National City Golf Finance v. Golf Cars of Mississ
899 F.3d 412
| 5th Cir. | 2018Background
- Marvin Scott (defendant) and National City Golf Finance (plaintiff) settled a federal suit over a personal guaranty: National agreed to release claims for $500,000 and the parties executed a broad mutual release that expressly covered unknown or later-discovered facts.
- The day after signing the settlement, the parties filed an unconditional stipulation of dismissal under Fed. R. Civ. P. 41(a)(1)(A)(ii), which (absent notation) operated as a dismissal without prejudice.
- Within weeks Scott signed (but did not then file) an affidavit denying the signature on the guaranty was his; a handwriting expert later opined it was likely forged.
- One year after settlement Scott filed in district court a motion to rescind the settlement and vacate the dismissal under state contract law (mistake of fact, unilateral mistake, unjust enrichment).
- The district court held an evidentiary hearing six years later and denied rescission on state-law grounds, enforcing the settlement; Scott appealed, and the Fifth Circuit addressed jurisdictional and Rule 60(b) questions.
Issues
| Issue | Plaintiff's Argument (National) | Defendant's Argument (Scott) | Held |
|---|---|---|---|
| Whether district court had jurisdiction to decide Scott’s post-dismissal rescission motion | The dismissal was unconditional; court lacked jurisdiction except to the extent Rule 60(b) allows; district court could adjudicate under Rule 60(b) | Scott proceeded under state-law contract doctrines and assumed district court had jurisdiction to rescind | Court held Rule 41(a)(1) dismissal divested the district court of subject-matter jurisdiction; the proper vehicle is Rule 60(b) |
| Whether ancillary jurisdiction allowed reopening to rescind settlement | Ancillary jurisdiction does not revive after unconditional dismissal; only applies if dismissal incorporated settlement or retained jurisdiction | Scott argued ancillary jurisdiction or court authority allowed resolution of settlement rescission | Court held ancillary jurisdiction unavailable because dismissal was unconditional and did not preserve enforcement jurisdiction |
| Whether Scott could obtain relief under Rule 60(b) (mistake/new evidence/other grounds) | Settlement expressly allocated risk of unknown facts; Scott’s late forgery claim was not newly discovered with required diligence and not extraordinary | Scott argued mistake of fact, newly discovered evidence (forgery), and unjust enrichment justified vacatur | Court construed the motion as Rule 60(b) and denied relief: (1) Rule 60(b)(1) barred by Scott’s assumed risk; (2) Rule 60(b)(2) lacked diligence and newness; (3) other subsections inapplicable; (b)(6) not warranted |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (ancillary jurisdiction and when district court may retain jurisdiction over settlements)
- SmallBizPros, Inc. v. MacDonald, 618 F.3d 458 (5th Cir. 2010) (an unconditional Rule 41(a)(1) stipulation generally strips the district court of jurisdiction unless the dismissal preserves jurisdiction)
- Yesh Music v. Lakewood Church, 727 F.3d 356 (5th Cir. 2013) (a voluntary Rule 41(a)(1)(A) dismissal qualifies as a final proceeding subject to Rule 60(b))
- George P. Reintjes Co. v. Riley Stoker Corp., 71 F.3d 44 (1st Cir. 1995) (relief from settlement and underlying judgment must proceed under Rule 60(b))
- Cummings v. Greater Cleveland Reg’l Transit Auth., 865 F.3d 844 (6th Cir. 2017) (vacatur of settlements grounds rooted in Rule 60(b), not general post-dismissal jurisdiction)
- Peacock v. Thomas, 516 U.S. 349 (1996) (limitations on ancillary jurisdiction once the original federal dispute is dismissed)
- Gonzalez v. Crosby, 545 U.S. 524 (2005) (scope and limits of Rule 60(b)(6) extraordinary-relief doctrine)
- Thermacor Process, L.P. v. BASF Corp., 567 F.3d 736 (5th Cir. 2009) (requirements for Rule 60(b)(2) relief based on newly discovered evidence)