Stancu v. Starwood Hotels & Resorts Worldwide, Inc.

Case: 15-11285 Document: 00513784641 Page: 1 Date Filed: 12/05/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 15-11285 United States Court of Appeals
Fifth Circuit
FILED
JOHN STANCU, December 5, 2016
Lyle W. Cayce
Plaintiff–Appellant, Clerk
v.
STARWOOD HOTELS AND RESORTS WORLDWIDE, INCORPORATED;
SHERATON HOTEL,
Defendants–Appellees.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:14-CV-2876
Before WIENER, CLEMENT, and HIGGINSON, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant John Stancu, proceeding pro se, appeals the district
court’s denial of his Motion to Reopen the Case and Refer the Matter Back to
Magistrate Judge Irma Ramirez for a Second Settlement Conference (“Motion
to Reopen”). We affirm.
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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I. FACTS AND PROCEDURAL BACKGROUND
Stancu filed suit against his former employer, Defendant-Appellee
Starwood Hotels & Resorts Worldwide, Inc. 1 (“Starwood”), in August 2014,
alleging violations of the Age Discrimination in Employment Act. In December
2014, the district judge scheduled the parties for a judicial settlement
conference before Magistrate Judge Irma Ramirez. At the conference on
January 22, 2015, the parties entered into and executed an “Agreement of
Settlement and Release” (“Settlement Agreement” or “Agreement”).
A. The Settlement Agreement
Pursuant to the Settlement Agreement, Stancu agreed to terminate his
employment with Starwood, released any claims against Starwood, and
promised not to disparage his former employer. 2 In exchange, Starwood agreed
to pay Stancu $63,000 “minus applicable taxes and withholding” and to return
Stancu’s personal toolbox and the tools found in it. 3 The Settlement Agreement
also contained a confidentiality provision prohibiting Stancu from disclosing
the provisions of the Agreement.
B. Dismissal
On January 26, 2015, the district court entered a 30-Day Order of
Dismissal, dismissing “all claims . . . without prejudice for thirty (30) days,
subject to the Parties’ right to reopen the case during that time if a settlement
agreement is not reached.” The order stated that “[i]f the Parties cannot
finalize a settlement, any party may reopen this action during this time” and
1 Although Stancu’s complaint also named “Sheraton Hotel” as a defendant, it is not
a legal entity.
2 No provision of the Settlement Agreement gives Stancu reciprocal protection from
disparagement by Starwood.
3 This is not expressly provided for in the text of the Settlement Agreement, but it
appears from the briefing that both parties understood Starwood would return Stancu’s
personal effects when Stancu met with human resources.
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that if the case was not reopened within the 30-day window, the case would be
considered dismissed with prejudice.
On February 6, 2015, counsel for Starwood provided Stancu with the
settlement check pursuant to the Settlement Agreement, and the parties filed
a Joint Stipulation of Dismissal, dismissing the matter with prejudice. On
February 11, 2015, Stancu met with counsel for Starwood, who gave Stancu
his final paycheck and returned a box to Stancu containing at least some of
his tools.
C. The Motion to Reopen
On February 24, 2015, Stancu filed a Motion to Reopen, alleging that
Starwood had breached the Settlement Agreement. 4 To resolve the issues
between the parties, the magistrate judge scheduled a follow-up settlement
conference for April 15, 2015, but no agreement was reached. 5
Ultimately, Magistrate Judge Ramirez recommended that Stancu’s
Motion to Reopen be denied and that the remaining motions in the case be
denied as moot. The magistrate judge construed Stancu’s Motion to Reopen as
a motion seeking relief from the parties’ joint stipulation of dismissal, pursuant
4 While the Motion to Reopen was still pending, Stancu filed a second lawsuit alleging
age discrimination and retaliation and claiming that the previous settlement agreement was
void for Starwood’s alleged breach of the agreement. See Stancu v. Starwood Hotels & Resorts
Worldwide, Inc., No. 3:15-cv-00672 (N.D. Tex. filed March 2, 2015). In response, Starwood
moved to dismiss the second lawsuit and requested sanctions for a violation of the parties’
confidentiality agreement.
5Following the settlement conference, Stancu moved for sanctions for violation of the
Settlement Agreement and to invalidate the Agreement, and Starwood filed a second motion
for sanctions for violation of the magistrate judge’s order that the terms of the settlement
remain confidential. On May 4, 2015, Starwood also filed a separate lawsuit against Stancu
seeking a temporary restraining order, preliminary injunction, and permanent injunction
enjoining Stancu from breaching the confidentiality and nondisparagement provisions of the
Settlement Agreement. The instant case was eventually consolidated with Stancu’s second
lawsuit, which is still pending before the district court for the Northern District of Texas.
Stancu v. Starwood Hotels & Resorts Worldwide, Inc., No. 3:15-cv-00672, ECF No. 25 (N.D.
Tex. Apr. 24, 2016).
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to Rule 60(b) of the Federal Rules of Civil Procedure. Specifically, the
magistrate judge liberally construed Stancu’s arguments for relief as follows:
(1) seeking relief under Rule 60(b)(1) by alleging that the Settlement
Agreement was invalid because there was no meeting of the minds between
the parties; (2) seeking relief under Rule 60(b)(3) because Starwood had
purportedly breached the material terms of the Settlement Agreement by not
paying Stancu the full amount agreed on, by failing to return all of Stancu’s
personal effects, and by making disparaging comments about Stancu; and
(3) seeking relief under Rule 60(b)(6) based on Starwood’s alleged bad faith,
Starwood’s alleged breach of the Settlement Agreement, and the alleged lack
of meeting of the minds.
Stancu objected to the magistrate judge’s recommendations and also
alleged that Magistrate Judge Ramirez’s involvement in his case was a conflict
of interest. 6 On December 16, 2015, the district court accepted the magistrate
6 Magistrate Judge Ramirez’s participation in the settlement discussions and her
issuing her Findings and Recommendation regarding Stancu’s Motion to Reopen does not
create a conflict of interest requiring recusal. Although we do not necessarily approve of the
district court’s decision to refer Stancu’s Motion to Reopen to the same magistrate judge who
presided over the parties’ settlement discussions, we cannot say that it was improper for the
magistrate judge to review Stancu’s motion and issue her Findings and Recommendations.
“We have stated that ‘[a]s a general rule, for purposes of recusal, a judge’s “personal”
knowledge of evidentiary facts means “extrajudicial,” so facts learned by a judge in his or her
judicial capacity regarding the parties before the court, whether learned in the same or a
related proceeding, cannot be the basis for disqualification.’” Brown v. Oil States Skagit
Smatco, 664 F.3d 71, 81 (5th Cir. 2011) (per curiam) (alteration in original) (quoting Conkling
v. Turner, 138 F.3d 577, 592 (5th Cir. 1988)). “Furthermore, we have explained that
‘[o]pinions formed by the judge that are based on . . . events occurring during the proceedings
do not constitute a basis for recusal unless they display a deep-seated favoritism or
antagonism that would make fair judgment impossible.’” Id. at 81 (alterations in original)
(emphases added) (quoting Conkling, 138 F.3d at 593); see also Blackmon v. Eaton Corp., 587
F. App’x 925, 934 (6th Cir. 2014) (“[W]e cannot find authority for the proposition that
participation in a mediated settlement conference categorically disqualifies a judge from later
deciding a motion in that same case.”). Here, there is no indication of a deep-seated
antagonism on the part of the magistrate judge toward Stancu. Moreover, Magistrate Judge
Ramirez’s role in issuing the Findings and Recommendations does not bear on the district
court’s ultimate denial of Stancu’s Motion to Reopen in this case because the district court
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judge’s findings and recommendation and denied Stancu’s Motion to Reopen.
Stancu appeals the district court’s denial.
II. ANALYSIS
The district court had jurisdiction over this case pursuant to 28 U.S.C.
§ 1331. This court has jurisdiction to review the district court’s judgment on
the Motion to Reopen pursuant to 28 U.S.C. § 1291.
The denial of a Rule 60(b) motion for relief from judgment is reviewed
for abuse of discretion. 7 In other words, “[i]t is not enough that the granting of
relief might have been permissible, or even warranted—denial must have been
so unwarranted as to constitute an abuse of discretion.” 8
Rule 60(b) states:
On motion . . . the court may relieve a party . . . from a final
judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly
discovered evidence that, with reasonable diligence, could not have
been discovered in time to move for a new trial under Rule 59(b);
(3) fraud . . . , misrepresentation, or misconduct by an opposing
party; (4) the judgment is void; (5) the judgment has been satisfied,
released[,] or discharged; it is based on an earlier judgment that
has been reversed or vacated; or applying it prospectively is no
longer equitable; or (6) any other reason that justifies relief.
However, “[w]e have consistently held that the relief under Rule 60(b) is
considered an extraordinary remedy . . . [and that] [t]he desire for a judicial
process that is predictable mandates caution in reopening judgments.” 9
reviewed the magistrate judge’s recommendation de novo, the district court adopted the
Findings and Conclusions as its own, and nothing in the record suggests that Stancu was
foreclosed from making, or hindered in pursuing, any arguments before the district court
because of the magistrate judge’s involvement in the case. See Blackmon, 587 F. App’x at 934.
7 Diaz v. Stephens, 731 F.3d 370, 374 (5th Cir. 2013).
8 Seven Elves, Inc. v. Eskenazi, 635 F.2d 396, 402 (5th Cir. Unit A Jan. 1981).
9In re Pettle, 410 F.3d 189, 191 (5th Cir. 2005) (alterations in original) (internal
quotation marks omitted) (quoting Carter v. Fenner, 136 F.3d 1000, 1007 (5th Cir. 1998)).
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Federal courts have consistently “refus[ed] to grant a party who voluntarily
requests dismissal of a claim to obtain relief from that judgment under
Rule 60(b).” 10
A. Rule 60(b)(1)
Rule 60(b)(1) permits a court to grant relief from judgment because of
“mistake, inadvertence, surprise, or excusable neglect.” The district court
correctly characterized Stancu’s argument that the Settlement Agreement was
invalid for lack of a meeting of the minds as a motion pursuant to Rule 60(b)(1).
Stancu’s argument is that the form of the Settlement Agreement was
misleading so he signed the agreement without being “sure of what Defendants
had in mind during the settlement negotiations”—i.e., that this was
a “mistake.” 11
The evidence presented by Stancu is insufficient to show that he lacked
knowledge of the material terms of the Settlement Agreement. Under Texas
law, 12 determining whether there was a meeting of the minds is “based on the
objective standard of what the parties said and did and not on their subjective
state of mind.” 13 Stancu does not allege that he was unable to or did not
negotiate the terms of the Settlement Agreement; neither does he contend that
10 Id. at 192–93 (giving examples).
11 Stancu specifically points to (1) the handwritten notes on the final copy of the
Agreement, (2) Starwood’s failure to provide a fully typed version of the Agreement, (3) the
fact that the name of the person signing on behalf of Starwood was not printed, and (4) the
fact that the agreement was not notarized.
12The Settlement Agreement contains a choice-of-law clause specifying that Texas
law should govern any dispute over its interpretation or enforcement. Because neither party
disputes the validity of this provision, it is valid and enforceable and any dispute about the
Settlement Agreement is properly resolved under Texas law. Jimenez v. Sun Life Assurance
Co. of Can., 486 F. App’x 398, 407–08 (5th Cir. 2012) (per curiam) (setting forth several tests
under which the validity of a choice-of-law clause can be tested, each of which establishes a
rebuttable presumption that the provision is valid).
13In re Capco Energy, Inc., 669 F.3d 274, 280 (5th Cir. 2012) (quoting Copeland v.
Alsobrook, 3 S.W.3d 598, 604 (Tex. App.—San Antonio 1999, no pet.)).
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any provisions were somehow vague or unclear. Rather, Stancu’s objections
focus on the form of the document, not on its substance. Moreover, the parties’
arguments show that there was a meeting of the minds regarding what the
material terms were, even if there remains disagreement about whether
Starwood met those terms. Indeed, Stancu personally participated in the
settlement negotiations, signed the Settlement Agreement, and later filed a
Joint Stipulation of Dismissal with Starwood. Together, these facts objectively
show that Stancu was aware of the Settlement Agreement’s content. Therefore,
the district court did not abuse its discretion in dismissing Stancu’s Motion to
Reopen based on Rule 60(b)(1).
B. Rule 60(b)(3)
The district court also properly determined that Stancu’s argument that
Starwood breached the Settlement Agreement could be construed as a motion
for relief from judgment under Rule 60(b)(3). “A party making a Rule 60(b)(3)
motion must establish by clear and convincing evidence (1) that the adverse
party engaged in fraud or other misconduct and (2) that this misconduct
prevented the moving party from fully and fairly presenting his case.” 14
The facts of this case do not clearly show that Starwood breached the
Settlement Agreement. First, Stancu’s assertion that Starwood disparaged
him is not tantamount to a breach of the Settlement Agreement because no
such prohibition exists in the Agreement. Second, Stancu alleges that
Starwood failed to pay him the requisite sum required by the Settlement
Agreement and did not return all of his personal belongings. Even though
Stancu was admittedly not given the full dollar amount specified in the
Settlement Agreement, he presented no evidence that the amount deducted
14 In re Isbell Records, Inc., 774 F.3d 859, 869 (5th Cir. 2014) (emphasis omitted)
(quoting Washington v. Patlis, 916 F.2d 1036, 1039 (5th Cir. 1990)).
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was greater than the applicable tax and withholding amounts and therefore
did not clearly demonstrate breach. Neither is Stancu’s contention that
Starwood failed to return his toolbox and tools clearly supported by the
evidence: Starwood provided affidavit testimony that it attempted to return all
of Stancu’s items but Stancu refused to accept them. Thus, there is no clear
evidence that Starwood breached the Settlement Agreement or engaged in the
sort of fraud or misconduct contemplated by Rule 60(b)(3).
Courts have not generally interpreted “misconduct” in Rule 60(b)(3) to
include the breach of a settlement agreement. 15 Even if Stancu were correct
that Starwood breached the terms of their settlement, this does not in and of
itself justify post-judgment relief, given the importance of maintaining finality
of judgments and predictability of the judicial process. 16 Because this court has
not definitively determined whether breach of a settlement agreement
constitutes “misconduct” under Rule 60(b)(3), the district court did not abuse
its discretion by denying relief on these grounds.
C. Rule 60(b)(6)
Finally, Stancu’s objections in the Motion to Reopen could also be
construed as a motion for relief under Rule 60(b)(6). That subsection “is a
residual clause used to cover unforeseen contingencies; that is, it is a means
for accomplishing justice in exceptional circumstances.” 17 Although there is
some disagreement among the circuits regarding whether breach of a
15 See Info-Hold, Inc. v. Sound Merch., Inc., 538 F.3d 448, 458–59 (6th Cir. 2008).
16 Importantly, if Stancu’s objection is an alleged breach of the Settlement Agreement,
he is not without recourse. He has the option of bringing suit for breach of contract.
17 Steverson v. GlobalSantaFe Corp., 508 F.3d 300, 303 (5th Cir. 2007) (quoting
Stipelcovich v. Sand Dollar Marine, Inc., 805 F.2d 599, 604–05 (5th Cir. 1986)).
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settlement agreement can serve as a basis for relief under Rule 60(b)(6), 18
Stancu has not established that Starwood breached the Settlement Agreement
in the first place. Because Stancu has not demonstrated any “unforeseen
contingencies” or “exceptional circumstances” that would otherwise justify
relief under Rule 60(b)(6), the district court did not abuse its discretion by
denying his Motion to Reopen.
III. CONCLUSION
We AFFIRM the district court’s denial of Stancu’s Motion to Reopen.
18 See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 378 (1994) (listing
cases).
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