Point PCS, LLC v. Sea Haven Realty & Construction , 95 F. App'x 24 ( 2004 )


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  •                            UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    POINT PCS, LLC,                          
    Plaintiff-Appellant,
    v.
             No. 03-1809
    SEA HAVEN REALTY AND
    CONSTRUCTION,
    Defendant-Appellee.
    
    Appeal from the United States District Court
    for the Eastern District of North Carolina, at Elizabeth City.
    Terrence W. Boyle, Chief District Judge.
    (CA-02-10-2-10-BO)
    Argued: February 24, 2004
    Decided: April 9, 2004
    Before WILKINSON, NIEMEYER and DUNCAN, Circuit Judges.
    Affirmed by unpublished per curiam opinion.
    COUNSEL
    ARGUED: Neil Samuel Lowenstein, VANDEVENTER BLACK,
    LLP, Norfolk, Virginia, for Appellant. Charles Everett Thompson, II,
    Elizabeth City, North Carolina, for Appellee.
    Unpublished opinions are not binding precedent in this circuit. See
    Local Rule 36(c).
    2                  POINT PCS v. SEA HAVEN REALTY
    OPINION
    PER CURIAM:
    Appellant Point PCS, L.L.C. ("Point PCS") challenges the district
    court’s order denying its motion for relief from judgment pursuant to
    Fed. R. Civ. P. 60, and its motion for stay of proceedings to enforce
    judgment pursuant to Fed. R. Civ. P. 62. Point PCS argues that its
    failure to prosecute was due to excusable neglect. Because we con-
    clude that the district court did not abuse its discretion in denying the
    motions for relief from judgment and for stay of proceedings to
    enforce judgment, we affirm.
    I.
    Point PCS contracted with Appellee Sea Haven Realty and Con-
    struction ("Sea Haven") to perform renovations on two retail stores in
    Nags Head, North Carolina. On October 1, 2001, Point PCS com-
    menced an action against Sea Haven in the United States District
    Court for the District of New Jersey, claiming breach of contract and
    tortious interference with a contract. On February 13, 2002, the case
    was transferred by consent order to the Eastern District of North Car-
    olina.
    Following the transfer, a significant amount of correspondence was
    sent to Point PCS. On March 15, 2002, the Clerk of Court for the
    Eastern District sent a letter to Point PCS’s counsel-of-record, Rich-
    ard Walsh, pointing out the need to retain local counsel. On April 5,
    2002, Sea Haven filed an Answer and Counterclaim, and served a
    copy on Walsh. On April 8, 2002, counsel for Sea Haven sent a letter
    to Walsh, reminding him that Sea Haven had filed an Answer and
    enclosing a proposed Discovery Plan. On April 12, 2002, the Clerk
    sent a Request for Discovery Plan to Walsh, pointing out that a man-
    datory discovery meeting was required by May 12, 2002. On May 13,
    2002, counsel for Sea Haven sent a letter to Walsh reminding him
    about the pending First Discovery Request, and asking him to respond
    to the proposed Discovery Plan. On June 3, 2002, counsel for Sea
    Haven sent another letter to Walsh, requesting a response regarding
    the pending discovery issues. On June 21, 2002, the Clerk sent Walsh
    an Order directing him to associate local counsel, and warning that if
    POINT PCS v. SEA HAVEN REALTY                      3
    Point PCS failed to associate local counsel by July 5, 2002, the case
    would be referred to the district judge for dismissal or other action.
    On July 3, 2002, Walsh sent a letter to the Clerk acknowledging
    receipt of the June 21 Order, and stating that Point PCS was retaining
    Neil Lowenstein as local counsel. However, Lowenstein did not file
    an appearance until March 3, 2003. All of the correspondence
    described above, including the June 21 Order Walsh acknowledged
    receiving, was sent to the same address of record.
    On August 9, 2002, Sea Haven filed a motion for entry of default
    on its counterclaim and for default judgment. Having not heard from
    Point PCS, the Clerk entered a default against it on September 11,
    2002. On October 15, 2002, Sea Haven filed a motion to dismiss the
    complaint based on Point PCS’s failure to follow the local rules,
    respond to pleadings and communications, or take any other action.
    On January 7, 2003, the district court granted Sea Haven’s motion to
    dismiss and motion for entry of default judgment. A copy of the order
    and judgment was mailed to Walsh at the address to which all corre-
    spondence had been sent.
    On March 3, 2003, Point PCS filed its motions for relief from judg-
    ment and for stay of proceedings to enforce judgment. In its memo-
    randum to the district court in support of the motions, Point PCS
    contended that following transfer of venue in February of 2002, "nei-
    ther Point PCS nor its counsel of record received any notice whatso-
    ever of pleadings having been filed by Sea Haven or with respect to
    any proceeding by or before the Court" until it received a copy of the
    order entering default judgment in favor of Sea Haven in January of
    2003. J.A. 12. However, in the same memorandum, Point PCS stated
    that it responded to the court’s June 21, 2002 Order to associate local
    counsel. Point PCS offered the district court no explanation for these
    inconsistent statements.
    Further, on appeal, Point PCS changed its story again. In its brief,
    Point PCS admitted to receiving all pre-default pleadings and corre-
    spondence, and contends only that it did not receive any default-
    related pleadings. During oral argument, counsel for Point PCS
    argued that the nonreceipt of default-related pleadings prevented
    Point PCS from participating in the default proceedings.
    4                  POINT PCS v. SEA HAVEN REALTY
    II.
    Under Rule 60(b) of the Federal Rules of Civil Procedure, the court
    may relieve a party from a final judgment for "mistake, inadvertence,
    surprise, or excusable neglect" or "any other reason justifying relief"
    from the judgment. Fed. R. Civ. P. 60(b). Denials of Rule 60(b)
    motions are reviewed for abuse of discretion. Heyman v. M.L. Mktg.
    Co., 
    116 F.3d 91
    , 94 (4th Cir. 1997).
    A.
    The district court analyzed the Rule 60(b) motion for relief from
    the default judgment based on the approach set out in Augusta Fiber-
    glass Coatings, Inc. v. Fodor Contracting Corp., 
    843 F.2d 808
     (4th
    Cir. 1988). In Augusta, we stated that "over the years this court has
    taken an increasingly liberal view of Rule 60(b)" where default judg-
    ments are at issue. 
    Id. at 810
    . Default judgment is a particularly harsh
    result, and therefore "any doubt as to the propriety of giving [such]
    relief must be resolved in the movant’s favor when the movant bears
    no personal responsibility for the error which led to the default." 
    Id. at 811
    . Further, we held that "when the party is blameless, his attor-
    ney’s negligence qualifies as a ‘mistake’ or as ‘excusable neglect’
    under Rule 60(b)(1)." 
    Id.
     However, "[w]hen the party is at fault, the
    [system’s need for finality and efficiency in litigation] dominate[s]
    and the party must adequately defend its conduct in order to show
    excusable neglect." 
    Id.
    Point PCS contends that the district court erred when it found that
    Point PCS "shares responsibility for the conduct leading to the default
    in this case." J.A. 93. The facts of this case, however, support the dis-
    trict court’s finding. Point PCS now acknowledges receipt of all pre-
    default pleadings and communications. This acknowledgement sup-
    ports the district court’s finding that Point PCS was aware of the pro-
    ceedings and was involved in the decision-making process. Further,
    in his deposition, Point PCS member Larry Paragano stated that Point
    PCS associated local counsel pursuant to the June 2002 Order. While
    local counsel did not enter the case until March 3, 2003, this state-
    ment of active involvement belies the contention that Point PCS itself
    had no responsibility for the conduct in this case. On these facts, the
    POINT PCS v. SEA HAVEN REALTY                        5
    district court did not abuse its discretion in denying the Rule 60(b)
    motion for relief from the default judgment.
    B.
    Point PCS’s Rule 60(b) motion addresses the dismissal of its com-
    plaint for failure to follow the local rules and failure to prosecute, as
    well as the default judgment on the counterclaim. As noted by the dis-
    trict court, the foregoing analysis under Augusta applies to 60(b)
    motions for relief from default judgments. When considering the "ex-
    cusable neglect" standard as applied to the dismissal of the complaint,
    the district court correctly applied the stricter standard articulated in
    Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 
    507 U.S. 380
    , 394, 396 (1993) (finding that the determination of what consti-
    tutes "excusable neglect" is an equitable one, and that "clients must
    be held accountable for the acts and omissions of their attorneys").
    Point PCS never responded to Sea Haven’s Answer and Counter-
    claim, nor did it respond to any communication except the June 21
    Order to associate local counsel. On appeal, Point PCS abandoned
    even the inconsistently asserted defense that it did not receive the pre-
    default pleadings and communications. In any event, the record is
    clear that from February 13, 2002 to March 3, 2003, Point PCS took
    no action regarding its complaint, even with respect to checking the
    status of its action. Therefore, the district court did not abuse its dis-
    cretion when it found that Point PCS failed to demonstrate that the
    dismissal of the complaint was the result of excusable neglect.
    C.
    Point PCS’s Rule 62(b) motion for stay of proceedings was denied
    because the district court denied the Rule 60(b) motion for relief from
    judgment. The denial of the Rule 60(b) motion was proper, and the
    appeal of the district court’s denial of the Rule 62(b) motion is dis-
    missed as moot.
    III.
    Based on the foregoing, we conclude that the district court did not
    abuse its discretion in denying the motions, and the judgment of the
    district court is affirmed.
    AFFIRMED
    

Document Info

Docket Number: 03-1809

Citation Numbers: 95 F. App'x 24

Judges: Duncan, Niemeyer, Per Curiam, Wilkinson

Filed Date: 4/9/2004

Precedential Status: Non-Precedential

Modified Date: 8/6/2023