Opinion
Civil Action No. 02-1235 Section: E/4, Civil Action No. 91-2321 Section: E/1.
September 28, 2004
BACKGROUND
On July 25, 2001, after a jury verdict in favor of the plaintiff in the Burge case, the Court entered an Amended Judgment in favor of Gerald Burge (Burge) and against St. Tammany Parish Sheriff Strain (Strain) and co-defendant Gary Eugene Hale ("Hale"), in solido, for total of $4,075,000.00, with interest against Hale from the date of judicial demand on the claims arising under state law, and with interest against Strain from the date of entry of judgment together with reasonable attorney's fees on the 42 U.S.C. § 1983 claims. Burge, rec. doc. 529. Sheriff Strain appealed; Hale, who appeared at the trial in pro se, did not.
Gerald Burge v. St. Tammany Parish Sheriff's Office et al, C.A. No. 91-2321, Eastern District of Louisiana.
The jury, in answering the Interrogatories, found:
(1) that Gary Hale, while acting under color of state law, deprived Gerald Burge, of his constitutional rights, including his right to a fair trial and due process (a 42 U.S.C. § 1983 violation);
(2) that Hale's conduct, "acting under color of state law", deprived Burge of his constitutional rights during all three time periods — Sept. 1, 1980 to Aug. 31, 1983; Sept. 1, 1983 to Aug. 31, 1986; and Sept. 1, 1986 to present;
(3) that Hale intentionally inflicted emotional distress on Burge during all three time periods;
(4) that Sheriff Strain in his official capacity failed to adequately train and supervise his employees and deputies (a 42 U.S.C. § 1983 Monell violation).
The jury awarded damages as follows:
Loss of freedom and imprisonment: $2,000,000.00 Physical/mental pain suffering, emotional distress/anxiety: $2,000,000.00 Economic loss during imprisonment: $ 250,000.00 Legal expenses: $ 50,000.00
The jury specifically found that there was no conspiracy between the Sheriff and Hale as to either the § 1983 violation or the intention infliction of emotional distress.
Gary Hale was employed as a St. Tammany Parish Sheriff's Deputy during 1980 and the early part of 1981. He left the department sometime in the spring of 1981.
The Court concluded "that these defendants are solidarily liable for the judgment because plaintiff can only recover once for his compensatory damages, and, viewing the judgment and the evidence in the light most favorable to the jury's verdict, the actions of Hale and the employees of the Sheriff occurred in concert to cause the plaintiff's damages." See Ruling on Motions, C.A. No. 91-2321, r.d. #528 at p. 6.
Burge subsequently forced Hale into involuntary bankruptcy in the State of Mississippi in an attempt to collect his entire judgment against Hale. Hale individually has been discharged in the bankruptcy proceeding. Stanley, the trustee of Hale's bankruptcy estate, filed suit in federal court in this district on April 25, 2002, on behalf of Hale's bankruptcy estate. The lawsuit alleges malpractice in defendants Clare Trinchard's and Trinchard Trinchard L.L.C.'s (collectively "Trinchard") representation of Hale during the Burge litigation which, according to the lawsuit, exposed Hale to liability for the multimillion dollar judgment. The Stanley lawsuit also alleges bad faith of Northwestern National Insurance Company of Milwaukee, Wisconsin (NNIC). These unliquidated claims are the only assets of Hale's bankruptcy estate, and the only claim against Hale's bankruptcy estate is Burge's claim for payment of his entire judgment against Hale.
Stanley v. Trinchard et al, C.A. No. 02-1235.
NNIC insured the St. Tammany Parish Sheriff's Office during the 1980-1983 period related to the Burge litigation. Additional defendants are Trinchard Trinchard, L.L.C., Leigh Ann Schell, Esq., and Lincoln Insurance Company.
Meanwhile, on June 25, 2003, the Fifth Circuit reversed the judgment against Sheriff Strain. On January 12, 2004, the United States Supreme Court denied Burge's request for certiorari. Based on the Interrogatories answered by the jury, the reversal of the judgment against Strain raised the question of the equity of enforcing the full judgment amount against Hale when a substantial portion of the amounts awarded by the jury may represent damages for the 42 U.S.C. § 1983 liability of Sheriff Strain rather than damages for Hale's actions. Considering the these unusual circumstances, on May 28, 2004, at rec. doc. #70 in the Stanley litigation, the Court entered an order requesting that the interested parties in both cases, if they wished to do so, brief the following issues:
1) the standing or lack thereof of any party or of this Court to initiate an action for relief from judgment on Gary Hale's behalf in Burge v. St. Tammany Parish Sheriff's Office, C.A. 91-2321;
2) whether relief from judgment pursuant to Fed. Rule Civ. Pro. 60(b) is appropriate as to the judgment for damages of $4,075,000.00 against Gary Hale individually; and if so,
3) what is the appropriate remedy.
Gerald Burge, the Trinchards, and NNIC filed briefs, reply briefs and sur reply briefs. Stanley did not file a brief, but his undated letter to the Court explaining his position as trustee of Hale's bankruptcy estate was filed into the record on August 20, 2004, at rec. doc. #139. After careful consideration of all parties' briefs, the law, and the circumstances presented in this matter, and for the reasons that follow, the Court concludes that Rule 60(b) relief from this Court's Amended Judgment entered in Burge v. St. Tammany Parish Sheriff's Office et al, C.A. No. 91-2321, is not necessary in the interests of equity or justice.
ANALYSIS
Rule 60(b) provides in pertinent part as follows:
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: . . . (5) the judgment has been satisfied, released, or discharged, or a prior judgment on which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. . . . . 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 grant relief to a defendant not actually personally notified as provided in Title 28, U.S.C., § 1655, or to set aside a judgment for fraud upon the court. . . . .
Although relief under Rule 60(b) is considered an extraordinary remedy, the Fifth Circuit has held "that the rule should be construed in order to do substantial justice." Carter v. Fenner, 136 F.3d 1000, 1007 (5th Cir. 1998); Johnson Waste Materials v. Marshall, 611 F.2d 593, 600 (5th Cir. 1980) (liberal construction of a Rule 60(b) motion "is particularly appropriate where equitable considerations are involved.");Brennan v. Midwestern United Life Insurance Co., 450 F.2d 999, (7th Cir.) cert. denied, 405 U.S. 921 (1971) ("While Rule 60(b) is not a substitute for an appeal and the finality of judgments ought not be disturbed except on very narrow grounds, a liberal construction should be given the rule to the end that judgments which are void or are vehicles of injustice not be left standing.")
A.
At the outset, Burge challenges this Court's jurisdiction to "reopen" a closed civil rights case in which the judgment is final in order to amend or reverse the judgment. He cites Snell v. Cleveland, 316 F.3d 822 (9th Cir. 2002) in support. That case is inapposite to this situation. Snell involved a district court's power to raise the issue of subject matter jurisdiction in a case that had been tried, a final judgment rendered, and the case closed in another court. The district judge in Snell sua sponte vacated the final judgment of another district court judge, then dismissed the entire action because the complaint failed to properly plead diversity jurisdiction. The Ninth Circuit reversed and reinstated the original judgment, finding that under the circumstances the Snell district judge had no jurisdiction or power to do what it did. Here, this Court entered the judgment at issue, and its subject matter jurisdiction is not in question.
B.
Burge also challenges the timeliness of any Rule 60(b) motion as to the judgment against Hale, which has been final for three years. Motions brought pursuant to Rule 60(b)(4), (5) and (6) "shall be made within a reasonable time". Fed.R.Civ.P. 60(b). The Fifth Circuit addressed the issue of "a reasonable time" inIn re Timely Secretarial Service, Inc., 987 F.2d 1167 (5th Cir. 1993). In that case, at a hastily called hearing purportedly to address the debtor's motion to dismiss, the bankruptcy court sua sponte vacated a previously agreed order lifting the automatic stay, reimposed the stay and awarded possession of leased premises to the debtor. A creditor appealed alleging that even though it was present at the hearing, the two and one half hours of notice (by telephone) it had received was insufficient and a violation of its due process rights. On appeal, the district court found no due process violation and affirmed the bankruptcy court. The Fifth Circuit reversed, reasoning as follows:
[T]he Supreme Court has recognized that "[a]n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Mullane v. Central Hanover Bank Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1960). . . . . Finally, we have indicated that a court, when acting on its own initiative to grant relief under Rule 60(b) of the Federal Rules of Civil Procedure, must generally "give some sort of written notice to the parties." Chavez v. Balesh, 704 F.2d 774, 777 (5th Cir. 1983) (citing McDowell v. Celebrezze, 310 F.2d 43, 44 (5th Cir. 1962)).Id. at 1171 (emphasis in original). The Fifth Circuit has opined that there is no general standard as to what constitutes a "reasonable time", which instead must be determined according to the particular facts and circumstances of each case. Travelers Insurance Co. V. Liljeberg Enterprises, Inc., 38 F.3d 1404 (5th Cir. 1994).
In this case, it is not the indisputably final judgment against Hale that is the subject of this Court's inquiry. Rather, it is the effect, if any, of the Fifth Circuit's reversal of the judgment against Strain in light of Burge's claim on Hale's bankruptcy estate for the full amount of the judgment. The jury did not distinguish which defendant was liable for what portions of the damages awarded, nor did it allocate damages for particular time periods or to each defendant's actions. Moreover, before the trial Burge settled with Hale for any § 1983 damages incurred during the time period of 1980-1983.
The Court's Minute Entry setting a status conference with all counsel in the Stanley litigation was entered within three months of the U.S. Supreme Court's denial of certiorari on the Fifth Circuit's reversal of the judgment against Strain. Although neither Burge nor his counsel are parties to the Stanley litigation and were not present at the status conference called in that matter, as interested parties they were given written notice of the briefing schedule with ample time to respond. Under these unusual circumstances, the Court believes that a Rule 60(b) motion, if necessary in the interests of justice, would be timely at this point.
C.
All interested parties briefed the issue of standing. Burge, Hale and Strain, as parties to the Amended Judgment, clearly have standing to move for Rule 60(b) relief. Burge, as the judgment creditor, of course has no interest in doing so. Strain has already won relief via the Fifth Circuit's reversal of the judgment against him. Hale also has no interest in moving for relief from the Amended Judgment because his discharge from bankruptcy is a permanent bar to any attempt to collect the judgment from him. In essence, he too has already been released from the judgment against him. Stanley, as trustee of Hale's bankruptcy estate, has standing under Rule 60(b) because of his power and status with respect to the assets of the estate. In re Casco Chem. Co., 335 F.2d 645 (5th Cir. 1964). Stanley, however, has indicated that he has no interest in moving for Rule 60(b) relief. See record document #139.
One who is not a party to the judgment at issue lacks standing to move for Rule 60(b) relief, and an attorney for a party may not move for relief in his or her own name. 11 Wright Miller, Fed. Prac. Proc. § 2865. The exception to this rule is that one who is in privity with a party has standing to move for relief.Id. In El Paso Refinery LP v. Wright Killen Co., Inc., 37 F.3d 230 (5th Cir. 1994), the Fifth Circuit had occasion to inquire into the meaning of the term "a party's legal representative" for purposes of Rule 60(b), particularly as it relates to a debtor's prior legal counsel. The Court explained as follows:
The phrase "a party's legal representative" means one who stands in the place and stead of another, such as an heir at law. Mobay Chemical Co. v. Hudson Foam Plastics Corp., 277 F.Supp. 413 (S.D.N.Y. 1967).
The term was intended to reach "only those individuals who were in a position tantamount to that of a party or whose legal rights were otherwise so intimately bound up with the parties that their rights were directly affected by the final judgment." Kem Mfg. Corp. v. Wilder, 817 F.2d 1517 (11th Cir. 1987).Id. at 234.
Both the Trinchards and NNIC argue that they have standing to bring a Rule 60(b) motion. NNIC claims that it is in privity with Hale because its alleged liability to Hale arises from his claim for insurance coverage for his actions leading to the judgment against him. NNIC argues that its rights are therefore intimately bound up with Hale's and it is directly affected by the final judgment against Hale. The Trinchards argue that they are in privity with Hale because they essentially "stand in the shoes of Hale" since Burge is actually seeking to enforce his judgment against Hale against them via Stanley's legal malpractice action against them.
The Court concludes that neither NNIC nor the Trinchards have standing to move for Rule 60(b) relief with regard to the Amended Judgment in the Burge case. It is undisputed that, beginning even prior to the trial, Burge has orchestrated Hale's involuntary bankruptcy and the trustee's claims against the Trinchards and NNIC in an attempt to collect on his judgment against Hale. It is also undisputed that Burge in entitled to use every legal and judicial weapon at his disposal to collect on his judgment. However, neither NNIC nor the Trinchards have any liability to Hale, and certainly not to Burge, as a direct result of the judgment against Hale.
NNIC is liable to Hale's bankruptcy estate if, and only if, after a trial on the merits, it is cast in judgment for its bad faith dealings with respect to its insurance coverage vis-a-vis Burge's claims against the St. Tammany Parish Sheriff's Office for the 1980-1983 period. That potential liability arises out of its insurance contract with the St. Tammany Parish Sheriff's Office, not the judgment against Hale. Likewise, the Trinchards are liable to Hale's bankruptcy estate if, and only if, after a trial on the merits they are cast in judgment for malpractice with respect to their legal representation of Hale prior to theBurge trial. Their potential liability to Hale arises out of Clare Trinchard's representation of Hale, not the judgment against him.
Finally, should either NNIC or the Trinchards be cast in judgment, neither will be directly liable to Burge for his judgment against Hale, although certainly, any damages awarded to Hale's bankruptcy estate will ultimately inure to Burge's benefit via his claim against the estate for payment of his judgment against Hale. Rather, the amount of Burge's judgment against Hale may be one measure of damages in favor of Hale's bankruptcy estate for which NNIC and/or the Trinchard's may ultimately be liable. But that is all it is, and in light of the reversal of the judgment against Strain and the jury's answers to the Interrogatories, the judgment amounts awarded by the jury in theBurge trial will be subject to the same scrutiny at that time as they would be pursuant to a Rule 60(b) motion at this time.
Accordingly, to the extent that NNIC's brief dated July 28, 2004, at page 10, purports to move this Court to set aside the judgment against Hale pursuant to Rule 60(b), the motion is DENIED, and to the extent that the Trinchards' brief dated July 28, 2004, at page 23, purports to move this Court for remittitur of any portion of the verdict against Hale, the motion is DENIED. IT IS ORDERED that the Court's Minute Entry dated August 5, 2004, rec. doc. # 122, staying all discovery in Stanley v. Trinchard et al, C.A. No. 02-1235, BE AND IS HEREBY VACATED, allowing discovery to proceed in this matter.