Karak v. Bursaw Oil Corp.

• Decision Date: 02 May 2002
• Docket Number: No. 01-2127.,01-2127.
• Citation: 288 F.3d 15
• Parties: Elie N. KARAK et al., Plaintiffs, Appellants, v. BURSAW OIL CORP. et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 15

288 F.3d 15

Elie N. KARAK et al., Plaintiffs, Appellants, v. BURSAW OIL CORP. et al., Defendants, Appellees.

No. 01-2127.

United States Court of Appeals, First Circuit.

Heard April 3, 2002.

Decided May 2, 2002.

COPYRIGHT MATERIAL OMITTED

Robert E. Weiner, with whom Jeffrey A. Gorlick was on brief, for appellants.

Raymond S. Ewer, with whom Tennant & Ewer, P.C. was on brief, for appellees.

Before SELYA, Circuit Judge, BOWNES and STAHL, Senior Circuit Judges.

SELYA, Circuit Judge.

The district court in this case entered a controversial (and arguably incorrect) judgment. See Karak v. Bursaw Oil Corp., 147 F.Supp.2d 9 (D.Mass.2001). The plaintiff eschewed an appeal. Later, he moved for relief from the judgment on grounds of newly discovered evidence, Fed.R.Civ.P. 60(b)(2), and misrepresentation, Fed.R.Civ.P. 60(b)(3). The district court denied the motion. Finding that ruling free from any abuse of discretion, we affirm.

I. Background

The facts that give rise to the underlying litigation are chronicled in the district court's original opinion, see Karak, 147 F.Supp.2d at 10-11, and it would be pleonastic to repeat them here. For present purposes, it suffices to say that, at the times relevant hereto, defendant-appellee Bursaw Oil Corp. (a wholesaler and distributor of motor fuel and allied products), through a subsidiary, owned a prime service station in Newton, Massachusetts. Beginning in 1989, plaintiff-appellant Elie N. Karak leased this station and sold, inter alia, gasoline supplied by Bursaw.¹ The parties' relationship was bounded by several agreements, revised and renewed periodically, which covered both the lease of the real estate and the supply of motor fuel. The last lease renewal expired on June 30, 2000. Karak nonetheless remained on the premises as a tenant at will, and Bursaw continued to supply the station with motor fuel.

On or about February 20, 2001, Karak learned from Bursaw's general manager, Andrew Slifka, that Bursaw planned to sell the station to a third party. With that objective in mind, Bursaw served notice on March 28, 2001, directing Karak to vacate the premises within thirty days. Karak did not go quietly; as the thirty-day period wound down, he brought suit against Bursaw in the federal district court. His suit premised federal jurisdiction on the existence of a federal question, see 28 U.S.C. § 1331, charging Bursaw with having violated the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. §§ 2801-2841.

Concerned about possession of the premises and his ability to keep his business afloat, Karak immediately moved for injunctive relief. The district court treated his motion as a motion for a temporary restraining order and denied it on April 30, 2001. Two days later, Karak filed an amended complaint and a renewed request for preliminary injunctive relief. Bursaw responded by filing a motion to dismiss and an opposition to the prayer for injunctive relief. As part of its response, Bursaw attached affidavits subscribed by Slifka and Edward Davis (Bursaw's operations manager).

The district court held a hearing on May 10 in respect to Karak's motion for a preliminary injunction. The court then took the matter under advisement, directing the parties to supplement the record. Pursuant to this directive, Karak swore out and served an affidavit, and Bursaw filed four affidavits of company officials (including supplementary declarations from Slifka and Davis).

On May 30, 2001, the district court denied Karak's motion for injunctive relief and dismissed the action for want of federal subject matter jurisdiction. Karak, 147 F.Supp.2d at 15. The court's decision rested on two determinations: (1) that the idiosyncratic relationship between the parties did not fall within the scope of the PMPA, and (2) that it should not exercise supplemental jurisdiction over Karak's pendent state-law claims. Id. at 15-16.

Karak abjured an appeal. Instead, he filed a strikingly similar suit in a Massachusetts state court. That court too denied Karak's pleas for injunctive relief. Karak then abandoned his state court action and returned to the federal court. This time, he filed what he termed a "motion to reconsider" (in reality, a motion for relief from judgment).² The motion invoked Fed.R.Civ.P. 60(b)(2)-(3) and incorporated affidavits from Karak's attorney, Richard P. Blaustein, and from a former Bursaw employee, Edward Yaeger. For eleven years, Yaeger had supervised the Karak-Bursaw relationship, and he had great familiarity both with that relationship and with Bursaw's corporate hierarchy. Yaeger claimed, inter alia, that Davis had misrepresented the structure of the company, and that both Davis and Slifka had distorted the nature of Bursaw's dealings with Karak. Karak asserted that this affidavit constituted new, previously undiscovered evidence supporting his position, and that it proved the falsity of Bursaw's representations to the district court.

Bursaw strenuously opposed this motion. More importantly, the district court found it wanting and summarily denied it. This appeal followed.

II. Analysis

"In our adversary system of justice, each litigant remains under an abiding duty to take the legal steps that are necessary to protect his or her own interests." Cotto v. United States, 993 F.2d 274, 278 (1st Cir.1993). Given this duty, the failure to take a timely appeal has serious consequences. While a motion for relief from judgment can be filed under certain circumstances, an appeal from the denial of such a motion will not expose the merits of the underlying judgment to appellate scrutiny. See id.; Ojeda-Toro v. Rivera-Mendez, 853 F.2d 25, 28-29 (1st Cir.1988); see also Rodriguez-Antuna v Chase Manhattan Bank Corp., 871 F.2d 1, 2 (1st Cir.1989) (explaining that the appeal from a denial of a Rule 60(b) motion "does not automatically produce a Lazarus-like effect; it cannot resurrect appellants' expired right to contest the merits of the underlying judgment, nor bring the judgment itself before us for review"). In short, an appeal from the denial of a Rule 60(b) motion is not a surrogate for a seasonable appeal of the underlying judgment.

In view of this paradigm, the merits of the district court's original order are not now in issue. To the contrary, the only justiciable question on this appeal involves the propriety of the lower court's denial of Karak's Rule 60(b) motion. Our inquiry into that question proceeds on the understanding that relief under Rule 60(b) is extraordinary in nature and that motions invoking that rule should be granted sparingly. See Teamsters, Chauffeurs, Warehousemen & Helpers Union, Local No. 59 v. Superline Transp. Co., 953 F.2d 17, 19-20 (1st Cir.1992); Lepore v. Vidockler, 792 F.2d 272, 274 (1st Cir.1986). Thus, a party who seeks recourse under Rule 60(b) must persuade the trial court, at a bare minimum, that his motion is timely; that exceptional circumstances exist, favoring extraordinary relief; that if the judgment is set aside, he has the right stuff to mount a potentially meritorious claim or defense; and that no unfair prejudice will accrue to the opposing parties should the motion be granted. Teamsters, 953 F.2d at 20-21.

On appeal from a denial of a Rule 60(b) motion, the movant faces a further hurdle. The district court typically has an intimate, first-hand knowledge of the case, and, thus, is best positioned to determine whether the justification proffered in support of a Rule 60(b) motion should serve to override the opposing party's rights and the law's institutional interest in finality. Consequently, we defer broadly to the district court's informed discretion in granting or denying relief from judgment, and we review its ruling solely for abuse of that discretion. Claremont Flock Corp. v. Alm, 281 F.3d 297, 299 (1st Cir.2002); Teamsters, 953 F.2d at 19.

A.

Rule 60(b)(2)

Against this backdrop, we turn first to Karak's attempt to invoke Rule 60(b)(2). That rule provides in pertinent part that the trial court may relieve a party from a final judgment on the basis of "newly discovered evidence which by due diligence could not have been discovered [within ten days of the date of the judgment.]" On this record, we cannot disturb either the district court's assessment of these criteria or its decision to deny relief.

Although Karak touts the Yaeger affidavit as newly discovered evidence, he wholly fails to explain why this evidence could not have been found, well before the entry of judgment, in the exercise of even minimal diligence. The inference of availability seems compelling. Yaeger — although retired from his position at Bursaw — lived in nearby Lynn, Massachusetts. Karak had dealt with him for many years and knew him intimately. On the face of things, the delay in contacting Yaeger appears to doom Karak's current quest. See, e.g., Washington v. Patlis, 916 F.2d 1036, 1038 (5th Cir.1990) (affirming trial court's denial of Rule 60(b)(2) motion when movant knew of her "newly discovered" witness at the time she filed her complaint, but did not attempt to present that witness until after entry of judgment).

Of course, appearances can be deceiving. Cf. Aesop, The Wolf in Sheep's Clothing (circa 550 B.C.). But a party who seeks relief from a judgment based on newly discovered evidence must, at the very least, offer a convincing explanation as to why he could not have proffered the crucial evidence at an earlier stage of the proceedings. See Lepore, 792 F.2d at 274. Karak did not carry this burden: he himself eschewed any attempt to explain the delay in adducing Yaeger's version of the facts, and the Yaeger affidavit provided nothing suggesting that Yaeger was unavailable during the weeks leading up to the entry of judgment. Indeed, the only effort that Karak made to persuade the district court that Yaeger's evidence was beyond his reach was to file an affidavit from his then-counsel (Blaustein).

The Blaustein affidavit is scarcely...