Roberts v. Strg Relocation Svc

• Court: Court of Appeals for the Fifth Circuit
• Decided: March 29, 2002
• Docket: 01-10412
• Status: Unpublished

Opinion

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 01-10412

LATRESA DENISE ROBERTS

Plaintiff--Counter Defendant--Appellee,

v.

STORAGE AND RELOCATION SERVICES INC, et al

Defendants.

CHRIS TINGIRIDES

Defendant--Counter Claimant--Appellant.

Appeal from the United States District Court for the Northern District of Texas (3:99-CV-2593-G) March 28, 2002

Before ALDISERT*, DAVIS, and PARKER, Circuit Judges.

PER CURIAM:**

Chris Tingirides appeals a default judgment of $500,000 plus

interest after he failed to make an appearance at a pre-trial

* Circuit Judge of the Third Circuit Court of Appeals, sitting by designation. ** Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.4. conference. The standard of review for the entry of sanctions

under Rule 16(f), Federal Rules of Civil Procedure, is abuse of

discretion. SEC v. First Houston Capital Res. Fund, Inc., 979

F.2d 380, 381-382 (5th Cir. 1992).

We hold that if the court granted the default judgment under

Rule 55(b)(2), then it exceeded its permissible exercise of

discretion by not complying with the three-day notice

requirement, and by not holding a hearing on the amount awarded

in the judgment. On the contrary, if the court granted the

judgment under Rule 16(f), then it exceeded its proper exercise

of discretion by not setting forth the efficacy of lesser

sanctions on the record.

In light of our determination to reverse the granting of

default judgment, it will not be necessary to decide whether, by

not providing Appellant with a hearing on the unliquidated

damages awarded, the court violated Rule 55 and denied him the

protections of due process.

Because we write only for the parties, is not necessary to

set forth the facts in detail.

I.

On November 15, 1999, Latresa Denise Roberts filed a lawsuit

alleging, among other things, sexual harassment and a hostile

work environment. She named Storage and Relocation Services,

2 Hire Solutions, Chris Tingirides, and Mark Haag as co-defendants.

The matter proceeded through various pre-trial proceedings,

including an amended complaint by Roberts. After several

motions, counsel for the parties filed a Joint Status Report in

which it was agreed that a trial would take place in February

2001.

By this time, Tingirides had moved to California and had

retained a second attorney there. After the withdrawal of his

second attorney, Tingirides wrote a letter to the court, stating

the following:

I would like to appeal to you for an extension for time to try and retain counsel. My former attorney has withdrawn from my case and I have not been able to retain new counsel. Not all attorneys are qualified to handle this type of case therefore it is making it difficult to find a qualified attorney. I am requesting and [sic] an additional 30 days to retain counsel.

Record Excerpts, Tab 5.

The district court construed this letter as a motion for

continuance, and denied the motion on January 24, 2001. At this

time, Tingirides was not represented by counsel. The Clerk’s

office did not send him actual notice of the denial, but rather

mailed it to Appellant’s former counsel of record. On February

2, 2001, a pre-trial conference was held at which Tingirides did

not appear. There is no evidence in the record indicating that

by this date Appellant had received notice that his request for

continuance had been denied. The court stated:

3 Let the record reflect that Ms. Julie Johnson is here on behalf of the plaintiff, but Mr. Tingirides has not appeared, even though it is now 9:12 a.m. by my watch on February 2nd, 2001. It appears that Mr. Tankeredies [sic] is not going to appear . . . It appears to me that he is in default now by virtue of his failure to appear today. And Ms. Juden [sic] I am going to ask you as counsel for the plaintiff to prepare and present appropriate papers to enter a default judgment.

Record Excerpts, Tab 6.

On February 6, 2001, Roberts submitted a motion for default

judgment, as well as an affidavit, to the court. The following

day, the court entered a default judgment against Tingirides in

the amount of $500,000, plus pre and post-judgment interest. In

addition, Roberts obtained default judgments against other named

defendants. The court later denied Tingirides’ Motion for Relief

from Judgment. In this action, Tingirides appeals the entry of

this default judgment.

II.

If the foregoing judgment is analyzed as a Rule 16(f)

sanction, the proceedings were tantamount to a dismissal. The

sanction of dismissal “is the most severe sanction that a court

may apply, and its use must be tempered by a careful exercise of

judicial discretion.” Durgin v. Graham, 372 F.2d 130, 131 (5th

Cir. 1967). “In this circuit it is well established that

dismissal with prejudice is a drastic remedy to which a court may

resort only in extreme situations where there is ‘a clear record

of delay or contumacious conduct by the plaintiff.’” Silas v.

Sears, Roebuck & Co., Inc., 586 F.2d 382, 385 (5th Cir. 1978)

4 (citing Durham v. Florida East Coast Ry. Co., 385 F.2d 366, 368

(5th Cir. 1967)).

We view the case at bar similar to the circumstances facing

us in SEC v. First Houston Capital Res. Fund, Inc., 979 F.2d at

381. In that proceeding, we confessed that it was “not entirely

clear whether the district court entered the default judgment

pursuant to Fed. R. Civ. P. 55 or Fed. R. Civ. P. 16 . . .” Id.

We held that “[b]ecause sanctions were imposed for failure of the

defendant to attend a pretrial conference, Rule 16(f) provides

the appropriate rubric under which sanctions should have been

dealt.” Id.

Because the district court here appears to have entered its

default judgment as a sanction for not appearing at pretrial

conference, we believe that Rule 16, and not Rule 55(b)(2) is the

most appropriate vehicle for analyzing the issues presented.1

After Tingirides failed to appear at the pre-trial conference, it

would be difficult to conclude that the judge intended the

default judgment as anything other than a sanction.

We require that three things occur before a dismissal is

justified. First, there must be “a clear record of delay or

1 Rule 55(b) states that the court must provide three days notice for a hearing on a default judgment. Appellant correctly notes that the motion for default judgment was submitted to the court on February 6, 2001, and was signed by the Clerk the following day. Hence, if this appeal is analyzed using Rule 55(b), then the judge clearly abused his discretion by not providing the required notice period.

5 contumacious conduct by the plaintiff.” Florida East Coast Ry.

Co., 385 F.2d at 368. Second, it must be clear that “lesser

sanctions would not serve the best interests of justice.” Rogers

v. Kroger Co., 669 F.2d 317, 320 (5th Cir. 1982). Third, the

record must contain evidence that the court actually considered

the lesser sanctions, and why it determined that dismissal was

the only appropriate remedy.

For the purposes of this decision, we will consider only the

third factor. We have stated that:

[W]e cannot affirm a dismissal unless the district court expressly considered alternative sanctions and determined that they would not be sufficient to prompt diligent prosecution or the record reveals that the district court employed lesser sanctions prior to dismissal (assuming that plaintiff was capable of performing them) that in fact proved to be futile.

Callip v. Harris County Child Welfare Dept., 757 F.2d 1513, 1521

(5th Cir. 1985). Dismissal with prejudice is normally

appropriate only if “its deterrent value cannot be substantially

achieved by use of less drastic sanctions.” Marshall v. Segona,

621 F.2d 763, 768 (5th Cir. 1980). “In fact, in a case which

presented a similar problem recently, [this Court] suggested that

charging the offending party with the costs and attorney’s fees

accumulated because of his actions is a more appropriate, and

less harsh, sanction than dismissal.” McNeal v. Papasan, 842

F.2d 787, 793 (5th Cir. 1988).

There is no evidence in the record that the district court

considered any sanctions other than dismissal. We have said that

6 even if the record teems with instances of delay or other

egregious behavior, a district court cannot impose the extreme

sanction of dismissal “unless the court first finds that a lesser

sanction would not have served the interests of justice.” Id.

We have repeatedly made clear that before dismissal, the

court must not merely consider lesser sanctions, it must make

them part of the record. “A silent record is inadequate. We

shall not infer that the district judge weighed alternative

sanctions; he must have ‘expressly considered’ them.” Callip,

757 F.2d at 1521.

We have emphasized that “ . . . where the record does not

disclose that the district court considered alternative

sanctions, ‘findings of fact [on the appropriateness of sanctions

short of dismissal] are essential for our consideration of the

inevitable argument that the dismissal was an abuse of

discretion.’” Id. (citing Hornbuckle v. Arco Oil & Gas Co., 732

F.2d 1233 (5th Cir. 1984)).

Because the record does not indicate that the court

considered any alternative sanction, we are constrained to hold

that the court exceeded the limits of an appropriate exercise of

discretion.

III.

Having so decided, we are undoubtedly sympathetic with the

acute frustration obviously felt by the district court at the

time it entered the default order. The record does not indicate

7 that at the time the court entered the order it knew that

Tingirides had not been personally notified that his motion for

continuance had been denied.2 Had the court been so informed, it

probably would not have entered the order.

Moreover, both parties are anything but model litigants.

Between the time of the initial complaint and the pre-trial

conference, Tingirides instructed his prior attorney to withhold

contact information from Roberts, and behaved in such a way as to

cause two separate attorneys, within a four-month period, to

withdraw from representing him. Robert’s behavior does not

entitle her to any kudos either, considering that she waited four

months after filing the pleading to serve Tingirides with notice

of the case, and only did so after the court threatened to

dismiss her suit altogether.

* * * * *

We reverse the judgment of damages entered on the default

judgment, reverse the default judgment entered prior thereto and

remand for further proceedings.

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2 The notice was sent to Appellant’s former counsel of record.

8 9