Harman v. Pauley, 81-1370
| Decision Date | 19 January 1982 |
| Docket Number | No. 81-1370,81-1370 |
| Citation | 678 F.2d 479 |
| Parties | C. Dale HARMAN, Appellant, v. Esther Harman PAULEY, Vera Harman Tomlinson, Margaret Benton Harman, Joann Harman, Gail Harman Williams, and Helen Harman Kidwell, Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Arthur P. Strickland, Roanoke, Va. (Mundy & Strickland, Roanoke, Va., Edward M. Payne, III, Beckley, W. Va., on brief), for appellant.
Jerry K. Jebo, Radford, Va. (Jebo & Rosenthal, Radford, Va., on brief), for appellee.
Before MURNAGHAN, SPROUSE and ERVIN, Circuit Judges.
This is an appeal from the district court's refusal to vacate its final judgment under F.R.Civ.P. 60(b)(6) for violation of a settlement agreement. Because we believe the district court did not abuse its discretion, we affirm that court's order denying the Rule 60(b)(6) motion.
On July 15, 1977, Dale Harman, a practicing attorney, filed suit in federal court against Esther Harman Pauley and five of his other cousins alleging that they had individually and as part of a conspiracy sought to injure his reputation by falsely accusing him of fraud, conversion, and breach of fiduciary duties. Dale Harman further alleged that the defendants had initiated a suit against him in the name of their aunt, Perle T. Harman, while she was mentally and physically incapacitated, in which they falsely alleged that he had fraudulently procured certain coal stocks and personalty from Perle T. Harman. After limited discovery, the parties entered into a "Release in Full and Covenant Not to Sue." The release stated that both parties would dismiss their pending lawsuits and not reinstate their suits or prosecute any other suit against the other party arising out of the transactions in question. It included a release from claims related to and arising from the prior transfer to Dale Harman of certain stock in three named coal companies, "together with certain personal property given by Perle T. Harman" to Dale Harman. The release also provided for attorneys fees and expenses to be awarded if necessary to enforce the agreement. On March 10, 1978, the court dismissed Harman's suit with prejudice based on this agreement.
In the spring of 1979 Harman filed a claim with the Commissioner of Accounts in Mercer County, West Virginia, to recover stocks and personal property which apparently were part of the settlement agreement, but which had remained part of Perle T. Harman's estate. Upon receiving notice from the Commissioner, Esther H. Pauley submitted a claim to the personal property that Harman had claimed. Alleging that Esther H. Pauley was violating the settlement agreement by attempting to obtain the same personal property referred to in the settlement agreement, Harman moved the district court pursuant to F.R.Civ.P. 60(b)(6) to vacate the March 10, 1978 order so that he could proceed to enforce the agreement. Pauley filed a response in opposition asserting, inter alia, that she had not violated the settlement agreement, that if there had been a violation Harman's remedy was a separate action to enforce the agreement, and that the other defendants in the suit had not received notice of his Rule 60(b) (6) motion.
At that time, Harman had in fact filed a separate action against Pauley individually alleging that she had breached the settlement agreement by attempting to claim the personalty referred to in the settlement agreement, and making other allegations not relevant here. That action is still pending in federal court.
After considering arguments from both sides, the district court denied Harman's motion to vacate its prior order. It is from this ruling that Harman appeals.
F.R.Civ.P. 60(b)(6) allows a district court to vacate its own final judgment "for any other reason obviously justifying relief from the operation of the judgment." The rule gives the court such authority to accomplish justice and leaves such determinations to its discretion. We must affirm the district court, therefore, unless we find that the court abused its discretion. See C. Wright and A. Miller, Federal Practice and Procedure § 2864 (1973).
Basically, Harman contends that the district court abused its discretion because it "has a duty to vacate its dismissal order when settlement terms are violated." This court, however, has stated clearly that when a settlement agreement has been breached two remedies are available-a suit to enforce the agreement or a Rule 60(b)(6) motion to vacate the prior dismissal. Fairfax Countywide Citizens Assoc. v. County of Fairfax, 571 F.2d 1299 (4th Cir. 1978). In this case, Harman seeks to pursue both avenues.
Harman does cite authority holding that when one party repudiates a settlement agreement, the district court has a duty to vacate its prior judgment under Rule 60(b)(6) and proceed to enforce the agreement when justice requires. In Aro Corp. v. Allied Witan Co., 531 F.2d 1368 (6th Cir. 1976), two companies had settled a claim of patent infringement and a counterclaim through the issuance of a license. The suit was dismissed voluntarily, but when the licensee subsequently refused to make royalty payments, the licensor moved to have the district court vacate its order of dismissal and enjoin the licensee from future nonpayment. The district court granted the motion. The sixth circuit, in affirming the district court, stated that "the court below had not only the inherent power but, when required in the interests of justice, the duty to enforce the agreement which had settled the dispute pending before it." Id. at 1371.
Harman appears to misread the dictum in Aro. The sixth circuit clearly states in that case that a district court has a duty to vacate a prior order of dismissal when required in the interests of justice, not whenever a settlement agreement has been breached. Aro, therefore, simply stands for the general rule that when considering a Rule 60(b)(6) motion, the trial judge should use his discretion to determine if the granting of such motion would further justice. 1
In denying Harman's motion, the district court pointed to the following facts:
1) that Harman alleges breach of the agreement by only one of the defendants in the suit that was dismissed;
2) that Harman has already filed...
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