Karak v. Bursaw Oil Corp.

United States Court of Appeals
For the First Circuit

No. 01-2127

ELIE N. KARAK ET AL.,

Plaintiffs, Appellants,

v.

BURSAW OIL CORP. ET AL.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Reginald C. Lindsay, U.S. District Judge]

Before

Selya, Circuit Judge,

Bownes and Stahl, Senior Circuit Judges.

Robert E. Weiner, with whom Jeffrey A. Gorlick was on brief,
for appellants.
Raymond S. Ewer, with whom Tennant & Ewer, P.C. was on brief,
for appellees.

May 2, 2002
 SELYA, Circuit Judge. The district court in this case

entered a controversial (and arguably incorrect) judgment. See

Karak v. Bursaw Oil Corp., 147 F. Supp. 2d 9 (D. Mass. 2001). The

defendant eschewed an appeal. Later, he moved for relief from the

judgment on grounds of newly discovered evidence, Fed. R. Civ. P.

60(b)(2), and misrepresentation, Fed. R. Civ. P. 60(b)(3). The

district court denied the motion. Finding that ruling free from

any abuse of discretion, we affirm.

I.

Background

The facts that give rise to the underlying litigation are

chronicled in the district court's original opinion, see Karak, 147

F. Supp. 2d at 10-11, and it would be pleonastic to repeat them

here. For present purposes, it suffices to say that, at the times

relevant hereto, defendant-appellee Bursaw Oil Corp. (a wholesaler

and distributor of motor fuel and allied products), through a

subsidiary, owned a prime service station in Newton, Massachusetts.

Beginning in 1989, plaintiff-appellant Elie N. Karak leased this

station and sold, inter alia, gasoline supplied by Bursaw.1 The

parties' relationship was bounded by several agreements, revised

and renewed periodically, which covered both the lease of the real

1
There are two plaintiffs here (Karak and a corporation that
he controls) and two defendants (Bursaw and its parent company).
For ease in reference, we treat the case as if Karak and Bursaw
were the sole parties in interest.

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estate and the supply of motor fuel. The last lease renewal

expired on June 30, 2000. Karak nonetheless remained on the

premises as a tenant at will, and Bursaw continued to supply the

station with motor fuel.

On or about February 20, 2001, Karak learned from

Bursaw's general manager, Andrew Slifka, that Bursaw planned to

sell the station to a third party. With that objective in mind,

Bursaw served notice on March 28, 2001, directing Karak to vacate

the premises within thirty days. Karak did not go quietly; as the

thirty-day period wound down, he brought suit against Bursaw in the

federal district court. His suit premised federal jurisdiction on

the existence of a federal question, see 28 U.S.C. § 1331, charging

Bursaw with having violated the Petroleum Marketing Practices Act

(PMPA), 15 U.S.C. §§ 2801-2841.

Concerned about possession of the premises and his

ability to keep his business afloat, Karak immediately moved for

injunctive relief. The district court treated his motion as a

motion for a temporary restraining order and denied it on April 30,

2001. Two days later, Karak filed an amended complaint and a

renewed request for preliminary injunctive relief. Bursaw

responded by filing a motion to dismiss and an opposition to the

prayer for injunctive relief. As part of its response, Bursaw

attached affidavits subscribed by Slifka and Edward Davis (Bursaw's

operations manager).

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 The district court held a hearing on May 10 in respect to

Karak's motion for a preliminary injunction. The court then took

the matter under advisement, directing the parties to supplement

the record. Pursuant to this directive, Karak swore out and served

an affidavit, and Bursaw filed four affidavits of company officials

(including supplementary declarations from Slifka and Davis).

On May 30, 2001, the district court denied Karak's motion

for injunctive relief and dismissed the action for want of federal

subject matter jurisdiction. Karak, 147 F. Supp. 2d at 15. The

court's decision rested on two determinations: (1) that the

idiosyncratic relationship between the parties did not fall within

the scope of the PMPA, and (2) that it should not exercise

supplemental jurisdiction over Karak's pendent state-law claims.

Id. at 15-16.

Karak abjured an appeal. Instead, he filed a strikingly

similar suit in a Massachusetts state court. That court too denied

Karak's pleas for injunctive relief. Karak then abandoned his

state court action and returned to the federal court. This time,

he filed what he termed a "motion to reconsider" (in reality, a

motion for relief from judgment).2 The motion invoked Fed. R. Civ.

2
Karak filed this motion on June 27, 2001. As final judgment
had entered in the district court on May 31, 2001, the appeal
period was still open. See Fed. R. App. P. 4(a)(1)(A). Despite
this window of opportunity, Karak again eschewed a direct appeal.

At about this same time, Karak stipulated to the entry of
judgment in yet a third case — an eviction proceeding that Bursaw

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P. 60(b)(2)-(3) and incorporated affidavits from Karak's attorney,

Richard P. Blaustein, and from a former Bursaw employee, Edward

Yaeger. For eleven years, Yaeger had supervised the Karak-Bursaw

relationship, and he had great familiarity both with that

relationship and with Bursaw's corporate hierarchy. Yaeger

claimed, inter alia, that Davis had misrepresented the structure of

the company, and that both Davis and Slifka had distorted the

nature of Bursaw's dealings with Karak. Karak asserted that this

affidavit constituted new, previously undiscovered evidence

supporting his position, and that it proved the falsity of Bursaw's

representations to the district court.

Bursaw strenuously opposed this motion. More

importantly, the district court found it wanting and summarily

denied it. This appeal followed.

II.

Analysis

"In our adversary system of justice, each litigant

remains under an abiding duty to take the legal steps that are

necessary to protect his or her own interests." Cotto v. United

States, 993 F.2d 274, 278 (1st Cir. 1993). Given this duty, the

failure to take a timely appeal has serious consequences. While a

motion for relief from judgment can be filed under certain

had brought in a state district court. Under the terms of the
stipulation, Karak agreed to vacate the service station premises no
later than July 17, 2001.

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circumstances, an appeal from the denial of such a motion will not

expose the merits of the underlying judgment to appellate scrutiny.

See id.; Ojeda-Toro v. Rivera-Mendez, 853 F.2d 25, 28-29 (1st Cir.

1988); see also Rodriguez-Antuna v. Chase Manhattan Bank Corp., 871

F.2d 1, 2 (1st Cir. 1989) (explaining that the appeal from a denial

of a Rule 60(b) motion "does not automatically produce a Lazarus-

like effect; it cannot resurrect appellants' expired right to

contest the merits of the underlying judgment, nor bring the

judgment itself before us for review"). In short, an appeal from

the denial of a Rule 60(b) motion is not a surrogate for a

seasonable appeal of the underlying judgment.

In view of this paradigm, the merits of the district

court's original order are not now in issue. To the contrary, the

only justiciable question on this appeal involves the propriety of

the lower court's denial of Karak's Rule 60(b) motion. Our inquiry

into that question proceeds on the understanding that relief under

Rule 60(b) is extraordinary in nature and that motions invoking

that rule should be granted sparingly. See Teamsters, Chauffeurs,

Warehousemen & Helpers Union, Local No. 59 v. Superline Transp.

Co., 953 F.2d 17, 19-20 (1st Cir. 1992); Lepore v. Vidockler, 792

F.2d 272, 274 (1st Cir. 1986). Thus, a party who seeks recourse

under Rule 60(b) must persuade the trial court, at a bare minimum,

that his motion is timely; that exceptional circumstances exist,

favoring extraordinary relief; that if the judgment is set aside,

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he has the right stuff to mount a potentially meritorious claim or

defense; and that no unfair prejudice will accrue to the opposing

parties should the motion be granted. Teamsters, 953 F.2d at 20-

21.

On appeal from a denial of a Rule 60(b) motion, the

movant faces a further hurdle. The district court typically has an

intimate, first-hand knowledge of the case, and, thus, is best

positioned to determine whether the justification proffered in

support of a Rule 60(b) motion should serve to override the

opposing party's rights and the law's institutional interest in

finality. Consequently, we defer broadly to the district court's

informed discretion in granting or denying relief from judgment,

and we review its ruling solely for abuse of that discretion.

Claremont Flock Corp. v. Alm, 281 F.3d 297, 299 (1st Cir. 2002);

Teamsters, 953 F.2d at 19.

A.

Rule 60(b)(2)

Against this backdrop, we turn first to Karak's attempt

to invoke Rule 60(b)(2). That rule provides in pertinent part that

the trial court may relieve a party from a final judgment on the

basis of "newly discovered evidence which by due diligence could

not have been discovered [within ten days of the date of the

judgment.]" On this record, we cannot disturb either the district

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court's assessment of these criteria or its decision to deny

relief.

Although Karak touts the Yaeger affidavit as newly

discovered evidence, he wholly fails to explain why this evidence

could not have been found, well before the entry of judgment, in

the exercise of even minimal diligence. The inference of

availability seems compelling. Yaeger — although retired from his

position at Bursaw — lived in nearby Lynn, Massachusetts. Karak

had dealt with him for many years and knew him intimately. On the

face of things, the delay in contacting Yaeger appears to doom

Karak's current quest. See, e.g., Washington v. Patlis, 916 F.2d

1036, 1038 (5th Cir. 1990) (affirming trial court's denial of Rule

60(b)(2) motion when movant knew of her "newly discovered" witness

at the time she filed her complaint, but did not attempt to present

that witness until after entry of judgment).

Of course, appearances can be deceiving. Cf. Aesop, The

Wolf in Sheep's Clothing (circa 550 B.C.). But a party who seeks

relief from a judgment based on newly discovered evidence must, at

the very least, offer a convincing explanation as to why he could

not have proffered the crucial evidence at an earlier stage of the

proceedings. See Lepore, 792 F.2d at 274. Karak did not carry

this burden: he himself eschewed any attempt to explain the delay

in adducing Yaeger's version of the facts, and the Yaeger affidavit

provided nothing suggesting that Yaeger was unavailable during the

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weeks leading up to the entry of judgment. Indeed, the only effort

that Karak made to persuade the district court that Yaeger's

evidence was beyond his reach was to file an affidavit from his

then-counsel (Blaustein).

The Blaustein affidavit is scarcely worth the paper on

which it is typed. Other than parroting the language of Rule

60(b)(2),3 Blaustein stated only that he did not know about Yaeger

until June 23, 2001. That statement, even if true, is beside the

point. The relevant standard is not whether a plaintiff told his

attorney about a particular witness, but, rather, whether someone

on the plaintiff's side of the case (be it the plaintiff or his

attorney) knew of the witness. See Parrilla-Lopez v. United

States, 841 F.2d 16, 19-20 (1st Cir. 1988). Taking the record as

a whole, Karak not only must have known of the witness (Yaeger) but

also must have appreciated his likely significance. Thus, Karak

has failed to undermine the logical inference that he had ample

time and opportunity to secure and present the Yaeger affidavit

prior to the initial entry of judgment.

Karak endeavors to blunt the force of this reasoning by

bemoaning that the case moved at lightning speed, thus depriving

3
We disregard the chanting of this mantra. Although a court,
for purposes of a Rule 60(b) motion, sometimes may assume the truth
of fact-specific statements proffered by the movant, it need not
credit "bald assertions, unsubstantiated conclusions, periphrastic
circumlocutions, or hyperbolic rodomontade." Teamsters, 953 F.2d
at 18.

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him of a fair chance to marshal his proof. This is little more

than a post hoc rationalization. After all, it was Karak who

dictated the pace of the proceedings by pressing vigorously for

preliminary injunctive relief (which he termed "emergency"

injunctive relief). Moreover, when the district court requested

supplementary materials in connection with the motion to dismiss,

Karak could have sought time for discovery or for further

investigation. Cf. Fed. R. Civ. P. 56(f). He elected not to do

so. Having decided to proceed full throttle, Karak hardly can be

heard to complain that the district court obliged him by moving

expeditiously.

To sum up, Karak failed to show that, had he exercised

due diligence, Yaeger's affidavit would not have been available

earlier. Given this failing, the district court did not abuse its

wide discretion in denying the motion for relief from judgment

insofar as that motion implicated Rule 60(b)(2). See Lepore, 792

F.2d at 274 ("An unexcused failure to produce the relevant evidence

before the entry of judgment is sufficient grounds for denial of a

60(b) motion.").

B.

Rule 60(b)(3)

The second prong of Karak's argument suggests that his

motion for relief from judgment should have been granted under the

aegis of Rule 60(b)(3). That rule authorizes the district court to

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absolve a party from a final judgment upon a showing that the

adverse party has committed "fraud (whether heretofore denominated

intrinsic or extrinsic), misrepresentation, or other misconduct .

. . ." There are two prerequisites to obtaining redress under this

rule. First, the movant must demonstrate misconduct — such as

fraud or misrepresentation — by clear and convincing evidence.

Anderson v. Cryovac, Inc., 862 F.2d 910, 923 (1st Cir. 1988).

Second, the movant must "show that the misconduct foreclosed full

and fair preparation or presentation of [his] case." Id.

Karak's theory is that the Yaeger affidavit proves that

Slifka's and Davis's affidavits contained material misstatements,

and that those misstatements evince misconduct on Bursaw's part.

This theory is far from watertight. For one thing, Karak

overstates the degree to which the Yaeger affidavit contradicts the

Slifka and Davis affidavits.4 For another thing, Karak himself

knew most of the pertinent information contained in the Yaeger

affidavit (e.g., information concerning the division of

responsibilities between Karak and Bursaw during their working

relationship). Finally, Yaeger's affidavit, even when read through

rose-colored glasses, merely establishes a conflict in the

4
To cite but one glaring example, Karak contrasts Yaeger's
testimony that Bursaw had two divisions dealing with gasoline sales
to the public with Davis's testimony that Bursaw maintained three
types of "relationships" with its affiliated service stations.
Although Karak makes much of this "misrepresentation," we see no
necessary inconsistency in these descriptions.

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evidence; it does not clearly and convincingly show that Slifka and

Davis, at Bursaw's instance, intentionally misrepresented pertinent

facts. The former showing, without the latter, is not enough. See

Geo. P. Reintjes Co. v. Riley Stoker Corp., 71 F.3d 44, 49 (1st

Cir. 1995) (holding that a showing of perjury, without more, is

insufficient to entitle a party to relief from judgment under Rule

60(b)(3)).

In all events, we need not probe too deeply whether Karak

made an adequate showing of misconduct. Even assuming that he did,

any misstatements that may have occurred did not inhibit him from

fully and fairly preparing his case. We explain briefly.

To meet the second requirement for application of Rule

60(b)(3), the asserted misconduct "must substantially have

interfered with the aggrieved party's ability fully and fairly to

prepare for and proceed [to judgment]." Anderson, 862 F.2d at 924

(emphasis in original). The burden is on the movant to make this

showing. But the Blaustein affidavit contains no claim that any

such interference occurred, and Karak nowhere persuasively explains

what interference transpired.

The absence of such an explanation is fatal, as the

circumstances of the case, unexplained, do not support an inference

of substantial interference. After all, Karak had at his beck and

call the complete panoply of pretrial discovery devices, including

deposition notices and demands for document production. He also

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had access to Yaeger, had he chosen to take advantage of that

opportunity in a timely fashion. See supra Part II(A). Karak

availed himself of none of these measures. Had he done so, common

sense suggests that he easily could have discovered any

misstatements and laid bare the facts prior to the entry of

judgment.

This is not a case like Anderson, in which a defendant

allegedly concealed evidence during pretrial discovery. 862 F.2d

at 922-23. Bursaw made no bones about the fact that Slifka and

Davis were its key witnesses, and did not in any way obstruct

Karak's ability to depose them or to inspect its corporate records.

When a party is capable of fully and fairly preparing and

presenting his case notwithstanding the adverse party's arguable

misconduct, the trial court is free to deny relief under Rule

60(b)(3). See Diaz v. Methodist Hosp., 46 F.3d 492, 497 (5th Cir.

1995). So is it here: while one can debate the extent to which

Yaeger's version of the facts differs from Slifka's and Davis's,

and which of those versions is more credible, one cannot plausibly

contend, on this record, that Karak's pursuit of the truth was

hampered by anything except his own reluctance to undertake an

assiduous investigation (including pretrial discovery).

That ends the matter. Rule 60(b)(3) is designed to

afford protection against judgments that are unfairly obtained

rather than against judgments that are factually suspect. In re

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M/V Peacock, 809 F.2d 1403, 1405 (9th Cir. 1987); Rozier v. Ford

Motor Co., 573 F.2d 1332, 1339 (5th Cir. 1978). In light of this

design, the district court did not abuse its discretion in refusing

to set aside the instant judgment under Rule 60(b)(3).

III.

Conclusion

It is trite, but true, that "[c]ourts, like the Deity,

are most frequently moved to help those who help themselves."

Paterson-Leitch Co. v. Mass. Mun. Wholesale Elec. Co., 840 F.2d

985, 989 (1st Cir. 1988). This is such an instance: Karak

neglected to prepare his case in a diligent fashion and compounded

that omission by failing to appeal from the adverse judgment. On

this record, there is no principled way that we can extricate him

from his self-dug hole.

We need go no further. For the reasons explicated above,

we uphold the district court's denial of Karak's Rule 60(b) motion.

We take no view of the correctness of the underlying judgment,

however, as that is beyond our proper purview.

Affirmed.

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