Kiril Zahariev v. Hartford Life & Accident Insurance Company ( 2023 )

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 22-1209
KIRIL ZAHARIEV
Plaintiff - Appellant,
v.
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the District of South Carolina, at Beaufort.
Richard Mark Gergel, District Judge. (9:20-cv-01072-RMG)
Submitted: November 29, 2022 Decided: February 3, 2023
Before WYNN and RUSHING, Circuit Judges, and KEENAN, Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
Kiril Zahariev, Appellant Pro Se. Nikole M. Crow, Atlanta, Georgia, Lewis Gregory Cook
Horton, WOMBLE BOND DICKINSON (US) LLP, Charleston, South Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Kiril Zahariev appeals from the district court’s order overruling his objections to the
magistrate judge’s report and recommendation and denying his Fed. R. Civ. P. 60(b)
motion to reopen his settled case, and the district court’s order denying Zahariev’s motion
to disqualify the district court judge. Because Zahariev’s claims of error were known to
him at the time he settled his case, we find that the district court did not abuse its discretion
in denying Zahariev’s motion to reopen. In addition, the record in this case does not show
the alleged judicial bias. Accordingly, we affirm.
Zahariev filed an action in district court seeking to recover unpaid long-term
disability benefits under a group policy issued by Hartford Life and Accident Insurance
Company (“Hartford”) pursuant to the Employee Retirement Income Security Act of 1974,
29 U.S.C. §§ 1001-1461. Several months after the complaint was filed, the magistrate
judge appointed a mediator who successfully assisted the parties in reaching a settlement
in October 2020. “[H]aving been advised by counsel for the parties that the . . . action
ha[d] been settled,” the district court entered an order dismissing the action without
prejudice. The parties were informed that, if the settlement was not consummated, either
party could move, within 60 days, to “reopen this action and restore it to the calendar”
under Fed. R. Civ. P. 60(b). The court explicitly retained the jurisdiction to enforce the
settlement. (E.R. 678). On October 24, 2020, Zahariev cashed his settlement check; on
October 28, the parties filed a joint stipulation of dismissal with prejudice pursuant to Fed.
R. Civ. P. 41.
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In February 2021, Zahariev moved to reopen the case and set aside the judgment
pursuant to Fed. R. Civ. P. 60(b)(1), (3), (6), arguing that the case should be reopened based
on the mediator’s misconduct that led Zahariev to accept an unfavorable settlement. In his
reply to Hartford’s response to his motion, Zahariev argued, for the first time, that he was
entitled to relief under Rule 60(b)(3) because Hartford submitted fraudulent responses
during discovery that materially affected the mediation process. Specifically, he asserted
that Hartford’s supplemental discovery responses included items “inadvertently” left out
of its initial responses and falsely stated that “[t]here are no written performance
evaluations of the vendors.” (E.R. 733).
The magistrate judge recommended denying Zahariev’s Rule 60(b) motion as
untimely or, alternatively, on the merits. Zahariev timely filed specific objections to
several findings from the report and recommendation, including the magistrate judge’s
analysis of Zahariev’s discovery fraud claim. The district court adopted the magistrate
judge’s report and recommendation and denied Zahariev’s motion to reopen, without
specifically addressing the discovery fraud issue.
Zahariev timely appealed. On appeal, we ruled that the district court erroneously
failed to consider the discovery fraud issue. Accordingly, we vacated and remanded so
that the district court could consider Zahariev’s objections regarding this issue. Zahariev v.
Hartford Life & Accident Ins. Co., 2022 WL 260057 (4th Cir. Jan. 27, 2022) (No. 21-1426).
On remand, the district court entered a supplemental order addressing and overruling
Zahariev’s discovery fraud objections. Zahariev again appealed.
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Rule 60(b) permits a district court to relieve a party from an order on the grounds of
mistake, inadvertence, excusable neglect, newly discovered evidence, fraud or “any other
reason that justifies relief.” Fed. R. Civ. P. 60(b). A remedy under Rule 60(b) “is
extraordinary and is only to be invoked upon a showing of exceptional circumstances.”
United States v. Welsh, 879 F.3d 530, 536 (4th Cir. 2018) (internal quotation marks
omitted). Moreover, a decision not to reinstate a settled case under Rule 60(b) has been
described as “discretion piled on discretion.” See McCormick v. Chicago, 230 F.3d 319,
327 (7th Cir. 2000) (internal quotation marks omitted). Therefore, a district court’s
decision not to reinstate should stand absent “substantial danger that dismissal of plaintiff’s
claims was fundamentally unjust.” Id.To prevail on a Rule 60(b)(3) motion (fraud on the court by a party), the movant
must (1) show that he has a meritorious claim or defense, (2) establish the alleged
misconduct by clear and convincing evidence, and (3) demonstrate that the misconduct
prevented him from fully presenting his case. Schultz v. Butcher, 24 F.3d 626, 630 (4th
Cir. 1994). “After proof of these elements, the court must balance the competing policies
favoring the finality of judgments and justice being done in view of all the facts, to
determine within its discretion, whether relief is appropriate in each case.” Id. (internal
quotation marks omitted).
Here, the district court offered Zahariev 60 days to move to reopen his case if he
chose not to consummate the settlement agreement. Rather than moving to reopen the case,
Zahariev, with knowledge of both the mediator’s alleged improper behavior and Hartford’s
alleged discovery fraud, chose to cash his settlement check and sign a joint order of
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dismissal with prejudice. He then waited over three months after the stipulated dismissal
of his suit and over a month after the expiration of the 60-day period before filing the
instant Rule 60(b) motion.
We note that Zahariev argues that he proceeded with the settlement and dismissal
“based in large part on incomplete and false responses provided by Hartford during the
discovery stage.” (E.R. 870.) The discovery disputes involved Zahariev’s attempt to
obtain information regarding the compensation of Hartford’s medical consultants and
vendors involved in Zahariev’s case. Zahariev alleges that he was served with
supplemental responses on October 14, 2020, the night before mediation began. Zahariev
asserts that he was unable to review the responses in time to be prepared for mediation.
However, Zahariev provides no reason why he could not have reviewed the documents
within the 60-day period provided by the district court, and why, instead, he settled the
case and cashed his settlement check.
Similarly, Zahariev was well aware of the alleged improper actions of the mediator
at the time of the settlement. Zahariev specifically asserts that he was forced to settle given
the mediator’s threat that, if he did not, Hartford would continue to investigate his disability
and conduct further intrusive surveillance. Presumably, Zahariev is contending that the
mediator was influencing Hartford to conduct more surveillance. Even if true, Zahariev
does not explain why the threat of further surveillance caused him to settle prematurely but
did not deter him from filing to reopen his case. Moreover, Zahariev does not assert that
the mediator’s statement was untrue; instead, he appears to argue the opposite—that is, that
Hartford had improperly surveilled him in the past and would likely do it again. In short,
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Zahariev’s arguments regarding the mediator’s threats or statements about possible
surveillance are conflicting and unconvincing, and in any event, Zahariev does not explain
why he could not have raised this claim (and his other mediator-related claims) during the
60-day window proffered by the district court.
Given that Zahariev was, or should have been, aware of the alleged discovery and
mediator abuse at the time he settled his case, he has failed to show extraordinary or
exceptional circumstances meriting Rule 60(b) relief. Moreover, even if we believed that
extraordinary or exceptional circumstances exist, the district court did not abuse its
discretion in finding to the contrary. See Welsh, 879 F.3d at 536 (showing an abuse of
discretion is a “heavy” burden); see Pagan v. American Airlines, Inc, 534 F.2d 990, 993
(1st Cir. 1976) (finding no abuse of discretion where district court denied Rule 60(b)
motion to set aside settlement because Appellant did not move to reinstate within the 60-
day period provided by the court). Given the great deference due to the district court and
the high bar to reopen a settled case, we affirm the district court’s order denying Zahariev’s
Rule 60(b) motion.
Turning to Zahariev’s judicial bias claim, it is well settled that, “[u]nder 28 U.S.C.
§ 455(a), all ‘judge[s] of the United States’ have a general duty to ‘disqualify [themselves]
in any proceeding in which [their] impartiality might reasonably be questioned.’” Belue v.
Leventhal, 640 F.3d 567, 572 (4th Cir. 2011) (quoting 28 U.S.C. § 455(a)). The relevant
code provision further provides specific “situations requiring recusal, one of which is
where a judge ‘has a personal bias or prejudice concerning a party, or personal knowledge
of disputed evidentiary facts concerning the proceeding.’” Id. (quoting 28 U.S.C.
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§ 455(b)(1)). But the Supreme Court has explained that “both § 455(a) and § 455(b)(1)
carry an ‘extrajudicial source’ limitation, under which bias or prejudice must, as a general
matter, stem from ‘a source outside the judicial proceeding at hand’ in order to disqualify
a judge.” Id. (quoting Liteky v. United States, 510 U.S. 540, 545, 554 (1994)) (other
citations omitted).
Zahariev’s claim of judicial bias does not have such an “extrajudicial source” from
which it stems. Instead, Zahariev bases his argument in this court on the district court’s
rejection of his claims, failure to consider all of his assertions, and error in failing to
conduct de novo review. It is well established that “judicial rulings alone almost never
constitute a valid basis for a bias or partiality motion,” Liteky, 510 U.S. at 555, and the
record in this case does not reveal any support for the claimed judicial bias. Accordingly,
Zahariev’s judicial bias claim lacks merit.
Accordingly, we affirm the district court’s orders denying Rule 60(b) relief and
denying Zahariev’s motion to disqualify. We grant Hartford’s motion to seal and deny
Zahariev’s motions to supplement and to file a sur-reply. We dispense with oral argument
because the facts and legal contentions are adequately presented in the materials before the
district court and argument would not aid the decisional process.
AFFIRMED
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