Government Financial Services One Ltd. Partnership v. Peyton Place, Inc.

• Decision Date: 07 September 1995
• Docket Number: No. 94-30297,I-10,94-30297
• Citation: 62 F.3d 767
• Parties: GOVERNMENT FINANCIAL SERVICES ONE LIMITED PARTNERSHIP, Plaintiff-Appellee, v. PEYTON PLACE, INC. andInc. fka Management Equities Corporation, Defendants, Peyton Place, Inc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 767

62 F.3d 767

32 Fed.R.Serv.3d 376

GOVERNMENT FINANCIAL SERVICES ONE LIMITED PARTNERSHIP, Plaintiff-Appellee, v. PEYTON PLACE, INC. and I-10 Inc. fka Management Equities

Corporation, Defendants,

Peyton Place, Inc., Defendant-Appellant.

No. 94-30297.

United States Court of Appeals, Fifth Circuit.

Sept. 7, 1995.

William E. Brown, Covington, LA, for appellant.

Robert A. Mathis, Newman, Mathis, Brady, Wakefield & Spedale, Metairie, LA, for appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before POLITZ, Chief Judge, EMILIO M. GARZA and STEWART, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Peyton Place, Inc., appeals from the district court's denial of both its motion for relief from judgment, see Fed.R.Civ.P. 60(b), and its motion for a new trial, see Fed.R.Civ.P. 59(a). We affirm.

I

At the time of the events underlying this suit, Robert Guastella was President of Management Equities Corp. ("MEC"), now known as I-10, Inc., and a shareholder and employee of Peyton Place, Inc. ("Peyton Place"). MEC executed a promissory note in the amount of $600,000 in favor of Southern Savings Bank ("Southern Savings"). The $600,000 note was secured by a mortgage encumbering a hotel in New Orleans, Louisiana. Ownership of the hotel was subsequently transferred to Peyton Place, which assumed the indebtedness.

Several years after the hotel mortgage was executed, Robert Guastella obtained a loan from Southern Savings in the amount of $114,000, which was secured by a mortgage on his residence, 3721 Rue Chardonnay, in Metairie, Louisiana. Soon thereafter, Peyton Place executed a mortgage encumbering two units of Metairie condominiums known as Peyton Place Condominiums, both of which are owned by Peyton Place.

The Resolution Trust Corporation ("RTC"), during the time it was the receiver for Southern Savings, ¹ filed suit in state court against Peyton Place and I-10, seeking to foreclose on the condominium mortgage. The RTC contended that the condominium mortgage was executed as additional security for the $600,000 note, which is past due. Peyton Place contends that the condominium mortgage was executed as additional security for the $114,000 residential loan.

The court presiding over the foreclosure proceedings scheduled a sheriff's sale of the condominiums. Before the sale could take place, however, Peyton Place filed a "Petition for Issuance of an Injunction to Arrest Seizure and Sale under Executory Process," and the RTC removed the matter to federal court.

At the federal district court's hearing on Peyton Place's request for injunctive relief, Peyton Place submitted to the court a photocopy of the condominium mortgage that is on file in the Jefferson Parish Mortgage Office. ² On its face, the mortgage stipulates that it secures the $600,000 promissory note assumed by Peyton Place. Peyton Place contended at the hearing that the mortgage had been altered before it was filed, and called several witnesses to testify in support of its assertion.

The district court denied Peyton Place's request for injunctive relief, concluding that Peyton Place "had not sustained their burden on the issue of fraud or lack of authenticity so as to justify setting aside a mortgage which on its face[ ] appeared to be duly prepared, executed, and recorded." Peyton Place filed a "Motion to Supplement, for New Trial and/or for Relief from Judgment," in which it moved for a new trial under Rule 59 of the Federal Rules of Civil Procedure or, in the alternative, relief from the court's judgment under Rule 60(b) of the Federal Rules of Procedure. Peyton Place filed three memoranda in support of its motion.

With the motion, Peyton Place filed a "Memorandum in Support of Motion to Supplement, for New Trial and/or for Relief from Judgment" (the "First Memorandum"), in which it stated that it had obtained three appraisal sketches of 3721 Rue Chardonnay. Peyton Place argued that the court should reconsider its judgment in light of the sketches.

Peyton Place later filed an "Ex Parte Motion to File Supplemental Memorandum and Memorandum in Support" (the "Second Memorandum"), in which it informed the court that it had obtained a copy of a forbearance agreement between Peyton Place and Southern Savings, ³ and that it had discovered that the first page of the condominium mortgage filed in the Jefferson Parish mortgage records is a photocopy. ⁴ Peyton Place argued that its discovery of the agreement and missing mortgage page provided further reason for the court to reconsider its judgment.

Peyton Place then filed an "Ex Parte Motion to File Second Supplemental Memorandum in Support of Motion for New Trial and/or Relief from Judgment and Memorandum in Support" (the "Third Memorandum"), in which it stated that it had received a letter from Oster & Wegener, Southern Savings' attorneys, and that Oster & Wegener claimed in the letter that all of the documents in their possession concerning the relevant loans and mortgage had been seized by the RTC before the trial. In its Third Memorandum, Peyton Place argued that the RTC's failure to produce these documents at trial provided additional grounds for the court to reconsider its judgment.

The district court denied Peyton Place's motion, concluding that it "amount[ed] to little more than an attempt to reargue its case through a new attorney." ⁵ Peyton Place appeals the district court's denial, claiming that the court erred in holding that it was not entitled to either a new trial under Rule 59 or relief from the court's judgment under Rule 60(b). ⁶

II

Under Federal Rule of Civil Procedure 60(b), a court may relieve a party from a final judgment on the basis of newly discovered evidence, evidence of misconduct on the part of an adverse party, or "any other reason justifying relief from the operation of the judgment." ⁷ We will reverse a district court's denial of a Rule 60(b) motion only if the court abused its discretion. First Nationwide Bank v. Summer House Joint Venture, 902 F.2d 1197, 1200-01 (5th Cir.1990). We apply this deferential standard "to ensure that 60(b) motions do not undermine the requirement of a timely appeal." Id. " '[T]o overturn the district court's denial of [a] Rule 60(b) motion, it is not enough that a grant of the motion might have been permissible or warranted; rather, the decision to deny the motion must have been sufficiently unwarranted as to amount to an abuse of discretion.' " Lancaster v. Presley, 35 F.3d 229, 231 (5th Cir.1994) (quoting Fackelman v. Bell, 564 F.2d 734, 736 (5th Cir.1977)), cert. denied, --- U.S. ----, 115 S.Ct. 1380, 131 L.Ed.2d 233 (1995).

A

Peyton Place contends that the district court's denial of its Rule 60(b) motion was erroneous in light of the newly discovered evidence. Under Rule 60(b)(2), ⁸ a 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 in time to move for a new trial under Rule 59(b)." ⁹ "To succeed on a motion brought under 60(b)(2) based on newly discovered evidence, the movant must demonstrate (1) that it exercised due diligence in obtaining the information and (2) 'the evidence is material and controlling and clearly would have produced a different result if presented before the original judgment.' " New Hampshire Ins. Co. v. Martech USA, Inc., 993 F.2d 1195, 1200-01 (5th Cir.1993) (footnote omitted) (quoting Brown v. Petrolite Corp., 965 F.2d 38, 50 (5th Cir.1992)). ¹⁰ "The newly discovered evidence must be in existence at the time of trial and not discovered until after trial." Longden v. Sunderman, 979 F.2d 1095, 1102-03 (5th Cir.1992).

In its Third Memorandum, Peyton Place provided a "summary of the new evidence obtained by Peyton Place, Inc. since the trial," listing: (1) "The fact that the first page (front and back) of the condominium mortgage in the Jefferson Parish mortgage records is a photocopy, while the last page is an original;" (2) "The Assignment of Proceeds of Contract in which Southern Savings agreed to forbear from foreclosure over a month before the condominium mortgage was, according to the R.T.C./Southern Savings, executed in order to obtain forbearance;" and (3) "The response from Oster & Wegener that the R.T.C. seized all of the Oster & Wegener files in [D]ecember 1990 or January 1991, including the files relating to the $114,000 loan and the condominium mortgage." ¹¹

Peyton Place all but concedes that the fact that the first page of the condominium mortgage in the Jefferson Parish mortgage records is a photocopy is not newly discovered evidence, stating in its brief on appeal that "the physical evidence of alteration on the first page of the mortgage is not newly discovered evidence, but evidence that was already entered into evidence at trial." Although the fact that the first page of the recorded mortgage is a photocopy was not mentioned at trial, evidence at trial showed that Peyton Place did have access to the document. ¹² Peyton Place did not contend in its memoranda in support of its Rule 60(b)(2) motion or in its brief on appeal that it did not have access to the document either before or during the trial. Therefore, we conclude that Peyton Place failed to demonstrate to the district court that it could not have obtained the information before or during the trial even if it had exercised due diligence. See Longden, 979 F.2d at 1103 (affirming denial of Rule 60(b)(2) motion in part because movant did not show due diligence).

Peyton Place contends on appeal that the "Assignment of Proceeds of Contract and the forbearance agreement referred to in it were not found until after the trial and judgment." However, in its Second Memorandum, Peyton Place stated that it obtained a copy of the assignment of proceeds of contract containing the forbearance agreement "from the records of Jefferson Parish." Peyton Place has never contended that it did not have access to...