Durant v. Husband ( 1994 )

Opinions of the United
1994 Decisions States Court of Appeals
for the Third Circuit
6-24-1994
Durant v. Husband, et al.
Precedential or Non-Precedential:
Docket 93-7414
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Recommended Citation
"Durant v. Husband, et al." (1994). 1994 Decisions. Paper 59.
http://digitalcommons.law.villanova.edu/thirdcircuit_1994/59
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 93-7414
____________
FRANK DURANT,
Appellee
v.
DAVID HUSBAND; GOVERNMENT OF THE VIRGIN ISLANDS;
CONTANT RESTAURANT ASSOCIATION, INC., d/b/a
OLD MILL AND SUGARS NIGHT CLUB,
Government of the Virgin Islands, Appellant
____________
APPEAL FROM THE DISTRICT COURT OF THE VIRGIN ISLANDS
(Division of St. Thomas and St. John)
(D.C. Civ. No. 90-00281)
____________
Argued April 18, 1994
Before: STAPLETON, ALITO, and WEIS, Circuit Judges
Filed June 24, 1994
____________
Frederick Handleman, Esquire (ARGUED)
Rosalie Simmonds Ballentine, Esquire
Attorney General
Paul L. Gimenez, Esquire
Solicitor General
Darlene C. Grant, Esquire
Office of the Attorney General
4850 Kronprindsens Gade
GERS Complex, 2nd floor
Charlotte Amalie, St. Thomas
USA Virgin Islands 00802
Attorneys for Appellant, Government of the Virgin Islands
Andrew L. Capdeville, Esquire (ARGUED)
Law Offices of Andrew L. Capdeville
201 Nisky Center, Box 6576
Charlotte Amalie, St. Thomas
USA Virgin Islands 00804-6576
1
Attorney for Appellee, Frank Durant
2
____________
OPINION OF THE COURT
___________
WEIS, Circuit Judge.
In this suit under the Virgin Islands Tort Claims Act,
plaintiff secured a default in the district court after the
territorial government had failed to answer the complaint. After
a contested hearing that was limited to damages, plaintiff
received a judgment for $25,000. We hold that the award was a
"judgment by default" against the government and thus proscribed
by the Tort Claims Act. Accordingly, we will reverse the
judgment and remand for a trial on liability and damages.
Plaintiff Frank Durant was employed as a security guard
at the Old Mill Restaurant and Sugars Night Club on St. Thomas,
Virgin Islands. At about 4:00 a.m. on January 14, 1990, a
disturbance erupted among several patrons at the nightclub.
Plaintiff managed to quell the altercation. Shortly thereafter,
however, defendant David Husband, an off-duty policeman employed
by the Virgin Islands government who was also a patron at the
nightclub, struck plaintiff on the head with a pistol and later
fired a shot that missed him. For his conduct at the nightclub,
Husband was convicted on charges of assault and using a deadly
weapon.
After properly serving the Attorney General with a
notice of intent to submit a claim under the Virgin Islands Tort
Claims Act, V.I. Code tit. 33, § 3401 et seq., plaintiff filed a
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suit in the district court on September 18, 1990. The complaint
named as defendants the owner of the nightclub, the Government of
the Virgin Islands, and Husband. The government was not served
with the complaint until April 30, 1991.
In July 1991, the owner of the nightclub was dismissed
on the plaintiff's stipulation. Meanwhile, pretrial proceedings
in the claim against Husband continued in the district court.
As of September 1992, the Attorney General's office had
not responded to the complaint, and on September 18, 1992,
plaintiff moved for default against the government. There is no
indication in the record that the government was ever given
notice of the motion before the clerk entered the default on
January 26, 1993.
On February 12, 1993, the Attorney General's office
filed an untimely answer without obtaining leave of court. The
district court struck the answer on February 22, 1993 and
directed that a hearing on damages would begin on March 29, 1993.
In the period between March 9, 1993 and March 24, 1993,
the Attorney General's office filed motions to file an answer out
of time, to set aside the default, and for judgment on the
pleadings. The trial judge denied all of these motions, thus
rejecting the government's contention that no judgment by default
could be entered under the governing Virgin Islands law.
The court conducted a hearing that was confined to the
amount of damages the government would be required to pay.
Plaintiff and one of his physicians testified on the extent of
the physical and emotional injuries that were caused by the
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incident at the nightclub. Although a Deputy Attorney General
cross-examined the witnesses, he did not produce any evidence. At
the conclusion of the damages hearing, the district court entered
a judgment in favor of plaintiff in the amount of $25,000.
The plaintiff's claim against the government is based
on the Virgin Islands Tort Claims Act.1 The statute is a limited
waiver of the Virgin Islands' sovereign immunity conferred by the
Revised Organic Act of the Virgin Islands, 48 U.S.C. § 1541(b).
See Deary v. Three Un-Named Police Officers, 746 F.2d 185, 193
(3d Cir. 1984).2
One of the limitations on the government's conditional
waiver can be found in V.I. Code tit. 33, § 3408. This section
provides that the government assumes liability with respect to
personal injury "caused by the negligent or wrongful act or
omission of an employee . . . while acting within the scope of
his office or employment, under circumstances where the
Government of the Virgin Islands, if a private person, would be
liable to the claimant . . . ." Id. § 3408(a). However, those
provisions do not apply if the injury "is caused by the gross
negligence of an employee . . . while acting within the scope of
his office or employment." Id. § 3408(b).
1
The complaint also asserted damages under 42 U.S.C. § 1983, but
the Virgin Islands government is not subject to such suits, see
Ngiraingas v. Sanchez, 495 U.S. 182 (1990); Brow v. Farrelly, 994
F.2d 1027, 1037 (3d Cir. 1993), and that claim is not raised in
this appeal.
2
For a discussion of the sovereign immunity of a U.S. Territory,
see Ngiraingas, 495 U.S. at 203-06 (Brennan, J., dissenting).
5
A further limitation of the government's conditional
waiver can be found in section 3411(a): "No judgment shall be
granted on any claim against the [g]overnment . . . except upon
such legal evidence as would establish liability against an
individual or corporation in a court of law, and no judgment by
default shall be entered against the [g]overnment." No case
law defines the meaning of "judgment by default" as that term is
used in the Virgin Islands Tort Claims Act.
The Federal Rules of Civil Procedure are in effect in
the Virgin Islands. In moving for a default, plaintiff followed
the procedures set out in Rule 55, which makes a distinction
between an "entry of default" and a "judgment by default." Rule
55(a) allows the court clerk to enter a default against a party
on its failure to plead or otherwise defend. However, when the
claim is unliquidated, plaintiff must apply to the court for a
"judgment by default." If it is necessary "to determine the
amount of damages or to establish the truth of any averment by
evidence," the court may conduct a hearing. Fed. R. Civ. P.
55(b)(2).
Rule 55(e) provides that "[n]o judgment by default
shall be entered against the United States . . . unless the
claimant establishes a claim or right to relief by evidence
satisfactory to the court." Fed. R. Civ. P. 55(e). However,
because that subsection is expressly limited to the government of
the United States, it is not applicable to the case at hand, and
consequently, decisional law interpreting that subsection is not
controlling. Moreover, the clause beginning with "unless" is
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conspicuously not present in the Virgin Islands statute. Thus,
the cases allowing the entry of a "default" against the federal
government and granting relief to a plaintiff under the exception
provided by that clause are not particularly helpful, even by
analogy.
Plaintiff proceeded in the district court as if the
Virgin Islands Tort Claims Act and Federal Rule of Civil
Procedure 55 were compatible and complementary. The language of
the Tort Claims Act, however, is quite specific and unambiguously
prohibits any judgment by default against the territorial
government.
The Rules Enabling Act provides that the federal rules
must not "abridge, enlarge or modify any substantive right." 28
U.S.C. § 2072(b). Rule 55(e), however, substantially restates
the now-repealed last clause of 28 U.S.C. § 763 (action against
the United States under the Tucker Act). See Fed. R. Civ. P. 55
advisory committee's note; see also 10 Charles A. Wright et al.,
Federal Practice and Procedure § 2702 (1983). Because Rule 55(e)
in a sense incorporates a statute addressing the limitation on
the sovereign immunity of the United States, the Rule is not
wholly procedural.
To the extent that the Virgin Islands waiver of
sovereign immunity is flatly conditioned on the non-availability
of a default judgment, the matter is one of substance and not
procedure. Applying Rule 55(e) to permit default judgments
against the Virgin Islands government in the present case would
significantly "enlarge" the substantive rights conferred on
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claimants under section 3411(a) of the Tort Claims Act Therefore,
where a conflict between Rule 55 and the substantive Virgin
Islands statute exists, as here, the Rule must give way.3
Before presenting his testimony on damages in the
district court, plaintiff argued that a judgment entered after a
damages hearing would constitute a judgment on the merits, even
though the government was prohibited from contesting its
liability because of the default. The district court accepted
this reasoning, but we cannot agree that the clear statutory
prohibition against a judgment by default may be so evaded.
The judgment against the government was grounded on two
essential bases -- liability and damages. Lacking either
element, the judgment can have no validity under the Tort Claims
Act. In the case at hand, the default ruling on liability goes
to the very heart of the judgment, despite the fact that a
hearing was conducted to enable the government to contest the
amount of damages. The judgment here was not based on the merits
of both liability and damages, but on damages only. The
judgment, therefore, is fatally deficient under the Virgin
Islands Tort Claims Act.
The facts before us support the legislative decision to
ban default judgments against the government. The Attorney
General's office was indeed negligent and inefficient in its case
3
We are not presented here with the situation where a federal
rule has merely an incidental effect on a substantive right and
is "reasonably necessary to maintain the integrity of that system
of rules." See Burlington N. R.R. v. Woods, 480 U.S. 1, 5
(1987).
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processing procedures by allowing so much time to elapse before
it filed an answer. However, the circumstances in which
plaintiff was injured suggests that there may be serious
questions about whether the government is liable. There is
reason to believe that the government might ultimately prevail if
given a full opportunity to defend and present evidence.
In discussing a default against the federal government
in a different context, the United States Court of Appeals for
the Fifth Circuit explained: "[Rule 55(e)] rests on the
rationale that the taxpayers at large should not be subjected to
the cost of a judgment entered as a penalty against a government
official which comes as a windfall to the individual litigant."
Campbell v. Eastland, 307 F.2d 478, 491 (5th Cir. 1962). In the
present state of the record, we cannot determine whether the
award to plaintiff would be a windfall, but we must recognize
legitimate concerns for taxpayers who would be detrimentally
affected by the entry of a judgment by default.
The problem in this case was apparently brought about
by someone in the Attorney General's office who had placed the
civil complaint in the file on the criminal case pending against
defendant Husband. Although efficient procedures can minimize
the risk of such an occurrence, misfilings can occur in any
office. It may well be that the legislature had anticipated such
human failings when it prohibited default judgments against the
government.
The district court is not powerless to cope with delays
such as occurred in this case. We are confident that if the
9
court -- at the plaintiff's urging -- had called the delinquency
to the attention of the Attorney General, an answer would have
been forthcoming. There is no evidence in the record to indicate
that the Attorney General's office was being uncooperative or
deliberately delaying disposition of the case.4 We expect that
the Attorney General will improve the procedures in the office so
that similar incidents of this nature will not occur in the
future.
Because the territorial government had the power to
completely retain its sovereign immunity and thus bar all relief
to tort claimants, the legislature's decision to deny recovery
based on default judgments is obviously defensible. We conclude
that a judgment entered after default on liability and following
a contested hearing on damages is nevertheless a "judgment by
default" prohibited in actions brought under the Virgin Islands
Tort Claims Act. See Concepcion v. Soto, 519 F.2d 405, 407 n.2
(3d Cir. 1975).
We emphasize that our holding applies to the situation
where the government has failed to appear or file an answer in
response to a properly served complaint. We do not consider in
this case the circumstances where sanctions -- whether
categorized as a default or simply having the effect of one --may
4
Plaintiff opposed the government's motion to set aside the
default, arguing: "`After several demands, not only from my
office but also from the Court, when this case was pending with
no response from the government. Default was the only avenue
that we had.'" Br. of Plaintiff-Appellee at 11-12 (quoting R. at
18). We have found nothing in the record to support this
statement.
10
be imposed as a penalty for government conduct during the
progress of litigation. Cf. Reynolds v. United States, 192 F.2d
987, 998 (3d Cir. 1951) (Federal Rule of Civil Procedure 55 does
not apply to sanctions for the government's failure to produce
discovery materials), rev'd on other grounds, 345 U.S. 1 (1953).
Our holding is consistent with Anchorage Assocs. v.
Virgin Islands Bd. of Tax Review, 922 F.2d 168 (3d Cir. 1990). In
that case, we pointed out the difference between granting a
default judgment and granting a motion for relief pursuant to a
local rule upon the complete failure of a party to respond. The
defendant had failed to file an answer to a motion for summary
judgment. However, we held that delinquency was not sufficient
to justify the entry of summary judgment in the absence of facts
in the record to support the action on the merits. Id. at 176.
Plaintiff suggests that if the default is found to be
improper, then the finding on damages should be sustained to
avoid retrial on that issue if liability is ultimately found
against the government. We decline to follow that suggestion
because the limited scope of the hearing on damages did not
permit inquiry into the potential effect of the settlements
reached between plaintiff and the other two defendants, nor did
it address issues of joint or several liability and primary or
secondary liability.
Accordingly, we will reverse the judgment of the
district court and will remand for a trial on both liability and
damages.
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