Defendants go one step further, however, arguing not only that this Court should be influenced by Judge Sprizzo's statements, but also that those findings should bind plaintiff in the present forum. (See Defendants' Mem., at 9; Berman Aff., at para. 16.) The Court finds this argument wholly meritless. The first and most obvious flaw in defendants' theory is that Judge Sprizzo did not intend his statements regarding a possible fraud on the Court to bind plaintiff in this forum. Significantly, defendants did not move to vacate the default judgment in the New York proceedings. Thus, the propriety of that judgment was not at issue before Judge Sprizzo. In commenting on his view of the record, therefore, Judge Sprizzo clearly did not intend to make definitive findings that would be binding on this Court. That fact is evident from his statements alone. Judge Sprizzo specifically stated that the issue of fraud "is an issue I am not going to address" and that that issue "is up to the judge in Chicago." (Tr. at 28 (emphasis added).) This Court will not disregard Judge Sprizzo's express intentions and find plaintiff bound by his statements regarding a possible fraud. Any other result would be contrary to the obvious intention of the New York Court.
Furthermore, the Court finds no evidence in the current record to support the fraud or other misconduct to which Judge Sprizzo referred. This Court already has explained at length that the current record is devoid of any evidence that would establish the slightest misconduct by plaintiff or his attorneys. Accordingly, the Court rejects defendants' suggestion that Judge Sprizzo's statements are binding on this Court. On the current record, defendants have failed to establish any fraud or other misconduct that would entitle them to relief from the Court's judgment.
B. No Prompt Action Was Taken to Correct the Default.
Even if the Court had found good cause for defendants' default, it still would deny the present motion because defendants failed to take prompt action to correct the default. Pursuant to Rule 60(b), defendants were required to make the present motion "within a reasonable time" after entry of the default and "not more than one year" after the judgment was entered by this Court. Fed. R. Civ. P. 60(b). The one year time limit in Rule 60(b) "is jurisdictional and may not be extended in any event." Wesco Products Co. v. Alloy Automotive Co., 880 F.2d 981, 985 (7th Cir. 1989). Plaintiff does not contend, however, that defendants failed to make the present motion within the one-year time limitation.
Instead, Simon argues that defendants failed to make the motion within "a reasonable time," as required by the above rule.
Plaintiff is correct that defendants do not comply with Rule 60(b) simply by filing their motion within the absolute one-year time limitation. The delay in filing the motion must also be "reasonable." The Seventh Circuit has held that "'the one-year period represents an extreme limit, and the motion will be rejected as untimely if not made within a 'reasonable time,' even though the one-year period has not expired.'" Kagan v. Caterpillar Tractor Co., 795 F.2d 601, 610 (7th Cir. 1986) (quoting Wright & Miller, Federal Practice and Procedure, Civil § 2866, at 232); see also Planet Corp. v. Sullivan, 702 F.2d 123, 125-26 (7th Cir. 1983). The determination of a "reasonable time" for purposes of Rule 60(b) "'depends on the facts of each case, taking into consideration the interest in finality, the reason for delay, the practical ability to learn earlier of the grounds relied upon, and prejudice to other parties.'" Planet Corp., 702 F.2d at 126 (quoting Ashford v. Steuart, 657 F.2d 1053, 1055 (9th Cir. 1981). "'Although the fact that a motion was made barely within the one-year time limit gives the court the power to entertain it, as the delay in making the motion approaches one year there should be a corresponding increase in the burden that must be carried to show that the delay was 'reasonable'." Planet Corp., 702 F.2d at 126 (quoting Amoco Overseas Oil Co. v. Compagnie Nationale Alagrienne de Navigation, 605 F.2d 648, 656 (2d Cir. 1979) (emphasis in original)). Because defendants filed the present motion shortly before the expiration of the one-year period, they carry a heavy burden in establishing that their delay was reasonable. Defendants have failed to carry that burden in the instant case.
Defendants' explanation for their delay again is based on the alleged settlement negotiations between the parties. Defendants assert that plaintiff had led them to believe that their dispute had been "amicably resolved" and that, therefore, it was unnecessary to reopen the present litigation by filing a motion to vacate the default judgment. (See Defendants' Reply Mem., at 5.) The Court possibly could understand defendants' reluctance, between the months of June and the middle of October 1989, to suffer the expense necessary to vacate the default judgment, because the parties clearly were attempting to settle their dispute during that time. The Court, however, finds no evidence that plaintiff ever suggested that the default need not be vacated. Instead, while defendants stalled for time during the summer and early autumn of 1989, plaintiff repeatedly threatened to register the judgment in a New York court. Plaintiff eventually made good on his threat and had his judgment entered in New York on October 20, 1989. Shortly thereafter, plaintiff restrained certain of defendants' bank accounts as a means of collecting on the judgment. The Court does not understand how these actions could have led any reasonable defendants to believe that their dispute had been amicably resolved and that it was therefore unnecessary to move to vacate the default judgment entered by this Court.
Moreover, in granting defendants' motion to stay enforcement of the judgment for a period of ninety days, Judge Sprizzo explicitly told defendants that they should immediately move to vacate the judgment in this Court. With respect to the default against Berman individually, Judge Sprizzo warned that he "ought to move to vacate the default judgment" and that "I expect if he doesn't move by tomorrow or next week, he is going to be in real trouble with the judge in Chicago." (Tr. at 31, 30.) Furthermore, with respect to all defendants, Judge Sprizzo told their attorney to "get that default judgment set aside in Chicago" and that "the longer you wait, the more difficult it is going to be to set aside the default judgment." (Id. at 34, 50.) Despite these warnings, defendants continued to permit the current judgment to stand unchallenged.
They filed no motion to vacate the default during the period of the ninety day injunction issued by Judge Sprizzo. That injunction expired during the first week of April 1990. Even after the expiration of that injunction, when defendants had not secured the money to complete the alleged settlement, they still did not take "quick action" to vacate the default judgment. Instead, defendants waited until June 1, 1990, shortly before the expiration of the one-year limitation of Rule 60(b), to reappear before this Court. Considering all of these circumstances, the Court finds it unreasonable for defendants to suggest that they thought it unnecessary to vacate the default judgment because of the purported amicable resolution of this case.
The Seventh Circuit has found much shorter time periods unreasonable under Rule 60(b). For example, in Zuelzke, the defendant took no formal action to vacate a default judgment until four months after the entry of the judgment, instead relying on another party who was attempting to settle the dispute with the plaintiff. The Seventh Circuit there held that the defendant's "conduct to protect itself in district court could hardly be described as prompt." 925 F.2d at 230. Moreover, in a case in which a default judgment was entered on March 17 and a motion to vacate the judgment was made on May 20 of the same year, the Seventh Circuit emphasized that defendants had failed to move "promptly to vacate the default judgment, and that this fact weighs heavily against them." C.K.S. Engineers, 726 F.2d at 1208; see also Planet Corp., 702 F.2d at 126-27. In the present case, where defendants had notice of the default less than one week after its entry, defendants clearly did not take quick action to remedy their default.
C. A Meritorious Defense.
Defendants propose to defend the claims alleged in plaintiff's complaint by contesting many of the instances of fraud alleged therein.
The Court sees no need to further lengthen its opinion by detailing defendants' proposed defense, for the Seventh Circuit recently recognized that the existence of a meritorious defense, standing alone, does not excuse the carelessness and outright defiance of the Court's orders exhibited by defendants herein. See Zuelzke, 925 F.2d at 230 (defendant "has not shown that it had good cause for its failure to act and regardless of whether it had a meritorious defense, it failed to present its defense to the court in a timely manner"); see also Pyramid Energy, Ltd. v. Heyl & Patterson, Inc., 869 F.2d 1058, 1062 (7th Cir. 1989). The Court is not convinced that the defense proposed by defendants is meritorious; however, even if it were, the existence of such a defense does not require that the default judgment be vacated in these circumstances. Defendants had every opportunity to present their proposed defense to this Court two years ago. They chose not to avail themselves of that opportunity. They now must suffer the consequences of that decision.
For the reasons set forth above, the Court denies defendants' motion to vacate the default judgment entered by this Court on June 2, 1989, nunc pro tunc as of May 23, 1989. Defendants have failed to demonstrate either good cause for their default or prompt action to correct that default. Accordingly, defendants are not entitled to relief from the judgment pursuant to Rule 60(b) of the Federal Rules of Civil Procedure.