485 B.R. 112
Bankr. E.D. Pa.2013Background
- Trustee obtained a default judgment against Defendant on August 8, 2011 in this adversary proceeding.
- Trustee filed the complaint on December 1, 2010; Defendant failed to answer, and default was entered after multiple motions and orders.
- Defendant and counsel delayed action for over a year; a stipulation allowed Defendant to answer within 20 days to avoid default, which never occurred.
- November 6, 2012 hearing occurred on Defendant’s motion for reconsideration; Snyder Affidavit was hand-filed and initially rejected as hearsay, then admitted in evidence.
- Judge denied Defendant’s continuance as moot and denied the motion for reconsideration on merits; matter culminated in an order dated January 9, 2013.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of the Snyder Affidavit | Trustee argues affidavit not admissible as live testimony was expected. | Defendant argues affidavits can be admitted in lieu of live testimony. | Affidavit admitted for consideration on merits. |
| Whether to grant a continuance for live evidence | Continuance unnecessary and moot after admitting Snyder Affidavit. | Continuance needed to present live witnesses and evidence. | Continuance denied as moot. |
| Whether Rule 60(b)(6) reconsideration is warranted | Defendant bears burden under three-factor test to show meritorious defenses and diligence. | Rule 60(b)(6) relief justified by extraordinary circumstances and counsel neglect. | Reconsideration denied; three Subramanian factors not satisfied. |
| Application of Subramanian factors (prejudice, meritorious defense, culpable conduct) | Trustee would be prejudiced by further delay; Defendant lacks meritorious defense; culpable conduct by Defendant. | Defendant asserts meritorious defenses and diligence despite delays. | All three factors not met; denial affirmed. |
| Equitable tolling and independent action arguments | Equitable tolling not applicable due to inaction and delay after garnishment. | Equitable tolling or independent action could salvage relief. | Equitable tolling and independent-action theories rejected. |
Key Cases Cited
- Skehan v. Board of Trustees, 669 F.2d 142 (3d Cir.1982) (whether a proceeding is a 'hearing' affects admissibility of affidavits)
- Publicker v. Shallcross, 106 F.2d 949 (3d Cir.1939) (fraud on court and reopening after fraud; balance of justice and truth)
- Gambocz v. Ellmyer, 438 F.2d 915 (3d Cir.1971) (limitations on Rule 60(b) relief and discretionary relief standards)