`
`[PUBLISH]
`
`FOR THE ELEVENTH CIRCUIT
`________________________
` FILED
`
` U.S. COURT OF APPEALS
` ELEVENTH CIRCUIT
` APRIL 22, 2003
` THOMAS K. KAHN
`D. C. Docket No. 01-01419-CV-PAS
` CLERK
`and BKC Docket No. 00-16067 BKC-RA
`
`No. 02-11890
`________________________
`
`In Re: WORLDWIDE WEB SYSTEMS, INC.,
`d.b.a. Teleware Global Corp.,
`
`Debtor.
`__________________________________________________
`
`D. OMAR VALDEZ,
`
`Defendant-Appellant,
`
`WORLDSTAR COMMUNICATIONS CORPORATION,
`
`versus
`
`JAMES S. FELTMAN,
`
`Defendant,
`
`________________________
`
`Plaintiff-Appellee.
`
`Appeal from the United States District Court
`for the Southern District of Florida
`_________________________
`
`(April 22, 2003)
`
`
`
`Before CARNES, MARCUS, and SUHRHEINRICH*, Circuit Judges.
`
`MARCUS, Circuit Judge:
`
`This is an appeal from a bankruptcy court order denying a motion to set
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`aside final default judgment entered against Defendants D. Omar Valdez
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`(“Valdez”) and Worldstar Communications Corporation (“Worldstar”). The
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`district court affirmed the bankruptcy court’s denial, and it is from these orders
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`that Valdez appeals. Worldstar has not appealed to this Court.1 We agree with the
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`bankruptcy and district courts that Valdez has failed to meet his burden of
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`demonstrating under Fed. R. Civ. P. 60(b)(1) (“Rule 60(b)(1)”) that final default
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`judgment should have been set aside for excusable neglect and, accordingly,
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`affirm.
`
`I.
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`The relevant facts and procedural history are straightforward. This case
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`arose out of the Chapter 11 bankruptcy proceedings of Worldwide Web Systems,
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`Inc. (“Worldwide”). On August 11, 2000, one month after Worldwide filed a
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`Chapter 11 petition, James S. Feltman (“Feltman”) was appointed as the trustee for
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`*Honorable Richard F. Suhrheinrich, United States Circuit Judge for the Sixth Circuit,
`sitting by designation.
`
`1Although the bankruptcy court also entered final default judgment against Worldstar and
`Worldstar subsequently appealed to the district court, all parties stipulated to the dismissal of that
`appeal.
`
`2
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`
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`its estate. Soon thereafter, Feltman filed a complaint against Valdez and
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`Worldstar seeking to recover some $1.7 to $1.8 million that was allegedly paid
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`wrongfully to Valdez and Worldstar within one year of the filing of the Chapter 11
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`petition.
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`On August 28, 2000, Valdez was served with a summons and complaint at
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`his last known business address, which was on file with the Florida Secretary of
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`State, by first class U.S. mail and certified mail, return receipt requested.2 A
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`summons and complaint also were delivered to Michael Schiffrin, Esq.,
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`Worldstar’s registered agent.3 Neither Valdez nor Worldstar answered or
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`otherwise responded to the complaint. Not surprisingly, default and final default
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`judgments were entered against them on October 13, 2000, and November 2, 2000,
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`respectively.
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`Throughout December 2000, Feltman served numerous discovery requests
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`in aid of execution on Valdez and Worldstar. Again, neither party responded to
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`2While Valdez concedes that this was a valid method of service of process under the
`bankruptcy code and that the return receipt was signed, he says that the receipt was not signed by him
`or anyone purporting to be his agent. Indeed, Valdez claims that he moved permanently from this
`address prior to the delivery of service of process and was in transit at the time the summons and
`complaint were received by an unknown individual at that address.
`
`3Schiffrin acknowledged service of process on Worldstar, but advised Feltman that he
`could not accept service of process for Valdez. Nevertheless, he sent the summons and complaint
`by mail and fax to a forwarding address and fax number provided to him by Valdez.
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`3
`
`
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`any of these requests. By his own admission, Valdez learned of the final default
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`judgment against him on November 11, 2000. On January 4, 2001, Schiffrin filed
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`a Notice of Appearance on behalf of Valdez and Worldstar, and moved the
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`bankruptcy court on January 8, 2001 to set aside the final default judgment.
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`Valdez argued that the final default judgment should be set aside for excusable
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`neglect pursuant to Rule 60(b)(1) and (b)(6), see Fed. R. Civ. P. 60(b) (1), (6)
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`(“On motion and upon such terms as are just, the court may relieve a party or a
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`party's legal representative from a final judgment, order, or proceeding for the
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`following reasons: . . . (1) mistake, inadvertence, surprise, or excusable neglect . . .
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`[or] (6) any other reason justifying relief from the operation of the judgment.”).4
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`Notably, Valdez did not challenge personal jurisdiction or sufficiency of service of
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`process under Rule 60(b)(4).
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`The bankruptcy court conducted a hearing on January 23, 2001 affording
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`Valdez the opportunity to appear and be heard, but Valdez did not appear. The
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`court concluded that Valdez and Worldstar failed to present sufficient evidence to
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`satisfy their burden to set aside the final default judgment. Valdez and Worldstar
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`timely filed Notices of Appeal with the district court and again argued that the
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`4Valdez never raised a Rule 60(b)(6) claim in the district court or in this court and,
`therefore, we will not address that claim.
`
`4
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`
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`final default judgment should be set aside for excusable neglect pursuant to Rule
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`60(b)(1). They also raised for the first time the claim that final default judgment
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`should be set aside as void for lack of proper service of process pursuant to Rule
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`60(b)(4), see Fed. R. Civ. P. 60(b) (4) (“On motion and upon such terms as are
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`just, the court may relieve a party or a party's legal representative from a final
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`judgment, order, or proceeding for the following reasons: . . . (4) the judgment is
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`void”). Soon thereafter, the district court concluded that Valdez had not met his
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`burden of demonstrating that the bankruptcy court abused its discretion and
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`affirmed the bankruptcy court’s decision.
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`On appeal, Valdez reprises the same arguments he presented to the district
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`court: that Valdez has demonstrated excusable neglect pursuant to Rule 60(b)(1);
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`and that the final default judgment entered against him is void for lack of proper
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`service of process pursuant to Rule 60(b)(4).
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`II.
`
`We will reverse the lower court’s denial of a motion to set aside a default
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`judgment only for abuse of discretion, see Fla. Physician’s Ins. Co. v. Ehlers, 8
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`F.3d 780, 783 (11th Cir. 1993) (citing Gibbs v. Air Canada, 810 F.2d 1529, 1537
`
`(11th Cir. 1987) and Jackson v. Seaboard Coast Line R.R., 678 F.2d 992, 1020
`
`(11th Cir. 1982)), and we have cautioned that “appellant cannot prevail simply
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`5
`
`
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`because the [bankruptcy court] properly could have vacated its order.” Solaroll
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`Shade & Shelter Corp. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1132 (11th Cir.
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`1986) (citing Fackelman v. Bell, 564 F.2d 734, 736 (5th Cir. 1977)). Instead, to
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`show an abuse of discretion, the “appellant must demonstrate a justification so
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`compelling that the [lower] court was required to vacate its order.” Id. However,
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`there is a strong policy of determining cases on their merits and we therefore view
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`defaults with disfavor. See id. (citing Gulf Coast Fans, Inc. v. Midwest Elecs.
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`Imps., Inc., 740 F.2d 1499, 1510-11 (11th Cir.1984)); see also Seven Elves, Inc. v.
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`Eskenazi, 635 F.2d 396, 401-02 (5th Cir. Unit A Jan. 1981) (discussing Rule 60(b)
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`balancing of the desire to preserve the finality of judgments with the desire that
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`judgments reflect the merits of the case).5
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`A.
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`Valdez argues first that the bankruptcy court abused its discretion and the
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`district court erred in failing to reverse the order denying his motion to set aside
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`default final judgment for excusable neglect under Fed. R. Civ. P. 60(b)(1). To
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`establish mistake, inadvertence, or excusable neglect under Rule 60(b)(1), a
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`defaulting party must show that: “(1) it had a meritorious defense that might have
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`5In Bonner v. City of Prichard, we adopted as binding precedent all of the decisions of the
`former Fifth Circuit handed down prior to the close of business on September 30, 1981. See 661
`F.2d 1206, 1207 (11th Cir.1981) (en banc).
`
`6
`
`
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`affected the outcome; (2) granting the motion would not result in prejudice to the
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`non-defaulting party; and (3) a good reason existed for failing to reply to the
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`complaint.” Ehlers, 8 F.3d at 783 (citing E.E.O.C. v. Mike Smith Pontiac GMC,
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`Inc., 896 F.2d 524, 528 (11th Cir. 1990)).
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`In this case, Valdez has demonstrated neither excusable neglect, nor an
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`abuse of discretion. In the first place, Valdez has not offered anything resembling
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`a meritorious defense. Valdez inexplicably failed to appear at a hearing set by the
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`court to address his claim that the $1.8 million default judgment should be set
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`aside. Instead, he claims in an affidavit only that his meritorious defense is
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`demonstrated by his Answer and Affirmative Defenses to the Complaint.
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`However, these documents amount to little more than general denials offered only
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`at the highest order of abstraction, and we made clear in Solaroll that a moving
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`party cannot satisfy the burden of showing a meritorious defense simply by
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`“asserting a general denial.” 803 F.2d at 1133. We also explained that in order to
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`establish a meritorious defense, the moving party “must make an affirmative
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`showing of a defense that is likely to be successful.” Id. (citation omitted).
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`Specifically, Valdez has offered nothing to explain what happened to the money
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`that was transferred, nor anything to show that the large financial transfers were
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`not made to him personally by the debtor.
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`7
`
`
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`Indeed, other than his general denials, the only evidence Valdez offers is the
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`testimony of his brother, Frank Valdez. Valdez claims the bankruptcy court
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`misinterpreted his brother’s testimony as stating that the transfers were made to
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`Valdez himself, whereas the testimony at most indicates that the money was
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`transferred to Worldstar and/or Valdez. After thoroughly reviewing the testimony,
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`we are satisfied that the bankruptcy court reasonably characterized Frank Valdez’s
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`testimony as indicating that the money was transferred to Valdez personally.6
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`6The relevant portion of Frank Valdez’s testimony reads as follows:
`
`Q.
`
`. who received
`.
`.
`The other person
`Valdez/Worldstar, 1.8 to $1.7 million?
`
`transfers
`
`is Omar
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`[Frank Valdez].
`Yes, that was the aggregate or the total that -- the other one is a direct
`accounting from one bank account, and so if you take the transfers
`total, then that’s what it would be.
`
`Q.
`
`A.
`
`Q.
`
`A.
`
`Q.
`
`A.
`
`What was the purpose of the transfers to Omar Valdez/Worldstar in
`the amount of 1.8 to $1.7 million?
`
`Well, some of it was -- the small amount of it, I don’t remember what
`the invoice was, it was for some management fees, but the rest of it
`was the same reason that I took the money out, was to get it out of the
`corporation so that we would no longer have it to be extorted, and the
`idea was we needed to return it, like I did.
`
`So it was transferred to your brother in a corporation he controlled for
`safekeeping?
`
`That’s exactly correct.
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`And ultimately the money was never returned?
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`Unfortunately with him it was never returned, and with great pleading
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`8
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`
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`Moreover, even if the testimony also could be read as indicating the money was
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`transferred to Worldstar, a closely held corporation of which Valdez was the
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`principal, Valdez cannot establish a meritorious defense simply by pointing to an
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`alternate interpretation of this testimony. Quite simply, he has failed to offer
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`anything to affirmatively and specifically show that there was a valid defense that
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`would probably change the outcome of the case.
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`As to the prejudice prong of a Rule 60(b)(1) motion, Valdez says that
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`Feltman sustained virtually no prejudice by his failure to plead or defend prior to
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`the entry of final default judgment, and that the bankruptcy court failed to give the
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`lack of prejudice its proper weight. In particular, Valdez argues that the existence
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`of “excusable neglect” is “primarily governed by the lack of prejudice,” and that it
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`is apparent that any neglect on the part of Valdez and his counsel Schiffrin, while
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`on my part, you know, and warnings that this is going to be a
`problem, it was never returned.
`
`Q.
`
`A.
`
`So just so I’m clear, these payments that we’re talking about now to
`your brother . . . were neither dividends nor payments in the ordinary
`course of business, they weren’t for compensation, they were just
`transfers to your brother, who was supposed to hold the money so that
`the alleged extortionist couldn’t get it, is that correct?
`
`Partially. Some of it, I don’t have the exact invoice, there is an
`invoice for management fees or consulting fees, but the majority,
`probably close to the 1.5 figure or 1 point something was for that
`particular reason.
`
`Section 341 Meeting of Creditors Tr. (August 18, 2000), at 50-52.
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`9
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`
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`“perhaps evidencing some carelessness was nevertheless excusable.” In support,
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`he cites our decision in Cheney v. Anchor Glass Container Corp., 71 F.3d 848
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`(11th Cir. 1996), and argues that because there was “virtually no prejudice” and
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`“no evidence that granting Valdez’[s] Motion would adversely [a]ffect the
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`efficient administration of justice,” the bankruptcy court abused its discretion in
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`denying his motion to set aside final default judgment.
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`Valdez is correct that in Cheney we acknowledged that the Supreme Court
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`in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd., 507 U.S. 380, 113 S. Ct.
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`1489, 123 L. Ed. 2d 74 (1993) accorded primary importance to the absence of
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`prejudice and to the interest of efficient judicial administration in determining
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`whether the district court had abused its discretion. Cheney, 71 F.3d at 849-850.
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`While the absence of prejudice to the nonmoving party and to the interest of
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`efficient judicial administration are of “primary importance,” the Pioneer and
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`Cheney decisions do not alter the fact that a determination of excusable neglect is
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`an equitable one that necessarily involves consideration of all three elements -- a
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`meritorious defense, prejudice, and a good reason for not responding to the
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`complaint -- and not, as Valdez argues, exclusively prejudice. See Ehlers, 8 F.3d
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`at 783; see also Pioneer, 507 U.S. at 395, 113 S. Ct. at 1498 (“[The excusable
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`neglect] determination is at bottom an equitable one, taking account of all relevant
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`10
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`
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`circumstances surrounding the party’s omission.”); Cheney, 71 F.3d at 850 (same).
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`While the prejudice in this case is not particularly pronounced, we find -- as
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`did the bankruptcy court -- that there is some prejudice to Feltman. See January
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`23, 2001 Bankr. Court Proceedings Tr. at 38 (“[T]here certainly is some prejudice
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`to the plaintiff in the delay if the default was to be set aside.”); see also id. at 24
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`(Statement of counsel for Feltman) (“[T]he estate has been prejudiced by the
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`failure of Mr. Valdez to previously appear, in that any evidence that we could have
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`obtained from him during the course of the proceeding would have been helpful or
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`could have been helpful to the trustee’s efforts to locate other assets and to recover
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`other assets for the estate.”). Indeed, if we were to vacate the final default
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`judgment and remand for a trial on the merits, this trial would take place nearly
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`three years after Feltman initially filed the complaint. Moreover, on the facts of
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`this case, we cannot say that the lack of substantial prejudice to the non-moving
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`party so tips the scale in favor of Valdez that we should excuse his failure to make
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`even the barest showing of a meritorious defense or to present a good reason for
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`failing to respond to the complaint.
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`As to the “good reason” prong of a Rule 60(b)(1) motion, Valdez claims
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`that he learned of the final default judgment on November 11, 2000. It was not
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`until January 4, 2001, however, that Schiffrin entered his appearance on behalf of
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`11
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`
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`Worldstar and Valdez, and not until January 8, 2001, that Schiffrin filed a motion
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`to set aside the final default judgment. Valdez has not offered any reason, let
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`alone a “good reason,” for this delay.
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`Moreover, as we’ve noted, Valdez did not even appear at the bankruptcy
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`court’s hearing on his motion to set aside the final default judgment. Instead,
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`counsel for Valdez submitted an affidavit from Valdez that at most says that he
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`just learned of the lawsuit on November 11, 2000.7 Nothing in Valdez’s brief
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`7Valdez’s affidavit states in full:
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
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`7.
`
`My name is D. Omar Valdez and I am one of the named
`Defendants in the above-captioned adversary proceedings.
`I am over the age of 18 years and I make this Affidavit upon
`personal knowledge.
`Allegedly, it appears that the Summons and Notice of
`Pretrial/Trial in an Adversary Proceeding, together with the
`Complaint to Recover Preferential Transfers, Fraudulent
`Transfers and Unlawful Distribution (hereinafter referred to
`as the “Lawsuit”), were served upon me by mail on August
`25, 2000 at 800 Brickell Avenue, Suite 900, Miami, Florida
`33131.
`In fact, I never received the Lawsuit and the first knowledge
`that I had of its existence was when I was advised that a
`Default Final Judgment was entered against me on November
`11, 2000.
`I moved permanently from the State of Florida on July 8,
`2000, having closed down my business of Worldstar
`Communications, Inc. on June 16, 2000.
`Accordingly, on August 25, 2000 (the day the lawsuit was
`allegedly served upon me by mail) neither myself or my
`previous business, Worldstar Communications, Inc., were
`located at or received mail at the business’ prior address of
`800 Brickell Avenue, Suite 900, Miami, Florida 33131.
`Additionally, on August 25, 2000, I was virtually unreachable
`as I was in transit and in fact I was in the process of relocating
`
`12
`
`
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`affidavit provides any basis, let alone a sufficient one, for finding an abuse of
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`discretion. Accordingly, we affirm the bankruptcy court’s denial of Valdez’s Rule
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`60(b)(1) motion to set aside the final default judgment.
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`B.
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`To the extent Valdez raises the additional claim that final judgment is void
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`for lack of proper service of process under Fed. R. Civ. P. 60(b)(4) (“Rule
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`60(b)(4)”), because Valdez did not present this issue in his Rule 60(b) motion to
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`the bankruptcy court, sitting as a trial court, he waived it and we will not address it
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`on appeal. Federal Rule of Bankruptcy Procedure 9024,8 which incorporates Rule
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`8.
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`to my present place of residence.
`I have a meritorious defense to the Lawsuit and in support of
`this assertion, I herewith attach hereto and make a part hereof
`as Exhibit “A”, a copy of my Answer and Affirmative
`Defenses which I propose filing with this Court.
`
`Affidavit of D. Omar Valdez (emphasis omitted).
`
`8Bankruptcy Rule 9024 states:
`
`Rule 60 F[ed.] R. Civ. P. applies in cases under the Code except that
`(1) a motion to reopen a case under the Code or for the
`reconsideration of an order allowing or disallowing a claim against
`the estate entered without a contest is not subject to the one year
`limitation prescribed in Rule 60(b), (2) a complaint to revoke a
`discharge in a chapter 7 liquidation case may be filed only within the
`time allowed by § 727(e) of the Code, and (3) a complaint to revoke
`an order confirming a plan may be filed only within the time allowed
`by § 1144, § 1230, or § 1330.
`
`Fed. R. Bankr. P. 9024.
`
`13
`
`
`
`60(b)(4), permits a party to seek relief from a void judgment or order. See Fed. R.
`
`Civ. P. 60(b)(4) (“On motion and upon such terms as are just, the court may
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`relieve a party or a party’s legal representative from a final judgment, order, or
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`proceeding for the following reasons: . . . (4) the judgment is void.”). The burden
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`of proof in a Rule 60(b)(4) motion rests with the defendant. See Hazen Research,
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`Inc. v. Omega Minerals, Inc., 497 F.2d 151, 154 (5th Cir. 1974).
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`Although we review a district court’s Rule 60(b)(4) motion for abuse of
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`discretion, insufficient service of process under Rule 60(b)(4) implicates personal
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`jurisdiction and due process concerns. Generally, where service of process is
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`insufficient, the court has no power to render judgment and the judgment is void.
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`See Varnes v. Local 91, Glass Bottle Blower’s Ass’n, 674 F.2d 1365, 1368 (11th
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`Cir. 1982) (finding a judgment void under Rule 60(b)(4) where the defendant was
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`not properly served); see also Mullane v. Cent. Hanover Bank & Trust Co., 339
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`U.S. 306, 314, 70 S. Ct. 652, 657, 94 L. Ed. 865 (1950) (“An elementary and
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`fundamental requirement of due process in any proceeding . . . accorded finality is
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`notice reasonably calculated, under all the circumstances, to apprise interested
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`parties of the . . . action and [to] afford them an opportunity to present their
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`objections.” (citations omitted)).
`
`14
`
`
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`However, there are limitations on this doctrine. See, e.g., Harris Corp. v.
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`Nat’l Iranian Radio & Television, 691 F.2d 1344, 1353 n.18 (11th Cir. 1982)
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`(holding that an “objection to service of process does not preserve the issue of
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`personal jurisdiction.”). One important limitation is that objections to personal
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`jurisdiction (unlike subject matter jurisdiction) are generally waivable. See Ins.
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`Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 705,
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`102 S. Ct. 2099, 2105-06, 72 L. Ed. 2d 492 (1982). The Supreme Court explained
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`this difference in these terms:
`
`The concepts of subject-matter jurisdiction and personal jurisdiction .
`. . serve different purposes, and those different purposes affect the
`legal character of the two requirements.
`. . .
`Subject-matter jurisdiction . . . is an Art. III as well as a statutory
`requirement; it functions as a restriction on federal power, and
`contributes to the characterization of the federal sovereign. Certain
`legal consequences directly follow from this. For example, no action
`of the parties can confer subject-matter jurisdiction upon a federal
`court. Thus, the consent of the parties is irrelevant, principles of
`estoppel do not apply, and a party does not waive the requirement by
`failing to challenge jurisdiction early in the proceedings. . . .
`. . .
`None of this is true with respect to personal jurisdiction. . . . The
`personal jurisdiction requirement recognizes and protects an
`individual liberty interest. It represents a restriction on judicial power
`not as a matter of sovereignty, but as a matter of individual liberty. . .
`. Because the requirement of personal jurisdiction represents first of
`all an individual right, it can, like other such rights, be waived.
`
`15
`
`
`
`Id. at 701-03, 102 S. Ct. at 2103-05 (citations and internal quotation marks
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`omitted).
`
`Consistent with Bauxites, we have found that a party’s right to dispute
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`personal jurisdiction on insufficient service of process grounds is waived if the
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`party fails to assert that objection in his first Rule 12 motion, other initial pleading
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`or general appearance. See Pardazi v. Cullman Med. Ctr., 896 F.2d 1313, 1317
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`(11th Cir. 1990) (explaining that “[a] party that fails to raise a defense of lack of
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`personal jurisdiction at the appropriate time is deemed to have conferred personal
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`jurisdiction on the court by consent.”). We have not previously addressed whether
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`our holding in Pardazi is applicable when a party failed to dispute sufficiency of
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`service of process in its first Rule 60(b) motion. However, the Seventh Circuit
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`addressed a similar issue in Swaim v. Moltan Co. -- the failure to allege the lack of
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`in personam jurisdiction -- and concluded that “in personam jurisdictional
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`challenges to default judgments are forfeited if not asserted in a Rule 60(b)
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`motion, if such a motion is made.” 73 F.3d 711, 718 (7th Cir. 1996).9 The
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`9The Sixth Circuit has also addressed this issue in an unpublished opinion. See Ladder
`Man, Inc. v. Mfr’s. Distrib. Servs., Inc., 234 F.3d 1268 (6th Cir. Oct. 31, 2000) (unpublished table
`decision) (holding that appellant’s failure to raise the issue of personal jurisdiction in his Rule
`60(b)(4) motion to vacate default judgment “precludes that argument from being raised on appeal”
`and citing in support cases holding that under Rule 12(h), a party waives the right to contest personal
`jurisdiction by failing to raise the issue when the party makes its first significant defensive move).
`
`16
`
`
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`Seventh Circuit explained, “when a party chooses to utilize the attention and
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`limited resources of a district court in a motion under Rule 60(b), we think it just
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`and proper that it be required to put before the district court whatever infirmities
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`support setting aside the default judgment [because it] brings to bear the district
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`court’s factfinding function and unique knowledge of the case and maintains the
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`court of appeals’ role as a forum for resolving disputed questions of law -- not
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`fact.” Id. at 719.
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`We agree with the reasoning of the Seventh Circuit in Swaim and conclude
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`that when a party asserts a Rule 60(b) challenge to a default judgment, absent a
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`compelling showing that we should make an exception to this rule, see Dean
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`Witter Reynolds, Inc. v. Fernandez, 741 F.2d 355, 360-61 (11th Cir.1984)
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`(enunciating five important exceptions to the general rule that an appellate court
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`will not consider an issue not presented to the trial court), challenges under Rule
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`60(b)(4) on insufficient service of process grounds are waived if not squarely
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`raised.
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`Since a bankruptcy court sits as a trial court, “we review the bankruptcy
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`court’s findings as if this were an appeal from a trial in the district court.” In re St.
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`Laurent, 991 F.2d 672, 675 (11th Cir. 1993) (citation omitted). We have declined
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`to address issues not raised before the bankruptcy court because an alternate
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`course would “delay the disposition of bankruptcy cases” and permit a party
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`objecting to the default judgment to “say nothing to the bankruptcy court, await its
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`ruling, bypass that judgment, and for the first time take that objection to the
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`district court.” In re Daikin Miami Overseas, Inc., 868 F.2d 1201, 1208 (11th Cir.
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`1989); see also, e.g., In re Freeman, 956 F.2d 252, 255 (11th Cir. 1992) (declining
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`to consider issues not raised with the bankruptcy court).
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`Quite simply, we hold that when a party first moves under Rule 60(b) to set
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`aside a default judgment in the bankruptcy court (absent a compelling showing
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`that we should make an exception), the failure to raise a claim under Rule 60(b)(4)
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`for insufficient service of process waives the claim and we will not address it on
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`appeal. Our sister circuits similarly have found that failure to raise a claim in
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`bankruptcy court generally constitutes waiver of the claim. See, e.g., In re
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`Hemingway Transp, Inc., 993 F.2d 915, 935 (1st Cir. 1993) (“[F]ailure to advance
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`the present contention below deprived the bankruptcy court of an opportunity to
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`consider it, thereby waiving the claim.” (citation omitted)); In re Kieslich, 258
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`F.3d 968, 971 (9th Cir. 2001) (holding that “a party waives any objection to a
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`bankruptcy court’s discretionary exercise of its jurisdiction over related suits by
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`failing to raise it before the bankruptcy court”).
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`Valdez waived his insufficient service of process argument under Rule
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`60(b)(4) by failing to include it in his Rule 60(b) motion to the bankruptcy court.
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`Before the bankruptcy court, Valdez argued only that the final default judgment
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`should be set aside under Rule 60(b)(1) and (b)(6). Although he mentioned that he
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`failed to receive service of process, he did so solely in the context of
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`demonstrating Rule 60(b)(1) “excusable neglect.” He neither referenced “personal
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`jurisdiction” or “due process,” nor in any way alluded to Rule 60(b)(4).
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`Moreover, Valdez has provided us with no compelling reason to make an
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`exception today. In Dean Witter, we explicated five important exceptions to the
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`general rule that an appellate court will refuse to consider an issue not presented to
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`the trial court and raised for the first time on appeal. Thus, an appellate court may
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`consider (1) a pure question of law if the refusal to consider it would result in a
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`miscarriage of justice; (2) an objection not raised in the court below when the
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`appellant had no opportunity to raise the objection; (3) an objection not raised
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`below when there is at stake a substantial interest of justice; (4) an issue not raised
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`in the lower court when the proper resolution is beyond any doubt; and (5) an
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`issue for the first time if the issue presents significant questions of general impact
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`or great public concern. See Daikin, 868 F.2d at 1207 (discussing Dean Witter
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`Reynolds, Inc. v. Fernandez, 741 F.2d 355 (11th Cir.1984)).
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`We can discern none of these exceptions here. First, the question at issue
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`was whether the bankruptcy court abused its discretion in denying the motion to
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`set aside final default judgment. See id. This matter necessarily involves whether
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`the requirements of service of process were met and, as such, includes questions of
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`fact as well as of law. Moreover, after thorough review of this record, there is no
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`miscarriage of justice in this case. Second, Valdez filed a Rule 60(b) motion
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`before the bankruptcy court on subsection (1) and (6) grounds. Plainly, he had a
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`robust opportunity to include subsection (4) objections as well. Third, Valdez
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`argues that a $1.8 million dollar judgment against him without a trial on the merits
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`raises questions of substantial justice. However, as we noted in Daikin, “the
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`‘interests of substantial justice’ are generally equated with the vindication of
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`fundamental constitutional rights,” rather than a monetary judgment. Id.; see, e.g.,
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`Edwards v. Sears, Roebuck & Co., 512 F.2d 276, 286 (5th Cir. 1975) (“[A]
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`healthy regard for the necessity and desirability of having errors corrected at trial
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`rather than on appeal leads us to [consider arguments not raised below] only in
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`exceptional cases where the interest of substantial justice is at stake.”). No
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`substantial interests of justice are raised. Fourth, it cannot fairly be said that the
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`issue raised for the first time on appeal here -- one which requires the resolution of
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`factual questions -- places its resolution beyond doubt. See Daikin, 868 F.2d at
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`20
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`1207. Finally, we can divine no issue of transcending public importance, such as
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`was found in Dean Witter (which addressed the national policy of denying Cuban
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`nationals access to American dollars to finance allegedly violent acts abroad).
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`Accordingly, because Valdez failed to raise his Rule 60(b)(4) claim in his
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`Rule 60(b) motion to the bankruptcy court, he has waived it and we will not
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`address it on appeal.
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`AFFIRMED.
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