SCOVT reverses, as an abuse of discretion, order vacating dismissal of complaint due to pending bankruptcy proceeding, holding the court had no legal basis to vacate the dismissal order under Rule 60 or otherwise, two years after it issued.

Hill v. Springfield Hospital and Emergency Services of New England, Inc., 2023 VT 23

CARROLL, J. In this interlocutory appeal, defendants challenge the civil division’s order granting plaintiff’s request to vacate its previous order dismissing her malpractice complaint. We agree that there was no legal basis for the court to grant such relief, and therefore reverse.

 After notification of bankruptcy proceedings, the court entered a “dismissal order” without prejudice to the Plaintiff’s right to have the order vacated, and the case reopened, if Plaintiff made application within thirty (30) days of the date of Bankruptcy Court removed the automatic stay.

Plaintiff moved to vacate, but more than thirty days after the bankruptcy case was closed.

The court granted plaintiff’s motion, stating that it was “persuaded that there was no legal or equitable basis to dismiss the action simply because one of the two defendants filed a bankruptcy petition.” The court stated that it had intended to simply stay the action and that dismissal would be unjust.

 The court denied defendants’ request for reconsideration, reasoning that “[w]hether pursuant to the court’s inherent authority to vacate unlawful orders, or pursuant to V.R.C.P. 60(b)(4) or (6), the court is duty bound to vacate the unlawful dismissal order because failure to do so would work a substantial injustice by unlawfully denying plaintiff’s right to seek redress for her alleged injuries."

This Court accepted the interlocutory appeal on the question whether the civil division had a legal basis to vacate the 2019 dismissal order V.R.A.P. 5(b)(6)(B).  We conclude that it did not, and reverse.

 

First, plaintiff failed to comply with the terms of the dismissal order. By law, the bankruptcy court’s decision closing the bankruptcy case operated to remove the automatic stay. Under the plain terms of the dismissal order, plaintiff had thirty days from that date to move to reopen the case. She did not do so.

 

The trial court had no inherent authority independent of Rule 60 to modify or vacate a final judgment. Once the twenty-eight-day time period set forth in Rule 59 elapsed, relief is only available if one of the conditions in Rule 60 is satisfied. Kotz v. Kotz, 134 Vt. 36, 38, 349 A.2d 882, 884 (1975); see also Reporter’s Notes, V.R.C.P. 60 (“The rule is intended to provide the sole means of obtaining relief from a judgment after the time for a motion under Rule 59 has run.”). Having failed to follow that procedure, plaintiff’s sole avenue of relief was Vermont Rule of Civil Procedure 60.

 

In this case, plaintiff’s motion was filed more than a year after the judgment, so she is not entitled to relief under subdivisions (b)(1), (2), or (3).  Thus, even assuming the 2019 dismissal order qualified as a “mistake” within the meaning of Rule 60(b)(1), that provision is of no aid to her.

 

Plaintiff does not claim that she is entitled to relief under subdivision (b)(5), nor does that provision appear to fit the circumstances in this case. We accordingly assess whether the trial court could properly grant relief under Rule 60(b)(4) or (b)(6).

 

Plaintiff argued below that relief was available under Rule 60(b)(4) because the 2019 dismissal order was contrary to law and therefore void when it was entered.  Whether it was unlawful for the civil division to dismiss her entire case in response to Springfield’s notice of bankruptcy is not the issue before us.  The question certified for review is whether the court had a valid reason to vacate the dismissal. We conclude that the civil division had jurisdiction to enter the dismissal order, meaning that it was not “void” within the meaning of Vermont Rule of Civil Procedure 60(b)(4), and that plaintiff demonstrated no other valid basis to challenge the order two years after it was issued.

A judgment is void within the meaning of Rule 60(b)(4) “only if the court that rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process of law.” In re C.L.S., 2020 VT 1 ¶ 17.  The civil division had jurisdiction, concurrent with the bankruptcy court, to determine the applicability of the automatic stay to plaintiff’s case. Klass v. Klass, 831 A.2d 1067, 1071 (Md. 2003).  Plaintiff had notice and multiple opportunities to object to or remedy the dismissal order, and we see no basis to conclude that the order was inconsistent with due process such that it was void for purposes of Rule 60(b)(4).  The argument that the order violated the automatic stay is not grounds for relief under Rule 60(b)(4).

Rule 60(b)(6) allows the trial court to relieve a party from a final judgment for any reason beside those set forth in the first five sections of the rule, as long as the request for relief is made within a reasonable time.  The record is clear that plaintiff’s own lack of diligence, not the dismissal order or defendants’ conduct, is the reason for her situation. It was therefore an abuse of discretion for the court to grant plaintiff’s motion to reopen the case under that subdivision of the rule.

 

The civil division did not have inherent authority or any basis under Rule 60(b) to vacate the dismissal order.

 

 Reversed.

How cited

SCOVT NOTE: The Court expressly did not validate the dismissal order in question as a lawful response to the automatic stay. 

In another context, the Court characterized this type of dismissal without prejudice to a time-limited motion to reopen as “procedurally unorthodox,” stating “litigants and courts would be well advised not to follow its model."  Re Purvis Nonconforming Use, 2019 Vt 60 ¶ 14.