Ream v. Hill, Inc.

Background

Christopher Ream sued Berry-Hill Galleries, Inc., James Berry Hill, and David Berry Hill over unpaid wages under the Fair Labor Standards Act and New York Labor Law, as well as breach of contract, unjust enrichment, and fraudulent misrepresentation. Judge Valerie E. Caproni granted Ream’s summary-judgment motion on the wage claims and denied the defendants’ competing motion on the remaining common-law claims because factual disputes remained.

The parties later reached a settlement agreement providing for a $75,000 payment by February 15, 2019. If payment was not made and the default was not cured, the agreement allowed Ream to seek a $150,000 judgment against James Berry Hill and the Galleries. Judge Henry B. Pitman entered a $150,000 judgment against those defendants on May 3, 2019. Ream’s claims against David Berry Hill were dismissed without prejudice.

The court later declined to enforce the agreement, confession of judgment, or judgment on the existing record. It noted that the confession of judgment was not notarized and that the filed settlement agreement was incomplete. The court also declined to approve the settlement because Ream did not submit a fully executed agreement and, separately, because the terms were not fair and reasonable under the required review for Fair Labor Standards Act settlements. The court identified possible options, including submitting a complete agreement for review, holding another settlement conference, or bringing a separate enforcement action in New York State Court.

The Motion

Ream moved under Federal Rule of Civil Procedure 60(b)(4) to vacate the judgment as void. He argued that the settlement’s lack of the required review made it unenforceable and created a fundamental defect in the judgment. In the alternative, he relied on Rule 60(b)(6), which permits relief for other reasons that justify reopening a judgment, arguing that he and Judge Pitman had been mistaken about whether the review was required. No defendant opposed the motion.

Court’s Analysis

Judge Cave explained that a judge’s legal error is treated as a “mistake” under Rule 60(b)(1). Because Ream’s argument concerned Judge Pitman’s alleged legal error about the need for settlement review, the court treated that argument as one governed by Rule 60(b)(1). Such a motion must be filed within one year after the judgment. Ream filed his motion more than two years after the May 3, 2019 judgment, so the argument was untimely.

The court rejected Ream’s attempt to proceed under Rule 60(b)(4), which applies when a judgment is void. A judgment is void under that rule only in limited circumstances, such as a lack of subject-matter or personal jurisdiction or a violation of due process that deprived a party of notice or an opportunity to be heard. Judge Cave found that Ream cited no authority, and the court found none, establishing that failure to conduct the required settlement review constituted that type of jurisdictional or due-process defect.

The court also rejected Rule 60(b)(6) relief. That provision is available only when the other Rule 60(b) grounds do not apply and when extraordinary circumstances justify reopening the judgment or avoiding extreme and undue hardship. Because Ream’s legal-error argument belonged under Rule 60(b)(1), and because the court found no extraordinary circumstances supporting Rule 60(b)(6), that provision did not provide a basis for relief.

Disposition

Judge Sarah L. Cave denied Ream’s motion to vacate the judgment and directed the Clerk of Court to close the motion docket entry. The court stated that Ream had exhausted his options in this federal case and continued to have the option of seeking relief in New York State Court.