Court Opinion

ID: 4329123
Source: CourtListenerOpinion
Date Created: 2018-11-08 18:00:22.920397+00
Date Added: 2024-06-11T14:47:09.945940
License: Public Domain

NOT PRECEDENTIAL

              UNITED STATES COURT OF APPEALS
                   FOR THE THIRD CIRCUIT
                      ________________

Nos. 17-1115, 17-1116, 17-1117, 17-1118, 17-1119, 17-1120 and 17-2891
                         ________________

                      DAVID SHAUN NEAL,
                               Appellant in 17-1115

                                 v.

                       ASTA FUNDING, INC.

                                 v.

                        ROBERT F. COYNE
                         ______________

                       DAVID SHAUN NEAL

                                 v.

                       ASTA FUNDING, INC.

                                 v.

                        ROBERT F. COYNE,
                                  Appellant in 17-1116
                         ______________

                       ASTA FUNDING, INC.

                                 v.

                    DAVID SHAUN NEAL;
                     ROBERT F. COYNE;
                 NEW WORLD SOLUTIONS, INC.

                           Robert F. Coyne,
                                 Appellant in 17-1117
                            ______________

                         ASTA FUNDING, INC.

                                   v.

                      DAVID SHAUN NEAL;
                       ROBERT F. COYNE;
                   NEW WORLD SOLUTIONS, INC.

                             David Shaun Neal,
                              Appellant in 17-1118 & 17-2891
                            ______________

                        DAVID SHAUN NEAL,
                                 Appellant in 17-1119

                                   v.

                         ASTA FUNDING, INC.
                           ______________

                          ROBERT F. COYNE,
                                    Appellant in 17-1120

                                   v.

                         ASTA FUNDING, INC.
                           ______________

                     On Appeal from the District Court
                       for the District of New Jersey
(D.N.J. Nos. 2-13-cv-06981, 2-14-cv-02495, 2-14-cv-03550 & 2-14-cv-03932)
                Honorable Kevin McNulty, U.S. District Judge
                            ________________

                Submitted Under Third Circuit LAR 34.1(a)
                           November 5, 2018

    Before: HARDIMAN, KRAUSE, and GREENBERG, Circuit Judges

                    (Opinion filed: November 8, 2018)

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                                   ________________

                                       OPINION*
                                   ________________

KRAUSE, Circuit Judge.

       This appeal arises from a dispute over the validity of an arbitration award in favor

of Appellee ASTA Funding Inc. (ASTA) based on several fraud-related claims against

Appellants David Shaun Neal and Robert F. Coyne. Appellants challenge the District

Court’s grant of summary judgment in favor of ASTA and its denial of their Rule 60(b)

motion. We will affirm the District Court’s orders.

I.     Background

       A.     The Parties and Their Dispute

       ASTA hired Neal for an IT service position as an independent contractor through

an entity run by Coyne, and did additional business with other entities controlled by Neal

and Coyne. Among these entities were New World Solutions, Inc. (NWS), which entered

into an IT services agreement (ITS Agreement) with ASTA, and Sun Interactive Services,

Inc. (SIS), which Coyne controlled and which ASTA retained on Neal’s recommendation

to provide computer-network monitoring services. ASTA contends that during the course

of its relationship with these entities, Neal and Coyne committed fraud and other

misconduct.

       B.     Arbitration and District Court Proceedings

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

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       After ASTA filed an arbitration action against NWS, Neal, and Coyne pursuant to

an arbitration clause in the ITS Agreement, asserting fraud, breach of contract, and other

claims, Neal and Coyne objected that the claims against them were not arbitrable because

neither of them signed the ITS Agreement and that the question of arbitrability, in any

event, must be resolved by a court, not by the arbitrator. The arbitrator disagreed,

concluding that the issue was his to decide and that both Neal and Coyne were personally

bound by the ITS agreement under a veil-piercing/alter-ego theory, among others.

       The arbitrator ultimately issued a liability award of over $3 million against Neal

and Coyne, which they sought to vacate, and which ASTA sought to confirm. The

parties filed cross-motions for summary judgment. The District Court found that the

claims against Neal and Coyne were arbitrable and granted summary judgment to ASTA.

It also denied Appellants’ subsequent motions for reconsideration and for relief from

judgment under Rule 60(b).

II.    Discussion1

       Appellants challenge the District Court’s grant of summary judgment, denial of

reconsideration, and denial of relief under Rule 60(b), raising three arguments. None is

persuasive.

1
  The District Court had jurisdiction under 28 U.S.C. § 1332(a). This Court has
jurisdiction pursuant to 28 U.S.C. § 1291 and 9 U.S.C. § 16(a)(1)(D). We review de
novo the District Court’s order granting summary judgment. See, e.g., Chesapeake
Appalachia, LLC v. Scout Petroleum, LLC, 809 F.3d 746, 753 (3d Cir. 2016). We review
the District Court’s order denying Appellants’ Rule 60(b) motion for abuse of discretion.
See, e.g., Norris v. Brooks, 794 F.3d 401, 403 n.1 (3d Cir. 2015).
                                             4
       First, Appellants contend that the District Court erred by applying federal law,

instead of New Jersey law, in finding that it was proper for the arbitrator to decide

whether Neal and Coyne were individually bound by the ITS Agreement—that is,

whether the claims against them were arbitrable. Under New Jersey law, according to

Appellants, “an arbitrator can never find his own jurisdiction.” Appellants’ Br. 14. The

problem with Appellants’ contention is that the District Court permitted the parties to

take discovery and made its own independent determination that the claims against Neal

and Coyne were arbitrable.2 Thus, even assuming arguendo that the parties did not

delegate the question of arbitrability to the arbitrator, such that the court was required to

“decide that question just as it would decide any other question that the parties did not

submit to arbitration, namely, independently,” First Options of Chi., Inc. v. Kaplan, 514

U.S. 938, 943 (1995), here, the District Court did just that. In short, there is no further

remedy to which Appellants would be entitled.3

       Second, Appellants contend that three types of damages awarded against them

were not authorized by the ITS Agreement: (1) what Appellants call “indirect” damages,

referring to damages arising from claims concerning fraud related to transactions with the

2
  Like the arbitrator, the District Court based its conclusion that the ITS Agreement was
binding on Neal and Coyne—rendering the merits of their dispute arbitrable—on several
independent theories, including a veil-piercing/alter-ego theory.
3
  Notably, Appellants do not challenge any of the bases upon which the District Court
determined that the dispute was arbitrable, such as the District Court’s finding that they
were bound to the ITS Agreement under a veil-piercing/alter-ego theory. While they
remark that the District Court erroneously “relied on Encap Golf heavily to determine
that Rule 8 of the AAA rules can be used to compel nonparties to arbitrate,” Appellants’
Br. 19, the District Court did not in fact rely on that case for that proposition, and
Appellants take no issue with the myriad other bases for the District Court’s
determination that the dispute was arbitrable.
                                              5
SIS entity; (2) punitive damages; and (3) attorney’s fees. Though Appellants fault the

District Court for “ignor[ing]” their arguments on these issues, Appellants’ Br. 21,

Appellants did not raise the same arguments below. As to damages arising from SIS

fraud claims, Appellants only raised arguments that are, at most, tangentially related to

the arguments they now raise on appeal, and they offer no rebuttal to ASTA’s contention

that these are new arguments. As to punitive damages and attorney’s fees, Appellants fail

to cite any place in the record where they raised these particular issues, arguing instead

that they preserved them by challenging the arbitration award generally. That is simply

not the law, and these arguments are therefore waived. See In re Ins. Brokerage Antitrust

Litig., 579 F.3d 241, 261–62 (3d Cir. 2009).

       Finally, Appellants posit that the District Court erred by denying their Rule 60(b)

motion. At the outset, the relief sought by Appellants’ Rule 60(b) motion is not entirely

clear. The motion purports to seek relief from the District Court’s own order granting

summary judgment. See Memorandum of Law in Support of Respondent’s Motion

Pursuant to FRCP 60(B), Case No. 2:14-cv-02495, ECF No. 64-1, at 1 (May 1, 2017).

Yet the substance of the motion concerns allegations that the arbitration award—not the

District Court’s judgment—was procured through fraud. Regardless of what relief the

motion sought, we see no basis to conclude that the District Court erred by denying it, as

the motion merely makes unsubstantiated accusations that ASTA lied at various points

during the arbitration and does not present the “extraordinary justifying circumstances”

that could warrant relief under Rule 60(b). Bohus v. Beloff, 950 F.2d 919, 930 (3d Cir.

1991) (citation omitted). And while Appellants’ brief takes issue with several of the

                                               6
District Court’s particular criticisms of their motion, it ultimately fails to offer any

specific explanation as to how the District Court abused its discretion or to address the

District Court’s central reasons for denying their motion.

III.   Conclusion

       For the foregoing reasons, we will affirm the District Court’s grant of summary

judgment, denial of reconsideration, and denial of Appellants’ Rule 60(b) motion.

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