Supreme Court Backs Timeline to File Void Judgment Challenge (3)

The US Supreme Court sided with a bankruptcy trustee in its finding that a time limit applies in a Brooklyn-based auto parts company’s challenge of a potentially void judgment.

The unanimous high court decision on Tuesday affirmed the US Court of Appeals for the Sixth Circuit’s 2024 ruling and ended a dispute over two federal statutes. The justices held that Federal Rule 60(c), which applies a “reasonable-time requirement” to a void judgment challenge, is the ruling statute.

“The argument that a party may allege voidness at any time, if taken to its logical conclusion, would have extreme implications,” Justice Samuel Alito wrote in the opinion.

“And in the context of a default judgment, it might be reasonable for a defendant not to seek relief before learning about a plaintiff’s attempted enforcement,” he added.

A Tennessee bankruptcy court and federal district court previously denied Coney Island Auto Parts Unlimited Inc.'s effort to overturn a default judgment against it.

Coney Island Auto argued in October 2021 that the default judgment should be voided because the related complaint wasn’t properly served in February 2015 by the bankruptcy trustee for Nashville-based Vista-Pro Automotive LLC.

Coney Island Auto argued that Federal Rule 60(b), which says a void judgment can be vacated and doesn’t apply a timeframe, should’ve been the controlling statute.

But the high court held that relief sought under Federal Rule 60(b) has to comply with Rule 60(c), meaning a motion must be filed within a reasonable time.

The justices were concerned during November oral arguments about whether the merits of the underlying judgment would collapse if they decided there’s an unlimited time to bring a challenge.

Alito noted during arguments that if a judgment is void, “it’s as if it never existed,” under the high court’s June decision in Hewitt v. United States.

There is “no historical consensus” that a party can request relief from void judgments at any time even though some courts have “concluded that laches or other time limits could bar relief, even when a litigant alleged voidness,” he wrote in Tuesday’s opinion.

Though the justices backed the time limit, they didn’t decide whether the company’s timing was reasonable because it didn’t contend that it complied with the requirement.

The high court treated “reasonableness” as a statute of limitations, “but one that is highly factual and will lead to litigation,” former Nevada bankruptcy judge Bruce Markell, now a Northwestern Pritzker School of Law professor said in an email.

The complaint was mailed to Coney Island Auto in 2015, but it didn’t include a corporate officer’s name, and the company never responded. The bankruptcy trustee sought to collect from Coney Island Auto in 2016 after the default judgment was awarded.

The trustee sent a letter to the Coney Island Auto’s CEO, but still didn’t get a response until 2021, when the company’s bank was served with a subpoena and placed a hold on $97,000 in the company’s account.

Whether the judgment against Coney Island Auto is actually void is unknown, Justice Ketanji Brown Jackson said during oral arguments.

The Supreme Court’s decision “will disproportionately affect bankruptcy,” Markell said. Unlike bankruptcy law, which permits service of notice nationwide and to corporations through the mail, the federal rules don’t allow either option, he noted.

“There will be more instances like Coney Island where there may be doubt as to whether service by mail was effectuated properly,” Markell said.

The “proper” address for service is often in doubt, as is whether the mailing was sent to “an officer, [or] a managing or general agent,” he added.

Attorneys for Coney Island Auto and the Vista-Pro Automotive trustee didn’t immediately respond to a request for comment. Justice Sonia Sotomayor issued a concurring opinion.

Ginzburg Law Firm PC represents Coney Island Auto. Williams & Connolly LLP represents the trustee.

The case is Coney Island Auto Parts Unlimited Inc. v. Burton, U.S., No. 24-808, 1/20/26.