FRAUDULENT CONVEYANCES Nassau Academy of Law CLE Live ...

443 F.3d 180 Page 6443 F.3d 180(Cite as: 443 F.3d 180)Berman reasoned that the proper venue was the EasternDistrict, the alleged fraudulent conveyances involvedreal property located in the Eastern District,the transfer promoted efficiency, and plaintiffs'choice of forum was entitled to little weight. He alsocalled the plaintiffs' choice of forum an attempt at"judge shopping." Id. at *13.In October 2002, movants had written to JudgeTrager to request a pre-motion conference, explainingthat they intended to file a motion to vacate the 1997judgment. In 2003, movants filed motions to vacate.The district court then issued a memorandum andorder, which addressed movants' arguments for vacatingthe judgment. Grace v. Rosenstock, No. 85-cv-2039 (E.D.N.Y. Oct. 4, 2004) ("Grace XI"). Thesereasons included the following: (1) Briggs was notrepresented by counsel when the settlement was entered;(2) Robert Rosenstock lacked power to confessjudgment against Briggs; (3) the amount of the defaultjudgment against Briggs exceeded the reliefsought against Briggs in the original complaint; and(4) the class was not notified of the settlement and afairness hearing was not held. See id. at 9.*187 Judge Trager vacated the 1997 judgment asvoid under Rule 60(b) of the Federal Rules of CivilProcedure. He explained that it is well-settled lawthat a corporation may appear in the federal courtsonly through licensed counsel; damages for a defaultjudgment should not be awarded without a hearing ora demonstration by affidavits establishing the facts;no inquest was held because the stipulation was thebasis for entry of judgment against Briggs; rescissorydamages are not available for freeze-out mergers; theamount was both excessive and different in kind fromthat sought in the complaint; and there was evidenceof collusion between Rosenstock and plaintiffs to thedetriment of movants. Grace XI, at 9-20. JudgeTrager concluded, "[i]n any event, movants shouldnot be required to suffer further legal costs to bring asummary judgment motion, while plaintiffs pressforward with a 19-year-old litigation fraught withprocedural errors and excessive, if not completelymeritless, claims." [FN6] Id. at 20. He then dismissedthe two fraudulent conveyance actions, because therewas no longer a judgment on which to collect. Gracev. Bank Leumi, No. 04-cv-0708 (E.D.N.Y. Oct. 6,2004) ("Grace XII"); Grace v. Schwartz, No. 04-cv-1622 (E.D.N.Y. Oct. 14, 2004) ("Grace XIII").FN6. Although the merits of this case werenot an issue, Judge Trager neverthelessnoted that "even if the Judgment were upheld,plaintiffs would probably not survive amotion for summary judgment," Grace XI,at 19. He explained that he was skepticalthat Bank Leumi did not give fair considerationfor the mortgages. Id. at 20. He wrotethat if Briggs was not a defendant in an actionfor money damages when the conveyanceswere made, DCL § 273-a did not applyand therefore the judgment could not affectmovants. And he found that the transfersto Mack, Berger, and Apex occurredwhile this action was administrativelyclosed. Id. Therefore, if they had checkedthe court documents (which movants saidthey did), they would have found that thecase was administratively closed because ofa pending settlement. Id.Plaintiffs filed an appeal to this Court on November1, 2004.DiscussionI. JurisdictionWe have jurisdiction over the appeals of Grace XI,Grace XII, and Grace XIII based on 28 U.S.C. §1291, the notices of appeal having been filed on November1, 2004. The district court had jurisdictionover Grace XI under 28 U.S.C. § 1331, as it was anaction arising under federal law. Jurisdiction inGrace XII and Grace XIII was based on Rule 69 ofthe Federal Rules of Civil Procedure, because theyconcerned the collection of a federal judgment. SeeEpperson v. Entm't Express, Inc., 242 F.3d 100, 107(2d Cir.2001); Fed.R.Civ.P. 69.II. Standard of Review[1] Federal Rule of Civil Procedure 60(b) decisionsby district courts are accorded deference. We reverseonly where there has been an abuse of discretion. SeeLawrence v. Wink (In re Lawrence), 293 F.3d 615,623 (2d Cir.2002); Nemaizer v. Baker, 793 F.2d 58,61-62 (2d Cir.1986). [FN7]FN7. When we recognized in Central VermontPublic Service Corp. v. Herbert, 341F.3d 186 (2d Cir.2003), that "[a]lmost everyCircuit has adopted de novo review of Rule60(b)(4) motions, and we know of no Circuit© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.