*1 COFFEY, Circuit Before WOOD SWYGERT, Judges, and Senior Circuit Judge.
COFFEY, Judge. Circuit (Hilton Company In- Hilton International ternational) appeals the district to vacate a court’s denial of Hilton’s motion pursu- ant to Federal Rule of Civil Procedure 60(b). We reverse and vacate the default I appellee Pas- This case arose out of the engagement her diamond sarella’s loss of $18,000 during stay ring valued at a at the in Puerto Rico. Pas- Hilton Hotel Caribe complaint against the Hilton sarella filed a Judge, filed Swygert, Circuit Senior 3,May seeking Corporation on Hotels dissenting opinion. $18,000 ring. for the lost recovery of court dismissed the The district allege sponte for failure to sua citizenship. for Hilton diversity of Counsel that the then informed Passarella Hotels Company, not the Hil- International Corporation, de- Hotels ton filed an amended com- fendant. Passarella 17, 1985, later, May plaint two weeks appellant Hilton International substituting May Passarella On as the defendant. Tortilleria, Inc., Rey any exception- instance. NLRB v. Del The Union has failed to establish Cir.1986). ques- al circumstances that would warrant tioning credibility Board’s determination in
675
Presi-
just,
International’s Vice
such terms as are
may
served Hilton
the court
Milligan
party
legal representative
relieve a
or his
Counsel Melvin
dent and General
order,
judgment,
from a final
Milligan
proceed-
or
copy
complaint,
and
with a
ing
(1)
following
reasons:
mis-
Acknowledgment
Receipt
of
executed the
take, inadvertence, surprise, or excusable
Complaint and returned it
of Summons and
(2)
neglect;
newly discovered evidence
plaintiff. Upon receipt of the com-
to the
by
diligence
which
due
could not have
Milligan
it to the
plaint,
forwarded
Conti-
been discovered in time to move for a
Company,
nental Insurance
Hilton Interna-
59(b); (3)
new trial under Rule
fraud
liability carrier
U.S. mail. Milli-
tional’s
via
(whether heretofore denominated intrin-
gan mailed another letter to Continental on
extrinsic), misrepresentation,
sic or
or
June 3
additional information
(4)
other
party;
misconduct of an adverse
concerning
claim. A search of
Passarella’s
void; (5)
is
records revealed that
it did
Continental’s
satisfied,
released,
has been
or dis-
Milligan’s
not receive either of
two letters
charged,
prior judgment upon
or a
which
consequently
repre-
took no action to
it is based has been reversed or other-
sent Hilton International.
vacated,
longer
wise
or it
equitable
is no
granted
The district court
Passarella’s
that the
prospec-
should have
judgment against
for a
Hil-
motion
(6)
application;
tive
or
other reason
3,
July
ton International on
after Passarel-
justifying relief
operation
from the
of
la demonstrated that Hilton International
The motion shall be made
5,
August
had been
served. On
time,
within a reasonable
and for reasons
the district court heard evidence concern-
(1), (2),
(3)
year
not more than one
damages
judg-
Passarella’s
and entered
judgment,
after the
proceeding
order or
$18,000 plus
ment in the amount of
inter-
was entered or
A
taken.
motion under
against
ests and costs
Hilton International.
(b)
this subdivision
does not affect the
Passarella filed an affidavit of
finality
of a
suspend
or
its
August 22
directed to the Chase Man-
operation. This rule does not limit the
Bank, alleged
hattan
to be Hilton Interna-
power of
indepen-
a court to entertain an
Milligan
tional’s debtor.
a
received
tele-
party
dent action to relieve a
from a
phone
September
repre-
call on
18 from a
proceeding,
order or
or to
informing
sentative of Chase Manhattan
grant
actually
relief to a defendant not
pending garnishment proceed-
him of the
personally
provided
notified as
in Title
ing. Attorneys for Hilton International
28, U.S.C., 1655,
or to set aside a
§
appearances
filed
the district court on
upon
ment for fraud
the court.”
September 20 and moved to vacate the
Engineers,
Inc. v.
C.K.S.
White
Gypsum Company,
Mountain
726 F.2d
International. The district court denied
1202,
(7th Cir.1984),
we noted that
Hilton International’s motion to vacate de-
“[tjhis
policy
circuit has a well-established
judgment pursuant
fault
to Federal Rule of
favoring a trial on the merits
over default
60(b),
421,
Civil Procedure Rule
108 F.R.D.
judgment.”
v. An
See also United States
appeals.
and Hilton International
Quantity
Undetermined
Article
of
of
Drug
Benylin Cough Syrup,
Labeled as
II
(7th
Cir.1978).
In A.F.
Hilton International contends that
the Dormeyer Company v. M.J. Sales & Dis-
denying
trial court abused its discretion in
(7th
tributing
Cir.
its motion to vacate the default
1972),
philosophy
we stated that
“[t]he
pursuant
to Federal Rule of
Proce-
Civil
procedure favors trials on
modern federal
60(b).
dure Rule
states:
merits,
judgments
and default
should
“(b) Mistakes; Inadvertence;
moving
generally
Excusa-
be set aside where
promptness,
Neglect; Newly
ble
with reasonable
al-
Discovered Evi-
acts
action,
dence; Fraud,
leges
On
a meritorious defense to the
upon
etc.
motion and
the default has not been will-
$175,-
and where
fendants have been burdened with a
Inryco,
Metropoli-
ful.”
also
Inc. v.
with no opportunity to
Inc.,
Engineering Company,
tan
708 F.2d present their defenses because their attor-
Cir.1983).
(7th
In Ellingsworth
ney misunderstood the court when orally
Chrysler, 665 F.2d
announced the date of trial.” Id. at 185.
1981),
qualify
stated that
order to
“[i]n
Dormeyer
A.F.
Company v. M.J. Sales
*3
judgment
for relief from a
under Rule
Distributing,
Cir.1972),
&
counterclaimed,
being
despite
even after
directed
the fact
that Hilton had
client;
by
responded to
courtesy
do so
his
never
extended a similar
to her when it
to in-
interrogatories;
failed for months
notified her
to serve.
outstanding discovery
form his clients of
Further,
attempted
Passarella
satisfy
Inryco
requests; misrepresented to
judgment through
her
pro-
having
getting documents
he was
trouble
ceeding,
a method more
used as a
clients;
appear
his
and failed to
at
from
payment
last resort
to secure
of a
attempting
once
five status calls without
deadbeat,
ment from a
one who has a histo-
court the current
to ascertain
ry
paying
of not
his debts or judgments.
status
case.”
Hilton International does not fall into this
Engineers,
Id. at
also C.K.S.
category.
Ellingsworth
Chrysler,
Gypsum Compa-
Inc. v. White Mountain
180,185 (7th Cir.1981),
we vacated
1202,1203-04 (7th Cir.1984).
ny, 726 F.2d
stating
“[tjhe
a default
after
*4
case,
present
the defendant re-
the
pattern
record here reveals no willful
of
no notice of Passarella’s suit other
ceived
disregard for the court’s orders and rules.”
original
complaint.
service of the
than the
present
The record in the
case fails to
from the record that
There is no indication
any
pattern
disregard
reveal
“willful
of
Passarella and Hilton International ever
the court’s orders.”
In Ellingsworth,
Id.
any
negotiations or
conducted
settlement
we also stated that
default
“[a]
The trial court
had
other contact.
dismissal,
like
is a harsh sanction which
against Hilton Interna-
entered a default
employed only
should be
in extreme situa-
July
although
on
3
Hilton Interna-
tional
tions, or when other less drastic sanctions
very recently on
tional had been served
proven unavailing.”
have
Id.
20,
receiving
After
the default
May
While it is clear that Hilton International
plaintiff
attempt
made no
the
should have
more careful in monitor-
been
notify the defendant of the
whatsoever to
ing
progress
complaint,
the
subse-
proceeded
judgment against it but
default
quently
party
served on the
with
garnishment action
immediately with a
agree
cooperation,
their
we do not
with the
as cus-
against the Chase Manhattan Bank
entry
of default
district court’s
of Hilton International’s funds and
todian
against Hilton International. The dissent
learning
gar-
Upon
thus its debtor.
asserts that we have “chosen to substitute
and the default
on
nishment
district
court’s rea-
[our]
based, Hilton International
which it was
in
conclusion in this case” and
so
sonable
promptly
having
attorneys
en-
acted
its
doing
“overstepp[ed]
of
have
the bounds
filing
appearances
ter
a motion to
their
extremely
of
limited standard
review.”
and set aside
vacate
Instead,
pursuant
adopts
the dissent
what amounts
garnishment proceeding
the
60(b).
approach to our
Rule of Civil Procedure
to a form over substance
Federal
judg-
review of motions
vacate
Hilton International was careless
While
ignoring
Hil-
completely
the fact that
ment
monitoring
sending the
in not
the suit after
undoubtedly prevail at
trial
ton would
company,
plaintiff
insurance
the
file to its
on its claim that it does not own or
based
not extend Hilton International
the
did
her
operate the hotel where Passarella lost
professional courtesy extended to fel-
usual
foolish and
ring and it seems rather
sense-
the
of inform-
professionals
low
before
bar
judicial time in an
less to waste valuable
entry
the
of de-
the defendant before
Further,
system.
court
the
overburdened
garnishment.
fault
Passar-
cavalierly
aside the fact
dissent
brushes
ques-
attorney’s
leads one to
ella’s
action
is no
the record that
that there
evidence
tion it for the record reveals that Passarel-
appearance and
Hilton’s failure to enter an
case tried
la was not anxious to have this
judg-
thereby
entry
of default
avoid
carefully
merits since she
avoided
on the
Although
against it
willful.
ment
was
any notice that
providing would
with
of
might question the wisdom
Hilton’s
of its
have informed Hilton International
following-up on the informa-
reverse
judgments]
in not
refusals to set
counsel
[default
Continental,
aside.”);
as the Ninth
Northrop Corp.,
he sent to
Tolliver v.
tion
Neustadter,
(7th Cir.1986) (“
in Butner v.
F.2d
Circuit noted
of
‘[A]buse
Cir.1963),
(9th
of
60(b)
the “wisdom
F.2d
discretion’ in cases under Rule
is re-
(or
as in
appellant’s actions”
inactions
stricted review indeed. It limits review to
case)
of whether
is not determinative
person
cases in
no
which
reasonable
could
judgment should be
the motion to vacate
agree with the district court’s decision.
Butner,
explained
the court
granted.
Esmark, Inc.,
Metlyn Realty Corp. v.
exist as to the events
doubts
(7th Cir.1985)”);
where
830-32
C.K.S.
responsible for the
Engineers, Inc. v.
Gyp-
White Mountain
ment,
should be resolved in
those doubts
sum
1205-06
moving
to vacate the
favor of
1984);
DeFrantz,
United States v.
Thus, in
a case where
(7th Cir.1983);
F.2d 310
Brewer Electric
explanation
the defendant has a reasonable
America,
Mfg.
Systems
Co. Toronado
of
any possibility
for its conduct that excludes
Inc.,
(7th Cir.1982).
tion. The court’s of no neglect surely
excusable falls into the dis-
cretionary “judgment realm of call.” This
was not a clear case and this makes it
precisely the kind of case where a court of
appeals step give should back and the dis-
trict court room to exercise that
The position district court is the best
weigh “imponderables”: the need for
finality litigation, expectations
parties, the unfairness of
ment, strength and the of the defendant’s Owens,
excuse. Dimmitt & 1193; Tolliver,
at
Also, although judicial the desire for effi-
ciency should not override considerations of
justice, judges closely trial must monitor prevent delay.
their calendars and needless Thus,
Kagan,
“nearly
impossible placed judges demands on trial system” the overburdened federal court weighs in impondera-
also the balance of
bles. Id. factors, weighing Judge these Shadur permissible,
made his decision within rea-
sonable bounds. It is majority here oversteps the bounds of extremely
limited standard of review.
I would affirm. STRAUSS, Plaintiff-Appellee,
Isidore CORPORATION,
STRATOJAC
Defendant-Appellant.
No. 85-1498. Appeals,
United States Court of
Seventh Circuit.
Argued Feb. 1986.
Decided Jan.