Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-3_15-cv-00932/USCOURTS-almd-3_15-cv-00932-1/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BA

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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

CENTRAL MISSISSIPPI CREDIT 

CORPORATION,

Appellant,

v.

PEGGY ANN VAUGHN,

Appellee.

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 CASE NO. 3:15-cv-00932-JAR

OPINION

Appellant Central Mississippi Credit Corporation (“CMCC” or “Appellant”) and 

Appellee Peggy Ann Vaughn (“Vaughn” or “Appellee”) jointly move the court to vacate its 

August 4, 2016, Memorandum Opinion and Order. Joint Mot. to Vacate Order & Final J., ECF 

No. 23 (“Joint Mot. to Vacate”).1 The court intends to grant the parties’ joint motion upon a 

return of jurisdiction to this court.

The court presumes familiarity with the facts of the case, as discussed in its prior 

decision. See Cent. Miss. Credit Corp. v. Vaughn, 555 B.R. 803, 809–11 (M.D. Ala. 2016). The 

court affirmed in part and remanded in part the U.S. Bankruptcy Court for the Middle District of 

Alabama (the “bankruptcy court”)’s decision, rejecting most of CMCC’s challenges but vacating 

and remanding the bankruptcy court’s actual award of punitive damages as excessive. Id. at 818, 

1 Although the parties make their motion pursuant to Federal Rule of Civil Procedure 60(b), that 

rule by its own terms applies to a “Final Judgment, Order, or Proceeding” and may not govern 

because the court’s prior decision, which ordered a remand and did not resolve all of the issues 

appealed to the district court, does not appear to be a final order. Thus, the court treats the 

motion as one brought under Federal Rule of Civil Procedure 54(b), which provides that “any 

order . . . that adjudicates fewer than all the claims . . . may be revised at any time before the 

entry of a judgment adjudicating all the claims . . . .”

 

Case 3:15-cv-00932-JAR Document 24 Filed 12/06/16 Page 1 of 4
820. On August 12, 2016, Vaughn filed a notice of appeal to the U.S. Court of Appeals for the 

Eleventh Circuit (“Eleventh Circuit”). Notice of Appeal 1, ECF No. 17. According to the 

parties, while the appeal was pending and at the behest of the Kinnard Mediation Center for the 

Eleventh Circuit, the parties participated in telephone mediation on November 1, 2016. Joint 

Mot. to Vacate ¶ 4. After continuing to engage in informal mediation over the following days, 

the parties “reached an agreement in principle to settle the matters on appeal . . . with the 

agreement contingent upon this [court’s] vacating its” August 4, 2016, Memorandum Opinion 

and Order. Id. ¶¶ 6–7. The parties, therefore, jointly filed the present motion on December 1, 

2016.

The Supreme Court in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 

18 (1994) was confronted with determining “the effect of a settlement on the normal practice of 

vacating lower courts’ decisions once an appeal has become moot” and thereby “laid out a 

balancing approach in the ‘equitable tradition of vacatur.’” Hartford Cas. Ins. Co. v. Crum & 

Forster Specialty Ins. Co., 828 F.3d 1331, 1334 (11th Cir. 2016) (quoting Bancorp, 513 U.S. at 

24–25). The Supreme Court held that “mootness by reason of settlement does not justify vacatur 

of a judgment under review” in part because in settling “the losing party has voluntarily forfeited 

[its] legal remedy by the ordinary processes of appeal or certiorari, thereby surrendering [its]

claim to the equitable remedy of vacatur.” Bancorp, 513 U.S. at 24, 29. Nevertheless, even 

where mootness is caused by settlement, vacatur may be appropriate in “exceptional 

circumstances.” Id. at 29 (“[E]xceptional circumstances do not include the mere fact that the 

settlement agreement provides for vacatur[.]”). In such situations, the Eleventh Circuit has 

explained that “courts determine the propriety of granting vacatur by weighing the benefits of 

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settlement to the parties and to the judicial system (and thus to the public as well) against the 

harm to the public in the form of lost precedent.” Hartford Cas. Ins., 828 F.3d at 1336. 

Although the present controversy will be mooted pursuant to a settlement, the equities 

favor vacating because exceptional circumstances exist. At the outset, the court recognizes that 

judicial precedents are “valuable to the legal community as a whole” and thereby benefit the 

public interest. Bancorp, 513 U.S. at 26 (quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. 

U.S. Philips Corp., 510 U.S. 27, 40 (1993) (Stevens, J., dissenting)). But, the situation is similar 

to that in Hartford Casualty Insurance, in which the Eleventh Circuit held that exceptional 

circumstances existed. First, even though Vaughn, the appealing party, has voluntarily agreed to 

a settlement, the parties “did not begin their negotiations leading to settlement unprompted.” See

828 F.3d at 1336. The parties were directed to participate in the initial telephone mediation by 

the Kinnard Mediation Center for the Eleventh Circuit. Joint Mot. to Vacate ¶¶ 4, 16. Second, 

the parties have made settlement conditioned on vacatur and, thus, according to Eleventh Circuit 

precedent, this “is not the case of an appellant ‘voluntarily forfeiting [its] legal remedy by the 

ordinary processes of appeal or certiorari.’” Hartford Cas. Ins., 828 F.3d at 1336 (quoting 

Bancorp, 513 U.S. at 25–26); see also Joint Mot. to Vacate ¶¶ 7, 19. Moreover, the public 

interest would be furthered by halting further proceedings, which would potentially involve three 

levels of the federal court system, thereby saving judicial resources. The benefit to judicial 

resources is even more apparent given that this case was identified by the Kinnard Mediation 

Center for the Eleventh Circuit as appropriate for mediation. See 11th Cir. R. 33-1(c)(1) (“[T]he 

Kinnard Mediation Center . . . may direct counsel and parties in an appeal to participate in 

mediation conducted by the court’s circuit mediators.”). Thus, whereas there may be some slight 

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harm to the public in vacating the court’s opinion, that harm does not outweigh the benefits to 

the parties in settling the litigation and to the public in preserving judicial resources. 

The attached judgment is effective upon dismissal of the appeal to the Eleventh Circuit

and return of jurisdiction to this court.

 /s/ Jane A. Restani 

Dated: December 6, 2016 Jane A. Restani

New York, New York Judge

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