Thursday, November 10, 2016

Rule 60(B)(4) - when does it apply?

Rule 60(B) provides for relief from a final judgment on certain specified conditions, including mistake or excusable neglect, newly discovered evidence, and fraud or misrepresentation. Subdivision (4) provides for relief if "the judgment has been satisfied, released or discharged," and honestly, it's never been clear to me when or why that might warrant the vacature of a judgment. I understand why a judgment might be noted as "paid" or "satisfied," but why should that be grounds for relief from the judgment? The Second District has an answer, though not necessarily an entirely satisfying one, in Kossoudji v. Stamps.

This case involves a land installment contract. The Stamps defaulted and ultimately the trial court awarded six figures of damages, and ordered the return of the property to the vendor (even though the return of the property wasn't requested). The transfer was effected, the vendor immediately sold the property, and then attempted to collect the monetary judgment from the Stamps--without allowing a set-off for the sale value of the property.

The court found that this was grounds for relief under Rule 60(B)(4), writing that it would not be equitable to give such a judgment prospective application. The judgment was essentially satisfied, at least in part, by the transfer of the property, and so the plaintiff was not entitled to continue to pursue monetary damages; allowing that would be double-dipping. The court remanded for the trial court to determine the extent to which the transfer of the property satisfied the monetary damages.

That's all well and good, but what's totally unclear to me is why this issue shouldn't have been raised on direct appeal, rather than through a 60(B) motion. There's no shortage of case law stating that Rule 60(B) "is not a substitute for a direct appeal" on the merits of the judgment, and indeed the Stamps did not pursue a direct appeal from the final judgment. In fact, it's worse than that--the case was tried to a magistrate, who issued a decision in favor of the plaintiffs. The Stamps sought and obtained leave for additional time to file objections to the magistrate's decision, but then failed to file any objections at all.

It's certainly possible that the failure to object or appeal was through no fault of the Stamps, and that it rather was their counsel who was at fault. (The Stamps argued in their 60(B) motion that they did not personally receive notice of the judgment.) But even if that's true, that would seem to give rise not to a 60(B) motion but to a potential malpractice claim.

I suppose we throw this one on the pile for future reference, but it's hard to see this fact pattern coming up very frequently.

No comments:

Post a Comment