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Docket Number

Nos. 14294, 14295.

Attorney(S)

Bruce R. Martin, Pittsburgh, Pa. (Pringle, Bredin Martin, Pittsburgh, Pa., on the brief), for appellants. Samuel M. Rosenzweig, Pittsburgh, Pa. (Aaron Rosenzweig, Pittsburgh, Pa., on the brief), for other appellees. George I. Buckler, Pittsburgh, Pa., on the brief for appellee Fred Hitzeman.

Judges

William Henry Hastie

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Smart Summary

Case Summary: Simon Friedman v. Wilson Freight Forwarding Company; O. Steinman, Inc. v. Wilson Freight Forwarding Company

Factual and Procedural Background

This litigation began as an action for personal injuries. After a non-jury trial and findings, the district court on January 20, 1961 ordered judgment in the amount of $65,000 for the plaintiff (Simon Friedman) against Fred Hitzeman (whose negligence caused the accident) and Wilson Freight Forwarding Company ("Wilson"), Hitzeman's employer. The court also adjudicated that Wilson "has a right of contribution" against O. Steinman, Inc. ("Steinman"), a joint venturer with Hitzeman, and indicated Wilson "may hereafter have judgment against the said Steinman, Inc. for the amount which it proves it has paid the plaintiff, Simon Friedman, in excess of the sum of $32,500 plus interest."

A formal judgment against Hitzeman and Wilson for $65,000 was entered on January 24, 1961. Subsequent docket entries (February 3, 8 and 22, 1961) reflect the plaintiff's "Praecipe to Satisfy Judgment," the clerk's entry "Judgment is hereby marked satisfied," and the filing of a "Release and Receipt" reciting payment of $65,000 by Wilson to the plaintiff. On February 23, 1961 an unconditional judgment was entered in favor of Wilson against Steinman for $32,500.

Steinman appealed from the February 23 judgment, but this court dismissed that appeal on December 5, 1961 for want of prosecution. Thereafter, on March 15, 1962, Steinman moved under Rule 60(b)(4), (5) and (6) of the Federal Rules of Civil Procedure for relief from the February 23, 1961 judgment, asserting (1) the judgment was void because entered against Steinman without a hearing and without proper proof of payment by Wilson to the plaintiff, and (2) the judgment had become inequitable because the original judgment had been marked satisfied and Hitzeman had been released. At the Rule 60(b) hearing Steinman made no request to introduce evidence, and there was an admission in open court that Wilson's insurer had paid part of Wilson's judgment obligation and that Hitzeman was not insured. The district court denied Steinman's motion; Steinman appealed. The opinion on appeal was written by Circuit Judge Hastie.

Legal Issues Presented

Whether the unconditional judgment entered February 23, 1961 in favor of Wilson against Steinman was void because it was entered without a hearing and without proper proof that Wilson had paid the plaintiff.
Whether the release of Hitzeman (and the marking of the original judgment satisfied) rendered enforcement of Steinman's contribution obligation inequitable or otherwise abrogated Steinman's obligation.
Whether Steinman's delay (13 months) in seeking post-judgment relief under Rule 60(b) rendered its motion untimely and barred relief.
Whether Steinman's failure to raise the contested issues on direct appeal (and the dismissal of its earlier appeal for want of prosecution) precluded use of Rule 60(b) to obtain the relief sought.

Arguments of the Parties

Appellant (O. Steinman, Inc.)

Asserted that the February 23, 1961 unconditional judgment against Steinman was void because it was entered without a hearing and without proper proof that Wilson had paid the plaintiff.
Argued that the earlier marking of the original judgment as satisfied and the release of Hitzeman made it unfair to enforce Steinman's contribution obligation, since Steinman's liability was secondary and derivative from Hitzeman's.
Sought relief under Rule 60(b)(4), (5) and (6) on the ground of a void judgment, mistake, or other reason justifying post-judgment relief.

Other Parties / Appellees

The opinion does not contain a detailed account of the appellees' legal arguments. The record reflects an admission in open court that Wilson's insurer paid part of Wilson's judgment obligation and that Hitzeman was not insured. The district court concluded that Steinman's release-based contention was without merit and untimely, but the opinion does not set out a party-by-party presentation of opposing legal arguments in detail.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Smith v. Whitmore, 3d Cir., 1959, 270 F.2d 741	Illustrative procedure for adjudicating liability over and allocating contribution obligations.	The district court's prior order adjudicating liability over was said to be "in a manner suggested" by this court in Smith v. Whitmore; the opinion refers to that decision as analogous to the court's approach to liability over.
Delzona Corp. v. Sacks, 3d Cir. 1959, 265 F.2d 157	Authority concerning timing and reasonableness for seeking post-judgment relief (Rule 60).	Quoted as supporting the conclusion that Steinman's 13-month delay in seeking Rule 60(b) relief was not within a "reasonable time" and that denial of relief was not an abuse of discretion.
Morse-Starrett Prod. Co. v. Steccone, 9th Cir. 1953, 205 F.2d 244	Authority on timeliness of post-judgment relief and Rule 60 practice.	Cited alongside other authorities to support the court's view that Steinman's delay rendered its Rule 60(b) motion untimely.
Gilmore v. Hinman, 1951, 89 U.S.App. D.C. 165, 191 F.2d 652	Authority relevant to timeliness and the appropriate use of post-judgment remedies.	Included among authorities the court relied on to affirm denial of Rule 60(b) relief because of Steinman's unreasonable delay.
Ackermann v. United States, 1950, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207	Principle that Rule 60(b) should not be used to litigate matters which could have been raised on direct appeal.	Used to support the conclusion that Steinman's attempt to litigate on Rule 60(b) issues that were available to be raised on direct appeal (but were not) was an improper use of Rule 60(b).
American Sur. Co. v. Baldwin, 1932, 287 U.S. 156, 168, 53 S.Ct. 98, 77 L.Ed. 231	Principle that a post-judgment order is not void when the rules afford an opportunity to be heard after the fact; a court may act on the record to administer an already-determined obligation.	Applied to reject Steinman's claim that lack of pre-entry notice rendered the unconditional order of contribution void; the court held post-judgment remedies (e.g., Rule 59) provided an adequate opportunity to be heard.

Court's Reasoning and Analysis

The court's analysis proceeded in two principal strands: (1) procedural timeliness and the appropriateness of Rule 60(b), and (2) whether the challenged February 23, 1961 judgment was void for lack of notice or opportunity to be heard.

On timeliness and proper use of Rule 60(b), the court emphasized that Steinman received prompt notice of entry of the February 23 judgment and that the trial record at that time contained the very docket entries and supporting papers showing payment by Wilson and the release of Hitzeman. Given that the record already contained the facts Steinman now contends rendered the judgment improper, Steinman could have promptly moved under Rule 59 to alter or amend the judgment, or raised the matter on direct appeal. Instead, Steinman waited 13 months to seek relief under Rule 60(b) and offered no excuse for the delay. The court observed that Rule 60(b) requires that extraordinary post-judgment relief be sought "within a reasonable time," and concluded that Steinman's delay was unreasonable. The court relied on prior precedents (including Delzona, Morse-Starrett, and Gilmore) to support the determination that denying relief for such delay was not an abuse of discretion. The court also cited Ackermann to reinforce that Rule 60(b) is not a vehicle for litigating issues that could have been raised on direct appeal but were not pursued.

On the contention that the judgment was void for lack of notice or opportunity to be heard, the court explained that Steinman's basic legal obligation of contribution had already been properly determined at the earlier proceedings, and what remained was purely administrative — namely, verifying that Wilson had paid the plaintiff so that Steinman should reimburse Wilson. In this administrative phase the court could "assure itself in any reasonable way" that Wilson had paid, and the filing of the plaintiff's receipt and release as part of the post-judgment record was a normal and proper means of providing that assurance. The court emphasized that the rules afforded Steinman a post-judgment remedy (e.g., a Rule 59 motion supported by evidence) if it believed the court had acted on misinformation. Therefore, the absence of pre-entry notice or an opportunity to be heard did not render the unconditional order of contribution void. At most, the order was subject to vacation upon a timely showing of mistake or misrepresentation; Steinman neither raised such a challenge promptly nor proved that the court had been misinformed. For these reasons the court found Steinman's claims procedurally and substantively deficient.

Holding and Implications

Holding: The court affirmed the district court's order denying Steinman relief under Rule 60(b) and affirmed the judgment entered against United Bonding Insurance Co. (as surety for Steinman's payment) stemming from the February 23, 1961 judgment. The core disposition is: Affirmed.

Implications:

The direct effect is that Steinman remains liable for the $32,500 judgment entered in favor of Wilson, and the district court's denial of post-judgment relief under Rule 60(b) is sustained.
The court treated Steinman's failure to act promptly (either by a Rule 59 motion or by prosecuting its direct appeal) as fatal to the Rule 60(b) motion; thus this opinion underscores the necessity of timely post-judgment motions or direct appeals when a party believes a judgment rests on improper facts or procedures.
The court held that an administrative entry effectuating an adjudicated contribution obligation may be based on record evidence (such as a plaintiff's receipt and release) without separate pre-entry hearings, so long as post-judgment remedies remain available to an aggrieved party; absent timely and successful post-judgment challenge, such an entry is not void.
No new broad legal rule or novel precedent was announced; the court applied existing standards regarding timeliness of Rule 60(b) relief, the proper use of Rule 60(b) relative to direct appeal, and when a post-judgment administrative action is void.

Opinion by Circuit Judge Hastie; panel included Judges Ganey and Smith; argued June 13, 1963; decided July 19, 1963.

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Simon FRIEDMAN v. WILSON FREIGHT FORWARDING COMPANY and Fred Hitzeman

HASTIE, Circuit Judge.

O. Steinman, Inc., hereinafter called "Steinman", appeals from the district court's denial of its Rule 60(b) motion for relief from a judgment entered against it on February 23, 1961, in favor of Wilson Freight Forwarding Co., hereinafter called "Wilson".

This case began as an action for personal injuries. After a non-jury trial and the making of appropriate findings, the district court, on January 20, 1961, ordered that judgment in the amount of $65,000 be entered for the plaintiff against Fred Hitzeman, whose negligence caused the accident, and Wilson, Hitzeman's employer. The court further ordered that Wilson "has a right of contribution" against Steinman, a joint venturer with Hitzeman, and "may hereafter have judgment against the said Steinman, Inc. for the amount which it proves it has paid the plaintiff, Simon Friedman, in excess of the sum of $32,500 plus interest * * *." This order adjudicated liability over in a manner suggested by this court in Smith v. Whitmore, 3 Cir., 1959, 270 F.2d 741. The formal judgment against Hitzeman and Wilson for $65,000 was entered on January 24, 1961.

Subsequent docket entries, dated February 3, 8 and 22, 1961, show the filing by the plaintiff of a "Praecipe to Satisfy Judgment", the clerk's entry that "Judgment is hereby marked satisfied", and the filing by the plaintiff of a "Release and Receipt" reciting the payment of $65,000 by Wilson to the plaintiff.

On February 23, 1961, the unconditional judgment which is here challenged was entered in favor of Wilson against Steinman for $32,500. Steinman appealed from this judgment, but on December 5, 1961, this court dismissed that appeal for want of prosecution.

Steinman's motion under Rule 60(b)(4), (5) and (6), Federal Rules of Civil Procedure, for relief from the judgment of February 23, 1961, was made on March 15, 1962. It asserted that the judgment over was void because it had been entered against Steinman without a hearing and without proper proof of payment by Wilson to the plaintiff. In addition, the motion asserted that when the original judgment was marked satisfied as to both Wilson and Hitzeman, it ceased to be fair to enforce Steinman's obligation on the theory that its liability was secondary to and derivative from Hitzeman's.

At the hearing on this motion, Steinman made no request to introduce any evidence. There was an admission by counsel in open court that Wilson's insurer paid part of Wilson's judgment obligation and that Hitzeman was not insured. The district court denied the motion and Steinman appealed.

The district court concluded that Steinman's contention based upon the release of Hitzeman was without merit and, in any event, came too late. Without suggesting any disagreement with the district court's position on the merits, we hold merely that Steinman's contention is foreclosed.

Steinman received prompt notice of the entry of the judgment of February 23, 1961. At that time the docket entries and supporting papers which were part of the record of this case showed the evidence of payment upon which the court relied. These papers also showed the release of Hitzeman. If Steinman believed that, in these circumstances, the judgment was improper or inequitable, it could immediately have filed a motion under Rule 59, Federal Rules of Civil Procedure, to alter or amend the judgment. Instead, it waited 13 months to seek relief from the judgment under Rule 60. No excuse has been offered for this delay, although Rule 60 specifies that the extraordinary post-judgment relief which it provides must be sought "within a reasonable time". The court below concluded that Steinman had not moved within a reasonable time. Far from being an abuse of discretion, that conclusion was the only one rationally possible in the circumstances. Cf. Delzona Corp. v. Sacks, 3d Cir. 1959, 265 F.2d 157; Morse-Starrett Prod. Co. v. Steccone, 9th Cir. 1953, 205 F.2d 244; Gilmore v. Hinman, 1951, 89 U.S.App. D.C. 165, 191 F.2d 652.

Steinman's abortive appeal is also relevant in this connection. When that appeal was filed in March, 1961, the trial record showed the release of Hitzeman just as it does now. If Steinman wished, it could have made the contention on that appeal which it now advances. Instead, it failed to prosecute the appeal it had initiated. No excuse is offered for this dilatory conduct. On the record, therefore, we have inexcusable failure to raise an available contention by direct appeal followed by an attempt to litigate the matter later by a motion for post-judgment relief under Rule 60(b). This is not a proper use of Rule 60(b). Ackermann v. United States, 1950, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207.

There remains the contention that the judgment of February 23, 1961, is void because Steinman did not have notice or an opportunity to be heard before it was entered.

Steinman's basic legal obligation of contribution had already been properly determined, subject only to the payment of money by Wilson to the plaintiff. All that followed was administration of that basic decision. In this process, different from a trial, the court could assure itself in any reasonable way that Wilson had paid the plaintiff and, therefore, that the matter was ripe for an unqualified order that Steinman reimburse Wilson. The filing of the plaintiff's receipt and release as part of the post-judgment record was a normal and proper way of supplying the court with that assurance.

This does not mean that Steinman had no remedy if the court had acted on misinformation. A post-judgment motion under Rule 59 to alter the judgment, supported by evidence that Wilson had not paid, would have been appropriate. Since the rules thus afford an aggrieved party an adequate opportunity to be heard and to present evidence, failure to give Steinman notice and an opportunity to be heard before the court acted pursuant to the record showing that Wilson had paid plaintiff's claim in full did not make the unconditional order of contribution void. Cf. American Sur. Co. v. Baldwin, 1932, 287 U.S. 156, 168, 53 S.Ct. 98, 77 L.Ed. 231.

Once we reach the conclusion that the judgment was not void but, at most, subject to vacation upon a subsequent showing of mistake of misrepresentation, the failure of Steinman to raise that issue promptly, or to prove that the court was misinformed even in this tardy proceeding under Rule 60(b), is fatal to his claim. Steinman is in the same position procedurally on this contention as on the tardy claim that Hitzeman's release should abrogate the obligation of contribution.

The order denying the appellant O. Steinman, Inc., relief under Rule 60(b) and the judgment entered against the appellant United Bonding Insurance Co. as surety for Steinman's payment of the judgment of February 23, 1961, will both be affirmed.

FRIEDMAN v. WILSON FREIGHT FORWARDING COMPANY