U-Nest Holdings, Inc. v. Ascensus Coll. Sav. Rk'ing Svcs. ( 2023 )

United States Court of Appeals
For the First Circuit
No. 23-1229
U-NEST HOLDINGS, INC.,
Plaintiff, Appellant,
v.
ASCENSUS COLLEGE SAVINGS RECORDKEEPING SERVICES, LLC,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. William E. Smith, U.S. District Judge]
Before
Barron, Chief Judge,
Lynch and Howard, Circuit Judges.
Joseph A. Farside, Jr., with whom Alexandra G. Lancey and
Locke Lord LLP were on brief, for appellant.
Marc DeSisto, with whom DeSisto Law LLC, Mitchell R. Edwards,
and Hinckley Allen & Snyder LLP were on brief, for appellee.
September 22, 2023
LYNCH, Circuit Judge. In a case filed in 2021 in the
United States District Court for the District of Rhode Island, U-
Nest Holdings, Inc., claimed that its suit was not foreclosed by
a judgment entered on February 4, 2020, in a 2019 federal court
action. That judgment had embodied a prior state court settlement
agreement. In the 2021 case, U-Nest asserted that it had been
fraudulently induced to enter into that settlement agreement by a
statement made in court by counsel for Ascensus College Savings
Recordkeeping Services, LLC.
After a hearing in the 2021 case, the federal district
court determined that for the case to proceed, U-Nest would first
need to file a motion for relief from judgment in the 2019 action.
The court stayed the 2021 action pending resolution of the motion.
On May 16, 2022, U-Nest filed a motion seeking relief from judgment
in the 2019 action under Fed. R. Civ. P. 60(b)(6).
Thereafter, the motion was heard by the judge who had
presided over the 2019 case, who took submissions, briefing, and
held arguments on the motion on November 9, 2022. No party asked
for an evidentiary hearing. At the conclusion of the November 9
hearing the court informed the parties it would take the matter
under advisement and later issue a written opinion. On December
6, 2022, the court ruled that the motion more properly sounded
under Fed. R. Civ. P. 60(b)(3) than under Rule 60(b)(6) and ordered
additional briefing on the issue of whether concepts of equitable
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tolling could save a Rule 60(b)(3) motion brought over one year
after the entry of judgment.
The court denied U-Nest's motion on February 9, 2023, in a
written order. See U-Nest Holdings, Inc. v. Ascensus Coll. Sav.
Recordkeeping Servs., LLC ("U-Nest"), No. 19-659 WES, 2023 WL
1861401 (D.R.I. Feb. 9, 2023). In the interim between the November
9 argument and the February 9 written order U-Nest did not request
any form of evidentiary hearing. The written order found that U-
Nest had not met its burden, as the party seeking relief under
Rule 60, to show either fraud or misrepresentation.
The written opinion of the district court denying the
motion reasoned as follows:
U-Nest has failed to sustain this burden as it
has presented no evidence to support its claim
of fraud.
U-Nest’s filings on this matter present a
simple scenario: during the preliminary
injunction hearing, Ascensus’s attorney made
a misrepresentation when he claimed that
Ascensus was not developing [a mobile phone
application to compete with U-Nest's app], the
purpose of which was to trick U-Nest into
entering a settlement agreement. To support
its version of events, U-Nest filed a copy of
the preliminary injunction hearing
transcript, a comparison of the U-Nest app and
the Ascensus app, a transcript of the motion
to dismiss hearing . . . , and the complaint
. . . . The only support for their claim that
the statement made during the preliminary
injunction hearing was false is an argument,
contained in the briefing, that such an app
could not be developed in thirteen months (the
time between the hearing and the release of
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the Ascensus app). An attorney’s claim,
however, is not evidence, and it cannot
support the remedy requested. [FN 5]
[FN 5] U-Nest suggests it can avoid its
evidentiary obligations because Ascensus
has never said it did not lie. However,
U-Nest has presented no law that supports
a conclusion that Ascensus’s decision to
not directly disclaim the accusation
removes U-Nest's burden to support its
allegations.
Further, U-Nest has had multiple opportunities
to present the necessary evidence. During the
hearing on the motion for relief from
judgment, the [c]ourt inquired as to whether
an evidentiary hearing was needed[.] U-Nest’s
counsel responded that it was ready for such
a hearing and "if your honor wants to have an
evidentiary hearing . . . we would not object
to that at all." At no point, however, did
counsel affirmatively request such a hearing.
In addition, the [c]ourt requested several
sets of additional briefs, each presenting its
own opportunity to provide evidentiary
support. At each opportunity, U-Nest declined
to present evidence.
Thus, all the [c]ourt has to go on is the
movant's bald assertions. Without any
evidence to support the allegations of fraud,
the [c]ourt is unable to grant the
extraordinary relief requested.
. . .
For the reasons contained herein, Plaintiff U-
Nest’s Motion for Relief from Judgment is
DENIED.
U-Nest, 2023 WL 1861401, at *3-4 (citations omitted and third
omission in original). U-Nest timely appealed from this ruling.
Our review for denial of a Rule 60 motion, whether under
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Rule 60(b)(6) or Rule 60(b)(3), is for abuse of discretion. See
Giroux v. Fannie Mae, 810 F.3d 103, 106 (1st Cir. 2016). U-Nest
argues first that the district court erred by denying its motion
solely on the basis that U-Nest had failed to request an
evidentiary hearing. The record refutes that contention by U-
Nest. The district court denied U-Nest's motion not because it
had failed to request an evidentiary hearing, but rather because
U-Nest had not adequately substantiated its allegations of fraud.
See AngioDynamics, Inc. v. Biolitec AG, 780 F.3d 420, 425 (1st
Cir. 2015) (Rule 60(b) motion must do more than "cast doubt on the
soundness of the underlying judgment." (quoting Nansamba v. N.
Shore Med. Ctr., Inc., 727 F.3d 33, 37 (1st Cir. 2013)).
U-Nest argues that it should be excused from its failure
to request an evidentiary hearing because U-Nest represents to us
that the district court, in essence, stated that it did not want
an evidentiary hearing. But the record contradicts this
representation by U-Nest and shows the district court said no such
thing. U-Nest does point to two statements in which the district
court questioned the need for an evidentiary hearing. But neither
statement could reasonably be read to state that no such hearing
would be granted if requested.
U-Nest next argues that the district court should have
sua sponte conducted an evidentiary hearing even in the absence of
a such a request by U-Nest. We reject U-Nest's argument. There
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is no such requirement and U-Nest has not cited any case law which
says that there is. To the contrary, the burden is on the Rule 60
movant to demonstrate the existence of exceptional circumstances
justifying relief from judgment. See Teamsters, Chauffeurs,
Warehousemen & Helpers Union, Loc. No. 59 v. Superline Transp.
Co., 953 F.2d 17, 19-20 (1st Cir. 1992). It therefore falls upon
the movant to request an evidentiary hearing and thereafter to
"convince the court of its desirability." Gen. Contracting &
Trading Co., LLC v. Interpole, Inc., 899 F.2d 109, 115 (1st Cir.
1990); see Roger Edwards, LLC v. Fiddes & Son Ltd., 427 F.3d 129,
137 (1st Cir. 2005) ("[T]here is no requirement under Rule 60(b)
that contested allegations automatically get an evidentiary
hearing regardless of plausibility or import.").
We see little point in adding to the district court's
sound reasoning. See Cotto v. United States, 993 F.2d 274, 277
(1st Cir. 1993) (Under Rule 60, a district court need not credit
"bald assertions, unsubstantiated conclusions, periphrastic
circumlocutions, or hyperbolic rodomontade." (quoting Superline
Transp. Co., 953 F.2d at 18)). The district court reviewed the
"evidence" U-Nest had filed and stated why it was inadequate. The
district court amply supported its finding that U-Nest did not
support its claim of fraud and/or of misrepresentation. And so
the motion fails, whether it is characterized as a Rule 60(b)(6)
or a Rule 60(b)(3) motion. There is accordingly no need to address
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U-Nest's argument that the district court erred in reviewing its
motion under Rule 60(b)(3) rather than under Rule 60(b)(6). The
district court's reasoning also disposes of the equitable tolling
argument which U-Nest advocates on appeal. As the district court
did not err in its ruling, we reject U-Nest's appeal. The district
court's Rule 60 ruling is affirmed. Costs are awarded to Ascensus.1
1 We express no views on the 2021 action or as to what
preclusive effect, if any, this ruling has on that action.
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