Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
6-12-2007
Sander Sales Entr v. Saks Inc
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-1085
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Recommended Citation
"Sander Sales Entr v. Saks Inc" (2007). 2007 Decisions. Paper 958.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-1085
SANDER SALES ENTERPRISES, LTD.
Appellant.
v.
SAKS INC.; PROFFITTS INC.; McRAE’S,
Appellees.
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 01-cv-04794)
District Judge: Honorable William G. Bassler
Submitted pursuant to Third Circuit LAR 34.1(a)
March 12, 2007
Before: FUENTES, VAN ANTWERPEN, SILER,* Circuit Judges.
*
The Honorable Eugene E. Siler, Jr., Senior Circuit Judge for the United States
Court of Appeals for the Sixth Circuit, sitting by designation.
(Filed: June 12, 2007)
OPINION OF THE COURT
FUENTES, Circuit Judge.
After the District Court dismissed the complaint of Sander Sales Enterprises
(“Plaintiff”) pursuant to a settlement agreement, Plaintiff sought to reinstate the
complaint because of an alleged breach of the agreement. However, Plaintiff failed to
attend the scheduled status conference regarding the reinstatement, and, according to
Saks, Inc., Proffitts, Inc., and McRae’s (collectively, “Defendant”), failed to timely move
to restore its case to the calendar. The District Court denied Plaintiff’s request for relief
from judgment, and we will affirm.
I.
Plaintiff, a manufacturer of bedding products, filed a complaint in the U.S. District
Court for the District of New Jersey alleging that Defendant had breached a contract to
pay for delivered goods. The case was assigned to a Magistrate Judge and the parties
reached a settlement. The terms of the settlement provided that Plaintiff and Defendant
would agree to “engage in good faith discussions, in the ordinary course of business, for
[Plaintiff] to sell bedding products to [Defendant] and for [Defendant] to buy such
products, without obligation to either party to place or accept an order . . . .” (A73.) It
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also provided that, if Defendant placed a purchase order with Plaintiff, the matter would
be settled provided Defendant paid an additional $20,000. If Defendant did not place an
order, however, Plaintiff could either accept $20,000 or seek to reinstate the action. The
parties agreed that the case would be “the subject of a 45 day Court Order,” under which
the case would be dismissed with prejudice unless the parties notified the Court “in
writing that the matter ha[d] not been settled.” (Id.)
On July 8, 2004, the District Court dismissed Plaintiff’s suit in accordance with the
settlement, “without prejudice to the right, upon good cause shown within 45 days, or
until August 17, 2004, to reopen the action if the settlement is not consummated.” (A1.)
The Order stated that the terms of the settlement were “incorporated herein by reference
and the Court shall retain jurisdiction over the settlement agreement to enforce its terms.”
(A1.)
On August 16, 2004, the Clerk’s Office for the District of New Jersey received a
two-line letter from Plaintiff’s attorney stating: “Please be advised that the settlement has
not been consummated. We request that the case be restored to active calendar per the
order of the court.” (A47.) On August 19, 2004, the Magistrate Judge scheduled a Status
Conference on the matter for September 7, 2004. Despite apparent attempts by the
Magistrate Judge to reach Plaintiff’s attorney, Plaintiff did not appear at the conference.1
1
Plaintiff’s attorney claims he was never notified of this conference. The
scheduling of the conference is listed on the District Court’s docket. (A26.)
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On February 17, 2005—six months after asking the Court to restore the case to the
docket—Plaintiff’s attorney sent a follow-up letter to the Magistrate Judge inquiring why
the case had not “moved,” and seeking to “fully restore the case to active status.” (A82.)
On March 7, 2005, the Magistrate Judge held a telephone conference at which she told
Plaintiff’s attorney that he had failed to appear at the September conference and that the
case was dismissed pursuant to the Court’s Order of July 8, 2004. On March 11, 2005,
Plaintiff filed a formal motion to reopen the case. After oral argument, the District Court
denied Plaintiff’s motion, ruling that Plaintiff had failed to file a proper motion under
Local Rule 41.1 alleging “good cause” to reopen, and had failed to meet the standard for
relief from judgment under Federal Rule of Civil Procedure 60(b).
On appeal, Plaintiff argues that the District Court should have reinstated the action
because the terms of the settlement agreement had not been consummated. We review
the District Court’s decisions not to reinstate the case and to deny relief from judgment
under Rule 60(b) for abuse of discretion. Lorenzo v. Griffith, 12 F.3d 23, 26 (3d Cir.
1993).
II.
On appeal, Plaintiff argues that its August 16 letter was sufficient on its own to
vacate the District Court’s dismissal Order and to automatically restore the case to the
active docket. The District Court disagreed, and we find no abuse of discretion in this
determination. In the District of New Jersey, dismissal pursuant to a settlement
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agreement is governed by Local Civil Rule 41.1(b), which provides:
When a case has been settled, counsel shall promptly notify the Clerk and
the Court, thereafter confirming the same in writing. Within 15 days of such
notification, counsel shall file all papers necessary to terminate the case.
Upon failure of counsel to do so, the Clerk shall prepare an order for
submission to the Court dismissing the action, without costs, and without
prejudice to the right to reopen the action within 60 days upon good cause
shown if the settlement is not consummated.
Besides setting a period of 45 days (instead of 60), the District Court’s Order dismissing
Plaintiff’s action mirrored the language of Rule 41.1(b). Like the Rule, the Order
required a showing that the settlement was not consummated and a showing of “good
cause.” Although Plaintiff’s letter stated that the settlement had not been consummated,
it made no mention of “good cause” for reopening the case. The Magistrate Judge
scheduled a conference on the issue, but Plaintiff was not present to offer further
argument on reinstatement, and waited six more months before attempting to do so. We
do not believe the District Court abused its discretion in determining that more was
required of Plaintiff to reinstate the case under Local Rule 41.1(b).
Nor do we believe that relief from dismissal was required. As we have explained
previously, Federal Rule of Civil Procedure 60 takes precedence over local rules
governing petitions to reinstate an action. Sawka v. Healtheast, Inc., 989 F.2d 138, 140
(3d Cir. 1993). Accordingly, “any time a district court enters a judgment, even one
dismissing a case by stipulation of the parties, it retains, by virtue of Rule 60(b),
jurisdiction to entertain a later motion to vacate the judgment on the grounds specified in
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the rule.” Id. (quoting Halderman v. Pennhurst State School and Hospital, 901 F.2d 311,
320 (3d Cir. 1990)) (alterations omitted). In spite of Local Rule 41.1(b), therefore, the
District Court properly considered whether Plaintiff’s action should be reinstated under
Rule 60.
After failing to appear at a scheduled status conference and waiting an additional
six months before taking further action, Plaintiff filed a motion under Rule 60 for relief
from judgment (at which point the judgment of dismissal was more than eight-months
old). The District Court scheduled a hearing that provided Plaintiff the opportunity to
demonstrate a basis to reinstate the action. Plaintiff does not challenge the District
Court’s thorough Rule 60 analysis, and we see no reason to disturb it. Instead, Plaintiff
argues that the breach of settlement was enough, by itself, to warrant relief from
dismissal. In Sakwa, however, we explained that a breach alone is insufficient to set
aside a judgment of dismissal, although it can provide a basis for seeking enforcement of
the settlement agreement. Id.
By incorporating the terms of the settlement in its dismissal Order, the District
Court retained jurisdiction over its enforcement. See In re Phar-Mor, Inc. Securities
Litigation, 172 F.3d 270, 274 (3d Cir. 1999) (“[B]y incorporating the terms of the
settlement agreement in the order . . ., a breach of the agreement would be a violation of
the order, and ancillary jurisdiction to enforce the agreement would therefore exist.”)
(quoting Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375, 381
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(1994)). Plaintiff challenges the enforcement of the agreement, arguing that, under its
terms, a breach required reinstatement of the case.
As stated in Plaintiff’s brief, the agreement required that “(1) [Defendant] would
pay [Plaintiff] twenty thousand dollars ($20,000); and (2) [Defendant] would negotiate in
good faith with [Plaintiff] to buy bedding products under terms acceptable to both.”
(Sander’s Br. at 4.) Plaintiff asserts that Defendant never placed a purchase order with
Plaintiff and never paid the $20,000. Before the District Court, Defendant explained that
it had not paid the $20,000 only because Plaintiff had continued to pursue reinstatement.
Accordingly, the District Court enforced the agreement by ordering Defendant to pay the
$20,000 (an order that Defendant does not challenge). Furthermore, although Defendant
did not make a purchase from Plaintiff, the settlement agreement did not require it to do
so; it only required negotiations in the ordinary course of business. The District Court
enforced the agreement in accordance with these provisions.2
III.
The District Court ordered Plaintiff’s complaint dismissed without prejudice to its
moving to reopen within 45 days, as long as the settlement was not consummated and
good cause was shown. The District Court ruled that Plaintiff failed to satisfy Local Rule
41.1(b) and failed to warrant relief from dismissal under Rule 60. Retaining jurisdiction,
2
To the extent Plaintiff is dissatisfied with the amount it received under the
settlement, the fault lies not with the District Court, but with the provisions of the
agreement.
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it enforced the agreement in accordance with its applicable terms. For the foregoing
reasons, we will affirm.
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