Rismed Oncology Systems, Inc. v. Daniel Esgardo Rangel Baron ( 2015 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14–15567
Non-Argument Calendar
________________________
D.C. Docket No. 5:13–cv–00310–CLS
RISMED ONCOLOGY SYSTEMS, INC.,
Plaintiff-Appellant,
versus
DANIEL ESGARDO RANGEL BARON, et al.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
________________________
(July 17, 2015)
Before JORDAN, JULIE CARNES, and JILL PRYOR, Circuit Judges.
PER CURIAM:
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This appeal arises from frauds allegedly committed by Defendants, and
comes to us following the district court’s denial of Plaintiff’s motions for relief
from the voluntary dismissal of its complaint. Upon review of the record and the
parties’ briefs, we AFFIRM for the reasons set forth below.
I. BACKGROUND 1
After spending a decade working on the Space Shuttle program in
Huntsville, Alabama, thermodynamics engineer José A. Rodriguez (“Rodriguez”)
decided he wanted to pursue a long-held interest in business. So in 1990, at the
urging of a friend, Rodriguez formed and incorporated Rismed Oncology Systems,
Inc. (“Rismed Oncology” or “Rismed”) to “suppl[y] medical equipment to Latin
America, principally Venezuela.”
A number of years later, sensing a demand from his customers for dialysis
supplies, Rodriguez developed an expertise in the area and “began marketing
dialysis sales through” Rismed Oncology. Over a five year span, from 1999 to
2004, Rodriguez made “several attempts to break into the dialysis business in
Venezuela[,]” with the ultimate aim of becoming the sole supplier of dialysis
products to the Instituto Venezolano de los Seguros Sociales (“IVSS”)—the
Venezuelan equivalent of the United States Social Security Administration. He
1
The following facts are taken from Plaintiff’s Complaint and Motion to Set Aside the
District Court’s Order of Dismissal. We assume them to be true for purposes of our review here.
2
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eventually found success: IVSS placed an order with Rismed Oncology for over
350,000 dialysis kits, paying the corporation $13.7 million between March and
August 2005. Sales representative Daniel Esgardo Rangel Baron (“Rangel
Baron”)—the biological father of Rodriguez’s stepson, the ex-husband of his wife,
and a resident of Caracas—was put in charge of the account.
IVSS appeared satisfied with Rismed Oncology, as it placed a second order
with the corporation, this time representing 100% of its dialysis supplies needs. 2
But sometime in late 2005 and early 2006, Rangel Baron made a series of troubling
representations to Rodriguez about the order: first, that the Venezuelan government
was postponing it; second, that it “was ‘being processed’” and should arrive
“sometime during the fourth quarter of 2005”; and finally, that it had been
cancelled. Rather than proceed with Rismed, Rangel Baron informed Rodriguez
that IVSS had decided to award the purchase order to “Continental”—a medical
supply company that Rangel Baron had allegedly formed with his biological son,
Daniel Alberto Rangel Di Nardo (“Daniel Rangel”), whom Rodriguez had raised
since Daniel was thirteen.
Or so Rangel Baron said. What actually happened, Rodriguez learned, was
that Rangel Baron directed the incorporation of a number of companies in a
number of locations, all called Rismed Dialysis Systems, Inc. Specifically, Rangel
2
The initial order represented 25% of IVSS’s dialysis supplies needs.
3
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Baron and his sister, Isabel Rangel Baron, incorporated a Rismed Dialysis Systems
in Venezuela (“Rismed Dialysis Venezuela”); Daniel Rangel incorporated a
Rismed Dialysis Systems in Alabama (“Rismed Dialysis Alabama”); Rangel
Baron, under Daniel Rangel’s name, incorporated a Rismed Dialysis Systems in
Florida (“Rismed Dialysis Florida”); and Rangel Baron and partner Orlando Araya
Amador incorporated a Rismed Dialysis Systems in San Jose, Costa Rica (“Rismed
Costa Rica”).
The ramifications of Rangel Baron’s creation of these Rismed Dialysis
companies is two-fold. First, while Rodriguez had incorporated his company as
Rismed Oncology and operated its oncology business under that name, he actually
conducted Rismed’s dialysis business under the trade name “Rismed Dialysis
Systems.” This trade name was emblazoned on all of Rismed’s dialysis products,
and it was the name by which Rismed’s vendors knew the company. Second,
when IVSS paid an invoice to Rismed Oncology, it simply made the payment out
to “Rismed.” 3
Given the above, it should come as no surprise that IVSS never cancelled its
second order for dialysis supplies from Rismed Oncology, but “continued to make
purchase orders for the dialysis kits under the contract trade name ‘RISMED,’” and
did so through at least February 2013. In short, if Plaintiff’s allegations are
3
To pay invoices, IVSS would wire the funds to Rismed’s bank account in Alabama.
4
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accurate, Rangel Baron orchestrated a scheme whereby he usurped Rismed
Oncology’s contract with IVSS by utilizing the same products, supplies, and
company name that had for years been used by Rismed. Rangel Baron concealed
this scheme from Rodriguez and explained his new-found wealth by claiming that
IVSS had cancelled its contract with Rismed Oncology and had awarded it instead
to his father-son corporation, Continental. Rangel Baron fooled IVSS by
convincing it to change the routing numbers for bank accounts to which it wired
payments to those he established in connection with each Rismed Dialysis
company he had formed. (He had previously failed to persuade IVSS to change
the name of the contract award from Rismed Oncology to Continental.) And he
pulled the wool over the eyes of Rismed’s vendors by incorporating his companies
under Rismed’s trade name.
Thus, to the outside world it seemed that the only thing different about
IVSS’s subsequent orders was the routing information for payments. But really,
Rangel Baron had siphoned away roughly $50 million worth of business from
Rismed Oncology and Rodriguez: his employer and the man who had raised his
son.
Rodriguez learned of Rangel Baron’s scheme in July 2012 and when seven
months of “efforts to avoid a lawsuit” failed, he filed suit in the Northern District
of Alabama on behalf of Rismed Oncology. The complaint alleged three federal
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RICO claims and two state law fraud claims against Rangel Baron; Isabel Rangel
Baron; Rismed Dialysis Venezuela (the “Foreign Defendants”); and Rismed
Dialysis Alabama and Rismed Dialysis Florida (the “Domestic Defendants”).
Almost immediately after Rodriguez filed the lawsuit, he was contacted by a
minister, Daniel Garlick (“Garlick”), with whom he and Daniel Rangel were close.
Garlick impressed upon Rodriguez that litigation would be a treacherous path,
detrimental to his family and faith, and that instead he should engage in Christian
mediation with Daniel Rangel to work through the dispute. Rodriguez agreed, and
he and Garlick traveled to Miami to “resolve the lawsuit and the underlying
disagreements.”
With Garlick acting as mediator, Rodriguez and Daniel Rangel ironed out
their differences over the course of an extended lunch. Afterward, Garlick drafted
a document that the parties refer to as the “Miami Agreement[,]” which outlined
their basic obligations to one another. Generally, Rodriguez agreed to
“[i]rrevocably [c]lose[]” Rismed’s lawsuit and give Daniel Rangel an ownership
interest in a side business, while Daniel Rangel agreed to provide capital to that
company and to give Rodriguez an ownership position in his own side business.
Both Rodriguez and Daniel Rangel signed the Miami Agreement on March 28,
2013.
Next, the parties’ attorneys set to work drafting a settlement agreement. The
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document they created more or less provided that the parties would release any
claims they may have had as a result of the IVSS imbroglio and that Rodriguez
would transfer shares in his side business to Daniel Rangel. Notably, however, the
Settlement Agreement did not incorporate every obligation outlined in the Miami
Agreement. Despite being advised by his attorneys that the Settlement Agreement
did not protect him to any meaningful degree and that he should not sign the
document, Rodriguez did so anyway on April 3, 2013. So too did Daniel Rangel.
The next day, pursuant to Rodriguez’s obligations under the Miami
Agreement, Rismed Oncology filed a motion to voluntarily dismiss its complaint
with prejudice, “as a settlement ha[d] been reached in th[e] action.” Four days
later, Rismed filed a second motion to voluntarily dismiss its complaint with
prejudice that was exactly the same as the first, except for the addition of one
paragraph. That paragraph, in full, stated:
[c]onsent [for a voluntary dismissal] has been obtained from the
domestic parties[,] all of whom have been served in this matter. The
foreign parties have not stated a position with regard to the dismissal
(Rismed Dialysis Systems, C.A. (Venezuela), Daniel Esgardo Rangel
Baron, [and] Isabel Rangel Baron).
The district court granted Rismed’s motion on April 9, 2013. It noted that Rismed
had served its complaint on the Domestic Defendants, who consented to the
dismissal, but had not effected service on the Foreign Defendants, who “ha[d] not
stated a position on the issue.” Nevertheless, the court dismissed all claims,
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against all defendants, with prejudice.
Nearly eight months passed when, on November 22, 2013, Rismed
Oncology filed a motion for relief from the above order, pursuant to Federal Rules
of Civil Procedure 60(b)(3) and 60(b)(6).4 Rismed premised this motion upon
newly-discovered “fraud, misrepresentation, deceit[,] and illegality” by which the
Defendants obtained the Settlement Agreement, which agreement was the reason
Rismed voluntarily dismissed its claims with prejudice.
Essentially, Rismed alleged that Daniel Rangel only negotiated, agreed to,
and partially performed under the Settlement Agreement to “buy time” to finalize
and complete Rangel Baron’s scheme and that he had no intention of fulfilling his
end of the bargain. Specifically, Rismed claimed that Daniel Rangel engaged in
this conduct to enable his mother, Liliana Di Nardo Rodriguez (“Di Nardo”)—
Rodriguez’s wife at the time and Rangel Baron’s ex-wife—to fraudulently transfer
and sell two properties that belonged to Rodriguez. Upon completion of these
transfers, Di Nardo divorced Rodriguez and moved to Caracas to be with her ex-
husband, Rangel Baron. Daniel Rangel cut off all communication with Rodriguez.
Rismed claimed that given these actions, the Settlement Agreement and order
dismissing its lawsuit should be set aside.
4
Before then, though, Rismed, Rodriguez, and two other companies filed suit in
Alabama state court against a number of individuals, including Daniel Rangel, Rangel Baron,
and Garlick, alleging various fraud claims. After hearing oral argument, the state court
dismissed the action in a one paragraph order, which was not appealed.
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In a thorough order, the district court denied Rismed’s motion. As to its
Rule 60(b)(3) claims, the court found Rodriguez’s reliance upon any fraud to be
unreasonable, given that he was represented by counsel, understood the importance
of the Miami Agreement, and deeply desired to resolve the dispute in order to
repair familial relationships. As the court wrote: “[i]n short, [Rodriguez] closed
his eyes where ordinary diligence required him to see, and thereby was willingly
deceived.” With respect to the Rule 60(b)(6) claims, the court found them
improperly classified, as they hinged upon fraudulent acts of Daniel Rangel and Di
Nardo, and Rule 60(b)(6) “applies only to conduct that does not fit within the first
five clauses of Rule 60(b).” Again, the court questioned Rodriguez’s level of
ignorance as to Daniel Rangel’s and Di Nardo’s actions and motivations.
Following the court’s denial, Rismed filed two motions. The first was a
lengthy motion for reconsideration, citing, among other things, (1) errors in the
court’s consideration of Di Nardo’s fraudulent transfers and the role they played in
the Settlement Agreement, (2) errors in the court’s consideration of Garlick’s role
in Rodriguez’s and Daniel Rangel’s lives, and (3) the need for full discovery. The
court granted this motion, allowing the parties a limited period of time to explore
“the issue of whether [Rodriguez] was tricked or induced by fraud into executing
the ‘Settlement Agreement’ that precipitated the dismissal of [Rismed’s] action on
April 9, 2013.” Rismed’s second motion noted that it had finally served the
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Foreign Defendants with process and asked the court to set aside its order of
dismissal under Rule 60(b)(4), which Rismed now claimed was void since it
addressed previously unserved parties.
Reconsideration of Rismed’s motion, additional briefing, and “hundreds of
pages of evidentiary materials” did not change the court’s mind. It still concluded
that Rismed Oncology failed to produce “‘clear and convincing evidence that an
adverse party obtained [the dismissal of this action with prejudice] through fraud,
misrepresentation, or other misconduct.’” In particular, the court noted that
Rodriguez had the support of counsel throughout the settlement process and
understood that the settlement document had to reflect the Miami Agreement to
retain its protections. Yet, Rodriguez still chose to sign the Settlement Agreement
and dismiss Rismed Oncology’s action anyway because he “got [his] son and
grand kids back[.]” Thus, the court concluded, Rismed failed to show Rodriguez’s
reliance on “the alleged frauds that led to dismissal of [Rismed’s] action” was
reasonable under the circumstances. The court did not address Rismed’s 60(b)(4)
motion, denying it as moot.
Rismed later tried one final motion for reconsideration, but the court
affirmed its earlier findings in a summary order. This appeal followed in
December 2014.
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II. STANDARD OF REVIEW
We generally review a district court’s denial of relief under Rule 60(b) for
an abuse of discretion. BUC Int’l Corp. v. Int’l Yacht Council Ltd., 517 F.3d 1271,
1275 (11th Cir. 2008); see, e.g., Aldana v. Del Monte Fresh Produce N.A., Inc.,
741 F.3d 1349, 1355 (11th Cir. 2014) (reviewing a 60(b)(6) ruling for abuse of
discretion). “‘A district court abuses its discretion if it applies an incorrect legal
standard, applies the law in an unreasonable or incorrect manner, follows improper
procedures in making a determination, or makes findings of fact that are clearly
erroneous.’” Fed. Trade Comm’n v. Nat’l Urological Grp., Inc., 785 F.3d 477,
481 (11th Cir. 2015) (quoting Citizens for Police Accountability Political Comm. v.
Browning, 572 F.3d 1213, 1216–17 (11th Cir. 2009)).
A Rule 60(b)(4) ruling receives a more stringent review, however. Because
the validity of a judgment or order is a question of law, “‘[w]e review de novo . . .
a district court’s ruling upon a Rule 60(b)(4) motion to set aside a judgment as
void[.]’” Baragona v. Kuwait Gulf Link Transp. Co., 594 F.3d 852, 854 (11th Cir.
2010) (quoting Burke v. Smith, 252 F.3d 1260, 1263 (11th Cir. 2001)).
III. ANALYSIS
A. The District Court Did Not Err By Denying Rismed’s Rule
60(b)(4) Claims
Federal Rule of Civil Procedure 60(b)(4) provides a means by which a court
can relieve a party from a void judgment or order. Fed. R. Civ. P. 60(b)(4); see
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Burke, 252 F.3d at 1263. When evaluating a Rule 60(b)(4) motion, the district
court possesses no discretion: “the judgment is either void or it is not.” Burke, 252
F.3d at 1267. The remedy for a void judgment or order is similarly limited—the
only relief available is for the court to set it aside. Id. “Generally, a judgment is
void under Rule 60(b)(4) ‘if the court that rendered it lacked jurisdiction of the
subject matter, or of the parties, or if it acted in a manner inconsistent with due
process of law.’” Burke, 252 F.3d at 1263 (quoting In re Edwards, 962 F.2d 641,
644 (7th Cir. 1992)).
Regarding the order from which it seeks relief, Rismed Oncology argues that
[t]he claims against the Foreign Defendants could not have been
dismissed with prejudice, because the [district court] lacked the
authority to effect such a dismissal over the Foreign Defendants, as
they were never served. Where service of process is insufficient, the
[district court] has no power to render judgment, and the judgment is
void.
Rismed further notes that the Foreign Defendants were not parties to the Miami
Agreement or Settlement Agreement and never consented to nor presented a
position on its motion for dismissal. Boiled down, Rismed’s argument is that the
district court could not dismiss the Foreign Defendants because they were neither
served nor waived service. The court’s order is therefore void, Rismed claims, and
must be set aside. For the following reasons, we disagree.
This Court has previously stated that “[g]enerally, where service of process
is insufficient, the court has no power to render judgment and the judgment is
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void.” In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1299 (11th Cir. 2003)
(citing Varnes v. Local 91, Glass Bottle Blowers Ass’n, 674 F.2d 1365, 1368 (11th
Cir. 1982) and Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314
(1950)). That is so because insufficient service of process “implicates personal
jurisdiction[,]” and personal jurisdiction “‘recognizes and protects an individual
liberty interest. It represents a restriction on judicial power not as a matter of
sovereignty, but as a matter of individual liberty.’” Id. (quoting Ins. Corp. of
Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701–03 (1982)).
Typically, insufficient service of process on a party operates to prohibit a
court from entering a default judgment against that party. See, e.g., id. at 1298–
1301 (affirming denial of motion to set aside default because defendant waived
objection for insufficient service of process) and Varnes, 674 F.2d at 1370
(reversing with directions to vacate default against party not properly served).
This is true generally of personal jurisdiction, of which service of process is a
subset. A court cannot enter a binding judgment against a party over which it lacks
personal jurisdiction. See McGee v. Int’l Life Ins. Co., 355 U.S. 220, 222 (1957)
(“Since Pennoyer v. Neff, this Court has held that the Due Process Clause of the
Fourteenth Amendment places some limit on the power of state courts to enter
binding judgments against persons not served with process within their
boundaries.”) (internal citation omitted); see generally Louis Vuitton Malletier,
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S.A. v. Mosseri, 736 F.3d 1339 (11th Cir. 2013) (affirming denial of 60(b)(4)
motion because defendant had sufficient minimum contacts) and Baragona v.
Kuwait Gulf Link Transp. Co., 594 F.3d 852 (11th Cir. 2010) (affirming order
vacating judgment for lack of service and minimum contacts).
Rismed Oncology believes these concepts should also extend to prohibit a
court from entering an order dismissing claims against a defendant that has not
been served. Yet Rismed cites no authority that supports such an application, nor
can we find any. In contrast, dictum in Varnes implies that a court may dismiss a
complaint that was not properly served upon all the parties against which it was
filed. 674 F.2d at 1370 (“Moreover, the reason given for dismissal of the
complaint against [the served party], if valid, also required dismissal of the
complaint as to [the unserved party].”). And in the context of the Prison Litigation
Reform Act a district court may, “prior to service of process,” dismiss a complaint
that is frivolous, malicious, fails to state a claim upon which relief can be granted,
or seeks monetary relief from a defendant who is immune from such. See, e.g.,
Neitzke v. Williams, 490 U.S. 319, 324 (1989) and Caldwell v. Warden, FCI
Talladega, 748 F.3d 1090, 1096 n.11 (11th Cir. 2014).
Further, Rismed’s theory of service and personal jurisdiction conflicts with
Federal Rules of Civil Procedure 12(b)(2) and 12(b)(5), and would restrict a
plaintiff’s ability to dismiss its complaint under Rule 41(a)(2). That is, if a court
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could only dismiss claims asserted against a party over which it possessed
jurisdiction, as Rismed suggests, it would lose the ability to grant a motion to
dismiss for lack of personal jurisdiction or insufficient service of process. Fed. R.
Civ. P. 12(b)(2), (5); cf. PVC Windoors, Inc. v. Babbitbay Beach Constr., N.V., 598
F.3d 802 (11th Cir. 2010) (affirming grant of motion to dismiss for lack of
personal jurisdiction) and Prewitt Enters., Inc. v. Org. of Petroleum Exporting
Countries, 353 F.3d 916 (11th Cir. 2003) (affirming grant of motion to dismiss for
lack of service of process). And requiring that a court possess jurisdiction over a
defendant in order to dismiss claims against that party would engraft an additional
element onto Rule 41(a)(2), which permits a court to grant a plaintiff’s motion to
dismiss its complaint so long as no defendant has pled a counterclaim (or, if one
has, so long as the counterclaim can “remain pending for independent
adjudication”). Fed. R. Civ. P. 41(a)(2); cf. Pontenberg v. Boston Scientific Corp.,
252 F.3d 1253 (11th Cir. 2001) (discussing Rule 41(a)(2)).
Finally, the order from which Rismed seeks relief is different in kind from
the judgments for which this Court normally requires personal jurisdiction to exist.
Here, the district court granted Rismed’s motion to dismiss its own complaint with
prejudice. The court’s order concerns the unserved Foreign Defendants only
insofar as it did away with the claims against them, but it does not bind the Foreign
Defendants in the same manner as it does Rismed. Notably, until the court ordered
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them to respond to Rismed’s motion for relief, no defendant had filed an answer,
motion to dismiss, or counterclaim or otherwise made an appearance in the case.
Thus, by dismissal of the suit against them, the Foreign Defendants lost nothing; to
the contrary, their anxiety over litigation, if they had any, was eliminated. Contra
Int’l Shoe Co. v. State of Wash., Office of Unemp’t Compensation & Placement,
326 U.S. 310, 316 (1945) (“Historically the jurisdiction of courts to render
judgment in personam is grounded on their de facto power over the defendant’s
person. Hence his presence within the territorial jurisdiction of [the] court was
prerequisite to its rendition of a judgment personally binding him.”) and Pennoyer
v. Neff, 95 U.S. 714, 729–34 (1877) (discussing “the force and effect of judgments
rendered against non-residents without personal service of process upon them”),
overruled in part on other grounds by Shaffer v. Heitner, 433 U.S. 186 (1977). In
short, the district court did not err by denying Rismed Oncology’s Rule 60(b)(4)
claims, because its order was not void. 5
B. The District Court Did Not Err By Denying Rismed’s Rule
60(b)(6) Claims
Rule 60(b)(6) is a “catchall provision”; it permits a court to “relieve a party
from a final judgment ‘upon such terms as are just,’ provided that the motion is
5
We express no view on whether Rismed might be able to pursue an action against the
Foreign Defendants. Cf. Norfolk S. Corp. v. Chevron, U.S.A., Inc., 371 F.3d 1285, 1289 (11th
Cir. 2004) (res judicata effect of dismissal based on settlement agreement is determined by the
terms of the agreement “as interpreted according to traditional principles of contract law”).
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made within a reasonable time and is not premised on one of the grounds for relief
enumerated in clauses (b)(1) through (b)(5).” Liljeberg v. Health Servs.
Acquisition Corp., 486 U.S. 847, 863 and n.11 (1988) (citing Klapprott v. United
States, 335 U.S. 601, 613 (1949) and 11 C. Wright & A. Miller, Fed. Practice &
Procedure § 2864 (1973)); Cano v. Baker, 435 F.3d 1337, 1342 (11th Cir. 2006).
Relief under Rule 60(b)(6) “‘is an extraordinary remedy which may be
invoked only upon a showing of exceptional circumstances[,]’” and that “absent
such relief, an extreme and unexpected hardship will result.” Crapp v. City of
Miami Beach, 242 F.3d 1017, 1020 (11th Cir. 2001) (quoting Griffin v. Swim-Tech
Corp., 722 F.2d 677, 680 (11th Cir. 1984)); Galbert v. W. Caribbean Airways, 715
F.3d 1290, 1294 (11th Cir. 2013) (same). In other words, the movant “‘must
demonstrate a justification so compelling that the district court was required to
vacate its order.’” Galbert, 715 F.3d at 1294 (quoting Cano, 435 F.3d at 1342).
However, even under exceptional circumstances, the decision to grant Rule
60(b)(6) relief is a matter for the court’s sound discretion. Id. at 1294 (citing
Cano, 435 F.3d at 1342 and Seven Elves, Inc. v. Eskenazi, 635 F.2d 396, 402 (5th
Cir. Unit A 1981)).
Here, Rismed claims an entitlement to relief from the district court’s order
because “several conflicts of interest [] existed between Garlick’s role as facilitator
(or mediator) and his relationship with [] Rangel, which extended not only through
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mediation, but the Settlement Agreement, and dismissal.” (Emphasis in original.)
Specifically, Rismed notes that Garlick and Daniel Rangel engaged in a for-profit
joint venture to sell “Bibles, Music, and Biblical Resources” and that Daniel
Rangel personally wired Garlick a total of $60,000 ($10,000 of which was a
personal gift to help his sick child). Had Garlick disclosed this relationship,
Rodriguez claims he would not have participated in the mediation and therefore
would not have voluntarily dismissed Rismed’s lawsuit. This bias and prejudice,
Rismed believes, entitles it to relief under Rule 60(b)(6). Again, we disagree.
As noted, to obtain relief under Rule 60(b)(6) a movant must demonstrate
“exceptional circumstances” that will lead to “extreme and unexpected hardship”
without court intervention. Griffin, 722 F.2d at 680. The circumstances must be
“so compelling that the district court was required to vacate its order.” Galbert,
715 F.3d at 1294. The district court below did not abuse its discretion by
concluding that Rismed has not identified such circumstances in this case.
First, Rodriguez claims he relied upon Garlick’s advice and guidance when
negotiating the Miami Agreement and Settlement Agreement with Daniel Rangel,
and that Garlick led him astray because of the latter’s undisclosed relationship with
Rangel. However, Rodriguez was represented by counsel throughout the
settlement process. Though Garlick “frequently told the parties to not use their
attorneys, [Rodriguez] always used [his] attorney . . . because [he] needed [his]
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attorney’s assurance that the settlement agreement was drafted fair[ly] and
accurate[ly], and with the appropriate legal terms understood and accepted in the
United States.” Further, Rodriguez “relied on [his] attorney for making all the
changes to the [Settlement Agreement,]” who did so “because [] the initial []
agreement did not settle [the parties’] disputes, but only dismissed [Rismed’s]
claims in the federal lawsuit.” Nevertheless, despite his continued reliance on his
attorneys, and in spite of being twice instructed by them not to sign the Settlement
Agreement, Rodriguez did so anyway.
Rodriguez argues that his decision to sign the Settlement Agreement resulted
from Garlick’s deception; that is, Garlick told him “the attorneys had worked into
the night finalizing the legalities of the document” and that it had “been . . .
approved . . . and was ready for the parties’ signatures.” Assuming that Rodriguez
was so swayed by this representation as to deviate from his practice of conferring
with his attorneys and to sign the Agreement without their blessing, Rodriguez and
his attorneys had six days from that point until the court granted Rismed’s motion
to read the document and confirm it accurately reflected the parties’ agreement.
Moreover, Rodriguez used the very same attorneys who warned him not to sign the
Settlement Agreement to file both of Rismed’s motions to voluntarily dismiss its
case. So if Garlick did pressure or otherwise unduly influence Rodriguez into
signing an unfinished Settlement Agreement that did not accurately reflect the
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parties’ intent, Rodriguez had the opportunity to correct that error, and he failed to
do so.
Second, even if Rodriguez had relied on Garlick’s advice during the
settlement negotiations, he was not unfamiliar with the minister and his connection
to Daniel Rangel. At the time, Rodriguez had known Garlick for more than ten
years and “loved him like a brother.” Garlick stayed at Rodriguez’s home
occasionally, and the latter approached the former for guidance when experiencing
deep personal and family troubles. Further, Rodriguez had his own financial ties to
Garlick, providing him with a credit card and making monetary donations to and
for Garlick’s ministry over the years—including during the pendency of the
lawsuit, settlement, and dismissal of Rismed’s action. And Rodriguez encouraged
Daniel Rangel to assist Garlick with his sick child and to consider business with
the minister.
Related to this latter point, Rismed Oncology asserts that Garlick, as a
Christian mediator, should be held to the same disclosure and recusal standards
that 28 U.S.C. § 455(a) and Liljeberg, 486 U.S. 847, impose upon “justice[s],
judge[s], [and] magistrate judge[s] of the United States[.]” In support, Rismed
points to CEATS, Inc. v. Cont’l Airlines, Inc., 755 F.3d 1356 (Fed. Cir. 2014). But
in that case a district court ordered the parties before it to engage in mediation, and
appointed a magistrate judge as mediator. Id. at 1358. Here, however, there is no
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suggestion the district court recommended, in any way, that the parties attempt to
resolve their dispute through formal mediation, nor was Garlick a court-appointed
mediator (let alone a federal justice, judge, or magistrate judge). Rather,
Rodriguez and Daniel Rangel, of their own volition, resolved their dispute over a
long lunch in Miami with their friend and minister, Garlick, whom they chose to
act as facilitator. Rismed Oncology cites no authority that applies the § 455 and
Liljeberg disclosure standards in such circumstances, nor can we find any.
Also, even though the CEATS court held that the mediator there should have
disclosed his relationship to the parties involved in the litigation, it nevertheless
affirmed the district court’s denial of Rule 60(b) relief. Id. at 1358, 1361–67.
Given the above, and even assuming Rodriguez’s ignorance that Garlick might
have felt more loyalty to Daniel than to Rodriguez, the CEATS holding provides no
support for Rodriguez’s position. In summary, the district court did not abuse its
discretion in finding that Rismed has not identified circumstances sufficiently
extraordinary to warrant Rule 60(b)(6). See Liljeberg, 486 U.S. at 864 (“Rule
60(b)(6) relief is accordingly neither categorically available nor categorically
unavailable for all § 455(a) violations.”); compare Cano, 435 F.3d at 1341–42
(scientific developments and alterations to Supreme Court precedent were not
sufficiently compelling justifications that district court was required to vacate its
order).
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We therefore AFFIRM the district court’s order denying Rismed
Oncology’s request for relief.
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