Hartford Accident and Indemnity Company v. Crum & Forster Specialty Insurance Company
828 F.3d 1331
| 11th Cir. | 2016Background
- Hartford appealed district-court summary-judgment and fee/cost orders entered in favor of Crum & Forster; the Eleventh Circuit ordered mediation and later a second mediation.
- After the second mediation the parties executed a conditional settlement (Jan 26, 2015) that was expressly contingent on a court-ordered vacatur of the summary judgments and related cost/fee orders.
- The parties jointly moved in the district court under Fed. R. Civ. P. 60(b)(6) for vacatur so the settlement could be effective; the Eleventh Circuit stayed the appeal to allow that motion.
- The district court denied vacatur, invoking U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership and concluding the parties had voluntarily forfeited appellate review and that vacatur was not warranted because it would not affirmatively serve the public interest.
- The Eleventh Circuit reviewed for abuse of discretion, rejected the district court’s application of Bancorp, and found two exceptional circumstances here: (1) settlement followed court-ordered mediation (i.e., was prompted by the court) and (2) vacatur was a necessary condition of settlement agreed to by both parties.
- The Eleventh Circuit reversed, holding the district-court orders awarding summary judgment, costs, and attorneys’ fees were VACATED.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether vacatur under Rule 60(b) is appropriate where parties settle conditioned on vacatur | Parties (Hartford & Crum) argued vacatur is appropriate because settlement followed court-ordered mediation and vacatur was a necessary condition of settlement | District Court argued Bancorp generally bars vacatur when mootness results from parties’ voluntary settlement and vacatur must affirmatively serve the public interest | Vacatur is appropriate here; the district court abused its discretion and its orders were vacated |
| Whether Bancorp’s "exceptional circumstances" exception can apply when settlement is voluntary | Parties argued Bancorp allows vacatur in exceptional circumstances, including where settlement followed a court-ordered mediation and both parties need vacatur | District Court treated any voluntary settlement as forfeiture of review, precluding exceptional-circumstance relief | Court held Bancorp permits exceptional-circumstance vacatur; a categorical bar to vacatur for all settlements is incorrect |
| How to weigh public interest in precedent preservation against settlement/judicial-efficiency benefits | Parties emphasized direct benefits of settlement and judicial efficiency outweigh limited public interest in preserving a district-court precedent on state law | District Court insisted vacatur should be granted only where it affirmatively serves the public interest (narrow test) | Court held public interest includes judicial efficiency and must be balanced against parties’ and courts’ interests; narrow bright-line test is wrong |
| Whether settlement prompted by court mediation changes the equities | Parties argued mediation referral by the appellate court meant the settlement was not a unilateral voluntary forfeiture of appeal rights | District Court treated the settlement as voluntary and thus as forfeiture | Court found mediation-prompted settlement is a significant factor favoring vacatur when vacatur is necessary to effect settlement |
Key Cases Cited
- U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18 (1994) (establishes equitable balancing test for vacatur of lower-court decisions when appeals become moot due to settlement)
- Major League Baseball Props., Inc. v. Pac. Trading Cards, Inc., 150 F.3d 149 (2d Cir. 1998) (holds vacatur appropriate where vacatur was necessary condition of settlement following mediation)
- Motta v. Dist. Dir. of INS, 61 F.3d 117 (1st Cir. 1995) (permits vacatur when settlement followed court suggestion and the agency continued to pursue appeal absent that suggestion)