De Saracho v. Custom Food Machinery, Inc.

182 F.R.D. 601, 1998 U.S. Dist. LEXIS 20792, 1998 WL 695289
CourtDistrict Court, N.D. California
DecidedSeptember 16, 1998
DocketNo. C-95-20854-RMW
StatusPublished
Cited by1 cases

This text of 182 F.R.D. 601 (De Saracho v. Custom Food Machinery, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
De Saracho v. Custom Food Machinery, Inc., 182 F.R.D. 601, 1998 U.S. Dist. LEXIS 20792, 1998 WL 695289 (N.D. Cal. 1998).

Opinion

MEMORANDUM OF DECISION ON MOTION UNDER FED.R.CIV.P. 60(b)(3)

INGRAM, Senior District Judge.

The instant motion follows a jury trial which resulted in a verdict in favor of Plaintiffs above named and against Defendants above named. Judgment was entered upon that verdict. Defendants Ron McNiel, Sr. and Custom Food Machinery were found liable for intentional misrepresentation, negligent misrepresentation, and conspiracy, and monetary compensatory damages were assessed against them.

Following trial, and within one year of the entry of judgment, Defendants Custom Food Machinery, Inc. and Ron McNiel, Sr., (herein called “Movants”), have moved under Fed. R.Civ.P. 60(b)(3) and Local Rule 7-2 for relief from the judgment heretofore entered upon jury verdict. Plaintiffs Maria De Sara-cho, Eureka Canners Group and Eureka Mexicana are herein called “Respondents.”

MOVANTS’ CONTENTIONS

Movants make the following contentions in support of their motion:

1. Respondents systematically suppressed the truth concerning Respondents Maria De Saracho’s and Eureka Canners Group’s litigation with Banco De Crédito Rural De Pacifico Norte, SNC, hereinafter called “BanRural” which was predicated upon allegedly defaulted loans made by Ban-Rural to Respondents Eureka Canners Group and Maria De Saracho in that Respondents failed to produce their own pleadings in that Mexican action which set forth their defenses to that action, when the production of those pleadings was clearly within the scope of discovery propounded by Defendants, including Movants herein. Movants also contend that as a part of their suppression of the truth Respondents introduced false testimony at trial as to the amounts owed by Respondents to BanRural, which amounts constituted a substantial portion of the damages claimed by Respondents in the instant case. Movants contend further that Respondents failed to supplement their dis-[603]*603eovery responses to disclose the fact that the Mexican action against Respondent Eureka Canners Group was dismissed prior to the trial of the instant case.

2. Respondents suppressed the accounting records of Respondent Eureka Canners Group which showed that a $1,050,000 capital contribution allegedly fraudulently made to Custom Food Machinery by Defendant Fred Avalli was in fact recorded as having been made jointly by Avalli and by Respondent Eureka Mexicana, a corporation owned by Mr. De Saracho. Movants contend that if the $1,050,000 was in fact fraudulent, the De Sarachos were themselves parties to the fraud and had knowledge of it, and that their testimony to the contrary at the trial of the instant case was untruthful and false.

3. Respondents and their expert, Mr. Degnan, testified falsely at trial with respect to the monies due and owing to BanRural at the time of the trial of the instant case.

Movants are required to prove the assertions cited above by clear and convincing evidence, but are not required to prove nefarious intent or purpose. The term “misconduct” as used in the Rule covers even accidental omission. Jones v. Aero/Chem Corp., 921 F.2d 875 (9th Cir.1990). In order to prevail upon this motion Movants must prove by clear and convincing evidence that the conduct of Respondents was fraudulent or constituted misrepresentation, or constituted misconduct, and that Movants were thereby prevented from fully and fairly presenting their defense at the trial of the instant case. Movants must prove that the challenged behavior substantially interfered with their ability to prepare for and to proceed to trial, Anderson v. Cryovac Inc., 862 F.2d 910 (1st Cir.1988).

RESPONDENTS’ CONTENTIONS

In responding to Movants’ Rule 60(b)(3) motion, Respondents contend:

1. No judgment of dismissal was ever entered in the Mexican suit.
2. Respondents did not suppress the pleadings in the Mexican suit. They contend that those pleadings do not fall squarely within the scope of Respondents’ initial required disclosure or of Defendants’ initial document request. It has been admitted by Mov-ants in connection with another proceeding that trial counsel representing Movants in the instant case conducted no pretrial discovery of any kind other than the depositions of Respondents and of Respondents’ expert witnesses.
3. Respondents did not suppress the accounting records of Eureka Canners Group, S.A. Respondents have had neither custody nor control over those records since May of 1985, and still have neither custody nor control over those records. Respondents contend further that no request was ever made by Movants for the production of the Eureka Canners Group’s accounting records, and that the accounting records under consideration do not fall squarely within the scope of Respondents’ initial required disclosure or of Movants’ initial document request.
4. Respondents presented no false or misleading testimony concerning the amount owing on the BanRural loans.
5. The Motion for Relief from Judgment is untimely as not made within a “reasonable time.”
6. Movants should be sanctioned and censured.
7. Rule 60(b)(3) requires exercise of due diligence by Movants when failure to respond to discovery and consequent “misconduct” within the meaning of Rule 60(b)(3) is an issue. Movants did not exercise due diligence.

DECISION

The Motion of Custom Food Machinery and Ron McNiel, Sr. under Fed.R.Civ.P. 60(b)(3) is denied. The court finds no clear and convincing evidence of fraud, misrepresentation or misconduct on the part of Respondents or any of them.

DISCUSSION

I.

STANDARD OF RELIEF UNDER RULE 60(b)(3)

Movants must prove by clear and convincing evidence (1) that the verdict of [604]*604which they seek to be relieved was obtained through fraud, misrepresentation, or other misconduct and (2) that the conduct complained of prevented Movants from fully and fairly presenting their case on defense. Jones v. Aero/Chem Corp., 921 F.2d 875, 878, 879 (9th Cir.1990). Rule 60(b)(3) relief is aimed at judgments which were unfairly obtained, not at those which are factually incorrect. In Re M/V Peacock, 809 F.2d 1403, 1405 (9th Cir.1987). Factually incorrect judgments are subject to Rule 60(b)(2) consideration. Rozier v. Ford Motor Co., 573 F.2d 1332, 1339 n. 4 (5th Cir.1978).

Where “misconduct” is predicated upon a failure to respond to discovery movants must show: (1) they exercised due diligence in their discovery requests; (2) respondents knew or were charged with knowledge of the document not produced and had actual or constructive possession of it; (3) that respondent did not divulge document’s existence. Anderson v.

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182 F.R.D. 601, 1998 U.S. Dist. LEXIS 20792, 1998 WL 695289, Counsel Stack Legal Research, https://law.counselstack.com/opinion/de-saracho-v-custom-food-machinery-inc-cand-1998.