In re Molina, No. 8-21-70830-las (2025)

Case details
Country
United States
Jurisdiction
Federal
Decided
2025
Disposition
Motion Denied
© 2025 Thomson Reuters. No claim to original U.S. Government Works.In re MolinaUnited States Bankruptcy Court, E.D. New York. | September 22, 2025 | Slip Copy | 2025 WL2697623Document Detailsstandard Citation:In re Molina, No. 8-21-70830-LAS, 2025 WL 2697623 (Bankr.E.D.N.Y. Sept. 22, 2025)All Citations:Slip Copy, 2025 WL 2697623Search DetailsSearch Query:adv: (openai "artificial intelligence" chatgpt "google gemini" "westlawcocounsel" "large language model") (hallucinat! fake fictitious spuriousnonexistent "non-existent" "made up" imagined /p (gpt ai "artificialintelligence" chatgpt chaton perplexity openai copilot "google gemini""google bard" grok "mata v. avianca" claude llm llms)) (hallucinat! fakefictitious spurious nonexistent "non-existent" "made up" imagined) +3(precedent case "legal authority" "legal case") & DATE(aft 1/1/2023)Jurisdiction:New YorkDelivery DetailsDate:October 2, 2025 at 3:48 AMDelivered By: Client ID:NOCLIENTIDOutlineMEMORANDUMDECISION ANDORDER DENYING(I) DEFENDANT'SMOTIONTO REOPENADVERSARYPROCEEDINGTO VACATEUNDER FED. R.CIV. P. 60(b) THECOURT'S ORDERAPPROVINGSETTLEMENTAGREEMENTAND JUDGMENTAND (II) CROSSMOTIONS FORSANCTIONS(p.1)All Citations (p.19)
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.12025 WL 2697623Only the Westlaw citation is currently available.United States Bankruptcy Court, E.D. New York.IN RE: Carlos Javier MOLINA, Debtor.Jack Landsmanas Stern Plaintiff,v.Carlos Javier Molina, Defendant.Case No.: 8-21-70830-las|Adv. Pro. No.: 8-21-08139-las|Signed September 22, 2025MEMORANDUM DECISION AND ORDERDENYING (I) DEFENDANT'S MOTION TOREOPEN ADVERSARY PROCEEDING TOVACATE UNDER FED. R. CIV. P. 60(b) THECOURT'S ORDER APPROVING SETTLEMENTAGREEMENT AND JUDGMENT AND (II)CROSS MOTIONS FOR SANCTIONSLouis A. Scarcella, United States Bankruptcy Judge*1 Carlos Javier Molina (the “Defendant” or “Mr.Molina”), proceeding pro se, filed a motion (the “Rule60(b) Motion”) [AP Dkt. No. 108]1 under Rules 60(b)(2), 60(b)(3), and 60(b)(6) of the Federal Rules ofCivil Procedure (the “Rules”), as made applicable hereby Rule 9024 of the Federal Rules of BankruptcyProcedure (the “Bankruptcy Rules”), seeking entry ofan order (i) reopening the above-captioned adversaryproceeding and (ii) vacating (a) the Order ApprovingSettlement Agreement signed by the parties and theirrespective counsel [AP Dkt. No. 104], and (b) theOrder and Judgment for Plaintiff [AP Dkt. No. 105].2Plaintiff Jack Landsmanas Stern (the “Plaintiff”) filedopposition to the Rule 60(b) Motion. [AP Dkt. Nos.125-127, 131-132, 147-148]. The Defendant replied.[AP Dkt. Nos. 137-140].The Court has jurisdiction over this adversaryproceeding pursuant to 28 U.S.C. § 1334(b) and theStanding Order of Reference of the United StatesDistrict Court for the Eastern District of New York,dated August 28, 1986 (Weinstein, C.J.), as amendedby Order dated December 5, 2012 (Amon, C.J.) enteredin accordance with 28 U.S.C. § 157(a).This matter has been fully briefed, and the Courthas considered carefully the parties’ submissions,the relevant law, and the record in this action. Forthe reasons set forth below, the Rule 60(b) Motionis denied and the parties’ respective motions forsanctions are denied.I. Background3*2 The Court assumes the parties’ familiarity withthe background and procedural history of Mr. Molina'schapter 7 case and this adversary proceeding, andrecounts only those facts relevant to this decision.Mr. Molina filed a voluntary petition for relief underchapter 7 of the Bankruptcy Code with this Courton May 3, 2021 (the “Petition Date”).4 [Bankr. Dkt.No. 1].5 This adversary proceeding (the “LandsmanasStern Action”) is one of three adversary proceedingscommenced against Mr. Molina objecting to thedischargeability of debts pursuant to 11 U.S.C. § 5236and/or objecting to his discharge under § 727.7Mr. Molina was represented in this adversaryproceeding by the law firm of Ciardi Ciardi & Astin(the “Ciardi Firm”).8 By motion dated March 2, 2022,the Ciardi Firm moved to withdraw as counsel ofrecord. [AP Dkt. No. 17].9 By letter filed on March15, 2022, the Ciardi Firm advised the Court thatit had agreed to remain as counsel of record forthe Defendant to complete the pending documentproduction. [AP Dkt. No. 20]. Thereafter, by letter filedon April 4, 2022, the Ciardi Firm advised the Courtthat the parties completed document production. [APDkt. No. 21]. An Order authorizing the Ciardi Firmto withdraw as counsel of record in this adversaryproceeding was entered on April 5, 2022. [AP Dkt.No. 22]. After entry of the Order authorizing thewithdrawal of the Ciardi Firm as counsel, Mr. Molinaproceeded pro se in this adversary proceeding. TheCiardi Firm later appeared as Mr. Molina's counselin connection with the settlement of this adversaryproceeding. See Joint Emergency Motion [AP Dkt.
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.2No. 99], Molina Declaration [AP Dkt. No. 99-2], andCiardi Declaration [AP Dkt. No. 99-3].10A. The Plaintiff's Proofs of Claim and theComplaint*3 On August 17, 2021, the Plaintiff filed three proofsof claim in Mr. Molina's Chapter 7 case, identifiedon the claims register as Claim Nos. 12-1, 13-1 and14-1 (collectively, the “Landsmanas Stern Claims”).According to Claim No. 12-1, the Plaintiff assertsan unsecured claim in the amount of $2,874,767.23.According to Claim No. 13-1, the Plaintiff assertsan unsecured claim in the amount of $1,615,838.91.According to Claim No. 14-1, the Plaintiff asserts anunsecured claim in the amount of $5,000,000.On September 10, 2021, the Plaintiff commenced thisadversary proceeding with the filing of a Complaint[AP Dkt. No. 1], as amended by the First AmendedComplaint [AP Dkt. No. 6], and by the SecondAmended Complaint [AP Dkt. No. 7]. The SecondAmended Complaint is the operative complaint inthis adversary proceeding. In the Second AmendedComplaint, the Plaintiff centrally alleges that theDefendant “fraudulently induced millions of dollarsin loans and investments” from the Plaintiff, andtherefore the Landsmanas Stern Claims should benon-dischargeable under § 523(a)(2)(A) or, in thealternative, Mr. Molina should be denied a dischargeunder § 727(a)(2) and § 727(a)(4). See generallySecond Amended Complaint. The Defendant filed hisanswer and asserted affirmative defenses on October13, 2021 (the “Answer”). [AP Dkt. No. 9]. Pursuantto the Court's Order Extending Discovery Deadline,entered August 29, 2022, all discovery was to becompleted by November 15, 2022. [AP Dkt. No.28]. On November 4, 2022, prior to the discoverycompletion date, the parties filed the Joint EmergencyMotion seeking approval of a settlement and dismissalof this adversary proceeding. [AP Dkt. No. 99]. Asnoted above, Mr. Molina was represented by the CiardiFirm in connection with the settlement and dismissalof this adversary proceeding.B. Parties’ Motions for SanctionsOn May 2, 2022, the Defendant, proceeding pro se,filed a motion seeking to impose sanctions againstthe Plaintiff's counsel, Gabriel Hertzberg, Esq. (“Mr.Hertzberg”), alleging that the commencement of theLandsmanas Stern Action violated Bankruptcy Rule9011(b)(1) (as amended, the “Defendant's SanctionsMotion”). [AP Dkt. Nos. 32, 36]. In brief, theDefendant alleged that Mr. Hertzberg filed thecomplaint with false or misleading statements ofmaterial fact. Through the Defendant's SanctionsMotion, the Defendant sought an order from the Courtfinding that Mr. Hertzberg filed the complaint for animproper purpose and that he knowingly filed thecomplaint containing allegations without evidentiarysupport, awarding the reimbursement of expensesand attorneys’ fees incurred by the Defendant,and imposing other sanctions as appropriate. Seegenerally Defendant's Sanctions Motion. Related tothe Defendant's Sanctions Motion, the Defendant fileda motion to compel the Plaintiff to comply withcertain discovery demands and requests for productionof documents on May 18, 2022 (the “Motion toCompel”). [AP Dkt. No. 35]. For his part, Mr.Hertzberg filed an opposition to the Defendant'sSanctions Motion and the Motion to Compel (the“Hertzberg Opposition”). [AP Dkt. No. 48]. Additionalpleadings were filed by the parties following the filingof the Hertzberg Opposition. [AP Dkt. Nos. 66, 77,81]. The Court heard oral argument and reserved itsdecision on the Defendant's Sanctions Motion and theMotion to Compel.The Plaintiff filed his own request for sanctionsagainst the Defendant (the “Plaintiff's SanctionsMotion”) alleging the Defendant submitted alteredand fabricated judicial decisions and governmentdocuments from Argentina as supporting exhibits forthe Rule 60(b) Motion. [AP Dkt. Nos. 116, 117, 118].The Defendant responded to the Plaintiff's SanctionsMotion [AP Dkt. Nos. 119, 120, 130], which in turndrew further responses from the Plaintiff. [AP Dkt.Nos. 134, 135]11.C. The Defendant's Arrest and Detention inArgentina*4 In August 2020, prior to the Petition Date, thePlaintiff initiated a criminal complaint (the “MexicoComplaint”) with the authorities in Mexico City,Mexico (the “Mexico Action”). See Second CorrectedDeclaration of Gabriel Hertzberg, at 2. [AP Dkt.No. 132]. The Mexico Attorney General thereafter
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.3prosecuted the Mexico Action, and during the Chapter7 case Mr. Molina was arrested and detained inArgentina in September 2022, pending extradition toMexico. See Molina Declaration, at 4. Accordingto the Defendant's testimony, he was first held in jailfor about a week and was then placed under housearrest for approximately five months. [Dec. 19 Tr.12at 9:18-10:3, 13:4-14:4]. Shortly after his release fromhouse arrest, Mr. Molina was arrested a second timein Argentina and held for about another five monthsbefore being allowed to return to the United States. [Id.at 14:5-16:9].D. Joint Motion to Dismiss and Entry ofJudgment Pursuant to Settlement of theLandsmanas Stern ActionAs noted above, on November 4, 2022, the Defendantand the Plaintiff filed the Joint Motion to Dismiss withthe Court. [AP Dkt. No. 99]. An affidavit of servicewith respect to the Joint Motion to Dismiss was filedwith the Court on November 7, 2022. [AP Dkt. No.102].Through the Joint Motion to Dismiss, the movantssought approval of a settlement between the Defendantand the Plaintiff resolving their dispute over claimsasserted by the Plaintiff amounting to approximately$9.5 million, and which were reflected in theLandsmanas Stern Claims filed in the Chapter 7case. [AP Dkt. No. 99-1 (as corrected at AP Dkt.No. 103, the “Settlement Agreement”)]. Among otherthings, the Settlement Agreement provided for thefixing of the Plaintiff's claim in the amount of$6,880,000 (the “Settlement Amount”) and the entryof a judgment for the Settlement Amount. In addition,the Settlement Agreement provided that the SettlementAmount would be non-dischargeable in the Chapter7 case or any other bankruptcy case in which theDefendant was a debtor. See Settlement Agreement,at ¶¶ 2-3. The Settlement Agreement further providedfor dismissal of the Landsmanas Stern Action withprejudice and a mutual release of claims (other thanthose rights and obligations set forth in the judgment)and required the Plaintiff to take the necessary andappropriate procedures under Mexico law to withdraw,with prejudice, his complaint that gave rise to theMexico Action. See id. at ¶¶ 2, 4-5.The Settlement Agreement provided that by executingthe Agreement, the executing party represented,among other things, that “he is under no duress,coercion, or compulsion of any kind whatsoeverbut, instead, enters into this Agreement willfully,voluntarily, and having been fully informed of thepremises and concluded that the terms hereof arein his own best interests.” Settlement Agreement, at 12.c; id. at 14 (“The Parties have entered intothis Agreement freely, voluntarily, and without duressof any kind or nature, after having consulted withprofessionals of their choice.”).Notably, in filing the Joint Motion to Dismiss, eachparty was represented by his own counsel. As statedin the Joint Motion to Dismiss, “Plaintiff determinedit was essential that Defendant be advised by hisown separate and independent legal counsel of hisrights concerning all relevant matters, including toavoid the possibility that Defendant could later seekto contend that any aspect of the Settlement wasunenforceable on account of any alleged duress orany other legal or equitable doctrine of any similarnature that could potentially (if improperly) deprivePlaintiff of the benefit of the bargain to be reachedthrough the negotiation process.” Joint Motion toDismiss, at 3; see also Settlement Agreement,at p. 1 (expressly reciting that “Plaintiff declinedto enter into this Agreement unless Defendant wasadvised and represented by competent independentlegal counsel of Defendant's choosing in connectionwith the Agreement” and that the “terms of thisAgreement were negotiated in good faith at arms’length”).*5 In support of the Joint Motion to Dismiss, themovants filed the Molina Declaration [AP Dkt. No.99-2] and the Ciardi Declaration [AP Dkt. No.99-3].As stated in the Molina Declaration, the Defendantdeclared under penalty of perjury that the Joint Motionto Dismiss was “jointly prepared together with [thePlaintiff]” and that he “obtained Plaintiff's consent”to seek the approval of the Joint Motion to Dismisson an expedited basis. Molina Declaration, at ¶¶ 2-3.The Defendant also stated that he “believe[d] theSettlement Agreement is fair to me and also to Plaintiffand should be approved” as soon as possible. Id. at 6.
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.4Among the “important benefits” emphasized by theDefendant in the Molina Declaration was the dismissalof the Landsmanas Stern Action and the Plaintiff'snotification to the Mexico Attorney General thathe wished to withdraw the Mexico Complaint withprejudice. Molina Declaration, at 4. The Defendantalso acknowledged that it was his “understanding andbelief, based solely on advice [he] received from [his]own Mexican and Argentinian counsel, that Plaintiff'snotification to the Mexican Attorney General will leadto [his] being released from house arrest, terminatethe extradition process, and enable [his] return to theUnited States.” Id.As previously noted, while the Defendant initiallyproceeded in the Landsmanas Stern Action on a prose basis after the withdrawal of the Ciardi Firm as hiscounsel, the Defendant later “re-engaged Mr. Ciardi”as his legal counsel in connection with the SettlementAgreement, noting that the selection of Mr. Ciardiwas the Defendant's decision. Molina Declaration, at 5. According to the Molina Declaration, “Plaintiffinsisted that [he] be represented by [his] ownseparate and independent legal counsel and declinedto participate in settlement discussions with [him]unless [he] obtained [his] own independent separatelegal counsel.” Id. The Defendant further stated thathe had “in-depth communications with Mr. Ciardiregarding this matter” and that “[Mr. Ciardi] advisedme concerning the Settlement Agreement” and “[Mr.Ciardi] answered all of the questions I asked him aboutthese matters.” Id. Paragraph 14 of the SettlementAgreement similarly provided: “The Parties furtherrepresent that their respective counsel have presentedand explained to each of them the entire contentsof this Agreement as well as its legal consequences.The Parties further represent that before signing thisAgreement, they fully understood each of its terms andconditions.” Settlement Agreement, at 14.In the Ciardi Declaration, Mr. Ciardi confirmed thathe was “re-engaged by Defendant to represent himin negotiating and documenting the Settlement thatis embodied in the Settlement Agreement.” CiardiDeclaration, at 4. He added that he “provided legaladvice to Defendant about the terms of the SettlementAgreement” and that he had “in-depth communicationswith Defendant regarding this matter, ... concerningthe settlement negotiations, and ... answered all ofDefendant's questions [to the best of his ability].” Id.On November 7, 2022, the Court entered the OrderApproving Settlement Agreement (the “SettlementAgreement Order”), which approved the SettlementAgreement, approved the entry of a judgment in favorof the Plaintiff, and directed the Clerk's Office todismiss the Landsmanas Stern Action. [AP Dkt. No.104]. Also on November 7, the Court entered the Orderand Judgment for Plaintiff (the “Judgment”), whichprovided for judgment in favor of the Plaintiff againstthe Defendant declaring that the Settlement Amount of$6,880,000 is non-dischargeable under § 523. [AP Dkt.No. 105]. The Landsmanas Stern Action was officiallyclosed by the Clerk's Office on November 22, 2022.E. The Defendant's Motion to Vacate theSettlement Agreement Order and the Judgment*6 On November 7, 2023, one year after the entryof the Settlement Agreement Order and the Judgment,the Defendant, proceeding pro se, filed the Rule60(b) Motion. [AP Dkt. No. 108]. The Rule 60(b)Motion was opposed by the Plaintiff, which includeda memorandum of law [AP Dkt. No. 125], theDeclaration of Ricardo Mier y Teran (the Plaintiff'scounsel in Mexico City) [AP Dkt. No. 127], the SecondCorrected Declaration of Gabriel Hertzberg [AP Dkt.No. 132], the Declaration of Gabriel Hertzberg [APDkt. No. 147], and a letter from the Plaintiff's counselregarding a final decision from the Argentine courtdismissing the criminal complaint commenced by theDefendant against the Plaintiff and his counsel [APDkt. No. 148]. Additional papers relating to the Rule60(b) Motion were filed by the Defendant in furthersupport of his motion and in response to the Plaintiff'sopposition. [AP Dkt. Nos. 137, 138, 139, 140]. TheCourt heard oral argument on the Rule 60(b) Motionat which Mr. Molina appeared pro se and the Plaintiffappeared by counsel.The Defendant bases his request for relief on Rules60(b)(2), (3), and (6). In short, the Defendant contendsthat the Settlement Agreement and the Judgmentwere entered under circumstances involving duress,demonstrated by his arrest and detention in Argentina,and that the settlement was coerced and a “forced act ofsurvival” on the Defendant's part. See generally Rule60(b) Motion. He further contends that the Plaintiff's
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.5counsel, Mr. Hertzberg, was allegedly aware thatthe Plaintiff's accusations in the Mexico Complaintwere false (according to the Defendant) but used theDefendant's situation (i.e., his arrest and detention)to obtain a favorable settlement for the Plaintiff. Seegenerally id. The Defendant also argues that a rulingfrom the Argentine court (the “Argentine Ruling”)should be considered newly discovered evidence thatwarrants the relief sought in the Rule 60(b) Motion,and that he was “legally impeded” from informing theCourt about the investigation underlying the ArgentineRuling. See generally id. Lastly, the Defendant arguesthat the imposition of a $6.88 million judgment wasegregious and epitomized extreme and undue hardship,especially considering his bankruptcy filing and thecircumstances he encountered. See generally id.In his opposition, the Plaintiff argues that the Rule60(b) Motion must be denied for the following reasons.First, the Defendant cannot prevail under Rule 60(b)(3) because he failed to establish clear and convincingevidence of duress and that there was no evidenceof a wrongful threat to coerce settlement. Rather,the Defendant was the party who initiated settlementdiscussions and was represented by legal counsel.Second, the Defendant cannot prevail under Rule 60(b)(2) because the Argentine Ruling arose about one yearafter the entry of the Settlement Agreement Order andJudgment and thus is not newly discovered evidencethat existed at the time the Settlement AgreementOrder and Judgment were entered. Lastly, the Plaintiffmaintains that the Defendant cannot prevail under thecatch-all provision of Rule 60(b)(6) because he failedto establish an extreme and undue hardship and merelyreargues the very same points he previously made insupport of his request for relief under Rule 60(b)(2)and (3). See generally Plaintiff's MOL.13In response, the Defendant countered that, amongother things, duress is not negated merely because heinitiated settlement discussions, and that duress mayarise from implicit threats. He further argued that whilethe Argentine Ruling is not entirely new, the ruling“substantiates and confirms” his prior allegations.Lastly, he argued that his request for relief underRule 60(b)(6) is a “desperate cry for justice” from the“unconscionable $6.8 million settlement” that is “anagreement poisoned by coercion and injustice.” Seegenerally Defendant's Corrected Response.14II. DiscussionA. The Rule 60(b) Motion*7 The Defendant did not appeal the SettlementAgreement Order, nor did he appeal or move toalter or amend the Judgment, and the time do sohas long passed.15 Yet, despite his having failed totimely file an appeal or move under Rule 59 orotherwise challenge the order and judgment to whichhe expressly consented, the Defendant now movesto set aside the Settlement Agreement Order and theJudgment under Rule 60(b).The Court has construed the arguments in the Rule60(b) Motion in the light most favorable to theDefendant as a pro se movant. See, e.g., In re DitechHolding Corp., No. 19-10412, 2021 WL 2258291, at*1 (Bankr. S.D.N.Y. June 2, 2021) (Court applying ananalysis under Rules 59 and 60 to pro se claimant'smotion for rehearing and “construing the Motion inthe light most favorable to the pro se Claimant to statethe strongest argument that it suggests.”). As explainedbelow, to the extent Rule 60(b) relief might otherwisebe available to the Defendant, the Defendant has failedto meet the heavy burden of proof on the specificelements of Rule 60(b) that he invokes. While it istrue that there are motions to set aside a final orderor judgment that meet the heavy burden under Rule60(b), it is also true that there are those that do not. Thisis one that does not. The Court finds the Defendant'sarguments unpersuasive and without merit. He has notmet the exacting standard necessary to set aside theSettlement Agreement Order and the Judgment.Rule 60(b) provides that the Court may relieve a partyfrom a final judgment, order or proceeding due to:(1) mistake, inadvertence, surprise, or excusableneglect;(2) newly discovered evidence that, with reasonablediligence, could not have been discovered in timeto move for a new trial under Rule 59(b);(3) fraud (whether previously called intrinsic orextrinsic), misrepresentation, or misconduct by anopposing party,(4) the judgment is void;
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.6(5) the judgment has been satisfied, released ordischarged; it is based on an earlier judgmentthat has been reversed or vacated; or applying itprospectively is no longer equitable; or(6) any other reason that justifies relief.Fed. R. Civ. P. 60(b).“A motion for relief from judgment is generallynot favored and is properly granted only upon ashowing of exceptional circumstances.” United Statesv. Int'l Bhd. of Teamsters, 247 F.3d 370, 391 (2dCir. 2001); Nemaizer v. Baker, 793 F.2d 58, 61 (2dCir. 1986) (although Rule 60(b) “should be broadlyconstrued to do substantial justice [,] ... final judgmentsshould not be lightly reopened .... Since 60(b) allowsextraordinary judicial relief, it is invoked only upona showing of exceptional circumstances.”). “Courtstypically require that the evidence in support ofthe motion for relief [under Rule 60(b)] be ‘highlyconvincing’ that a party show good cause for the failureto act sooner, and that no undue hardship be imposedon other parties.” Playboy Enters. Int'l, Inc. v. OnLine Ent., Inc., No. CV 00-6618, 2004 WL 626807,at *9 (E.D.N.Y. Mar. 29, 2004, as amended Apr. 1,2004) (quoting Jedrejcic v. Croatian Olympic Comm.,190 F.R.D. 60, 77 (E.D.N.Y. 1999)) (quotation marksand citations omitted), aff'd, 135 F. App'x 479 (2dCir. 2005). “Pro se litigants are not excused fromthe requirement that they produce highly convincingevidence to support a Rule 60(b) motion.” Toriolav. FJC Sec. Servs. Inc., No. 13-CV-5142, 2017 WL819483, at *4 (E.D.N.Y. Mar. 1, 2017) (quotationmarks and citations omitted).*8 “The burden of proof is on the party seekingrelief from the judgment.” Int'l. Bhd. of Teamsters,247 F.3d at 391. Moreover, as relevant here and asnoted above, “[t]he heavy burden for securing relieffrom final judgments applies to pro se litigants aswell as those represented by counsel.” Toriola, 2017WL 819483, at *4. Whether a motion for relief underRule 60(b) should be granted is subject to the sounddiscretion of the court. Stevens v. Miller, 676 F.3d 62,67 (2d Cir. 2012); In re Taub, 421 B.R. 37, 42 (Bankr.E.D.N.Y. 2009). “In no circumstance ... may a partyuse a Rule 60(b) motion as a substitute for an appealit failed to take in a timely fashion.” Stevens, 676 F.3dat 67.Courts recognize “[a]s a general matter, there is astrong interest in the finality of judgment, especiallywhen the parties have entered into a settlementagreement.” Playboy Enters. Int'l, 2004 WL 626807,at *9 (citing Nemaizer, 793 F.2d at 61); see Collickv. United States, 552 F. Supp. 2d 349, 352 (E.D.N.Y.2008) (“Settlement agreements to end litigation arestrongly favored by courts and are not lightly castaside.”). “When the parties submit to an agreed-upondisposition instead of seeking a resolution on themerits ... the burden to obtain Rule 60(b) relief isheavier than if one party proceeded to trial, lost, andfailed to appeal.” Nemaizer, 793 F.2d at 63. In otherwords, “[w]hen a party makes a deliberate, strategicchoice to settle, she cannot be relieved of such a choicemerely because her assessment of the consequenceswas incorrect.” United States v. Bank of New York,14 F.3d 756, 759 (2d Cir. 1994); Rand Int'l LeisureProds., Ltd. v. Teksource, L.C., No. 97-cv-0319, 1998WL 372356, at *1 (E.D.N.Y. July 2, 1998) (“Amovant's burden is even more formidable where themovant has made a deliberate choice to enter into asettlement agreement as opposed to having litigatedthe case on the merits and lost.”); see also Humblesv. Reuters Am., Inc., Nos. 05-CV-4895, 02-CV-60,2006 WL 2547069, at *5 (E.D.N.Y. Aug. 31, 2006)(“In considering the finality of judgments, Rule 60(b)should not be employed simply to relieve a party froma voluntary and deliberate choice that later turns out tobe unfortunate.”). “Buyer's remorse is insufficient tovacate a stipulation of settlement even where the partyis a pro se litigant.” Francis v. Excelsior College, No.04-CV-656, 2017 WL 2399483, at *5 (N.D.N.Y. May8, 2017) (emphasis omitted).With these legal principles in mind, the Courtnow addresses the Defendant's arguments that theSettlement Agreement Order and the Judgment mustbe vacated under Rules 60(b)(2), (b)(3) and (b)(6).The Court first considers the timeliness of the Rule60(b) Motion and then addresses each argument in turnbelow.1. Timeliness of Rule 60(b) MotionAs an initial matter, “[t]imeliness is a threshold issueunder Rule 60.” Taub, 421 B.R. at 42. Rule 60(c)(1)
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.7provides that motions seeking relief under Rule 60(b)“must be made within a reasonable time” and morespecifically requires that if relief is sought under Rules60(b)(1), (b)(2), and (b)(3) then such motion mustbe made “no more than a year after the entry of thejudgment or order or the date of the proceeding.” FED.R. CIV. P. 60(c)(1).As the Defendant moves in part under Rules 60(b)(2) and (b)(3), the Court must determine in the firstinstance if the Defendant timely moved with respect tothe relief sought under Rules 60(b)(2) and (b)(3). Eachof the Settlement Agreement Order and the Judgmentwas entered on November 7, 2022. The Defendant'sRule 60(b) Motion was filed on November 7, 2023, andthus falls within the one-year limitation period.*9 Notwithstanding the filing of the Rule 60(b)Motion on the last day of the one-year deadline, theone-year deadline is “merely an outer limit.” Gonzalesv. Nat'l Westminster Bank PLC, No. 11 Civ. 1435,2013 WL 6978874, at *5 (S.D.N.Y. Nov. 18, 2013);see also LaFortune v. Hertz Corp., No. 98 Civ. 9154,2000 WL 281779, at *2 (S.D.N.Y. Mar. 13, 2000)(“But Rule 60(b) requires in all events that such amotion be made within a reasonable time.”) (internalquotation marks omitted). Indeed, “the motion may berejected as untimely if not made within a reasonabletime even though the one-year period has not expired.”Gonzales, 2013 WL 6978874, at *5; see also Geo-Group Commc'ns, Inc. v. Chopra, No. 15 Civ. 1756,2023 WL 6235160, at *8 (S.D.N.Y. Sept. 26, 2023)(“Two related questions about timeliness pursuant toRule 60(c) must be resolved” - whether the motionis time-barred by the one-year cutoff and if not time-barred, then whether the motion was made within areasonable time).Additionally, the movant faces an increasing burden todemonstrate the reasonableness for the delay in time asthe deadline draws closer. See Amoco Overseas Oil Co.v. Compagnie Nationale Algerienne De Navigation,605 F.2d 648, 656 (2d Cir. 1979) (“Although the factthat a motion was made barely within the one-yeartime limit gives the court the power to entertain it,as the delay in making the motion approaches oneyear there should be a corresponding increase in theburden that must be carried to show that the delaywas ‘reasonable.’ ”). In that regard, what is consideredreasonable is “based on ‘the particular circumstancesof the case,’ taking into account the reason for anydelay, the possible prejudice to the non-moving party,and the interests of finality.” Thai-Lao Lignite Co. v.Gov't of Lao People's Democratic Republic, 864 F.3d172, 182 (2d Cir. 2017) (quoting PRC Harris, Inc. v.Boeing Co., 700 F.2d 894, 897 (2d Cir. 1983)); see alsoKagan v. Caterpillar Tractor Co., 795 F.2d 601, 610(7th Cir. 1986) (“[t]here is no hard and fast rule as tohow much time is reasonable ....”); see, e.g., Barrettv. Local 804 Union (IBT), No. 18-CV-2046, 2023WL 4551686, at *5 (E.D.N.Y. July 14, 2023) (findingmotion was not filed within a reasonable time becauseit was filed “ten months after he allegedly discoverednew evidence purporting to require reopening of thismatter and reconsideration of the Court's [decision].”);Wyche v. Advanced Drainage Sys., Inc., 332 F.R.D.109, 116 (S.D.N.Y. 2019) (finding the failure to givean explanation for the four and a half months fromthe discovery of new evidence to the filing of theRule 60(b)(2) motion was unreasonable); Gonzales,2013 WL 6978874, at *6 (“Plaintiffs do not explainwhy it took them approximately six months fromDeRosa's deposition in August 2012 to file theirmotion in February 2013. Without more, that delay isunreasonable and renders Plaintiff's Rule 60(b) motionuntimely.”); United States v. $350,000, No. 92 CV4011, 1996 WL 706821, at *2 (E.D.N.Y. Dec. 6, 1996)(finding unexplained eight-month delay to filing Rule60(b) motion an unreasonable time); Sasso v. M. FineLumber Co., 144 F.R.D. 185, 188-89 (E.D.N.Y. Oct.13, 1992) (finding no reasonableness from nine-monthdelay); Gould Ent. Corp. v. Bodo, 107 F.R.D. 308,311 (S.D.N.Y. 1985) (giving movant benefit of doubtthat he did not receive notice of default judgmentuntil nearly seven months after the notice but stating“the fact remains that he waited approximately fivemonths before moving to vacate” and which filinghappened just two days shy of the one-year deadline,and because there was no explanation for the delay,“[t]his unexcused delay is in itself adequate basis fordenying the motion.”); Sony Corp. v. S.W.I. Trading,Inc., 104 F.R.D. 535, (S.D.N.Y. 1985) (finding filing ofRule 60(b) motion two-months after movant receivednotice of default judgment to be unreasonable undercircumstances).*10 As previously mentioned, the Rule 60(b)Motion was filed on the last possible day to be
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.8deemed “timely” for purposes of Rule 60(c)(1). TheDefendant's explanation for the delay in filing wasthat he was not able to leave Argentina and returnto the United States until July 2023 and that it tooksome time for him to prepare his Rule 60(b) Motionbecause he was proceeding pro se after the entry ofthe Settlement Agreement Order and the Judgment.See Defendant's Corrected Response, at p. 3. TheDefendant filed the Rule 60(b) Motion on November 7,2023, approximately four months later. Interestingly,while the Defendant stressed the time it took for himto return to the United States as the reason for hisdelay in seeking relief under Rule 60(b), the Defendantwas nevertheless able to file a complaint in Argentinaagainst the Plaintiff and Mr. Hertzberg on or aboutFebruary 14, 2023 (the “Argentine Complaint”). SeeDeclaration of Santiago Fontán Balestra, at 2 [APDkt. No. 127-4].If the Court accepts July 14, 2023 as the operativedate from which to determine the reasonableness ofthe filing of the Rule 60(b) Motion, there is nodispute that the Defendant filed the Rule 60(b) Motionapproximately four months after his return to theUnited States. Thus, the question is whether a lapseof four months under the circumstances presentedby the Defendant is reasonable. Here, the Defendantclaims that any perceived delay was occasioned by thecircumstances of his arrest and detention in a foreigncountry until July 2023. See Defendant's CorrectedResponse, at p. 8. Yet, as noted above, despite his arrestand detention, the Defendant was able to file a criminalcomplaint in Argentina in February 2023 while underhouse arrest at an apartment provided by one of histhen attorneys. While this does dampen, and possiblyundercuts, his argument that the time it took for himto file the Rule 60(b) Motion after his return to theUnited States was reasonable,16 the Court concludesthat the Defendant adequately explained the reason forany perceived delay in filing the Rule 60(b) Motion.Accordingly, the Court finds the Rule 60(b) Motionwas filed within the one-year limitation and within areasonable time for purposes of Rule 60(c)(1).2. Relief under Rule 60(b)Having determined that the Rule 60(b) Motion wastimely and filed within a reasonable time, the Courtwill now address whether the Defendant is entitled torelief under Rules 60(b)(2), (b)(3) and/or (b)(6).a. Rule 60(b)(2)The movant has an “onerous standard to meet.” Int'l.Bhd. of Teamsters, 247 F.3d at 392. To prevail onthe grounds of newly discovered evidence under Rule60(b)(2), the movant must establish that:(1) the newly discovered evidence was of factsthat existed at the time of trial or other dispositiveproceeding; (2) the movant must have beenjustifiably ignorant of them despite due diligence;(3) the evidence must be admissible and of suchimportance that it probably would have changed theoutcome; and (4) the evidence must not be merelycumulative or impeaching.Metzler Inv. Gmbh v. Chipotle Mexican Grill, Inc.,970 F.3d 133, 146-47 (2d Cir. 2020) (quoting Int'lBhd. of Teamsters, 247 F.3d at 392 (quotation marksomitted)). To qualify as “new evidence” under Rule60(b)(2), the movant must present evidence that is“truly newly discovered or could not have been foundby due diligence.” Space Hunters, Inc. v. United States,500 F. App'x 76, 81 (2d Cir. 2012) (citing United Statesv. Potamkin Cadillac Corp., 697 F.2d 491, 493 (2d Cir.1983)).The purported “new evidence” that the Defendantrelies upon is the Argentine Ruling which relatesdirectly to the Defendant's Argentine Complaint. Asdiscussed above, there are four criteria that must bemet by the Defendant. For the reasons to follow, theCourt finds that the Defendant has not met his burdenand thus the Argentine Ruling does not constitute “newevidence” for purposes of Rule 60(b)(2).*11 The Plaintiff argues that the Argentine Rulingis outside the scope of Rule 60(b)(2) because theArgentine Ruling was entered by the Argentinecourt on September 19, 2023, approximately tenmonths after the Settlement Agreement Order andthe Judgment was entered by this Court. [AP Dkt.No. 108-1; as corrected at AP Dkt. No. 123-1]. Incountering this argument, the Defendant does not focus
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.9on the fact that the Argentine Ruling was entered afterthe Settlement Agreement Order and the Judgmentwere entered by the Court; rather, he contends thatthe Argentine Ruling “should be considered newlydiscovered in its capacity to transform prior claimsfrom hypothetical threats to a substantial reality”and that “[i]t is this transition of evidence fromthe theoretical to the actual that I believe justifiesits consideration under Rule 60(b)(2), warrantinga reevaluation of the judgment in light of thesedevelopments.” Defendant's Corrected Response, at p.9.The Court finds the Defendant's argument unavailing.The Argentine Ruling does not qualify as “newlydiscovered” evidence because the Argentine Rulingwas entered months after the entry of the SettlementAgreement Order and the Judgment. Even if the Courtwere to accept the Defendant's argument that theArgentine Ruling should be considered because itrelates to facts that preceded the Settlement AgreementOrder and the Judgment, and thus “was of factsthat existed at the time,” the Court would still findthat the Argentine Ruling fails to qualify as “newlydiscovered” evidence for the following reasons.The Defendant likens the Argentine Ruling tothe proverbial “smoking gun.” But the Defendant'sreliance on the Argentine Ruling is fatally flawed. OnMay 30, 2024, the Argentine court issued a decisionrejecting the Defendant's arguments and dismissed hiscomplaint on the merits, with prejudice (the “ArgentineDecision”). [AP Dkt. No. 147-1 (as translated toEnglish at pp. 36-53)]. Notably, it appears that theDefendant did not provide relevant documents to theArgentine court (e.g., the Joint Motion to Dismissand the supporting declarations from the Defendantand Mr. Ciardi). See Argentine Decision, at p. 53.The relevance of the Joint Motion to Dismiss andthe supporting declarations to the Argentine courtis evidenced by the following statement from theArgentine Decision: “Furthermore, the documentssubsequently provided by the defense of LandsmanasStern (joint motion and attached statements of MolinaGil and Albert Ciardi) were not available at thetime, from where it can be concluded – as exposedthroughout this decision – that he had no plausiblereason to file the complaint that led to the proceedingin this investigation[.]” Id. The Argentine court alsoconcluded:In this case, there are neither objectivenor subjective elements described, since thecircumstances surrounding the facts prove there wasno pressure or intimidation by the accused to causethe agreement to be executed. On the contrary,an open negotiation, initiated and promoted byMolina Gil occurred who, once apprehended inthe Argentine Republic by the criminal proceedingagainst him carried out in the City of Mexico, startedan exchange of e-mails with Gabriel Hertzberg,attorney of Landsmanas Stern, in which mails heclearly evidenced his desire to reach an economicagreement.Id. at p. 42. As such, the Court finds that the ArgentineRuling is not outcome-determinative. The Defendant'scontention that the Argentine Ruling is highly relevantas dispositive evidence simply loses all steam and forcein view of the Argentine Decision.Even if the Argentine court did not issue the ArgentineDecision, this Court would still find that the ArgentineRuling fails as “newly discovered” evidence sufficientto vacate the Settlement Agreement Order and theJudgment. The Defendant consistently ignores ordownplays the undisputed fact that the parties jointlymoved to resolve this adversary proceeding via anegotiated settlement in which the Defendant wasrepresented by counsel.*12 There is, and can be no dispute, that theDefendant was an active proponent seeking the entryof the Settlement Agreement Order and the Judgment.He submitted his own declaration in support ofthe joint motion seeking dismissal of the adversaryproceeding pursuant to the settlement agreementbetween the Plaintiff and himself. See generallyMolina Declaration. In the Molina Declaration, theDefendant unambiguously states, among other things,that he was represented by legal counsel withrespect to the Settlement Agreement, that therewere back-and-forth negotiations over many weeksthat provided material economic concessions bythe Plaintiff and himself, and that he believed theSettlement Agreement is fair to the Plaintiff andhimself. Id. at ¶¶ 5-6. All the Defendant's statementsin the Molinas Declaration were expressly made underpenalty of perjury.
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.10Albert Ciardi, the Defendant's legal counsel withrespect to the Settlement Agreement, likewisesubmitted a declaration sworn under penalty of perjury.See generally Ciardi Declaration. Mr. Ciardi confirmedthat he provided legal counsel to the Defendant inconnection with the Settlement Agreement, and thatthe underlying settlement discussions were conductedin good faith and at arm's-length. Id. at 4.Further, the terms of the Settlement Agreement refutethe Defendant's arguments in the Rule 60(b) Motion.The Settlement Agreement clearly specifies that thesettlement was negotiated by the parties in good faithand at arm's-length. Settlement Agreement, at p. 1.The Settlement Agreement clearly specifies that theDefendant, by executing the Settlement Agreement,represented that “he is under no duress, coercion,or compulsion of any kind whatsoever but, instead,enters into this Agreement willfully, voluntarily, andhaving been fully informed of the premises andconcluded that the terms hereof are in his own bestinterests.” Id. at 12.c(2) (emphasis added); id. at 14 (“The Parties have entered into this Agreementfreely, voluntarily, and without duress of any kind ornature, after having consulted with professionals oftheir choice.”). The Settlement Agreement also makesclear that the Defendant relied solely upon his ownjudgment and that of his counsel's legal advice andrecommendations. Id. at 12.c(1). The SettlementAgreement also makes clear that the “Defendantconsents to the entry of a judgment against himdetermining that the amount of $6,880,000, inclusiveof costs and interest, shall be non-dischargeablein Defendant's Bankruptcy Case and any otherbankruptcy case that may ever be filed by or againstDefendant.” Id. at 2.In addition, the Joint Motion to Dismiss echoes manyof the statements in the Molina Declaration andCiardi Declaration. The Joint Motion to Dismiss statesthat the Settlement Agreement globally resolved atwo-party dispute and expressly noted critical issuesresolved by the parties including: (1) a reduction inthe amount of the Plaintiff's claim from approximately$9.5 million down to approximately $6.88 million,with such reduced claim being non-dischargeable;(2) the Plaintiff's dismissal of the LandsmanasStern Action with prejudice; and (3) the Plaintiff'sundertaking to withdraw the complaint he filed inMexico that gave rise to the Mexico Action. Seegenerally Joint Motion to Dismiss.All the foregoing strongly undercuts the allegations ofmisconduct that the Defendant wants this Court to nowuse as grounds to grant the relief sought in the Rule60(b) Motion. The record is abundantly clear that theSettlement Agreement and the Judgment were fullyendorsed by the Defendant.Further, no concerns, questions or issues regarding theSettlement Agreement were raised by the Defendantwith the Court prior to entry of the SettlementAgreement Order and the Judgment. At the time theJoint Motion to Dismiss was heard and considered bythe Court, the Defendant did not claim he was at adisadvantage during the settlement negotiations. Hedid not express any reservation about his decision toenter into the settlement, nor did he claim that hewas compelled to accede to any settlement demand bythe Plaintiff. He, himself, initiated the settlement talksculminating in his zealously advocating for entry ofthe Settlement Agreement Order and the Judgment andwas not heard to complain about its terms until a yearlater when he filed the Rule 60(b) Motion.*13 Further, the Defendant's affirmative entry intothe Settlement Agreement definitively put an end toall the controversies, issues and disputes between theparties. See Settlement Agreement, at 12.a (“[T]hisAgreement constitutes a compromise and settlementof disputed claims, and is not intended, nor shall beconstrued, as an admission by any Party of liabilityor responsibility to the other Party on any basis.This Agreement is a compromise and settlement ofdisputed claims and is the product of arm's-lengthnegotiations. No admission of liability is made by anyParty to this Agreement.”); id. at 12.c (representationof “no duress, coercion, or compulsion of any kindwhatsoever” and entered into “willfully, voluntarily,and having been fully informed of the premises ....”);id. at p. 1 (“the terms of this Agreement werenegotiated in good faith at arm's length ....”).Lastly, the Court additionally finds the ArgentineRuling does not constitute “newly discoveredevidence” for purposes of Rule 60(b)(2) because theDefendant, himself, recognizes that it is cumulative
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.11and not “new” stating that “[t]he evidence thathas come to light, rather than being entirely new,substantiates and confirms the allegations I havepersistently made about the Plaintiff's coercive tacticsaimed at extorting money from me under the threatof legal and personal harm.” Defendant's CorrectedResponse, at p. 8 (emphasis added). It bears repeatingthat at no time prior to, or one year after, the entryof the Settlement Agreement Order and Judgment didthe Defendant complain of any coercive tactics by thePlaintiff in extracting the settlement which again theCourt emphasizes was initiated by the Defendant.For all of the forgoing reasons, the Court finds thatthe Defendant has failed to meet his burden to vacatethe Settlement Agreement Order and the Judgmentpursuant to Rule 60(b)(2).b. Rule 60(b)(3)To prevail under Rule 60(b)(3), the movant “mustprove by clear and convincing evidence” that the orderor judgment from which relief is sought was “procuredby fraud, misrepresentation or other misconduct.” Inre Waugh, 367 B.R. 361, 367 (Bankr. E.D.N.Y. 2007)(citing Fleming v. New York Univ., 865 F.2d 478,484 (2d Cir. 1989); see Thai-Lao Lignite Co., 864F.3d at 182 (“The burden is on the moving party todemonstrate that it is entitled to relief, and courts‘[g]enerally ... require that the evidence in supportof the motion to vacate a final judgment be highlyconvincing.’ ”) (quoting Kotlicky v. U.S. Fidelity &Guar. Co., 817 F.2d 6, 9 (2d Cir. 1987)) (internalquotation marks omitted). “To meet this high burden,the [movant] must do more than make ‘conclusoryallegations of fraud’ and must show that the allegedfraud, misrepresentation, or other misconduct was‘material to the outcome.’ ” In re Waugh, 367 B.R.at 367 (quoting In re St. Stephen's 350 E. 116th St.,313 B.R. 161, 174 (Bankr. S.D.N.Y. 2004)). “A partymay not use Rule 60(b)(3) to relitigate the merits of theorder from which he seeks relief.” In re Sanders, 408B.R. 25, 33 (Bankr. E.D.N.Y. 2009) (citing Fleming,865 F.2d at 484).As discussed above, the movant's burden to vacatean order approving a settlement is high. Indeed,“[b]ankruptcy courts in the Second Circuit have placeda heavy burden upon a party seeking to vacatea final order approving a settlement.” EngineeredDevices Corp. v. Carlton Concrete Constr. (In reCarlton Concrete Corp.), No. 08-CV-242, 2008 WL4443233, at *5 (E.D.N.Y. Sept. 26, 2008) (listingcases). In the Second Circuit, a settlement agreementis construed as a contract. See Goldman v. Comm'rof Internal Revenue, 39 F.3d 402, 405 (2d Cir. 1994)(“As the settlement agreement constituted a contract,general principles of contract law must govern itsinterpretation.”); Tolkin v. Pergament, No. 11CV 3467,2012 WL 1132475, at *9 (E.D.N.Y. Mar. 31, 2012) (“Asettlement agreement is a contract that is interpretedaccording to general principles of contract law.”)(quoting Powell v. Omnicom, BBDO/PHD, 497 F.3d124, 128 (2d Cir. 2007) (quotation marks omitted).Under the Settlement Agreement, the parties expresslyagreed to a choice of law provision, which provides“that in any dispute among them arising from orrelating to this Agreement, the Agreement shall begoverned by, and shall be construed in accordancewith, the internal laws of the State of New Yorkwithout regard to its conflicts of laws jurisprudence.”Settlement Agreement, at 12.e.*14 With New York law governing the SettlementAgreement, “[a] court may vacate a settlementagreement only when there has been a showing offraud, collusion, mistake, or duress or when theagreement is unconscionable, contrary to public policy,or ambiguous.” Ogbolu v. Trustees of Columbia Univ.,No. 22-419, 2023 WL 2579044, at *2 (2d Cir. Mar. 21,2023) (citing McCoy v. Feinman, 99 N.Y.2d 295, 302(2002)); see Jordan v. Verizon Corp., No. 04-5581CV,2005 WL 3116750, at *2 (2d Cir. Nov. 22, 2005) (“Asettlement agreement is a contract that can only beinvalidated upon a showing of fraud, duress, illegality,or mutual mistake.”); see also Hallock v. State, 64N.Y.2d 224, 230 (N.Y. 1984) (“Only where there iscause sufficient to invalidate a contract, such as fraud,collusion, mistake, or accident, will a party be relievedfrom the consequences of a stipulation made duringlitigation.”).For the movant to successfully vacate a settlementagreement based on duress, it must be “established thatthe party making the claim was forced to agree to itby means of a wrongful threat precluding the exerciseof his free will.” Doe. v. Kogut, 759 F. App'x 77, 81
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.12(2d Cir. 2019) (citing First Nat'l Bank of Cincinnativ. Pepper, 454 F.2d 626, 632 (2d Cir. 1972)); seeDimino v. Fisher (In re Dimino), 429 B.R. 408, 418(Bankr. E.D.N.Y. 2010) (holding a “contract may bevoided as a result of duress if the party claimingduress can prove that he was ‘involuntarily forced’to act because of ‘a wrongful threat precluding theexercise of ... free will.’ ”) (quoting Warnaco, Inc. v.Farkas, 872 F.2d 539, 546 (2d Cir. 1989)); see alsoMcIntosh v. Consol. Edison Co. of New York, Inc.,No. 82065, 96 CIV 3624, 1999 WL 151102, at *2(S.D.N.Y. Mar. 19, 1999) (explaining there are threecircumstances of duress to void a contract – duressby physical compulsion, duress by threat, or duress byundue influence); Feuer v. Darkanot, 36 A.D.3d 753,753-54 (2d Dep't 2007) (“A party seeking to vacatea stipulation by asserting duress must demonstratethat ‘threats of an unlawful act compelled his or herperformance of an act which he or she had the legalright to abstain from performing.’ ”) (quoting Polito v.Polito, 121 A.D.2d 614, 614-15 (2d Dep't 1986)).General contentions that a party felt pressured isnot sufficient. See, e.g., Duran v. J.C. RefinishingContracting Corp., 421 F. App'x 20, 21-22 (2dCir. 2011) (citing cases and finding unsubstantiatedargument by movant that he was pressured to settleby the court, even if credited, was insufficient toestablish duress claim); Playboy Enters. Int'l, 2004WL 626807, at *6-8 (finding burden was not met bymovant's contention that the Court's strong admonitionof the movant's counsel outside the presence of thejury resulted in the movant's position being weakenedthereby causing him to be coerced and enter intoa settlement agreement under duress). Nor is thereduress simply because of a party's bargaining position.See Davis v. M&M Dev., LLC (In re MBM Ent.,LLC), 531 B.R. 363, 410 (Bankr. S.D.N.Y. 2015)(“[D]uress does not exist based only on the existenceof financial pressure and unequal bargaining positionor on a lack of good faith in performing a contract.”);Playboy Enters. Int'l, 2004 WL 626807, at *7 (“Duressmay not be found merely from the existence of adifficult bargaining position or the pressure of financialcircumstances.”) (citing McIntosh, 1999 WL 151102,at *2).Here, the Defendant contends that vacating the Court'sapproval of the Settlement Agreement is warrantedunder Rule 60(b)(3) based on allegations of duress.According to the Defendant, the Settlement Agreement“was reached amidst undue pressure” and that theunderlying settlement is “inherently void” as a result.Rule 60(b) Motion, at pp. 2-3. The Court disagreesand finds that the Defendant failed to satisfy the heftyburden of vacating the Settlement Agreement Orderunder Rule 60(b)(3).i. The Defendant Failed to Establish Duress froma Wrongful Threat that Precluded the Exercise ofFree Will*15 Based on the record, the Court finds that theDefendant failed in two critical respects to invalidatethe Settlement Agreement (and the Judgment) becauseof duress. First, the Defendant failed to establishthere was a wrongful threat. The Defendant contendsthe filing of a criminal complaint in Mexico andsubsequent detention under house arrest pendingthe outcome of an extradition process should beconsidered a wrongful threat, but such contention isinsufficient. “[A] threat to resort to civil litigation orlegal remedies does not constitute duress, since ‘[i]tis never duress to threaten to do what one has a legalright to do.’ ” MBM Ent., 531 B.R. at 410 (quotingCitibank, Nat'l Ass'n v. London, 526 F. Supp. 793,803 (S.D. Tex. 1981)) (applying New York law); seeUnited States v. Twenty Miljam-350 IED Jammers,669 F.3d 78, 89 (2d Cir. 2011) (“[U]nder New Yorklaw, the threatened exercise of a legal right cannotconstitute duress....”). Here, there is nothing in therecord to support a finding that initiation of the MexicoComplaint almost a year before the date the Defendantfiled his chapter 7 bankruptcy petition constitutes awrongful threat designed to force the Defendant tosettle this postpetition adversary proceeding.Second, assuming a wrongful threat was demonstrated,the Defendant must also show that such wrongfulthreat had the effect of precluding the exercise of hisfree will. In that regard, the Defendant failed to makethe required showing. The record does not supporta finding that he was precluded from exercising hisfree will in entering into the Settlement Agreement.See, e.g., Nisselson v. Softbank AM Corp. (In reMarketxt Holdings Corp.), 361 B.R. 369, 401 (Bankr.S.D.N.Y. 2007) (“Although there is no line of absolute
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.13demarcation between a threat that deprives a party ofits free will as opposed to a threat that portends somelesser degree of harm, any finding of duress at leastmust reflect a conviction that one party to a transactionhas been so improperly imposed upon by the other thata court should intervene.”) (internal quotation marksand citation omitted). Here, the Defendant's actionsdemonstrate that he acted upon his own free willthrough active participation in settlement negotiations.As discussed above, the Defendant resolutely arguedin favor of the Settlement Agreement and hisunbridled determination in pursuing approval ofits terms undermines any notion that his entryinto the Settlement Agreement was under duress,coercion or other wrongful conduct. By executingthe Settlement Agreement, the Defendant definitivelyand affirmatively represented that “he is underno duress, coercion, or compulsion of any kindwhatsoever but, instead, enters into this Agreementwillfully, voluntarily[.]” Settlement Agreement, at 12.c(2) (emphasis added). The Settlement Agreementfurther provides that “[t]he Parties have enteredinto this Agreement freely, voluntarily, and withoutduress of any kind or nature, after having consultedwith professionals of their choice.”). Id. at 14(emphasis added). The Defendant also represented thatbefore he signed the Settlement Agreement he fullyunderstood each of the terms and conditions therein.Id. Additionally, the Defendant declared under penaltyof perjury that the Settlement Agreement is “fair” tohim. Molina Declaration, at 6.Next, once again it bears repeating that theDefendant contacted the Plaintiff's counsel regardingthe Defendant's request to settle. See Rule 60(b)Motion, Exhibit F at pp. 13-14 (email dated Oct. 6,2022, at 12:36 pm). Before settlement discussionsproceeded, however, the Plaintiff's counsel expresslyinformed the Defendant in writing that the Defendant(who was appearing pro se at the time) needed to havelegal counsel for settlement negotiations, stating:[Y]ou will need to engage Mexican counsel torepresent you in settlement negotiations becausethe Mexico City Attorney General will be a partyto any agreement that results in dismissal of theMexican complaint, and you will need local counselin Mexico to implement the agreement. You willalso need to engage US counsel to advise youregarding dismissal of the adversary proceeding,and that counsel will sign off on any settlement.Obviously given your email below we are concernedthat you are manufacturing a defense of duressand want to be certain you enter any agreementvoluntarily, on your own accord and free will, andwith proper legal advice.*16 Id. at p. 14 (email dated Oct. 6, 2022, at3:59 pm). The Defendant thereafter re-engaged Mr.Ciardi as his attorney for purposes of settlementdiscussions and documentation. That the Plaintiff'scounsel conditioned further settlement discussions onthe Defendant's engagement of legal counsel of theDefendant's own choice supported a setting wherebythe Defendant could exercise his free will. Indeed, Mr.Ciardi, the Defendant's attorney, confirmed that thesettlement negotiations were conducted in good faithand at arm's-length and advocated for the approval ofthe Settlement Agreement at the earliest practicabletime. Ciardi Declaration, at ¶¶ 4-5. Mr. Ciardi notonly provided a separate declaration in support ofthe Settlement Agreement, but he also signed theSettlement Agreement, which further supports theconclusion that there was no duress involved. See,e.g., Donaldson v. N.Y.C. Dep't of Educ., No. 09-cv-2816, 2010 WL 935560, at*1 (E.D.N.Y. Mar. 12,2010) (District Court noting that the State CourtJudge had dismissed the litigant's claims of duressand coercion relating to his Article 78 petition tovacate a settlement agreement and letter of resignationbecause “the agreement states that he entered intothe agreement ‘freely, knowingly and openly, withoutcoercion or duress’ and because his attorney signed theagreement as well.”).Third, the Settlement Agreement was the product ofback-and-forth negotiations spanning several weeks.See Molina Declaration, at 5 (“The settlementdiscussions resulting in the Settlement Agreementwere conducted over several weeks, and the back-and-forth negotiations included material economicconcessions being made both by Plaintiff and by me.”);see also Ciardi Declaration, at 4 (“The settlementdiscussions resulting in the Settlement Agreementwere conducted in good faith and at arms’-length overseveral weeks, and the back-and-forth negotiationsincluded material economic concessions being madeboth by Plaintiff and by Defendant.”); Joint Motionto Dismiss, at ¶¶ 3, 20 (“conducted by both Parties in
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.14good faith and at arms’ length”; “material economicconcessions ... over the course of the negotiations”;“negotiating the terms of the Settlement for severalweeks”).That the parties’ engaged in back-and-forthnegotiations is especially relevant as it shows thatthe Defendant was engaged and actively participatingin the negotiation of a settlement with the Plaintiff.See, e.g., Rule 60(b) Motion, Exhibit F at p. 1 (emaildated Oct. 17, 2022, at 6:20 pm) (“Carlos and I havenegotiated the main deal points over the last coupleof days ....”). In other words, this was not a one-sidedaffair in which the Defendant acted involuntarily andwas forced to agree to every term and condition thePlaintiff wanted.Indeed, the Defendant not only initiated settlementdiscussions, but he also reviewed the terms proposedby the Plaintiff and made several counteroffers.Even more, the Defendant admitted that he took histime evaluating the consequences of the proposedsettlement terms, explaining that “I needed tounderstand exactly what I was getting into. Talkingto my wife, see what I was getting into, think itover.” Rule 60(b) Motion, Exhibit E at p. 1 (Englishtranscription of conference call between the Defendantand Mr. Hertzberg) [AP Dkt. No. 115]; see, e.g.,Interactive Edge, Inc. v. Martise, No. 97 Civ. 3354,1998 WL 35131, at *3-4 (S.D.N.Y. Jan. 30, 1998)(finding settlement agreement was “negotiated overa number of weeks ... and involved concessions andcompromises from both parties” and that there was nosupport from the record that pro se defendant signedthe settlement agreement under duress for fear ofcriminal prosecution as he was advised by his attorneyof a possibility of criminal prosecution for an allegedact by the defendant and that a settlement provided away to avoid that possibility); see also Best v. Schecter,No. 12-CV-6142, 2018 WL 4635726, at *4 (E.D.N.Y.Feb. 22, 2018) (Report and Recommendation denyingmotion to strike a provision from the settlementagreement after applying a Rule 60(b) analysis andfinding the pro se movant was not rushed, surprisedor pressured into agreeing to terms, but rather hadample time to review and negotiate amendmentsand that movant participated actively and negotiatedeffectively, including the making of a counteroffer,and only accepted to execute agreement upon theinclusion of certain additional non-monetary termsthat movant wanted), adopted, Best v. Barbarotta, No.12-CV-6142, 2018 WL 3970886 (E.D.N.Y. Aug. 20,2018), aff'd, 790 F. App'x 336 (2d Cir. 2020) (summaryorder). The Defendant benefitted from the back-and-forth negotiations because it resulted in materialconcessions in his favor. For example, the Plaintiffagreed to withdraw the Mexico Complaint to facilitatethe Defendant's return to the United States, agreedto a claim in a reduced amount (from approximately$9.5 million to $6.88 million), and agreed that iffunds were received by the Plaintiff in connectionwith a related dispute involving a different party thensuch funds would be partially credited to the amountowed under the judgment (i.e., a potential reductionin the judgment amount). In all, the Court finds theDefendant's actions run contrary to his contention thathe was precluded from exercising his free will inagreeing to the terms of the negotiated settlement.*17 Further, the Defendant presented no evidenceto support the conclusion that there was no otherchoice for him but to settle. It is well-settledthat a claim of duress is fatally deficient if themovant cannot establish that there was no otheralternative available to the movant. See, e.g., Bekhor v.Josephthal Group, Inc., No. 96 CIV. 4156, 2000 WL1521198, at *3-4 (S.D.N.Y. Oct. 13, 2000) (findingno duress, even if there was “uneven bargainingposition” and an “intimidating and hostile atmosphere”during negotiations, because movant “always had thealternative of refusing to settle ... and pursuing his legalclaims”); Batac Dev. Corp. v. B & R Consultants Inc.,No. 98 CIV. 721, 1999 WL 76873, at *3-4 (S.D.N.Y.Feb. 16, 1999) (finding no duress because while thenegotiation was “heated, stressful and contentious”and the “atmosphere may have been intimidating”there was nothing threatening or that movant wasin fear of actual physical harm, and the movant's“claim of duress is fatally deficient because [he] cannotestablish that he was faced with no alternative butto sign”); In re Dimino, 429 B.R. at 418 (findingsettlement was not made under duress because thedebtor produced no evidence that his free will wasaffected such that it left him with only the option tosettle, and that the debtor's agreement to pay a portionof the sale proceeds to satisfy a lien was a bargained-for-exchange – “[t]he mere fact that the Debtor felt
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.15pressure ... does not, by itself, dictate a conclusion thatthe settlement is void as a product of duress.”).The Defendant has not offered any evidence that hedid not have a choice but to agree to the SettlementAgreement. He could have elected to challenge theextradition, and the charges asserted against him. ThePlaintiff's counsel also reminded the Defendant that hecould fight the extradition and that he did not haveto settle. The Defendant, of his own volition, chosethe path to take and opted to settle this adversaryproceeding. No evidence was presented that he wasprevented from opposing the extradition and theDefendant has not offered any evidence that his freewill was compromised. In the end, he opted to initiateand negotiate terms of a settlement. As such, theDefendant's claim of duress must be rejected for thisadditional reason.ii. The Defendant Failed to Establish Threat ofPhysical HarmThe Defendant also appears to contend that threatsthat implicitly evoke a “pervasive fear of harm” or“threats of immediate harm” or “imminent threats to ...safety” may satisfy a showing of duress. Defendant'sCorrected Response, at p. 5. The Defendant howeverpresented no evidence that the Plaintiff threatened himwith personal harm in any way. Accordingly, the Courtdenies the Defendant's claim of duress premised on athreat (whether explicit or implicit) of physical harm.iii. The Defendant Failed to Act Promptly toRepudiateAs a matter of law in the Second Circuit, the failureto promptly repudiate the contract will result in theparty claiming duress to be “deemed to have ratifiedit.” VKK Corp. v. National Football League, 244 F.3d114, 122-23 (2d Cir. 2001)A party may ratify a contract or release enteredinto under duress by intentionally acceptingbenefits under the contract, by remaining silent oracquiescing in the contract for a period of timeafter he has the opportunity to avoid it, or byacting upon it, performing under it, or affirmativelyacknowledging it.Twenty Miljam-350 IED Jammers, 669 F.3d at 89(quoting VKK Corp., 244 F.3d at 123) (internalquotation marks omitted). “Delay precludes acontention that the contract was invalid on grounds ofduress.” MBM Ent., 531 B.R. at 411. “A repudiationmust be ‘clear and unequivocal.’ ” Grullon v. DeltaAir Lines, Inc., No. 20-3207-cv, 2021 WL 6116784, at*3 (2d Cir. Dec. 27, 2021) (summary order) (quotingWalton Mgmt., LLC v. Walton Apartments, LLC, 298A.D.2d 277, 278 (1st Dep't 2002)).Even accepting as true the Defendant's contention thathe signed the Settlement Agreement under duress, theCourt finds that he failed to act promptly to repudiatethe Settlement Agreement. See Twenty Miljam-350IED Jammers, 669 F.3d at 89 (“[O]ne who wouldrepudiate a contract procured by duress must act or willbe deemed to have elected to affirm it.”) (emphasis inoriginal); VKK Corp., 244 F.3d at 122 (“[T]he personclaiming duress must act promptly to repudiate thecontract or release or he will be deemed to have waivedhis right to do so.”) (internal quotation marks andcitation omitted).*18 There is nothing in the record to show thatthe Defendant repudiated the Settlement Agreementpromptly. At a minimum, the Defendant did notrepudiate, if at all, the Settlement Agreement until hefiled his criminal complaint in Argentina against thePlaintiff and Mr. Hertzberg in February 2023. Thus,at least three months passed without the Defendantrepudiating the Settlement Agreement. The Court findsthat to be an untimely repudiation by the Defendant.See, e.g., Twenty Miljam-350 IED Jammers, 669 F.3dat 91 (concluding that duress claim would fail even ifsufficient evidence of duress was proffered because noattempt to repudiate was made until four months afterstipulation was signed).iv. The Defendant Ratified the SettlementAgreementThe Court also finds that the Defendant ratified theSettlement Agreement by accepting the benefits ofthe Settlement Agreement. The Defendant specificallystated an “important benefit” of the Settlement
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.16Agreement is the requirement that the Plaintiff notifythe Mexican Attorney General that he wishes towithdraw with prejudice the complaint (i.e., theMexico Complaint) that he initiated. See MolinaDeclaration, at 4. In accordance with the termsof the Settlement Agreement, the Plaintiff (throughcounsel) dismissed the Mexico Complaint against theDefendant with prejudice on November 23, 2022.See Declaration of Julia Raquel Quiroga Herrera, at 9. [AP Dkt. No. 127-2]. The Defendant acceptedthe consequences of the Plaintiff's withdrawal of theMexico Complaint without question and thereforeratified the Settlement Agreement. See MBM Ent., 531B.R. at 411 (“[A] party who accepts benefits undera contract, without challenging the legitimacy of thecontract, has ratified the contract and is precluded fromlater seeking to undo it on grounds of duress.”); seealso Fruchthandler v. Green, 233 A.D.2d 214, 215(1st Dep't 1996) (“Having accepted the benefits of theagreement before commencing this action, plaintiff, ineffect ratified the release and is therefore barred fromalleging economic duress in its execution.”).For all of the foregoing reasons, the Court finds thatthe Defendant failed to meet his burden to vacatethe Settlement Agreement Order and the Judgmentpursuant to Rule 60(b)(3).c. Rule 60(b)(6)Lastly, the Defendant seeks relief under the catch-all of Rule 60(b)(6), which allows a court to grantrelief from a final judgment for “any other reason thatjustifies relief.” Fed. R. Civ. P. 60(b)(6). Rule 60(b)(6)is “properly invoked only when there are extraordinarycircumstances justifying relief or when the judgmentmay work an extreme and undue hardship.” Seegenerally 53rd St., LLC v. U.S. Bank Nat'l Ass'n,No. 18-CV-4203, 2023 WL 8283656, at *3 (E.D.N.Y.Nov. 30, 2023) (internal citations omitted). The partyseeking relief has the burden to prove extraordinarycircumstances.” Id.It is well-established that “Rule 60(b)(6) only appliesif the reasons offered for relief from judgment arenot covered under the more specific provisions ofRule 60(b)(1)-(5).” See Gustavia Home, LLC v. Hoyer,No. 16-CV-4015, 2022 WL 875096, at *4 (E.D.N.Y.Mar. 23, 2022) (citing Warren v. Garvin, 219 F.3d111, 114 (2d Cir. 2000)); Manney v. IntergrooveMedia GMBH, No. 10-CF-4493, 2014 WL 1224171,at *7 (E.D.N.Y. Mar. 24, 2014) (“Rule 60(b)(6) reliefis only available if Rules 60(b)(1) through (5) donot apply.”). Rule 60(b)(6) is therefore inapplicablewhere a movant's “arguments are premised and canbe considered [under] the enumerated clauses of Rule60(b).” Gustavia Home, 2022 WL 875096, at *4. Inother words, Rule 60(b)(6) and the preceding fiveenumerated provisions under Rule 60(b) are mutuallyexclusive. See Liljeberg v. Health Services AcquisitionCorp., 486 U.S. 847, 863 (1988).*19 Here, the Defendant maintains that both theSettlement Agreement and the Judgment amountof $6.88 million constitute an extreme and unduehardship justifying relief under Rule 60(b)(6).However, with respect to a judicially approvedsettlement, “[a] failure to properly estimate the loss orgain from entering a settlement agreement is not anextraordinary circumstance that justifies relief underRule 60(b)(6).” United States v. Bank of N.Y., 14 F.3d756, 760 (2d Cir. 1994).Further, the Defendant framed his claim for reliefunder Rule 60(b)(6) in terms covered expressly byother enumerated provisions of Rule 60(b), reiteratingallegations that he raised in support of his Rule 60(b)(2) and (b)(3) claims. See, e.g., Pastor v. P'ship forChildren's Rights, 856 F. App'x 343, 345 (2d Cir. 2021)(summary order) (“[T]o the extent Pastor relied onnew evidence or the Partnership's purported ‘fraud’and misconduct, such grounds for relief are cognizableonly under Rule 60(b)(2) and 60(b)(3).”).Measured against the standard for applying Rule 60(b)(6), the Court denies the Defendant's request to vacatethe Settlement Agreement Order and the Judgmentpursuant to Rule 60(b)(6).Having now conclusively determined that the Rule60(b) Motion must be denied as the Defendant hasfailed to meet his burden of proof under Rules 60(b)(2), (3) and (6), the Court next addresses the separatemotions for sanctions that the parties lodged againstone another.B. The Sanctions Motions
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.171. The Defendant's Sanctions MotionThe crux of the Defendant's contention for sanctionsagainst Mr. Hertzberg is that he filed the complaintinitiating the Landsmanas Stern Action for an improperpurpose. The Second Circuit has held that a complaintis not filed for an improper purpose if it is notfrivolous. “[I]t would be counterproductive to use Rule11 to penalize the assertion of nonfrivolous substantiveclaims, even when the motives for asserting thoseclaims are not entirely pure.” Sussman v. Bank ofIsrael, 56 F.3d 450, 459 (2d Cir. 1995) (quoting andadopting analysis in Townsend v. Holman ConsultingCorp., 929 F.2d 1358, 1361 (9th Cir. 1990)). “‘Although a frivolous position will often signal animproper purpose,’ frivolousness alone does not giverise to a finding of improper purpose, absent somethingmore.” Ammann v. Sharestates, Inc., No. 21-CV-2766,2024 WL 1956237, at *3 (E.D.N.Y. Mar. 21, 2024)(quoting Sierra Club v. U.S. Army Corps of Eng'rs,776 F.2d 383, 391 (2d Cir. 1985)). Thus, “court[s]may infer an improper purpose if, in light of [aparty's] conduct during and outside of litigation, acomplaint is so baseless as to suggest that there isan ulterior motive behind the lawsuit.” Id. (quotationmarks and citation omitted). In other words, thereis a violation of Bankruptcy Rule 9011 “when it ispatently clear that a claim has absolutely no chanceof success.” Moxey v. Pryor, No. 15-cv-4632, 2017WL 1229735, at *3 (E.D.N.Y. Mar. 31, 2017) (quotingOliveri v. Thompson, 803 F.2d 1265, 1275 (2d Cir.1986)) (quotation marks omitted). All doubts must beresolved in favor of the signer of the pleading. SeeLax v. 29 Woodmere Blvd. Owners, Inc., 812 F. Supp.2d 228, 242 (E.D.N.Y. 2011). In the end, whethersanctions are imposed is a decision that lies withinthe discretion of the court. See, e.g., Ipcon CollectionsLLC v. Costco Wholesale Corp., 698 F.3d 58, 63(2d Cir. 2012) (holding “sanctions under Rule 11 arediscretionary, not mandatory.”).*20 The Court finds that the Defendant has notcarried his burden of proof for sanctions. See CleanAir Car Serv. & Parking Branch Three, LLC v.Clean Air Serv. & Parking Branch Two, LLC, No.24-CV-05444, 2025 WL 1005838, at *2 (E.D.N.Y.Apr. 3, 2025) (moving party has the burden andonly after a prima facie case is established does theburden shift to the other party) (citing In re KlieglBros. Univ. Elec. Stage Lighting Co., 238 B.R. 531,541 (Bankr. E.D.N.Y. 1999). The Defendant failedto present any admissible evidence supporting hisallegations of any improper purpose by Mr. Hertzbergin filing the Complaint (and as amended, the SecondAmended Complaint). The Defendant's conclusoryand unsubstantiated statements do not suffice.Even if the Defendant presented a prima facie case,the record supports a rebuttal on the part of Mr.Hertzberg. Applying the Second Circuit's standardof “objective unreasonableness” when considering amotion for sanctions pursuant to Rule 11 (as madeapplicable here by Bankruptcy Rule 9011), see Storeyv. Cello Holdings, L.L.C., 347 F.3d 370, 387 (2dCir. 2003), the Court would find that the Defendant'sallegations pertaining to the complaint filed by Mr.Hertzberg do not give rise to sanctionable relief forthe Defendant. “If a factual allegation in a complaint,motion or other paper filed with the court has noevidentiary support, sanctions are appropriate unlessthe paper includes a specific disclaimer that additionalinvestigation is necessary.” Scientific ComponentsCorp. v. Sirenza Microdevices, Inc., No. 03-CV-1851,2007 WL 1026411, at *2 (E.D.N.Y. Mar. 30, 2007)(citing O'Brien v. Alexander, 101 F.3d 1479, 1489(2d Cir. 1996)). On the other hand, sanctions are notappropriate if “evidentiary support is merely weak andthe claim is unlikely to prevail, as opposed to beingutterly lacking in support.” Id. (citing O'Brien, 101F.3d at 1489).Here, Mr. Hertzberg responded to the sanctions motionby explaining that the allegations in the complaint were“based principally upon the report of KPMG Bahamas,which was retained by the Central Bank of Bahamasin 2019, in connection with Mr. Molina's effortsto own a Bahamian bank called PIBL.” HertzbergOpposition, at ¶¶ 8-9. Mr. Hertzberg further explainedthat information gleaned from document productionfrom Mr. Molina supported the allegations in thecomplaint. Id.at 9. Additionally, as pointed out byMr. Hertzberg, objections to the Defendant's dischargeunder § 727 were similarly asserted by other interestedparties in separate adversary proceedings. Id. at 11.It thus cannot be concluded that the allegationsunderlying the complaint were completely baseless.Nor can it be concluded that it is “patently clear” the
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.18claims in the complaint have “absolutely no chanceof success.” Moxey, 2017 WL 1229735, at *3; seeFischoff v. Coty Inc., 634 F.3d 647, 654 (2d Cir. 2011)(“The fact that a legal theory is a long-shot doesnot necessarily mean it is sanctionable. The operativequestion is whether the argument is frivolous, i.e., thelegal position has no chance of success, and there isno reasonable argument to extend, modify or reversethe law as it stands.”) (internal quotation marks andcitation omitted).For these reasons, the Court denies the Defendant'sSanctions Motion, and the Motion to Compel is deniedas moot.2. The Plaintiff's Sanctions MotionThe Plaintiff contends that sanctions must be imposedagainst the Defendant because he submitted judicialdecisions and other governmental documents that arealleged to have been intentionally altered from theoriginal versions.*21 Based on the record, the Court does not findthat the Plaintiff established the Defendant's bad faith.While the Court finds the Defendant's explanation ofthe English-translated version of the Argentine rulinghe submitted to be problematic such that it does givethe Court some pause for concern, the Court notes thatthe same ruling in the original Spanish language wasalso submitted by the Defendant. Thus, an argumentthat the Defendant may have attempted to deceive orotherwise “pull a fast one” is stripped of its impact. TheCourt does not find it likely that the Defendant wouldintentionally submit a highly inaccurate translation ofa ruling with the hopes of gaining an advantage forhis position while at the same time also submitting thesame ruling in its original native language. The Courttherefore declines to exercise its inherent powers tosanction the Defendant based on the submission of thewrongly translated judicial ruling.The Court is particularly troubled, however, by theDefendant's multiple case citations in his responseto the Plaintiff's Sanctions Motion that appear to befictional or are completely different from the legalproposition that the Defendant cited the case for in hispapers. At oral argument, the Plaintiff's counsel statedthat they were not able to find certain cases identifiedby the Defendant. See Dec. 19 Tr. at 36:17-37:25. TheCourt, too, was not able to locate several cases cited bythe Defendant. Although the Plaintiff's counsel raisedthe point at the December 19 hearing, the Defendantdid not refute the case citation issue or otherwise offeran explanation.“Without question, it is improper and unacceptablefor litigants – including pro se litigants – to submit‘nonexistent judicial opinions with fake quotes andcitations.’ ” Anonymous v. N.Y.C. Dep't of Educ., No.1:24-cv-04232, 2024 WL 3460049, at *7 (S.D.N.Y.July 18, 2024) (quoting Mata v. Avianca, Inc., 678 F.Supp. 3d 443, 448 (S.D.N.Y. 2023)). Regardless ofthe source for the questionable case citations, the factremains that some of the cases cited by the Defendantdo not exist. See, e.g., In re Disciplinary ProceedingAgainst The Law Offices of Michael S. Pasano, 2007WL 1044517 (N.D. Ill. 2007) (cited by the Defendantbut could not be located); L-7 Designs, Inc. v. OldNavy (LLC), 647 F. Supp. 2d 181 (E.D.N.Y. 2009)(same); Zaldivar v. Los Angeles County, 170 Cal. App.3d 632 (1985) (same); Pavelic & LeFlore v. MarvelEntertainment Group, 493 F. Supp. 2d 1060 (E.D. Cal.2007) (same).Because the record reveals that the Defendant hassubmitted “fake” cases to the Court, the questionis what consequence, if any, should the Defendantface as a result. “Sanctions may be imposed forsubmitting false and nonexistent legal authority tothe Court.” Anonymous, 2024 WL 3460049, at *7;see Ramirez v. Humala, No. 24-cv-242, 2025 WL1384161, at *1 (E.D.N.Y. May 13, 2025) (listing casesand finding “the Second Circuit, as well as districtcourts across the country, have found the submissionof nonexistent case citations in filings to the courtto constitute sanctionable conduct under Rule 11(b)(2).”). Courts presented with the issue of fictitiouscase citations and the imposition of sanctions havereached different outcomes. “Courts across the countryhave issued sanctions against attorneys and pro separties for submitting fictitious case citations, fictitiousquotations, and related misrepresentations to the court,including (1) monetary sanctions; (2) striking the filingcontaining the fictitious citations ; (3) requiring writtennotification to the client and the judges incorrectlyidentified as having authored the fictitious cases cited;
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.19(4) dismissing the complaint; and (5) dismissing ordenying the appeal.” United States v. Hayes, 763 F.Supp. 3d 1054, 1071-72 (E.D. Cal. 2025) (surveyingcases) (internal citations omitted).After careful consideration, the Court declines toimpose monetary sanctions against the Defendantunder the circumstances. See, e.g., Anonymous, 2024WL 3460049, at *7 (“[T]he Court is mindful of its‘obligat[ion] to afford a special solicitude to pro selitigants,’ which ‘includes leniency in the applicationof procedural rules.’ ”) (quoting Rosa v. Doe, 86 F.4th1001, 1007 (2d Cir. 2023)); id. (declining to sanctionthe offending pro se litigant and issues a warning thatthe Court will not be as forgiving if there are futureviolations).*22 To be clear, notwithstanding the above,the Court does not conclude that the Defendantshould face no consequence for the fictitious casecitations. Going forward, the Defendant shall (1) filecontemporaneously with each document (each a “FiledDocument”) that he files or causes to be filed inthe Chapter 7 case and in any associated adversaryproceeding a statement in his name sworn underpenalty of perjury that certifies that he has verified theaccuracy of each legal authority (including, but notlimited to, cases, opinions, reports, statutes, articles)that he cites or quotes in the Filed Document, andthe Defendant shall keep and maintain a complete,legible copy of all such legal authority until such timewhen the Chapter 7 case is closed by an order of finaldecree and all associated adversary proceedings havebeen closed. See, e.g., Kruglyak v. Home Depot U.S.A.,Inc., No. 22cv00024, 2025 WL 900621, at *3 (W.D.Va. Mar. 25, 2025) (finding pro se litigant who citedfictitious and misrepresented case holdings did not actin bad faith but nonetheless ordered that the pro selitigant identify all cases resulting from legal researchperformed from generative AI and verifying accuracy).Separate from the Defendant's Sanctions Motion, theDefendant requested sanctions against the Plaintiffin connection with his response to the Plaintiff'sSanctions Motion. The Court denies the Defendant'srequest for sanctions because the Defendant failedto abide by the safe harbor noticing period underRule 11(c)(2). “The safe-harbor provision is a strictprocedural requirement.” Star Mark Mgmt., Inc. v.Koon Chun Hing Kee Soy & Sauce Factory, Ltd., 682F.3d 170, 175 (2d Cir. 2012); see also Guarino v.Resciniti (In re Resciniti), No. 8-16-70669, Adv. Pro.No. 8-16-08068, 2019 WL 1451278, at *1 (Bankr.E.D.N.Y. Mar. 29, 2019). Here, there is nothing toindicate that the 21-day safe harbor notice period wasprovided by the Defendant.Accordingly, the Defendant's request for additionalsanctions against the Plaintiff is procedurally defectiveand is denied.III. ConclusionFor all the reasons stated above, the Defendant's Rule60(b) Motion seeking to reopen the Landsmanas SternAction and to set aside the Settlement AgreementOrder and the Judgment pursuant to Rules 60(b)(2), (b)(3) and (b)(6) is denied. The Defendant'sSanctions Motion seeking to impose sanctions againstMr. Hertzberg is denied. The Defendant's Motion toCompel seeking to compel production by the Plaintiffis denied as moot. The Plaintiff's Sanctions Motionseeking to impose sanctions against the Defendantis denied, and the Defendant's request to imposeadditional sanctions against the Plaintiff is denied.The Defendant shall (1) file contemporaneously witheach Filed Document he files or causes to be filed inthe Chapter 7 Case and in any associated adversaryproceeding a statement in his name sworn underpenalty of perjury that certifies that he has verified theaccuracy of each legal authority (including, but notlimited to, cases, opinions, reports, statutes, articles)that he cites or quotes in the Filed Document, and theDefendant shall keep a complete copy of all such legalauthority until such time when the Chapter 7 case isclosed by an order of final decree and all associatedadversary proceedings have been closed.So Ordered.All CitationsSlip Copy, 2025 WL 2697623
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.20Footnotes1All references to “AP Dkt. No. (number)” refer to the corresponding docket entry number for this adversaryproceeding, Adv. Pro. No. 21-08139.2The Order Approving Settlement Agreement and the Order and Judgment for Plaintiff were entered uponthe parties’ Joint Emergency Motion to Dismiss Adversary Proceeding and Enter Judgment Pursuant to theSettlement (the “Joint Emergency Motion”) [AP Dkt. No. 99]. The Joint Emergency Motion was supported bythe Declaration of the Defendant (the ‘Molina Declaration”) [AP Dkt. No. 99-2] and a separate Declarationof Albert A. Ciardi, III, Esq. (the “Ciardi Declaration”), counsel for the Defendant [AP Dkt. No. 99-3].3Unless otherwise noted, the facts are taken from the parties’ submissions in connection with the Rule 60(b)Motion. The Court has also taken judicial notice of the docket in this adversary proceeding (Adv. Pro. No.21-08139) and the docket in the main bankruptcy case (Case No. 21-70830). See Teamsters Nat'l FreightIndus. Negotiating Comm. et al. v. Howard's Express, Inc. (In re Howard's Express, Inc.), 151 F. Appx. 46,48 (2d Cir. 2005) (stating that courts are empowered to take judicial notice of public filings, including a court'sdocket); Levine v. Egidi, No. 93 C 188, 1993 WL 69146, at *2 (N.D. Ill. Mar. 8, 1993); Katzenstein v. VIIISV5556 Lender, LLC (In re Saint Vincent's Catholic Med. Ctrs. of N.Y.), 440 B.R. 587, 599 (Bankr. S.D.N.Y.2010) (taking judicial notice of the docket in the underlying bankruptcy case); In re Campbell, 500 B.R. 56, 59n.7 (Bankr. D.N.M. 2013) (electing to take judicial notice of the entire file in the case for sake of completenessas a bankruptcy court has the inherent authority to take judicial notice of entries on its own docket).4According to page 6 of the Petition, the Defendant (as the debtor) signed the Petition on April 29, 2021.[Bankr. Dkt. No. 1].5All references to “Bankr. Dkt. No. (number)” refer to the corresponding docket entry number for the mainbankruptcy case, Case No. 21-70830.6All statutory references to sections of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq., willhereinafter be referred to as “§ (section number).”7The other two adversary proceedings are: (i) Jorge A. Carreras v. Carlos Javier Molina, Adv. Pro. No.21-08138-las (the “Carreras Action”) in which Mr. Carreras objects to Mr. Molina's discharge under § 727, or,in the alternative, seeks a determination that that the debt owed to him is nondischargeable under § 523, and(ii) Allen B. Mendelsohn, as Trustee of the Estate of Carlos Javier Molina, v. Carlos Javier Molina, Adv. Pro.No. 21-08163-las (the “Trustee Action”) in which the Trustee objects to Mr. Molina's discharge under § 727.8The Ciardi Firm was also counsel for Mr. Molina in his Chapter 7 case.9The Ciardi Firm also separately moved to withdraw as counsel of record for Mr. Molina in the Carreras Actionand in the Trustee Action. Orders were entered on March 7, 2022 in each of these adversary proceedingsauthorizing the Ciardi Firm to withdraw as counsel.10On November 7, 2022, the Ciardi Firm filed a Notice of Appearance in this adversary proceeding on behalfof Mr. Molina. [AP Dkt. No. 101].11The Defendant filed multiple exhibits to “address an inadvertent error concerning the translations andcertification” of certain exhibits he filed in support of his Rule 60(b) Motion. [AP Dkt. Nos. 113, 115, 123]. OnDecember 12, 2023, the Defendant filed the “complete versions of the exhibits previously included in [his]opposition” filed on December 11, 2023, to the Plaintiff's Sanctions Motion. [AP Dkt. No. 133].12For convenience, citations to the transcript for the hearing held on December 19, 2023, are cited as “Dec.19 Tr.”.
In re Molina, Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.2113Citations to “Plaintiff's MOL” refer to the Memorandum of Law of Plaintiff Jack Landsmanas Stern inOpposition to the Motion of Defendant Carlos Javier Molina to Reopen Case and for Relief from JudgmentUnder Rule 60(b)(2), (b)(3), and (b)(6) filed on December 8, 2023. [AP Dkt. No. 125].14Citations to “Defendant's Corrected Response” refer to the Corrected Defendant's Response to Plaintiff'sOpposition to Motion to Reopen Case and for Relief from Judgment Under Rule 60 filed on December 18,2023. [AP Dkt. No. 140].15Bankruptcy Rule 8002(a) provides that “[t]he notice of appeal shall be filed with the clerk within 14 days ofthe date of the entry of the judgment, order, or decree appealed from. Fed. R. Bankr. P. 8002(a). BankruptcyRule 9023 makes Rule 59 applicable to cases under the Bankruptcy Code and provides that “[a] motion fora new trial or to alter or amend a judgment shall be filed, and a court may on its own order a new trial, nolater than 14 days after entry of judgment.” Fed. R. Bankr. P. 9023.16The Defendant also contends that “[t]he proximity of this motion to the one-year deadline underscores nota hesitance to act but a steadfast persistence to procure all necessary evidence and testimonials that fortifythe grounds for relief sought herein.” Rule 60(b) Motion, at pp. 3-4.End of Document© 2025 Thomson Reuters. No claim to original U.S.Government Works.
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