Rita Allaire v. Maria Benton

Case: 10-30001 Document: 00511250885 Page: 1 Date Filed: 10/01/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 1, 2010
No. 10-30001
Summary Calendar Lyle W. Cayce
Clerk
RITA M. ALLAIRE; DON C. RICHARDSON,
Plaintiffs-Appellees,
versus
MARIA VAN NIFTRIK BENTON,
Defendant-
Third Party Plaintiff-
Appellant,
versus
HAROLD BUTCHART,
Third Party Defendant-
Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
No. 2:02-CV-475
Case: 10-30001 Document: 00511250885 Page: 2 Date Filed: 10/01/2010
No. 10-30001
Before DAVIS, SMITH, and SOUTHWICK, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Maria Benton appeals a judgment ordering her to pay plaintiffs Rita Al-
laire and Don C. Richardson on a promissory note. Benton also appeals the de-
nial of her motions for new trial and relief from judgment. Because none of Ben-
ton’s arguments has merit, we affirm.
I.
Plaintiffs claim the benefits of a mortgage promissory note executed by
Benton and payable to them for $85,000 plus interest. The loan was one aspect
of a larger real estate deal in which Benton purchased a commercial property us-
ing the $85,000 loan, the proceeds of the simulated sale of her house, a bank
loan, and her personal funds.
In 2002, plaintiffs sued on the note, alleging that Benton had failed to pay
since 1999. Benton responded by arguing that she did not sign the note and,
even if she did, she was incompetent because of an alleged brain injury.
Benton filed a counterclaim against the plaintiffs and a third-party de-
mand against Harold Butchart. In her counterclaim and third-party demand,
Benton alleged that (1) plaintiffs were her financial advisors after she suffered
the brain injury; (2) plaintiffs breached their fiduciary duty to her by advising
her to purchase property she could not afford; (3) plaintiffs advised her to sell
her house to Butchart; (4) Butchart purchased the house for less than it was
worth; (5) part of the money the plaintiffs seek to recover was loaned by them to
Butchart; and (6) as a consequence of the actions of the plaintiffs and Butchart,
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
2
Case: 10-30001 Document: 00511250885 Page: 3 Date Filed: 10/01/2010
No. 10-30001
Benton lost her house and wound up with a heavily mortgaged piece of commer-
cial property.
Following a bench trial in which Benton appeared pro se, the district court
found Benton liable for the balance due on the promissory note, plus interest and
attorneys’ fees, for a final sum of $158,820.15. The court dismissed Benton’s
counterclaim and third-party demand.
Benton moved for a new trial under Federal Rule of Civil Procedure 59(a)
and a motion for relief from judgment under rule 60(b). The district court denied
both. Benton appeals the judgment and the denial of her motions.
II.
On appeal from a bench trial, we review conclusions of law and mixed
questions of fact and law de novo, Am. Int’l Specialty Lines Ins. Co. v. Res-Care,
Inc., 529 F.3d 649, 656 (5th Cir. 2008) (citation omitted); findings of fact for clear
error, Dickerson v. Lexington Ins. Co., 556 F.3d 290, 294 (5th Cir. 2009) (citation
omitted); and evidentiary rulings for abuse of discretion, Abner v. Kansas City
S.R.R. Co., 513 F.3d 154, 168 (5th Cir. 2008). If, however, “the complaining par-
ty failed to object [to the evidentiary ruling] at trial, we review only for plain er-
ror.” United States v. Thompson, 454 F.3d 459, 464 (5th Cir. 2006). The denial
of a rule 60(b) motion is reviewed for an abuse of discretion. Thermacor Process,
L.P. v. BASF Corp., 567 F.3d 736, 744 (5th Cir. 2009).
Ordinarily, this court will not review the denial of a rule 59(a) motion for
a new trial. Youmans v. Simon, 791 F.2d 341, 349 (5th Cir. 1986). That is be-
cause an appeal from a denial of a new trial “merely restates the attack on the
merits of the final judgment. It is from the final judgment that the appeal
should be taken.” Gov’t Fin. Servs. v. Peyton Place, 62 F.3d 767, 774 (5th Cir.
1995) (citation omitted). We will review the decision not to grant a new trial on-
ly where “new matters arise after the entry of the judgment.” Id. Because there
3
Case: 10-30001 Document: 00511250885 Page: 4 Date Filed: 10/01/2010
No. 10-30001
are no such new matters here, we review only the judgment and the denial of the
rule 60(b) motion.
III.
Benton raises seven substantive arguments in her appeal. They are all
unpersuasive.
A.
Benton incorrectly claims that the district court failed to credit her repeat-
ed denial of signing the promissory note. The court did consider Benton’s tes-
timony but found plaintiffs’ countervailing testimony more “compelling and cred-
ible.” R. 1964. Both plaintiffs provided consistent and detailed testimony that
they were familiar with Benton’s signature, recognized it on the note, and had
personally witnessed her sign it. Id. The credibility decision is for the district
court, and we have no reason to disturb it. See United States v. Turner, 319 F.3d
716, 720-21 (5th Cir. 2003).
The district court also noted that Benton made payments of $12,155.48
toward the balance of the loan, a voluntary performance that constitutes tacit
confirmation of the contract. R. 1964. Thus, even if the court had erroneously
credited plaintiffs’ testimony over Benton’s, the error was harmless. Benton
raises no arguments on appeal that directly contradict this conclusion.
Finally, even if the court did err in concluding that Benton had signed the
note and engaged in voluntary performance, the errors are harmless, because
Benton would still be obligated to repay the loan under a theory of unjust enrich-
ment. Under Louisiana law, a claim for unjust enrichment is established where
there is (1) an enrichment; (2) an impoverishment; (3) a connection between the
enrichment and resulting impoverishment; (4) an absence of “justification” or
“cause” for the enrichment and impoverishment; and (5) no other remedy at law
4
Case: 10-30001 Document: 00511250885 Page: 5 Date Filed: 10/01/2010
No. 10-30001
available to the plaintiff. Finova Capital Corp. v. IT Corp., 774 So. 2d 1129,
1132 (La. App. 2d Cir. 2000). Based on the trial testimony, the district court
found that all five requirements for unjust enrichment were satisfied, so Benton
is liable for the balance on the note.
B.
Benton contests the district court’s conclusion that she was cognitively
competent when she signed the note. In Louisiana, it is presumed that all par-
ties have the capacity to contract. See L A. C IV. C ODE A NN. art. 1918. Lack of ca-
pacity, as a defense, must be shown by clear and convincing evidence. Florida
v. Stokes, 944 So. 2d 598, 603 (La. App. 1st Cir. 2006). “Where doubt exists as
to the showing of an exception, the presumed capacity to contract prevails.”
First Nat’l Bank v. Williams, 346 So. 2d 257, 264 (La. App. 3d Cir. 1977).
On her defense of lack of capacity, Benton proffered a neuropsychologist,
Roberta Bell, who testified that Benton displayed a disparity between certain
neurological functions, such as abstract reasoning and memory formation, and
her otherwise above-average intellect. R. 1965. Bell linked that disparity to a
previously suffered brain injury and concluded that it was “more probable than
not that that injury resulted in decreased ability to make decisions and judg-
ments in a manner that is in her best interest, and an inability to adequately
comprehend and encode written information in memory, in order to make such
decisions.” App. [not paginated].
As the district court noted, however, Bell’s statement does not provide
clear and convincing evidence that Benton lacked capacity to enter into a con-
tract. The testimony merely suggests that Benton probably faced an increased
difficulty when entering into a contract; it does not show, by clear and convincing
evidence, that the difficulty rose to the level of incapacity. Not only is the stan-
dard offered by Bell insufficientSSbecause “more probable than not” is not the
5
Case: 10-30001 Document: 00511250885 Page: 6 Date Filed: 10/01/2010
No. 10-30001
equivalent of “clear and convincing”SSbut Bell’s final conclusion is insufficient
to deem Benton legally incapable of consenting to the contract, even if clear and
convincing evidence were offered to support that conclusion.
Moreover, though Bell testified that Benton might have difficulty fully
comprehending complex decisions or documents, Bell qualified that statement
by stating that the difficulty could be mitigated if Benton was familiar with
those types of documents. Indeed, Benton possessed a history of engaging in
various transactions, including large-scale commercial purchases, real estate
transactions, and other loans, after the date of her alleged brain injury. She was
familiar with the types of documents at issueSSa familiarity that further dimin-
ished the possibility that she lacked capacity to consent to the contract. Finally,
even if, arguendo, the district court did err in concluding that Benton had the c-
apacity to consent, the error was harmless, because she would still be obligated
to repay the loan under a theory of unjust enrichment, as explained above.
C.
Benton maintains that her consent to the contract was vitiated by fraud
on the part of the plaintiffs. Louisiana law defines fraud as “a misrepresentation
or a suppression of truth made with the intention either to obtain an unjust ad-
vantage for one party or to cause a loss or inconvenience to the other [, and]
[f]raud may result from silence or inaction.” L A. C IV. C ODE A NN. art. 1953. Ben-
ton claims that the plaintiffs orchestrated the larger real estate transaction, of
which the promissory note was a small part, with the intent to defraud Benton
for their own profit. The district court disagreed, finding that there was no evi-
dence in the record to support Benton’s allegations.
On appeal, Benton has not cited any relevant evidence, besides her own
conjectures and conclusional statements, to cast doubt on the finding of no fraud.
Much of the evidence she offers relates not to the principal transaction on which
6
Case: 10-30001 Document: 00511250885 Page: 7 Date Filed: 10/01/2010
No. 10-30001
this claim arose but more generally to her belief that the plaintiffs are the types
of individuals who have the propensity to commit fraud and have done so in the
past. The most charitable reading we can prescribe to Benton’s argument for
fraud is based solely on her own testimony, which the district court did not find
credible in light of the plaintiffs’ countervailing testimony and the absence of cor-
roborating evidence. Again, it is not our role to second-guess legitimate credibili-
ty determinations made by a trial court. See Turner, 319 F.3d at 720-21. Thus,
even with a liberal construction of Benton’s claims, there is no merit to her argu-
ment.
D.
Benton contends that the district court erred by not affording her the op-
portunity to testify as to every exhibit that she proffered. During trial, the court
took several exhibits under submission and informed Benton that they would be
taken into account during the court’s deliberations, as is customary in bench tri-
als. R. 2590-91. Accordingly, the court did not allow additional testimony re-
garding some of those exhibits but did allow Benton the chance to file a memo-
randum if she wished to point out any specific information contained in them.
R. 2972. Benton did not object to that decision during trial, so we review it only
for plain error. See Thompson, 454 F.3d at 464.
Benton does not deny that the district court considered the exhibits before
ruling; rather, she argues that just “considering” the exhibits without the assis-
tance of her trial testimony was insufficient to understand fully the claims she
was making. Benton lists in her brief what information she would have testified
to regarding some of the exhibits that were admitted.
There are at least two problems with Benton’s presentation. First, she did
file a post-trial memorandum in which she imparted substantially the same in-
formation regarding the submitted exhibits that she now argues should have
7
Case: 10-30001 Document: 00511250885 Page: 8 Date Filed: 10/01/2010
No. 10-30001
been part of her trial testimony. R. 1398-1452. Thus, the court considered that
information. Second, all of the additional information that Benton claims she
would have imparted in her testimony, and that was not already discussed in
her post-trial memorandum, are either irrelevant to the claims at issue or are
merely a restatement of her conclusional assertions of fraud. Disallowing this
type of testimony on exhibits already taken under submission is not error, much
less plain error.
E.
In her opening brief, Benton alleges that the district court failed to apprise
her of the consequences of not testifying regarding some of her trial exhibits.
She argues that that failure affected her substantial rights and is plain error un-
der Federal Rule of Civil Procedure 61 because it seriously affected the fairness
and integrity of the judicial proceedings.
Benton does not expand any further on the alleged failure to warn. It is
frivolous on its face. Even assuming that there were negative consequences from
Benton’s not providing testimony on some her trial exhibitsSSwhich, as ex-
plained in part III.D above, there were notSSa trial court owes no duty to warn
a litigant, pro se or otherwise, of the strategic consequences of an evidentiary
ruling. Though we construe the arguments of pro se appellants liberally, there
is no construction we can offer to create a rational argument from this claim.
(We also note that rule 61, on which Benton relies, speaks to harmless error, not
plain error.)
F.
Benton claims that the district court erred in refusing to allow a witness
to testify for her via telephone. During trial, Benton made a proffer as to what
the witness’s testimony would be if he were called. R. 1374. Benton wanted the
8
Case: 10-30001 Document: 00511250885 Page: 9 Date Filed: 10/01/2010
No. 10-30001
witness to testify to prior dealings with the plaintiffs and to attest that, in his
opinion, plaintiffs had committed fraud against him. R. 2870-2874. Instead of
allowing the phone testimony, the court advised Benton that her proffer was suf-
ficient and that the court would take that information into account when render-
ing a decision. R. 2874. Specific details regarding the witness’s interactions
with the plaintiffs, none of which had any relationship to the financial transac-
tions between Benton and the plaintiffs, were properly deemed unnecessary in
light of the court’s acceptance of Benton’s proffer. The court did not abuse its
discretion by merely accepting the proffer, especially given that Benton does not
point to any additional, relevant information that would have been imparted
through trial testimony.
G.
Benton urges that the district court erred in failing to grant her motion for
relief from final judgment under rule 60(b). Before the district court, Benton for-
mally based her motion on rule 60(b)(1), (2), (3), and (6). On appeal, however,
she relies only on rule 60(b)(3), so we limit our discussion to it.
Rule 60(b) provides that “the court may relieve a party or its legal rep-
resentative from a final judgment, order, or proceeding for . . . (3) fraud (whether
previously called intrinsic or extrinsic), misrepresentation, or misconduct by an
opposing party.” The evidence of fraud that Benton offers in her rule 60(b)(3) ar-
gument is the same evidence she presented for fraud on the merits, which we
addressed and dismissed in part III.C above. For those same reasons, Benton’s
claim that the court should have granted her rule 60(b)(6) motion is without
merit.
AFFIRMED.
9