United Marketing Solutions v. Angie Fowler

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:09-cv-01392-GBL-TCB Copies to all parties and the district court/agency. [999052311].. [12-1132]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 12-1132

UNITED MARKETING SOLUTIONS, INC.,
Plaintiff - Appellee,
v.
ANGIE M. FOWLER; TIMOTHY P. FOWLER,
Defendants - Appellants.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:09-cv-01392-GBL-TCB)

Argued:

January 30, 2013

Decided:

February 27, 2013

Before NIEMEYER, SHEDD, and AGEE, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Nancy D. Greene, ACKERMAN BROWN, Washington, D.C., for
Appellants.
Patrick James McDonald, CAMERON MCEVOY, PLLC,
Fairfax, Virginia, for Appellee. ON BRIEF: John Patrick Sherry,
CAMERON MCEVOY, PLLC, Fairfax, Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Angie

and

Timothy

Fowler

(“the

Fowlers”)

appeal

the

district court's denial of their Federal Rule of Civil Procedure
60(b) motion seeking relief from a final judgment against them
and in favor of United Marketing Solutions, Inc. (“United”).
For the reasons set forth below, we affirm the district court's
judgment denying relief.

I.
For several years, the Fowlers operated a United direct
mail coupon franchise in Greensboro, North Carolina.

Following

the Fowlers' termination of their contract with United, United
obtained a final judgment in the amount of $106,076.82 against
the Fowlers (“the Fowler Judgment”) in the Eastern District of
Virginia. 1
that

The Fowlers voluntarily dismissed their appeal of

judgment,

and

this

case

presents

no

issue

as

to

the

appropriateness or finality of the original judgment.
Rees Associates, Inc. (“Rees”), is an Iowa corporation that
possesses an outstanding judgment, rendered in Iowa state court,
against

United

in

the

amount

1

of

$172,194.94

(“the

Rees

Federal jurisdiction existed by way of diversity, as
United is a Virginia corporation and the Fowlers reside in North
Carolina, and the amount in controversy exceeded $75,000.
See
28 U.S.C. § 1332.

2

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Judgment”).

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In the fall of 2011, after United obtained the

Fowler Judgment, Rees properly domesticated the Rees Judgment in
Fairfax

County,

Virginia

Circuit

Court,

and

initiated

garnishment proceedings there naming the Fowlers as garnishees.
After receiving the garnishment summons, the Fowlers and
Rees entered into a “Settlement and Release Agreement” (“the
Agreement”), which called for the Fowlers to pay Rees “the sum
of $ ___ upon execution of this Agreement in full and complete
satisfaction of the Garnishment.

In return for this payment,

Rees will credit the Rees Judgment for [$111,766.92] resulting
in full satisfaction of the Fowler Judgment.”

(J.A. 234.)

Rees

and the Fowlers signed the Agreement on November 9, 2011, and a
few days later the Fowlers paid an unknown sum to Rees with the
memo of the check noting “For: Satisfaction in full of [United]
judgments against Tim Fowler & Angie Fowler.” 2

(J.A. 238.)

Rees

subsequently filed a notice of partial satisfaction of the Rees
Judgment in Iowa state court showing $111,766.92 as credited
toward the judgment amount.
When United refused to mark the Fowler Judgment as having
been

satisfied

in

light

of

2

the

Agreement

and

partial

The amount paid has been marked out on the record copies
of the Agreement and the check. The amount is not an issue in
the case, but the Fowlers aver they paid Rees $10,000, and
United does not contest this point.
The district court used
this $10,000 sum in ruling on the Fowlers’ Rule 60(b) motion.

3

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satisfaction

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of

the

Rees

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Judgment,

the

Fowlers

filed

the

underlying Rule 60(b) motion for relief from final judgment in
the district court.

They argued that relief was appropriate

under subsection (5) or (6) because the Fowler Judgment had been
satisfied

or

discharged,

and

other

equitable

considerations

favored relief.
The district court denied the motion.

From the bench, the

court explained that the Fowlers had failed to demonstrate the
Fowler

Judgment

had

been

satisfied,

released,

or

discharged

because the Agreement did not have any legal effect on United’s
right to enforce that judgment.

In addition, the district court

held that equitable considerations did not weigh in favor of
relief given that United in no way influenced the Fowlers or
Rees to enter into the Agreement.

Nonetheless, the district

court permitted a $10,000 equitable offset be applied to the
Fowler Judgment based on the actual amount the Fowlers claimed
they had paid Rees under the Agreement. 3
The Fowlers noted a timely appeal, and we have jurisdiction
under 28 U.S.C. § 1291.

3

United did not file a cross-appeal as to the $10,000
offset and does not otherwise contest that amount in this
appeal.

4

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II.
We review the denial of a Rule 60(b) motion for abuse of
discretion.

MLC Auto., LLC v. Town of S. Pines, 532 F.3d 269,

277 (4th Cir. 2008).
Rule

60(b)

judgment.

relief,

Our review is limited to the propriety of
and

does

not

extend

to

the

underlying

Id.

III.
The Fowlers contend the district court erred in denying
Rule

60(b)

relief

because

such

either subsection (5) or (6). 4

relief

was

appropriate

under

They assert that the Agreement

constituted a satisfaction or discharge of the Fowler Judgment
that entitles them to relief under Rule 60(b)(5) because the
Fowlers “purchased” a portion of the Rees Judgment and “used
this

property

to

satisfy

(Opening Br. 9, 14.)

the

Fowler

Judgment[]

by

offset.”

As such, they contend it does not matter

how much they paid Rees for the offset, or what terms were
negotiated between them and Rees.

Instead, they claim that all

that matters for purposes of reviewing the propriety of Rule

4

The opinion follows the parties’ lead in focusing on the
requirements
specifically
required
for
relief
under
Rule
60(b)(5) and (6) as opposed to the additional requirements for
relief from a judgment under Rule 60. Because we conclude that
the Fowlers have not satisfied the former, we need not consider
the latter.

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60(b) relief is that as a result of the Agreement, the Fowlers
“owned”
monetary

a

portion
value

Consequently,

of

the

Rees

the

entirety

contend

the

than
they

Judgment
of

that
the

Fowler

was

of

Fowler

Judgment

greater

Judgment.
has

been

effectively paid in full and they are entitled to relief under
Rule 60(b)(5).
Rule 60(b)(5) authorizes, in relevant part, relief where
“the judgment has been satisfied, released[,] or discharged.”
While the Fowlers are correct that they could lawfully purchase
a portion of the Rees Judgment from Rees, the record shows that
is not what they did.

Looking to the plain language of the

Agreement, it is clear that neither Rees nor the Fowlers were
negotiating a sale of the Rees Judgment to the Fowlers at a
reduced

rate.

context

of

a

Instead,

the

“Settlement

Agreement

and

arose

Release”

of

solely
the

in

the

garnishment

proceedings Rees initiated against the Fowlers with respect to
the

Fowler

Judgment. 5

In

order

to

“settle[]

.

.

.

the

Garnishment,” the Fowlers paid Rees a sum “in full and complete
satisfaction

of

the

Garnishment,”

5

in

return

for

which

Rees

Beyond the title of the agreement—which refers to it being
a settlement of the garnishment proceeding and release of any
claims arising therefrom, the Agreement repeatedly refers to the
garnishment proceedings, noting that the Agreement arose out of
the parties’ “desire to settle[,] resolve[,] and voluntarily
compromise . . . all claims or disputes arising out of or
related to the garnishment.” (J.A. 233.)

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agreed to “credit the Rees Judgment for $111,766.92 resulting in
full satisfaction of the Fowler Judgment.”

(J.A. 234.)

This

language does not reflect a partial sale and purchase of the
Rees Judgment, as the Fowlers now contend the transaction in
effect was.
Rees

and

the

Fowlers’

behavior

immediately

following

entering into the Agreement further supports this conclusion.
Rees independently and voluntarily entered a partial notice of
satisfaction of the Rees Judgment.

The Fowlers, in turn, filed

an answer in the garnishment proceedings indicating that the
“funds due” to United had been tendered to Rees “pursuant to a
settlement agreement with [Rees] related to this garnishment.”
(J.A. 244.)

Even the check the Fowlers wrote to Rees stated

that it was in “[s]atisfaction in full of” the Fowler Judgment,
as opposed to the purchase of a portion of the Rees Judgment.
(J.A. 238.)

Simply put, the Agreement was not a contract to

sell a portion of the Rees Judgment to the Fowlers.

The Fowlers

ask the Court to ignore the Agreement’s plain terms in favor of
an

after-the-fact

alternate

construction

that

would

fix

the

mistakes of law and fact that they and Rees were operating under
at the time of entering into the Agreement.

We cannot do so.

See Comtois v. Rogers, 715 S.E.2d 1, 4 (Va. 2011) (stating that
contracts are to be construed according to their “plain meaning”
where the terms are “clear and unambiguous”).
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Moreover, the Agreement did not satisfy or discharge the
Fowler Judgment even though Rees and the Fowlers stated that it
should have that effect.
entered

into

the

The Fowlers and Rees appear to have

Agreement

fundamentally

misunderstanding

the

nature of garnishment proceedings in Virginia, as well as each
entity’s rights and responsibilities in such a proceeding.

At

bottom, the garnishment did not permit Rees and the Fowlers to
contract around United’s right to enforce the Fowler Judgment, a
judgment

owned

and

controlled

solely

by

United.

In

Marcus,

Santoro & Kozak, P.C. v. Wu, 652 S.E.2d 777 (2007), the Supreme
Court of Virginia ably described garnishment proceedings in the
Commonwealth:
Garnishment is the process by which a judgment
creditor may enforce the lien of his writ of fieri
facias against any debt or property due his judgment
debtor that is held by a third party, the garnishee.
The creditor can assert no greater rights against the
garnishee
than
the
judgment
debtor,
himself,
possesses.
Id. at 782 (internal citation omitted).

“The summons issued in

a garnishment proceeding ‘warns’ the garnishee not to pay the
judgment

debtor’s

money

to

the

judgment

debtor,

with

the

sanction that if the garnishee were to do so, it would become
personally liable for the amount paid.”
marks omitted).

Id. at 783 (quotation

“[T]he judgment creditor does not ‘step into

the shoes’ of the judgment debtor and become a party to the
contract, but merely has the right to hold the garnishee liable
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for the value of that contract right.’”

Network Solutions, Inc.

v. Umbro Int’l, Inc., 529 S.E. 2d 80, 88 (Va. 2000) (quoting
United States v. Harkins Builders, Inc., 45 F.3d 830, 833 (4th
Cir. 1995)).
The

Fowlers

had

garnishment summons.

several

options

upon

receiving

the

See Harkins Builders, 45 F.3d at 833 (“The

garnishee is required to respond to the garnishment summons by
confessing the amount owed to the judgment debtor or by denying
it has any property of the judgment debtor.

It may also pay

such monies into court as it confesses.”) (internal citation
omitted);

see

also

Va.

Code.

Ann.

§

8.01-512.3.

Rees’

garnishment merely allowed Rees to hold the Fowlers “liable for
the value of” the Fowler Judgment; i.e., it was effectively an
attachment of assets.

See Harkins Builders, 45 F.3d at 833.

The garnishment did not cause Rees to “become a party to the
contract” such that Rees could negotiate on behalf of either
United or the Fowlers with respect to settling, discharging, or
otherwise altering the Fowler Judgment itself.

See id.

The

Fowlers and Rees could not, under the guise of settling the
garnishment, enter into separate negotiations and agree to the
direct payment of money from the Fowlers (the garnishee) to Rees
(the

judgment

creditor)

owned by United.

as

“payment”

of

the

Fowler

Judgment

The Agreement thus had no legal effect on

United’s ability to enforce the Fowler Judgment.
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Consequently,

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court

did

not

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abuse

its

discretion

in

denying

relief pursuant to Rule 60(b)(5).
The Fowlers also assert that they are entitled to relief
under Rule 60(b)(6), which permits relief from judgment on “any
other reason that justifies relief.”

This is so, they maintain,

because failing to enforce the Agreement against United in the
manner

the

Fowlers

unjustly enriched.

and

Rees

intended

causes

United

to

be

Put another way, the Fowlers contend that

because United received the “benefit” of partial satisfaction of
the Rees Judgment, it would be inequitable for them to also
retain the “benefit” of enforcing the Fowler Judgment.

As such,

they submit the district court abused its discretion in denying
relief under Rule 60(b)(6).
We

disagree.

provision,

it

has

Although
limited

Rule

60(b)(6)

applicability.

is

a

“While

“catchall”
[subsection

(6)] includes few textual limitations, its context requires that
it may be invoked in only ‘extraordinary circumstances’ when the
reason for relief from judgment does not fall within the list of
enumerated

reasons

given

in

Rule

60(b)(1)-(5).”

Ingram, 652 F.3d 496, 500 (4th Cir. 2011) (en banc).
because

“giv[ing]

undermine
judgments.”

numerous

Rule

60(b)(6)

other

rules

Id. at 501.

10

broad

that

favor

Aikens

This is so

application
the

v.

would

finality

of

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In

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considering

whether

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the

district

court

abused

its

discretion in denying relief under Rule 60(b)(6), we look to
whether relief is appropriate “to accomplish justice” as between
the Fowlers and United.

Cf. Klapprott v. United States, 335

U.S.

Neither

601,

615

(1949).

Agreement

altered

United

any

in

the

way.

the

relationship
Under

the

Rees

Judgment

between

terms

of

nor

the

Fowlers

and

Agreement,

the

the

the

Fowlers gave Rees $10,000, and in exchange Rees gave United a
benefit with respect to the Rees Judgment.

But that transaction

did not change anything with respect to the relative positions
of the Fowlers and United; more importantly, and as discussed
above, the Agreement in no way altered United’s right to enforce
the Fowler Judgment.

That is as true in equity as it is in law.

To hold otherwise would permit a judgment debtor and third party
to contract around a judgment creditor’s right to enforce its
judgment
consent.
concluding

without

the

judgment

creditor’s

participation

or

The district court did not abuse its discretion in
that

“extraordinary

this

scenario

circumstance”

did

allowing

for

not

constitute

relief

under

an
Rule

60(b)(6). 6
6

The Fowler also challenge an alternative rationale the
district court provided regarding the priority of an attorney’s
lien over the Agreement.
In light of our conclusion that the
district court did not abuse its discretion on its primary ratio
decidendi, we need not address that argument.

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IV.
For

the

aforementioned

reasons,

we

affirm

the

district

court’s judgment.
AFFIRMED

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