure,
the enforcement of a judgment is done "in accordance with the
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practice and procedure of the state in which the district court is
held . . . except that any statute of the United States governs to
the extent that it is applicable." The parties agree that Puerto
Rico law governs the enforcement of the judgment and do not
indicate any applicable federal law. Defendants argue that the
enforcement of the default judgment against Cortés through the
seizure of the M/V Bramela violated Puerto Rico law.
Defendants first argue that the execution of the default
judgment against the M/V Bramela violated Puerto Rico law because
the boat was communal property, in which Ortiz had a 50 percent
interest. Defendants assert that under Puerto Rico law, a judgment
against a spouse must first be satisfied, if possible, against the
spouse's private assets, and only if the spouse's private assets
are not sufficient, may the judgment be satisfied with communal
property. See P.R. Laws Ann. tit. 31, § 3663. According to
Defendants, the M/V Bramela is communal property, and Plaintiff
failed to satisfy the judgment first with Cortés's personal
property.
Documentation regarding the ownership of the boat is
inconsistent. Plaintiff requested a certified copy of the M/V
Bramela's registration from the Puerto Rico Department of Natural
Resources. The registration listed Cortés as the sole owner of the
M/V Bramela. Defendants submitted the mortgage and promissory note
from their bank, which indicate that Cortés and Ortiz are both
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owners of the vessel. The date of the mortgage and promissory note
is November 21, 2003, which is after the accident and the filing of
this case but before the entry of the default judgment. Defendants
have made no attempt to resolve this conflict. Defendants merely
assert the M/V Bramela is community property but do not cite any
Puerto Rico law to explain why their mortgage documents are
entitled to greater deference than the boat's registration or the
import of the date of the mortgage. Defendants have thus not
carried their burden on appeal to show that Ortiz is part owner of
the M/V Bramela.
Defendants also contend that Plaintiff failed to provide
the proper notice before the sale of the M/V Bramela. Under Rule
51.8 of the Puerto Rico Rules of Civil Procedure, where the
defendant property owner has not appeared, the party seeking a
judicial sale must send notice to the defendant's last known
address by certified mail. Defendants claim that Ortiz was part
owner of the M/V Bramela and did not receive notice by certified
mail. Since Defendants have not shown that Ortiz is part owner of
the M/V Bramela, we find no violation of Rule 51.8.
IV. Conclusion
The default judgment against Cortés and the execution of
the default judgment against the M/V Bramela are affirmed.
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