United States v. Golden Elevator, Incorporated

301 appellants ample acting. Whatley, provided the See 155 B.R. at the order 778-79. plans weigh prospects, their make time to Even if CGI and Katz had filed a notice of stay appeal, prepare and to a motion for appeal immediately upon entry of the sale filing the order was either before after order, the trustee would have remained free Order at 8-9. entered. proceed to stay unless and until a were 363(m) sought, for section makes clear that argue and Katz nonetheless CGI knowledge appeal pending that an itself completed the sale to because the trustee good render the sale to a faith appeal lapsed, to Starmont before the time purchaser subject to reversal. Rock Indus. they seeking stay were excused from Mach., 1199; Manage- 572 F.2d at Stadium they Seizing lan expеditiously than did. ment, 895 F.2d at 848 n. 4. guage in to the effect that “the Winstead prematurely conveying prop trustee acts ten-day erty prior expiration to of the III. CONCLUSION 411, period,” appel B.R. at [appeals] 33 appellants dispute do not that the sale suggest long they eventually lants that as good to Starmont was faith and that the stay, appeal obtained a should not be bankruptcy authority court was within its to stay despite deеmed moot the fact that the approve Consequently, given sale. already gone after the sale had

was entered 363(m), explicit terms of inquiry section our Bankruptcy Rules forward. The render By is at an end. the time CGI Katz filed untenable, theory It is true that however. appeal, their notice of completion of the Bankruptcy Rule 7062 renders Fed.R.Civ.P. already sale had appeal rendered the moot. 62(a)’s ten-dаy stay automatic on the execu subsequent entry stay by aof the bank- judgments applicable tion or enforcement of ruptcy reviving court had no effect in this adversary Bankruptcy proceedings; to regard. judgment of the district court applicable Rule 9014 in turn makes Rule 7062 appeal Affirmed, by appropriate to “contested matters” raised stay judgment pending appeal of that gener motion. Even if we were to assume this court is Vacated. ously argument and for the sake of that the might qualify sale as a “contested matter” scope

within of Rule it is not clear 62(a)’s stay

that Rule on “execution” or “en judgment require

forcement” of the would days finalizing

the trustee to wait ten before Ewell,

the sale to Starmont. See re 958 (9th Cir.1992);

F.2d 279-80 In re What (Bankr.D.Colo.

ley, 155 B.R. 780-81 1993). 8017(a) Compare Bankruptcy Rule America, UNITED STATES of (“Judgments of the district court or the Plaintiff-Appellant, bankruptcy appellate panel stayed until are days expiration entry, after unless otherwise ordered the district court or the ELEVATOR, GOLDEN INCORPORAT- bankruptcy appellate panel.”) But ED, al., Defendants-Appellees. et academic, question entirely is in event ‍​​‌‌‌​​‌‌​‌​‌‌​‌‌​​‌‌‌​​‌​​​‌‌‌​​‌‌‌‌‌​​​​​​​​‌‌‍No. 93-3827. exempt Rule 7062 was in 1991 sales ordered under section 363 of the Code Appeals, United States Court of 62(a). stay from the automatic of Rule Rule Seventh Circuit. note; Ewell, advisory committee’s Argued May 1994. Thus, at n. 1. the notion that the prematurely in completing trustee acted Decided June days approval sale four after the order of mistakеn; simply was entered is absent en

try stay, required of a the trustee was not ten-day period expire

wait for the before Lewis, Atty., Asst. U.S. Office A.

James (argued), IL Atty., Springfield, the U.S. plaintiff-appellant. (ar- Nokomis, IL Barringer,

Jerold W. defendants-appellees. gued), for BAUER, WOOD, Jr., and Before EASTERBROOK, Judges. Circuit EASTERBROOK, Judge. way is the surest Ignoring deadlines Time limits coordinate ex- lose a case. they complex process; pervade pedite statute of system, starting with the legal lim- disregard of timе Extended limitations. kind) (even non-jurisdictional is ruin- “Lawyers litigants who decide ous. play by rules of their own invention they will game cannot be won.” will find that National Insurance Co. Northwestern (7th Cir.1994). Baltes, fore- which filed this suit to guaran- on a and collect close tors, several deadlines suffered missed consequence. usual July was defi- complaint, filed pointed problems. to five Defendants cient. com- filed an amended The United States them, fixing coupled with a brief plaint one of four were irrele- contending that the other then dismissal vant. Defendants complaint, magistrate and a or- respond. The United plaintiff dered magis- response. The did not file a judge again response; once trate ordered At comply. again the United States did judge stepped point the district 18, 1993, the first March complaint the United and directed than a fresh no later States to filе rectifying April the four impress on coun- shortcomings. In order to complying with this importance sel order, “Plaintiff is informed the court added: to file an amended that failure prescribed will result in a the time within ease.” dismissal of the arrived, April 2 but an amended ask for did not did not. The United States time —and it had not asked the district reconsideration dismissing of the order suit; to reconsider the order of March 18 timely did not file a appeal. By complaint. first amended On August 1993 all it could do was throw itself word, 7 the true to his mercy of the court —for that is what a Unit- 60(b)(1) does, and, motion under Rule if mer ed States did not seek reconsideration under cy supply, is short the case is over. For 59(e) appeal. Fed.R.Civ.P. or file a notice of appellate review of an order denying a mo August On it filed a motion under 60(b) under Rule exceptionally tion defer 60(b)(1), which a Fed.R.Civ.P. authorizes discretion, еntial. We review for abuse of litigant judgment from a court to relieve a and the district court’s order stands unless “mistake, inadvertence, surprise, based on person no reasonable could have acted as the neglect”. According supervi- excusable to a Esmark, Metlyn did. Realty Corp. v. attorney motion, sory presented who an Inc., (7th Cir.1985); cf. inexperienced Assistant United States Attor- Pipe Concrete California, аnd Products of ney missed the series of deadlines Trust, Inc. v. Construction Laborers Pension but also failed to inform the head of the - U.S. -, -, 2264, 2280, 124 113 S.Ct. office’s civil division that the case had been (1993). Litigants L.Ed.2d 539 ‍​​‌‌‌​​‌‌​‌​‌‌​‌‌​​‌‌‌​​‌​​​‌‌‌​​‌‌‌‌‌​​​​​​​​‌‌‍lawyers whose dismissed. After the “Civil Chief [AUSA] asleep fall at crucial may moments seek relief periodic case-by-case conducted a file review agents; from the somnolent inexcusable inat ease”, and found out about this he made the (the only tention to the descrip sensible 60(b) Rule motion. The subordinate’s omis- here) happened tion of what justify excused, supervisor sions should be con- putting adversary to the continued ex tended. The district court deemed the con- pense uncertainty litigation. The dis duct added that inexcusable and the United accordingly trict court did not abuse its dis newly-filed should on a States concentrate declining cretion in to reinstatе the case. suit, seeking remedies for defaults after the dismissal of first suit. The United quarrel States has no real 60(b) with the decision on the Rule motion. Dismissal with ais sanc Instead it wants us to focus on the orders of tion, proportionate and sanctions should be March 18 and 7. The order of March wrong. Chicago, to the Ball v. 2 F.3d 752 (if erroneous, arguably 18 was and that error (7th Cir.1993). Still, holds, plain as Ball one) there was influenced the termination of comрly tiffs failure to with the court’s orders April 7. The court dismissed the litigation interferes with conduct of the complaint, though whole amended even justifies dismissal. See also Newman v. I, four deficiencies were in Count Metropolitan Exposition Authority, Pier & II, sought which foreclosure. Count which (7th Cir.1992) (plaintiffs 962 F.2d 589 guaranties, to collect on dismissal). justifies deposition to attend own asks, good Why, order. the United States sue, entity may as an elect not to Just so it good should a district court throw claim out may pending litigation. Ig elect to abandon potential with a bad one? One answer is that noring deadlines and orders marks the aban complex if is less there is suit, surely filing donment of a as does complaint. referring active Instead of to the E.g., notice of dismissal. United States v. complaint first amended for Count Avenue, 7108 West Grand 15 F.3d 632 Cir.1994). complaint second amended The United States disdained or plaintiff district court called on the to file a repeatedly: ders and deadlines invited to new sufficient on both counts. complaint, correct five deficiencies in the it change one; The United States did not need to respond corrected it did to the refiling; suppose Count II when and we complaint, motion to dismiss the amended if despite so; district court would have been satisfied requiring two orders it to do it jettisonеd did not United States had seek reconsideration of the order refiled, by April the amended and set a new limited to ting complaint; guarantors. a deadline a new than a for neat did More desire complaint; may explain not file a new it did not seek of March 18: ness the decision (7th Cir.1986); Board Trustees ‍​​‌‌‌​​‌‌​‌​‌‌​‌‌​​‌‌‌​​‌​​​‌‌‌​​‌‌‌‌‌​​​​​​​​‌‌‍response for which by failing to file Fund v. Sulli called, Employees’ Retirement Public the United judge had magistrate (7th Cir.1991). An van, error F.2d 988 to ask the dis- оpportunity an missed States of law leaves the rule official ruling the fore- an executive his judge to limit trict case it is enforceable. events, way unaffected and to deal At all claim. closure rules, to enforce the who want defendants to ask for reconsidera- oversight was with an that wants to avoid failed, Having and the United tion, and, appeal. if might afford have complain of them. The opportunities tо neglected its chance, but still another ple- ed the error, appellate review legal on which have to. much it did not assumed nary, the United States establishing abuse of discre- job of tougher Affirmed. faded. tion. It argument the what asked at oral When Jr., WOOD, HARLINGTON after the have done court should dissenting. Judge, by set missed one deadline had United States by another set the magistrate judge and have been done My as to what should idea supervisory Assistant delinquency of the undisputed about Attorney suggested that States United with the district is at variance supervisor summoned a judge should have which the of its discretion court’s exercise herself) (perhaps the United States majority approves. expla- demanded an into the courtroom for the in the record There is no excuse supe- judge is not the But a district nation. no court neglect, neglect Attor- of the United States supervisor rior or My simply that the view is should overlook. govern- Branch of the ney, Executive preju- with punishment of dismissal ultimate to the Judicial is not accountable ment necessary and was not more than dice was A its decisions. Branch for particular cir- discretion to the tailored with in the internal judge ought not interfere only to note that this It is fair cumstances. (or disorganization) of another organization present bеfore the occurred government. If the Executive branch Illinois Attorney in District of the Central case, the district pending Branch abandons her office. assumed litigation and devote should dismiss the court parties seek- the claims of its scarce time to which must It is not the executive branch Supervision Assis- judicial ing attention. resulting consequences accept Attorneys job is a for the tant United States majority sug- prejudice, as the with dismissal Branch, the Judicial Executive to the consequences are a loss gests. The fail, Branch, and, the Ex- if internal controls public treasury, and the government, accept the conse- Branch must ecutive government filed its generally. When quences. alleged amount complaint in March 1992 the government mortgage government to be due principle that the federal costs, $235,361.58 interest, plus court misrepre- by employees’ estopped costs, Richmond, attorneys’ fees. Now the sentations, 496 U.S. title see OPM v. (1990), greater. amount would be Whatever 110 L.Ed.2d 387 110 S.Ct. unless lost to the amount it is the United States from com- does not excuse by govern- subsequent separate efforts for the con- plying with the rules established theory, suggested underlying ment on some dubious litigation. The idea duct of civil something. government, by recovers cases such as Federal Richmond and earlier Merrill, problems separate raises which That effort Crop Corp. v. 332 U.S. Insurance (1947), government’s suc- auger well for the is that do not 92 L.Ed. 68 S.Ct. things stand now the debtors cess. As Executive Branch cannot employees of the unexpected will benefit from an guarantors and rules departures from statutes authorize also, unjustified windfall at the e.g., having of law. See Unit- the force Industries, Inc., expense. v. Medico ed States by the distriсt the four unresolved defects con- counts, consisted of each nam- two original complaint tained or the case ing sought different Count I defendants. would be dismissed. No mention of failure mortgage foreclosure of a 1980 prosecute or prejudice dismissal with Elevator, Inc., Golden while Count mentioned this order. important Those judgment against two unconditional mort- appeared only details Mills’ subse- guarantors, gagе Robert H. Leenerts and quent April 7, order of 1993 which dismissed Though J. Leenerts. Debra both counts was not noted other, were related to each counts district court that those defects raised separately alone and be tried. stand Golden Elevator in its motion dismiss re- lated to Count II. Only mortgagor subject government neglect. I consider it an abuse of discretion in those Elevator, mortgagor, Golden moved to dis- circumstancеs to dismiss the entire case with miss that count for claim state a prejudice. To have dismissed the whole 12(b)(6). under Fed.R.Civ.P. That motion complaint but without would no defects, nothing raised technical substantial. adequate doubt have up to wake mortgagor argued Even the defendant in the government attorney. That would have anticipated that it that was prompted an permit- amended and easily claimed defects could these be cured getting on ted with the merits of the lawsuit. by government. the something If thought more serious was against mortgage guar- II was Count the get government needed to attorney’s the at- only subject and antors was not the of only the tention dismissal of I Count with to dismiss. motion Count was answered prejudice, the count for which a defen- by guarantors the and was at issue when dismissal, dant would have been more guarantors The filed a dismissed. routine enough. than In that Count II which event admitting to this count answer some of the was at issue could have been set for trial. allegations government’s asking and for would, however, have complicated less been proof strict as to the others. No affirmative adequate if and the court had first tried some defenses were raised. dismissal, certainly alternative short of and Initially government the was attentive and not dismissed with diligent response this In сase. to Golden justification I see no for Count I, Elevator’s motion to dismiss Count with view, my exaggeration II. it was an permission, government the court’s premature say to that the ne- complaint, thereby correcting amended glect as to Count I evidenced an abandon- alleged of the five Septem- errors. On of total ment case. The case could have government ber also filed a tried on Count II. been II cоuld have response to regarding the motion to dismiss remained the samé even with remaining alleged errors. Golden Eleva- Count I dismissed out. rou- tor filed its in support memorandum of its simple. tine and long The not complaint was government motion on December 1. The did complex. In such a I am not aware reply file a by not a memorandum December of the of pleadings being “neatness” result, 9 deadline. As a on December 31 the fаctor. magistrate judge government to ordered file a memorandum in support put by further of its majority The blame is opposition to Golden government failing Elevator’s motion to to ask the district dismiss, reply but no memorandum was filed. to restrict his to ruling the foreclosure Judge stage Mills took over at this and even- gov- claim and not to the whole case. The tually denied the late, motion dismiss on Febru- to ernment did not until it too it but ary Upon а motion mortga- Golden Ele- should have. since the Nevertheless and, by Mills gor’s vator reconsidered order dismissal motion to applied 18,1993, March of warned it was the court’s order which was broader file a second necessary. resulting to address than sanction was United represented as usual nec- ment likely have been than would harsh ordinarily han- does who movement States desired accomplish the essary to it is fashiоn negligent litigation in this dle there had In the event litigation. of the default personal that it apparent have been could neglect, this case further Attorney, of- prema- ended, it was an Assistant I but believe quickly had a well have judge could policy. The fice at this time.. turely done the United States call with notice status large extent majority relies to likely have That would Attorney personally. 2 F.3d 752 Chicago, City v. Ball quick reme- explanation in an resulted states, Cir.1993). holds, majority Ball man- does not government. Ball dy by the proportionate to should be “sanctions client, it but given to the notice date that be requirement wrong.” agree I with Id. suggest its usefulness. does majority further proportionality. plaintiffs holding that “a Ball as cites court commends In Ball this interferes order the court’s comply with lay practice, but judges as sound justifies of the the conduct rule, a last resort be that dismissal down accepted and neces- That is an dismissal.” get the efforts to only when “to ‍​​‌‌‌​​‌‌​‌​‌‌​‌‌​​‌‌‌​​‌​​​‌‌‌​​‌‌‌‌‌​​​​​​​​‌‌‍be used Ball, how- more to There is sary principle. adjudged or are lawyer have failed to behave analysis helpful a most Ball contains ever. approach does 758. That Id. at fruitless.” dismissal for principles of governing of the in this been considered appear to have forth, says, prosecution set want con case, warning of the dire except for the judges. welcome of district guidance quickly followed. Sanctions sequences which case, ap- of Ball to application govern levied have been colleagues in my only differ with parently attorney personal or the ment gathers helpfully application here. Ball ly. See Chilcutt generally be- was opinion what the law Cir.1993) (5th Unit (ordering Assistant 1313 making be, new law. without but lieved personally pay attor ed States a few months unfortunately out came Ball discovery neys’ and as sanction fees costs as a refresher too late to serve abuses); v. Marine Sumitomo in Ball neglect set out plaintiffs Mills. Cir.1980) (9th Co., 1365 F.2d Fire Ins. 617 & as to that case applicable and varied was gov against personally (imposing sanctions whole, present in this just one as not to count counsel); Mattingly v. United ernment’s some of helpful to review It is case. Cir.1991) (holding F.2d 816 989 in suggestions Ball. other is not immune age the case to be sanctions); of of Ball takes note v. United States KenMar Rule 11 twenty-seven (W.D.Okla. In it was Ltd., Ball Assoc., F.Supp. 405 dismissed. 697 old, Id. at 754. The 1987) “not ancient.” against govern months (imposing sanctions year old and not was less than present case suit foreclosure includ ment in its activity. attorney’s without ing party’s fees defendant for the Assis costs, reprimand along with lawyers plaintiffs also characterizes Ball Attorney). tant United States evasive, disrespectful, “rude, dilatory, in- In at 754. this contemptuous.” Id. deed delay suggests that caused Ball evasive, dis- not negligent, counsel work neglect of its own suit can plaintiffs contemptuous. respectful, or is to be hardships on defendants considered, trial impact on the as well as the in law other the dismissal Ball considers Ball, In 2 at 752. F.3d judge’s calendar. circuits, Third for instance in in period time involved the short for failure a suit “before where have to defendants prejudice judge notify must prosecute the district Monetary claimed. much none citing Dunbar been directly.” Id. at plaintiffs assuaged whatever Co., could have sanctions Supply Triangle Lumber & F.2d v. mort- A routine (3d Cir.1987). plaintiffs. harm resulted In this circuit that likely Ball, short duration gage foreclosure of only in dicta. appears, but also rule disruptive of a trial calen- very could not be Particularly govern- when the at 756. dar. event these considerations do should, ease as he then there appear to have been considered. would be no further dissent from me. very important Another consideration of entirely proper that “it

Ball is for the

judge likely to consider the merits the suit ‍​​‌‌‌​​‌‌​‌​‌‌​‌‌​​‌‌‌​​‌​​​‌‌‌​​‌‌‌‌‌​​​​​​​​‌‌‍deciding whether to dismiss for failure to

prosecute.” Id. at 759. The foreclosure of а GELDERMANN, INC., Plaintiff- government mortgage and a suit Appellant, guarantors ordinarily expected would be frivolous, to be but to have merit. The “wrongdoer,” stand, things “get now will FINANCIAL MANAGEMENT off scot-free.” Id. at 759. That element also CONSULTANTS, INC., appears not to have been considered. Defendant-Appellee. In Ball egre- where the situation was more No. 92-2821.

gious present than in the case the court United States Court Appeals, “balance,” cоncluded that on weighing after Seventh Circuit. here, the various factors we have touched on justified, dismissal was there was no abuse Argued Sept. 13, 1993. discretion, However, and affirmed. the Ball Decided June 1994. telling court adds the comment that “we might well differently have ruled had we As Amended on Rehearing Denial of place.” her Id. at 760. present Suggestion for Rehearing case is not as serious a dereliction inas Ball. En Aug. Banc

Ball, sum, makes it clear that contem-

plating dismissal with in- “should

duce caution.” Id. at 753. easy why to see the trial

irritated negligence and end, quick

sanctioned it to a but that is not

the exercise of discretion and caution that is required.

first usually More discretion is

required of a doomsday than a

warning imposition. dismissal, and its circumstances, it,

in these as I see is a clear

abuse of discretion. There were other less

drastic, final, less promising things but still

that should first have been considered. This greatly precedent weakens the Ball of a

cautious, approach considered without a rush

to dismissal.

Therefore, respectfully I must dissent my

from the colleagues. views of I would

vacate the dismissal and return the case to Mills,

Judge get some other

pleadings in shape try and to the case in

short order. Rule 11 sanctions could be

considered. If the did not react

properly to opportunity, which I cannot

imagine, again Mills dismissed the

Case Details

Case Name: United States v. Golden Elevator, Incorporated

Court Name: Court of Appeals for the Seventh Circuit

Date Published: Jun 21, 1994

Citation: 27 F.3d 301

Docket Number: 93-3827

Court Abbreviation: 7th Cir.