Court Opinion

ID: 9842224
Source: CourtListenerOpinion
Date Created: 2023-09-22 21:00:25.886426+00
Date Added: 2024-06-11T09:15:00.137902
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 23-1229

                     U-NEST HOLDINGS, INC.,

                      Plaintiff, Appellant,

                               v.

      ASCENSUS COLLEGE SAVINGS RECORDKEEPING SERVICES, LLC,

                      Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF RHODE ISLAND

          [Hon. William E. Smith, U.S. District Judge]

                             Before

                       Barron, Chief Judge,
                Lynch and Howard, Circuit Judges.

     Joseph A. Farside, Jr., with whom Alexandra G. Lancey and
Locke Lord LLP were on brief, for appellant.
     Marc DeSisto, with whom DeSisto Law LLC, Mitchell R. Edwards,
and Hinckley Allen & Snyder LLP were on brief, for appellee.

                       September 22, 2023
             LYNCH, Circuit Judge.   In a case filed in 2021 in the

United States District Court for the District of Rhode Island, U-

Nest Holdings, Inc., claimed that its suit was not foreclosed by

a judgment entered on February 4, 2020, in a 2019 federal court

action.   That judgment had embodied a prior state court settlement

agreement.    In the 2021 case, U-Nest asserted that it had been

fraudulently induced to enter into that settlement agreement by a

statement made in court by counsel for Ascensus College Savings

Recordkeeping Services, LLC.

             After a hearing in the 2021 case, the federal district

court determined that for the case to proceed, U-Nest would first

need to file a motion for relief from judgment in the 2019 action.

The court stayed the 2021 action pending resolution of the motion.

On May 16, 2022, U-Nest filed a motion seeking relief from judgment

in the 2019 action under Fed. R. Civ. P. 60(b)(6).

             Thereafter, the motion was heard by the judge who had

presided over the 2019 case, who took submissions, briefing, and

held arguments on the motion on November 9, 2022.    No party asked

for an evidentiary hearing.    At the conclusion of the November 9

hearing the court informed the parties it would take the matter

under advisement and later issue a written opinion.     On December

6, 2022, the court ruled that the motion more properly sounded

under Fed. R. Civ. P. 60(b)(3) than under Rule 60(b)(6) and ordered

additional briefing on the issue of whether concepts of equitable

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tolling could save a Rule 60(b)(3) motion brought over one year

after the entry of judgment.

     The court denied U-Nest's motion on February 9, 2023, in a

written order.   See U-Nest Holdings, Inc. v. Ascensus Coll. Sav.

Recordkeeping Servs., LLC ("U-Nest"), No. 19-659 WES, 2023 WL

1861401 (D.R.I. Feb. 9, 2023). In the interim between the November

9 argument and the February 9 written order U-Nest did not request

any form of evidentiary hearing.   The written order found that U-

Nest had not met its burden, as the party seeking relief under

Rule 60, to show either fraud or misrepresentation.

          The written opinion of the district court denying the

motion reasoned as follows:

          U-Nest has failed to sustain this burden as it
          has presented no evidence to support its claim
          of fraud.

          U-Nest’s filings on this matter present a
          simple scenario: during the preliminary
          injunction hearing, Ascensus’s attorney made
          a misrepresentation when he claimed that
          Ascensus was not developing [a mobile phone
          application to compete with U-Nest's app], the
          purpose of which was to trick U-Nest into
          entering a settlement agreement. To support
          its version of events, U-Nest filed a copy of
          the     preliminary     injunction     hearing
          transcript, a comparison of the U-Nest app and
          the Ascensus app, a transcript of the motion
          to dismiss hearing . . . , and the complaint
          . . . . The only support for their claim that
          the statement made during the preliminary
          injunction hearing was false is an argument,
          contained in the briefing, that such an app
          could not be developed in thirteen months (the
          time between the hearing and the release of

                               - 3 -
         the Ascensus app).     An attorney’s    claim,
         however, is not evidence, and it        cannot
         support the remedy requested. [FN 5]

              [FN 5] U-Nest suggests it can avoid its
              evidentiary obligations because Ascensus
              has never said it did not lie. However,
              U-Nest has presented no law that supports
              a conclusion that Ascensus’s decision to
              not directly disclaim the accusation
              removes U-Nest's burden to support its
              allegations.

         Further, U-Nest has had multiple opportunities
         to present the necessary evidence. During the
         hearing on the motion for relief from
         judgment, the [c]ourt inquired as to whether
         an evidentiary hearing was needed[.] U-Nest’s
         counsel responded that it was ready for such
         a hearing and "if your honor wants to have an
         evidentiary hearing . . . we would not object
         to that at all." At no point, however, did
         counsel affirmatively request such a hearing.
         In addition, the [c]ourt requested several
         sets of additional briefs, each presenting its
         own   opportunity   to   provide   evidentiary
         support. At each opportunity, U-Nest declined
         to present evidence.

         Thus, all the [c]ourt has to go on is the
         movant's bald assertions.        Without any
         evidence to support the allegations of fraud,
         the   [c]ourt   is   unable  to    grant  the
         extraordinary relief requested.

         . . .

         For the reasons contained herein, Plaintiff U-
         Nest’s Motion for Relief from Judgment is
         DENIED.

U-Nest, 2023 WL 1861401, at *3-4 (citations omitted and third

omission in original).   U-Nest timely appealed from this ruling.

         Our review for denial of a Rule 60 motion, whether under

                              - 4 -
Rule 60(b)(6) or Rule 60(b)(3), is for abuse of discretion.                See

Giroux v. Fannie Mae, 810 F.3d 103, 106 (1st Cir. 2016).               U-Nest

argues first that the district court erred by denying its motion

solely   on    the   basis   that   U-Nest   had   failed   to   request    an

evidentiary hearing.         The record refutes that contention by U-

Nest.    The district court denied U-Nest's motion not because it

had failed to request an evidentiary hearing, but rather because

U-Nest had not adequately substantiated its allegations of fraud.

See AngioDynamics, Inc. v. Biolitec AG, 780 F.3d 420, 425 (1st

Cir. 2015) (Rule 60(b) motion must do more than "cast doubt on the

soundness of the underlying judgment." (quoting Nansamba v. N.

Shore Med. Ctr., Inc., 727 F.3d 33, 37 (1st Cir. 2013)).

              U-Nest argues that it should be excused from its failure

to request an evidentiary hearing because U-Nest represents to us

that the district court, in essence, stated that it did not want

an   evidentiary     hearing.       But   the   record   contradicts    this

representation by U-Nest and shows the district court said no such

thing.   U-Nest does point to two statements in which the district

court questioned the need for an evidentiary hearing.            But neither

statement could reasonably be read to state that no such hearing

would be granted if requested.

              U-Nest next argues that the district court should have

sua sponte conducted an evidentiary hearing even in the absence of

a such a request by U-Nest.         We reject U-Nest's argument.       There

                                    - 5 -
is no such requirement and U-Nest has not cited any case law which

says that there is.      To the contrary, the burden is on the Rule 60

movant to demonstrate the existence of exceptional circumstances

justifying   relief    from   judgment.    See   Teamsters,    Chauffeurs,

Warehousemen & Helpers Union, Loc. No. 59 v. Superline Transp.

Co., 953 F.2d 17, 19-20 (1st Cir. 1992).         It therefore falls upon

the movant to request an evidentiary hearing and thereafter to

"convince the court of its desirability."            Gen. Contracting &

Trading Co., LLC v. Interpole, Inc., 899 F.2d 109, 115 (1st Cir.

1990); see Roger Edwards, LLC v. Fiddes & Son Ltd., 427 F.3d 129,

137 (1st Cir. 2005) ("[T]here is no requirement under Rule 60(b)

that    contested   allegations   automatically    get   an   evidentiary

hearing regardless of plausibility or import.").

            We see little point in adding to the district court's

sound reasoning.       See Cotto v. United States, 993 F.2d 274, 277

(1st Cir. 1993) (Under Rule 60, a district court need not credit

"bald    assertions,     unsubstantiated   conclusions,       periphrastic

circumlocutions, or hyperbolic rodomontade." (quoting Superline

Transp. Co., 953 F.2d at 18)).        The district court reviewed the

"evidence" U-Nest had filed and stated why it was inadequate.         The

district court amply supported its finding that U-Nest did not

support its claim of fraud and/or of misrepresentation.            And so

the motion fails, whether it is characterized as a Rule 60(b)(6)

or a Rule 60(b)(3) motion.     There is accordingly no need to address

                                  - 6 -
U-Nest's argument that the district court erred in reviewing its

motion under Rule 60(b)(3) rather than under Rule 60(b)(6).    The

district court's reasoning also disposes of the equitable tolling

argument which U-Nest advocates on appeal.   As the district court

did not err in its ruling, we reject U-Nest's appeal. The district

court's Rule 60 ruling is affirmed. Costs are awarded to Ascensus.1

     1 We express no views on the 2021 action or as to what
preclusive effect, if any, this ruling has on that action.

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