Catherine Kerruish, et al v. Rodney Rutty, et al

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 20-11135
Non-Argument Calendar
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D.C. Docket No. 0:16-cv-60877-KMW
CATHERINE KERRUISH,
BARBARA CRESSMAN,
Plaintiffs - Appellants,
versus
ESSEX HOLDINGS, INC., et al.,
Defendants,
RODNEY RUTTY,
JPMORGAN CHASE BANK, N.A.,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 8, 2021)
Before WILSON, MARTIN, and ROSENBAUM, Circuit Judges.
PER CURIAM:
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Plaintiffs Catherine Kerruish and Barbara Cressman appeal from the district
court’s order denying their motion to set aside the judgment under Federal Rule of
Civil Procedure 60(b). Plaintiffs each lost more than $700,000 investing in what
turned out to be a Ponzi scheme. Kerruish v. Essex Holdings, Inc., 777 F. App’x
285, 287 (11th Cir. 2019) (per curiam) (unpublished). They say they invested in
Essex Holdings, Inc. (“Essex”) partly in reliance on false representations made by
a JPMorgan Chase Bank, N.A. (“Chase”) employee named Rodney Rutty in a
letter sent on Chase letterhead. Id. at 287. They sued Rutty for common law fraud
and sought to hold Chase vicariously liable. Id. at 287–88. The district court
dismissed their claims against Chase and granted summary judgment to Rutty. Id.
at 288. A panel of this Court affirmed those decisions in June 2019. Id.
In October 2019, Plaintiffs filed a Rule 60(b) motion in the district court,
claiming they were entitled to relief. The district court denied Plaintiffs’ motion as
untimely. After careful review, we affirm.
I.
Between 2012 and 2013, Plaintiffs each invested £500,000 (more than
$700,000 in U.S. dollars) in Essex. Kerruish, 777 F. App’x at 287–88.1 Essex
held itself out to be a Florida-based global trading company active in sugar trading
1 The facts and procedural history are more fully laid out in the previous panel’s opinion.
See Kerruish, 777 F. App’x at 287–90.
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and iron ore mining.2 However, Essex was actually a sham company set up by
Defendant Navin Xavier to defraud investors.3 Plaintiffs filed suit in the Southern
District of Florida, naming several people and companies as defendants, alleging
Defendants fraudulently induced Plaintiffs to invest £500,000 in Essex’s Ponzi
scheme.
Plaintiffs alleged that in making their investments, they relied on, among
other things, letters from two Chase employees.4 They alleged that Rutty signed
one of these letters in his capacity as a Chase Business Specialist. The “Chase
letter” reads:
Dear Sir/Madam
At the request of our valued customer Essex Holdings, Inc. please be
advised of the following information in reference to their Sugar
Allocation.
Essex Holdings, Inc. has purchased the following contract in the
amount of One Million Five Hundred Thousand Metric Tons of White
Refined Sugar from Shepton Mallet Corp. S.A., under allocation
number SM009582-121SM3331MT1500000-51210. The initial
purchase consists of One Hundred Twenty Five Thousand Metric Tons
for the next twelve consecutive months.
2 Kerruish and her husband, Stephen, invested in 2012. Cressman invested in 2013.
Plaintiffs are both citizens of Great Britain.
3 The government brought federal fraud charges against Xavier. He ultimately pled
guilty to two counts of wire fraud in connection with the Essex scheme.
4 Plaintiffs also relied on advice from Kerruish’s brother-in-law, Simon Kerruish. Simon
and a man named Robert Jarvis ran Lucino Limited, a Cyprus-based company acting as a
collection agent to facilitate fraudulent overseas investments into Essex. Simon and Jarvis are
both deceased.
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We further confirm that Essex Holdings have [sic] a proven business
history in the export of ICUMSA 45 sugar from Brazil.
Please feel free to contact us if you have any further questions on this
matter.
[Signature]
Rodney Rutty
Business Specialist
After several of Plaintiffs’ claims had been dismissed, Rutty moved for
summary judgment on the two remaining claims against him. Among other things,
Rutty argued the fraud claims against him could not be sustained because the
evidence showed he did not sign the Chase letter and there was no evidence he
received payments from the Essex scheme. Then, more than two months after
summary judgment briefing was complete and more than four months after the
close of discovery, Plaintiffs moved to submit a declaration from Xavier to support
the authenticity of the Chase letter. In the declaration, Xavier says he paid Rutty to
sign the Chase letter and make false representations to any potential investor who
inquired about Essex.
The district court declined to consider Xavier’s declaration.5 And, in
reaching its decision to grant Rutty summary judgment, it found that “Plaintiffs
5 Aside from Plaintiffs’ lateness in submitting the declaration, the district court noted
several problems with Xavier’s declaration. For example, the court had “serious concerns” about
the reliability of Xavier’s statements because they “directly contradict” previous statements
Xavier had made under oath. The district court also said Xavier was not represented by counsel
during the meeting with Plaintiffs’ counsel.
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have not offered sufficient evidence to create a genuine issue of fact regarding
whether Rutty signed the Chase letter.” The court noted that although Rutty
admitted the signature looked like his signature, he also testified he did not prepare
or sign the letter, and never saw the letter before Plaintiffs’ counsel emailed it to
him. Beyond that, Xavier admitted in his criminal proceedings that he used forged
bank letters as part of his scheme to attract investors. See Kerruish, 777 F. App’x
at 289. The district court then entered judgment in favor of Rutty on July 10, 2018.
The final judgment in this action was electronically filed with the court on October
29, 2018.
On October 28, 2019, Plaintiffs filed the motion that is the subject of this
appeal. They claimed that under Rule 60(b), they were entitled to relief from the
judgment because newly discovered evidence showed Rutty lied about his
involvement with the letter. Plaintiffs’ counsel discovered a document, obtained
from a backup hard drive maintained by Kerruish’s recently deceased brother-in-
law, Simon, that implicated Rutty. The letter, purportedly written by Simon,
apologized to Rutty for his receiving a rogue phone call from a prospective Essex
investor. Plaintiffs argued this letter shows that Simon and Rutty had a business
relationship, which in turn proves “beyond a shadow of a doubt” that Rutty
perjured himself at his deposition. Plaintiffs also pointed to deposition testimony
from other Essex investors in a separate civil suit, and Xavier’s recantation of his
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sworn statement that he forged the Chase letter, as evidence to bolster their Rule
60(b) motion.
The district court denied the motion. It held that because the motion was
filed “over a year and three months after final judgment was entered in favor of
Rodney Rutty,” Plaintiffs’ motion was untimely. And because Plaintiffs offered no
explanation for why they did not obtain the deposition evidence from the other
Essex investors while this case was ongoing, Plaintiffs’ delay in filing their motion
also did “not constitute a ‘reasonable’ amount of time under Rule 60(c).” Plaintiffs
timely appealed.
II.
We review the grant of relief under Rule 60(b) for an abuse of discretion.
AIG Baker Sterling Heights, LLC v. Am. Multi-Cinema, Inc., 579 F.3d 1268, 1270
(11th Cir. 2009). We review de novo legal conclusions and review factual findings
for clear error. Id.
III.
Plaintiffs argue the district court abused its discretion on two grounds. First,
they say the district court made an error of law when it found Plaintiffs’ motion
was untimely. Second, they argue the district court clearly erred by failing to
consider the evidence supporting the motion. We do not need to reach the second
argument because the first is dispositive of this appeal.
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Rule 60(b) permits a district court to relieve a party from a final judgment
for specified reasons. See Fed. R. Civ. P. 60(b). Plaintiffs filed their motion under
Rule 60(b)(2), relying on newly discovered evidence, and Rule 60(b)(3), relying on
fraud. A Rule 60(b)(2) or (3) motion must be made within one year of the entry of
the judgment. See Fed. R. Civ. P. 60(c)(1). A motion made under Rule 60(b)
“must” also be “made within a reasonable time.” Id.
In Plaintiffs’ case, the district court found the motion untimely under both
the “year after the entry of the judgment” and the “reasonable time” requirements.
Plaintiffs argue the judgment entered against Rutty on July 10, 2018 was not a
“final judgment” for purposes of Rule 60(b). Rather, they assert the district court
did not enter final judgment until October 29, 2018. And because they filed their
motion on October 28, 2019, one day before the year-end clock, Plaintiffs say their
motion was timely. Defendants primarily argue that whether the district court
erred on this point makes no difference, because Plaintiffs failed to appeal the
court’s “reasonable time” finding.
Defendants’ argument prevails. Motions under Rule 60(b)(1), (2), or (3)
“must be made within a reasonable time” and be made “no more than a year after
the entry of judgment or order, or the date of the proceeding.” Fed. R. Civ. P.
60(b), (c); see 11 Mary Kay Kane, Federal Practice and Procedure § 2866 (3d ed.
2019) (Oct. 2020 Update); A & F Bah. LLC v. World Venture Grp., Inc., 796 F.
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App’x 657, 661 (11th Cir. 2020) (per curiam) (unpublished) (explaining that “Rule
60(c)(1) ostensibly requires that all motions under Rule 60(b)”—except Rule
60(b)(4) motions—“be ‘made within a reasonable time’” (quoting Hertz Corp. v.
Alamo Rent-A-Car, 16 F.3d 1126, 1130 (11th Cir. 1994)). Thus “the motion may
be rejected as untimely if not made within a ‘reasonable time’ even though the
one-year period has not expired.” Federal Practice and Procedure § 2866. That is
precisely what the district court did here. And because Plaintiffs have failed to
challenge the court’s “reasonable time” finding,6 which is an independent ground
for denying their motion, we affirm the district court’s order.
AFFIRMED.
6 Plaintiffs say they did not waive the issue because it “is clear from the appeal itself” and
argue that this Court must read appellate briefs liberally. But a determination of what constitutes
a reasonable time depends on the facts in any given case, and in making the determination, courts
should consider whether the movant had a good reason for the delay in filing and whether the
non-movant would be prejudiced by the delay. Lairsey v. Advance Abrasives Co., 542 F.2d 928,
930 (5th Cir. 1976); see also Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981)
(en banc) ( adopting as binding precedent all decisions of the former Fifth Circuit handed down
before October 1, 1981). This is a fact-intensive inquiry that Plaintiffs have not briefed, so we
will not address it. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330 (11th Cir.
2004).
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