Client Advisory

GROUP 2

In Coney Island Auto Parts Unlimited v. Burton, the United States Supreme Court considered whether a motion seeking relief from a void judgment brought under Federal Rule of Civil Procedure 60(b)(4) falls within the “reasonable time” requirement outlined under Rule 60(c).

The matter arose when company, Vista-Pro Automotive, LLC declared bankruptcy in 2014 and initiated adversarial proceedings against Coney Island to collect $50,000 in invoices that were allegedly unpaid. Due to alleged service issues, Coney Island failed to answer, and a default judgment was entered against Coney Island from a Tennessee bankruptcy court in 2015. Jeanne Burton, in her capacity as Vista-Pro trustee, attempted to enforce the judgment against Coney Island, including a demand letter sent to Coney Island’s CEO in 2016. Ultimately in 2021, a marshal seized the funds from Coney Island’s bank account to satisfy the judgment.

Following this, Coney Island filed a motion under Rule 60(b) to vacate the judgment as void for failure to make proper service, which the bankruptcy court denied, finding Coney Island failed to abide by the Rule 60(c)(1) requirement to file Rule 60(b) motions for relief within a “reasonable time.” The District Court and Sixth Circuit Court of Appeals affirmed.

The Supreme Court granted certiorari to resolve the circuit split of authority on whether Rule 60’s reasonable time limit applies to Rule 60(b) motions seeking relief from void judgments, and upon review, the Supreme Court acknowledged that many Courts of Appeals decisions have maintained that Rule 60(c)(1)’s reasonable time limit does not apply to motions alleging voidness. Instead of relying on the text of the Federal Rule, these decisions have instead relied on the generally accepted belief that a void judgment is a legal nullity, and the passage of time cannot turn such a nullity into an enforceable judgment. The Court disagreed, determining the plain text of Rule 60(c)(1) provides that a “motion under Rule 60(b) must be made within a reasonable time,” and because a motion for relief from an allegedly void judgment is a motion under Rule 60(b), the reasonable time limit must apply. It also considered that Rule 60 expressly modifies the default reasonable time limit on other Rule 60(b) motions, so in the absence of such language modifying the reasonable time limit for motions alleging voidness, the Court was limited to the text of the Rule.

With the decision to adhere to text of Rule 60(c) in mind, the Supreme Court considered the time that passed between Coney Island’s notice of the bankruptcy court’s initial default judgment and when it filed its motion to have the judgment vacated as void, and it ultimately determined the reasonable time standard applied and that Coney Island failed to file its motion within the constraints of the time limit. The Court therefore affirmed.

Key Takeaway: Although defendants may have previously had viable grounds to overcome a void judgment, defendants must now be prepared to file motions to void a judgment pursuant to Federal Rule of Civil Procedure 60(b) within a reasonable time or else they may forfeit their ability to obtain such relief.