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denying defendant's motion under Rule 60(b) because it was filed outside the mandatory one year-time limit
Summary of this case from Provident Life & Accident Ins. Co. v. ClarkeOpinion
Civil Action No. DKC 86-1611, Civil Action No. DKC 88-65.
February 26, 2001
MEMORANDUM OPINION
Presently pending and ready for resolution is Montgomery County Fire-Rescue Association, Inc.'s ("Association") Motion for Relief from Judgment pursuant to Rule 60(b) brought on behalf of fifteen private volunteer fire corporations ("private fire corporations") located in Montgomery County, Maryland. Association seeks relief from a judgment entered on March 29, 1996, approving a settlement agreement involving Plaintiffs, the private fire corporations, and Montgomery County. Paper No. 274. The issues are fully briefed, and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, this court shall DENY Association's Motion for Relief.
I. Background
In 1986 and 1988, Plaintiffs, approximately 270 firefighters, filed the above-captioned suits alleging that the fire and rescue corporations for which they worked failed to pay them overtime in direct violation of the Fair Labor Standards Act ("FLSA"). 29 U.S.C. § 201 et al. On cross-motions for summary judgment, the court found that the private fire corporations were indeed private employers and not public agencies as they had claimed. Conway, et. al v. Takoma Park Volunteer Fire Dept., Inc., 666 F. Supp. 786 (D.Md. 1987), appeal dismissed, 838 F.2d 465 (4th Cir. 1987). Thus, the private fire corporations did not qualify for the overtime exemption stating that public safety employees of public agencies may work over 40 hours a week without incurring overtime. 29 U.S.C. § 207(k).
The private fire corporations then joined Montgomery County as a third party defendant. After further litigation, all of the parties agreed to settle this action. Two settlement agreements were signed: 1) an agreement between Plaintiff and the private fire corporations and 2) an agreement between the private fire corporations and Montgomery County. On March 29, 1996, this court entered a Final Order and Judgment approving the settlement agreement between the private fire corporations and Montgomery County as "fair, reasonable, appropriate, and in accordance with law." Paper No. 274. This agreement, involving Montgomery County, incorporated by reference the agreement between Plaintiffs and the private fire corporations.
Association asserts that these settlement agreements had and continue to have the prospective effect of prohibiting firefighters from volunteering their time to the private fire corporations.
On August 8, 2000, Association, on behalf of fifteen private fire corporations, filed its Motion for Relief from Judgment. Association contends that in light of a decision by the United States Court of Appeals for the Fourth Circuit, Benshoff v. City of Virginia Beach, 180 F.3d 136 (4th Cir. 1999), the private fire corporations should be relieved from judgment because there was a mutual mistake of law at the time the settlement agreements were finalized and approved by the court: that firefighters employed by the County were prohibited from volunteering with private fire corporations without subjecting the County to overtime liability. Both Plaintiffs and Montgomery County have filed opposition memoranda requesting that this court deny relief. Papers No. 278 279.
II. Standard of Review
Fed.R.Civ.P. 60(b) invests federal courts with the power in certain restricted circumstances to "vacate judgments". Klapprott v. United States, 335 U.S. 601, 614-5 (1949). In fact, the remedy provided by Rule 60(b) is for extraordinary relief and is only to be invoked upon a showing of exceptional circumstances. Boyd v. Bulala, 905 F.2d 764, 769 (4th Cir. 1990). In pertinent part, Rule 60(b) states:
On motion, and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding, for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; . . . (5) the judgment has been satisfied, released, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken.
Fed.R.Civ.P. 60(b). In determining whether to exercise the power under Rule 60(b), the court must engage in a delicate balancing of the "sanctity of final judgments, expressed in the doctrine of res judicata, and the incessant command of the court's conscience that justice be done in light of ALL the facts." Compton v. Alton Steamship Co., 608 F.2d 96, 102 (4th Cir. 1979) (emphasis in original and quoting Banker's Mortgage Co. v. United States, 423 F.2d 73, 77 (5th Cir. 1970)).
Association has not specified the exact provisions of 60(b) under which it is seeking relief. Based on its arguments asserting mistake of law, prospective application of the settlement agreement, and overall justice concerns, this court concludes that provisions (1), (5), and (6) are the most applicable.
"The consideration of a Rule 60(b) motion proceeds in two stages: first, the court must assess whether the movant has met each of three threshold conditions; and second, if the threshold requirements have been met, the court must determine whether the movant has satisfied one of the six enumerated grounds for relief under the rule." Holland v. Virginia Lee Co., Inc. 188 F.R.D. 241, 248 (W.D.Va. 1999) (citing National Credit Union Admin. Bd. v. Gray, 1 F.3d 262, 264, 266 (4th Cir. 1996)).
The threshold requirements are as follows:
In order to obtain relief from a judgment under Rule 60(b), a moving party must show that his motion is timely, that he has a meritorious defense to the action, and the opposing party would not be unfairly prejudiced by having the judgment set aside.
Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987).
Additionally, some decisions have read into the statute a fourth threshold condition, requiring a showing of "exceptional circumstances." Dowell v. State Farm Fire Cas. Auto Ins. Co., 993 F.2d 46, 48 (4th Cir. 1993) (quoting Werner v. Carbo, 731 F.2d 204, 207 (4th Cir. 1984)). As noted by Judge Jones, "exceptional circumstances are specifically required where relief is sought under subsection (6) of Rule 60(b). Holland, 188 F.R.D at 248 n. 11. Because Association cannot satisfy the first three threshold conditions, it is unnecessary to decide whether a showing of exceptional circumstances is appropriately considered to be a fourth.
III. Analysis
Association fails to establish the threshold requirements because this motion is untimely, fails to establish a meritorious defense, and unfairly prejudices Plaintiffs.
A. Timeliness
Rule 60(b) stipulates that motions for relief from judgment must be made "within a reasonable time," with the further requirement that motions brought under subsections (1) through (3) of the rule be made within one year after judgment is entered. Fed.R.Civ.P. 60(b). Moreover, timeliness must be shown by the movant. Holland, 188 F.R.D. at 248 (citing Werner v. Carbo, 731 F.2d at 206-7). Association does not argue the timeliness of its actions, not even in response to Plaintiff and Montgomery County's specific assertion that this motion is untimely.
Defendant asserts that in light of Benshoff, et al. v. City of Virginia Beach, et al., 180 F.3d 136 (4th Cir. 1999), they entered into the settlement agreements with a mistaken view of the law. Thus, these private fire corporations request to be freed from the settlement agreements they volitionally signed. Motions filed under Rule 60(b)(1) for "mistake, inadvertence, surprise, or excusable neglect" must be filed "not more than one year after the judgment, order, proceeding was entered or taken." Fed.R.Civ.P. 60(b)(1). The Association filed its motion for relief from judgment on August 8, 2000, more than four years after the entry of judgment. Thus, Association does not have a viable Rule 60(b)(1) motion.
Rule 60(b)(5) and 60(b)(6) motions have a more lenient timeliness standard as they must be made "within a reasonable time". Fed.R.Civ.P. 60(b). "Reasonableness, . . . is judged by looking to the delay from the time the party is deemed to have notice of the grounds for its Rule 60(b) motion." Holland, 188 F.R.D. at 248 (quoting Jones v. City of Richmond, 106 F.R.D. 485, 489 (E.D.Va. 1985)). In the case where a movant relies on a change in the law as the basis for its Rule 60(b) motion, a year-long delay is considered unreasonable particularly in light of the movant's lack of explanation. Natl. Org. For Women v. Operation Rescue, 47 F.3d 667, 669 (4th Cir. 1995) (per curiam) (finding that movants could not be relieved from judgment in response to a Supreme Court ruling on a different case when the movants waited over a year after the decision to file their motion). In Operation Rescue, movants provided absolutely no "valid reason why they delayed almost a year" and this fact figured prominently in the court's analysis. Id.; see also McLawhorn v. John Daniel Co., 924 F.2d 535, 538 (4th Cir. 1991) (delay of three to four months in bringing Rule 60(b) motion considered untimely in the absence of an explanation). Similarly, in the case before this court, the Benshoff decision was handed down on June 8, 1999, and Association filed this motion more than a year later with absolutely no explanation for the time lapse. Consequently, Association's motion for relief from judgment is untimely.
B. Merit-Based Defense
Even if Association's motion met the timeliness requirement, Association has not established a meritorious claim or defense to the action. A meritorious claim requires that the movant "proffer . . . evidence which would permit a finding for the [moving] party or which would establish a valid counterclaim." Augusta Fiberglass Coatings, Inc. v. Fodor Contracting Corp., 843 F.2d 808, 812 (4th Cir. 1988); see also Holland, 188 F.R.D. at 249 ("make allegations that, if established at trial, would constitute a valid claim or defense") (citing James Wm. Moore et al., Moore's Federal Practice § 60.24[2] (3d ed. 1999)). Of course, this case involves an effort to overturn a settlement agreement, rather than a default judgment. In this context, it is not enough for the movant to proffer evidence related to the underlying litigation. Instead, it must address the validity of the agreements themselves.
The original litigation was settled by agreement of all the parties. Paper no. 274. Association has presented no facts disavowing its decision to settle. To supply this prong of the test, Association must allege facts upon which the settlement agreement could be overturned. See Holland, 188 F.R.D. at 250 ("By its very definition, a settlement agreement ends litigation . . . and unless [the movant] pleads facts which could prove that the settlement agreement is invalid, no action is cognizable on the original claim."); Wood v. Virginia Hauling Co., 528 F.2d 423, 425 (4th Cir. 1975).
Defendant does not assert that the settlement agreements are invalid per se or that the parties made a mistake regarding the status of the law when they executed the agreements. Instead, Association argues that in light of the 1999 alleged change in the law, the parties agreed based on erroneous legal assumptions.
Association relies on institutional reform cases in which courts are engaged in modifying an ongoing consent decree as authority for its argument that the settlement agreements should be vacated due to their prospective effect. See Rufo et al. v. Inmates of the Suffolk County Jail, et al., 502 U.S. 367 (1992); Escalera v. N.Y. Housing Authority, 924 F. Supp. 1323 (S.D.N Y 1996). The case at hand does not involve an ongoing consent decree requiring court supervision. In fact, Association has not alleged that the settlement agreements at issue contain even one provision mandating a prospective effect. Rather, these settlement agreements provided for a cash payment to the fire corporation employees as back pay compensation for overtime worked. See Schwartz v. United States, 976 F.2d 213, 218 (4th Cir. 1992) (finding that plaintiff continuing to be bound by the dismissal and feel the effects of a money judgment against him is not a "prospective effect").
However, a mere change in decisional law subsequent to the issuance of a final judgment "does not provide a sufficient basis for vacating the judgment." Dowell v. State Farm Fire Casualty Auto. Ins. Co., 993 F.2d 46, 48 (4th Cir. 1993); see also Schwartz v. United States, 129 F.R.D. 117, 121 (D.Md. 1990) ("a change in the judicial view of the applicable law, after a final judgment, is not a basis for vacating a judgment entered before announcement of the change") (citation and internal quotations marks omitted).
Moreover, in cases where the final judgment stems from a settlement agreement between the parties, a "supervening change in the law will not alone suffice as a ground for invalidating a settlement agreement." Holland, 188 F.R.D. at 250; (citing Anita Foundations, Inc. v. ILGWU Nat'l Retirement Fund, 902 F.2d 185, 189 (2d Cir. 1990) (holding that "a settlement payment, made when the law was uncertain, cannot be successfully attacked on the basis of any subsequent resolution of the uncertainty")).
Additionally, the private fire corporations agreed to the terms of the settlement because the outcome of the litigation was uncertain. The parties' settlement agreement specifically stated:
Plaintiffs and Defendants agree that this Settlement Agreement is in settlement of all disputes, claims and liabilities described in paragraph 5 above, which are uncertain and disputed; and that the parties do not admit to any liability but enter into this Agreement for the sole purpose of resolving such contested claims without the burden and expense of further litigation.
Paper No. 278, Plaintiffs' Opposition, Exhibit A, 7; see also Anita Foundations, Inc., 902 F.2d at 190 ("The uncertainty of a legal position and the desire to avoid the risk of a lawsuit are the impetus for many out-of-court settlements. It is simply inappropriate to equate these settlement agreements with agreements premised upon the misapplication of settled legal principles."). Thus, both sides bargained for and received consideration for their part in the compromise.
Perhaps even more importantly, the relief that Association is seeking cannot be achieved by vacating the settlement agreements. Association requests that the settlement agreements be vacated because they prohibit firefighters employed by the County from volunteering with the private fire corporations. The settlement agreements resolved the overtime liability arising as a result of the fire corporations' private employer status under the FLSA but did not address the permissibility of County career fire personnel volunteering for these same organizations. Rather, the Montgomery County Code, not the settlement agreements, explicitly prohibits career firefighters from providing, on a volunteer basis, the same services to a volunteer corporation as they perform while employed by the County. MONTGOMERY CO. CODE § 21-17(a) (1994, as amended) (attached as exhibit C to paper no. 278, exhibit no. 2 to paper no. 279). Vacating this court's judgment will not, in turn, eliminate this Montgomery County policy. Consequently, this court finds that Association has failed to assert a meritorious defense.
C. Unfair Prejudice to Plaintiffs
Association does not address the prejudice suffered by Plaintiffs if the court were to accord relief from judgment in this case. See Dowell, 993 F.2d at 48 (movant must show "a lack of unfair prejudice to the opposing party"). The original complaint in this case was filed in 1986, and the matter was settled four years ago. Plaintiffs assert that to vacate the judgment and reopen the case for further proceedings would cause them substantial prejudice. Furthermore, Plaintiffs assert that witnesses and evidence readily available four years ago may be unavailable. As Defendant does not dispute these contentions, the court infers that the relief sought would cause Plaintiffs unfair prejudice. Accordingly, this court finds that Association, on behalf of the private fire corporations, fails to establish timeliness, a meritorious defense to the action, and lack of prejudice to the opposing party; the threshold requirements for a Rule 60(b) motion.
Because the private fire corporations fail to meet the threshold requirements of a Rule 60(b) motion, this court does not reach the question of whether Benshoff actually represents a change in the law.
IV. Conclusion
For the foregoing reasons, the court shall DENY Association's Motion for Relief from Judgment. A separate Order will be entered.ORDER
In accordance with the accompanying Memorandum Opinion, IT IS this day of February, 2001, by the United States District Court for the District of Maryland, ORDERED that:
1. Montgomery County Fire-Rescue Association, Inc.'s Motion for Relief from Judgment BE, and the same hereby, IS, DENIED;
2. The Clerk is directed to transmit a copy of this Order and the accompanying Memorandum Opinion to counsel for the parties and CLOSE this case.