Kile v. United States ( 2019 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT February 15, 2019
_________________________________
Elisabeth A. Shumaker
Clerk of Court
ANGELA KILE, et al.,
Plaintiffs,
v. No. 18-7004
(D.C. No. 6:00-CV-00404-KEW)
UNITED STATES OF AMERICA, (E.D. Okla.)
Defendant - Appellee,
and
COMPHEALTH, INC., a Delaware
corporation formerly known as C.H.S., Inc,
et al.,
Defendants.
------------------------------
BARBARA LEMMINGS, et al.,
Movants - Appellants.
_________________________________
ORDER
_________________________________
Before McHUGH, MURPHY, and CARSON, Circuit Judges.
_________________________________
On February 13, 2019, the United States filed a letter notifying the court of a
typographical error contained in the Opinion filed on February 11, 2019. Via this order,
we now direct the Clerk to correct the error and to reissue the decision nunc pro tunc to
the original filing date. A copy of the corrected Opinion is attached to this order and shall
be filed forthwith.
Entered for the Court
ELISABETH A. SHUMAKER, Clerk
2
FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS February 11, 2019
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
ANGELA KILE; JODY LEMMINGS,
Plaintiffs,
v. No. 18-7004
UNITED STATES OF AMERICA,
Defendant - Appellee,
and
COMPHEALTH, INC., a Delaware
corporation formerly known as C.H.S., Inc;
COMPHEALTH MEDICAL STAFFING,
INC., a Delaware corporation; ROMULO
G. PEREZ,
Defendants.
------------------------------
BARBARA LEMMINGS; ORAN
HURLEY, JR.,
Movants - Appellants.
_________________________________
Appeal from the United States District Court
for the Eastern District of Oklahoma
(D.C. No. 6:00-CV-00404-KEW)
_________________________________
George W. Braly, Braly, Braly, Speed & Morris, PLLC, Ada, Oklahoma, appearing for
Appellants Barbara Lemmings and Oran Hurley, Jr.
Elliott M. Davis, Trial Attorney, United States Department of Justice, Washington D.C.
(Susan Stidham Brandon, Assistant United States Attorney, United States Attorney’s
Office, Muskogee, OK, with him on the brief), appearing for Appellee United States of
America.
_________________________________
Before McHUGH, MURPHY, and CARSON, Circuit Judges.
_________________________________
CARSON, Circuit Judge.
_________________________________
Federal Rule of Civil Procedure 17 controls when a district court must appoint
a guardian ad litem for a minor settling claims with a defendant. The plain language
of the Rule is clear: a district court is not required to appoint a guardian ad litem
every time it considers the fairness of a settlement. Rather, a district court need only
appoint a guardian ad litem where the minor is not otherwise represented by a general
guardian or other appropriate person. We thus reject Appellants Barbara Lemmings
and Oran Hurley, Jr.’s contention that the rule requires the formal appointment of a
guardian ad litem whenever a parent and child settle their claims with a defendant.
We further reject the contention that an inherent conflict of interest always exists
where a minor is represented by a parent who is a party to the same lawsuit as the
minor.
I.
Plaintiff Millard Lance Lemmings (“Lance”) was born at a government-
operated hospital in Ada, Oklahoma. During his birth, Lance suffered a brain injury.
He cannot speak, walk, or care for himself. Lance and his parents, suing as “parents
and next friends,” filed this civil action against Defendants on August 8, 2000.
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Plaintiffs alleged that Defendants committed medical malpractice during Lance’s
birth and sued under the Federal Tort Claims Act.
The parties settled the case on September 28, 2001. Lance’s parents were
simultaneously engaged in a state court proceeding regarding guardianship of Lance.
On the morning of October 25, 2001, Lance’s parents filed an application for an
order approving the agreed settlement, attorneys’ fees, and litigation costs in the state
court action. The state district court appointed Lance’s parents as the guardians of
Lance’s estate. Following that court order, Lance’s parents withdrew their state court
application for an order approving the settlement. Later that day, Lance’s parents
appeared before the federal district court for a fairness hearing regarding the
settlement. Lance’s parents represented him at the fairness hearing. The district
court did not appoint a guardian ad litem.
At the fairness hearing, Plaintiffs’ counsel recited the terms of the settlement
into the record in detail. The parties settled the matter for $5,000,000.00. Of that
amount, the United States paid $1,350,000.00 into a reversionary medical trust
(“Irrevocable Governmental Trust”) and the remaining two Defendants paid a
combined $1,000,000.00 into a separate trust (“Non-Governmental Trust”). The
United States funded the Irrevocable Governmental Trust with annuities. By its
terms, the Irrevocable Governmental Trust is a “secondary payor” after Lance
exhausts coverage from Medicare, Medicaid, and any tribal or insurance benefits. In
the event of Lance’s death, the Irrevocable Governmental Trust benefits revert to the
United States. The United States paid an additional $2,650,000.00 to Plaintiffs
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outside of the Irrevocable Governmental Trust. Of that amount, Plaintiffs’ attorneys
received $1,425,000.00.
Lance’s parents, Angela Kile and Jody Lemmings, testified at the fairness
hearing. Both Kile and Lemmings acknowledged that they understood the terms of
the settlement. Additionally, they stated that they had cared for Lance since his birth
and confirmed their plan to care for him in the future. The court sealed the fairness
hearing transcript.
On October 25, 2001, the district court approved the settlement. At the same
time, the parties executed a Stipulation for Compromise Settlement and Release of
Federal Tort Claims Act Claims and Judgment Dismissing Action by Reason of
Settlement. The next day, the parties filed a Release of Claims. On December 5,
2001, the case concluded with the filing of a Stipulation of Dismissal with Prejudice.
The district court did not retain jurisdiction to further affect the settlement or the
trusts the settlement documents created.
Over fifteen years later, on June 16, 2017, Appellants filed a motion seeking to
intervene, in which they contended: (1) the parties presented materially inaccurate
information to the district court in 2001 in order to obtain the district court’s
approval; (2) the district court did not have jurisdiction to approve the settlement
because it did not appoint a guardian ad litem to represent Lance; and (3) a conflict
of interest existed between Lance and his parents which required the appointment of
a guardian ad litem. Belatedly, Appellants further sought access to the 2001 sealed
fairness hearing transcript. In the motion to intervene, Appellants asserted that
4
Lance’s parents spent a large portion of the proceeds and abandoned him in 2011,
leaving him in the care of his paternal grandmother, Appellant Barbara Lemmings.
The state district court appointed her Lance’s guardian in January 2017. After Ms.
Lemmings suffered a health issue, the state court appointed Appellant Oran Hurley,
Jr. as co-guardian. Appellants sought to reopen the district court action, vacate the
dismissal, intervene, and rewrite the terms of the Irrevocable Governmental Trust in
order to access the proceeds contained in that trust. The United States objected.
In December 2017, the district court issued an Order denying Appellants’
request. It held that no basis in law existed to invade the finality of the stipulation of
dismissal. The district court therefore concluded it lacked jurisdiction to consider
Appellants’ requested relief. As to Appellants’ requested access to the sealed
transcript of the fairness hearing, the district court denied the request. The district
court stated that because it lacked the jurisdiction to grant the relief requested,
intervention would be futile. And, because the district court did not allow Appellants
to intervene, it concluded they remained non-parties who were not entitled to access
to the sealed transcript of the fairness hearing. Appellants appealed. Our jurisdiction
arises under 28 U.S.C. § 1291. We affirm.
II.
Appellants assert the district court erred in concluding that, without the
appointment of a guardian ad litem, it had personal jurisdiction over Lance to
approve and enter the settlement agreement on October 25, 2001. Because of that
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alleged error, Appellants next contend the district court erred in determining that it
lacked jurisdiction under Federal Rule of Civil Procedure 60(b) to consider
Appellants’ requested relief. Finally, Appellants argue the district court’s refusal to
allow Appellants access to the sealed transcript of the fairness hearing denied Lance
his fundamental constitutional right to due process. We address each issue in turn.
A.
Federal Rule of Civil Procedure (“Rule”) 60(b)(4) provides that a court may
relieve a party from final judgment if the judgment is void. A judgment is void for
Rule 60(b)(4) purposes if the rendering court lacked the power to enter it. Gschwind
v. Cessna Aircraft Co., 232 F.3d 1342, 1346 (10th Cir. 2000). This occurs “only if
the court which rendered it lacked jurisdiction of the subject matter, or of the parties,
or acted in a manner inconsistent with due process of law.” United States v. Buck,
281 F.3d 1336, 1344 (10th Cir. 2002). Unlike other Rule 60(b) motions, relief from a
void judgment is mandatory. Williams v. Life Sav. & Loan, 802 F.2d 1200, 1203
(10th Cir. 1986). “We review de novo the district court’s ruling on a Rule 60(b)(4)
motion.” Buck, 281 F.3d at 1344.
Appellants contend the 2001 judgment in this civil action is void because the
district court lacked personal jurisdiction over Lance. Specifically, Appellants argue
that a guardian ad litem for Lance was a necessary and indispensable party. Federal
Rule of Civil Procedure 17(c) controls the procedural question of the appointment of
a guardian ad litem. In 2001, Rule 17(c) provided:
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Whenever an infant or incompetent person has a representative, such as a
general guardian, committee, conservator, or other like fiduciary, the
representative may sue or defend on behalf of the infant or incompetent
person. An infant or incompetent person who does not have a duly
appointed representative may sue by a next friend or by a guardian ad litem.
The court shall appoint a guardian ad litem for an infant or incompetent
person not otherwise represented in an action or shall make such other
order as it deems proper for the protection of the infant or incompetent
person.1
Appellants urge us to adopt a mandatory rule that whenever a child and a
parent settle their claims against a defendant, a district court must appoint a guardian
ad litem to represent the child’s interests or it must make findings that no such
appointment is necessary. We reject such a rule.
The plain language of Rule 17(c) does not require the district court to appoint
a guardian ad litem in all cases. Instead, the Rule provides that the court shall
appoint a guardian ad litem for a person not otherwise represented in an action.2
1
We note that our analysis is the same under the current version of Rule 17(c),
the language of which the Committee amended in 2007 as part of the general
restyling of the Federal Rules of Civil Procedure.
2
Appellants point us to Roberts v. Ohio Casualty Insurance Company, 256
F.2d 35 (5th Cir. 1958). The Roberts court held that the “orderly administration of
justice and the procedural protection of minors requires the trial judge to give due
consideration to the propriety of an infant’s representation by a guardian ad litem
before he may dispense with the necessity of appointing the guardian.” Id. at 39.
That case is factually distinguishable. In Roberts, the district court granted judgment
against minor children who were not represented by guardians or next friends. Id. at
37. Because the minor children were not represented, the Roberts court considered
the final sentence of Rule 17(c), which provided that the court shall appoint a
guardian ad litem for an infant not otherwise represented. In this case, Lance was
represented at the settlement by his parents, who expressly served as his general
guardians and next friends.
7
Rule 17(c) further provides that an infant or incompetent person may sue by “a next
friend.” Thus, Appellants’ position is foreclosed by the plain language of Rule 17(c).
The established caselaw precludes the relief sought by Appellants as well.
Courts addressing the issue have held that “unless a conflict of interest exists
between the representative and minor, a district court need not even consider the
question whether a guardian ad litem should be appointed.” Burke v. Smith, 252
F.3d 1260, 1264 (11th Cir. 2001) (citing Croce v. Bromley Corp., 623 F.2d 1084,
1093 (5th Cir. 1980)). “[W]hen a minor is represented by a parent who is a party to
the lawsuit and who has the same interests as the child there is no inherent conflict of
interest.” Id. Indeed, absent an apparent conflict of interest, the appointment of a
guardian ad litem is not necessary where a parent is a party to the lawsuit and presses
the child’s claims before the court. Croce, 623 F.2d at 1093.
Appellants further urge us to consider that Lance’s parents were unmarried,
allegedly did not have a stable family relationship, and never received state court
approval of the settlement agreement. Marital status and wealth do not impact our
analysis. Nor does it matter that the parties abandoned their motion for approval in
state court once the state court officially named Lance’s parents his guardians. At
that time, the evidence before the district court showed that Lance’s parents had
cared for Lance, that they would continue to care for him in the future, and that the
state court had appointed them as his general guardians.
We perceive no inherent conflict of interest between Lance and his parents as
his representatives. Moreover, for purposes of reopening this civil action that had
8
been dormant for over fifteen years, although Appellants allege that Lance’s parents
squandered a share of the settlement proceeds, we cannot conclude from the record
that an actual conflict existed at the time the district court approved the settlement.
For these reasons, we hold that Rule 17(c) did not require the district court to sua
sponte appoint a guardian ad litem and that the district court properly exercised
personal jurisdiction over Lance. Accordingly, the judgment was not void and
Appellants are entitled to no relief under Rule 60(b)(4).
Appellants alternatively argue that Rule 60(b)(6), the catch-all provision,
permits reopening in this case. This provision applies when the movant shows any
reason justifying relief from the operation of the judgment. We have described Rule
60(b)(6) as a “grand reservoir of equitable power to do justice in a particular case.”
Cashner v. Freedom Stores, Inc., 98 F.3d 572, 579 (10th Cir. 1996). However, a
district court may grant a Rule 60(b)(6) motion “only in extraordinary circumstances
and only when necessary to accomplish justice.” Id. “We have sometimes found
such extraordinary circumstances to exist when, after entry of judgment, events not
contemplated by the moving party render enforcement of the judgment inequitable.”
Id. The “broad power granted by clause (6) is not for the purpose of relieving a party
from free, calculated, and deliberate choices he has made.” Id. We review the
district court’s decision to deny a Rule 60(b)(6) motion for an abuse of discretion.
LaFleur v. Teen Help, 342 F.3d 1145, 1153 (10th Cir. 2003).
A Rule 60(b)(6) motion must be made within a reasonable time. Fed. R. Civ.
P. 60(c)(1). In this case, almost sixteen years passed between the settlement and
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Appellants’ motion to the district court. Appellant Barbara Lemmings has cared for
Lance since 2011 even though she did not become his guardian until 2017. As the
district court noted, Appellant Barbara Lemmings knew of the manner in which
payment was being made for Lance’s care in 2011, but waited until 2017 to file her
motion. In the context of this case, a motion made sixteen years after the entry of
judgment is not reasonable.
The district court further denied the Rule 60(b)(6) motion on the ground that
mistakes that led to entering into an “improvident bargain” do not provide a basis for
relief. Rule 60(b)(6) cannot be used to set aside “a free, counseled, deliberate choice
whose consequences in hindsight are unfortunate.” Cashner, 98 F.3d at 580. Thus,
even if the settlement upon which the parties agreed constituted a bad deal in
hindsight, there is “nothing sufficiently ‘unusual or compelling’ about making a bad
bargain to warrant relief under Rule 60(b)(6).” Id. Accordingly, we conclude that
the district court did not abuse its discretion in denying Appellants’ Rule 60(b)(6)
motion.
B.
Appellants further seek access to the sealed transcript of the fairness hearing.
Court documents “are covered by a common law right of access.” United States v.
McVeigh, 119 F.3d 806, 811 (10th Cir. 1997). “Under that doctrine, judicial
documents are presumptively available to the public, but may be sealed if the right to
access is outweighed by the interests favoring nondisclosure.” Id. “Once a court
orders documents before it sealed, the court continues to have authority to enforce its
10
order sealing those documents, as well as authority to loosen or eliminate any
restrictions on the sealed documents.” United States v. Pickard, 733 F.3d 1297, 1300
(10th Cir. 2013). “Challenges to closure decisions based on the common law right of
access are reviewed for abuse of discretion.” McVeigh, 119 F.3d at 811; see also
Pickard, 733 F.3d at 1302 (reviewing decision to seal or unseal documents for an
abuse of discretion).
In this case, the district court denied Appellants access to the sealed transcript.
The district court concluded that because it denied intervention, Appellants remained
nonparties to the case and were, therefore, not entitled to access.3 We agree with the
district court that Appellants, as of now, are non-parties to the action and are not
entitled to the sealed transcript in this capacity.4 That is not to say Appellants cannot
still obtain the sealed transcript in another manner. Appellants became guardians for
3
Appellants allege that the government lacks standing to oppose their request
for access to the sealed transcript and in doing so violated its formal regulatory
mandates. In support of this argument, Appellants cite 28 C.F.R. § 50.23, which
provides that the government’s policy is not to enter into final settlement agreements
or consent decrees that are subject to confidentiality provisions, or to seek or concur
in the sealing of such documents. In this case, the settlement agreement provides that
it may be made public in its entirety. 28 C.F.R. § 50.23 does not speak to a district
court’s decision to grant or deny a non-party’s access to sealed court records.
Accordingly, Appellants’ argument that the government has no standing to oppose
unsealing court records is without merit.
4
On appeal, Appellants complain the district court characterized them as
intervenors rather than as Lance’s guardians. But Appellants ignore that they
characterized themselves as intervenors rather than as an existing Plaintiff. Indeed,
in their initial motion to the district court, Appellants asked the district court “to
allow them to intervene as a party in this matter” in order to modify the terms of the
Irrevocable Governmental Trust.
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Lance, a party, in 2017. At no time did Appellants seek permissive intervention for
the limited purpose of accessing the sealed transcript. Nor did Appellants seek to
substitute themselves in place of Lance’s parents as parties to this civil action and
simply ask for the transcript by standing in Lance’s shoes. Had Appellants sought
the transcript in a correct manner, the district court would have abused its discretion
in denying their request. Until Appellants either substitute in the action or intervene
for the limited purpose of obtaining the transcript, they are nonparties not entitled to
the transcript.
III.
For the foregoing reasons, the district court’s judgment is AFFIRMED.
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