Binder v. Capital One Bank, N.A.

Background

Neil Binder sued Capital One Bank, N.A. after disputes arising from his default on a commercial loan and a settlement agreement. Binder owned 50% of FAWBS, Inc. and received monthly distributions from the company. Under the settlement, Binder was to make monthly payments to Capital One, and FAWBS was to send part of Binder’s distributions directly to Capital One. After Binder defaulted on the settlement payments, Capital One sued FAWBS in New Jersey state court and obtained a judgment directing FAWBS to send all of its monthly obligations to Binder directly to Capital One.

Binder’s federal lawsuit alleged that Capital One breached the settlement agreement. In a prior order, the court dismissed the action for lack of subject-matter jurisdiction under the Rooker-Feldman doctrine, which generally prevents a federal court from reviewing a state-court judgment against a party or someone legally treated as standing in that party’s place.

Motion for Reconsideration

Binder moved for reconsideration under Local Rule 6.3 and Federal Rules of Civil Procedure 59(e) and 60(b). Reconsideration is available only when the moving party identifies an intervening change in controlling law, newly available evidence, or a clear error that must be corrected to prevent serious injustice. It is not a vehicle for repeating old arguments or presenting arguments that could have been raised earlier. The court also recognized that filings by people without lawyers receive special consideration, but that consideration does not excuse frivolous or repetitive filings.

Binder first argued that Rooker-Feldman did not apply because he was not formally a party to the New Jersey litigation. The court rejected that argument, explaining that Binder could be treated as FAWBS’s “alter ego”—a person whose interests and actions were so closely connected with the corporation that he effectively stood in its place for purposes of the doctrine. The court relied on Binder’s participation in the state case, including his sworn testimony and certification, his admission that he was FAWBS’s 50% stockholder and vice president, and his direction that FAWBS make no payments to Capital One.

Binder also argued that the New Jersey court lacked authority to decide the dispute because the settlement agreement required disputes to be resolved in New York courts under New York law. The court held that this repeated an earlier argument and therefore did not support reconsideration. The court further stated that a forum-selection clause does not determine a court’s subject-matter jurisdiction.

Finally, Binder argued that the New Jersey proceedings violated due process because he was not allowed to speak as the debtor or present evidence supporting his interpretation of the settlement. The court found that this argument also repeated an earlier claim. It further concluded that Binder had participated extensively in the state proceedings, including by submitting a certification and engaging in an on-the-record discussion with the state judge. The state judge explained the settlement’s written language and the parol evidence rule, which limited consideration of outside evidence. The federal court concluded that Binder had received the fundamental opportunity to be heard, even though due process did not guarantee that he would win.

Disposition

The court denied Binder’s motion for reconsideration. The opinion did not alter the prior dismissal for lack of subject-matter jurisdiction. The clerk was directed to mail Binder a copy of the order.