Court Opinion

ID: 1019877
Source: CourtListenerOpinion
Date Created: 2013-07-04 22:42:28.983964+00
Date Added: 2024-06-11T11:31:49.582542
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 05-1336

FIRST PENN-PACIFIC LIFE INSURANCE COMPANY,

                                              Plaintiff - Appellant,

           versus

WILLIAM R. EVANS, Chartered; MARYLAND FIRST
FINANCIAL SERVICES CORPORATION,

                                             Defendants - Appellees.

Appeal from the United States District Court for the District of
Maryland, at Baltimore. Andre M. Davis, District Judge. (CA-01-
680-AMD)

Argued:   May 23, 2006                       Decided:   July 14, 2006

Before WILKINSON and NIEMEYER, Circuit Judges, and Henry F. FLOYD,
United States District Judge for the District of South Carolina,
sitting by designation.

Vacated and remanded with instructions by unpublished per curiam
opinion.

ARGUED: Hugh Michael Bernstein, FUNK & BOLTON, P.A., Baltimore,
Maryland, for Appellant. David G. Sommer, GALLAGHER, EVELIUS &
JONES, L.L.P., Baltimore, Maryland, for Appellees. ON BRIEF: Bryan
D. Bolton, FUNK & BOLTON, P.A., Baltimore, Maryland, for Appellant.
Paul S. Caiola, GALLAGHER, EVELIUS & JONES, L.L.P., Baltimore,
Maryland,   for   Appellee   Maryland  First   Financial   Services
Corporation.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).

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PER CURIAM:

       On March 6, 2001, plaintiff First Penn-Pacific Life Insurance

Company filed suit in federal court against William R. Evans,

Chartered, seeking rescission of a life insurance policy that it

had issued to Stanley Moore.        First Penn-Pacific alleged that the

Moore policy was void due to fraudulent misrepresentations and lack

of an insurable interest.       Moore had assigned the policy to Evans,

who served as an escrow agent for Answer Care, Inc., a viatical

settlement company.        In a viatical settlement, investors purchase

interests in the life insurance policy of a terminally ill insured.

The insured sells the policy at less than face value, and the

investors recognize a return when the insured dies.

       Prior to the initiation of the above action, the Maryland

Securities Commissioner had separately filed suit against Answer

Care in Maryland state court, alleging that Answer Care’s viatical

settlements were fraudulent and violated Maryland securities laws.

The Circuit Court for Baltimore City froze Answer Care’s assets,

and,    inter   alia,   appointed   Maryland     First    Financial   Services

Corporation to serve as receiver for Answer Care.

       Maryland    First   Financial   claimed    that,    as   Answer   Care’s

receiver, it had an interest in the Moore policy, and on June 19,

2001, the district court granted Maryland First Financial’s request

to     intervene   in   First   Penn-Pacific’s     2001    rescission    suit.

Subsequently, it granted the receiver’s motion to dismiss First

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Penn-Pacific’s    suit      without       prejudice   on     grounds   of

Burford abstention, finding that federal court resolution of First

Penn-Pacific’s claim would interfere with the ongoing Answer Care

receivership proceedings in Maryland state court.          See Burford v.

Sun Oil Co., 319 U.S. 315 (1943).          On appeal, we held that the

district court did not abuse its discretion in abstaining under

Burford.   See First Penn-Pacific Life Ins. Co. v. Evans, 304 F.3d

345, 346 (4th Cir. 2002).    Like the court below, we recognized that

the parties disagreed as to whether the Moore policy was in fact an

asset of the receivership estate, and that this was the subject of

some dispute in the state receivership proceedings.           Id. at 350.

We explained, however, that “[r]egardless of the resolution of this

issue on appeal, it shows that the present situation is rife with

the potential for conflict.”     Id.

     First Penn-Pacific meanwhile on June 5, 2002 refiled its

rescission claim in a special claims process set up within the

Answer Care state receivership proceedings.           On July 21, 2003,

however, the Court of Special Appeals of Maryland held that the

receivership estate lacked an ownership interest in various life

insurance policies, including the Moore policy.            See Goodman v.

Lubin, No. 2067, slip op. at 2 (Md. Ct. Spec. App. July 21, 2003).

As a result, the state receivership court dismissed First Penn-

Pacific’s suit without prejudice.

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     First Penn-Pacific thereafter on February 7, 2005 filed two

motions in federal court under Federal Rule of Civil Procedure

60(b), seeking to reopen its 2001 federal lawsuit and requesting

reconsideration of the district court’s order allowing the receiver

to intervene in that suit.     Several days later, First Penn-Pacific

also filed a new action against Evans in federal court, which once

again sought rescission of the Moore policy.          This 2005 suit was

based on the same factual allegations as the original 2001 suit.

The district court subsequently denied First Penn-Pacific’s Rule

60(b) motions, finding that the new 2005 suit mooted any need to

reopen the older proceedings.       It further stated in a subsequent

order that “there is no reason to suppose any prejudice will inure

to [First Penn-Pacific] from a refusal to ‘reconsider’ a final

judgment long-since affirmed on appeal.”

     First Penn-Pacific now appeals the district court’s denial of

its Rule 60(b) motions, contending that relief is appropriate under

both Rules 60(b)(5) and (b)(6).      It argues that while it has filed

a new lawsuit against Evans, a reopening of the first suit is

warranted   because   the   2005   suit   may   potentially   suffer   from

timeliness problems.

     Under the circumstances, we find that the proper course is to

vacate the district court’s denial of First Penn-Pacific’s Rule

60(b) motions, with instructions to hold those motions in abeyance

pending a determination on the viability of the new 2005 suit.         The

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potential timeliness issues affecting the 2005 suit are not before

us, and have neither been briefed nor argued here.                   If these

defenses to the 2005 suit fail and that suit is allowed to go

forward, reopening of the 2001 suit becomes a moot issue.            It would

thus be premature to address a potentially difficult Rule 60(b)

question at this time.

     On remand, then, the district court must first determine

whether the 2005 suit may proceed.           If it resolves this question

against First Penn-Pacific, it should then revisit First Penn-

Pacific’s Rule 60(b) motions pertaining to the original 2001 suit.

Should   an   appeal   become   necessary,    these   issues   may   be   best

considered in tandem rather than in piecemeal fashion.

     The judgment of the district court is therefore

                                VACATED AND REMANDED WITH INSTRUCTIONS.

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