Opinions of the United
2009 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


5-29-2009

Haiying Xi v. Shengchun Lu
Precedential or Non-Precedential: Non-Precedential

Docket No. 08-3322




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                                                                NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT
                                  ___________

                                       No. 08-3322
                                       ___________

                                       HAIYING XI,
                                              Appellant

                                             v.

                 SHENGCHUN LU; CHEN YI YANG; SCOF USA INC.
                            _________________

                     On Appeal from the United States District Court
                         for the Eastern District of Pennsylvania
                        (E.D. Pa. Civil Action No. 05-cv-05305)
                      District Judge: Honorable Legrome D. Davis
                      ____________________________________

                     Submitted Pursuant to Third Circuit LAR 34.1(a)
                                     May 20, 2009

             Before: RENDELL, FUENTES and ALDISERT, Circuit Judges

                               (Opinion filed: May 29, 2009)

                                       ___________

                                        OPINION
                                       ___________

PER CURIAM

       Haiying Xi, proceeding pro se, appeals an order of the United States District Court

for the Eastern District of Pennsylvania denying his post-judgment motions in his breach

of contract action. We will affirm in part and vacate in part the District Court’s order.
       Xi filed a breach of contract action in District Court against SCOF USA Inc.,

Shengchun Lu, SCOF USA’s President and Chief Operating Officer, and Chen Yi Yang,

its Assistant President. Xi’s action arose out of an agreement under which Xi invested in

SCOF USA, a business that would sell liquor imported from China, in return for a partial

ownership interest in the company. In addition to breach of contract, Xi claimed that the

defendants engaged in fraud and conspiracy.1

       On April 28, 2008, the District Court granted Xi’s motion for a default judgment

based on the defendants’ failure to respond to the complaint. The District Court entered

judgment in favor of Xi and against Lu, Yang, and SCOF USA Inc. on all counts of the

complaint in the amount of $541,133.12. The District Court denied Xi’s request for

punitive damages. Pursuant to the parties’ agreement, the District Court ordered that the

defendants disclose certain information to Xi, including their social security numbers,

home addresses, and telephone numbers, and the names of SCOF USA’s shareholders.

The District Court further ordered Lu to transfer to Xi a stamp collection, which Lu had

promised as a guarantee for his debt. Finally, the District Court denied Xi’s request to

transfer to him the right of exclusive use of SCOF USA’s trademark and Lu’s shares of

stock because Xi had not shown, as required by the parties’ agreement, that his loss could



   1
    The District Court initially dismissed Xi’s complaint for lack of subject matter
jurisdiction because Xi had also named Li Xiao Li as a defendant. Li is a citizen of the
same state as Xi, and diversity of citizenship was lacking. We vacated the District
Court’s order because it was not clear that Li was an indispensable party. On remand, the
District Court granted Xi’s motion to dismiss Li as a party to the action.

                                             2
not be immediately fully recovered in cash.

       Xi filed a motion for reconsideration in which he argued that punitive damages

were warranted. Xi also asked the Court to reconsider the denial of his request for a

transfer of SCOF USA’s stock and licenses. On May 14, 2008, the District Court entered

an order denying the motion. The District Court reiterated its finding that punitive

damages were not warranted, noting that dissatisfaction with the court’s ruling was not a

proper basis for reconsideration.

       Xi then filed several motions. In a motion to clarify the District Court’s May 14,

2008, order, Xi asked the District Court to further explain its rulings and his available

remedies in the event the defendants did not comply with the judgment. Xi also moved

pursuant to Federal Rule of Civil Procedure 69 for an order requiring the defendants to

disclose SCOF USA’s financial records and other information. Finally, Xi filed a petition

for a restraining order to freeze the defendants’ assets, alleging that the defendants

continued to engage in deceptive business activities. In an order filed June 24, 2008, the

District Court denied Xi’s post-judgment motions. The District Court explained that its

function was not to explain legal concepts to Xi, assist him in enforcing his judgment, or

clarify his potential remedies if he could not collect. The District Court also stated that

Xi had not shown that the extraordinary relief of a restraining order was warranted.2

   2
    Before the District Court issued its order, Xi filed an appeal of the May 14, 2008,
order denying his motion for reconsideration. Citing Venen v. Sweet, 

(3d
Cir. 1985), the District Court noted that its jurisdiction was not divested because Xi’s
appeal related to the issue of punitive damages. On July 9, 2008, this Court dismissed

                                              3
       Xi then filed two additional post-judgment motions. He moved for reconsideration

of the District Court’s June 24, 2008, order, asserting that he had new evidence that the

defendants planned to dissolve SCOF USA and open another business using the money

and licenses belonging to SCOF USA.3 Xi renewed his request for discovery pursuant to

Rule 69 in order to prepare a writ of execution and his request for a restraining order. Xi

also filed a motion for reconsideration of the denial of punitive damages.

       In an order entered July 28, 2008, the District Court denied reconsideration of its

June 24, 2008, order, explaining that it did not find Xi’s new factual allegations sufficient

to reconsider the denial of his requests for discovery and a restraining order to freeze the

defendants’ assets after a default judgment had already been entered in his favor. The

District Court also denied Xi’s motion for reconsideration on the issue of punitive

damages on grounds of issue preclusion and untimeliness. The District Court explained

that it had already denied reconsideration on this issue, and that this Court had dismissed

Xi’s appeal. This appeal followed.4

       We have jurisdiction pursuant to 28 U.S.C. § 1291. In his brief, Xi challenges the

District Court’s April 28, 2008, order, which granted his motion for default judgment but


Xi’s appeal of the May 14, 2008, order for failure to pay the requisite fee.
   3
    In support of his allegations, Xi submitted various documents in the Chinese language
and his own translation of those documents.
   4
    The District Court also denied Xi’s motion to extend the time to appeal, noting that it
was not clear which order Xi wished to appeal, and explaining that he had 30 days to file
an appeal from the July 28, 2008, order. Xi does not seek review of this ruling.

                                              4
denied his request for an order transferring to him SCOF USA’s trademark and Lu’s

shares of stock. Alternatively, he argues that he should be awarded additional shares of

stock under the parties’ agreement. Xi also challenges the District Court’s July 28, 2008,

denial of his post-judgment motion for discovery from the defendants pursuant to Rule 69

and his motion for a restraining order freezing their assets. Finally, Xi challenges the

District Court’s denial of punitive damages.

          Our scope of review is limited to the District Court’s July 28, 2008, order denying

Xi’s request for discovery and a restraining order and reconsideration of the denial of

punitive damages. Xi has already appealed the District Court’s May 14, 2008, order

denying reconsideration of the April 28, 2008, order, and that appeal was dismissed for

failure to prosecute. Xi’s first two issues on appeal, challenging the District Court’s

denial of Xi’s request to transfer to him SCOF USA’s trademark and stock, were the

subject of the District Court’s April 28, 2008, and May 14, 2008, orders, and are not

properly before us. Similarly, the District Court’s decisions on punitive damages in the

April 28, 2008, and May 14, 2008, orders are not properly before us. To the extent Xi

seeks to appeal the District Court’s order filed June 24, 2008, denying his first post-

judgment motions for discovery and a restraining order, the June 24, 2008, order is also

not properly before us because Xi did not file a notice of appeal with respect to that

order.5

   5
    Xi refers in his brief to the District Court’s July 3, 2008, order granting his motion to
reopen the time to file a notice of appeal. Xi’s motion did not relate to the June 24, 2008,

                                               5
       Xi’s latest round of post-judgment motions can be construed as filed pursuant to

Federal Rule of Civil Procedure 60(b)(3),(6). We review the denial of Rule 60(b) relief

for an abuse of discretion. Coltec Industries, Inc. v. Hobgood, 

, 269 (3d Cir.

2002). We agree with the District Court that Xi’s allegations that the defendants planned

to dissolve SCOF USA and open a new business using SCOF USA’s funds, along with

his supporting documentation, are insufficient to warrant an order freezing the

defendants’ assets under the circumstances of this case. We also agree with the District

Court that the issue of punitive damages had already been litigated and was not properly

before the court as no basis to reopen the judgment had been shown.

       We agree with Xi, however, that the District Court erred in denying his motion for

discovery pursuant to Rule 69 based on the fact that a default judgment had already been

entered in his favor. Rule 69 provides that, in aid of the judgment or execution, a

judgment creditor may obtain discovery from any person, including the judgment debtor,

as provided in the Federal Rules of Civil Procedure or by the procedure of the state where

the court is located. Fed. R. Civ. P. 69(a)(2). Discovery of a judgment debtor’s assets is

conducted routinely under the Federal Rules of Civil Procedure. See First City, Texas

Houston N.A. v. Rafidain Bank, 

, 54 (2d Cir. 2002) (citing cases). It appears

that the District Court viewed Xi’s motion as a request for discovery related to his

complaint rather than in aid of the judgment or execution. Thus, we will vacate the


order, but to his appeal of the District Court’s May 14, 2008, order, which was untimely
filed on June 16, 2008.

                                             6
District Court’s July 28, 2008, order to the extent that the order denied Xi’s Rule 69

motion and will remand so that the District Court may reconsider Xi’s request for

discovery under that Rule.

         Accordingly, we will affirm in part and vacate in part the order of the District

Court.




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