Court Opinion

ID: 2643421
Source: CourtListenerOpinion
Date Created: 2013-11-21 17:54:23.039831+00
Date Added: 2024-06-11T12:51:55.031249
License: Public Domain

NOT PRECEDENTIAL

                  UNITED STATES COURT OF APPEALS
                       FOR THE THIRD CIRCUIT
                            _____________

                                 No. 12-4143
                                _____________

                   44A TRUMP INTERNATIONAL, INC.,
                                              Appellant

                                       v.

                             JESSE E. RUSSELL
                               _____________

                On Appeal from the United States District Court
                          for the District of New Jersey
                        District Court No. 2-07-cv-03425
               District Judge: The Honorable Susan D. Wigenton

               Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                             November 20, 2013

                   Before: AMBRO, SMITH, Circuit Judges
                   and O’CONNOR, ∗Associate Justice (Ret.)

                          (Filed: November 21, 2013)

                           _____________________

                                  OPINION
                           _____________________

∗
 The Honorable Sandra Day O’Connor, Associate Justice (Ret.) of the Supreme
Court of the United States, sitting by designation.
SMITH, Circuit Judge.

      44A Trump International, Inc. (“Trump International”), appeals from the

District Court’s order denying its motion to reopen this action pursuant to Federal

Rule of Civil Procedure 60(b). We will affirm.

                                          I.

      On or about August 9, 2001, Trump International loaned $560,000 to Jesse

E. Russell (“Russell”). On July 24, 2007, Trump International filed this action

against Russell alleging that he defaulted on the loan.

      After the complaint was filed, the parties negotiated a settlement agreement.

The settlement agreement consisted of three documents executed between Trump

International and IncNetworks, a company owned in whole or in part by Russell.

The first document was a Promissory Note, which provided that IncNetworks was

to repay the full amount of the loan in thirty consecutive monthly payments of

$20,000 at an annual interest rate of six percent. The second document was a

Pledge Agreement, wherein IncNetworks agreed to purchase 560,000 shares of its

own stock from Trump International as insurance against repayment of the Note.

Finally, the parties executed an Escrow Agreement that provided for an escrow

agent, Eric Magnelli (“Magnelli”), to hold the stock, “other collateral,” and the

agreements in escrow. Russell was not named in any of these documents.

      On February 4, 2009, after being informed by the parties that settlement was

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imminent, the District Court dismissed this action without prejudice “subject to the

right of the parties[,] upon good cause shown within 60 days, to reopen the action

if the settlement is not consummated.” On October 28, 2009, after two sixty-day

extensions, Trump International’s counsel informed the Court that the settlement

had been finalized by counsel and would soon be executed by the parties.

      Shortly after the settlement agreement was finalized, IncNetworks defaulted

on the Promissory Note. On April 17, 2012, Trump International filed a second

lawsuit against IncNetworks and Magnelli, seeking to recover the balance of the

Promissory Note and the release of collateral held in escrow. See Complaint, 44A

Trump Int’l, Inc. v. IncNetworks, No. 2:12-cv-2292 (D.N.J. April 17, 2012), ECF

No. 1. Trump International then filed a motion under Federal Rule of Civil

Procedure 60(b) to reopen this action against Russell and to consolidate it with the

recently filed lawsuit against IncNetworks. Trump International argued that “[t]he

First Action should be reopened and consolidated with the Second Action because

the failed settlement of the First Action gave rise to the claims in the Second

Action.”

      On October 4, 2012, the District Court issued an order denying Trump

International’s motion to reopen the case. It concluded this was not one of the

extraordinary circumstances in which a party is entitled to relief under Rule 60(b).

The Court stated that Trump International “voluntarily entered into a settlement

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agreement” that resolved its claims against Russell. And although Russell was not

named in the settlement documents, the Court found that “if [Trump International]

wanted to ensure that [it] could pursue Russell for the remaining debt in the event

of IncNetworks’ default, [it] should have contracted for such terms.” Ultimately

the Court determined that Trump International’s only recourse was to enforce the

settlement agreement in the second lawsuit against IncNetworks, not to reopen its

action against Russell. Trump International timely appealed.

                                           II.

      The District Court had subject matter jurisdiction under 28 U.S.C. § 1332.

We have jurisdiction under 28 U.S.C. § 1291.

      We review a district court’s decision to deny relief under Rule 60(b) for

abuse of discretion. Budget Blinds, Inc. v. White, 536 F.3d 244, 251 (3d Cir. 2008).

                                          III.

      Trump International contends this case should be reinstated pursuant to Rule

60(b)(6), which provides: “On motion and just terms, the court may relieve a party

or its legal representative from a final judgment, order, or proceeding for . . . (6)

any other reason that justifies relief.” Fed. R. Civ. P. 60(b)(6).

      This Court has consistently held that Rule 60(b)(6)’s catchall provision

“‘provides for extraordinary relief and may only be invoked upon a showing of

exceptional circumstances.’” Coltec Indus., Inc. v. Hobgood, 280 F.3d 262, 273

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(3d Cir. 2002) (quoting In re Fine Paper Antitrust Litig., 840 F.2d 188 (3d Cir.

1988)). Such extraordinary circumstances generally exist only where the movant

can demonstrate that “an ‘extreme’ and ‘unexpected’ hardship will result.” Budget

Blinds, 536 F.3d at 255 (quoting Mayberry v. Maroney, 558 F.2d 1159, 1163 (3d

Cir. 1977)). Importantly, however, “extraordinary circumstances rarely exist when

a party seeks relief from a judgment that resulted from the party’s deliberate

choices.” Budget Blinds, 536 F.3d at 255; see also Coltec, 280 F.3d at 274

(“[C]ourts have not looked favorably on the entreaties of parties trying to escape

the consequences of their own ‘counseled and knowledgeable’ decisions.”).

      We hold that the District Court did not abuse its discretion in denying Trump

International’s motion to reopen this case. As the District Court explained, Trump

International deliberately and voluntarily entered into the settlement agreement that

resulted in the dismissal of this action. Trump International was, or should have

been, aware that the terms of that agreement did not provide for recourse directly

against Russell in the event of IncNetworks’ default. We agree with the District

Court that there is no basis for reopening this action under Rule 60(b)(6).

Therefore, we will affirm its judgment.

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