Opinion ID: 797281
Heading Depth: 1
Heading Rank: 2

Heading: Plaintiffs' Post-Judgment Fed. R.Civ.P. 60(b) Motion

Text: 36 After the district court entered its Amended Judgment on August 31, 2004, plaintiffs moved to vacate the judgment and the district court's ruling on Dux's standing as a minority shareholder, subject to Plaintiffs' filing and service herein of a ratification, pursuant to Fed.R.Civ.P. 17(a), by Mr. George Chen of the commencement and maintenance of this civil action upon the claims of the minority shareholder, and amending the Amended Judgment entered herein on August 31, 2004 to reinstate the jury's verdict for Dux on those claims for relief. Notice of Mot. and Mot. by Pls. for Relief from Judgment at 1. The district court denied this motion. Plaintiffs appealed. Defendants moved to dismiss the appeal for lack of jurisdiction. Plaintiffs opposed the motion and moved for limited remand to the district court to rule on the merits of their Fed.R.Civ.P. 60(b) motion. The Appellate Commissioner denied both motions on January 5, 2005. 37 J. Dux's Adversary Proceeding Against George Chen 38 After Dux filed its appeal to this court seeking review of the district court's denial of its request to entertain Dux's Rule 60(b) motion, Dux sought George Chen's ratification of the Minority Shareholder claim under Fed.R.Civ.P. 17(a). Dux sought ratification as a way around the district court's standing ruling: if it did not have standing, it would obtain the claim from the person who did. On July 25, 2003, however, Chen had filed his own bankruptcy petition, which was converted into a Chapter 11 proceeding on August 8, 2003. The Trustee, E. Lynn Schoenmann, was appointed on August 28, 2003. Dux commenced an Adversary Proceeding in bankruptcy court on November 2, 2004. In its amended complaint filed on November 17, 2004, Dux argued that it had been deprived of the mutually intended benefit of its bargain gained from entering into the Chen-Dux settlement because the 200,000 shares transferred therein had become worthless as a result of the bankruptcy. Dux sought specific performance of Paragraph 12.2 of the Settlement Agreement, which provided that the parties were to take all actions as may be reasonably required to effectuate this Agreement, and it argued that Chen was obligated to ratify its direct action against the Yageo defendants. 39 Chen moved to dismiss on the ground that he had no authority to ratify because a Trustee had already been appointed to his bankruptcy estate. The Trustee moved for summary judgment on the ground that the Settlement Agreement created no obligation to ratify the suit or otherwise transfer Chen's claims against the Yageo defendants to Dux. Dux moved for partial summary judgment on liability for breach of the agreement and requested declaratory relief and specific performance. 40 The bankruptcy court granted Chen's and the Trustee's motions and denied Dux's motion. Dux appealed to the district court. The district court held that Fed.R.Civ.P. 17(a) is not a substantive rule creating any right to ratification and the settlement agreement does not otherwise obligate the Trustee to transfer the Minority Shareholder claim to Dux. The district court also clarified that even if Dux obtained judgment against the Trustee, Chen could not be personally bound to that judgment because the claim was an asset of the estate that was no longer owned or controlled by Chen.