Tiller v. Baghdady

• Citation: 294 F.3d 277
• Decision Date: 01 July 2002
• Docket Number: No. 01-1618.,No. 01-1835.,01-1618.,01-1835.
• Parties: Georgette Baghdady TILLER, Plaintiff, Appellant, v. Sami J. BAGHDADY, Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 277

294 F.3d 277

Georgette Baghdady TILLER, Plaintiff, Appellant, v. Sami J. BAGHDADY, Defendant, Appellee.

No. 01-1618.

No. 01-1835.

United States Court of Appeals, First Circuit.

Heard February 5, 2002.

Decided July 1, 2002.

Donald R. Furman, Jr., for appellant.

Gael Mahony, with whom John D. Lawrence and Hill & Barlow, P.C. were on brief, for appellee.

Before TORRUELLA, Circuit Judge, STAHL, Senior Circuit Judge, and LIPEZ, Circuit Judge.

LIPEZ, Circuit Judge.

Georgette Tiller appeals from the district court's denial of her motion for relief from judgment under Rule 60(b) of the Federal Rules of Civil Procedure. The motion alleged several grounds for relief, among them discovery misconduct and fraud. The district court denied the motion and later rejected Tiller's request for reconsideration. Tiller challenges both decisions. We affirm.

I.

We described the facts of the underlying dispute in a previous appeal, and do not repeat them in detail here. See Tiller v. Baghdady, 244 F.3d 9 (1st Cir.2001) (Tiller I). It suffices to say that the parties disagreed as to the significance of a $31,000 transaction between Tiller and her brother, Sami Baghdady. The $31,000 represents the price of stock Tiller owned in a company named Teledyne, Inc. Tiller alleged that Baghdady sold her Teledyne shares without her consent and used the proceeds to finance his investment in a real estate project known as the Cedar Crest Apartments. Although she admitted at trial that she gave Baghdady a Power of Attorney authorizing him to manage her investments, Tiller maintained that she told him not to sell the Teledyne shares: "You don't touch these. These are untouchables. These are long-term investment for my old age." Thus, when she learned of the sale in the summer of 1971, she was furious and demanded that Baghdady repurchase the Teledyne shares. Baghdady told her that he could not afford to buy back the stock because he had used the $31,000 to purchase the property for the Cedar Crest development. Tiller claimed that Baghdady promised her that he would treat the money as an equity investment, making her a partner in the Cedar Crest Apartments. When he later reneged on that promise, she sued, alleging (among other things) intentional misrepresentation.

Baghdady told a different story. He denied promising Tiller a partnership interest in the Cedar Crest apartments. Instead, Baghdady testified that Tiller sold the Teledyne stock herself. Once the transaction was complete, she loaned him the $31,000, to be repaid at 10% simple interest, or roughly $250 per month. In support of that claim, Baghdady produced a hand-written note dated August 4, 1971, in which he pledged to repay a $31,000 "debt" to Tiller. Another note, dated the previous day, set out the parties' agreement as to interest. Moreover, Baghdady introduced a series of monthly checks in the amount of $250, marked "Int." or "Interest," — and a final check for $31,000, marked "For payment of loan dated August 4, 1971" — all of which had been cashed by Tiller.

At trial, Tiller called her sister, Violette Haddad, as a witness. Haddad testified that Baghdady had sold her Teledyne stock as well, and that he had attempted to make amends by promising her a partnership interest in the Cedar Crest Apartments. Haddad maintained that Baghdady had no authority to sell her stock. On cross-examination, however, defense counsel confronted her with a Power of Attorney, which — like that executed by Tiller — authorized Baghdady to sell Haddad's Teledyne shares. The Power of Attorney was signed by Haddad and Baghdady, witnessed by Tiller, and notarized by Baghdady's secretary, Mary Cooper. Haddad confirmed that her signature appeared on the Power of Attorney, although she claimed not to remember signing the document.

Defense counsel also showed Haddad a hand-written letter dated April 18, 1977, in which Haddad represented that she had authorized Baghdady to sell her Teledyne shares and that she had received the proceeds of the stock sale except for $15,000, which she allowed Baghdady to keep as a loan. The note was signed by Haddad and, again, witnessed by Tiller. Haddad confirmed that the signature on the note was hers.

Defense counsel sought to admit both documents into evidence. Tiller's attorney objected that the Power of Attorney was cumulative. The district court disagreed, stating: "There is nothing cumulative. This is impeaching evidence." The 1977 letter was admitted without objection, and defense counsel continued questioning Haddad. After a few minutes, he attempted to introduce into evidence a check from Baghdady to Haddad's son Nicholas. The check had been endorsed by Nicholas, and bore the notation "final payment" on both the front and back. Tiller's attorney objected on the ground that the check, like the Haddad Power of Attorney and the 1977 letter previously introduced, was not "provided under any discovery in this case." Defense counsel explained that he was "responding to information that has just come into the case" — presumably, Haddad's testimony that Baghdady had sold her Teledyne shares without permission, and used the money to invest in the Cedar Crest development. The district court overruled the objection.¹

Tiller took the stand after Haddad. Notwithstanding her sister's testimony to the contrary, Tiller maintained that Haddad's signatures on the Power of Attorney and the 1977 letter were forgeries.² She also stated repeatedly that her own signatures, as witness to both documents, had been forged.

At the conclusion of the case, the court submitted Tiller's claim of intentional misrepresentation to the jury. The first question on the jury form asked the jurors to determine whether Tiller had proved by a preponderance of the evidence that Baghdady misrepresented to her that she was his partner in the Cedar Crest development. The jury answered in the negative, and the court entered judgment for Baghdady on December 21, 1999.

Tiller appealed. She did not raise any issues regarding the production or admission of the Haddad Power of Attorney or the 1977 letter. Instead, she challenged the district court's refusal to admit certain evidence supportive of her claim. We agreed that the court erred in excluding the evidence. See Tiller I, 244 F.3d at 14. We concluded, however, that "the overwhelming weight of the evidence ... support[ed] Baghdady's version of this dispute." Id. at 15. Accordingly, we held that the district court's error was harmless. Id.

While her appeal was pending in Tiller I, Tiller engaged the services of two handwriting experts. The experts examined the sisters' signatures on the Haddad Power of Attorney and the 1977 letter. Both experts concluded, subject to certain reservations, that it was "probable" that both women's signatures had been forged.

On September 12, 2000 (while her Tiller I appeal was still pending), Tiller filed a motion in the district court seeking relief from the judgment under Rule 60(b). The crux of the motion was that the Haddad Power of Attorney and the 1977 letter were improperly withheld during discovery and, when produced at trial, contained forged signatures. More specifically, Tiller sought relief under Rule 60(b)(1) on the ground that she had suffered unfair "surprise" when Baghdady introduced the two documents at trial. She also requested relief under Rule 60(b)(2) on the ground that the reports of the two handwriting experts constituted "newly discovered evidence." Finally, Tiller sought relief under Rule 60(b)(3) on the grounds that the documents were forged and therefore constituted "fraud," and that Baghdady's failure to produce the documents during discovery was "misconduct." Fed.R.Civ.P. 60(b)(3) (authorizing relief from final judgment for reasons of "fraud ..., misrepresentation, or other misconduct of an adverse party").

The district court denied the motion by margin order, and later denied Tiller's request for reconsideration. Tiller appealed, challenging only the district court's judgments with respect to relief under Rule 60(b)(3).³

II.

In order to obtain relief under Rule 60(b)(3), Tiller had to present the district court with "clear and convincing evidence" that the claimed fraud or misconduct occurred. Anderson v. Cryovac, Inc., 862 F.2d 910, 926 (1st Cir.1988). Next, she had to show that the misconduct or fraud "substantially interfered with [her] ability fully and fairly to prepare for, and proceed at, trial." Id. In other words, the misconduct or fraud "must have been harmful — it must have affected [Tiller's] substantial rights." Id. at 924 (internal alterations and quotation marks omitted).

On appeal, Tiller faces an additional hurdle. "When Rule 60(b) is in play, we ordinarily defer to the trial judge's more intimate knowledge of the case." Id. at 923. We will upset the district court's judgment only if it represents an abuse of discretion. "Under this standard, we reverse only if it plainly appears that the court below committed a meaningful error in judgment." Id.

A. Discovery Misconduct

We turn first to Tiller's claim that Baghdady wrongfully withheld the Haddad Power of Attorney and the 1977 letter, in violation of the Federal Rules of Civil Procedure and the district court's discovery orders. See Fed.R.Civ.P. 26(a). Baghdady maintains that the documents in question were never requested during discovery and that, in any event, Tiller forfeited her claim of discovery misconduct by failing to object properly to the admission of the evidence at trial, and by choosing not to raise the issue on appeal in Tiller I.

Our cases make clear that the appropriate course for parties who uncover discovery violations is "not to seek reversal after an unfavorable verdict," but to request a continuance "at the time the surprise occurs," United States Fidelity & Guaranty Co. v. Baker Material Handling Corp., 62 F.3d 24, 29 (1st Cir.1995) (internal quotation marks omitted),⁴ or to seek...