UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 95-30455
NEW YORK LIFE INSURANCE COMPANY,
Plaintiff-Appellee,
VERSUS
ALVIN J. BROWN,
Defendant-Appellant,
VERSUS
LESLIE A. BROWN,
Defendant-Appellee.
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No. 95-30786
NEW YORK LIFE INSURANCE COMPANY,
Plaintiff-Appellee,
VERSUS
ALVIN J. BROWN,
Defendant,
and
LESLIE A. BROWN
Defendant-Appellant.
Appeals from the United States District Court
for the Middle District of Louisiana
May 15, 1996
Before SMITH, DUHÉ and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
This case involves two separate appeals from the same district
court case. Both appeals arise out of an interpleader action
brought by New York Life Insurance Company (“New York Life”)
against Alvin Brown and his ex-wife Leslie Brown seeking to
determine who owned several life insurance policies. The district
court (1) found that Leslie owned the policies, (2) released New
York Life from liability and (3) enjoined both Alvin and Leslie
from re-litigating the ownership of the policies in any court. In
95-30455, Alvin appeals the district court’s denial of his motion
the vacate the judgment. He claims that the judgment against him
is void because it was entered without notice. He argues that even
though he had defaulted, he was still entitled to notice before
summary judgment was granted against him. In 95-30786, Leslie
appeals the district court order enjoining her from pursuing the
California small claims court actions and a California superior
court action against New York Life. We hold that the failure to
provide Alvin notice before the summary judgment denied him due
process of law. Thus, the district court erred in refusing to
vacate the judgment against him. We vacate 95-30455 and remand for
further proceedings. Because the summary judgment was
inappropriate, we also vacate and remand 95-30786, Leslie’s appeal.
2
I. BACKGROUND
In March 1971, Plaintiff-Appellee New York Life issued the
first of several whole life insurance policies to Defendant-
Appellant Alvin Brown. The policy provided for a waiver of
premiums if Alvin became disabled. In January 1972, Alvin was
found to be totally and permanently disabled because of his war
injuries (he lost his left arm in Vietnam), so the premium waiver
clause went into effect. Alvin married Defendant-Appellee Leslie
Brown in February 1971. In 1980, Alvin and Leslie divorced. On
July 4, 1981, ownership of the policies was transferred to Leslie.
(Alvin argues that his signature on the change of ownership form
was forged).
Leslie claimed ownership of the policies and sought to have
New York Life issue two option policies to her. New York Life
refused, because it was not sure whether Alvin or Leslie owned the
policies. On April 7, 1992, New York Life filed an interpleader
action under 28 U.S.C. § 1335 in federal district court in
Louisiana, seeking to establish the ownership of the policy. The
defendants in the interpleader action were Alvin Brown and his ex-
wife Leslie Brown. The federal district court enjoined the
defendants from instituting any suits against New York Life
concerning the ownership of the policies. The next day, April 8,
Leslie filed suit against New York Life in California state small
claims court, seeking the issuance of the option policies.1 In
1
Leslie claims that she did not learn of the interpleader
suit and injunction until May 18.
3
May, New York Life filed a notice of the federal injunction in the
small claims court and sought to stay the proceedings. The small
claims court apparently ignored that order. In July, two judgments
were entered against New York Life in the small claims cases; New
York Life has appealed those judgments. Leslie stipulated to a
stay of the appeals.
When Alvin was sued, two unsuccessful attempts to serve him
were made before he was properly served. On April 15, 1992, the
first try was made at “5101 Nicholson A-16" in Baton Rouge,
Louisiana. The remarks on the marshal’s return said “Invalid
Address According To Current Resident ... No Phone Directory
Listing ... Return Unexecuted.” The second attempt was on May 12,
1992, at “3539 Clayton Street” in Baton Rouge. The remarks on the
marshal’s return said “Current Resident Advises That Subject Moved
-- No Forward ... No Directory Asst. Listing.” The third attempt
was successfully made on June 29, 1992 at “4944 Castlebrook Apts
#326" in Baton Rouge.
On July 9, 1992, before either defendant answered, Alvin,
Leslie and New York Life attended a telephone settlement conference
before a magistrate judge. On August 12, Alvin phoned New York
Life’s attorney and told her that he had not responded because he
had been out of town. He told her that he was unwilling to
stipulate to Leslie’s ownership and that he would attempt to retain
counsel. New York Life’s attorney notified the court of this
conversation by letter. A status conference was set for September
10, but Alvin declined to participate in it.
4
On October 13, Alvin still had not answered, so New York Life
had a default entered against him.2 In October 1992, Leslie filed
a motion for summary judgment. In November, the magistrate ordered
the clerk to mail a copy of the motion to Alvin. The motion was
mailed to the Clayton address, which the second marshal’s return
showed to be invalid. The letter was returned undelivered.
Summary judgment was granted in January 1993. The judgment held
that Leslie owned the policies and both Leslie and Alvin were
permanently enjoined from suing New York Life in any court for a
determination of the ownership of the policies.
In February 1994, Leslie, this time represented by counsel,
sued New York Life in California state court, alleging that the
interpleader was a sham and seeking damages. In April 1995, the
federal district court denied New York Life’s motion to enforce the
injunction and stop the suits. In July 1995, however, the court
reconsidered that ruling and granted the motion. Leslie was
specifically enjoined from pursuing the California small claims
court actions and the California superior court action against New
York Life.
In April 1994, Alvin phoned New York Life’s attorney to check
the status of his case. He then learned that judgment had been
entered over a year earlier recognizing Leslie as the owner of the
policies and absolving New York Life of further liability. In
October 1994, Alvin obtained counsel and filed a motion to vacate
2
The notice of default was mailed to the Clayton address,
which the second marshal’s return had shown to be invalid. It was
returned undelivered.
5
the judgment. That motion was denied in April 1995. Alvin filed
a timely notice of appeal.
II. DISCUSSION
A. 95-30455 NEW YORK LIFE V. ALVIN BROWN
Because it is important to keep straight default language, a
review of the terms regarding defaults is appropriate. A default
is when a defendant has failed to plead or otherwise respond to the
complaint within the time required by the Federal Rules. An entry
of default is what the clerk enters when the default is established
by affidavit or otherwise. Fed. R. Civ. P. 55(a).3 After
defendant’s default has been entered, plaintiff may apply for a
judgment based on such default. This is a default judgment.
In the instant case, Alvin defaulted because he did not file
an answer within the allowed time. On New York Life’s motion, an
entry of default was entered against Alvin; a default judgment was
never entered. Instead, Leslie moved for summary judgment, which
was granted.
1. Whether Alvin “Appeared”
Alvin complains that he never received notice of the summary
judgment. Leslie contends that because Alvin defaulted, he was not
entitled to notice. We conclude that Alvin appeared in the lawsuit
and was thus entitled to notice before the granting of the summary
judgment.
3
All rule references are to the Federal Rules of Civil
Procedure.
6
Rule 5 requires that “every written motion ... be served upon
each of the parties. No service need be made on parties in default
for failure to appear.” (Emphasis added). “[B]y appearing at any
time in the action, a party becomes entitled to have his attorney
notified of all subsequent proceedings and receive copies of all
papers, even if he later chooses to default.” WRIGHT AND MILLER,
FEDERAL PRACTICE AND PROCEDURE § 1144 (2d ed. 1987) (emphasis added).
In order to determine whether Alvin was entitled to service of
the motion for summary judgment, we must first determine whether
Alvin’s actions rose to the level of an appearance.4 An appearance
“involves some presentation or submission to the court.”5 WRIGHT AND
MILLER, FEDERAL PRACTICE AND PROCEDURE § 2686 (2d ed. 1987) (internal
4
Leslie contends that Alvin is raising for the first time on
appeal the issue of whether he appeared in the action. While her
argument is not without merit, we disagree. No “bright-line rule”
exists for determining whether a matter was raised below. First
United Financial Corp. v. Specialty Oil Co., 5 F.3d 944, 948 n.9
(5th Cir. 1993). “[I]f a litigant desires to preserve an argument
for appeal, the litigant must press and not merely intimate the
argument during the proceedings before the district court. If an
argument is not raised to such a degree that the district court has
an opportunity to rule on it, we will not address it on appeal.”
F.D.I.C. v. Mijalis, 15 F.3d 1314, 1327 (5th Cir. 1994). Issues
may be raised for the first time in post-judgment motions. First
National Bank of Commerce v. Lamaze, 7 F.3d 1227, 1229 n.9 (5th
Cir. 1993). While Alvin might have raised the issue more
specifically, we are persuaded that his motion to vacate the
judgment met the threshold level to avoid waiver. Alvin’s motion
informs the court the he is complaining of a lack of notice before
the granting of summary judgment. We are convinced that this was
adequate to allow the court to rule on the issue.
5
This discussion of appearances is drawn from caselaw on
Rule 55(b)(2) appearances, which require three days notice and
entry of judgment by the court for default judgments when the
defendant has appeared. However, Rule 5(a) appearances will be
treated the same, as both 55(b)(2) and 5(a) involve defendants who
at one time appeared, but later defaulted.
7
quotation omitted). What constitutes an appearance is not
“confined to physical appearances in court or the actual filing of
a document in the record.” Sun Bank of Ocala v. Pelican Homestead
and Savings Assoc., 874 F.2d 274, 276 (5th Cir. 1989). Appearances
“include a variety of informal acts on defendant’s part which are
responsive to plaintiff’s formal action in court, and which may be
regarded as sufficient to give plaintiff a clear indication of
defendant’s intention to contest the claim.” Sun Bank, 874 F.2d at
276 (internal quotation omitted). In summary, an appearance is an
indication “in some way [of] an intent to pursue a defense.”
United States v. McCoy, 954 F.2d 1000, 1003 (5th Cir. 1992). This
is “a relatively low threshold.” Id.
Alvin took two actions which could be considered appearances:
(1) he participated in a telephone conference with the other
parties before the magistrate judge and (2) he spoke with counsel
for New York Life, informing her that he would not sign a
stipulation and that he was attempting to retain counsel to contest
the suit. We conclude that Alvin’s attendance at the phone
conference before the magistrate judge is an appearance, because he
actually appeared in court (albeit by phone). Likewise, his phone
call to New York Life’s counsel, informing him that he would
contest the suit, is also an appearance. Charlton L. Davis & Co.
v. Fedder Data Center, Inc., 556 F.2d 308, 309 (5th Cir. 1977)
(phone call from defendant to plaintiff’s attorney, informing him
that he intended to contest the suit, considered an appearance).
Therefore, because Alvin had appeared in the suit, he was entitled
8
under Rule 5(a) to service of all papers in the suit, including the
motion for summary judgment.6
2. Whether Alvin Received Notice
Because Alvin was entitled to notice, we must determine
whether he actually received it. After reviewing the facts, we
determine that the district clerk’s mailing of the notice to an
address it knew from its own documents to be invalid, does not
satisfy the notice requirement of Rule 5.
The magistrate judge ordered the clerk to mail a copy of the
summary judgment motion to Alvin.7 The clerk mailed the papers to
the Clayton address (where the second unsuccessful attempt at
service had been made). In its order denying Alvin’s motion to
vacate judgment, the district court found that this was not a
problem, because Alvin was under a continuing obligation to apprise
the court of any address changes.
Rule 5(b) requires service to be made by mailing a copy of the
papers “to the attorney or party at the attorney’s or party’s last
known address....” Alvin correctly points out that the Clayton
address was not his last known address; his last known address was
at the Castlebrook Apartments, where he had been served. The
district court’s statement that Alvin was under a continuing
obligation to notify the court of any change in address is
6
Rule 56 requires that the summary judgment motion be served
at least 10 days before the hearing.
7
Because Leslie was concerned that Alvin would harm her,
special arrangements were made with the court so Alvin would not
learn her address. Pursuant to the arrangement, service of all
papers from Leslie to Alvin was made through the court.
9
inapposite: he had not moved. The court tried to serve him at an
address it knew, or should have known, was not his last known
address. Therefore, the attempt at service did not conform with
Rule 5, and Alvin did not receive the notice to which he was
entitled.
3. Alvin’s Motion to Vacate the Judgment
Rule 60(b)(4) allows district courts to “relieve a party ...
from a final judgment” because the judgment is void. We typically
review district court orders denying Rule 60(b) relief for abuse of
discretion. CJC Holdings, Inc. v. Wright & Lato, Inc., 979 F.2d
60, 63 (5th Cir. 1992). “When, however, the motion is based on a
void judgment under rule 60(b)(4), the district court has no
discretion -- the judgment is either void or it is not.”
Recreational Prop. Inc. v. Southwest Mortgage Serv. Corp., 804 F.2d
311, 313 (5th Cir. 1986); WRIGHT, MILLER AND KANE, FEDERAL PRACTICE AND
PROCEDURE § 2862 (2d ed. 1995). “[T]here is no time limit on an
attack on a judgment as void. The one-year limit applicable to
some Rule 60(b) motions is expressly inapplicable, and even the
requirement that the motion be made within a ‘reasonable time,’
which seems literally to apply to motions under Rule 60(b)(4),
cannot be enforced with regard to this class of motion.” Briley v.
Hidalgo, 981 F.2d 246, 249 (5th Cir. 1993)(quoting WRIGHT, MILLER AND
KANE, FEDERAL PRACTICE AND PROCEDURE § 2862 (1973)) (brackets in
original).
In order to determine whether the judgment should be set
aside, we must determine whether the judgment is void. “A judgment
10
is not void merely because it is erroneous.” WRIGHT, MILLER AND KANE,
FEDERAL PRACTICE AND PROCEDURE § 2862 (2d ed. 1995) “A judgment ‘is
void only if the court that rendered it lacked jurisdiction of the
subject matter, or of the parties, or if it acted in a manner
inconsistent with due process of law.’” Williams v. New Orleans
Public Serv., Inc., 728 F.2d 730, 735 (5th Cir. 1984) (quoting
WRIGHT, MILLER AND KANE, FEDERAL PRACTICE AND PROCEDURE § 2862 (1973)).
The district court had both subject matter and personal
jurisdiction. Thus, our only inquiry is whether the district court
acted in a manner so inconsistent with due process as to render the
judgment void. “[O]rdinarily all that due process requires in a
civil case is proper notice and service of process and a court of
competent jurisdiction; procedural irregularities during the course
of a civil case, even serious ones, will not subject the judgment
to collateral attack.” Fehlhaber v. Fehlhaber, 681 F.2d 1015, 1027
(5th Cir. 1982), cert. denied, 464 U.S. 818 (1983).
Under our system of justice, the opportunity to be heard is
the most fundamental requirement. Mullane v. Central Hanover Bank
& Trust Co., 339 U.S. 306, 314 (1950) (“The fundamental requisite
of due process of law is the opportunity to be heard.”). Without
notice of an impending grant of summary judgment, a defendant has
no opportunity to be heard. Therefore, Alvin was denied due
process of law and the judgment against him is void. Bass v.
Hoagland, 172 F.2d 205 (5th Cir.), cert. denied, 359 U.S. 816
(1949). Because the judgment against him is void, the district
11
court erred in refusing the vacate the judgment under Rule
60(b)(4).
B. 95-30786 NEW YORK LIFE V. LESLIE BROWN
Leslie complains about the district court’s permanent
injunction prohibiting her from suing New York Life in California
for bad faith actions regarding the insurance policy. Because the
judgment against Alvin is vacated, it is yet to be determined
whether Leslie or Alvin owns the life insurance policies.
Therefore, there is no final judgment in the case. As there is no
final judgment, a permanent injunction is inappropriate, so it is
vacated. Thus, we need not consider Leslie’s claims.
CONCLUSION
Because the summary judgment against Alvin has been vacated,
the case is returned to the same procedural position that existed
before the summary judgment was taken. That is, (1) Alvin has
defaulted and an entry of default has been entered against him; (2)
Leslie has filed for summary judgment, but that motion has yet to
be served on Alvin; and (3) a preliminary injunction exists
restraining Leslie and Alvin from instituting any actions against
New York Life relative to the life insurance policies.
Because Alvin has defaulted, he must succeed in setting aside
the default before he will be permitted to respond to the motion
for summary judgment. Only if a Rule 55(c) motion is made, and
granted, will Alvin be allowed to file an answer or a response to
the summary judgment motion. We express no opinion as to how the
district court should rule on any Rule 55(a) motion.
12
Leslie has not brought the bad faith action against New York
Life as a counterclaim.8 Should Leslie seek to amend her answer to
raise this counterclaim, she may file for leave of the district
court to amend her answer.9 We express no opinion as to whether
the district court should grant leave; instead we entrust that
decision to the district court’s sound discretion. Chitimacha
Tribe of Louisiana v. Harry L. Laws Co., 690 F.2d 1157, 1163 (5th
Cir. 1982), cert. denied, 464 U.S. 814 (1983).
The judgments of the district court in both 95-30455 and 95-
30786 are VACATED and REMANDED for further proceedings consistent
with this opinion.
8
Because we need not reach the issue of the preclusive
effect of failing to file a counterclaim on the issue, we express
no opinion as to whether the claim is a compulsory counterclaim
under Rule 13(a).
9
One issue Leslie raised, however, does deserve comment.
Leslie argued that she did not raise her claims against New York
Life at the interpleader level because the district court has
enjoined her from doing so. We believe that Leslie misreads the
injunction. As we read it, Leslie is prohibited from filing an
action related to the policies in any other court. She is not
prohibited from filing a counterclaim in the interpleader action.
We are aware that Leslie was pro se throughout much of the
proceeding. Nonetheless, we believe that Leslie should have asked
the district court for clarification of its order before she chose
to avoid filing a possibly-compulsory counterclaim.
13