Fourth Circuit Affirms Denial of Long Term Disability Claimant’s Motion to Reopen ERISA Lawsuit After Settlement

In?Zahariev v. Hartford Life & Accident Insurance Company, No. 22-1209, 2023 WL 1519520 (4th Cir. Feb. 3, 2023), Plaintiff-Appellant, Kiril Zahariev, proceeding pro se, appealed the district court’s order denying his motion to reopen his settled long-term disability case under Fed. R. Civ. P. 60(b), and the district court’s order denying his motion to disqualify the district court judge. Zahariev filed suit against Hartford Life & Accident Insurance Company to recover unpaid long-term disability benefits. With the aid of a court-appointed mediator, Zahariev and Hartford settled his claim. The district court issued an order dismissing the action without prejudice and informed the parties that they could move to reopen the action within 60 days if the settlement was not consummated. Within the 60-day period, Zahariev cashed his settlement check, and the parties filed a joint stipulation of dismissal with prejudice pursuant to Fed. R. Civ. P. 41.

A few months after the dismissal of the lawsuit, Zahariev moved to reopen the case and set aside the judgment pursuant to Fed. R. Civ. P. 60(b)(1), (3), (6), on the basis that the mediator’s misconduct led Zahariev to accept an unfavorable settlement. In his reply to Hartford’s opposition to his motion, Zahariev argued that Hartford submitted fraudulent discovery responses including a statement that “there were no written performance evaluations of the vendors.” The Magistrate Judge recommended denying the motion as untimely, or alternatively, on the merits. Zahariev filed objections to the Magistrate Judge’s Report and Recommendation (R&R), including the court’s analysis of the discovery fraud claim. The district court adopted the R&R and denied the motion to reopen the case. The district court did not address the discovery fraud issue. On appeal, the Fourth Circuit ruled that the district court erroneously failed to consider the discovery fraud issue and remanded the case so the district court could consider Zahariev’s objections. On remand, the district court overruled Zahariev’s discovery fraud objections and Zahariev appealed again.

The Fourth Circuit found that the district court did not abuse its discretion in denying Zahariev’s motion to reopen because his claims of error were known to him at the time he settled his case. Zahariev received Hartford’s supplemental discovery responses the evening before the mediation. He claimed that he did not have time to review them to be prepared for the mediation, but he did not explain why he could not have reviewed the documents within the 60-day period. Zahariev claimed that the mediator forced him to settle by telling him that Hartford would continue to investigate his disability and conduct intrusive surveillance if his disability claim were reinstated. Zahariev alleged that this threat caused him to settle prematurely. However, the court noted that Zahariev does not allege that the mediator’s statement was untrue; indeed, Zahariev argued that Hartford improperly surveilled him in the past and would likely do it again. Moreover, Zahariev could have raised this claim during the 60-day window, which he did not. These facts do not present extraordinary or exceptional circumstances warranting Rule 60(b) relief. Lastly, the court also found that the record in this case does not show the alleged judicial bias. “It is well established that ‘judicial rulings alone almost never constitute a valid basis for a bias or partiality motion.’” The court affirmed the district court’s orders denying Rule 60(b) relief and denying Zahariev’s motion to disqualify the district judge.

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