United States District Court, D. Hawaii
EVAN AULD-SUSOTT, as Trustee for (1) IRREVOCABLE LIEF INSURANCE TRUST OF JOHN L. SUSOTT AND KATHRYN C. SUSOTT UAD 8/17/1988 AS RESTATED, EXEMPT TRUST FBO DANIEL C. SUSOTT, and (2) IRREVOCABLE LIFE INSURANCE TRUST OF JOHN L. SUSOTT AND KATHRYN C. SUSOTT UAD 8/17/1988 AS RESTATED, NON-EXEMPT TRUST FBO DANIEL C. SUSOTT; and JOHN L. SUSOTT, Plaintiffs,
LAURYN GALINDO, Defendant.
ORDER DENYING PLAINTIFFS' MOTION FOR RELIEF FROM
E. Kobayashi United States District Judge
31, 2019, Plaintiffs Evan Auld-Susott, as Trustee for (1)
Irrevocable Life Insurance Trust of John L. Susott and
Kathryn C. Susott UAD 8/17/1988 as Restated, Exempt Trust FBO
Daniel C. Susott, and (2) Irrevocable Life Insurance Trust of
John L. Susott and Kathryn C. Susott UAD 8/17/1988 as
Restated, Non-Exempt Trust FBO Daniel C. Susott; and John L.
Susott (collectively “Plaintiffs”) filed a Motion
for Relief from Judgment (“Motion”). [Dkt. no.
185.] Pursuant to an August 6, 2019 entering order,
Plaintiffs filed a supplemental memorandum in support of the
Motion on August 14, 2019. [Dkt. nos. 186 (entering order),
187 (suppl. mem.).] Defendant Lauryn Galindo
(“Defendant”) filed her memorandum in opposition
on September 3, 2019, and Plaintiffs filed their reply on
September 16, 2019. [Dkt. nos. 189, 190.] The Court has
considered the Motion as a non-hearing matter pursuant to
Rule LR7.1(d) of the Local Rules of Practice for the United
States District Court for the District of Hawaii
(“Local Rules”). Plaintiffs' Motion is hereby
denied for the reasons set forth below.
filed their Complaint on August 10, 2016, alleging three
claims: fraudulent conveyance (“Count I”); unjust
enrichment (“Count II”); and constructive trust
(“Count III”). [Dkt. no. 1 at ¶¶
19-28.] A bench trial was held on July 10 and 11, 2018. [Dkt.
nos. 140 (7/10/18 minutes), 142 (7/11/18 minutes).] The
Findings of Fact and Conclusions of Law
(“FOF/COL”) were issued on February 28, 2019.
[Dkt. no. 167.] Plaintiffs prevailed as to Count I, and
Counts II and III were dismissed for lack of jurisdiction
because Plaintiffs had an adequate remedy at law. [FOF/COL at
2; id. at 42, ¶¶ 44-45.] Specifically,
this Court ruled that: 1) the 2010 transfer of the property
at issue in this case - an apartment in Princeville, Hawai`i
(“the Property”) - from to Defendant to non-party
Daniel C. Susott (“D. Susott” and “the 2010
Transfer”) was fraudulent under Haw. Rev. Stat. §
651C-4(a)(1); and 2) Plaintiffs were entitled to avoidance of
the 2010 Transfer, to the extent necessary to satisfy their
claims against D. Susott. [FOF/COL at 6, ¶¶ 4-6;
id. at 43, ¶¶ 1-2.] Both the 2010 Transfer
and the quitclaim deed executed by D. Susott on April 8, 2010
in favor of Defendant (“2010 Quitclaim Deed”)
were declared void. [FOF/COL at 6, ¶ 6; id. at
43, ¶¶ 3-4.] Title in the Property reverted back to
D. Susott. [FOF/COL at 43, ¶ 4.]
Judgment in a Civil Case (“Judgment”) was issued
on March 1, 2019, and Defendant filed her Notice of Appeal on
March 23, 2019. [Dkt. nos. 168, 175.] Defendant's appeal
is still pending before the Ninth Circuit. Plaintiffs did not
appeal the Judgment.
March 5, 2019, D. Susott executed a Quitclaim Deed conveying
the Property to Defendant (“March 2019 Quitclaim
Deed”). [Motion, Decl. of Peter Knapman, Esq.
(“Knapman Decl.”), Exh. 1. D. Susott also
executed another Quitclaim Deed conveying the Property to
Defendant on April 25, 2019 (“April 2019 Quitclaim
Deed”). [Id., Exh. 2. Plaintiffs argue the 2019
Transfer was “in blatant disregard for” the
rulings in this case, and the 2019 Transfer “defeat[s]
plaintiffs' ability to pursue recovery of this
asset.” [Mem. in Supp. of Motion at 2.] Plaintiffs
therefore ask this Court to issue an inclination stating
that, if the Ninth Circuit remands the case to allow this
Court to rule on the Motion, this Court will grant
Plaintiffs' requested relief and amend the FOF/COL
because of the 2019 Transfer. Plaintiffs ultimately seek the
following relief: 1) reversal of the portion of the FOF/COL
dismissing Count III for lack of jurisdiction; and 2)
amendment of the FOF/COL to grant judgment in favor
Plaintiffs and against Defendant as to Count III and to
impose a constructive trust on the Property.
argues: the rulings in this case did not preclude D. Susott
from executing a new transfer of the Property to her; and the
2019 Transfer was supported by new consideration from her,
separate from the consideration given for the 2010 Transfer.
[Mem. in Opp. at 6.] Defendant provides a declaration by D.
Susott, dated March 4, 2019, stating he believes the voiding
of the 2010 Transfer was erroneous and exposes him to
liability to Defendant for the amounts Defendant paid him in
the 2010 Transfer. [Mem. in Opp., Decl. of Daniel C. Susott
(“3/4/19 D. Susott Decl.”) at ¶ 6.] D.
Susott agrees that Defendant incurred at least $400, 000 in
damages as a result of the dispute regarding the validity of
the 2010 Transfer. [Id. at ¶ 9.] He states
Defendant's release of her claims against him for those
damages was the consideration for the 2019 Transfer.
[Id.] Defendant argues that, to the extent
Plaintiffs assert the 2019 Transfer was an attempt to defraud
D. Susott's creditors, Plaintiffs must litigate that
issue in a new case, not through a Fed.R.Civ.P. 60 motion in
the instant case.
bring the Motion pursuant to Rule 60(b)(3), (5), and (6).
[Motion at 2-3.] Rule 60(b) states, in pertinent part:
On motion and just terms, the court may relieve a party or
its legal representative from a final judgment, order, or
proceeding for the following reasons:
(3) fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party;
(5) the judgment has been satisfied, released, or discharged;
it is based on an earlier judgment that has been reversed or
vacated; or applying it prospectively is no longer equitable;
(6) any other reason that justifies relief.
motion brought pursuant to Rule 60(b) “must be made
within a reasonable time, ” but a Rule 60(b)(3) motion
must be brought “no more than a year after the entry of
the judgment.” Fed.R.Civ.P. 60(c).
To prevail on a motion filed pursuant to Fed.R.Civ.P.
60(b)(3), the moving party must prove by clear and convincing
evidence that the judgment was obtained through fraud,
misrepresentation, or other misconduct and that the conduct
complained of prevented the losing party from fully and
fairly presenting its side of the case. ...