Civil practice – Settlement – Fraud

Where a plaintiff filed a motion for relief from a federal judgment that embodied a prior state court settlement agreement, it was not an abuse of discretion to deny that motion despite the plaintiff’s assertion that it had been fraudulently induced to enter into the settlement agreement by a statement made in court by counsel for the defendant.

Affirmed.

“In a case filed in 2021 in the United States District Court for the District of Rhode Island, U-Nest Holdings, Inc., claimed that its suit was not foreclosed by a judgment entered on February 4, 2020, in a 2019 federal court action. That judgment had embodied a prior state court settlement agreement. In the 2021 case, U-Nest asserted that it had been fraudulently induced to enter into that settlement agreement by a statement made in court by counsel for Ascensus College Savings Recordkeeping Services, LLC.

“After a hearing in the 2021 case, the federal district court determined that for the case to proceed, U-Nest would first need to file a motion for relief from judgment in the 2019 action. The court stayed the 2021 action pending resolution of the motion. On May 16, 2022, U-Nest filed a motion seeking relief from judgment in the 2019 action under Fed. R. Civ. P. 60(b)(6). …

“The court denied U-Nest’s motion on February 9, 2023, in a written order. …

“Our review for denial of a Rule 60 motion, whether under Rule 60(b)(6) or Rule 60(b)(3), is for abuse of discretion. … U-Nest argues first that the district court erred by denying its motion solely on the basis that U-Nest had failed to request an evidentiary hearing. The record refutes that contention by U-Nest. The district court denied U-Nest’s motion not because it had failed to request an evidentiary hearing, but rather because U-Nest had not adequately substantiated its allegations of fraud. …

“We see little point in adding to the district court’s sound reasoning. … The district court reviewed the ‘evidence’ U-Nest had filed and stated why it was inadequate. The district court amply supported its finding that U-Nest did not support its claim of fraud and/or of misrepresentation. And so the motion fails, whether it is characterized as a Rule 60(b)(6) or a Rule 60(b)(3) motion. There is accordingly no need to address U-Nest’s argument that the district court erred in reviewing its motion under Rule 60(b)(3) rather than under Rule 60(b)(6). The district court’s reasoning also disposes of the equitable tolling argument which U-Nest advocates on appeal. As the district court did not err in its ruling, we reject U-Nest’s appeal. The district court’s Rule 60 ruling is affirmed. Costs are awarded to Ascensus.”

U-Nest Holdings, Inc. v. Ascensus College Savings Recordkeeping Services, LLC (Lawyers Weekly No. 01-188-23) (7 pages) (Lynch, J.) Appealed from a decision by Smith, J., in the U.S. District Court for the District of Rhode Island. Joseph A. Farside Jr., with whom Alexandra G. Lancey and Locke Lord LLP were on brief, for the plaintiff-appellant; Marc DeSisto, with whom DeSisto Law LLC, Mitchell R. Edwards and Hinckley Allen & Snyder were on brief, for the defendant-appellee (Docket No. 23-1229) (Sept. 22, 2023).

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