Box v. Dall. Mexican Consulate Gen.
| Decision Date | 14 March 2014 |
| Docket Number | Civil Action No. 3:08-cv-1010-O |
| Parties | BLAKE BOX d/b/a BLAKE BOX COMPANY, Plaintiff, v. DALLAS MEXICAN CONSULATE GENERAL, Defendant. |
| Court | U.S. District Court — Northern District of Texas |
Before the Court are Dallas Mexican Consulate General's Sealed Motion for New Trial and Reconsideration and Brief in Support ("Motion for Reconsideration") (ECF No. 91), filed November 27, 2013; Plaintiff's Response (ECF No. 92), filed December 18, 2013; and Dallas Mexican Consulate General's Sealed Reply (ECF No. 93), filed December 30, 2013. Having reviewed the motion, related briefing, and the applicable law, the Court finds the Motion for Reconsideration should be and is hereby GRANTED in part and DENIED in part.
The Court assumes the parties' familiarity with the facts and procedural history of this case, which are set out fully in the Court's Memorandum Opinion and Order. See Mem. Op. & Order, Oct. 30, 2013, ECF No. 90. Accordingly, a brief summary of the pertinent background follows. Plaintiff Blake Box d/b/a Blake Box Company ("Box") is a licensed real estate broker who worked with Defendant Dallas Mexican Consulate General ("Consulate") in its search for a new consulate location in Dallas, Texas. See Pl.'s Original Compl. 2-3, ECF No. 1. Box contends he found abuilding (the "Property") for the Consulate to purchase, which was located at 1210 River Bend Drive and was part of a complex consisting of three buildings. See id. Box further alleges that when the owner of the three-building complex refused to subdivide the complex to permit the Consulate to acquire the Property, the Consulate officials agreed to enter a joint venture arrangement with Box whereby Box and possibly a third-party investor would buy the complex, subdivide it, and sell the Property to the Consulate. Id. at 4; see also Part III.B.2. infra. Ultimately, however, the Consulate purchased the Property from a third-party, Setco. Id. at 4-5. Box then filed suit against the Consulate contending the Consulate: (1) failed to pay Box for his real estate services and (2) breached the parties' joint venture agreement. See generally id.
After the Consulate failed to file any responsive pleading or otherwise defend the lawsuit, the Clerk of Court entered default against the Consulate. Clerk's Entry Default, ECF No. 10. On January 7, 2009, Box moved for default judgment. See generally Pl.'s Mot. Default J. & Mem. Supp., ECF No. 13. After a hearing, the Court granted Box's motion and entered final judgment the same day. Order, Sept. 30, 2009, ECF No. 16; Final J., ECF No. 17. On March 23, 2010, the Consulate filed its Motion to Set Aside Default Judgment (ECF No. 22).
The Consulate asserted that it was immune from suit under the Foreign Sovereign Immunities Act ("FSIA"). Mot. Set Aside Default J. & Br. Supp. 9-12, ECF No. 22. In granting default judgment, the Court relied on the commercial activity exception to the FSIA as its basis for subject matter jurisdiction. The Consulate contended the commercial activity exception did not apply because the Consulate officials lacked actual authority to transact with Box.1 Mot. Set Aside DefaultJ. & Br. Supp. 9-12, ECF No. 22.
Box requested discovery to prove subject matter jurisdiction existed but, after conducting a hearing, the Court denied Box's request to conduct discovery and granted the Consulate's motion. See Pl. Suppl. Br. Opp'n Mot. Set Aside Default J. 7-8, ECF No. 34; Order, Dec. 23, 2010, ECF No. 36. The Court agreed that the Consulate was immune from suit under the FSIA because there was no evidence the Consulate officials were authorized to engage in the commercial activity at issue in this case. Order 10-15, Dec. 23, 2010, ECF No. 36; Final J., ECF No. 37.
Thereafter, Box appealed the Court's ruling to the United States Court of Appeals for the Fifth Circuit. Pl.'s Notice Appeal, ECF No. 38. On August 21, 2012, the Fifth Circuit held that this Court abused its discretion in denying Box discovery on the issue of whether the Consulate officials had actual authority to pursue the transaction at issue. See Box, 487 F. App'x at 884-85. The Fifth Circuit remanded for limited discovery noting the fact that "the Consulate subsequently purchased the exact property suggests that some form of actual authority might have existed for the transaction." Id. at 885 n.6, 886. In compliance with the Fifth Circuit's directive, this Court issued its order finding that the Consulate's original Motion to Set Aside Default Judgment stands and ordering discovery as to whether the Consulate officials had actual authority to engage in commercialactivity. Order, Dec. 7, 2012, ECF No. 49.
After the parties took discovery and fully briefed the motion to set aside default judgment, the Court issued its Memorandum Opinion and Order denying the Consulate's motion. On November 27, 2013, the Consulate filed the instant motion to reconsider. Box filed his response on December 18, 2013, and the Consulate filed its reply on December 30, 2013. Accordingly, this matter has been fully briefed and is ripe for determination.
"A Rule 59(e) motion 'calls into question the correctness of a judgment.'" Templet v. HydroChem Inc., 366 F.3d 473, 478 (5th Cir. 2004) (quoting In re Transtexas Gas Corp., 303 F.3d 571, 581 (5th Cir. 2002)). "[It] is not the proper vehicle for rehashing evidence, legal theories, or arguments that could have been offered or raised before the entry of judgment." Id. (citing Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990)). Instead, a Rule 59(e) motion may address manifest errors of law or newly discovered evidence. Id.
Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000) (quoting Sedrak v. Callahan, 987 F. Supp. 1063, 1069 (N.D. Ill.1997)); cf. Guy v. Crown Equip. Corp., 394 F.3d 320, 325 (5th Cir. 2004) (defining "manifest error" in appellate review context as "one that is plain and indisuputable, and that amounts to a complete disregard of the controlling law." (quoting Venegas-Hernandez v. Sonolux Records, 370 F.3d 183, 195 (1st Cir. 2004) (internal quotation marks omitted) (citing Andreiu v. Ashcroft, 253 F.3d 477, 490 (9th Cir. 2001) (Beezer, J., concurring); LaCombe v. A-T-O, Inc., 679 F.2d 431, 435 (5th Cir. 1982); Bank One, Texas, N.A. v. F.D.I.C., 16 F. Supp. 2d 698, 713 (N.D. Tex. 1998)). Thus,Rule 59(e) allows courts to correct their own errors, "sparing the parties and the appellate courts the burden of unnecessary appellate proceedings." Pac. Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998) (quoting Russell v. Delco Remy Div. of Gen. Motors Corp., 51 F.3d 746, 749 (7th Cir. 1995)) (internal quotation marks omitted).
Courts have significant discretion in deciding whether to grant a motion to reconsider under Rule 59(e). Edward H. Bohlin Co. v. Banning Co., 6 F.3d 350, 353, 355 (5th Cir. 1995). Nevertheless, granting a motion for reconsideration is "an extraordinary remedy that should be used sparingly." Templet, 367 F.3d at 479. Thus, in determining whether to grant a motion to reconsider, courts must balance the following judicial imperatives: (1) "the need to bring litigation to an end" and (2) "the need to render just decisions on the basis of all the facts." Id.
The Consulate contends the Court committed manifest errors by: (1) applying the arguable basis rather than de novo standard to the 60(b)(4) motion, (2) assuming the joint venture existed, (3) placing the burden of proof on the Consulate rather than Box to disprove the commercial activity exception, and (4) finding actual authority for the provision of services or the joint venture. See generally Def.'s Mot. New Trial, ECF No. 91. For these reasons, the Consulate contends the Court should set aside the default judgment for lack of jurisdiction under the FSIA. Id. Box argues the Consulate "merely recycles its earlier briefing and argument—and therefore fails to support a new trial or reconsideration . . . ." Pl.'s Resp. 1, ECF No. 92.
For the reasons discussed below, the Court finds that it should have applied the de novo standard and should have evaluated the existence of the joint venture. Accordingly, the Court must reconsider whether the default judgment should be set aside as void. Shrader v. CSX Transp., Inc.,70 F.3d 255, 257 (2d Cir. 1995) (explaining motions for reconsideration "will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." (citing Schonberger v. Serchuk, 742 F.Supp. 108, 119 (S.D.N.Y.1990); Adams v. United States, 686 F. Supp. 417, 418 (S.D.N.Y. 1988)).
In determining whether the default judgment should be set aside, the Court applied an arguable basis standard of review. See Mem. Op. & Order 4-7, Oct. 30, 2013, ECF No. 90. Shortly after the Court issued its Memorandum Opinion and Order, the United States Court of Appeals for the District of Columbia Circuit decided Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175 (D.C. Cir. 2013). In Bell, the D.C. Circuit applied the de novo standard to a 60(b)(4) challenge to a default judgment in a FSIA case. Id. at 1181 (). Although this precedent is not controlling, the D.C. Circuit applied existing case law to reach this outcome. See id. at 1182 ...
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