Hewlett-Packard Puerto Rico v. Thomas Industries, Inc.

174 F.R.D. 6, 38 Fed. R. Serv. 3d 1281, 1997 U.S. Dist. LEXIS 10298, 1997 WL 392440
CourtDistrict Court, D. Puerto Rico
DecidedJuly 9, 1997
DocketNo. 95-1053 (HL)
StatusPublished
Cited by4 cases

This text of 174 F.R.D. 6 (Hewlett-Packard Puerto Rico v. Thomas Industries, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hewlett-Packard Puerto Rico v. Thomas Industries, Inc., 174 F.R.D. 6, 38 Fed. R. Serv. 3d 1281, 1997 U.S. Dist. LEXIS 10298, 1997 WL 392440 (prd 1997).

Opinion

ORDER

LAFFITTE, District Judge.

Pursuant to Rule 60(b), Defendant Thomas Industries, Inc. (“Thomas”) moves to vacate the Court’s October 26, 1995 Order entering a judgment by default. Dkt. No. 9. First, Thomas argues that its failure to plead and respond to any of Plaintiff Hewlett-Packard Puerto Rico’s (“Hewlett-Packard”) motions was due to the confusion generated by the relocation of its offices in May, June, and July of 1995 and, therefore, constitutes “excusable neglect.” Fed.R.Civ.P. 60(b)(1). Second, Thomas argues that the judgment is void because Hewlett-Packard never notified it of the motion for a judgment by default. Fed.R.Civ.P. 60(b)(4). Finally, Thomas asserts that it has a meritorious defense which constitutes another unlisted Rule 60 reason for vacating the judgment. Fed.R.Civ.P. 60(b)(6). Hewlett-Packard opposes Thomas’ motion. The Court shall consider Thomas’ three arguments for vacating the judgment seriatim.

Thomas blames its failure to plead or respond to any of Hewlett-Packard’s motions on the confusion created by the relocation of its offices from New Haven, Connecticut to Guilford, Connecticut. Thomas makes this argument in the hopes that its conduct would constitute “excusable neglect.” As a result of the Supreme Court’s decision in Pioneer Investment Services, Co. v. Brunswick Associates Limited Partnership, 507 U.S. 380, 394-95, 113 S.Ct. 1489, 1498, 123 L.Ed.2d 74 (1993), a finding of “excusable neglect” is “at bottom an equitable one, taking account of all relevant circumstances surrounding the par[7]*7ty’s omission.” It involves a balancing of the following factors: (1) the danger of prejudice to the prevailing party; (2) the length of the delay and its potential impact on the judicial proceedings; (3) the reason for the delay including whether the neglect was within the reasonable control of the movant; and (4) whether the movant acted in good faith. Id.; see also Pratt v. Philbrook, 109 F.3d 18, 22 (1st Cir.1997) (explaining the Supreme Court’s balancing test in Pioneer).

In Pioneer, the Supreme Court found that the bankruptcy court abused its discretion when it declined to find that there was “excusable neglect” for the creditor’s failure to file a proof of claim within the bankruptcy’s court’s deadline. Pioneer, 507 U.S. at 399, 113 S.Ct. at 1500. Its decision was based on the good faith of the creditor and the lack of evidence of any prejudice or disruption in the administration of justice as a result of permitting the creditor to file a belated proof of claim. The Court emphasized that “were there any evidence of prejudice to petitioner or to judicial administration in this case, we could not say that the Bankruptcy Court abused its discretion in declining to find the neglect to be excusable.” Id. Notably, the Court gave “little weight to the fact that counsel was experiencing upheaval in his law practice at the time of the bar date.” Id. at 398, 113 S.Ct. at 1499. It concluded that the parties must be held accountable for their counsel’s mistakes and/or negligence. The Court’s decision turned on the fact that the failure to file a proof of claim was due to the unusual manner in which the creditors were notified about the deadline to file proofs of claim. Id. at 396-400, 113 S.Ct. at 1499-1500.

Thomas concedes that it was neglectful when it failed to answer the complaint or otherwise plead. The question, therefore, is whether the balance of factors favors excusing Thomas’ neglect. After carefully reviewing the underlying circumstances of Thomas’ neglect, the Court finds that none of the factors favor a decision to vacate the judgment by default.

First, vacating the judgment would be prejudicial to Hewlett-Packard. Hewlett-Packard has already executed the judgment with the assistance of the District Court of Connecticut and withdrawn $137,755.59 from Thomas’ bank account in People’s Bank. Should the Court vacate the judgment, Hewlett-Packard would have to return the funds and begin the process of litigating the 1993 dispute. Thomas waited 363 days after the judgment by default was entered before it moved to vacate the judgment. Undoubtedly, this delay has aggrandized the resulting prejudice to Hewlett-Packard.

Second, waiting until two days before the Rule 60(b)(1) deadline elapses to file a motion to vacate the judgment and disregarding Hewlett-Packard’s repeated notices of the lawsuit constitutes a very long delay. Vacating the judgment would affect the finality of the Court’s judgments and the efficient administration of justice. Already the Court’s calendar is filled with criminal and civil trial dates until the end of 1998. Vacating the judgment in this 1995 case would require the Court to set a trial for the case in 1998. Although the Court has vacated judgments in other cases which has affected its calendar, the context in which the judgment by default was entered and the delay which occurred leads the Court to conclude that vacating the judgment would harm the efficient administration of justice.

Third, the Court is not persuaded by Thomas’ explanation for the cause of the delay. The Court finds that Thomas willfully disregarded Hewlett-Packard’s Lawsuit and that its neglect was within its control. Thomas was aware of Hewlett-Packard’s complaint. It had multiple notices from Hewlett-Packard that the lawsuit existed and Hewlett-Packard planned to proceed with the case should Thomas fail to settle the matter out-of-court. On January 23, 1995, a Thomas representative signed a return receipt indicating that she received a copy of the complaint and a request to waive the service of summons. Dkt. No. 2 at Ex. A. In a February 16, 1995 letter to Hewlett-Packard’s counsel at McConnell Valdes, the President of Thomas acknowledged that he received a copy of the complaint in Civil Action 95-1053 (HL) and denied any liability. Def.’s Mot., Dkt. No. 12 at Ex. F. In a March 21, 1995 letter addressed once again to Hewlett-[8]*8Packard’s counsel, the President of Thomas acknowledged receiving the counsel’s March 7,1995 letter discussing the dispute and forewarning Thomas that Hewlett-Packard planned to pursue relief through its civil action if Thomas did not reach an out-of-court settlement. Id. at Ex. G & H.

Furthermore, on June 1, 1995, Sheriff Henry F. Healy, Jr. served the President of Thomas personally with a summons and a copy of the complaint at Thomas’ former address. Thomas never informed Hewlett-Packard or its counsel that Thomas was relocating. For a defendant well-aware of the lawsuit and interested in defending against the action, the change of location would be a vital piece of information to pass on to both the Court and the plaintiff. Thomas did neither. Thomas also failed to react to Hewlett-Packard’s motion requesting the entry of Thomas’ default which Hewlett-Packard sent to Thomas at its former address. Dkt. No. 7. Finally, Thomas failed to react to Hewlett-Packard’s motion requesting the entry of a judgment by default and its motion for costs. Dkt. Nos. 8 & 10.

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174 F.R.D. 6, 38 Fed. R. Serv. 3d 1281, 1997 U.S. Dist. LEXIS 10298, 1997 WL 392440, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hewlett-packard-puerto-rico-v-thomas-industries-inc-prd-1997.