In Re: Jeffrey J. Prosser, et al

Filing

NOT PRECEDENTIAL OPINION Coram: RENDELL, FUENTES and GREENAWAY JR., Circuit Judges. Total Pages: 6. Judge: GREENAWAY JR. Authoring.

Case: 13-2075

Document: 003111681994

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Date Filed: 07/17/2014

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 13-2075
_____________
In Re: JEFFREY J. PROSSER,
Debtor
In Re: Innovative Communication Corporation,
Debtor

JAMES P. CARROLL, Chapter 7 Trustee of the
Estate of Jeffrey J. Prosser and Liquidating Trustee
Under the Reorganization Plan of Innovative
Communications Corporation
v.
JEFFREY J. PROSSER; DAWN PROSSER;
JUSTIN PROSSER; MICHAEL PROSSER;
SYBIL G. PROSSER; MICHELLE LABENNETT;
LYNDON A. PROSSER
Jeffrey J. Prosser and Dawn Prosser,
Appellants

On Appeal from the District Court
of the Virgin Islands – Appellate Division
(District Court No.: 3-11-cv-00113)
District Judge: Honorable Curtis V. Gómez

Submitted under Third Circuit LAR 34.1(a)
on May 15, 2014

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Date Filed: 07/17/2014

Before: RENDELL, FUENTES and GREENAWAY, JR., Circuit Judges.

(Opinion filed: July 17, 2014)

OPINION

GREENAWAY, JR., Circuit Judge.
Dawn Prosser and Jeffrey J. Prosser (“Appellants”) appeal from the judgment of
the District Court of the Virgin Islands Appellate Division (“District Court”) relating to a
Turnover Action. For the reasons discussed below, we will affirm the District Court’s
order.

I. Facts
Since we write principally for the benefit of the parties, we recount only the
essential facts and procedural history.
After being appointed as the Chapter 7 Trustee, James Carroll (“Trustee”) initiated
the Turnover Action against Jeffrey Prosser, Dawn Prosser, and Jeffrey Prosser’s four
adult children in an effort to recover estate property. Jeffrey Prosser was the owner and
sole member of Innovative Communications Company, LLC, which, in turn, owned
Innovative Communications Corporation, a company which provided telephone, internet,
and cable service to the United States Virgin Islands and other Caribbean islands.

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The Turnover Action was tried in the District Court of the Virgin Islands
Bankruptcy Division (“Bankruptcy Court”). The Court ordered turnover of various assets
to the Trustee, including a wine collection, cigars, real property, art, antiques, and
furnishings. After entry of an adverse judgment on the merits by the Bankruptcy Court,
that was not timely appealed, Appellants filed a motion under Federal Rule of Civil
Procedure 60(b) for relief, which the Bankruptcy Court denied. The District Court
entered an order affirming this ruling of the Bankruptcy Court. This timely appeal
followed.

II. Jurisdiction
The District Court exercised jurisdiction over the appeal of the Bankruptcy
Court’s order under 28 U.S.C. § 158(a). This Court has jurisdiction under 28 U.S.C. §
158(d)(1).

III. Analysis
Appellants seek to have us reverse the District Court on grounds that the judgment
of the Bankruptcy Court is void under Rule 60(b)(4) of the Federal Rules of Civil
Procedure contending that the Bankruptcy Court lacked jurisdiction. The District
Court’s ruling on the motion is reviewable by this Court only for abuse of discretion.
Virgin Islands Nat’l Bank v. Tyson, 506 F.2d 802, 804 (3d Cir. 1974).
Rule 60(b)(4) allows a court to relieve a party from a final judgment if “the
judgment is void.” Fed. R. Civ. P. 60(b)(4). “[A] void judgment is one so affected by a
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fundamental infirmity that the infirmity may be raised even after the judgment becomes
final.” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 270 (2010). “The list
of such infirmities is exceedingly short; otherwise, Rule 60(b)(4)’s exception to finality
would swallow the rule.” Id.; see also Boughner v. Sec’y of Health, Educ. & Welfare,
U.S., 572 F.2d 976, 977 (3d Cir. 1978) (“This Court has also cautioned that relief from a
judgment under Rule 60 should be granted only in exceptional circumstances.”). “Rule
60(b)(4) applies only in the rare instance where a judgment is premised either on a certain
type of jurisdictional error or on a violation of due process that deprives a party of notice
or the opportunity to be heard.” Espinosa, 559 U.S. at 271.
We have indicated that a judgment will be rendered void for lack of subject matter
jurisdiction only where there is a “total want of jurisdiction” or “in the rare instance of a
clear usurpation of power.” Marshall v. Bd. of Educ., Bergenfield, N.J., 575 F.2d 417,
422 n.19 (3d Cir. 1978) (internal quotation marks and citation omitted); see also
Espinosa, 559 U.S. at 271 (noting that courts generally find a “judgment is void because
of a jurisdictional defect . . . only for the exceptional case in which the court that rendered
judgment lacked even an arguable basis for jurisdiction” (internal quotation marks
omitted)).
Here, Appellants have failed to identify any alleged jurisdictional error sufficiently
egregious so as to render the judgment void. It is undisputed that the Bankruptcy Court
specifically addressed its subject matter jurisdiction in a Memorandum Opinion. (See
App. 85-88; see also App. 85 (“Dawn Prosser contends that this court lacks subject
matter jurisdiction on the basis that ownership is directly disputed in this turnover action .
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. . . However, even then the court has jurisdiction.”).) This is fatal to Appellants’
arguments, since it has long been the rule that principles of res judicata apply to
jurisdictional determinations—both subject matter and personal. See Chicot Cnty.
Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 376 (1940) (“[District Courts] are
courts with authority, when parties are brought before them in accordance with the
requirements of due process, to determine whether or not they have jurisdiction to
entertain the cause and for this purpose to construe and apply the statute under which
they are asked to act. Their determinations of such questions, while open to direct review,
may not be assailed collaterally.”).
Because subject matter jurisdiction was litigated prior to the entry of the judgment,
any further challenge on that ground could only have been made on direct appeal. See
Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702
(1982) (“A party that has had an opportunity to litigate the question of subject-matter
jurisdiction may not, however, reopen that question in a collateral attack upon an adverse
judgment.”). No appeal was taken.
Contrary to Appellants’ claim, Stern v. Marshall, 131 S. Ct. 2594 (2011) does not
alter this analysis, because this case does not involve a counterclaim, nor is it solely
based on state law. No circumstances, least of all “exceptional circumstances” requiring
“extraordinary relief,” have been demonstrated in this record. Marshall v. Bd. of Educ.,
Bergenfield, N.J., 575 F.2d at 426.
Therefore, Appellants cannot collaterally challenge the Bankruptcy Court’s
Turnover Opinion and Order in this instance.
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III. Conclusion
For the foregoing reasons, we will affirm the order of the District Court.

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