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Butner v. Neustadter

United States Court of Appeals for the Ninth Circuit
324 F.2d 783 (1963)


Facts

While he was temporarily visiting Los Angeles, R. Michael Butner (defendant), a businessman who resided in Little Rock, Arkansas, was served with a lawsuit filed by Ingrid Neustadter (plaintiff) in a California state court. Neustadter’s claim related to a note that Butner was allegedly obliged to satisfy. Under California state law at the time, Butner had 10 days to answer the complaint. He forwarded the papers he was served to his usual attorney in Little Rock and included the name of a California attorney who might be retained, Samuel Reisman. The Little Rock attorney contacted Reisman’s office close to the end of the 10-day period. Reisman was out of town. An associate of Reisman left messages with Neustadter’s attorney, requesting an extension of time to answer. When Neustadter’s attorney eventually responded, he said that he had already obtained a default judgment in the matter and that he would not set it aside. After entry of the default judgment in state court, Butner timely removed the case to federal district court. Butner then answered the complaint, contending that his answer superseded the default judgment. In the alternative, Butner moved the federal court to set aside the default judgment. As to the merits of Neustadter’s claim, Butner alleged that the note at issue had been obtained by fraud and that Neustadter was not a valid holder thereof. The federal court ruled against Butner, refusing to set aside the California judgment. Butner appealed.

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Holding and Reasoning (Hamlin, J.)

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