Albena Petrakov

The Supreme Court has opened the new year with a decision that should convince every company that ignoring a payment demand is a mistake. In Coney Island Auto Parts Unlimited, Inc. v. Burton, the Court resolved a long‑standing circuit split and held that motions to set aside a judgment as void under Rule 60(b)(4) must still be filed within a “reasonable time” under Rule 60(c)(1).

Vista-Pro Automotive, LLC entered bankruptcy in 2014. As part of its bankruptcy, Vista-Pro initiated ad­versary proceedings against Coney Island Auto Parts Un­limited, Inc., to collect $50,000 in allegedly unpaid invoices. Vista-Pro attempted to serve process on Coney Island by mail, but in doing so, it did not allegedly comply with the mail-service requirements in Federal Rule of Bank­ruptcy Procedure 7004(b)(3). Coney Island never answered the complaint, and the Bankruptcy Court entered a default judgment against Coney Island in 2015. The Vista-Pro bankruptcy trustee attempted to enforce the judgment over the next six years. The trustee sent a demand to Coney Island’s CEO in April 2016, which the Court treated as sufficient notice of the judgment and the trustee’s enforcement efforts. In 2021, a marshal seized funds from Coney Island’s bank account in satisfaction of the judgment. Only then did Coney Island file a motion to vacate the judgment as void for improper service. The Bankruptcy Court and the Sixth Circuit denied the motion. The Supreme Court has now affirmed.

Federal Rule of Civil Procedure 60 permits a court to “re­lieve a party . . . from a final judgment, order, or proceed­ing,” and subdivision (b)(4) specifically authorizes a court to Federal Rule of Civil Procedure 60 permits a court to “re­lieve a party . . . from a final judgment, order, or proceed­ing,” and subdivision (b)(4) specifically authorizes a court to have granted relief from void judgments long after their entry, especially when the issuing court lacked jurisdiction over the defendant. See, e.g., Harris v. Harde­man, 14 How. 334, 338, 344–346 (1853) (affirming a lower court order that set aside a judgment 11 years after its is­suance where the plaintiff did not make proper service and the defendant did not appear). The Court’s core reasoning is straightforward. A Rule 60(b)(4) motion is a Rule 60(b) motion. Rule 60(c)(1) says all Rule 60(b) motions must be filed “within a reasonable time.”

The Court rejected the position endorsed in several circuits for decades — that a “void” judgment is a “legal nullity” and can be attacked at any time. The Court emphasized that many legal errors cannot be cured by time, yet procedural rules still impose deadlines to prevent perpetual uncertainty. And importantly, the Court noted that a flexible “reasonable time” standard already protects defendants who truly had no notice, because what is “reasonable” depends on when the party first learned of the judgment.

Why This Matters

Litigation, especially bankruptcy litigation, is full of default judgments, service disputes, and defendants who surface years later claiming they never knew about the case. This decision will put defendants on the clock the moment they have actual or constructive notice, thus reducing strategic silence.

Practical Takeaways for Defendants

• Treat every demand letter as a priority item. Ignoring it may cost you your only avenue to relief.
• Act immediately when you learn of a judgment — any judgment.
• Preserve records showing when you first learned of the judgment. That date determines whether your motion is timely.

Litigants must treat demand letters not as administrative annoyances but as legal events that define rights, deadlines, and consequences. Procedural precision matters, and courts increasingly expect it from everyone. Default judgments remain serious, but defendants still have a path to relief if they move promptly.