Reinsurance Co. of America v. Administratia Asigurarilor de Stat

122 F.R.D. 517, 1988 U.S. Dist. LEXIS 11241, 1988 WL 117430
CourtDistrict Court, N.D. Illinois
DecidedOctober 3, 1988
DocketNo. 83 C 4682
StatusPublished
Cited by3 cases

This text of 122 F.R.D. 517 (Reinsurance Co. of America v. Administratia Asigurarilor de Stat) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reinsurance Co. of America v. Administratia Asigurarilor de Stat, 122 F.R.D. 517, 1988 U.S. Dist. LEXIS 11241, 1988 WL 117430 (N.D. Ill. 1988).

Opinion

MEMORANDUM OPINION

GRADY, Chief Judge.

This diversity case is before us on the defendant’s motion to vacate judgment pursuant to Rule 60(b)(6) of the Federal Rules of Civil Procedure and the plaintiff’s motion to compel discovery. We deny both motions.

I. MOTION TO VACATE

FACTS

This dispute arises out of a complex reinsurance treaty signed by the plaintiff Reinsurance Company of America (“RCA”) and CJV Associates (“CJV”), an agent of defendant Administratia Asigurarilor de Stat (“ADAS”). The facts relevant to this motion are as follows.

On January 19, 1983, RCA filed a complaint against ADAS in the Circuit Court of Cook County, alleging breach of the reinsurance treaty. ADAS then removed the case to federal court and filed its answer. ADAS’s answer lists nine affirmative defenses, none of which mention the treaty’s arbitration or liability limitation provisions. On April 17, 1985, we issued a memorandum opinion denying ADAS’s motion to dismiss on comity grounds and granting partial summary judgment in favor of RCA as to CJV’s status as an agent of ADAS. Because ADAS raised only the comity issue in its memoranda, we gave it until May 3, 1985 to file a supplemental memorandum in support of its other defenses.

[519]*519ADAS failed to file a supplemental memorandum, and we granted summary judgment on liability in favor of RCA on July 9, 1985. However, we reserved ruling on the amount of damages pending further submissions by the parties. RCA submitted documents showing its damages, but again ADAS failed to submit anything. Therefore, on November 26, 1985, we granted summary judgment for RCA in the amount of $337,597.00.

ADAS filed a notice of appeal in this court on December 31, 1985, four days after the expiration of the period for filing such a notice under Rule 4(a)(1) of the Federal Rules of Appellate Procedure. We found that the deadline was missed because of the inexcusable neglect of ADAS and Mr. Radu Herescu, ADAS’s then newly-hired attorney. See Memorandum Opinion of March 13, 1986. Consequently, we refused to extend the period within which ADAS could file its notice of appeal. The Seventh Circuit affirmed our decision and dismissed ADAS’s appeal. RCA v. ADAS, 808 F.2d 1249 (7th Cir.1987).

On this motion, ADAS seeks to vacate the judgments entered on July 9, 1985 and November 26, 1985. As grounds for its motion, ADAS points to the behavior of its original attorney, Bernard Hubscher (“Hubscher”). According to Emil Boldus, an ADAS officer, the company retained Hubscher in March 1983.1 Throughout 1983 and 1984, Boldus made “numerous” calls to Hubscher regarding this case and sent Hubscher several telexes requesting case status reports. At least two of the telexes reflect Boldus’s frustration at Hubscher’s failure to provide him promptly with information. In fact, Boldus stated in one telex: “Under [the] circumstances, we wonder whether you still work for us or not.” Affidavit of Boldus at Exhibit E.

In addition to phone calls and telexes, Boldus met with Hubscher in New York on May 7,1984. According to Boldus, though, “Hubscher ... failed to provide ADAS with meaningful advices [sic] respecting the status of the action [and] the nature and viability of ADAS’s defenses.” Id. at 114. It is unclear how often Boldus contacted Hubscher after the May 7 meeting. However, the two met again approximately one year later on May 13, 1985, at which time “Hubscher advised [Boldus] that the suit was still in the discovery stage.” Id. at 1J 6. Hubscher never told Boldus about our April 17 opinion denying ADAS’s motion to dismiss and granting partial summary judgment in favor of RCA.

Of course, by the time of the May 13, 1985 meeting with Boldus, Hubscher had already missed the deadline for filing a supplemental memorandum in opposition to RCA’s motion for summary judgment. As noted above, Hubscher also failed to submit a memorandum on damages in July 1985. According to Boldus, Hubscher never informed him that anything had happened in the case during 1985, much less that an opinion, two orders, and final judgment had been entered. Boldus was allegedly unaware of the final judgment until December 2, 1985, when a business contact informed him of it. In December, Boldus called Hubscher several times, and each time Hubscher “assured ... [him] that there could be no judgment rendered against ADAS.” Id. at 117. Also during December, Boldus contacted Herescu, who called Hubscher and received a similar response.

DISCUSSION

ADAS asks that we vacate judgment under Rule 60(b)(6) because of Hubscher’s “gross negligence.” “The general rule in this circuit is that relief from a judgment under [R]ule 60(b) is an extraordinary remedy and is granted only in exceptional circumstances.” C.K.S. Engineers v White Mountain Gypsum, 726 F.2d 1202, 1204-05 (7th Cir.1984). Mere negligence of counsel does not constitute such an “exceptional circumstance.” However, courts differ as to whether an attorney’s gross negligence may serve as grounds for Rule 60(b)(6) relief. Compare L.P. Steuart, Inc. v. Matthews, 329 F.2d 234 (D.C.Cir.1964), cert. [520]*520denied, 379 U.S. 824, 85 S.Ct. 50, 13 L.Ed.2d 35 (1964) (yes) with Shwarz v. U.S., 384 F.2d 833 (2d Cir.1967) (no). On two occasions, the Seventh Circuit has expressly reserved ruling on this question. Ben Sager Chemicals International v. E. Targosz & Co., 560 F.2d 805, 810 (7th Cir.1977); Inryco v. Metropolitan Engineering Co., 708 F.2d 1225, 1234 (7th Cir.), cert. denied, 464 U.S. 937, 104 S.Ct. 347, 78 L.Ed.2d 313 (1983).

In our view, gross negligence of counsel does not justify relief under Rule 60(b)(6) for three reasons. First, permitting relief is “inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyer-agent.” Link v. Wabash R.R., 370 U.S. 626, 633, 82 S.Ct. 1386, 1390, 8 L.Ed.2d 734 (1962). Second, all the parties have a powerful interest in maintaining the finality of judgments. While Rule 60(b) by its terms envisions exceptions to the rule that judgments are final, we believe that adopting as uncertain a standard as “gross negligence” risks unwarranted erosion of the rule. Third, in cases of attorney misconduct, the client’s proper remedy should lie with the true wrongdoer, the attorney, and not with the innocent party-opponent who relied upon the court decision. Therefore, we hold that ADAS cannot seek Rule 60(b)(6) relief on the basis of Hubscher’s allegedly gross negligence.

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122 F.R.D. 517, 1988 U.S. Dist. LEXIS 11241, 1988 WL 117430, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reinsurance-co-of-america-v-administratia-asigurarilor-de-stat-ilnd-1988.