44A TRUMP INTERNATIONAL, INC. v. RUSSELL
Filing
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OPINION. Signed by Judge Susan D. Wigenton on 10/4/12. (jd, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
44A TRUMP INTERNATIONAL, INC,
Plaintiff,
v.
JESSE E. RUSSELL,
Defendant.
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Civil Action No. 07-3425 (SDW)
OPINION
October 4, 2012
WIGENTON, District Judge.
Before the Court is Plaintiff 44A Trump International, Inc.’s (“Plaintiff”) Motion to
Reopen its prior action (“First Action”) against Defendant Jesse E. Russell (“Russell” or
“Defendant”) pursuant to Fed. R. Civ. P. 60(b)(6), and consolidate it with a currently pending
action (“Second Action”) against Defendants IncNetworks Inc. (“IncNetworks”) and Eric
Magnelli, Esq. (“Magnelli”) pursuant to Fed. R. Civ. P. 42(a). This Court has jurisdiction
pursuant to 28 U.S.C. § 1332. Venue is proper in this District pursuant to 28 U.S.C. § 1391.
This Motion is decided without oral argument pursuant to Fed. R. Civ. P. 78. For the reasons
stated below, this Court denies Plaintiff’s Motion.
FACTUAL AND PROCEDURAL HISTORY
On August 9, 2001, Plaintiff loaned Russell $560,000. (Pl. Br. at 1, Ex. A.) On or about
July 24, 2007, Plaintiff filed the First Action against Russell alleging default on the loan. (Pl. Br.
at 2.)
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On February 4, 2009, the parties negotiated a settlement agreement and this Court
dismissed the First Action “subject to the right of the parties upon good cause shown within 60
days, to reopen the action if the settlement is not consummated.” (Pl. Br. at 3.) On October 28,
2009, after two sixty-day extensions, Magnelli—Plaintiff’s former counsel and escrow agent—
informed this Court that Plaintiff and Russell settled the action. (See Pl. Br. at 3; Dkt. No. 29,
31.) Specifically, the terms of the settlement agreement between Plaintiff and Russell obligated
Plaintiff and IncNetworks, a company owned by Russell, to be bound by three documents. (Pl.
Br. at 3.) The documents included (1) a Promissory Note stating that IncNetworks was to repay
the full amount of the loan to Plaintiff in “thirty (30) consecutive monthly payments of
$20,000[,]” at an annual interest rate of six percent (6%); (2) a “Pledge Agreement,” designed to
act as insurance against repayment of the Note, in which IncNetworks agreed to purchase
560,000 shares of its own IncNetworks stock from Plaintiff; and (3) an Escrow Agreement
stating that an Escrow Agent was to hold the stock, “other collateral,” and the agreements in
escrow. (See Pl. Br. at 1-2; Pl. Br. Ex. C, D, E.) The settlement did not include Russell
personally; it involved only his entity, IncNetworks. (See Pl. Br. at 2.)
On or about July 2, 2010, IncNetworks defaulted on the Promissory Note. (See Pl. Br. at
3). Although IncNetworks made a few other “subsequent payments,” Plaintiff asserts that there
remained an unpaid balance of $421,000, at an annual interest rate of twelve percent (12%). (Id.)
On April 17, 2012, Plaintiff filed a separate suit, the Second Action, against IncNetworks
and Magnelli, seeking to recover the balance of the Promissory Note and a release of collateral
held in escrow. (See Pl. Br. at 4.) On May 24, 2012, Plaintiff filed its Motion to Reopen the
First Action and consolidate it with the Second Action. (Dkt. No. 35.) According to Plaintiff,
because the First Action and Second Action are based on the same debt and related defendants, it
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is appropriate for this Court to reopen the First Action, consolidate it with the Second Action,
and adjudicate both claims together. (See Pl. Br. at 1-2.)
LEGAL STANDARD
Federal Rule of Civil Procedure 60(b) states, in pertinent part: “[o]n motion and just
terms, the court may relieve a party or its legal representative from a final judgment, order, or
proceeding for . . . (6) any other reason that justifies relief.” Fed. R. Civ. P. 60(b)(6). Rule
60(b)(6) is “intended to be a means for accomplishing justice in extraordinary situations, and so
confined, does not violate the principle of the finality of judgments.” Kock v. Gov’t of the
Virgin Islands, 811 F.2d 240, 246 (3d Cir. 1987). In addition, the petitioning party must bring its
Rule 60(b) motion “within a reasonable time.” Fed. R. Civ. P. 60(c)(1).
A party seeking to reopen a final judgment must demonstrate “extraordinary
circumstances” justifying the need for such relief. Gonzalez v. Crosby, 545 U.S. 524, 535
(2005) (citing Ackermann v. United States, 340 U.S. 193, 199 (1950)).
For instance,
extraordinary circumstances involve a showing that absent relief, the moving party will suffer
“extreme” and “unexpected” hardship. Mayberry v. Maroney, 558 F.2d 1159, 1163 (3d Cir.
1977) (internal quotes and citation omitted).
DISCUSSION
A. Motion to Reopen the First Action Pursuant to Rule 60(b)(6)
In this case, pursuant to Rule 60(b)(6), Plaintiff seeks to reopen the 2007 First Action
against Russell for default on a loan which settled in 2009. Plaintiff’s Motion is premised on the
following contentions: (1) the debt at issue was originally owed to Plaintiff by Russell and was
the subject of the First Action; (2) Plaintiff and Russell settled the First Action and agreed to the
terms of a Promissory Note obligating IncNetworks to repay Russell’s remaining debt to
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Plaintiff; (3) IncNetworks defaulted on the Promissory Note; and (4) Plaintiff filed the Second
Action against IncNetworks to recover the outstanding debt. (See Pl. Br. at 1-2.) Plaintiff argues
that because it is still owed $421,000, they should now be able to pursue Russell for repayment
on the loan. (Id.) In support of his argument, Plaintiff contends that Russell was not discharged
of his liability. (Id.)
The Court does not find Plaintiff’s arguments convincing. As a preliminary matter,
Plaintiff voluntarily entered into a settlement agreement with Russell in 2009 to resolve the First
Action. As Defendant asserts, both parties negotiated, accepted, and executed the settlement
documents. (Def. Br. at 2.) In crafting the settlement terms, if Plaintiff wanted to ensure that
they could pursue Russell for the remaining debt in the event of IncNetworks’ default, they
should have contracted for such terms. Instead, the settlement documents are silent with respect
to Russell.
The Second Action against IncNetworks solely involves IncNetworks’ alleged default
based on the settlement documents. Accordingly, the Second Action against IncNetworks stems
from separate circumstances and documents than the First Action against Russell. If the First
Action and Second Action should have been considered in conjunction, the terms in the
settlement agreement or corresponding documents should have reflected this intent.
As
Defendant correctly points out, “[t]he Promissory Note contains its own default provisions and
sets forth the remedies that [Plaintiff] may seek as against the Maker of that Note, (i.e.:
IncNetworks), not Jesse Russell.” (Def. Br. at 2.) At this juncture, Plaintiff can pursue recourse
for IncNetworks’ default based on the terms of the settlement agreement. Plaintiff cannot,
however, ask this Court to rewrite or alter the terms of the contract simply because they are no
longer satisfied with the arrangement.
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Furthermore, the law requires that a party moving to reopen a case demonstrate
extraordinary circumstances justifying such relief.
See Gonzalez, 545 U.S. at 535.
Here,
Plaintiff has failed to address any extraordinary circumstances justifying a need to reopen the
First Action against Russell. Plaintiff alleges only that IncNetworks defaulted on the loan and
Plaintiff is still owed $421,000. This does not rise to the level of “extraordinary circumstances.”
Moreover, the Third Circuit has noted that “extraordinary circumstances rarely exist when a
party seeks relief from a judgment that resulted from the party’s deliberate choices.” Budget
Blinds, Inc. v. White, 536 F.3d 244, 255 (3d Cir. 2008); see also Coltec Indus., Inc. v. Hobgood,
280 F.3d 262, 274 (3d Cir. 2002) (stating that “courts have not looked favorably on the entreaties
of parties trying to escape the consequences of their own ‘counseled and knowledgeable’
decisions”). Plaintiff deliberately and voluntarily agreed to the settlement documents and their
terms. If Plaintiff wanted different or additional terms, he could have—and should have—
included them in the settlement documents. Accordingly, the Court denies Plaintiff’s Rule 60
Motion to Reopen the First Action.
B. Consolidation of Action Pursuant to Rule 42(a)
Plaintiff requests that the Court consolidate the First Action with the Second Action that
is currently pending. As this Court denies Plaintiff’s Motion to Reopen the First Action, the
issue of consolidation is moot.
CONCLUSION
For the reasons stated above, Plaintiff’s Motion to Reopen the First Action is DENIED.
The Motion to Consolidate is DENIED as moot.
s/Susan D. Wigenton, U.S.D.J.
cc: Madeline Cox Arleo, U.S.M.J.
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