Capitol Indemnity Corp. v. Jellinick

75 F. App'x 999
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 29, 2003
DocketNo. 02-5153
StatusPublished
Cited by4 cases

This text of 75 F. App'x 999 (Capitol Indemnity Corp. v. Jellinick) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capitol Indemnity Corp. v. Jellinick, 75 F. App'x 999 (6th Cir. 2003).

Opinion

SUTTON, Circuit Judge.

Richard Jellinick challenges the District Court’s denial of his motion to vacate a default judgment. Because the District Court did not abuse its discretion in rejecting the motion, we AFFIRM.

I.

In August 1998, Richard Jellinick purchased a piece of property in Jamestown, Kentucky for $155,000. He then insured the property with Capitol Indemnity Corporation for nearly four times that amount. A few days after purchasing this insurance, a fire consumed the property. When Jellinick filed a claim for the full amount of the policy, Capitol complained.

Alleging arson and fraud, Capitol denied Jellinick’s claim and filed this lawsuit. Capitol sought (1) a declaratory judgment that Jellinick did not have a right to the insurance proceeds, and (2) damages for the insurance proceeds that had been paid after the fire (to Jellinick’s mortgagors). Jellinick counterclaimed for breach of the insurance policy, unfair claims practices, fraud, and defamation.

Early in the case, several discovery disputes required the District Court’s involvement. On June 5, 2000, the District Court held a conference call to resolve a dispute over Jellinick’s objections to Capitol’s interrogatories. The result was an order overruling all of Jellinick’s objections and compelling responses within two weeks. Jellinick’s counsel, Arthur Muegler, Jr., promised that he could, and would, comply with the District Court’s order. He did not, however.

Four months later, on October 5, 2000, the District Court held another telephone conference concerning the status of discovery. The interrogatory responses promised by Muegler in June remained outstanding, as were any responses to a second set of interrogatories that had been served on his client in June. At this point, Muegler informed the District Court that he was being treated for laryngeal cancer and would not have a full voice for several months. Nevertheless, Muegler promised to provide the outstanding discovery within ten days. Mue[1001]*1001gler also agreed to an October 20th deadline for replacing his current local counsel, who either could not or was no longer willing to work on the case. The District Court issued an order reflecting both deadlines.

Once again, these deadlines passed without any action by Jellinick, Muegler, or local counsel. On October 27, 2000, Capitol moved for a default judgment under Rule 37 of the Federal Rules of Civil Procedure, arguing that Jellinick’s failure to provide discovery made it impossible for Capitol to comply with the District Court’s scheduling order and that a default was an appropriate sanction. On November 3, 2000, Jellinick’s local counsel moved to withdraw, claiming that Muegler had failed, since at least August, to respond to his calls and letters or to keep him informed of the status of the case. An August 25, 2000 letter to Muegler supports that claim.

On November 20, 2000, well after the deadline for a response to Capitol’s default motion had passed, the District Court granted the default motion in a written memorandum and order. The District Court found that (1) Muegler’s failure to cooperate in discovery was “certainly due to his own fault and perhaps [was] willful”; (2) Capitol was prejudiced by its inability to obtain discovery before the discovery cutoff, which had since passed; and (3) Muegler was given fair warning of the possible consequences of his conduct. The District Court waited another three weeks, while Capitol documented its damages, before entering a judgment of default on December 18, 2000.

On July 10, 2001, Jellinick moved to vacate the judgment under Fed.R.Civ.P. 60(b)(1). Jellinick argued that his counsel’s total disability from October 19, 2000, through May 20, 2001, established the requisite “excusable neglect” to grant the motion.

After allowing both parties to submit evidentiary support in the form of affidavits, the District Court denied the motion. The District Court found that Muegler was not, as he and Jellinick claimed, “totally disabled” from October 19, 2001 through May 30, 2001. According to the Court, Muegler had engaged in substantial legal activities during that period, even filing two pleadings in another matter while the default judgment was in the works in this case. Nor, according to the District Court, was there any legitimate excuse for waiting until July 10, 2001 to move to set aside the judgment. This appeal followed.

II.

Under Fed.R.Civ.P. 60(b)(1), a district court “may relieve a party ... from a final judgment,” such as the default judgment at issue here, for “excusable neglect.” See Waifersong, Ltd. Inc. v. Classic Music Vending, 976 F.2d 290, 292 (6th Cir.1992) (holding that, before issuing relief from a default judgment, a court must assess three factors — whether the neglect was excusable, whether the plaintiff will be prejudiced, and whether the defendant has meritorious defenses — the first of which must be satisfied before the others come into play); United Coin Meter Co. v. Seaboard Coastline R.R., 705 F.2d 839, 845 (6th Cir.1983). Whether “neglect” is “excusable” is an “equitable determination,” which considers several factors: the length of the delay, the reason for the delay, whether the movant acted in good faith, the potential impact of the delay on judicial proceedings, and the danger of prejudice to the other party. Jinks v. AlliedSignal, Inc., 250 F.3d 381, 386 (6th Cir.2001). See Pioneer Inv. Servs. Co. v. Brunswick Assocs., 507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993) (applying these factors [1002]*1002to determine whether “neglect” is “excusable” under Rule 9006(b)(1) of the Federal Rules of Bankruptcy Procedure).

The District Court considered these factors, and concluded that Muegler’s neglect was not excusable. In evaluating that assessment, our task is a modest one — to determine whether the District Court, which had a ring-side view of the proceedings, abused its discretion. See Manufacturers’ Indus. Relations Ass’n. v. East Akron Casting Co., 58 F.3d 204, 207 (6th Cir.1995). “[0]nly where there is a definite and firm conviction that the trial court committed a clear error of judgment,” Jinks, 250 F.3d at 385 (citation and quotation omitted), can that standard be met. No such showing has been made here.

As an initial matter, the law holds Jellinick “accountable for the acts and omissions of [his] chosen counsel” — Mr. Muegler. Pioneer, 507 U.S. at 397.

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75 F. App'x 999, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capitol-indemnity-corp-v-jellinick-ca6-2003.