United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
October 9, 2006
FOR THE FIFTH CIRCUIT
_____________________ Charles R. Fulbruge III
Clerk
No. 04-11426
_____________________
HAJI GUL KHAN,
Plaintiff - Counter Defendant -
Appellant - Cross Appellee,
versus
SALAH HAKIM; ZIAUDDIN HAKIM; MYLES H.
PENNINGTON; SWAN DEVELOPMENT COMPANY LLC,
Defendants - Counter Claimants -
Third Party Plaintiffs - Appellees -
Cross Appellants,
MUNIR HOMES INC.,
Third Party Plaintiff - Appellee,
versus
DRUMSTICK LLC, a Texas Limited Liability
Company; ET AL.,
Third Party Defendants.
_________________________________________________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 3:03-CV-2771-K
_________________________________________________________________
Before JOLLY, DAVIS, and BENAVIDES, Circuit Judges.
PER CURIAM:1
1
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Plaintiff-Appellant Haji Gul Khan (“Khan”) appeals from the
district court’s denial of his motion to reconsider summary
judgment and compel arbitration in favor of Defendants-Appellees,
Salah Hakim, Ziauddin Hakim, Myles H. Pennington, and Swan
Development Company L.L.C (“Defendants”). Khan also appeals the
district court’s order granting Defendants’ Rule 60 motion to amend
the judgment. For the reasons assigned, the decision of the
district court is AFFIRMED in part and VACATED in part, and the
case is REMANDED.
I
This lawsuit arises out of a dispute over the ownership of a
piece of commercial real estate in Alvarado, Texas. In October
2002, Khan sued the Defendants in Texas state court, alleging
constructive fraud and civil conspiracy. In January 2003, the
Defendants filed a counterclaim in the state court lawsuit against
Khan and a third-party claim against Alvarado Market Station, LLC
and Drumstick LLC. In September 2003, Khan filed for bankruptcy on
behalf of Alvarado Market and Drumstick. The Defendants then
invoked 28 U.S.C. § 1452 to remove the case to federal district
court on the basis of its relationship to the bankruptcy
proceeding.
Once in district court, the Defendants moved for summary
judgment. Khan filed his response and summary judgment evidence,
consisting of sworn affidavits, and on January 20, 2004, the
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Defendants filed their reply. On Friday, August 13, 2004, before
the district court issued its Opinion and Judgment, Khan and the
Defendants agreed to arbitrate their claims under a binding
agreement. Three days later, on Monday, August 16, 2004,
approximately seven months after the motion had been fully briefed
and before the court had been advised of the arbitration agreement,
the district court granted the Defendants’ motion for summary
judgment. On August 24, 2004, Khan moved for reconsideration or
for a new trial and simultaneously moved the court to compel
arbitration under the new agreement. Those orders were denied and
Khan timely filed his notice of appeal. On November 9, 2004, the
Defendants filed a Rule 60 motion to amend the judgment and this
motion was granted. Khan filed an amended notice of appeal,
challenging all these orders and Defendants filed a cross-appeal.
II
Khan appeals from the district court’s denial of his Rule
59(e) motion to reconsider the granting of summary judgment to the
Defendants. Khan also appeals from the district court’s denial of
his motion to compel arbitration. Because the motion to compel
arbitration was filed within 10 days after the entry of the
judgment and requests an alteration of the judgment, it is also
considered a Rule 59(e) motion regardless of its label. See Harcon
Barge Co., Inc. v. D & G Boat Rentals, Inc., 784 F.2d 665, 667 (5th
Cir. 1986) (en banc). The denial of a Rule 59(e) motion is
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generally reviewed for abuse of discretion. Fletcher v. Apfel, 210
F.3d 510, 512 (5th Cir. 2000). If the moving party “appeals from
the denial of a Rule 59(e) motion that is solely a motion to
reconsider a judgment on the merits, de novo review is
appropriate.” Piazza’s Seafood World, LLC v. Odom, 448 F.3d 744,
749 (2006) (citing Apfel, 210 F.3d at 512).
A
Khan relied almost exclusively on two self-composed affidavits
as evidence to defeat the Defendants’ summary judgment motion, both
of which the district court declined to consider, invoking the
doctrine of judicial estoppel. Khan does not assert that he can
meet his evidentiary burden for summary judgment without the
affidavits. In essence, therefore, Khan’s Rule 59(e) motion
challenges the district court’s evidentiary ruling, and therefore
its denial is reviewed for abuse of discretion.
The doctrine of judicial estoppel “protect[s] the integrity of
the judicial process by prohibiting parties from deliberately
changing positions according to the exigencies of the moment.” New
Hampshire v. Maine, 532 U.S. 742, 749-50 (2001) (internal
quotations marks and citations omitted). See also United States v.
McCaskey, 9 F.3d 368, 379 (5th Cir. 1993). Judicial estoppel
prevents a party from "playing fast and loose" with the courts,
Hall v. GE Plastic Pacific PTE Ltd., 327 F.3d 391, 396 (5th Cir.
1996) (quotation omitted), and the decision to invoke it is within
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the discretion of the district court. Ahrens v. Perot Sys. Corp.,
205 F.3d 831, 833 (5th Cir. 1999). This court has found that the
application of judicial estoppel is warranted when (1) the party's
position is clearly inconsistent with his earlier position; and (2)
the party has convinced a court to adopt the position urged, either
preliminarily or as part of a final disposition. In re Coastal
Plains, Inc., 179 F.3d 197, 206 (5th Cir. 1999). In his two
affidavits, Khan presented answers to questions to which he had
invoked his Fifth Amendment privilege in a deposition in the
related bankruptcy case. Applying this test, the district court
held that judicial estoppel was warranted to preclude consideration
of these affidavits.
The court found Khan's invocation of his Fifth Amendment
privilege in the bankruptcy proceeding based on the belief that his
answers would subject him to criminal liability was inconsistent
with his willingness to provide answers to those same questions in
support of his civil claim. The court also found that the
bankruptcy court had adopted that earlier position. Given the
facts presented, the district court did not err, and consequently
did not abuse its discretion, by invoking the doctrine of judicial
estoppel here.
Khan’s Rule 59(e) motion also requested that the district
court compel the parties to arbitration, attaching as supporting
evidence the newly signed agreement to arbitrate. This court has
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held that “[i]f the party seeking reconsideration attaches
additional materials to its motion that were not presented to the
trial court for consideration at the time the court initially
considered the motion for summary judgment, the court may consider
the new materials in its discretion.” Ford Motor Credit Co. v.
Bright, 34 F.3d 322, 324 (5th Cir. 1994). See also Apfel, 210 F.3d
at 512 (same). “[I]f the district court refuses to consider the
materials, the district court applies the abuse of discretion
standard [under which] the district court’s decision ... need only
be reasonable.” Bright, 34 F.3d at 324 (internal quotation marks
and citations omitted). Because the district court declined to
consider the arbitration agreement presented for the first time
together with the Rule 59(e) motion, we review the denial of the
motion to compel for abuse of discretion. In this case, where the
summary judgment motion was fully briefed for seven months prior to
the court's ruling, the district court did not abuse its discretion
by refusing to vacate its final judgment and take up consideration
of a contested motion to compel arbitration. Khan has cited no
persuasive authority that would require another outcome.
B
Khan also appeals the district court’s order amending the
judgment in response to the Defendants’ Rule 60 motion. On
September 7, 2004, the Defendants filed a Rule 60 motion requesting
that the district court amend its judgment to show that Khan “does
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not own any legal or equitable interest” in the disputed property.
Khan had filed a Notice of Lis Pendens together with his original
petition with the state court and Defendants requested the
emendation to remove “the cloud over the title that the lis pendens
ha[d] created.” The district court granted the order and entered
an Amended Final Judgment in favor of the Defendants. While not
raised by either party, the district court lacked jurisdiction to
grant the Rule 60 motion to amend the order because it did so
subsequent to the filing of the notice of appeal. It is well-
established that the filing of a notice of appeal divests the
district court of jurisdiction to grant a Rule 60(b) motion absent
leave from this court. Shepherd v. Int’l Paper Co., 372 F.3d 326,
329 (5th Cir. 2004) (“Once the notice of appeal has been filed,
while the district court may consider or deny a Rule 60(b) motion
... it no longer has jurisdiction to grant such a motion while the
appeal is pending.”) (citing Winchester v. United States Atty. for
S.D. of Tex., 68 F.3d 947, 950 (5th Cir. 1995)) (emphasis in
original). In the instant case, Khan appealed the district court’s
grant of summary judgment on October 27, 2004 and the district
court granted the Rule 60 motion on November 9, 2004,2 after its
jurisdiction over the judgment had been divested. Accordingly, the
Amended Final Judgment is vacated and the case remanded.
2
On November 16, 2004, Khan filed an Amended Notice of
Appeal with this court challenging the district court’s order
granting the Defendants Rule 60 motion.
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III
For the foregoing reasons, the judgment of the district court
is AFFIRMED, the Amended Final Judgment is VACATED, and the case is
REMANDED.
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