Keane v. HSBC Bank USA, N.A. ( 2017 )


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  •           United States Court of Appeals
    For the First Circuit
    No. 16-1045
    JOHN A. KEANE,
    Plaintiff, Appellant,
    v.
    HSBC BANK USA, as trustee for ELLINGTON TRUST, SERIES 2007-2;
    NATIONSTAR MORTGAGE, LLC; MORTGAGE ELECTRONIC REGISTRATION
    SYSTEMS, INC.,
    Defendants, Appellees.
    APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF MASSACHUSETTS
    [Hon. William G. Young, U.S. District Judge]
    Before
    Kayatta, Lipez, and Barron,
    Circuit Judges.
    Jamie Ranney, Jamie Ranney, P.C., on brief for appellant.
    Elizabeth T. Timkovich and Phoebe Norton Coddington, Winston
    & Strawn, LLP, on brief for appellees.
    October 31, 2017
    KAYATTA, Circuit Judge.         John Keane appeals from the
    denial of his motion to vacate an order dismissing his lawsuit
    against   HSBC,    Nationstar    Mortgage,    and   Mortgage    Electronic
    Registration Systems.     We reverse.
    I.
    In December 2014, Keane sued defendants in state court
    in Massachusetts, alleging a variety of state law violations in
    connection with a foreclosure action against a property he owned
    on Nantucket.     Defendants removed the action to federal court in
    the District of Massachusetts and moved to dismiss the case on
    April 23, 2015.     The district court entered an order setting a
    motion hearing for June 3.      At Keane's request, the district court
    extended Keane's response deadline to May 26, and moved the hearing
    date to June 17.     On May 26, Keane again requested an extension;
    the district court further extended his response deadline to June
    8, and reset the motion hearing to July 22, but noted in the order
    that   extended   the   deadline   that    "THERE   WILL   BE   NO   FURTHER
    EXTENSIONS ALLOWED." Keane timely filed his response in opposition
    to the motion on June 8.        His counsel, however, failed to appear
    at the July 22 motion hearing.        The district court, sua sponte,
    dismissed Keane's suit for failure to prosecute.
    One day after the district court entered its order
    dismissing the case, Keane's counsel filed a motion for relief
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    from that order, citing Federal Rule of Civil Procedure 60(b) and
    claiming      "mistake,   inadvertence,   carelessness   or   excusable
    neglect."      Keane's counsel explained that his failure to appear at
    the scheduled hearing was not intentional, but was instead the
    result of his neglect in failing to calendar the July 22 hearing
    date.       A solo practitioner with a heavy caseload, he attributed
    his neglect to the fact that his only two office assistants had
    both left on maternity leave in June.       The district court denied
    the motion without prejudice to its being refiled along with
    further supporting materials.       Keane refiled the motion with an
    affidavit from his attorney confirming the statements in the
    original motion, but the district court denied it without any
    further explanation.1      Keane appealed this denial, and only this
    denial; his notice of appeal does not mention the initial dismissal
    of the case for failure to prosecute.
    II.
    We begin with a preliminary jurisdictional issue.      In
    theory (and as a matter of prudence) Keane might have appealed
    from both the order dismissing the case for failure to prosecute
    1
    It appears that the renewed motion was actually filed one
    day after the 30-day deadline set by the district court, because
    the month in which that deadline was set was a month with 31 days.
    Neither party has made anything of this, nor did the district court
    cite this one day delay as a reason for denying the motion.
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    and the order denying his Rule 60(b) motion for relief from that
    order.        Instead, in his notice of appeal he designated only the
    latter, leaving us with jurisdiction only to review the latter.
    See Nansamba v. N. Shore Med. Ctr., Inc., 
    727 F.3d 33
    , 37 (1st
    Cir. 2013).        In this context, though, the analyses of both the
    underlying dismissal and the Rule 60(b) motion merge.                         When a
    district court dismisses a case for failure to prosecute due to
    non-attendance       at    a     hearing,   it   often    lacks   a   key   piece    of
    information: the reason why the party or attorney failed to attend.
    This information only becomes available when the dismissed party
    requests relief from the dismissal under Rule 60(b).                        Thus, the
    Rule 60(b) motion provides the first occasion upon which a party
    may be heard and a fully informed district court can decide the
    appropriate course of action. And while a dismissal without notice
    and the opportunity to be heard would normally trigger due process
    concerns, the ability of a party or attorney to present an excuse
    for the absence on a Rule 60(b) motion solves this problem.                         See
    Link     v.    Wabash     R.R.    Co.,   
    370 U.S. 626
    ,   632   (1962)("[T]he
    availability of a corrective remedy such as is provided by Federal
    Rule of Civil Procedure 60(b) . . . renders the lack of prior
    notice of less consequence.").              In evaluating the district court's
    denial of Keane's Rule 60(b) motion, we are essentially asking
    whether, given the information placed before it, the dismissal
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    remained justified as an act of the district court's discretion,
    or whether the district court was required to grant Keane's
    requested relief and vacate the dismissal.             Thus, Keane's appeal
    of the refusal to set aside, under Rule 60(b), the dismissal
    entered without notice permits us to consider the appropriateness
    of that dismissal, even if listing both rulings in the notice of
    appeal would have been preferable.
    The grant or denial of a motion under Rule 60(b) is
    committed to the sound discretion of the district court and we
    review its decision for abuse of discretion.             Dávila-Álvarez v.
    Escuela de Medicina Universidad Central del Caribe, 
    257 F.3d 58
    ,
    63 (1st Cir. 2001); see also Santos-Santos v. Torres-Centeno, 
    842 F.3d 163
    , 169 (1st Cir. 2016) ("The trial judge has wide discretion
    in this arena, and we will not meddle unless we are persuaded that
    some exceptional justification exists."          (internal quotation marks
    omitted)).     In general, our precedent dictates that Rule 60(b)
    motions should be granted sparingly, and any grant or denial of
    the same should be viewed with great deference on appeal.                See,
    e.g., 
    Santos-Santos, 842 F.3d at 169
    ("Demonstrating excusable
    neglect is a demanding standard."               (internal quotation marks
    omitted)).
    That   being   said,   the   law   also   manifests    a   strong
    preference that cases be resolved on their merits.                 See Ortiz-
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    Anglada     v.    Ortiz-Perez,     
    183 F.3d 65
    ,   66   (1st      Cir.     1999)
    ("[D]isposition on the merits is favored . . . .").                        We have
    repeatedly made clear that "dismissal with prejudice for want of
    prosecution is a unique and awesome [sanction]" to which courts
    should not resort lightly.         Pomales v. Celulares Telefónica, Inc.,
    
    342 F.3d 44
    , 48 (1st Cir. 2003) (collecting cases).                    We have said
    that dismissal is appropriate "in the face of extremely protracted
    inaction    (measured    in     years),    disobedience      of    court       orders,
    ignorance    of     warnings,    contumacious      conduct,       or    some    other
    aggravating       circumstance."          
    Id. (internal quotation
            marks
    omitted).        Such language implies that dismissal for failure to
    prosecute is usually not appropriate for garden-variety, isolated
    instances of attorney negligence.                Given the Supreme Court's
    explicit directive that Rule 60(b) may be used as a litigant's
    opportunity to be heard on the appropriateness of a dismissal for
    failure to prosecute, see 
    Link, 370 U.S. at 632
    , a district court
    facing a Rule 60(b) motion offering an explanation for failure to
    prosecute should give a party's explanation serious consideration
    and ensure that, on a full factual record, dismissal remains the
    appropriate sanction.         See Hernandez v. Herndandez-Colon, No. 94-
    2169, 
    1995 WL 146236
    , at *2 (1st Cir. Apr. 5, 1995) (unpublished
    opinion) (reversing the denial of a Rule 60(b) motion for relief
    from   a   dismissal    for     failure    to    prosecute    where      additional
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    information provided by the plaintiffs in their Rule 60(b) motion
    rendered dismissal inappropriate).
    Applying the above principles to the matter at hand, we
    conclude that the district court abused its discretion in denying
    Keane's Rule 60(b) motion.       There is no suggestion at all that
    Keane's counsel's failure to appear was intentional.           Nor does the
    record point to any prior neglect by counsel or a lack of regard
    for   the   importance   of   adhering    to   court-ordered    deadlines.
    Defendants cite the two instances when Keane's counsel sought to
    reschedule hearings.     Those instances, though, reflect no lack of
    regard for the court's deadlines; to the contrary, counsel paid
    attention to the hearing dates and followed the proper rules for
    securing changes to those dates.          It is possible that repeated
    last-minute requests for extensions could, at a certain point,
    become abusive, but wherever that point is, Keane's two requests
    did not reach it.
    The district court also gave no notice that failure to
    appear would result in dismissal with prejudice (rather than, for
    example, a loss of the ability to present oral argument).          And the
    unexplained refusal to vacate the dismissal meant, as a practical
    matter, that Keane's claims were left without a single merits
    adjudication.    While particularly egregious instances of a party
    neglecting to prosecute its case may lead to this result, the
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    strong preference for adjudicating disputes on the merits counsels
    against sua sponte dismissals where there has never been any
    consideration of the merits.
    Finally, defendants claim no serious prejudice beyond
    the costs of having counsel travel to and from the hearing, a harm
    that   could   have    been   remedied   by   a   monetary   sanction.
    Alternatively, and perhaps preferably, the district court might
    have proceeded with the hearing as scheduled.         In that event,
    defendants would have ended up suffering no harm at all, while the
    harm to Keane (having to rely on his brief alone) would have fit
    the fault without overshooting the mark.
    It is true that we have said that an attorney's failure
    to meet court deadlines due to "routine carelessness" does not
    generally constitute the excusable neglect that would merit relief
    under Rule 60(b).     See Negrón v. Celebrity Cruises, Inc., 
    316 F.3d 60
    , 62 (1st Cir. 2003); see also 
    Santos-Santos, 842 F.3d at 169
    (exceptional justification necessary for Rule 60(b) relief "must
    be something more than an attorney's failure to monitor the court's
    electronic docket"); Vargas v. Gonzalez, 
    975 F.2d 916
    , 918 (1st
    Cir. 1992) (an attorney's failure to attend a status conference
    rescheduled at that attorney's request was not excusable neglect
    justifying a Rule 60(b) vacatur of the district court's order
    dismissing the case).     But these cases dealt either with repeated
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    offenses over the course of three months, see 
    Vargas, 975 F.2d at 916
    , or failures to file objections to the reports of magistrate
    judges within a time specified by court rules, see 
    Negrón, 316 F.3d at 61
    ; 
    Santos-Santos, 842 F.3d at 166
    .         Reports by magistrate
    judges often include an express warning of what will happen if no
    timely objection is filed.      See 
    Negrón, 316 F.3d at 61
    (magistrate
    judge's order warned that failure to file specific objections
    within ten days would waive appellate review); see also Santos-
    Santos v. Puerto Rico Police Dep't, 
    63 F. Supp. 3d 181
    , 184 (D.P.R.
    2014) ("Absent objection, a district court has a right to assume
    that   the   affected   party   agrees    with   the   magistrate     judge's
    recommendation."        (alterations     and   internal   quotation    marks
    omitted)).    In such cases, moreover, dismissal results only if the
    magistrate judge first concludes that the dismissed claims fail on
    the merits.     In short, negligence in that context forfeits the
    right to seek review of a merits adjudication.            It does not, as
    here, prevent any merits adjudication whatsoever.
    It is also undoubtedly true that "[m]ost attorneys are
    busy most of the time and they must organize their work so as to
    be able to meet the time requirements of matters they are handling
    or suffer the consequences."        Stonkus v. City of Brockton Sch.
    Dept., 
    322 F.3d 97
    , 101 (1st Cir. 2003).           But this assumes that
    these consequences will be reasonably proportionate to the offense
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    and thus foreseeable to counsel.              As we have said, "the excusable
    neglect inquiry involves a significant equitable component and
    must give due regard to the totality of the relevant circumstances
    surrounding the [party's] lapse."                 Dimmitt v. Ockenfels, 
    407 F.3d 21
    , 24 (1st Cir. 2005) (internal quotation marks omitted).                          In
    sum,      Keane's   counsel's      behavior,       though    neglectful,    was    not
    intentional, egregious, or repetitive, and a sanction short of
    dismissal would have ensured that no harm was caused to Defendants
    or   to    the    court's      perfectly    appropriate      desire    to   move   the
    litigation forward.         Faced with an innocent and undisputed reason
    for counsel's absence, the district court should have concluded
    that while some sanction might have been appropriate, dismissal
    with prejudice was too harsh given the circumstances.
    III.
    For the foregoing reasons, the district court's denial
    of Keane's motion to vacate the prior order dismissing his case is
    reversed, the order dismissing the case is vacated, and the case
    is     remanded     to   the    district     court     for   further    proceedings
    consistent with this opinion. Each party shall bear its own costs.
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