Universitas Education, LLC v. Granderson ( 2024 )

United States Court of Appeals
For the First Circuit
No. 23-1675
UNIVERSITAS EDUCATION, LLC,
Plaintiff, Appellee,
v.
LILLIAN GRANDERSON, as successor to Jack E. Robinson, III,
Defendant, Appellant,
JACK E. ROBINSON, III,
Third Party Plaintiff,
v.
LOEB & LOEB LLP,
Third Party Defendant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge]
Before
Montecalvo, Thompson, and Rikelman,
Circuit Judges.
Elizabeth N. Mulvey, with whom Jason N. Strojny and Libby,
Hoopes, Brooks & Mulvey P.C. were on brief, for appellant.
Joseph L. Manson III, with whom Law Offices of Joseph L.
Manson III was on brief, for appellee.
April 15, 2024
THOMPSON, Circuit Judge. When Plaintiff Appellee
Universitas Education, LLC ("Universitas") first initiated this
lawsuit against Jack E. Robinson, III ("Robinson") in 2015, it
sought damages against him for (among many other things) alleged
violations of the Racketeer Influenced and Corrupt Organizations
("RICO") Act. But a lot has happened since then -- most notably,
Robinson died in November 2017.1
In the aftermath of Robinson's death, this case took a
turn from the merits of Universitas' claims against him to a focus
on finding a proper party to substitute into the case to act as a
personal representative of his estate. Eventually, Universitas
landed on Defendant Appellant Lillian Granderson ("Granderson"),
Robinson's elderly mother, as a proper party to substitute and
filed two motions in the district court, one to sub her in,
pursuant to Federal Rule of Civil Procedure 25(a), and the other
to enter default judgment against her, pursuant to Federal Rule of
Civil Procedure 55(b).2 The district court granted both.
1 The record is not clear on the precise date of Robinson's
death. As will soon become evident, the record's lack of clarity
on many things (not just the date of Robinson's death) will become
a bit of a theme of today's appeal.
2For those unfamiliar with default judgments, such a judgment
under Rule 55(b) is simply "a 'final disposition of the case and
an appealable order' that has the same effect as a judgment
rendered after a trial on the merits." United States v. $23,000
in U.S. Currency, 356 F.3d 157, 163 (1st Cir. 2004) (citation
omitted). A default judgment can come into play, as (allegedly)
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Now on appeal, Granderson argues the district court made
some mistakes in granting Universitas' motion to substitute and
motion for default judgment. After disentangling the (admittedly)
complicated procedural history underlying the district court's
decisions, we conclude that Granderson has a point, but only as to
the motion for default judgment. Accordingly, we affirm the
district court as to the motion to substitute and vacate the
default judgment. Our reasons for doing so follow.
The Procedural History3
On May 14, 2015, Universitas initiated this lawsuit
against Robinson in the United States District Court for the
District of Massachusetts, alleging RICO and supplemental state
law claims. In essence, the complaint alleged that Robinson, a
was the case here, "[w]hen a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise
defend" in the action. Fed. R. Civ. P. 55(a).
3 Avid court watchers will know we usually start off with a
detailed summary of the facts, before turning to how the case got
to us (i.e., the procedural history). As this appeal concerns the
ins and outs of party substitution and default judgments, however,
the actual merits of the factual allegations against Robinson are
not before us. We, accordingly, breeze past those factual
allegations and lay out (very) briefly what Universitas' complaint
alleges, before turning to what matters most to the issues on
appeal: the (dense) procedural history. (Bear with us.)
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lawyer himself, facilitated a former client's theft of over $30
million in life-insurance proceeds belonging to Universitas.
Robinson did not take these allegations lying down. To
the contrary, over the ensuing eighteen months, he defended himself
through the filings of various motions, including a motion to
dismiss, a motion to reconsider the district court's denial of
that motion to dismiss, a motion to transfer the case to the United
States District Court for Southern District of New York, and a
motion to compel arbitration. And he defended himself (literally)
to the end when he died in November 2017. On November 28, 2017,
Seth Marcus ("Marcus"), Robinson's lawyer in the case, informed
the district court and Universitas of Robinson's death through the
filing of a Notice of Suggestion of Death.
Following Robinson's death, the district court converted
an upcoming December 20, 2017 motion hearing on Robinson's then-
still-pending motion to compel arbitration to a status conference
to figure out how best to proceed. The district court also ordered
Universitas and Marcus to file a joint status report in
anticipation of that status conference to give it a run-down of
what issues remained in the case in light of Robinson's death.
Taking their cue from the district court, they did just that and
filed a joint status report, which stated (among many other things)
that a personal representative had not yet been appointed,
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Universitas would file a motion to extend the time to file a motion
for substitution until after it received notice of the personal
representative's identity, and several of the pending matters
before the district court could not be resolved without the
appointment of a personal representative.
At the December 20, 2017 status conference, the district
court stayed the case indefinitely until a personal representative
for Robinson's estate was appointed. The district court also
ordered Universitas and Marcus to file joint status reports on the
first day of every month, starting on February 1, 2018, to keep it
up-to-date on any personal-representative-related developments.
February 1, 2018 arrived and brought with it some welcome
and relevant news. In Universitas' and Marcus' joint status
report, Marcus indicated that he had spoken with Granderson, who
informed him that Robinson had a Last Will and Testament ("the
Will"), Robinson had named her as the executrix, she was still
interviewing possible estate attorneys, and probate proceedings
had not yet commenced. Marcus also indicated in the joint status
report that he had received a call from Jeraldine Williams-Shaw
("Williams-Shaw"), a lawyer who had not yet been retained by
Granderson but was investigating the extent of Robinson's estate
in anticipation of likely being retained.
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The next few months saw no further developments or
updates on the personal-representative front.4 What those next
few months did see, though, was the filing of several motions on
Universitas' part. It filed three motions to extend the time to
file a motion to substitute, the first on February 21, 2018, the
second on March 23, 2018, and the third on May 22, 2018. The
district court promptly granted each motion.
With no updates to move the case along, the district
court scheduled another status conference for July 23, 2018. At
that status conference, Marcus informed the district court and
Universitas that Granderson had decided not to initiate any probate
proceeding for Robinson's estate, so no personal representative
had been formally appointed. With that new tidbit of information,
it became clear to Universitas that, if it wanted to proceed with
its lawsuit, it would need to petition a probate court to appoint
a personal representative for Robinson's estate. Accordingly, at
the July 23, 2018 status conference, Universitas requested another
extension to file the motion to substitute in order to give it
time to initiate the relevant probate proceedings.5 As it had done
4 Universitas and Marcus filed one more joint status report
on March 2, 2018, indicating that neither of them had any update
to report. For reasons unclear to us from the record, no more
joint status reports were filed after March 2, 2018.
5 This status conference is the last time we hear from Marcus.
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before, the district court granted Universitas the extension, this
time until October 23, 2018.
The next few months came and went with no real progress
-- in fact, quite the opposite. Over the remaining months of 2018
and first two months of 2019, Universitas filed four status
reports, informing the district court that it had indeed filed a
creditor's petition in the Plymouth County Massachusetts Probate
Court seeking the appointment of a personal representative for
Robinson's estate, but that three separate lawyers had declined to
be appointed the estate's personal representative. In these status
reports, Universitas also sought further extensions of the time to
file a motion to substitute6 and informed the district court that
it would be filing a request for the district court to appoint a
receiver,7 pursuant to Federal Rule of Civil Procedure 66, to take
custody of Robinson's assets.
Things picked back up on February 5, 2019, at which point
the district court held a status conference with only Universitas
and its counsel. At the status conference, the district court got
6 The record below is (again) unclear as to whether these
requests were ever granted or denied.
7 A receiver is an individual appointed by a court, and "the
court itself holds and administers the estate through the receiver,
as its officer, for the benefit of those whom the court shall
ultimately adjudge to be entitled to it." Goldfine v. United
States, 300 F.2d 260, 263 (1st Cir. 1962) (citation omitted).
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down to business and noted its reticence at appointing a personal
representative or receiver itself, given the difficulty the
Plymouth County Probate Court was having in finding somebody
willing to take on the task. As an alternative, the district court
suggested that, because discovery was complete, it "would
entertain something in the nature of default process that consisted
of the submission of a motion for summary judgment fully supported,
followed by service on the likely beneficiaries of any estate that
Mr. Robinson may have." The "impediment" with this approach, the
district court noted, was that "in the absence of a personal
representative, there's nobody here . . . -- that we know of -- to
respond to a motion for summary judgment. And I would want to be
sure that there was the equivalent of notice -- effective notice
on those persons who otherwise might be expected to respond. That
may be the statutory beneficiaries of any estate, either here or
somewhere else. I just don't know where that somewhere else might
be."
To bypass this pesky impediment, the district court
suggested the following:
That I permit say 45 days of discovery to see
if you can find out who those people might be
and identify them for purposes of service so
that they get served with whatever motion for
summary judgment is what I suggest, because
that's giving me the factual materials. I
kind of struggled with a motion to dismiss
before. And then I'd feel fairly comfortable
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if they don't come forward and respond, and
you have a well-founded basis for summary
judgment to enter something like a default
judgment. It may be a failure to state -- it
may be failure to prosecute or failure to
defend their claims, but it's a default sort
of issue, and then you can be on to the
business of trying to execute on that
judgment.
Universitas mulled it over and agreed with that plan of attack,
and "only ask[ed] that the [district] [c]ourt continue to extend
the deadline . . . for substitution." The district court responded
that it would do that, but it would take that matter up when
Universitas' discovery was over because it "want[ed] to think about
that" since "[t]here really isn't anybody to substitute now."
At the end of the status conference, the district court
summarized its marching orders. Discovery would be reopened until
April 5, 2019, so that Universitas could "figure out who's who in
the line of succession here or who it is that [it] would proffer
as someone who can properly be said to have sufficient interests
in the estate to provide some response or at least be notified of
the response" and so that Universitas could "identif[y]
[Robinson's] assets." The stay the district court originally
issued upon Robinson's death was extended until April 5, 2019, and
Universitas was given a tentative June 3, 2019 deadline for filing
its summary judgment motion. Finally, the district court put an
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April 12, 2019 status conference on the books to discuss post-
discovery next steps.
In the following weeks, Universitas got straight to
work. In a status report it filed in anticipation of the April
12, 2019 status conference, Universitas recounted all its efforts:
(1) it served Granderson and Maxine Novak ("Novak"), Robinson's
longtime companion and business partner, with subpoenas and
notices of deposition; (2) while both Granderson and Novak moved
to quash those depositions in the United States District Court for
the Middle District of Florida, Granderson's motion to quash was
quickly denied, so she was deposed on April 2, 2019; (3) during
"Granderson's deposition, Universitas learned that Robinson had a
will, which was filed with the probate court in Naples, F[lorida]"
and that "Granderson was named as the personal representative of
the estate;"8 and (4) Universitas had obtained a copy of the Will,
which indicated that property had been bequeathed to Granderson,
Novak, and other previously unknown individuals, who Universitas
would need more time to locate and serve. The status report also
indicated that Universitas would be requesting extensions of the
8 Once again, it is unclear to us why Universitas indicated
it had only learned of the existence of the Will through
Granderson's April 2, 2019 deposition, because it is nose-to-face
plain from the record that Marcus informed both the district court
and Universitas as early as February 1, 2018 that Robinson had a
will and that Granderson was the named executrix.
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discovery and summary judgment deadlines that the district court
had previously imposed.
The April 12, 2019 status conference (attended only by
Universitas) saw additional updates. At the conference,
Universitas explained to the district court that it had "made
substantial progress in identifying the [W]ill and identifying
assets." Specifically, it noted that Robinson had taken out
several life insurance policies before his death, totaling about
$3 million, and a portion of those proceeds were to be paid to
Shadow Ridge Properties, LLC ("Shadow Ridge"), a corporation of
which Robinson and Novak each owned half. The Will, Universitas
explained, provided that Robinson's fifty-percent interest in
Shadow Ridge would go to Granderson upon his death.
Universitas continued and spelled out other deposition-
related developments. As to Novak, it explained to the district
court that her motion to quash was still pending, but it expected
to be able to depose her soon. As to Granderson, Universitas
explained that it successfully deposed her and, during that
deposition, she said she did file the Will in probate court in
Florida. Universitas also indicated that the Will provided that
should Granderson be unwilling or unable to serve as the personal
representative, two of Robinson's cousins, Cecily Ingram
("Ingram") and Eileen Heathington ("Heathington"), could serve in
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her place9 and that Heathington was present for Granderson's
deposition. Finally, Universitas told the district court that, at
the deposition, it had "put [Granderson and Heathington] on notice
that [it] would be filing a motion for summary judgment and that
[it] would be serving it on them."10
Still unclear about the status of a personal
representative, the district court followed up and asked, "Do you
understand that Ms. Granderson or anyone else has actually been
appointed to administer the estate?" Universitas clarified that
it was its understanding that no one had yet been formally
appointed and Granderson had stated at her deposition that she did
not initiate probate proceedings because Robinson had no assets.
Accordingly, the district court noted that "the administration of
the estate, at least under these circumstances, is open to
question" and granted Universitas extensions of the discovery and
summary judgment deadlines in order to give it more time to find
the appropriate personal representative.
Per the Will, should Granderson be unable or unwilling to
9
serve as the estate's personal representative, the personal
representative shall be Ingram and, if she is also unable or
unwilling, Heathington.
As Williams-Shaw (the lawyer who had spoken with Marcus to
10
say she had been mulling over whether she'd be representing
Granderson in the Florida probate matter) represented Granderson
at the deposition, Williams-Shaw was also put on notice of the
upcoming motion for summary judgment.
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The next few months passed by without much to report --
that is, until July. On July 8, 2019, Granderson made her first
appearance (of, eventually, quite a few appearances) on the
district court's docket. She filed pro se,11 as a non-party to the
case,12 an affidavit of hers, the same one that she had also filed
in the United States District Court for the Middle District of
Florida. The affidavit more or less informed the district court
that she had been cooperative with Universitas' subpoena; she
submitted, in anticipation of her deposition, all the documents
that she had in her possession that were addressed to Robinson;
she informed Universitas at her deposition of the Will; Novak had
told her that Shadow Ridge had no assets, so Granderson decided
not to initiate any probate proceedings; and she viewed
Universitas' continued efforts to question her as harassment.
Two additional developments occurred in July 2019.
First, the district court extended the discovery and summary
judgment deadlines to July 26, 2019 and September 3, 2019,
respectively. Second, Universitas finally succeeded in deposing
For the uninitiated, "pro se" is just a fancy Latin term
11
given to litigants "who do[] not retain a lawyer and appear[] for
[themselves] in court." Fed. Deposit Ins. Corp. v. Anchor Props.,
13 F.3d 27, 31 (1st Cir. 1994) (quoting Pro Se, Black's Law
Dictionary (6th ed. 1990)).
Recall Universitas still had not yet filed a motion to sub
12
her (or anyone, for that matter) into the case.
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Novak on July 25, 2019. During her deposition, she indicated that
Shadow Ridge had no substantial assets remaining, Shadow Ridge had
received about $2 million in proceeds from Robinson's life
insurance policies, and Granderson had received slightly less than
$1 million of those proceeds, as Robinson had left his ownership
interest in Shadow Ridge to Granderson.13
With Novak's deposition now complete, Universitas turned
its attention to its upcoming summary judgment deadline and timely
filed its motion and supporting documentation on September 3,
2019.14 Nevertheless, that motion went unadjudicated as the case
13 During July 2019, Universitas was also engaging in
litigation against Heathington in the United States District Court
for the Middle District of Florida regarding its attempts at
deposing her.
14 In its briefing to us, Universitas asserts that, at the
time of filing, it "remitted a copy of the Motion for Summary
Judgment to Ms. Novak and informed Ms. Granderson of the Motion."
There is evidence in the record to suggest that Novak was given a
copy of the summary judgment motion, and that Granderson was
informed that a summary judgment motion would be forthcoming.
There is, however, no evidence in the record that the summary
judgment motion ever made its way to Granderson. Rather, the
record shows the opposite. The certificate of service for each
summary-judgment-related filing only stated that it was filed
through the district court's electronic filing system. But, as no
party had yet been substituted into the case, no one could have
been served through that system. Moreover, the summary judgment
motion itself indicated that Universitas was unable to comply with
the district court's local rule requiring conference with the
opposing party prior to the filing of any motion because "Mr.
Robinson is deceased and there is no representative for his estate.
Therefore, there exists no party with whom counsel for Universitas
could confer prior to the filing of this motion." Finally, email
correspondence between Universitas' lawyer and Williams-Shaw
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went essentially dead for the next year or so with no more filings
or activity of any kind on the docket (for reasons, again, unclear
to us).15
The case was briefly brought back to life in the summer
of 2020, with two notable developments. First, Granderson made
her second appearance on the docket on June 2, 2020 with a pro se
motion to dismiss for lack of subject matter jurisdiction, which
she filed as a non-party to the case as she did before. While not
particularly a beacon of clarity, the motion seems to be a copy of
a motion filed with the United States District Court for the Middle
District of Florida in an effort to prevent Universitas from
deposing her again. Second, Granderson was indeed deposed again
on July 13, 2020, demonstrating that her efforts in Florida proved
unsuccessful. During that deposition, at which Granderson was
demonstrates that Universitas' lawyer could not serve Williams-
Shaw through email because the motion and supporting documentation
were too large. To sidestep the issue, Universitas' lawyer asked
Williams-Shaw what her preferred method of receipt would be.
Williams-Shaw followed up and explained that she was not barred in
Massachusetts nor had she entered an appearance in the case in the
United States District Court for the District of Massachusetts, so
she "decline[d] to accept delivery of legal papers, related to the
above-referenced Massachusetts cause, for Mrs. Granderson."
Nothing in the record suggests Universitas took any other steps to
serve Granderson.
15 It appears that in this interim period, Universitas and
Granderson were engaging in litigation in the United States
District Court for the Middle District of Florida relating to a
second deposition of Granderson that Universitas wanted to
conduct.
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represented by Williams-Shaw, Granderson confirmed (among many
other things) that she had received a check for a total of
$923,747.60 from the life insurance policy proceeds from Shadow
Ridge. And with those two developments, the case went
(inexplicably) dormant again.
A flurry of activity in the 2021 new year awoke the case
from its slumber. First up (and importantly), on January 26,
Universitas filed a Request for Entry of Default ("the Request")
against Robinson's estate (not Robinson specifically), pursuant to
Federal Rule of Civil Procedure 55(a).16 The Request itself argued
that Robinson's estate had not responded to Universitas' summary
judgment motion, and Granderson, as executrix with (alleged)
knowledge of the proceedings, had "knowingly and intentionally
. . . failed to defend this case." The Request also indicated
that Universitas had sent a copy of the Request to Granderson.17
Two days later, on January 28, 2021, the clerk of the district
16 We'll get into the weeds of entry of default and default
judgments later down the line but, for now, just keep in mind that
Federal Rule of Civil Procedure 55 governs the issuance of a
default judgment and the rule envisions a two-step process, with
the first step being entry of default under Rule 55(a) and the
second step being entry of default judgment under Rule 55(b). See
Fed. R. Civ. P. 55(a)–(b); see also $23,000 in U.S. Currency, 356
F.3d at 163 ("The rule distinguishes between the 'entry of default'
under Rule 55(a) and 'judgment by default' under Rule 55(b).").
17Nowhere in the Request, however, does Universitas address
the fact that no one, much less Granderson specifically, had been
substituted into the case.
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court entered default, but only as to Robinson (not specifically
as to his estate or Granderson).18 That same day, a copy of the
clerk's entry of default was mailed to Robinson at the last-known
address on file for him, which was returned as undeliverable to
the district court on February 8, 2021 (and obviously so, because
Robinson had been dead for years by that point).
Second, on March 1, 2021, Universitas moved for default
judgment against Robinson's estate, pursuant to Federal Rule of
Civil Procedure 55(b), because Granderson had allegedly "taken no
action to defend the case on behalf of Mr. Robinson's estate."
The default judgment sought $92,031,830.55 from Robinson's estate.
Granderson was quick to respond. Just three days later, on March
4, 2021, Granderson made her third appearance on the docket and
filed a motion to intervene in the case for the limited purposes
of setting aside the entry of default and of moving to dismiss for
lack of subject matter jurisdiction (essentially renewing her
prior motion to dismiss for lack of subject matter jurisdiction).
This time, though, Granderson was not proceeding pro se. Rather,
18It is unclear as to why entry of default was entered against
Robinson (personally) to begin with because it was clear from the
Notice of Suggestion of Death filed with the district court back
on November 28, 2017 that Robinson had passed and, prior to his
death, he had defended the case vigorously, he (needless to say)
couldn't have continued to defend himself after his death, and, in
the wake of his departure, the case had turned into a Robinson-
is-dead-there-is-no-defendant sideshow.
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Lana Sullivan ("Sullivan") filed the motion for Granderson as her
local counsel, and she entered her appearance only "for the limited
purpose of intervening in this matter and moving to dismiss if
this motion is granted." Williams-Shaw, for whom Sullivan filed
a separate motion for admission pro hac vice,19 was also listed as
counsel on the motion to intervene. Disagreeing with Granderson's
legal take, Universitas filed its opposition to Granderson's
motion to intervene on March 18, 2021.
Notwithstanding these filings and flurry of activity,
the case went dead-dead this time for reasons that (again) remain
unclear. Indeed, the next activity in the case came nearly
thirteen months later in June 2022. But that activity was merely
two letters. The first was a letter from Universitas to the
district court inquiring about the status of its pending motions
for summary judgment and default judgment since the district court
had not acted on either of its pending motions. The second was a
counseled letter from Granderson (her fourth appearance on the
docket), arguing that no party had been substituted into the case
19 Deciphering that Latin lingo, seeking admission pro hac
vice simply refers to the process by which a lawyer barred in the
relevant jurisdiction moves for the admission of a lawyer not
barred in that jurisdiction (but barred in another), so that the
latter can appear in a particular case. See Nationalist Movement
v. City of Boston, No. 94-1827, 1994 WL 706022, at *1 (1st Cir.
Dec. 19, 1994).
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and Universitas' motion for default judgment should be denied.
The case, nevertheless, remained dead-dead for several more
months.
That is, until February 7, 2023, at which point the
district court issued a sweeping order adjudicating all the pending
motions. The district court's February 7, 2023 order started off
with substitution. It noted that "[d]espite the initial challenges
Universitas faced when trying to identify a successor, Universitas
now contends that Ms. Granderson is an appropriate substitute under
[Federal Rule of Civil Procedure] 25" and it agreed with that
assessment. Accordingly, the district court ordered that the stay
it had put in place back in 2017 be lifted,20 that Universitas
serve Granderson by March 31, 2023 with copies of the February 7,
2023 order and with copies of the Notice of Suggestion of Death
that Marcus filed in November 2017. The district court further
ordered that Universitas would have ninety days after March 31,
2023 to file a motion for substitution and to serve Granderson
with that motion.
The record is unclear as to whether this stay had already
20
been lifted. As we laid out above, while the district court
initially stayed the case indefinitely on December 20, 2017, it
subsequently extended the stay only to April 5, 2019. Our review
of the record reveals no further action regarding the stay on the
district court's part after April 5, 2019 until this February 7,
2023 order.
- 20 -
Turning to its resolution of the pending motions, the
district court's February 7, 2023 order started off with
Granderson's pro se motion to dismiss for lack of subject matter
jurisdiction and her counseled motion to intervene. The district
court denied both, first, concluding that it did have subject
matter jurisdiction and that, second, permissive intervention (as
requested) was not appropriate because Granderson "does not seek
intervention to respond to Universitas' motions nor does she seek
to be substituted for Mr. Robinson."21 As for Universitas' motion
for summary judgment and motion for default judgment, the district
court denied both because no party had been substituted into the
case, but indicated Universitas could refile them at a later time.
With all the pending motions now resolved, the February 7, 2023
order ended by scheduling a status conference for April 12, 2023
and ordering Universitas and "any person substituted [for
Robinson]" to file a status report by April 7, 2023.
21The district court also ruled on Sullivan's motion for
Williams-Shaw's admission pro hac vice. While the district court
allowed that motion, it also terminated immediately thereafter
both Sullivan's and Williams-Shaw's appearances on the docket.
Recall that Sullivan and Williams-Shaw had filed their appearances
"for the limited purpose of intervening in this matter and moving
to dismiss if this motion is granted." Having denied the motion
to dismiss and motion to intervene, the district court reasoned
that the purpose for their appearances was no longer relevant and
terminated their appearances.
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Following the issuance of the February 7, 2023 order,
the case proceeded rather quickly, in contrast to the previous
periods of inactivity. A few weeks later, Universitas filed two
status reports detailing its efforts at serving Granderson with
copies of the February 7, 2023 order and Notice of Suggestion of
Death, despite Granderson's apparent refusal to accept service
from the service processor at her home in Florida. At the April
12, 2023 status conference held remotely, the district court
ordered Universitas to file a motion to substitute by April 19,
2023 and allowed Universitas to refile its motion for default
judgment no later than May 12, 2023. The district court indicated
that it would "schedul[e] a hearing on the motion for default
judgment promptly and w[ould] further address the execution of the
judgment when appropriate." While it does not appear that
Granderson was present for this status conference, Williams-Shaw
was present and the district court "treat[ed] [her] participation
. . . in this status conference as that of an interested party
since no formal appearance as counsel of record has been accepted
by the [c]ourt."22
22 At this point, though, Robinson was dead and no one had yet
been substituted in his place. There was, therefore, no one for
whom Williams-Shaw could have entered an appearance as counsel of
record.
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Universitas promptly filed its motion for substitution
on April 18, 2023 and served it upon Granderson. The district
court granted the motion a few weeks later on May 8, 2023 because
Granderson failed to file an opposition within fourteen days of
service as required by local rules. See D. Mass. R. 7.1(b)(2).
Notably, a counseled opposition23 (Granderson's fifth appearance
on the docket) did arrive on May 12, 2023, four days after the
district court granted Universitas' substitution motion. Also on
May 12, Universitas renewed its motion for default judgment. Then
two weeks later on May 26, 2023, Sullivan, on Granderson's behalf,
filed an opposition to Universitas' renewed motion for default
judgment (Granderson's sixth and final appearance on the docket)
and Universitas filed a reply to Granderson's opposition/motion to
vacate substitution.
After a nearly two-month lull in activity, the district
court denied Granderson's opposition/motion to vacate
substitution, and granted Universitas' motion for default
judgment, without scheduling any hearing on the motion for default
judgment as it had previously indicated it would. Despite
Granderson's six appearances and filings, the district court's
23 Granderson's opposition was styled as both an opposition
and a motion to vacate the district court's ruling ordering her
substitution. It was filed by Sullivan, who Granderson had
apparently retained again.
- 23 -
default judgment indicated that "Robinson . . . and his Estate,
through substituted party Lillian Granderson, . . . failed to plead
or otherwise defend in this action." The default judgment then
ordered that Universitas recover from Robinson's estate, through
substituted party Granderson, the hefty sum of $92,031,830.55
(plus interest).
Not wanting to be on the hook for a $92 million bill,
Granderson filed a timely appeal and brought the case to our bench.
The Issues
Having made it out the other end of that procedural-
history maze, we turn our attention now to the issues on appeal.
To remind, Granderson challenges the district court's granting of
Universitas' motion to substitute and motion for default judgment.
We'll take each in turn, kicking things off with the motion to
substitute, before ending with the motion for default judgment.
Motion to Substitute
Granderson believes the district court was wrong to sub
her into the case as a representative for Robinson's estate and
hopes that we will reverse that decision. She pins those hopes on
three arguments, all relating to Universitas' alleged failure to
follow the proper Rule 25(a) substitution process. First,
Granderson argues that Universitas should have filed its Rule 25(a)
substitution motion within ninety days of it having learned of the
- 24 -
Will and of the fact that the Will named her executrix. Second,
she alternatively argues that Universitas should have filed its
Rule 25(a) substitution motion within ninety days of Marcus having
filed the Notice of Suggestion of Death. And third, she argues it
would be unfair to order her substitution in light of her advanced
age and declining health. To make sense of these arguments, we'd
first better explain our standard of review and how the
substitution process works when a party to a case dies.
Starting off with our standard of review, we review a
district court's decision to substitute a party under Rule 25(a)
for abuse of discretion. See LN Mgmt., LLC v. JPMorgan Chase Bank,
N.A., 957 F.3d 943, 949 (9th Cir. 2020) (citing cases); cf. Potvin
v. Speedway LLC, 891 F.3d 410, 416 (1st Cir. 2018) (reviewing
substitution under Rule 25(c) for abuse of discretion). An "error
of law" is a prime example of an abuse of discretion, but such an
abuse also "occurs when a material factor deserving significant
weight is ignored, when an improper factor is relied upon, or when
all proper and no improper factors are assessed, but the court
makes a serious mistake in weighing them." Lech v. von Goeler, 92
F.4th 56, 63-64 (1st Cir. 2024) (citations and internal quotation
marks omitted).
With our standard of review squared away, we turn now to
the substitution process. When a party dies during litigation and
- 25 -
the "claim survives the death of [the] party, Rule 25 'facilitates
the substitution of a "proper party" to take the place of the
decedent.'" Marcus v. Am. Cont. Bridge League, 80 F.4th 33, 43
(1st Cir. 2023) (quoting Silas v. Sheriff of Broward Cnty., 55
F.4th 872, 876 (11th Cir. 2022)). In relevant part, that Rule
provides:
(a) Death.
(1) Substitution if the Claim Is Not
Extinguished. If a party dies and the
claim is not extinguished, the court may
order substitution of the proper party.
A motion for substitution may be made by
any party or by the decedent's successor
or representative. If the motion is not
made within 90 days after service of a
statement noting the death, the action by
or against the decedent must be
dismissed.
. . .
(3) Service. A motion to substitute,
together with a notice of hearing, must
be served on the parties as provided in
Rule 5 and on nonparties as provided in
Rule 4. A statement noting death must be
served in the same manner. Service may
be made in any judicial district.
Fed. R. Civ. P. 25(a)(1), (3).
Breaking this down, if a party dies and the claim(s) is
not extinguished,24 Rule 25(a) permits (but does not require) that
24Granderson did not contest below and does not contest here
Universitas' assertion that some of its claims against Robinson
(i.e., its civil RICO claims) survive his death -- an assertion
- 26 -
the district court order substitution of the proper party. Fed.
R. Civ. P. 25(a)(1) ("If a party dies and the claim is not
extinguished, the court may order substitution of the proper
party." (emphasis ours)); see In re Baycol Prods. Litig., 616 F.3d
778, 783 (8th Cir. 2010) ("The language of [Federal Rule of Civil
Procedure] 25(a)(1) is permissive. . . . The decision whether to
substitute parties lies within the discretion of the trial judge
and he may refuse to substitute parties in an action even if one
of the parties so moves." (citation and internal quotation marks
omitted)).
To effectuate that substitution, "[t]he rule [first]
requires 'service of a statement noting the death,' but fails to
specify upon who that notice must be served." Marcus, 80 F.4th at
43 (quoting Fed. R. Civ. P. 25(a)(1)). The "who" of it all "is an
for which there is caselaw support. See, e.g., Malvino v.
Delluniversita, 840 F.3d 223, 231 (5th Cir. 2016) (civil RICO
claims survive decedent's death); Faircloth v. Finesod, 938 F.2d
513, 518 (4th Cir. 1991) (same); McKinney v. Panico, No. 21-cv-
04602, 2022 WL 2356476, at *3 (N.D. Ill. June 30, 2022) (same and
collecting cases); Watchous Enters., LLC v. Pac. Nat'l Cap., No.
16-1432, 2021 WL 2311912, at *3 (D. Kan. June 7, 2021) (same);
First Am. Corp. v. Al-Nahyan, 948 F. Supp. 1107, 1122 (D.D.C. 1996)
(same). Granderson has, therefore, forfeited and waived any
argument to the contrary. See Brox v. Hole, 83 F.4th 87, 96–97
(1st Cir. 2023) (characterizing appellants' failure to "develop
[any] contrary argument" as waiver); Davila v. Corporación de P.R.
Para La Difusión Pública, 498 F.3d 9, 14 (1st Cir. 2007) ("The
appellant did not present [the argument] to the district court.
The argument is, therefore, forfeited.").
- 27 -
important facet of the rule because '[i]f the motion [to substitute
a party] is not made within 90 days after service of a statement
noting the death, the action by or against the decedent must be
dismissed.'" Id. (alterations in original) (quoting Fed. R. Civ.
P. 25(a)(1)). Our recent decision in Marcus makes clear that the
statement noting the death "must be served upon the decedent's
successor or personal representative before the 90-day clock
starts to run." Id. at 43–44.
While the rule does not specify who qualifies as a
"decedent's successor or representative" and, therefore, a "proper
party" for substitution, Fed. R. Civ. P. 25(a)(1), caselaw provides
some helpful examples, such as individuals who are "(1) the primary
beneficiary of an already distributed estate, (2) named in a will
as the executor of the decedent's estate, even if the will is not
probated, or (3) the primary beneficiary of an unprobated intestate
estate which need not be probated." In re Baycol Prods. Litig.,
616 F.3d at 784–85 (internal citations omitted); see also Sinito
v. U.S. Dep't of Just., 176 F.3d 512, 516 (D.C. Cir. 1999) ("Thus,
we have held not only that an executor or administrator of a
decedent's estate is a proper party for substitution, but also
that the distributee of a decedent's estate may be a 'successor'
of an estate that has been distributed and thus can be a proper
party.").
- 28 -
Once service of the statement noting the death is
effectuated, the last step in the process is the actual motion to
substitute, which must (as just explained) be filed and served
within ninety days. Fed. R. Civ. P. 25(a)(1).
Against this backdrop, we turn now to Granderson's first
argument against substitution, which goes like this: By
Universitas' own admission, it became aware that Granderson was
the executrix of Robinson's Will at her April 12, 2019 deposition,25
so it should have served her with a motion to substitute within
ninety days of it having learned that information. And by failing
to do so within ninety days -- the argument goes -- Universitas
should have been required to explain its multi-year delay pursuant
to Federal Rule of Civil Procedure 6(b)(1)(B), which provides,
"[w]hen an act may or must be done within a specified time, the
court may, for good cause, extend the time . . . on motion made
after the time has expired if the party failed to act because of
excusable neglect." Because the ninety-day clock had run and
Universitas did not make a Rule 6(b)(1)(B) good-cause showing, the
district court abused its discretion by allowing the substitution
motion (at least in Granderson's view).
25 As we mentioned above, Universitas was actually on notice
of the Will and Granderson being the named executrix as of February
1, 2018.
- 29 -
This argument, as Universitas argues, falls short for
several reasons. To start, recall that Granderson did not timely
oppose Universitas' substitution motion. That means her argument
was forfeited below. See Crispin-Taveras v. Mun. of Carolina, 647
F.3d 1, 7 (1st Cir. 2011) ("A party's failure, on account of
ignorance or neglect, to timely oppose a motion in the district
court constitutes forfeiture."). And "[f]orfeited arguments are
only considered for plain error." Nat'l Fed'n of the Blind v. The
Container Store, Inc., 904 F.3d 70, 86 (1st Cir. 2018). But
nowhere in her briefing does Granderson even attempt to map her
argument onto plain error's four prongs, which require that "(1)
an error occurred (2) which was clear or obvious . . . (3) affected
[her] substantial rights [and] (4) seriously impaired the
fairness, integrity, or public reputation of the judicial
proceedings." Id. (second alteration in original) (citation
omitted). This necessarily means that she, in addition to
forfeiting the argument below, has waived it on appeal. See United
States v. Colón-De Jesús, 85 F.4th 15, 25 (1st Cir. 2023).26
26 Even after Universitas raised this waiver-related defect,
Granderson did not attempt to cure this defect in her reply brief.
Rather, she argues that she did not forfeit her argument in the
first place because it took her some time to retain local counsel
to respond to the motion. While we recognize that Granderson, as
a Florida resident, might have had trouble retaining local counsel,
we note that she ended up retaining the same local counsel,
Sullivan, who had represented her earlier in this same litigation,
and Granderson could have filed a pro se request for more time to
- 30 -
Furthermore, even were we to wink-wink these forfeiture
and waiver issues away, her argument fails, again as Universitas
argues, on the merits. While Granderson argues that the ninety-
day clock should have started running in 2019 when Universitas
(supposedly) learned of the Will and Granderson's role as
executrix, our decision in Marcus makes crystal clear that the
ninety-day clock began to run when Robinson's successor or personal
representative (here, Granderson)27 was served with the statement
noting his death. Marcus, 80 F.4th at 43–44. And nowhere does
Granderson seriously contest that she was served with the statement
noting Robinson's death on March 27 and March 28, 2023.
Consequently, Universitas had ninety days from then to serve her
with the motion to substitute, which it then did by certified mail
within that ninety-day window (as evidenced by the motion to
substitute's certificate of service).28 So, in our view, no good-
respond, which we know she knew how to do as evidenced by her
previously-made pro se filings in this same litigation.
27 Nowhere in her briefing does Granderson contest that, as
the named executrix in the Will, she was a proper party to be
substituted. In re Baycol Prods. Litig., 616 F.3d at 784
(indicating that a proper party for substitution includes an
individual "named in a will as the executor of the decedent's
estate, even if the will is not probated").
28 While Granderson suggested below that she was not served
with the motion to substitute, she does not reiterate that
assertion anywhere in her briefing to us. In addition to the
motion to substitute's certificate of service, there are other
indicators in the record to demonstrate Granderson was put on
notice of the motion to substitute. For example, as earlier noted,
- 31 -
cause showing was required because Universitas complied with Rule
25(a) and our caselaw, and the ninety-day clock had not yet
expired.
Recognizing that our decision in Marcus is her
argument's undoing, she attempts to distinguish that case because,
there, it was the plaintiff who died, whereas here it was the
defendant. Moreover, in Marcus she notes, there was also "no
indication that [the substitute plaintiff] actually received
notice" and "sat on h[er] hands while the 90-day window lapsed."
Id. at 44 (second alteration in original) (citation and internal
quotation marks omitted). In Granderson's view, because
Universitas was aware of the proper party to substitute for many
years, Marcus should not apply because it would be inequitable and
would undermine federal courts' interest in finality to allow
Williams-Shaw was present at the April 12, 2023 status conference,
at which the district court let everyone know that Universitas
would be serving the motion to substitute by April 19, 2023.
Additionally, a few days prior to the April 12, 2023 status
conference, Universitas filed a status report, with its proposed
motion to substitute as an attachment, in anticipation of that
status conference. That status report also indicates it was served
upon Granderson by personal service and certified mail. Finally,
Granderson does not argue to us that she failed to timely respond
to Universitas' motion to substitute because she was not served
with it. Rather, she admits in her briefing to us that she did
not timely respond because she had trouble retaining local counsel.
She also asserts in her briefing to us that she was aware of the
deadline by which she needed to respond to the motion to
substitute, undermining any claim that she was not served or did
not have notice of the motion.
- 32 -
Universitas "perpetual and unlimited control of the 90-day clock"
by allowing it to pick and choose when to serve the statement
noting the death and, thereby, start the clock.
As an initial matter, there is no language in Marcus or
Rule 25(a) itself to even intimate that the Rule's requirements
should differ when the decedent is the defendant, as opposed to
the plaintiff. Id. at 43–45; see Silas, 55 F.4th at 877 (rejecting
identical argument and explaining that "the text of Rule 25 does
not distinguish between plaintiffs and defendants"). What's more,
Granderson's assertions that Universitas sat on its hands "for
four years" and had "perpetual and unlimited control of the 90-
day clock" are completely belied by the record. While Universitas
did have knowledge that Granderson was the executrix, it hardly
sat on its hands for years given that it actively engaged in
litigation against Granderson, Novak, and Heathington to determine
the proper party to substitute. Additionally, it filed countless
motions to continue the ninety-day deadline. It was also the
district court who was in the driver's seat vis-á-vis the running
of the ninety-day clock because it was the district court who
ordered Universitas to serve Granderson by a specific date.
Accordingly, we reject Granderson's first argument that the
ninety-day clock began to run in April 2019 or whenever Universitas
learned of the Will and of Granderson's role as the executrix.
- 33 -
Having thrown Granderson's first argument in the bin, we
turn our attention to her remaining two arguments, neither of which
do the trick. Granderson's next argument is essentially a
recycling of her first, but with a new coat of paint. She
(confusingly) argues that the ninety-day clock began to run when
Marcus filed the Notice of Suggestion of Death on November 28,
2017.29 Because Universitas did not file its motion to substitute
for years after that, Granderson argues Rule 6(b)(1)(B)'s good-
cause requirement applied here. To support that argument, she
looks to the Advisory Committee's Note to the 1963 Amendment to
Rule 25(a), which states:
The amended rule establishes a time limit for
the motion to substitute based not upon the
time of the death, but rather upon the time
information of the death as provided by the
means of a suggestion of death upon the
record, i.e., service of a statement of the
fact of the death. The motion may not be made
later than 90 days after the service of the
statement unless the period is extended
pursuant to Rule 6(b), as amended.
Fed. R. Civ. P. 25 advisory committee's note to 1963 amendment
(internal citations omitted). Setting aside the aforementioned
forfeiture and waiver issues,30 the Advisory Committee's Note, in
We say "confusingly" because she just argued that the clock
29
should have started running when Universitas learned Granderson
was the executrix in April 2019.
Adding onto those previous forfeiture and waiver issues,
30
the instant argument is also waived because it appears only in
- 34 -
our view, undermines Granderson's claim, rather than supports it.
It clearly states that "[t]he motion may not be made later than 90
days after the service of the statement unless the period is
extended pursuant to Rule 6(b)," and we explained in Marcus that
service of the statement must be made on the decedent's
representative of successor. Id. (emphasis ours); Marcus, 80 F.4th
at 43–44. So, even though Universitas had received and been served
with the Notice of Suggestion Death in November 2017, Granderson
had not and that makes all the difference. Marcus explicitly held
that "for the 90-day clock to begin running under Rule 25, the
suggesting party must properly serve both the other parties and a
nonparty successor or personal representative of the deceased with
a notice of death." Marcus, 80 F.4th at 44 (emphasis ours).
Accordingly, because the Notice of Suggestion of Death was not
served on Granderson back in 2017 when it was filed on the district
court's docket, the ninety-day clock did not start running and no
good-cause showing under Rule 6(b)(1)(B) was required.
As a last-ditch effort, Granderson contends that it
would be unfair to allow substitution because nearly six years
have passed since Robinson's death and, in the interim, she "has
Granderson's reply brief. Brox, 83 F.4th at 97 n.2 ("They do make
this assertion in their reply brief, but arguments not made in an
opening brief on appeal are deemed waived." (citation omitted)).
- 35 -
aged further and her physical and medical limitations [have]
worsened over time." While we are sympathetic to Granderson's
health issues, this argument is also forfeited and waived for the
reasons stated above. Moreover, despite these health issues,
Granderson's filings, both pro se and counseled, demonstrate that
she is still able to litigate this case.
Ultimately, having parried all of Granderson's
contentions, we determine that she was served in accordance with
Rule 25(a) and our caselaw, so we discern no abuse of discretion
in the district court's decision subbing her into the case.31
31 Before moving on, there's one wrinkle concerning
substitution that we must address. Elsewhere, and separately in
her briefing, Granderson suggests that the district court should
not have ordered her substitution because it is "moot," as the
estate is insolvent and life insurance proceeds are not part of
the estate. To the extent Granderson uses the word "moot" in the
jurisdictional sense to challenge our authority to decide this
appeal, that argument fails. See, e.g., Mission Prod. Holdings v.
Tempnology, LLC, 139 S. Ct. 1652, 1661 (2019) ("Here, Tempnology
notes that the bankruptcy estate has recently distributed all of
its assets, leaving nothing to satisfy Mission's judgment. But
courts often adjudicate disputes whose practical impact is unsure
at best, as when a defendant is insolvent. And Mission notes that
if it prevails, it can seek the unwinding of prior distributions
to get its fair share of the estate. So although this suit may
not make [Mission] rich, or even better off, it remains a live
controversy -- allowing us to proceed." (alteration in original)
(citations and internal quotation marks omitted)); Chafin v.
Chafin, 568 U.S. 165, 175–76 (2013) ("[T]he fact that a defendant
is insolvent does not moot a claim for damages."). And to the
extent Granderson is arguing that ordering her substitution would
not be fruitful for Universitas and thus the district court's
decision was an abuse of discretion, that argument was forfeited
by failing to timely oppose the motion to substitute below,
Crispin-Taveras, 647 F.3d at 7, waived for failing to address plain
- 36 -
Motion for Default Judgment
While Granderson's arguments regarding substitution
didn't get her a win, she has better luck with her arguments
regarding default judgment. When you get right down to it, she
basically argues that the district court erred because default
judgment is entered only after entry of default, which requires
that the party have failed to plead or otherwise defend, and
neither Robinson nor she failed to plead or otherwise defend. In
Granderson's mind, Robinson pleaded and defended the case, so
entering default against him was inappropriate simply because he
died and (obviously) stopped defending himself. For her part, she
argues she certainly defended the case both before and after her
substitution, as evidenced by her numerous appearances and filings
on the docket (six in total). Thus, according to Granderson, the
district court abused its discretion in granting Universitas'
motion. We agree for reasons we'll get into after we take two
beats, the first to explain our standard of review and the second
to lay out the default judgment process.
error's four prongs, Colón-De Jesús, 85 F.4th at 25, and doubly
waived for "failing to cite any authority whatsoever in support of
[her]" assertion that ordering substitution under these
circumstances constitutes an abuse of discretion, Rezende v. Ocwen
Loan Servicing, LLC, 869 F.3d 40, 43 (1st Cir. 2017).
- 37 -
"We review orders entering default judgment for abuse of
discretion." In re MacPherson, 254 B.R. 302, 305 (B.A.P. 1st Cir.
2000). Within that review, we may also review "the interlocutory
entry of default." Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95
(2d Cir. 1993). As before, the same examples of abuses of
discretion apply here. See In re MacPherson, 254 B.R. at 305.
One relevant example of an abuse of discretion worth repeating is
ignoring "a material factor deserving significant weight." Id.(citation omitted).
Turning to the ins and outs of default judgments, Rule
55 provides a two-step process for default judgment. Fed. R. Civ.
P. 55(a)–(b). Step one is entry of default under Rule 55(a), which
provides that "[w]hen a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise
defend, and that failure is shown by affidavit or otherwise, the
clerk must enter the party's default." Fed. R. Civ. P. 55(a).
Step two is entry of default judgment under Rule 55(b), which
provides that such a judgment can be entered by the clerk, assuming
certain conditions are met, and otherwise by the court. Fed. R.
Civ. P. 55(b). To spell it out, the clerk may enter default
judgment if the claim is for a sum certain, if the clerk has been
given an affidavit of the amount due, and provided that entry of
default has been entered against a person (who is neither a minor
- 38 -
nor an incompetent person) for failure to appear. Fed. R. Civ. P.
55(b)(1). In any other circumstance, an application or motion for
default judgment must be made directly to the court. Fed. R. Civ.
P. 55(b)(2). Importantly, "[p]rior to obtaining a default judgment
under [Rule 55(b)], there must be an entry of default as provided
by Rule 55(a)." $23,000 in U.S. Currency, 356 F.3d at 168 n.15
(second alteration in original) (citation omitted); see also 10A
Charles Alan Wright, Arthur R. Miller, Mary K. Kane & Adam N.
Steinman, Federal Practice and Procedure § 2682 (4th ed. 2023).
A defaulted party is deemed "to have conceded the truth
of the factual allegations in the complaint as establishing the
grounds for liability as to which damages will be calculated."
Franco v. Selective Ins. Co., 184 F.3d 4, 9 n.3 (1st Cir. 1999).
Notwithstanding that concession, the district court "may examine
a plaintiff's complaint, taking all well-pleaded factual
allegations as true, to determine whether it alleges a cause of
action." Ramos-Falcón v. Autoridad de Energía Eléctrica, 301 F.3d
1, 2 (1st Cir. 2002) (citation omitted). While "[a] hearing may
be required . . . to set damages when the amount is in dispute or
is not ascertainable from the pleadings," the district court can
also order a default judgment "without a hearing of any kind,"
assuming it "has jurisdiction over the subject matter and parties,
the allegations in the complaint state a specific, cognizable claim
- 39 -
for relief, and the defaulted party had fair notice of its
opportunity to object." In re The Home Rests., Inc., 285 F.3d
111, 114 (1st Cir. 2002) (citations omitted). On that score, the
district court may also "choose to hold a hearing to establish the
truth of any averment in the complaint." Id. at 114–15 (citation
and internal quotation marks omitted).
All that said, default judgment is a "drastic" measure
"that runs contrary to the goals of resolving cases on the merits
and avoiding harsh or unfair results." Remexcel Managerial
Consultants, Inc. v. Arlequín, 583 F.3d 45, 51 (1st Cir. 2009)
(citations and internal quotation marks omitted). As such, it
"should be employed only in an extreme situation," Stewart v.
Astrue, 552 F.3d 26, 28 (1st Cir. 2009) (citation omitted), and to
protect diligent parties from clearly unresponsive adversaries,
see Ortiz-Gonzalez v. Fonovisa, 277 F.3d 59, 63 (1st Cir. 2002)
(citing H.F. Livermore Corp. v. Aktiengesellschaft Gebruder
Loepfe, 432 F.2d 689, 691 (D.C. Cir. 1970)).
Applying this rubric here,32 we think the district court
abused its discretion by entering default judgment against
32At the outset, we note that a party can move under Rule
55(c) to set aside both entry of default and default judgment.
Fed. R. Civ. P. 55(c). While entry of default can be set aside
for good cause, default judgment can only be set aside for specific
reasons outlined in Rule 60(b), including mistake, excusable
neglect, newly discovered evidence, fraud, voidness, satisfaction
of judgment, or "any other reason that justifies relief." Fed. R.
- 40 -
Granderson because such a judgment can only be entered after entry
of default. In the case at bar, though, no entry of default had
ever been entered against Granderson and no entry of default could
have been entered against her because (contrary to Universitas'
argument) she did "otherwise defend" the lawsuit. A simple once-
over of the district court's docket shows why that is so. The
only entry of default in the record was against Robinson (who is,
Civ. P. 55(c); Fed R. Civ. P. 60(b). Here, Granderson never moved
to set aside the entry of default or default judgment under Rule
55(c) and/or Rule 60(b). Our caselaw suggests no such motion was
required, see $23,000 in U.S. Currency, 356 F.3d at 163(characterizing a Rule 55(b) default judgment as "a 'final
disposition of the case and an appealable order'" (citation
omitted)); In re MacPherson, 254 B.R. at 303-05 (reviewing appeal
of default judgment, because it "is a final order, ripe for our
review" (quoting In re Zeitler, 221 B.R. 934, 936 (B.A.P. 1st Cir.
1998))); see also Stelly v. Duriso, 982 F.3d 403, 407 (5th Cir.
2020) (holding "that a party's failure to file a motion to set
aside a default judgment in the district court does not prevent
the party from appealing that judgment"), and neither party makes
an argument to the contrary, but see Stelly, 982 F.3d 403, 407 n.4
(5th Cir. 2020) (collecting cases describing different approach of
circuits on whether defaulting parties must move under Rule
55(c)/Rule 60(b) prior to appeal); In re Taylor, 496 B.R. 28, 36
n.31 (B.A.P. 10th Cir. 2013) (same). Although Universitas does
cite the factors an appellate court must consider when reviewing
an appeal of a Rule 55(c) and/or Rule 60(b) motion, it cites no
case of ours to suggest that we must treat an appeal from a Rule
55(b) default judgment as an appeal from a Rule 55(c) motion or a
Rule 60(b) motion. Our review, therefore, is not for "whether the
district court abused its discretion in declining to vacate the
default judgment, but [rather for] whether it abused its discretion
in granting a default judgment in the first instance." City of
New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2d Cir.
2011); see also Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86
F.3d 852, 856 (8th Cir. 1996) (same).
- 41 -
emphatically, not Granderson), and Universitas never moved for
entry of default against her once she had been subbed into the
case.
Furthermore, just as Granderson argues in her brief, she
appeared six times total in the case and filed substantive motions
challenging the proceedings. Notably, the majority of these
appearances and filings occurred before Granderson was ever even
subbed into the case and had any formal obligation to respond as
a party to the litigation. While there can certainly be scenarios
in which, despite a party's appearances or filings, default
judgment might still be appropriate, "[d]efault judgment for
failure to defend is appropriate when the party's conduct includes
'willful violations of court rules, contumacious conduct, or
intentional delays.'" Ackra Direct Mktg. Corp., 86 F.3d at 856(quoting United States ex rel. Time Equip. Rental & Sales, Inc. v.
Harre, 983 F.2d 128, 130 (8th Cir. 1993)). It is not appropriate
where the party's conduct amounts to "a 'marginal failure to comply
with time requirements.'" Id. (quoting Harre, 983 F.2d at 130).
Indeed, our own caselaw reflects as much. See Alameda v. Sec'y of
Health, Educ. & Welfare, 622 F.2d 1044, 1048 (1st Cir. 1980)
("[T]he Secretary's failure to file the requested memoranda or
even explain the failure after months of delay, amounted to a
failure under [Federal Rule of Civil Procedure] 55(a) to 'otherwise
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defend' the suit." (citations omitted)). Nothing in the record
even suggests that Granderson engaged in such conduct.
To be sure, we concede that some of Granderson's filings
might not have been as clear or as artful as Universitas or the
district court might have liked and that her opposition to the
motion to substitute was untimely. But these purported failings
must be viewed in context. Several of her filings were pro se,
which "are subject to 'less stringent standards than formal
pleadings drafted by lawyers.'" In re Flynn, 582 B.R. 25, 31
(B.A.P. 1st Cir. 2018) (quoting Erickson v. Pardus, 551 U.S. 89,
94 (2007)). Her untimely opposition to Universitas' motion to
substitute was merely days late and did not amount to "months of
delay." Alameda, 622 F.2d at 1048. To boot, once Granderson had
been substituted into the case, there were no pending motions for
her to respond to and, once Universitas filed its second motion
for default judgment, she timely opposed that motion, thereby
"defend[ing]" the only thing in the record that she could have
defended. And the greater context of the whole case demonstrates
that Granderson, soon after Robinson's passing, informed Marcus of
the Will and her role as executrix and that, over the six years of
litigation following Robinson's passing, she made several
substantive filings on the record (including opposing both of
Universitas' motions for default judgment) and consistently raised
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her concerns to the district court that no party had been subbed
into the case. Under these particular case circumstances, we
believe the district court abused its discretion in granting
default judgment against Granderson.
Our conclusion finds further support in the fact that
the district court did not explain why it thought default judgment
was appropriate in this scenario. The district court's default
judgment merely states that default judgment was entered because
"Robinson . . . and his Estate, through substituted party Lillian
Granderson, . . . failed to plead or otherwise defend in this
action." Nowhere does the district court acknowledge Granderson's
multiple appearances and filings or even explain why, despite her
multiple appearances and filings, she should still be considered
to have "failed to . . . otherwise defend." As we've noted in the
past, "ignor[ing]" such "a material factor deserving significant
weight" is an abuse of discretion, plain and simple. In re
MacPherson, 254 B.R. at 305 (citation omitted) (concluding
issuance of default judgment "would have to be remanded" where
"the court failed to weigh factors pertinent to its decision").
Recognizing that it's on the losing end of this default
judgment scenario, Universitas attempts to counter with three
arguments -- none of which is a silver bullet. First, it argues
that Granderson forfeited any challenge to the default judgment
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because her opposition to that motion below merely incorporated by
reference the arguments in her opposition to the motion to
substitute. According to Universitas, therefore, we should review
her argument that she otherwise defended for plain error and,
because she didn't address plain error's four prongs, we should
consider that argument waived. Put simply, we don't buy any of
what Universitas is selling. It cites no First Circuit caselaw
for the proposition that incorporated-by-reference filings before
the district court amount to forfeiture below. And we are aware
of none. Universitas does, however, cite to an unpublished case
from the Sixth Circuit, where our sister circuit concluded that
"it is well settled that a party forfeits skeletal arguments, and
presenting the district court with only incorporated-by-reference
filings did just that." United States v. Rich, No. 18-2268, 2021
WL 4144059, at *40 (6th Cir. Sept. 13, 2021) (internal citation
omitted). But that case involved markedly different circumstances
than are at issue here. There, the defendants (plural) filed a
joint motion, which "adopt[ed] and incorporat[ed] by reference
numerous written and oral motions and objections that they had
lodged with the district court throughout trial." Id. Displeased,
the district court "denied the motion in one paragraph, noting
their incorporation by reference was improper -- it pointed to no
specific allegation of error . . . and did not articulate any form
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of reasoned analysis giving context to their motion." Id. (cleaned
up). On the other hand, when this case was before the district
court, Granderson (singular) incorporated only one filing, and
that filing had paragraphs specifically geared towards the
propriety of default judgment and "g[ave] context to [her
opposition]." Id. Plus, this is not a case in which Granderson
merely incorporated a district-court filing in her briefing to us;
rather, she clearly raised her argument in her appellate briefing.
In our view, therefore, Granderson's arguments were not forfeited
below and were not waived on appeal.
Second, Universitas argues that, "[w]hile it is true
that Mr. Robinson did originally litigate the case, after his death
he and his representatives did not," because Granderson's filings
were otherwise untimely and threadbare. We are not persuaded. To
begin, the implication that Robinson could have continued to
litigate the case after his death makes no sense. More to the
point, it is unclear to us how Granderson could have litigated, or
could have been reasonably expected to litigate, the case prior to
her substitution into the case. Furthermore, we have already
concluded, as previously discussed, that Granderson's actions
amount to "otherwise defend[ing]" as contemplated by Rule 55.
Third, and for its swan song, Universitas argues that we
should not reverse the default judgment because its "Motion for
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Default Judgment matched the requirements of Rule 55" by providing
the necessary affidavits and service. There is, quite simply, no
merit to this argument because Universitas let other procedural
requirements fall by the wayside. As we mentioned above, "[p]rior
to obtaining a default judgment under [Rule 55(b)], there must be
an entry of default as provided by Rule 55(a)." $23,000 in U.S.
Currency, 356 F.3d at 168 n.15 (second alteration in original)
(citation omitted). And here, there were several things wrong
with the entry of default (many of which we've hinted to already).
Laying those mistakes on the table, Universitas first
moved for the clerk of the district court to enter default under
Rule 55(a) against Robinson's estate, even though no one had been
substituted into the case yet to represent the estate. The clerk
then entered default against Robinson (not his estate or
Granderson), even though he had been dead and very clearly defended
himself prior to his passing. To add on top of that, Universitas
moved for default judgment under Rule 55(b) against Granderson
before securing an entry of default under Rule 55(a) against her
in her representative capacity or otherwise. We are aware of no
caselaw that allows for default judgment under these circumstances
or any caselaw that would allow Universitas to impute the Rule
55(a) entry of default against Robinson to Granderson. Universitas
proffered none below or in its briefing on appeal. And even though
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we raised these defects ourselves at oral argument, Universitas
did not even attempt to proffer some support through a Rule 28(j)33
letter. Accordingly, contrary to Universitas' contentions, its
motion for default judgment was procedurally improper because no
entry of default was on the books against Granderson, as required
by the rule and our caselaw. Fed. R. Civ. P. 55(a)-(b); $23,000
in U.S. Currency, 356 F.3d at 168 n.15 (explaining that default
judgment cannot be entered without first entering entry of
default). This is another reason why the district court abused
its discretion in granting default judgment. See Triantos v.
Guaetta & Benson, LLC, 52 F.4th 440, 445 (1st Cir. 2022)
(concluding district court abused its discretion where it did not
comply with the procedural requirements of Rule 11 before imposing
sanctions).
All told, we conclude that the district court abused its
discretion in entering default judgment against Granderson, where
she defended the case and no entry of default had been entered
against her.
33Federal Rule of Appellate Procedure 28(j) allows litigants
appearing before us to "promptly advise the circuit clerk by
letter" with any "pertinent and significant authorities [that]
come to a party's attention after the party's brief has been filed
-- or after oral argument but before decision." Fed. R. App. P.
28(j).
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The Wrap-Up
Having reasoned through all the issues, we make official
the conclusion we previewed above: We affirm the district court
as to substitution, vacate the default judgment, and remand this
matter back to the district court for further proceedings
consistent with this opinion. The parties shall bear their own
costs.
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