STATE STREET BANK AND TRUST COMPANY, Plaintiff-Appellee, v. INVERSIONES ERRAZURIZ LIMITADA, (f/k/a Inversiones Errazuriz S.A.); Supermercados Unimarc S.A., (f/k/a Comercial E Inmobiliaria Unimarc S.A.), Pesquera Nacional S.A., Unimarc Abastecimientos S.A., Cidef S.A., Salmones Unimarc S.A., Industria Forestal Nacional S.A., Forestal Regional S.A., Cidef Argentina S.A., Corporation De Inversiones Y Desarrollo Financiero Cidef S.A., and Sociedad Contractual Minera Compania De Salitre Y Yodo Primera Region, (f/k/a Compania De Salitre Y Yodo Primera Region S.A.), Defendants-Appellants,
Docket No. 02-9404. Docket No. 03-7415.
United States Court of Appeals, Second Circuit.
Argued December 19, 2003. Decided June 15, 2004.
374 F.3d 158
Joseph P. Moodhe, New York City (Daniel J. Levin, Deanna D‘Amore, Debevoise & Plimpton, New York City, of counsel), for Appellee.
Before: MESKILL, POOLER and SOTOMAYOR, Circuit Judges.
MESKILL, Circuit Judge.
This appeal concerns the propriety of a multimillion dollar default judgment entered against defendants-appellants Inversiones Errazuriz Limitada, Supermercados Unimarc S.A., Pesquera Nacional S.A., Unimarc Abastecimientos S.A., Cidef S.A., Salmones Unimarc S.A., Industria Forestal Nacional S.A., Forestal Regional S.A., Cidef Argentina S.A., Corporacion de Inversiones y Desarrollo Financiero Cidef S.A., and Socieded Contractual Minera Compania de Salitre y Yodo Primera Region (collectively “defendants“). In April 2001, plaintiff-appellee State Street Bank and Trust Company (“State Street Bank” or “the bank“) initiated a legal action to recover more than $100 million to which the bank was entitled pursuant to two credit agreements executed in 1994 and 1996 (individually and respectively the “1994 Credit Agreement” and the “1996 Credit Agreement” and collectively the “Credit Agreements“). When the defendants failed to respond to the complaint, the United States District Court for the Southern District of New York, Carter, J., on the application of State Street Bank, entered a default judgment of approximately $136 million.1 Thereafter, the defendants brought two motions to vacate the default judgment pursuant to various provisions of
Defendants contend that the district court improperly denied their efforts to secure relief from the default judgment. Defendants claim that the defenses and counterclaims they asserted justified the vacatur of the default judgment and that State Street Bank would not be prejudiced if that judgment were vacated. They also contend that State Street Bank perpetrated a fraud that merited vacatur. For the reasons that follow, we conclude that the district court properly denied their
The roots of the appeal before us can be traced to certain transactions that took place in 1994 and 1996. State Street Bank initially agreed to supply defendant Inversiones Errazuriz Limitida (Inverraz), a Chilean company, with $50 million in accordance with the terms of the 1994 Credit Agreement. Subsequently, Inverraz borrowed an additional $65 million from State Street Bank pursuant to the 1996 Credit Agreement.
State Street Bank entered into these financing arrangements on the express condition that certain operating affiliates of Inverraz would guarantee the loans. As such, various Inverraz subsidiaries signed guaranty agreements in 1994 and 1996 (individually and respectively the “1994 Guaranty Agreement” and the “1996 Guaranty Agreement” and collectively the “Guaranty Agreements“), making each of them liable for a share of the sums borrowed by Inverraz and for certain penalties if their parent company defaulted on the loans.2
According to the Credit Agreements, the sums borrowed by Inverraz were to be repaid, by and large, through several semiannual installments. Both Credit Agreements expressly provided that the failure to make timely payments would constitute an “Event of Default.” If an Event of Default occurred, State Street Bank could accelerate Inverraz‘s debt such that all of the interest and principal outstanding with respect to the loan defaulted on, together with a defined “Make Whole Amount,” would become immediately due and payable. Under the provisions of the Guaranty Agreements, each guarantor agreed to pay for a specified share of this accelerated debt.
In 1999 and 2000, Inverraz failed to make the semiannual installment payments required by the Credit Agreements. In response, State Street Bank accelerated Inverraz‘s debt and demanded repayment of all the sums then due. Nevertheless, neither Inverraz nor any guarantor repaid any portion of Inverraz‘s outstanding debt.
In April 2001, State Street Bank filed this legal action against the defendants in an effort to recover the sums to which it was entitled pursuant to the Credit Agreements and the Guaranty Agreements, as well as to secure a declaration that the defendants could not sell certain assets without the bank‘s prior consent.3 The defendants did not immediately answer State Street Bank‘s complaint. Rather, in June 2001 the district court endorsed a stipulation in which the defendants acknowledged personal jurisdiction as well as service of process and State Street Bank agreed to extend the defendants’ time to respond to the complaint. Notwithstanding this extension of time, the defendants failed to file an answer in the months that followed.
Thereafter, the defendants moved the district court to vacate the default judgment pursuant to various provisions of
In February 2002, the district court held that two of those defenses and counterclaims were not meritorious. See State Street Bank & Trust Co. v. Inversiones Errazuriz, Limitada, 230 F.Supp.2d 313, 319-24 (S.D.N.Y. 2002) (State Street Bank I). However, the court determined that the “factual record regarding [the] defendants’ seven remaining counterclaims [and defenses was] simply too incomplete for the court to conclude one way or the other whether they constitute meritorious defenses.” Id. at 324. As such, the court referred the remaining counterclaims and defenses to a magistrate judge and directed him to issue a report and recommendation, after the defendants had “been given an opportunity to flesh out the factual foundation for each counterclaim [and defense],” with respect to whether they were meritorious. Id. The district court also found that there was not enough information, as of yet, for it to decide whether the default had been willful or whether State Street Bank would suffer prejudice in the event of vacatur. See id. at 318-19, 324. Hence, the court also directed the magistrate judge to issue a report and recommendation evaluating these two issues following further briefing and factual inquiry. See id. at 324.
The magistrate judge responded to the district court‘s directives by holding a two day hearing in May 2002 and thereafter issued a report recommending that the district court deny the motion to vacate the default judgment. See Street Bank & Trust Co. v. Inversiones Errazuriz Limitada, 246 F.Supp.2d 231, 263 (S.D.N.Y. 2002) (State Street Bank II). Although the magistrate judge found that the defendants’ failure to respond to the complaint had not been willful, he nonetheless determined that their motion should be denied because they had failed to establish any meritorious defense or counterclaim and had failed to demonstrate that State Street Bank would not be prejudiced by the vacatur of the default judgment. Id.
Following the denial of their initial motion to vacate the default judgment and before we had an opportunity to consider their appeal therefrom, the defendants brought a second motion pursuant to various provisions of
Defendants filed a timely appeal challenging the denial of their second
DISCUSSION
Defendants contend that the district court erroneously denied both of their
I. Defendants’ First Motion to Vacate the Default Judgment
In the proceedings below, the defendants advanced a host of defenses and counterclaims in support of their initial motion to vacate the default judgment pursuant to several provisions of
When a district court decides a motion to vacate a default judgment pursuant to the provisions of
“In order to make a sufficient showing of a meritorious defense in connection with a motion to vacate a default judgment, the defendant need not establish his defense conclusively, but he must present evidence of facts that, if proven at trial, would constitute a complete defense.” McNulty, 137 F.3d at 740 (citation and internal quotation marks omitted); see also American Alliance Ins. Co., 92 F.3d at 61 (“A defense is meritorious if it is good at law so as to give the factfinder some determination to make.“) (citation and internal quotation marks omitted).
When the defendants moved to vacate the default judgment, they tried to establish a meritorious defense by articulating, among other things, an array of counterclaims. To date, we have never addressed whether a counterclaim, rather than a response to the substance of a complaint, may constitute a meritorious defense. In the instant appeal, State Street Bank contends that at least one of the counterclaims at issue is unrelated to the substance of the bank‘s action and should therefore be disqualified from consideration as a meritorious defense. We need not decide that issue here because, even if we were to assume that the counterclaims preserved in these consolidated appeals could be considered as meritorious defenses, they are without merit.
1. The Meritorious Defense Standard
The defendants argue that the district court applied an erroneous standard when the court evaluated whether their defense and counterclaims were meritorious.
When the district court set out to appraise whether the defense and counterclaims at issue in this appeal were meritorious, the court did so under an unusual formulation of the governing standard. The court held that “[w]hen, as here, defendants have been given the opportunity to show that a viable defense exists” through the presentation of evidentiary proof in support of their contentions, “they are required to provide some credible indication that if the default judgment is vacated, defendants will be able at trial to establish with finality a meritorious defense which has a reasonable chance of carrying the day.” State Street Bank II, 246 F.Supp.2d at 242.
The district court‘s statements appear to suggest that the defendants needed to present sufficient evidence to establish that they had a “reasonable chance of carrying the day.” Id. Such a test would contravene well settled principles that govern what constitutes a meritorious defense. Whether a defense is meritorious “is measured not by whether there is a likelihood that it will carry the day, but whether the evidence submitted, if proven at trial, would constitute a complete defense.” Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 98 (2d Cir. 1993). This standard applies regardless of whether there has been an evidentiary hearing or an opportunity for discovery. Judging the merit of a defense for the purposes of a motion to vacate a default judgment pursuant to a more rigorous standard would be inappropriate. Default judgments “are generally disfavored and are reserved for rare occasions.” Id. at 96. As such, the criteria for vacating a default judgment pursuant to
Even if we were to assume that the district court set forth an incorrect principle of law in the abstract, the court ultimately found that the defendants had failed “to establish even the rudimentary elements of a meritorious defense.” State Street Bank II, 246 F.Supp.2d at 242. In other words, the court determined that the defense and the counterclaims in question were wholly without merit. See, e.g., id. at 243 (“[The] defendants have failed to present proof even minimally sufficient to show the existence of a meritorious defense.“). Given that determination, the district court could not have found that the defense and counterclaims satisfied the proper meritorious defense standard. Indeed, after independently reviewing the record, we agree, for reasons that will become apparent in the discussion that follows, that the defendants failed to establish a meritorious defense and we may affirm the district court‘s denial of their initial
Defendants contend that they put forth a meritorious defense when they asserted a counterclaim against State Street Bank for the breach of an implied covenant of good faith and fair dealing. We disagree.
The facts and allegations pertaining to this counterclaim are relatively straightforward. When Inverraz defaulted on the loans by failing to make the necessary semiannual installment payments required by the Credit Agreements, State Street Bank accelerated Inverraz‘s debt. Thereafter, Inverraz sought to sell its assets in a purported effort to repay at least a portion of the accelerated debt. As part of this effort, Inverraz entered into negotiations in 2001 with Sociedad Quimica y Minera de Chile (SQM), another Chilean company, regarding the sale of the nitrate and iodine assets of Inverraz‘s subsidiary, Compania de Salitre y Yodo Primera Region S.A. (Cosayach).
Despite these negotiations, Inverraz did not have an unrestricted right to sell assets. Rather, Inverraz‘s ability to do so was qualified by certain provisions in the Credit Agreements. Each of these agreements included negative covenants that provided, among many other limitations, that neither Inverraz nor its “Restricted Subsidiaries” could sell, transfer, or otherwise dispose of any assets where, inter alia, Inverraz had defaulted on the loans enumerated in the agreements. The Credit Agreements defined the term “Restricted Subsidiary” to include “each of the Guarantors” as well as any other entity in certain countries such as Chile of which Inverraz directly or indirectly through other Restricted Subsidiaries owned more than 75% or more of the voting stock or held a 75% financial interest.
Because Inverraz defaulted on the loans, these negative covenants limited the company‘s rights, as well as the rights of its Restricted Subsidiaries, to sell assets. Indeed, all the parties agree that the defendants could not have sold the aforementioned nitrate and iodine assets to SQM in 2001 unless State Street Bank first consented to such a sale.5
After extensive negotiations, SQM apparently agreed in principle to purchase the nitrate and iodine assets for approximately $140 million if State Street Bank consented to the sale. This agreement led to a further series of negotiations between the defendants and State Street Bank as the former tried to secure the bank‘s consent to the sale. According to the defendants, State Street Bank refused to consent to the sale of the assets unless the defendants (a) paid the bank $87 million from the proceeds of the sale, and (b) agreed to provide the bank with new collateral and new economic benefits to which the bank would not already have been entitled under the Credit Agreements. On October 5, 2001, SQM notified Inverraz that it would not proceed with the purchase of the assets. The defendants maintain that State Street Bank‘s refusal to consent to the sale absent its stated conditions led SQM to back away from the transaction.
Defendants contend that the conditions State Street Bank placed on its consent to the sale of the assets to SQM — namely, that the defendants first needed to provide the bank with new collateral and new economic benefits to which the bank was not entitled under the Credit Agreements — were unreasonable. They take the position that, under the law, State Street Bank could only withhold its consent to the sale on reasonable and rational grounds. Because they believe that State Street Bank unreasonably and arbitrarily refused to consent to the sale, they argue that the bank breached a covenant of good faith and fair dealing implied in the Credit Agreements and that this breach constitutes a valid counterclaim for the purposes of their
Nevertheless, the duties imposed by an implied covenant of good faith and fair dealing are “not without limits, and no obligation can be implied that would be inconsistent with other terms of the contractual relationship.” Id., 87 N.Y.2d at 389, 639 N.Y.S.2d at 979-80, 663 N.E.2d at 291-92 (citation and quotations marks omitted). Where a contract allows a bank to withhold consent for particular conduct and sets no express restrictions on the bank‘s right to do so, the bank is not prohibited from unreasonably or arbitrarily withholding such consent. See Bonady Apartments v. Columbia Banking Fed. Sav. & Loan Ass‘n, 465 N.Y.S.2d 150, 154, 119 Misc.2d 923, 927-28 (N.Y. Sup. Ct. 1983), aff‘d as modified in non-relevant part, 472 N.Y.S.2d 221, 99 A.D.2d 645 (4th Dep‘t 1984); see also Teachers Ins. & Annuity Ass‘n of America v. Wometco Enterprises, 833 F.Supp. 344, 349 (S.D.N.Y. 1993) (“[I]n the absence of explicit contractual language stating that a party may not unreasonably withhold consent, parties may withhold consent for any reason or no reason, and ... no implied obligation to act in good faith exists to limit that choice.“). Cf. Dress Shirt Sales v. Hotel Martinique Assoc., 12 N.Y.2d 339, 342, 239 N.Y.S.2d 660, 662, 190 N.E.2d 10, 11 (1963) (“[U]nless [a] lease provides that [a] lessor‘s consent shall not be unreasonably withheld,” a provision in that lease prohibiting subleasing absent the lessor‘s consent “permits the lessor to refuse [consent] arbitrarily for any reason or no reason.“); cf. also Caridi v. Markey, 539 N.Y.S.2d 404, 405, 148 A.D.2d 653, 654 (2nd Dep‘t 1989) (same).
Here, the Credit Agreements provided that neither Inverraz nor its Restricted Subsidiaries could sell their assets if Inverraz had defaulted on the loans. As such, all the parties agree on appeal that the defendants could not have sold Cosayach‘s assets to SQM without State Street Bank‘s consent. There are no express restrictions in the applicable negative covenants that limit State Street Bank‘s right to refuse to consent to any such sale in the event of a default. Accordingly, the bank had the right under the Credit Agreements to “withhold consent for any reason or no reason.” Teachers Ins. & Annuity Association of America, 833 F.Supp. at 349; see also Bonady Apartments, 465 N.Y.S.2d at 154, 119 Misc.2d at 927-28.
Moreover, even if an implied covenant of good faith and fair dealing had circumscribed State Street Bank‘s right to unreasonably or arbitrarily withhold its consent to the sale of Cosayach‘s assets, the bank‘s refusal to consent to such a sale was neither unreasonable nor arbitrary. The bank‘s decision to condition its consent to such a sale on the receipt of additional collateral and economic benefits to which the bank was not entitled under the Credit Agreements was made for a legitimate business purpose. Although State Street Bank might have received $87 million from the proceeds of such a sale, those proceeds fell far short of satisfying the multi-million dollar sum of Inverraz‘s outstanding accelerated debt. Furthermore, as an unsecured creditor, State Street Bank faced significant uncertainty as to whether it could recover the substantial portion of Inverraz‘s debt that exceeded the $87 million that might come from the sale of Cosayach‘s assets to SQM. Under the circumstances, State Street Bank was justified in seeking to protect itself by conditioning its consent to the sale on the receipt of additional collateral and economic benefits. See Rexnord Holdings v. Bidermann, 21 F.3d 522, 526-27 (2d Cir. 1994) (holding that the defendant had no viable counterclaim based on any breach of good faith and fair dealing where the defendant had already defaulted on payments due and the plaintiff had refused to extend time to remit payment unless the defendant released the plaintiff from other unrelated obligations); cf. Bonady Apartments, 465 N.Y.S.2d at 154, 119 Misc.2d at 928 (“[a] decision by a [bank] to condition its consent to a transfer [of property on an agreement] to pay a higher rate of interest” than the rate set by the original contract was made for a legitimate business purpose exercised in good faith).
3. Tortious Interference with Business Relations
Defendants contend that they have articulated a meritorious defense by advancing a counterclaim for tortious interference with business relations. This counterclaim is also based on SQM‘s decision to break away from its aforementioned negotiations with the defendants regarding the sale of Cosayach‘s assets. According to the defendants, SQM refused to proceed with the transaction to purchase these assets for $140 million because State Street Bank failed to consent to the sale. The defendants argue that State Street Bank‘s refusal to consent to the sale unless the defendants provided the bank with additional collateral and economic benefits to which the bank would not have been entitled under the Credit Agreements constituted tortious interference with business relations.
To prevail on a claim for “tortious interference with business relations” under New York law, a party “must prove that (1) it had a business relationship with a third party;7 (2) the defendant knew of that relationship and intentionally interfered with it; (3) the defendant acted solely out of malice, or used dishonest, unfair, or improper means; and (4) the defendant‘s interference caused injury to the relationship.” Carvel Corp. v. Noonan, 350 F.3d 6, 17 (2d Cir. 2003); see also Scutti Enterprises, LLC v. Park Place Entertainment Corp., 322 F.3d 211, 215 (2d Cir. 2003). On appeal, the defendants vigorously argue that the district court erred in rejecting their tortious interference counterclaim because State Street Bank purportedly employed wrongful means to interfere with the defendants’ business relationship with SQM. In other words, they focus on whether the third element of their tortious interference counterclaim has been satisfied.
We need not address the merits of this argument because the defendants have failed adequately to challenge the district court‘s and the magistrate judge‘s determinations pertaining to the fourth element of a tortious interference claim, namely the absence of proximate causation. The defendants cannot prevail on their tortious interference counterclaim unless they “demonstrate both wrongful means and that the wrongful acts were the proximate cause of the rejection of the plaintiff‘s proposed contractual relations.” Pacheco v. United Medical Assoc., P.C., 759 N.Y.S.2d 556, 559, 305 A.D.2d 711, 712 (3d Dep‘t 2003) (citation and internal quotation marks omitted; emphasis added).
When a party fails adequately to present arguments in an appellant‘s brief, we consider those arguments abandoned. See Schwapp v. Town of Avon, 118 F.3d 106, 112 (2d Cir. 1997) (refusing to consider several claims on appeal where the appellant failed to make any legal or factual arguments in support thereof). Cf. Tolbert v. Queens College, 242 F.3d 58, 75 (2d Cir. 2001) (citation and internal quotation marks omitted) (“It is a settled appellate rule that issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.“);
In addition to asserting the foregoing counterclaims, the defendants attempt to articulate a meritorious defense by arguing that State Street Bank failed to satisfy the necessary conditions for the initiation of the instant lawsuit. Their arguments are based on certain provisions in several participation agreements.
When State Street Bank loaned Inverraz money in 1994 and 1996, the bank entered into separate agreements with various institutions (the “Participation Agreements“), defined in the agreements as “Participants,” pursuant to which the bank sold its interest in the loans to the Participants but retained responsibility for, inter alia, collecting on the loans. These Participation Agreements specifically charged State Street Bank with the duty of demanding that Inverraz and the various guarantors perform their obligations under the Credit Agreements and the Guaranty Agreements. However, the Participation Agreements also provided that State Street Bank would “not exercise any... rights or powers” that the bank possessed with respect to the loans, absent certain exceptions not relevant here, unless the bank did so “in accordance with the written instruction of the Required Participants.” The Participation Agreements defined “Required Participants” as Participants that owned, in the aggregate, more than 50% of the participation interests in the loans.10
The defendants contend that State Street Bank improperly initiated this lawsuit without complying with the “written instruction” condition because the bank failed to secure the written consent of the “Required Participants” to the commencement of this lawsuit before the bank filed this legal action on April 16, 2001. As such, the defendants argue that State Street Bank lacks standing to pursue this lawsuit on the Participants’ behalf.
When the defendants advanced this argument in the proceedings below in an effort to present a “meritorious defense,” State Street Bank responded by introducing two sets of “Written Direction[s]” during the hearing before the magistrate judge. These directions appear to have been signed by the “Required Participants”11 and direct State Street Bank “to promptly file and serve” the complaint in the lawsuit at bar. The instructions are dated “April 16, 2001;” in other words, they bear the very date on which State Street Bank commenced this legal action. Nevertheless, the defendants maintain that State Street Bank has failed to comply with the condition precedent enumerated in the Participation Agreements because there is no evidence that the Participants signed the foregoing “Written Direction[s]” before State Street Bank initiated this lawsuit on April 16, 2001.
The magistrate judge relied on these written instructions, among other things, to reject the defendants’ condition precedent defense as a matter of fact. See State Street Bank II, 246 F.Supp.2d at 257. The district court found that this factual determination was correct and adopted the magistrate judge‘s findings of fact. See id. at 243.
We review for clear error a district court‘s findings of fact with respect to the denial of a
Defendants argue that the district court erroneously denied their initial motion to vacate the default judgment both because the court incorrectly determined that they had failed to articulate a meritorious defense and because the court mistakenly found that they had failed to demonstrate that State Street Bank would not be prejudiced if the default judgment were vacated. We need not evaluate whether the vacatur of the default judgment would subject State Street Bank to prejudice because we have concluded that the defendants failed to establish a meritorious defense; the absence of such a defense is sufficient to support the district court‘s denial of the defendants’ first
II. The Defendants’ Second Rule 60(b) Motion
After the district court denied their initial
The newly discovered letter had been written by Inverraz‘s General Manager in January 1999 and sent to State Street Bank. In this correspondence, the General Manager delineated particular Inverraz subsidiaries which, according to Inverraz, had “become” guarantors or “continue[d] to be” guarantors since the execution of the 1996 Credit Agreement. This copy of the letter appears to have been endorsed by Kelley L. Rumps (Rumps), a former Assistant Vice President at State Street Bank. She countersigned the letter under a heading which read “Received and Agreed By.” Much of the information set out in this copy of the letter had been raised in the instant litigation long before the defendants filed a second
The countersignature of a State Street Bank employee, however, sets the copy of the January 1999 letter found in December 2002 apart from the previous copy that had repeatedly been admitted as an exhibit. The previous copy had not been countersigned by anyone from State Street Bank.
A. Fraud
Defendants posit that State Street Bank defrauded them and perpetrated a fraud on the court by purportedly withholding a copy of the January 1999 letter countersigned by Kelly Rumps during the course of this legal action and by allowing the litigation to proceed on the basis of the copy of the letter signed solely by Inverraz‘s General Manager. They argue that this alleged fraud merited the vacatur of the default judgment pursuant to
The district court rejected the defendants’ allegations regarding fraud and found, inter alia, that there was no evidence that State Street Bank had ever possessed a version of the letter countersigned by Rumps. State Street Bank III, 2003 WL 1907955, at *1. Although the defendants argue that this determination was clearly erroneous, albeit without advancing any evidence whatsoever to support that allegation, we need not address that contention. Even if we were to assume that State Street Bank had concealed the countersigned letter, we would nevertheless affirm the district court‘s rejection of the defendants’ arguments with respect to fraud.
Under
As the district court aptly explained, “[i]t is certainly unique to argue that [a] plaintiff concealed a document from [the] defendants that [the] defendants possessed all along in their own files.” State Street Bank III, 2003 WL 1907955, at *1. To prevail on a
B. Meritorious Defense
On appeal, the defendants contend that the district court should have vacated the default judgment pursuant to
The district court refused to vacate the default judgment on the basis of the countersigned copy of the letter. The court found the newly discovered correspondence to be “immaterial.” State Street Bank III, 2003 WL 1907955, at *2 n. 3. The court arrived at this conclusion after explaining that the “recently unearthed document would have had no bearing whatsoever on the court‘s determination to uphold the default judgment.” Id. at *1.
We agree with the district court that the 1999 correspondence signed by Rumps was immaterial. We therefore affirm the court‘s refusal to vacate the default judgment on the basis of that letter. We also affirm the district court‘s denial of the second
As we mentioned earlier,
If anything, the nature of the arguments raised by the defendants with respect to the newly found letter indicate that their second
C. Rule 60(b)(4) Motion
Defendants argue that the district court erred by refusing to vacate the default judgment as void pursuant to
A default judgment may be considered void if the judgment has been entered “in a manner inconsistent with due process of law.” Fustok v. ContiCommodity Serv., 873 F.2d 38, 39 (2d Cir. 1989) (citations and internal quotation marks omitted). However, we need not decide whether the default judgment is void. Even if we were to assume that the default judgment did violate due process, and was void as a result, we would nonetheless affirm the district court‘s denial of the defendants’
On appeal, the defendants fail to acknowledge that the district court denied their
The district court also denied the defendants’
As we explained several years ago,
a
Rule 60(b)(4) motion must be made “within a reasonable time” after entry of the judgment. Courts have been exceedingly lenient in defining the term “reasonable time,” with regard to voidness challenges. In fact, it has been oft-stated that, for all intents and purposes, a motion to vacate a default judgment as void “may be made at any time.”
Beller & Keller v. Tyler, 120 F.3d 21, 24 (2d Cir. 1997) (citations omitted). Nevertheless, where a party has previously filed a motion to vacate a default judgment that failed to raise a voidness argument and subsequently advances such an argument in a
D. Sanctions
State Street Bank asks us to sanction the defendants as well as their counsel for re-litigating many of the unsuccessful arguments they articulated in their
We begin by noting that sanctions would not be justified under
We also conclude that sanctions would not be appropriate under
For the foregoing reasons, we affirm the district court‘s denials of the motions the defendants brought pursuant to the provisions of
Notes
Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorney‘s fees reasonably incurred because of such conduct.