Court Opinion

ID: 45985
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:49:46+00
Date Added: 2024-06-11T17:17:32.428837
License: Public Domain

United States Court of Appeals
                                                                  Fifth Circuit
                                                               F I L E D
                 IN THE UNITED STATES COURT OF APPEALS
                                                               October 9, 2006
                         FOR THE FIFTH CIRCUIT
                         _____________________             Charles R. Fulbruge III
                                                                   Clerk
                              No. 04-11426
                         _____________________

HAJI GUL KHAN,

                                     Plaintiff - Counter Defendant -
                                         Appellant - Cross Appellee,

                                versus

SALAH HAKIM; ZIAUDDIN HAKIM; MYLES H.
PENNINGTON; SWAN DEVELOPMENT COMPANY LLC,

                                   Defendants - Counter Claimants -
                                Third Party Plaintiffs - Appellees -
                                                   Cross Appellants,

MUNIR HOMES INC.,

                                   Third Party Plaintiff - Appellee,

                                versus

DRUMSTICK LLC, a Texas Limited Liability
Company; ET AL.,

                                          Third Party Defendants.
_________________________________________________________________

           Appeal from the United States District Court
                 for the Western District of Texas
                      USDC No. 3:03-CV-2771-K
_________________________________________________________________

Before JOLLY, DAVIS, and BENAVIDES, Circuit Judges.

PER CURIAM:1

     1
       Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
     Plaintiff-Appellant Haji Gul Khan (“Khan”) appeals from the

district     court’s   denial       of   his   motion   to    reconsider   summary

judgment and compel arbitration in favor of Defendants-Appellees,

Salah   Hakim,      Ziauddin    Hakim,     Myles   H.   Pennington,      and   Swan

Development Company L.L.C (“Defendants”).                Khan also appeals the

district court’s order granting Defendants’ Rule 60 motion to amend

the judgment.        For the reasons assigned, the decision of the

district court is AFFIRMED in part and VACATED in part, and the

case is REMANDED.

                                           I

     This lawsuit arises out of a dispute over the ownership of a

piece of commercial real estate in Alvarado, Texas.                     In October

2002, Khan sued the Defendants in Texas state court, alleging

constructive fraud and civil conspiracy.                  In January 2003, the

Defendants filed a counterclaim in the state court lawsuit against

Khan and a third-party claim against Alvarado Market Station, LLC

and Drumstick LLC. In September 2003, Khan filed for bankruptcy on

behalf of Alvarado Market and Drumstick.                     The Defendants then

invoked 28 U.S.C. § 1452 to remove the case to federal district

court   on    the    basis     of   its    relationship      to   the   bankruptcy

proceeding.

     Once in district court, the Defendants moved for summary

judgment.     Khan filed his response and summary judgment evidence,

consisting of sworn affidavits, and on January 20, 2004, the

                                           2
Defendants filed their reply.        On Friday, August 13, 2004, before

the district court issued its Opinion and Judgment,             Khan and the

Defendants    agreed    to   arbitrate    their   claims    under   a   binding

agreement.      Three    days   later,    on   Monday,     August   16,   2004,

approximately seven months after the motion had been fully briefed

and before the court had been advised of the arbitration agreement,

the district court granted the Defendants’ motion for summary

judgment.     On August 24, 2004, Khan moved for reconsideration or

for a new trial and simultaneously moved the court to compel

arbitration under the new agreement.           Those orders were denied and

Khan timely filed his notice of appeal.           On November 9, 2004, the

Defendants filed a Rule 60 motion to amend the judgment and this

motion was granted.          Khan filed an amended notice of appeal,

challenging all these orders and Defendants filed a cross-appeal.

                                     II

     Khan appeals from the district court’s denial of his Rule

59(e) motion to reconsider the granting of summary judgment to the

Defendants.    Khan also appeals from the district court’s denial of

his motion to compel arbitration.           Because the motion to compel

arbitration was filed within 10 days after the entry of the

judgment and requests an alteration of the judgment, it is also

considered a Rule 59(e) motion regardless of its label. See Harcon

Barge Co., Inc. v. D & G Boat Rentals, Inc., 784 F.2d 665, 667 (5th

Cir. 1986) (en banc).           The denial of a Rule 59(e) motion is

                                      3
generally reviewed for abuse of discretion. Fletcher v. Apfel, 210
F.3d 510, 512 (5th Cir. 2000).        If the moving party “appeals from

the denial of a Rule 59(e) motion that is solely a motion to

reconsider    a    judgment   on    the        merits,   de   novo     review   is

appropriate.”     Piazza’s Seafood World, LLC v. Odom, 448 F.3d 744,

749 (2006) (citing Apfel, 210 F.3d at 512).

                                       A

     Khan relied almost exclusively on two self-composed affidavits

as evidence to defeat the Defendants’ summary judgment motion, both

of which the district court declined to consider, invoking the

doctrine of judicial estoppel.            Khan does not assert that he can

meet his evidentiary burden for summary judgment without the

affidavits.       In essence, therefore, Khan’s Rule 59(e) motion

challenges the district court’s evidentiary ruling, and therefore

its denial is reviewed for abuse of discretion.

     The doctrine of judicial estoppel “protect[s] the integrity of

the judicial process by prohibiting parties from deliberately

changing positions according to the exigencies of the moment.” New

Hampshire    v.   Maine,   532 U.S. 742,   749-50   (2001)    (internal

quotations marks and citations omitted). See also United States v.

McCaskey, 9 F.3d 368, 379 (5th Cir. 1993).                    Judicial estoppel

prevents a party from "playing fast and loose" with the courts,

Hall v. GE Plastic Pacific PTE Ltd., 327 F.3d 391, 396 (5th Cir.

1996) (quotation omitted), and the decision to invoke it is within

                                          4
the discretion of the district court.   Ahrens v. Perot Sys. Corp.,

205 F.3d 831, 833 (5th Cir. 1999).   This court has found that the

application of judicial estoppel is warranted when (1) the party's

position is clearly inconsistent with his earlier position; and (2)

the party has convinced a court to adopt the position urged, either

preliminarily or as part of a final disposition.     In re Coastal

Plains, Inc., 179 F.3d 197, 206 (5th Cir. 1999).        In his two

affidavits, Khan presented answers to questions to which he had

invoked his Fifth Amendment privilege in a deposition in the

related bankruptcy case.   Applying this test, the district court

held that judicial estoppel was warranted to preclude consideration

of these affidavits.

     The court found Khan's invocation of his Fifth Amendment

privilege in the bankruptcy proceeding based on the belief that his

answers would subject him to criminal liability was inconsistent

with his willingness to provide answers to those same questions in

support of his civil claim.      The court also found that the

bankruptcy court had adopted that earlier position.      Given the

facts presented, the district court did not err, and consequently

did not abuse its discretion, by invoking the doctrine of judicial

estoppel here.

     Khan’s Rule 59(e) motion also requested that the district

court compel the parties to arbitration, attaching as supporting

evidence the newly signed agreement to arbitrate.   This court has

                                 5
held   that   “[i]f     the   party   seeking   reconsideration   attaches

additional materials to its motion that were not presented to the

trial court for consideration at the time the court initially

considered the motion for summary judgment, the court may consider

the new materials in its discretion.”           Ford Motor Credit Co. v.

Bright, 34 F.3d 322, 324 (5th Cir. 1994).        See also Apfel, 210 F.3d

at 512 (same).    “[I]f the district court refuses to consider the

materials, the district court applies the abuse of discretion

standard [under which] the district court’s decision ... need only

be reasonable.”       Bright, 34 F.3d at 324 (internal quotation marks

and citations omitted).        Because the district court declined to

consider the arbitration agreement presented for the first time

together with the Rule 59(e) motion, we review the denial of the

motion   to compel for abuse of discretion.       In this case, where the

summary judgment motion was fully briefed for seven months prior to

the court's ruling, the district court did not abuse its discretion

by refusing to vacate its final judgment and take up consideration

of a contested motion to compel arbitration.           Khan has cited no

persuasive authority that would require another outcome.

                                       B

       Khan also appeals the district court’s order amending the

judgment in response to the Defendants’ Rule 60 motion.                On

September 7, 2004, the Defendants filed a Rule 60 motion requesting

that the district court amend its judgment to show that Khan “does

                                       6
not own any legal or equitable interest” in the disputed property.

Khan had filed a Notice of Lis Pendens together with his original

petition   with   the   state   court   and   Defendants   requested   the

emendation to remove “the cloud over the title that the lis pendens

ha[d] created.”    The district court granted the order and entered

an Amended Final Judgment in favor of the Defendants.          While not

raised by either party, the district court lacked jurisdiction to

grant the Rule 60 motion to amend the order because it did so

subsequent to the filing of the notice of appeal.            It is well-

established that the filing of a notice of appeal divests the

district court of jurisdiction to grant a Rule 60(b) motion absent

leave from this court.     Shepherd v. Int’l Paper Co., 372 F.3d 326,

329 (5th Cir. 2004) (“Once the notice of appeal has been filed,

while the district court may consider or deny a Rule 60(b) motion

... it no longer has jurisdiction to grant such a motion while the

appeal is pending.”) (citing Winchester v. United States Atty. for

S.D. of Tex., 68 F.3d 947, 950 (5th Cir. 1995)) (emphasis in

original). In the instant case, Khan appealed the district court’s

grant of summary judgment on October 27, 2004 and the district

court granted the Rule 60 motion on November 9, 2004,2 after its

jurisdiction over the judgment had been divested. Accordingly, the

Amended Final Judgment is vacated and the case remanded.

     2
        On November 16, 2004, Khan filed an Amended Notice of
Appeal with this court challenging the district court’s order
granting the Defendants Rule 60 motion.

                                    7
                               III

     For the foregoing reasons, the judgment of the district court

is AFFIRMED, the Amended Final Judgment is VACATED, and the case is

REMANDED.

                                 8