Petition — Gold v. Handel

In The YUN 4 4a!

Supreme Court of the Hited States

October Term, 1974

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No. @74-1603

MEYER GOLD,

Petitioner,

VS.

FANNY HANDEL and PREL CORPORATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

LAMPERT & LAMPERT

Attorneys for Petitioner

747 Third Avenue

New York, New York 10017

(212) 371-8811

(7817) LUTZ APPELLATE PRINTERS, INC

Law and Financia! Printing

South River, NJ. New York, N.Y Philadelphia, Pa Washington, D.C.

(201) 257-6850 (212) 563-2121 (215) 563-5587 (201) 783-7288

TABLE OF CONTENTS

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Constitutional Provisions Involved .............eeeeeeees

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Preliminary Statememt 2... cccccccccsccccccccscccsecsece

Reasons For Granting the Writ:

Petitioner's motion to vacate was denied without an

CVEROMMATY BORTUAM. ccccccccscccccccecceccccess

Entry of default judgment of $169,000 deprived

petitioner of property without due process of law

since the sanction imposed bore no reasonable

relationship to the petitioner’s alleged failure to

comply with discovery obligations. ..............

The respondent failed to give personal notice to the

petitioner prior to the entry of default judgment

although the respondent was aware of the fact that

the petitioner’s attorneys had ceased to appear or

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TABLE OF CITATIONS

Page

Cases Cited:

Dorsey v. Academy Moving & Storage, Inc., 423 F.2d 858 (Sth

Ce CDs cvueeccdtasecucencenunencewsedeseessaens 4

Flaks v. Koegel, 504 F.2d 702 (2d Cir. 1974) ............ 4

Peterson v. Term Taxi, Inc., 429 F.2d 888 (2d Cir. 1970) . 7

Societe Internationale, etc. v. Rogers, 357 U.S. 197 (1958) .3,5

Tolson v. Hodge, 411 F.2d 123 (4th Cir. 1969) .......... 7

Vindigni v. Meyer, 441 F.2d 376 (2d Cir. 1971) .......... 7

Statute Cited:

ee Ae: MEE eh visensdadendseecdaceseesalawennias 2

United States Constitution Cited:

a a il es Cee 2

Rules Cited:

Fed. R. Civ. Pro.:

iii

Contents

Page

APPENDIX:

Appendix A oe 8, ee Perr la

Appendix B ~~ Judgment of United States Court of Appeals . 2a

Appendix C — Order of United States Court of Appeals

Denying Petition For Rehearing ..........+eeeeeee: 4a

a — -

In The

Supreme Court of the United States

October Term, 1974

@-=—

No.

MEYER GOLD.

Petitioner,

VS.

FANNY HANDEL and PREL CORPORATION,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

SECOND CIRCUIT

Petitioner, Meyer Gold petitions this Court for a writ of

certiorari, to review the judgment cf the United States Court of

Appeals for the Second Circuit, entered March 27, 1975, and the

order of the Court of Appeals, denying a petition for rehearing,

dated April 16, 1975.

OPINIONS BELOW

The United States Court of Appeals affirmed the order of

the District Court, without opinion (Appendix A, Ia).

The petition for rehearing was denied without opinion

(Appendix C, 4a).

JURISDICTION

The jurisdiction of the Court to review the judgment of the

Court of Appeals, is authorized by 28 U.S.C. §1254(1).

CONSTITUTIONAL PROVISIONS INVOLVED

This petition involves the right of a defendant in a civil case

to due process of law as required by the Fifth Amendment to the

United States Constitution.

ISSUES INVOLVED

1. Did the Court of Appeals err, contrary to the

constitutional requirements of due process, when it failed to

require the holding of evidentiary hearings to determine the

truth of the matters and the issues of fact presented by the

petitioner's moving affidavits on his motion to vacate a default

judgment under Fed. R. Civ. Pro. 60(b)?

2. Was the petitioner deprived of his property without due

process of law in having his answer stricken and a default

judgment entered in the sum of $169,000 as a sanction under

Fed. R. Civ. Pro. 37, when the sanction bore no reasonable

relationship to the defendant's alleged failure to comply with

discovery obligations?

3. Should a large default judgment be permitted to stand

when the petitioner has made a prima facie showing of mistake

or excusable neglect; has a substantial defense; and no prejudice

will result to the other party by vacating the default judgment?

4. Was the respondent required, before obtaining a default

judgment, to give personal notice to the petitioner when it was

apparent that the petitioner's attorneys had ceased to appear and

answer in his behalf?

PRELIMINARY STATEMENT

A default judgment for $169,000, was entered against Meyer

Gold, pursuant to Fed. R. Civ. Pro. 37(d) for his failure to

answer interrogatories. The default judgment was granted

without a hearing, in the absence of opposing papers, and

without personal notice to the petitioner at a time when it was

apparent that his attorneys, without his knowledge had ceased to

appear or answer in his behalf. The petitioner’s motion to vacate

the default judgment, pursuant to Fed. R. Civ. Pro. 60(b), was

denied. The Court of Appeals affirmed the decision of the

District Court, and denied the petition for rehearing both

without opinion.

REASONS FOR GRANTING THE WRIT

PETITIONER’S MOTION TO VACATE WAS DENIED

WITHOUT AN EVIDENTIARY HEARING.

The Supreme Court has cautioned as to the “constitutional

limitations upon the powers of courts . . . to dismiss an action

without affording a party the opportunity for a hearing on the

merits of his cause.” Society Iniernational etc. v. Rogers, 357

U.S. 197, 209 (1958). The moving affidavits made a prima facie

showing as to the petitioner's good faith, mistake and excusable

neglect. If such sworn statements are true, as we must assume

they are, the Court of Appeals action in affirming the decision of

the District Court plainly violated the petitioner's constitutional

rights under Rogers. See Dorsey v. Academy Moving & Storage,

In... 423 F.2d 858 (Sth Cir. 1970).

This same Court of Appeals just seven months prior

required an evidentiary hearing.

“This matter could not be determined on the

basis of conflicting and competing affidavits. We

are in no better or worse position than the

District Court was in the absence of evidence

which a hearing could produce to determine

whether or not Koegel’s claims were credible.

This position is not sufficiently secure to support

the drastic action taken. We are persuaded that

the proper resolution is to reverse the order

denying the Rule 60(b) motion and remand for

an evidentiary hearing so that appropriate

findings may be made consonant with the due

process standards we have discussed.” Flaks v.

Koegel, 504 F.2d 702 (2nd Cir. 1974).

ENTRY OF DEFAULT JUDGMENT OF $169,000

DEPRIVED PETITIONER OF PROPERTY WITHOUT DUE

PROCESS OF LAW SINCE THE SANCTION IMPOSED

BORE NO REASONABLE RELATIONSHIP TO THE

PETITIONER’S ALLEGED FAILURE TO COMPLY WITH

DISCOVERY OBLIGATIONS.

The 1970 amendments to Rule 37, were intended to

authorize the Court, where it deemed appropriate, to impose

more flexible and softer sanctions for Rule 37 violations, than

theretofore provided. The dismissal of a pleading for the entry of

default judgment is the most drastic sanction provided by the

rule. Judge Sterry Waterman has commented:

“If the cause has not gone to trial and it is before

a Court of Appeals following an order of

dismissal, or a contempt conviction, the

reviewing court, before affirming the use of these

drastic sanctions permissible under Rule 37, will

scrutinize the situation out of which the sanction

order arose. The contempt sanction, though

wicked-sounding, is not nearly as drastic a

sanction as dismissal. It only leads to a fine or a

possible jail sentence — its use does not result in

the termination of a litigant’s cause of action.”

The Court in Societe Internationale v. Rogers, 357 U.S.

197, 209 (1958), established constitutional limitations upon the

power of the Courts even in aid of their own valid processes to

6

dismiss an action without affording a party the opportunity for

hearing on the merits of his cause. Such is the case before this

Court now. A default judgment was entered against the

petitioner without the opportunity for a hearing on the merits of

his cause, and a sanction which in effect imposed a penalty of

£169,000 for his failure to answer interrogatories which penalty

bore no reasonable relationship to his alleged failure to comply

with the discovery obligations.

THE RESPONDENT FAILED TO GIVE PERSONAL

NOTICE TO THE PETITIONER PRIOR TO THE ENTRY

OF DEFAULT JUDGMENT ALTHOUGH THE

RESPONDENT WAS AWARE OF THE FACT THAT THE

PETITIONER’S ATTORNEYS HAD CEASED TO APPEAR

OR ANSWER IN HIS BEHALF.

The Court of Appeals rejected the petitioner's argument

that the good faith and willfulness of the respondent must be

closely examined in determining whether the default judgment

should be permitted to stand. If either party took unfair

advantage of the other the interest of justice would require that

the default be vacated and a trial be held on the merits.

The Court of Appeals 2nd Circuit, in a 1971 decision held

as follows:

“... The procedure followed in the case of

sending all notices, motions and orders to Ennis

after it was known that he had disappeared seems

~2>- =e

~~

to indicate a disposition to take refuge in the

empty formality of fulfilling the letter of the legal

requirements while disregarding realistic

demands of the situation. Surely, once it became

known that Ennis had disappeared notice of

action proposed or taken should have been sent

to plaintiff personally. In the absence of a court

order, directing such service, the defendant's

attorneys were at fault for failing to do what

common sense required. In doing so they took

unfair advantage of the plaintiff. Vindigni v.

Meyer, 441 F.2d 376 (2nd Cir. 1971).”

The Courts universally favor trial on the merits. Any

doubts about whether relief should be granted should be

resolved in favor of setting aside the default so that the case may

be heard on the merits. Jolson v. Hodge, 411 F.2d 123 (4th Cir.

1969). Even in a case where the plaintiff exhibited failure of

good judgment and (the) conduct was an affront to the Court.

Peterson v. Term Taxi, 429 F.2d 888 (2nd Cir. 1970).

The case at hand could clearly serve as a guideline for a

problem which has long plagued the courts of our country: the

entry of default judgments; when they may be vacated; when

default judgments violate the constitutional requirements of due

process of law; and when personal notice is required before entry

of default judgment.

CONCLUSION

For the foregoing reasons, it is respectfully submitted that

the petition for the writ of certiorari should be granted.

Respectfully submitted.

s Irwin Lampert

Attorney for Petitioner

la

APPENDIX A — ORDER OF DISTRICT COURT

DECISION OF KEVIN T. DUFFY, U.S. DISTRICT COURT

JUDGE

The Motion to vacate the default judgment pursuant to

Rule 60(b) FRCP; is denied. The persistence of the defendant in

ignoring the orders of this court, directed both to him and to his

attorneys, constituted a blatent disregard for the process of

justice. While the size of the judgment is large, the record in this

case demonstrates that the plaintiff established a prima facie

case before Magistrate Jacobs and that the default was not due

to mistake or excusable neglect.

So Ordered:

July 29, 1974

KEVIN T. DUFFY

U.S. District Court Judge

2a

APPENDIX B — JUDGMENT OF UNITED STATES

COURT OF APPEALS

UNITED STATES COURT OF APPEALS

FOR THE

SECOND CIRCUIT

At a stated Term of the United States Court of Appeals for

the Second Circuit, held at the United States Courthouse in the

City of New York, on the twenty-fifth day of March, one

thousand nine hundred and seventy-five.

Present:

HON. IRVING R. KAUFMAN

Chief Judge

HON. WILLIAM H. MULLIGAN

Circuit Judge

HON. ROSZEL C. THOMSEN

District Judge

Fanny Handel,

Plaintiff-Appellee,

v.

Meyer Gold and Prel Corporation,

Defendants

3a

Appendix B

Meyer Gold,

Defendant-Appellant.

74-2295

Appeal from the United States District Court for the

Southern District of New York.

This cause came on to be heard on the transcript of record

from the United States District Court for the Southern District

of New York, and was argued by counsel.

ON CONSIDERATION WHEREOF, it is now hereby

ordered, adjudged, and decreed that the order of said District

Court be and it hereby is affirmed with costs to be taxed against

the appellant.

A. DANIEL FUSARO,

Clerk

By VINCENT A. CARLIN,

Chief Deputy Clerk

4a

APPENDIX C — ORDER OF UNITED STATES COURT

OF APPEALS DENYING PETITION FOR REHEARING

UNITED STATES COURT OF APPEALS

SECOND CIRCUIT

At a Stated Term of the United States Court of Appeals, in

and for the Second Circuit, held at the United States Court

House, in the City of New York, on the SIXTEENTH day of

April, one thousand nine hundred and seventy-five.

Present:

HON. IRVING R. KAUFMAN,

Chief Judge,

HON. WILLIAM H. MULLIGAN,

Circuit Judge,

HON. ROSZEL C. THOMSEN,

District Judge.

FANNY HANDEL,

Plaintiff-Appellee,

MEYER GOLD and PREL CORPORATION,

Defendants,

Sa

Appendix C

PREL CORPORATION,

Defendant-Appellee,

MEYER GOLD,

Defendant-Appellant.

74-2295

A petition for a rehearing having been filed herein by

counsel for the appellant, Meyer Gold

Upon consideration thereof, it is

Ordered that said petition be and hereby is denied.

s/ A. Daniel Fusaro

A. DANIEL FUSARO, CLERK