Trial Practice and Procedure - Philip W. Savrin

• Publication year: 1996

Trial Practice and Procedureby Philip W. Savrin^*

I. Introduction

This Article surveys the 1995 decisions of the Eleventh Circuit Court of Appeals that have a significant impact on issues relating to trial practice and procedure.

II. Pleadings

A. Timeliness of a Jury Demand

Burns v. Lawther¹ involves the timeliness of a jury demand in federal court. Burns, a federal inmate, claimed that he had received inadequate medical care at a federal institution, and sued two physician's assistants for a violation of his Eighth Amendment rights under Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics.² Although an Eighth Amendment claim, seeking legal relief, is triable to a jury, Burns did not include a jury demand with his complaint.³

In lieu of an answer, the defendants—at the direction of the magistrate to whom the case was assigned—filed a "special report" consisting of affidavits and documents disputing Burns' allegations. Nine months after the special reports were filed, Burns amended his complaint to add negligence claims against the existing defendants as well as the United

States of America, pursuant to the Federal Tort Claims Act ("FTCA").⁴ At that point, Burns for the first time demanded a jury trial.

The magistrate decided to treat the special reports as motions for summary judgment and, in passing on the issues, found a trial necessary. The district court adopted the magistrate's recommendation that triable issues existed and proceeded to conduct a non-jury trial of both the Bivens and the FTCA claims. The court thereafter entered judgment in favor of all defendants on all claims and expressly found that Burns had not made a timely demand for his case to be heard by a jury.⁵

The Eleventh Circuit found the jury demand issue to be one of first impression.⁶ After examining the relevant rules, the appeals court disagreed with the district court, and sent the case back for a jury trial.⁷ In reaching its decision, the Eleventh Circuit acknowledged that, under Federal Rule of Civil Procedure 38, a jury trial is waived if not demanded in a timely manner, "not later than 10 days after the service of the last pleading directed to [a jury] issue."⁸ The focus of the Eleventh Circuit's opinion is on the definition of "pleading" within the meaning of Rule 38. For assistance, the Eleventh Circuit looked to Federal Rule of Civil Procedure 7, which defines "pleadings" to include the following: a complaint, an answer, a reply to counterclaim, an answer to a cross claim, a third-party complaint, or a third-party answer.⁹ Under the doctrine of inclusio unius, exclusio alterius, the court of appeals held that the list in Rule 7(a) is specific and exclusive of other documents that might be considered a "pleading."¹⁰

In the court below, the district judge had construed the special reports, filed at the magistrate's direction in response to the complaint, to be the "last pleading" directed to the jury issue.¹¹ The Eleventh Circuit found this decision to be flawed because the reports, even though converted to motions for summary judgment, were simply not "pleadings" within the meaning of Rule 38.¹² Consequently, Burns's jury demand, filed along with his amended complaint which added the FTCA claims, was timely as it predated the defendants' answers.¹³

After reaching the conclusion that the district court erred in refusing to conduct a jury trial, the Eleventh Circuit applied a "harmless error" analysis, in light of the court's factual findings on the non-jury issue presented under the FTCA. Harmless error had not occurred, however, because, pursuant to the reasoning in Beacon Theatres v. Westover,¹⁴ a non-jury proceeding cannot foreclose jury consideration of legal issues, absent "imperative circumstances" that did not exist in this case.¹⁵ Consequently, the district court's deprivation of Burns's right to a jury trial was reversible error.

B. Resolution Trust Corporation Cases

1. Necessity of a Rule 59 Motion in Removed Actions. In Resolution Trust Corp. v. Bakker,¹⁶ the Eleventh Circuit discussed the proper procedure for appealing district court judgments in cases where the Resolution Trust Corporation has been appointed as a receiver for a savings and loan institution following an award against the savings and loan in state court.¹⁷ In dicta in a previous case, Jackson v. American Savings Mortgage Corp.,¹⁸ the Eleventh Circuit had hinted that a Rule 59 motion to modify or vacate the judgment would need to be filed to preserve issues for review.¹⁹ In Bakker, the court converted Jackson's dicta into a holding.

The facts of the case are as follows. First Federal Savings and Loan Association sued the Bakkers in state court for breach of contract, and the Bakkers counterclaimed on various theories. After a trial on the merits where both parties prevailed in part, the state court set aside Bakkers' award. While an appeal was pending, Resolution Trust Corporation ("RTC") was appointed as receiver of First Federal, filed a notice of substitution with the state court, and removed the case to federal court. Five months later, the Bakkers filed a Rule 59 motion asking the district court to vacate the state court order. Although the district court denied the motion and refused to rule on the merits, it held the motion was timely because it found the ten-day limit on Rule 59 motions to be discretionary and not to begin in any event until the district court has issued an order.²⁰

The Eleventh Circuit affirmed, though it disagreed with the lower court's analysis.²¹ It expressed a concern that federal courts not become a "super appellate" court for state court judgments, but noted at the same time that the RTC has additional defenses it can assert after it has been appointed as a receiver and removed a pending action to federal court.²² It also found no support for the district court's conclusion that the ten-day time period for bringing a Rule 59 motion is "discretionary" with the trial judge or that an order directing that such a motion be filed is at all necessary.²³ It also ruled that there must be some type of procedural vehicle to enable appellate court review of a district court's judgment in cases removed by the RTC in this circumstance.²⁴ It therefore established the following procedure: "A party must file a Rule 59 motion within ten days of removal to preserve its right to appeal. If a timely Rule 59 motion is filed, the district court must consider and decide the substance of that motion as it would had the judgment originated in federal court."²⁵ On the facts before it, the Eleventh Circuit then found that the Bakkers had waived their right to challenge the state court judgment by not filing a timely Rule 59 motion.²⁶ Accordingly, the district court's denial of the motion was affirmed, albeit on different grounds for reasons contrary to those expressed by the district court.²⁷ At a minimum, the decision in Bakker clarifies the procedure to be followed whenever the RTC removes a pending action to federal court following entry of judgment by the state court.

2. Time for Removal by Resolution Trust Corporation. In Resolution Trust Corp. v. Fragetti,²⁸ Resolution Trust Corporation ("RTC") was appointed receiver of Carteret Savings Bank in six separate mortgage foreclosure suits filed in state court against the defendants.²⁹ RTC filed notices of substitution atnd removal to federal court under the Financial Institutions Reform, Recovery, and Enforcement Act ("FIR-REA").³⁰ The district court remanded the actions to state court, however, finding that the removals were filed more than ninety days after the period allowed by FIRREA. In so ruling, the district court construed the ninety day period as commencing on the date the RTC was appointed as receiver.³¹

The Eleventh Circuit reversed, holding that the 1991 amendment to FIRREA provided a clear and unambiguous definition of substitution, which specifies Congress' intent for the removal period to commence when a document is filed noticing a state court of a party's appointment as receiver and not when the party is actually appointed.³² Because RTC filed its notices of removal on the same day that it filed the orders of appointment, the removal was timely in each case.³³ The court of appeals rejected the defendants' argument that such a definition of substitution would allow a party unfettered control over removal because it can control the timing of substitution.³⁴ FIRREA provides that any party may file a notice of receiver with a state court, thereby triggering the running of the ninety-day removal period.³⁵ Finally, the Eleventh Circuit acknowledged that its position contradicted that reached in Carteret Savings Bank v. Diedrick.³⁶ As an unpublished opinion, however, Diedrick is non-binding precedent, and the court declined to follow its analysis.³⁷

III. District Court's Jurisdiction

A. Service of Process on a Foreign Defendant

Silvious v. Pharaon³⁸ addresses the revised Federal Rule of Civil Procedure 4 regarding service of process on an agent of the defendant. Silvious had been a depositor at the Bank of Credit & Commerce International ("BCCI") and brought suit against Pharaon, as owner and operator of BCCI, for fraud. Pharaon, who was the subject of criminal proceedings as well, had apparently left the United States and was believed to be residing in Saudi Arabia. Silvious made numerous attempts to serve Pharaon by various methods and, after about a year and a half, served an individual in Georgia who was alleged to be Pharaon's agent. After Pharaon failed to answer the complaint following service on this individual, Silvious moved for entry of default judgment against Pharaon.³⁹

In reviewing Silvious' motion for default judgment, the magistrate addressed the adequacy of service on the agent. The magistrate concluded that Rule 4(e), which allows for service on an agent, did not apply because Pharaon was physically outside the country. The district court...