Keane v. HSBC Bank USA, N.A.

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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