Speiser, Krause & Madole P.C., D/B/A Speiser, Krause, Madole & Cook v. Rudy A. Ortiz Rudy A. Ortiz & Opinion Associates P.C.

for the just compensation pay ton has purpose impos-

taking. That serves a whole society as for ing the costs on rather programs, than social worthwhile have the misfortune the individuals who the cost first falls.86 standing where to be sum, gener- that the interest we hold trust accounts is pooled ated IOLTA the clients and customers property of trust, money deposited into whose appropriation of government taking purposes is public interest compensation just under entitling them just compen- But Fifth Amendment. than takings may be less sation for the taken, nothing, or amount the interest circumstances, so deter- on the depending a remand. remedy requires mining P.C., SPEISER, & MADOLE KRAUSE Krause, Speiser, Madole & d/b/a Cook, Plaintiff-Appellee,

v. ORTIZ; Rudy Rudy A. & A. P.C., Defendants- Associates Appellants. No. 00-55195. Appeals, Court of United States Ninth Circuit. * 12, 2001 Sept. Submitted 21, 2001 Filed Nov. * States, unanimously panel finds this case suitable Armstrong United U.S. See argument. oral Fed. (1960). for decision 40, 49, without 80 S.Ct. L.Ed.2d 34(a)(2). R.App. P. Flores,

Sidney C. Law Offices of Flores Barrios, Jose, California, & San for the defendants-appellants. Veth, Speiser, Madole,

John J. Krause & P.C., Irvine, California, plaintiff- for the appellee. FERGUSON, FERNANDEZ,

Before: McKEOWN, Judges. Circuit FERNANDEZ, Judge: Circuit Rudy A. A. Rudy Ortiz Ortiz & Associates, P.C., a Virginia corporation,1 appeal the district court’s denying order entry their motion to set aside of de- enlarge fault and to time to answer. We affirm.

BACKGROUND Madole, P.C.,

Speiser, Krause & Cali- firm, fornia law entered into an agreement Ortiz, attorney, purpose with an for the representation responsi- dividing legal arising bilities out of an airline crash case. concluded, dispute After the case was attorneys regarding arose between the attorneys’ division of the fees. result, 7, 1999, Speiser January As a complaint Superior filed a in the Krause California, County Court of the State 28, 1999, Orange, April Speiser and on Hereafter, convenience, corporation. opinion applies equal force to the this will with Ortiz, only analysis refer but the as to him fault,” does entry of default alone mail to because a letter certified Krause sent appealable an final order. entry not constitute intent to seek indicating its Id.; Edrick see also Savarese v. receive a in the event it did not of default Transfer Inc., Storage, & complaint. timely answer to the Cir.1975); Bumb, 4, 6 Madsen v. 419 an answer state having filed Without . (9th Cir.1969) court, the case to the Unit- Ortiz removed District for the Central ed States Pursuant to Rule

District of California. DISCUSSION 81(c) Proce- the Federal Rules of Civil The district court’s determination dure, file an answer required was Ortiz in this case was well within the boundaries 6,1999. by May complaint to the argues its discretion. Ortiz his Ortiz, however, reading did not bother pellu the neglect to read and understand 81(c) carefully enough to understand Rule 81(c) regarding of Rule the cid command and, therefore, answering did not bother complaint2 the was time to answer excusa much. He complaint. He admits as 60(b)(1). ble See Fed.R.Civ.P. later that the district court’s issu- also' said regarding ance of an order to show cause attorney’s egregious an fail While and ex- jurisdiction perplexed somehow unambigu follow clear and ure to read and because, thought, perhaps cused him he be might ous rules sometimes actually not have been re- might the case construing “mistakes the rules do neglect, 16, 1999, Thus, Speiser July moved. usually neglect.” not constitute ‘excusable’ as to requested entry Krause an of default v. Brunswick As Pioneer Inv. Servs. Co. day. that same Ortiz. Default was entered 380, 392, P’ship, Ltd. 507 113 socs. U.S. Speiser Krause notified Soon thereafter (1993). 1489, 1496, 74 123 L.Ed.2d S.Ct. it intended to seek a default Ortiz situation, As we have said in a similar judgment. presented persuasive “counsel has not then made a motion to set aside Ortiz of no justification for his misconstruction time to enlarge the default and to Accordingly, rules. there is nambiguous neglect that his was answer on the basis deviating general no basis for from the The district court denied the excusable. law not consti rule that a mistake of does entry the de- motion and ordered the neglect.” Kyle Campbell tute excusable appealed. (9th fault then judgment. Co., Soup 28 F.3d 931-32 1994); High see also Idaho’s Comm. for OF REVIEW STANDARD (9th Desert, Yost, Inc. v. 825 Cir.1996). 81(c) just that Again, of discre is We review for abuse clear, an attor tion decision to enter a and as we once said about the district court’s it, no Carpenters’ ney default Haw. who did not follow see judgment. “[w]e Stone, courts to excuse Trust Funds v. 511- reason for federal Savarese, Cir.1986). 513 professional neglect.” That standard of review such F.2d at 147. “necessarily encompasses entry of de based, 81(c) proceeding pertinent part: upon or is reads in “In a action days after the service of the removed action in which the defendant has or within answered, pleading, upon then ... summons such initial not the defendant shall answer filed, days receipt through after the days ser- or within within 20 after removal, period petition whichever copy vice or otherwise of a of the initial longest.’’ pleading setting forth the claim for relief tries to and then treat that as a mere formalistic Interestingly enough, Ortiz neglect by asserting preparatory of his incantation to their deciding avoid the effect when they fell into a state of confusion what they that he would have done had been it, an order to show the district court issued judge. district But as we see that, perhaps, the case thought cause. He standard means that within substantial really been had removed had not which he margins upheld the district court could be thus tries to excuse one removed. He had it way determined issue one or the plain provision of the law failure to read other. failure to read still by resting upon his Here the district court would not neces- provision. In other equally plain another sarily have had it decided that ex- erred

words, neglecting solace in his to he seeks cause) (or neglect good cusable was shown. automatically re observe that a case But it decided that neither was. That papers are moved when the removal In- certainly conclusion was not error. filed, here. they as were See served deed, being it was much closer to rhadam- 1446(d); § Resolution Trust 28 U.S.C. opposite anthine than the conclusion would 1230, Developers, 43 F.3d Corp. Bayside v. have been. (9th Callahan, Cir.1994); v. 788 1238 Okot AFFIRMED. (9th Cir.1986). However, 631, 633 his anodyne of one clear rule is no for neglect FERGUSON, Judge, dissenting: Circuit by neglect of another damage caused procedure history “The of is a series of Savarese, 513 F.2d at one. As we said attempts problems to solve the created feel, judge, 147: did the district “We as procedural preceding generation’s re- parties cases to the fed that who remove Resnick, Precluding Ap- forms.” Judith acquainted with eral courts should become (1985). 603, 70 L.Rev. 624 Cornell peals, of comply with the Federal Rules Civil Procedure.”3 respectfully By applying I dissent. rule, ig- the District Court per former se to the briefly Ortiz also alludes holdings nored the of Pioneer Investment defaults. good regarding cause standard Ltd. Services Co. v. Brunswick Associates 55(c). That standard is See Fed.R.Civ.P. 1489, Partnership, 507 U.S. 113 S.Ct. rigorous less than excusable See (1993) progeny, 74 and its 123 L.Ed.2d Funds, Carpenters’ Trust Haw. analysis and equitable which call for an however, distinction, is one of at 513. The under interpretation “neglect” broader at degree, might make a difference 60(b)(1). Similarly, by gloss- Fed.R.Civ.P. lawyer, margin. But the failure of this developments, majority ing over these properly removing party, who was the to per reintroduces this former implicitly 81(c) does language read the clear rule. id.; good not amount to cause either. See Savarese, F.2d at 146. 11 Chapter In of a creditors of the bar date sought debtor an extension

CONCLUSION of claim under Fed. proofs late 9006(b). Pioneer, R. Bankr.P. 507 U.S. Appellate judges tempted are often to 9006(b)(1) 382, 113 1489. Rule the abuse of discretion standard S.Ct. mention tempi rules.” Id. at 382. The Hotel to follow court 3. We do not overlook Briones Riviera But, Casino, (9th 1997). Post true of Bateman v. United States F.3d 379 Cir. same is & said, Service, 1222-23 did not al as we the error in case “only from a failure to read and at- result 2000). neg whether such In order to determine bankruptcy court the discretion grants the excusable, suggested the Court ligence is to filing if the failure permit a late analysis, which would take resulted comply with an earlier deadline all circumstances into account relevant bankrupt- The neglect.” “excusable from party’s Id. at surrounding the omission. and held that cy court denied the motion 395, 113 The stated S.Ct. 1489. Court circum- neglect was limited to include the follow analysis such an should beyond party’s were rea- stances that (1) danger prejudice ing factors: Circuit re- sonable control. Sixth (2) opposing party; length “the 385-86, 113 remanded. Id. at versed and impact judicial potential and its S.Ct. (3) delay, proceedings;” “the reason for the within the reason including whether was the decision of the Sixth affirming (4) movant;”3 and control of the able Circuit, Supreme held that “ne- good acted in faith.” “whether the movant meaning, ordinary expected has its glect” Id. carelessness, negligence, which includes Casino, In Briones v. Riviera Hotel & Id. at and inadvertent mistake. (9th Cir.1997) curiam), (per 116 F.3d 379 that intended (stating Congress 1489 S.Ct. for equitable this Circuit held that the test permitted that would be where “the courts in Pioneer neglect” “excusable set forth accept filings caused appropriate, to late equal application and in the Rule had force carelessness, inadvertence, mistake, by or 60(b) 381-82, at 113 context. Id. S.Ct. by intervening circumstances as well as per “ig- the se rule that (overturning 1489 control”). parties analogiz- In beyond the of court rules does not constitute norance 9006(b) ing Fed. R. Bankr.P. to Fed. neglect, litigant ap- even if the excusable 6(b) 60(b),1 and the Court ex- R.Civ.P. ”). Briones, peared pro se In a former that, purposes of Rule plained “at least employee proa se discrimination brought 60(b), neglect’ ‘excusable is understood to court dismissed the action. The district encompass situations in which the failure employee respond action after the failed to comply filing a deadline is attribut- to with dismiss, to to the defendant’s motion 394, 60(b) Id. at negligence.”2 113 S.Ct. employee’s able the Rule mo- then denied judgment. the This Cir- tion to set aside 1489. 9006(b)(1) comparable by beyond the R. sions caused circumstances Fed. Bankr.P. 60(b)(1) Pioneer, gives that to Fed.R.Civ.P. in the U.S. at control of the movant.” 507 filings 392, added). court discretion to allow late that are (emphasis 113 S.Ct. 1489 neglect. at the of excusable Id. 382-83. result 3.However, appears the third factor to have majority lan- 2. misconstrues the Court’s 60(b) applicability limited in the Rule context. guage by stating: attorney’s egre- "While an Casino, v. Riviera Hotel & Briones 116 gious failure to read and follow clear and (9th Cir.1997) curiam). (per 1 382 n. might unambiguous rules sometimes be ne- "Thus, 60(b), purposes at least for of Rule glect, construing 'mistakes the rules do not ” neglect' is to encom- 'excusable understood usually neglect.' Maj. constitute excusable comply pass situations in which the failure to (internal op. quotation marks and cita- at negli- with a deadline is attributable to omitted). quote tion This is taken out of Pioneer, gence.” at S.Ct. 507 U.S. "Although complete quote context. The inadvertence, is: language rules, 1489. "Because of the and struc- ignorance of the or mis- 60(b), party's failure to file on ture of construing takes the rules do not constitute beyond time for reasons his or her control is ” neglect, that 'excusable 'excusable' it is clear (internal 'neglect.' cita- neglect’ not considered Id. under Rule is a somewhat 'elas- omitted). concept’ strictly tion tic and is not limited to omis- order, court’s reversed remanded to the district the district cuit vacated grant with instructions to per se court application its of holding that 60(b)(1) motion. Id. at 1225. In applying apply failure to Pioneer's and its rule factors, panel the Pioneer of determined an abuse factors constituted equitable that, (re- although the reason for the was Id. at 113 S.Ct. discretion. weak,5 equities weighed the rest of the in proceedings further manding the case for favor of granting relief. Id. 1224-25. employee’s ne- whether the determine excusable). was glect determining In equitable analy- Briones, was mandated Pioneer and sis Briones, acknowledged In this Circuit panel prior reviewed the case law in tension, presently ex- underlying present the Circuit and clarified the state District the cases cited ists between of the law. Pio- holdings and the of opinion,4 Briones, we noted Pioneer The court stated progeny. neer and its changed our law on excusable that, to re- although this Circuit seemed Before we had held that “igno- seeking a Rule motion quire denial of rance of court rules does not constitute comply from a failure to with court relief neglect” applied per and had rules, type “per se rule cannot exist this against rule Thus, granting relief recog- Id. the court after Pioneer.” party comply when a failed to with a to follow possibility nized the that failure Pioneer, however, After we deadline. could constitute “excusable ne- court rules recognized that the term covers cases adopted equitable analysis glect” and and inadvertent negligence, carelessness in Pioneer. set forth adopted mistake. We also Briones, held that Following this Circuit in test articulated Pioneer to determine its discretion the district court abused neglect whether is “excusable” under apply equitable the test of when it failed to 60(b)(1). We stated the fac- determining and Briones in Pioneer in were not exclu- tors recited Pioneer comply to attorney’s whether an failure sive, they “provide but that a framework “excusa filing with a deadline constituted with which to determine whether miss- neglect.” Bateman v. United States ble constitutes ‘excusa- ing filing a deadline (9th Serv., Cir. Postal neglect.” ble’ 2000). Bateman, In the district court de (citations Bateman, at 1224 omit- plaintiffs Rule motion after nied the ted). attorney respond failed to to plaintiffs the law, the Dis- light mo In of the recent case summary judgment the defendant’s manner, in the same appeal, this Circuit trict Court erred tion. Id. at 1223. On respond the defendant's predominantly relied on 5. The failure to to 4. The District Court Desert, summary judgment a result the occurred as of High Idaho's Inc. v. Committee for Nigeria family attorney’s 19-day trip for a to Yost, (9th Cir.1996), Kyle and 92 F.3d 814 attorney emergency. Although knew that the Co., (9th Campbell Soup 28 F.3d 928 due, response was he failed to seek the 1994). pri- Both of these cases were decided the The defendant then extension from court. Bnones, per and both indicate that a se or to granted, unop- for the motion to be moved factors, rule, rather than the Pioneer should mentioning attorney's ab- posed, without the majority apply. The also relies on cases from attorney's Upon the re- to the court. sence prior that were decided to Briones this Circuit the country, the he failed to contact turn to Service, and Bateman v. United States Postal days explain to the defendant for 16 court or Cir.2000). 231 F.3d 1220 Bateman, 1222-23. absence. his way, where there has been no in It another court did Bateman. lower the decision, appropriate circum- merits exercise all relevant to consider failed under Rule district court discretion stances, equitable the factors including finality Pioneer, that the interest required by requires as in enumerated Further, way fairly readily,'to further applied give should Briones. Bateman and competing reaching interest in the per former se the a of the modified version dispute. i.e., of a rule, law cannot consti- merits a mistake of there a neglect unless tute excusable omitted). (internal Id. at 696 citations the miscon- persuasive justification for Here, majority ignores purpose the apply the correct By failing struction. 60(b), the District Court to allowing evaluating whether the legal standard for enter default avoid the merits decision and excusable, the District Court neglect was procedural for a minor error. judgment at 1222-23. its discretion. Id. abused in standard apply appropriate If we majority adopts this mistaken rea- case, present factors de- that Ortiz miscon- soning by surmising require in Pioneer would reversal. lineated per- rule without a unambiguous strued an First, prejudice op- to the danger by concluding justification,6 suasive and posing party this case is minimal. See Second, that his actions cannot constitute Bateman, 231 F.3d at 1224-25. majori- by The rule set forth potential length and its as follows: order ty can be summarized judicial proceedings was impact on the by apply equitable analysis required (holding id. that a failure negligible. See must show that a movant first days court did not to contact the persuasive justification a for the there is delay). filed significant constitute rule. This rea- misconstruction of court Entry Motion to Aside of Default his Set soning contrary runs to both Briones than one month after default had been less Bateman, and reinstitutes a modified ver- entered, approximately three months per rule. sion of the former after the deadline for his answer. Moreover, majority’s decision con Third, delay in filing the reason for the 60(b). purpose travenes the of Rule This an answer was Ortiz’s confusion caused that, general has “admonished as a Circuit sponte the District Court’s sua Order to 60(b) matter, ‘remedial in nature The District sua Show Cause. Court ” liberally applied.’ and ... be TCI must sponte question decided that there was a Knoebber, 244 Group Ins. Plan v. juris- diversity whether it had regarding Life (9th Cir.2001) (citing 695-96 diction. It then issued its Order to Show Allen, Falk v. why Cause the case should not be dis- 1984)). Further, this Circuit has stated: prior to the time that Ortiz was missed Ortiz, ordinary applying general required using terms of Rule to answer.

[I]n reasoning, and determined judgments, intelligence to default this Court emphasized judgments that such are that he should not burden the District has in of the case until “appropriate only extreme circum- Court with merits stances; should, possi- jurisdiction pro whenever was determined. As a a case ble, inexperienced attorney, Put litigant be decided on the merits.” and an Or- majority’s finding by the effects of the disagree also with the could have been confused I unambiguous an rule. sponte that Ortiz misconstrued Show District Court's sua Order to during below anal- As discussed Cause. facts, ysis ordinary person present the District regarding confusion tiz’s NELSON, Tarza R. Plaintiff- Cause Order to Show sponte sua

Court’s Appellant-Cross- its effect jurisdiction and federal regarding Appellee, Even the is understandable. on removal District or the by the Court rules cited the effect directly not address majority do Warden; HEISS; Prunty, Barbara K.W. on the by the court sponte order of a sua Gomez, Director of Correc James process.7 removal X, Inclusive; tions; through I Does Sylvia Garcia, Defendants-Appel H. Fourth, there is no evidence that lees-Cross-Appellants, good than faith. anything less with acted misreading “resulted appears that his It and carelessness, not from negligence from Through X, Inclusive, I Does Bateman, and willfulness.” deviousness Defendant. Finally, the merits at 1225. Rather, the never decided.

this case were 00-55523, Nos. 00-55567 way easy took the out court district Appeals, United States Court judgment default summarily entering Ninth Circuit. $157,291.55. * 17, 2001 Submitted Oct. equities weigh favor Accordingly, the Filed Nov. Ortiz, granted he should have been Because District relief. by failing to abused its discretion standard, I legal would apply the correct this case. and remand

reverse the effects unambiguous could have further researched are as the 7. Even if the rules petition been re- majority argues, sponte Ortiz should have still on his the sua order aforementioned, 60(b) Bateman, granted relief. As Rule not determinative. See moval applicability in the that, factor has limited the third although (finding 231 F.3d at 1225 Briones, 60(b). at Rule context of “weak,” delay was the Rule reason for the (noting “inapplicability [of that the 382 n. 1 granted be- have been motion should 60(b) may suggest the third factor] weighed equities in favor rest of the cause the neglect provision in that that the excusable movant). than it is under rule is somewhat broader * panel unanimously finds this case suitable rules.”). require does not other argument. Fed. without oral for decision beyond reasons that the was caused 34(a)(2). R.App. P. 507 U.S. the movant’s control. Thus, the fact that Ortiz S.Ct. 1489.

Case Details

Case Name: Speiser, Krause & Madole P.C., D/B/A Speiser, Krause, Madole & Cook v. Rudy A. Ortiz Rudy A. Ortiz & Opinion Associates P.C.

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Nov 21, 2001

Citation: 271 F.3d 884

Docket Number: 00-55195

Court Abbreviation: 9th Cir.