Budge v. Post

• Decision Date: 28 June 1982
• Docket Number: Civ. A. No. CA-3-79-0630-D.
• Citation: 544 F. Supp. 370
• Parties: Donald BUDGE, Plaintiff, v. Troy V. POST, Defendant.
• Court: U.S. District Court — Northern District of Texas

544 F. Supp. 370

Donald BUDGE, Plaintiff, v. Troy V. POST, Defendant.

Civ. A. No. CA-3-79-0630-D.

United States District Court, N. D. Texas, Dallas Division.

June 28, 1982.

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Donald C. McCleary, Dallas, Tex., for plaintiff.

Ross Teter, Dan Guthrie, Dallas, Tex., for defendant.

MEMORANDUM OPINION AND ORDER

ROBERT M. HILL, District Judge.

Came on for consideration Defendant's Motion for Relief from Judgment and Motion for Stay of Proceedings to Enforce Judgment. This Court entered Judgment against Defendant Troy V. Post ("Post") in the sum of $455,041 on January 17, 1980, following a jury trial in which the jury found that Post had breached his contract with Budge. This Court held a hearing to consider Post's Motions. Based on its examination of the parties' pleadings and briefs, together with applicable case law, the Court is of the opinion that Post is entitled to relief from this Court's prior Judgment pursuant to Fed.R.Civ.P. 60(b)(5). Post's Motion for Stay is now moot, and is therefore denied. The Judgment will be amended to reflect the Court's holding with respect to the Motion for Relief.

I. Facts

Plaintiff Donald Budge ("Budge") is a world famous tennis player, having distinguished himself as a Davis Cup champion and by his triumphant performance at Wimbledon. Post is a present and former owner of various resorts and hotels located throughout the world. Budge entered into an employment contract in which he was to serve as the tennis professional at Cambridge Towers Tennis & Racquet Club in Las Vegas, Nevada ("Cambridge Towers contract"). Budge began his post at Cambridge Towers in October 1978. In February 1979, Post informed Budge that he was being terminated because Budge did not promote interest in the tennis clinics or hold the requisite number of clinics pursuant to the Cambridge Towers contract. When Post discontinued payments, Budge sued Post in this Court for breach of contract (the "1979 lawsuit"). Following a three-day trial, the jury found that Budge had not materially breached the employment agreement with Post, and was entitled to $350,000 as compensation for the unpaid wages remaining under the Cambridge Towers contract and $85,500 for the value of housing and meals as provided in the contract. The Court entered Judgment on January 17, 1980, for a total of $455,041, which represents these two sums together with attorneys fees in the amount of $17,241, less the $1,500 sum which the jury found Budge could earn in similar employment during the remaining months under the contract.

This judgment was affirmed on appeal. Budge v. Post, 643 F.2d 372 (5th Cir. 1981). Pursuant to its limited power of review, id. at 374, the Fifth Circuit found that there was some evidence to support the jury's verdict, there was no merit to Post's claim that the jury selection process was discriminatory, and the district court's award of interest "at the legal rate" was proper. The Court of Appeals did find, however, that the jury failed to compute the present value of the award as instructed by the trial court. The case was remanded to this Court for a determination of the appropriate discount rate and recomputation of the award. Id. at 376.

Post's Motion for Relief does not attempt to challenge the jury's finding with respect to the parties' performance of their contractual duties at Cambridge Towers from October 1978 to February 1979. Rather, Post seeks to attack the entire basis on which the Cambridge Towers contract was reached. The Cambridge Towers contract was executed in April 1978 as a partial settlement ("the 1978 Settlement") of a prior lawsuit between Budge and Post. Under the terms of the 1978 Settlement,¹ Budge assigned to Post any claims for money which Budge had under a 1969 employment agreement which similarly had spawned a federal lawsuit in this Court in 1976 (the "1976 lawsuit"). The 1976 lawsuit concerned a ten year employment contract by which Budge was to perform similar functions from 1970 to 1980 at Post's Club Tres Vidas en la Playa in Acapulco, Mexico ("Tres Vidas contract"). Budge filed suit in 1976 contending that Post breached the Tres Vidas contract beginning in 1974 by failing to pay Budge his minimum guaranteed income and other amounts due under the contract. In 1975, prior to the filing of the 1976 lawsuit, Tres Vidas went into bankruptcy in Mexico. Shortly before the 1976 lawsuit went to trial, Budge and Post executed the 1978 Settlement, which incorporated the Cambridge Towers contract, settled all claims regarding the Tres Vidas contract, and assigned to Post any monies Budge was due to receive from the Tres Vidas trustee in bankruptcy. Unbeknownst to Post or this Court in the 1979 lawsuit, Budge, acting through an attorney in Mexico, entered into a voluntary settlement agreement in July 1979 ("the Bankruptcy Settlement") with the Mexican trustee in bankruptcy for Tres Vidas, settling all of Budge's claims with respect to the Tres Vidas contract. According to the Affidavit of the agent allegedly authorized by Post, Bruce C. Leadbetter ("Leadbetter"), this fact was discovered in the Spring of 1980 when Leadbetter was informed by the Mexican trustee in bankruptcy that Budge had executed the Bankruptcy Settlement. Leadbetter stated in his Affidavit that Budge received a check on or about July 17, 1979, from the trustee in bankruptcy for Tres Vidas² and that the Mexican court handling the Tres Vidas bankruptcy proceedings had approved the Bankruptcy Settlement. On December 12, 1979, a jury verdict in the 1979 lawsuit was returned and the Court entered Judgment against Post on January 17, 1980. The Fifth Circuit's opinion was handed down on April 24, 1981.

Pursuant to Fed.R.Civ.P. 60(b), Post asserts that the Bankruptcy Settlement violates the terms of the 1978 Settlement and Post's recent discovery of the Bankruptcy Settlement entitles him to have the January 17, 1980, Judgment vacated. Post also posits that the Bankruptcy Settlement constitutes an accord and satisfaction of the Tres Vidas contract, which became the basis for the 1978 Settlement. According to Post, the accord and satisfaction supercede the 1978 Settlement, and preclude Budge's cause of action and the 1979 lawsuit.

II. A Tangled Net of Procedural Faults

Before this Court may even attempt to examine the effect of the Bankruptcy Settlement upon the Judgment, the Court must determine if Post is entitled to relief pursuant to Rule 60(b).³ Post seeks relief from the Judgment pursuant to his Motion under Rule 60(b)(5) or 60(b)(6). Post also moved at the hearing that his Motion be considered, in the alternative, as an independent action under Rule 60(b).⁴ The difficulty in determining which provision, if any, is appropriate pursuant to Rule 60(b) arises from Post's delay in filing his Motions. The Leadbetter Affidavit indicates that Post learned of the Bankruptcy Settlement in October 1980, at the very earliest. Judgment was entered on January 17, 1980, and Post did not file the Motions in question until April 24, 1981. The Rule itself provides that subsections (1), (2), and (3) may not be utilized if more than one year has elapsed from entry of the judgment. It is also clear that the January 17, 1980, Judgment is not void under subsection (4). A judgment is not void if it is erroneous, William Skillings & Assoc. v. Cunard Transp., Ltd., 594 F.2d 1078, 1081 (5th Cir. 1979), or if it is defective due to an error in law. Gulf Coast Bldg. & Supply Co. v. International Brotherhood of Electrical Workers, Local 480, 460 F.2d 105, 108 (5th Cir. 1972).

With respect to the residual clause in subsection (6), it is well settled that the grounds specified under the first five subsections will not justify relief under subsection (6). Klapprott v. United States, 335 U.S. 601, 614, 69 S.Ct. 384, 390, 93 L.Ed. 266 (1949); Seven Elves, Inc. v. Eskenazi, 635 F.2d 396, 401 n.3 (5th Cir. 1981); William Skillings, 594 F.2d at 1081; Gulf Coast, 460 F.2d at 108. Furthermore, relief under subsection (6) is not available to a movant where the relief sought would have been available under another subsection but for the time limits of the other subsection. Kerwit Medical Products, Inc. v. N. & H. Instruments, Inc., 616 F.2d 833, 836-37 n.8 (5th Cir. 1980). Budge relies on this holding, and maintains that but for the time limitations imposed by the one year requirement, subsection (2) would have provided a basis on which Post could seek relief from the Judgment because the Bankruptcy Settlement was "newly discovered" under provision (2). The Court concurs with Budge that had Post's present charge been brought by January 17, 1981, Post would have been entitled to relief pursuant to Rule 60(b)(2). The fact that Post took an appeal of this Court's Judgment does not toll the one year requirement of Rule 60(b). Gulf Coast, 460 F.2d at 108. Accordingly, Post is not entitled to relief pursuant to Rule 60(b)(6).

Nor may Post obtain relief pursuant to the Rule 60(b) "fraud upon the court" provision. While the suggestion that Budge's concealment of the Bankruptcy Settlement from the Court in the 1979 lawsuit constitutes a fraud upon the Court is not so ludicrous as to justify the cavalier remarks of Budge's counsel,⁵ the Fifth Circuit has recently stated that "only a small number of those acts that can be considered fraud amount to `fraud upon the court,' as that phrase is used in Rule 60(b)." Kerwit, 616 F.2d 833, 836-37. The Kerwit court acknowledged that the

"concept should `embrace only that species of fraud which does or attempts to, defile the court itself, or is a fraud perpetrated by officers of the court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases that are presented for adjudication.'"

Id. at 837, citing Kupferman v. Consolidated Research and Manufacturing Corp., 459 F.2d 1072, 1078 (2d Cir. 1972) (quoting 7 Moore,...