Philips Lighting Co. v. Schneider

14-3797-cv
Philips Lighting Co. v. Schneider
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 26th day of January, two thousand sixteen.
PRESENT: REENA RAGGI,
DENNY CHIN,
CHRISTOPHER F. DRONEY,
Circuit Judges.
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PHILIPS LIGHTING COMPANY,
Plaintiff-Appellee,
v. No. 14-3797-cv
BARRY A. SCHNEIDER,
Defendant-Appellant,
THEODORE SCHNEIDER,
Defendant.
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APPEARING FOR APPELLANT: ALAN M. LEBENSFELD, Lebensfeld
Sharon & Schwartz, P.C., Red Bank,
New Jersey.
APPEARING FOR APPELLEE: DOUGLAS A. GOLDSTEIN (Brian D.
Spector, on the brief), Spector &
Ehrenworth, P.C., Florham Park, New
Jersey.
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Appeal from a judgment of the United States District Court for the Eastern District
of New York (Sandra L. Townes, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment entered on October 2, 2014, is AFFIRMED.
Defendant Barry Schneider appeals, for the second time, from the denial of his
Fed. R. Civ. P. 60 motion to vacate the district court’s September 30, 2008 award of
summary judgment in favor of plaintiff Philips Lighting Company (the “2008 award”).
See Fed. R. Civ. P. 60(b). After the district court denied Schneider’s first Rule 60
motion, filed on July 2, 2009, in which he argued, among other things, that he was not
notified of the 2008 award because his first attorney “disappeared,” J.A. 66, this court
vacated and remanded for further proceedings. See Philips Lighting Co. v. Schneider
(“Schneider I”), 395 F. App’x 796 (2d Cir. 2010). Schneider now argues that (1) on
remand, the district court failed to follow the Schneider I mandate; (2) the district court
erred in again denying him Rule 60(b) relief; and (3) even if the 2008 award is affirmed,
the accrual of post-judgment interest should be equitably tolled. We assume the parties’
familiarity with the underlying facts and procedural history, which we reference only as
necessary to explain our decision to affirm.
1. The Schneider I Mandate
In Schneider I, this court remanded for the district court to consider (1) whether
Schneider was prejudiced by his attorney’s disappearance after cross-motions for
summary judgment were fully briefed, but before the district court decided those
motions; (2) the date on which Schneider received notice of the 2008 award; (3) whether
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cash distributions paid to Philips Lighting in the course of Eltron’s bankruptcy
proceedings affected Schneider’s obligations as a guarantor for Eltron’s debts; and (4)
whether Schneider was otherwise relieved of his obligations under his 1985 Guaranty
Agreement with Philips Lighting. See Schneider I, 395 F. App’x at 798–99. Schneider
submits that the district court failed to follow this mandate by declining to decide the
notice issue. We are not persuaded.
Generally, where a mandate directs a district court to decide certain questions, the
district court “must . . . decide those questions.” Puricelli v. Republic of Argentina, 797
F.3d 213, 218 (2d Cir. 2015). In determining whether the terms of a mandate “have been
scrupulously and fully carried out,” we “consider both the express terms and broader
spirit of the mandate.” Id. (internal quotation marks omitted). Here, the district court
concluded that ascertaining the precise date on which Schneider learned of the 2008
award was unnecessary because, for purposes of deciding his motion, the court would
accept Schneider’s contention that he did not learn of the award until June 11, 2009,
which Philips Lighting did not dispute. Schneider can hardly claim that he was
prejudiced where a question of fact is assumed—rather than conclusively decided—in his
favor. Moreover, the core concern expressed in this court’s mandate was with “the
amount of the judgment,” specifically, whether that amount “is based on mistakes or
omissions.” Schneider I, 395 F. App’x at 799. On remand, the district court did modify
the original award in light of additional information about Eltron’s bankruptcy
proceedings. Thus, we reject Schneider’s mandate challenge as meritless.
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2. Rule 60(b) Relief Is Not Warranted
Schneider argues that the district court erred in declining to vacate the 2008 award
under Rule 60(b)(1), (b)(3), or (b)(6).1 Our review is limited to abuse of discretion, see
United Airlines, Inc. v. Brien, 588 F.3d 158, 175 (2d Cir. 2009), which is not evident
here.
Citing United States v. Cirami, 563 F.2d 26 (2d Cir. 1977), and Vindigni v.
Meyer, 441 F.2d 376 (2d Cir. 1971), Schneider argues that he is entitled to relief under
Rule 60(b)(6) based on the failure of Philips Lighting’s counsel to inform Schneider of
the 2008 award despite having reason to believe that his counsel had disappeared. Cirami
and Vindigni, however, do not support such a result. Although in both cases the court
faulted opposing counsel and the district court for failing to contact a party directly after
being unable to reach that party’s counsel, Rule 60(b)(6) relief was granted in those cases
because (1) the party whose counsel disappeared had acted diligently in attempting to
1
Rule 60(b) states as follows:
On motion and just terms, the court may relieve a party or its
legal representative from a final judgment, order, or
proceeding for the following reasons: (1) mistake,
inadvertence, surprise, or excusable neglect; (2) newly
discovered evidence that, with reasonable diligence, could not
have been discovered in time to move for a new trial under
Rule 59(b); (3) fraud (whether previously called intrinsic or
extrinsic), misrepresentation, or misconduct by an opposing
party; (4) the judgment is void; (5) the judgment has been
satisfied, released or discharged; it is based on an earlier
judgment that has been reversed or vacated; or applying it
prospectively is no longer equitable; or (6) any other reason
that justifies relief.
Fed. R. Civ. P. 60(b).
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contact his attorney, and (2) the interest in deciding the case on the merits outweighed the
interest in finality.2 That is not this case.
The remand record demonstrates that Schneider made no attempt to contact his
attorney for over two years. See J.A. 592, 603–05. Insofar as Schneider alleges that his
father tried to contact his attorney on his behalf, that is insufficient to establish
Schneider’s diligence, particularly where (1) Schneider failed to take any action even
when he believed that his father was having trouble contacting his attorney, see J.A. 606–
08; and (2) he received no assurances from his attorney, either directly or indirectly, that
he was adequately handling Schneider’s case, cf. United States v. Cirami, 563 F.2d at 34(noting that plaintiff, whose counsel failed to oppose summary judgment, “frequently
inquir[ed] about the status of his lawsuit” and received “assurances from his attorney,
relayed by his accountant, that the matter was in hand”). Nor was it sufficient for
Schneider to rely on generalized assurances from an attorney who served as a law clerk
for the New York state courts, but who had no knowledge regarding Schneider’s case or
his absent attorney. Accordingly, the district court did not abuse its discretion in
2
See United States v. Cirami, 563 F.2d at 33–35 (concluding that Rule 60(b)(6) relief
was warranted where attorney failed to oppose summary judgment due to psychological
disorder, plaintiff tried “on several occasions” to contact his attorney and, when unable to
reach him, asked his accountant to contact attorney on his behalf, who assured him that
case was being handled properly); Vindigni v. Meyer, 441 F.2d at 377 (remanding for
evidentiary hearing on Rule 60(b)(6) motion where plaintiff’s attorney disappeared,
resulting in dismissal of complaint, and plaintiff stated in affidavit that he “tried
diligently to find” his attorney over course of eighteen months); see also Gomez v. City
of New York, 805 F.3d 419, 423 (2d Cir. 2015) (explaining that this court has
“recognized as bases for Rule 60(b) relief an attorney’s disappearance . . . where the party
tried diligently to contact his or her attorney” (internal quotation marks omitted)).
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concluding that Schneider failed to establish “extraordinary circumstances” warranting
Rule 60(b)(6) relief. Stevens v. Miller, 676 F.3d 62, 67 (2d Cir. 2012).
Schneider further contends that the district court erred in denying him Rule
60(b)(1) relief because it only considered whether the disappearance of Schneider’s
attorney resulted in prejudice with respect to the timing and content of his Rule 60(b)
motion, and failed to consider prejudice from losing the opportunity to appeal the 2008
award. We are not persuaded. Schneider’s own lack of diligence in defense of this
action during the approximately eight months he was ignorant of the 2008 award
contributed to his lost opportunity to appeal, see Fed. R. App. P. 4(a)(1), (6); a party who
“fails to act with diligence” cannot “demonstrate that his conduct constituted ‘excusable
neglect’” under Rule 60(b)(1), State St. Bank & Tr. Co. v. Inversiones Errazuriz
Limitada, 374 F.3d 158, 177 (2d Cir. 2004).
Nor is Schneider entitled to relief under Rule 60(b)(3). Schneider charges Philips
Lighting’s counsel with fraud or misconduct in pursuing inflated damages of $578,635.14
against him without informing the district court that (1) before commencing this action, it
had executed a 2004 stipulation with Eltron indicating an indebtedness of only
$468,635.14; and (2) it had received approximately $56,236.21 in bankruptcy
distributions from Eltron. Philips Lighting does not dispute either fact.
Nonetheless, Schneider has failed to establish how Philips Lighting’s alleged
omissions prevented him from “fully and fairly presenting his case,” as required to
warrant Rule 60(b)(3) relief. State St. Bank & Tr. Co. v. Inversiones Errazuriz Limitada,
374 F.3d at 176 (internal quotation marks omitted). First, in moving for summary
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judgment in 2007, not only did Schneider not dispute that Eltron owed Philips Lighting
$578,635.14 as of October 2002, but he also did not inform the district court of the
stipulation or distributions despite the fact that his counsel had knowledge of what
occurred in the bankruptcy proceedings by virtue of representing Schneider’s brother,
Theodore Schneider, in those proceedings. See State St. Bank & Tr. Co. v. Inversiones
Errazuriz Limitada, 374 F.3d at 176 (explaining that party cannot claim it was prevented
from presenting its case where it also had access to information allegedly withheld by
opposing party). Second, and in any event, on remand the district court did grant
Schneider partial relief by reducing the damages owed by Schneider under the Guaranty
Agreement from $289,317.57 (half of the originally claimed $578,635.14) to $206,199.47
(half of $468,635.14 less $56,236.21). See Fed. R. Civ. P. 60(b)(5) (permitting relief
from judgment where “judgment has been satisfied, released or discharged . . . or
applying it prospectively is no longer equitable”). In these circumstances, Philips
Lighting’s alleged pursuit of an inflated damages claim does not support Rule 60(b)
vacatur of the district court’s liability determination under the Guaranty Agreement or its
modified award.3
Because Schneider is not entitled to Rule 60(b) relief, we need not address his
request for reassignment to a different district judge on remand. We also decline
Schneider’s invitation to review de novo the district court’s 2008 award. See Branum v.
3
No different conclusion is warranted under Rule 60(d)(3). See State St. Bank & Tr. Co.
v. Inversiones Errazuriz Limitada, 374 F.3d at 176 (explaining that Rule 60(d)(3) relief
for fraud on the court also requires showing that opposing party was prevented from
“fully and fairly presenting his case” (internal quotation marks omitted)).
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Clark, 927 F.2d 698, 704 (2d Cir. 1991) (“An appeal from an order denying a Rule
60(b) motion brings up for review only the denial of the motion and not the merits of the
underlying judgment for errors that could have been asserted on direct appeal.”); accord
In re Terrorist Attacks on Sept. 11, 2001, 741 F.3d 353, 357 (2d Cir. 2013).
3. Post-Judgment Interest
Schneider asserts that, if the challenged judgment is affirmed, post-judgment
interest should run from the date on which this court issues its mandate, rather than
October 10, 2008—the date on which judgment was entered following the 2008 award in
favor of Philips Lighting. In particular, he argues that the “sharp litigation tactics” of
Philips Lighting required the Schneider I remand, thereby delaying the finality of the
proceedings, and, under New York law, courts may equitably toll the accrual of post-
judgment interest where dilatory action by the judgment creditor delays the payment of
judgment. Appellant Br. 89.
Schneider’s argument fails because 28 U.S.C. § 1961, not state law, governs post-
judgment interest. See Schipani v. McLeod, 541 F.3d 158, 165 (2d Cir. 2008)
(explaining that, in diversity cases, state law governs award of pre-judgment interest, and
federal law governs award of post-judgment interest). Under § 1961, an award of post-
judgment interest is mandatory, see 28 U.S.C. § 1961 (“Interest shall be allowed on any
money judgment in a civil case recovered in a district court.”), and courts calculating
such interest “do not enjoy some amorphous equitable power to select a date other than
the ‘date of the entry of the judgment’ to trigger the running of interest, even if their
laudable aim is to effectuate the compensatory purpose of the postjudgment interest
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statute,” Andrulonis v. United States, 26 F.3d 1224, 1233 (2d Cir. 1994). Here,
Schneider does not dispute that October 10, 2008, is the date on which judgment was
entered for purposes of § 1961, see Adrian v. Yorktown, 620 F.3d 104, 107–08 (2d Cir.
2010) (explaining that post-judgment interest under § 1961 runs from date on which
judgment is “ascertained in a meaningful way and supported by the evidence” (internal
quotation marks omitted)), and, thus, that is the operative date on which pre-judgment
interest ceases to accrue and post-judgment interest begins to accrue.4
Finally, Schneider contends that the district court erred in awarding post-judgment
interest at the 9% rate applicable under New York law, rather than the 1.59% rate that
applies under § 1961. That contention, however, is belied by the district court’s amended
judgment entered on October 2, 2014. That amended judgment makes clear that the 9%
interest rate applies only to the pre-judgment period: October 3, 2003, through the date on
which judgment was entered for the district court’s award of summary judgment in favor
of Philips Lighting, October 10, 2008. Accordingly, Schneider’s argument is meritless.
4
We note that the judgments entered on October 10, 2008 and October 2, 2014, do not
explicitly provide for post-judgment interest, but state that Philips Lighting is entitled to
pre-judgment interest for the period October 3, 2003 to October 10, 2008. On appeal,
neither party challenges the judgment on this basis.
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4. Conclusion
We have considered Schneider’s remaining arguments and conclude that they are
without merit. Accordingly, the district court’s judgment is AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
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