Paul Fix v. Union Pacific Railroad Co.

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 29 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
PAUL FIX; GERALDINE FIX, DBA All No. 15-15827
Seasons Energy, DBA Geraldine Fix Trust,
D.C. No. 2:13-cv-00083-FJM
Plaintiffs-Appellants,
v. MEMORANDUM*
UNION PACIFIC RAILROAD
COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Arizona
Frederick J. Martone, District Judge, Presiding
Argued and Submitted March 16, 2017
San Francisco, California
Before: TALLMAN and WATFORD, Circuit Judges, and GUIROLA,** Chief
District Judge.
Appellants Paul and Geraldine Fix and the Geraldine Fix Trust, also known
as the Murphy Family Trust, appeal the district court’s order denying their Federal
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Louis Guirola, Jr., Chief United States District Judge
for the Southern District of Mississippi, sitting by designation.
Rule of Civil Procedure 60(b) motion to set aside a previous stipulated order of
dismissal with prejudice of their diversity action against Union Pacific Railroad
Company after the parties notified the court shortly before trial that they had
settled the case. Appellants brought the underlying action in January 2013,
alleging that they had established a prescriptive easement to use a private railroad
crossing to access their real property in Maricopa County. The jury trial was
scheduled to begin in May 2014, but counsel for both parties agreed to material
terms of a settlement agreement five days before trial. To effectuate the
settlement, counsel jointly stipulated to dismiss the case with prejudice, and the
district court entered the requested order on May 16, 2014. The parties continued
to try to resolve the details in a written settlement agreement but, ultimately, the
Fixes fired their trial lawyer and hired new counsel. More than five months later,
they filed their Rule 60(b) motion. That motion was denied on March 30, 2015.
We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
First, Union Pacific did not conceal material terms and conditions during
settlement discussions and, therefore, did not obtain the stipulated dismissal with
prejudice through fraud, misrepresentation, or misconduct. Fed. R. Civ. P.
60(b)(3). Counsel for both parties agreed to a number of key terms in the email
exchange before trial, and Union Pacific attached a copy of its standard Private
Road Crossing Agreement to those emails, requesting incorporation of its
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provisions in the formal settlement agreement. Although the private crossing
agreement served only as a template for the settlement, and would ultimately be
revised to reflect the terms agreed upon at the conclusion of the email exchange, it
included the various terms and conditions the Fixes now claim are unreasonable.
Thus, there is no evidence that Union Pacific omitted any material terms during
pre-trial settlement negotiations to warrant relief under Rule 60(b)(3). See Jones v.
Aero/Chem Corp., 921 F.2d 875, 878–79 (9th Cir. 1990).
Second, the district court correctly concluded that the Fixes’ former counsel
was not grossly negligent in agreeing to the stipulated dismissal before the
settlement was formally memorialized. Fed. R. Civ. P. 60(b)(6); Cmty. Dental
Servs. v. Tani, 282 F.3d 1164, 1168–69 (9th Cir. 2002). Counsel surely should
have finalized all settlement documents before signing the Joint Stipulation for
Dismissal with Prejudice, but his failure to do so does not rise to the level of gross
negligence. The Fixes also assert, as a basis for relief under Rule 60(b)(6), that
their former counsel lacked the authority to negotiate and convey their agreement
to the final settlement terms. While this contention could in some circumstances
provide a basis for relief, see Harrop v. W. Airlines, Inc., 550 F.2d 1143 (9th Cir.
1977) (per curiam), the district court properly concluded that it does not provide a
basis for relief here. The Fixes’ conduct after learning of the settlement indicates
that they had no objection to their former counsel’s act of settling the case on their
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behalf, so long as the settlement provided for a permanent crossing. Their real
complaint is that their former counsel dismissed the action with prejudice before
securing a finalized settlement containing that term. As we have said, however,
that conduct does not amount to gross negligence or “virtual abandon[ment]” as
required by Rule 60(b)(6). See Tani, 282 F.3d at 1170.
Finally, because the parties had agreed to the material terms of a settlement
agreement at the time of the joint stipulation, it was well within the district court’s
discretion to rely on the parties’ mutual representation that a settlement had been
reached on all claims and asking the court to dismiss the case. Latshaw v. Trainer
Wortham & Co., 452 F.3d 1097, 1100 (9th Cir. 2006). The district court’s order
denying Rule 60(b) relief sought nine months later was not an abuse of discretion
and is therefore
AFFIRMED.
Each party shall bear its own costs.
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