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Sciore v. Phung

United States District Court, D. New Jersey

August 30, 2019

MICHAEL SCIORE and OLD CITY PRETZEL COMPANY, LLC, Plaintiffs,
v.
KELLY PHUNG and STUDIO KP LLC, Defendants.

          DAVID D. LIN LEWIS & LIN LLC On behalf of Plaintiffs

          MATTHEW ADAM GREEN OBERMAYER REBMANN MAXWELL & HIPPELL LLP On behalf of Defendants

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         On August 24, 2018, Plaintiffs filed a complaint against Defendants seeking damages and injunctive relief arising from Defendants' alleged acts of defamation and tortious interference with contracts. Defendants allegedly published defamatory reviews of Plaintiffs' restaurant in Philadelphia, Pennsylvania on Yelp.com.[1] After Plaintiffs' complaint was successfully served on Defendants but before Defendants filed any response, Plaintiffs filed a notice of voluntary dismissal, without prejudice, pursuant to Federal Civil Procedure Rule 41(a)(1)(A)(i) on October 9, 2018.[2] On October 10, 2018, the Clerk's Office terminated the action pursuant to Plaintiffs' notice of voluntary dismissal.

         On February 8, 2019, Defendants filed a motion styled, “Motion for Relief Under Federal Rule of Civil Procedure 60(b).” Rule 60(b) permits a court to “relieve a party or its legal representative from a final judgment, order, or proceeding” for six enumerated reasons.[3] Defendants argue that this Court should vacate Plaintiffs' “without prejudice” dismissal, enforce the parties' settlement agreement, which Defendants contend mandated that Plaintiffs dismiss their action “with prejudice, ” and award Defendants the costs and reasonable attorneys' fees they have incurred in seeking enforcement of the settlement agreement. Defendants argue that their relief is supportable under Rule 60(b)(1) (“mistake, inadvertence, surprise, or excusable neglect”), Rule 60(b)(3) (“fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party”), and Rule 60(b)(6) (“any other reason that justifies relief”). Plaintiffs have opposed Defendants' motion and have cross-moved for sanctions.

         The Court finds that relief under Rule 60(b) is not available to Defendants. As a primary matter, it does not appear that a plaintiff's unilateral voluntary dismissal under Rule 41(a)(1)(A)(i) constitutes a final judgment, order, or proceeding required by Rule 60(b). See Catbridge Machinery, LLC v. Cytec Engineered Materials Inc., 2012 WL 2952434, at *5 (D.N.J. 2012) (explaining that because a voluntary dismissal “does not operate as a final order, there is no basis for the court to vacate the dismissal under Rule 60(b)”) (citing Ajiwoju v. Cottrell, 245 Fed.Appx. 563, 565 (8th Cir. 2007) (holding that a district court lacks jurisdiction to vacate a dismissal under 60(b) if the dismissal does not operate as a final order or judgment); Tundell v. Merck & Co., Inc., 2008 WL 2385508, at *2 (N.D. Fla. 2008) (noting “[a]s a threshold matter, it is not readily apparent that the [district] court had jurisdiction under Rule 60(b) to consider ... a motion to vacate because a notice of voluntary dismissal seemingly does not constitute a “‘final judgment, order, or proceeding'”)).[4]

         Even if a voluntary dismissal under Rule 41(a)(1)(A)(i) does satisfy the “final judgment, order, or proceeding” requirement of Rule 60(b), such voluntary dismissal is a product of Plaintiffs' deliberate, strategic choice. It is therefore not the result of mistake or excusable neglect, and “it should not be undone via Rule 60(b)(1).” See Thomas v. Ramapo College of New Jersey, 2011 WL 3206448, at *3 (D.N.J. 2011) (citing Eskridge v. Cook County, 577 F.3d 806, 810 (7th Cir. 2009) (finding that where choice to dismiss the federal lawsuit and proceed in state court was deliberate, the incorrect assessment of the consequences did not compel relief under Rule 60(b)).

         Further, “Rule 60(b) is not a tool to resolve conflicting interpretations of the parties' legal obligations.” In re Nazi Era Cases Against German Defendants Litigation, 213 F.Supp.2d 439, 451 (D.N.J. 2002) (citing Shaffer v. GTE North, Inc., 284 F.3d 500, 503 (3d Cir. 2002) (“Reinstatement of an action, which revives the underlying claim and sends the litigants back to the original battlefield, is totally different from the enforcement of the terms of a settlement agreement because one of the parties has not complied with those terms.”). Thus, Defendants' dispute over the parties' purported settlement does not constitute fraud, misrepresentation, or misconduct by Plaintiffs that would invoke Rule 60(b)(3).

         Finally, this case does not present the extraordinary circumstances required to implicate Rule 60(b)(6). See Buck v. Davis, 137 S.Ct. 759, 777-78 (U.S. 2017) (“Rule 60(b) vests wide discretion in courts, but we have held that relief under Rule 60(b)(6) is available only in ‘extraordinary circumstances.' In determining whether extraordinary circumstances are present, a court may consider a wide range of factors. These may include, in an appropriate case, the risk of injustice to the parties and the risk of undermining the public's confidence in the judicial process.” (citations and quotations omitted)); see also Coltec Industries, Inc. v.Hobgood, 280 F.3d 262, 273 (3d Cir. 2002) (explaining that a plaintiff's decision to voluntarily to dismiss its claims is an equitable factor militating against Rule 60(b)(6) relief); id. (observing that courts “have not looked favorably on the entreaties of parties trying to escape the consequences of their own ‘counseled and knowledgeable' decisions” (quoting In re Fine Paper Antitrust Litig., 840 F.2d 195 (3d Cir. 1988)).

         The remedy for Defendants' contention that Plaintiffs breached their settlement agreement is not through their current Rule 60(b) motion, but rather through the institution of a separate action, see, e.g., Guzman v. Nirvana Pool & Spa, LLC, 2011 WL 108953, at *1 (D.N.J. 2011) (denying the plaintiffs' motion to enforce the settlement because, inter alia, the settlement was not part of the record, and noting that a plaintiff's recourse for a defendant's alleged failure to abide by the terms of the settlement agreement may be to file a new action for breach of contract, citing Sawka v. Healtheast, Inc., 989 F.2d 138, 141-42 (3d Cir. 1993) (assuming arguendo that defendant breached the terms of the settlement agreement, “that is no reason to set the judgment of dismissal aside, although it may give rise to a cause of action to enforce the agreement”), or in defense of a subsequently filed action. See infra note 5.

         Consequently, the Court must deny Defendants' “Motion for Relief Under Federal Rule of Civil Procedure 60(b).” The Court will also deny Plaintiffs' corresponding cross-motion for sanctions.[5] The dispute over the parties' purported settlement cannot be raised before the Court in this action.[6]

         An appropriate Order will be entered.

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