                                                                                                                           Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


11-3-2005

Gilgallon v. Carroll
Precedential or Non-Precedential: Non-Precedential

Docket No. 05-2074




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Recommended Citation
"Gilgallon v. Carroll" (2005). 2005 Decisions. Paper 261.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/261


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                                                   NOT PRECEDENTIAL

             UNITED STATES COURT OF APPEALS
                  FOR THE THIRD CIRCUIT


                           NO. 05-2074
                        ________________

                   EILEEN GILGALLON;
                   RONALD GILGALLON;
              MARY HENNIG, AS TAXPAYERS IN
               HUDSON COUNTY, NEW JERSEY,

                                 Appellants


                                    v.


            NEIL CARROLL; VINCENT ASCOLESE;
             NEPTALI CRUZ; WILLIAM BRAKER;
          NIDIA DAVILA-COLON; WILLIAM O'DEA;
  ALBERT CIFELLI; SILVERIO VEGA; MAURICE FITZGIBBONS;
  EDWARD J. FLORIO; LABOR MANAGEMENT CONCEPTS, INC.;
 ABC CORPORATION 1-100; JANE AND MARY DOES 1-10 (fictitious)
BOARD OF CHOSEN FREEHOLDERS OF THE COUNTY OF HUDSON;
         JUDICIARY OF THE STATE OF NEW JERSEY;
                    MICHAEL DERMODY

            ____________________________________

           On Appeal From the United States District Court
                    For the District of New Jersey
                     (D.C. Civ. No. 00-cv-00591)
            District Judge: Honorable William G. Bassler
           _______________________________________


             Submitted Under Third Circuit LAR 34.1(a)
                        September 2, 2005
                 Before: ROTH, McKEE and ALDISERT, Circuit Judges

                                (Filed: November 3, 2005)


                               _______________________

                                      OPINION
                               _______________________

PER CURIAM

       Appellants appeal the District Court’s order enjoining them from prosecuting an

action in state court against appellee Dermody or filing an action in state or federal court

against Dermody regarding certain issues without prior approval from the District Court.

Appellants also appeal the order denying their motion for reconsideration of that order.

       The ten-year procedural history of this case and the details of appellants’ claims

are well-known to the parties, set forth in the District Court’s thorough opinions, and

need not be discussed at length. In 1994, Hudson County rejected appellants’ company’s

(CFS) bid for a contract to provide security for County buildings and awarded the

contract to Labor Management Concepts (LMC). When appellants filed suit in 1995, the

state courts agreed that CFS was not a responsible bidder because it maintained ties with

appellant Ronald Gilgallon who had been convicted of insurance fraud.. The state court

litigation also included settlement of a cross-claim against LMC by the County for

unauthorized telephone calls made by LMC employees. When the appellants challenged

the validity of the settlement, the Appellate Division of the Superior Court of New Jersey



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found that this settlement was proper. “We concur with the conclusion of Judge Gallipoli

that plaintiff did not show that the County acted illegally or beyond its authority in

agreeing to settle matters with LMC. . . .” Supp. App. at 13.

       Appellants, represented by counsel, then filed a suit in federal court as taxpayers of

the County alleging ultra vires payments to LMC. The District Court granted the

defendants’ motion to dismiss. It found that appellants could not bring their claims

because the County had settled its claims against LMC. It addressed appellants’

arguments that the settlement agreement was fraudulent based on the date stamps and that

the Board of Chosen Freeholders was unaware of ultra vires payments. Appellants,

acting pro se, withdrew their appeal of this order. See C.A. No. 01-1571.1 They later

appealed the denial of a motion filed pursuant to Federal Rule of Civil Procedure 60(b).

We concluded that District Court did not abuse its discretion in denying Rule 60(b) relief

because the appellants had already challenged the validity of the settlement agreement

based on the date stamps. We affirmed and noted:

       Appellants attempt to draw attention away from the frivolous nature of their claims
       by focusing on alleged picayune technical defects in the appellees’ pleadings.
       Appellants also repeatedly claim that their motions and pleadings were not
       properly filed or considered. We note that this Court had access to every
       document relevant to and necessary for this Court’s decision. It is clear to the
       Court that appellants are not approaching these proceedings in good faith. The
       federal court system is not a playground to be used by litigants for harassing those

   1
    In their briefs in a later appeal, appellants alleged that C.A. No. 01-1571 was
dismissed as a result of a secret alliance of attorneys, including their own, against them.
However, appellants voluntarily withdrew their appeal in order to file the Rule 60(b)
motion in the District Court. See C.A. No. 02-1864

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       they dislike. We emphatically warn appellants that further frivolous filings will
       result in sanctions.

See C.A. No. 02-1864. Appellants had already filed a second federal lawsuit which was

stayed because the District Court found that the substance of their claims was decided on

the merits in the first federal action. Appellants filed a third lawsuit concerning the

County’s motion to adopt another appellee’s brief on appeal in C.A. No. 02-1864. This

case was dismissed. Appellants then filed a fourth lawsuit. The District Court dismissed

the complaint because appellants’ arguments challenging the settlement had already been

decided by the state and federal courts. The District Court also enjoined appellants from

filing complaints in that court against the defendants without prior approval. In affirming

this injunction, we noted “[g]iven appellants’ continued attempts to repackage and

reframe previously litigated claims, we believe the District Court’s injunction was

narrowly tailored to the circumstances.” We cautioned appellants that “frivolous and

vexatious litigation will lead to additional sanctions.” See C.A. No. 03-2887. A fifth

federal lawsuit was also dismissed.

       Appellants returned to state court and filed a complaint alleging malpractice by

their former attorneys during the first federal proceeding. They later amended their

complaint to add Hudson County Attorney Michael Dermody, who had been opposing

counsel in the first federal action, as a defendant. They alleged that Dermody conspired

with their former attorneys to have the first federal case dismissed. Dermody filed a

motion to dismiss which the state court denied. He then filed a motion for

                                              4
reconsideration. Dermody also filed a motion in the District Court requesting that the

District Court enjoin the state action against him. After learning that the state court had

stayed the case, the District Court held oral argument. On February 8, 2005, the District

Court entered an order enjoining the appellants from prosecuting the state court action or

filing an action in state or federal court against Dermody with respect to certain issues.

Appellants filed a notice of appeal, and we have jurisdiction pursuant to 28 U.S.C. §

1291.

        Our review of the District Court’s authority to issue an injunction under the Anti-

Injunction Act is de novo. In re Diet Drugs, 369 293, 304 (3d Cir. 2004). We review the

injunction for an abuse of discretion; legal issues are reviewed de novo, and factual issues

are reviewed for clear error. Id. The District Court set forth the lengthy procedural

history of the case and explicated the relevant case law. We have little to add to its

thorough opinion and write here briefly to address appellants’ arguments on appeal.

        On appeal, appellants argue that their allegations of malpractice against Dermody

have not been previously litigated. In ruling on appellants’ Rule 60(b) motion, the

District Court in the first federal case addressed their allegations that appellants’ attorneys

and opposing counsel were part of a secret alliance that improperly filed motions. Supp.

App. at 85-86. Appellants raised these claims in their second federal complaint. Id. at

121-130. In his order administratively staying the second federal case, the Magistrate

Judge concluded that “the substance of the facts which give rise to the various claims in



                                              5
the proceeding sub judice were decided on the merits against plaintiffs by Judge Bassler

in his March 19th Opinion and Order.” Id. at 164. In affirming the Magistrate Judge’s

decision, the District Court expressly noted that appellants could address the merits of the

dismissal when the case resumed. Id. at 188. Appellants never sought to lift the stay and

challenge this conclusion. In the fourth federal case, the District Court noted that

appellants had raised the same allegations of violations of filing procedures as the first

federal case. Id. at 287.

       Appellants argue on appeal that there is no need to protect and effectuate the

District Court’s prior judgment. However, in their second amended complaint in state

court, appellants alleged that Dermody knew the settlement was a fraud and that

appellants’ former attorneys “possessed evidence that would have voided the decision

issued on January 31, 2001.” Id. at 371. Appellants are clearly seeking to invalidate the

District Court’s judgment against them.

       We note that the crux of appellants’ allegations in the state court action is that

their former attorneys conspired with Dermody to “simulate” the motion process and

secretly file an unopposed motion to dismiss but not any opposition. This allegation is

contradicted by the District Court’s addressing of the arguments made in appellants’

opposition and its citation to several of appellants’ exhibits in its opinion. Id. at 65.

Appellants further allege in state court that the settlement was fraudulent. This issue was

clearly addressed in earlier state and federal court litigation. Moreover, we note that in



                                               6
denying the Rule 60(b) motion in the first federal action, the District Court concluded

“[p]laintiffs have not presented any new evidence or fraud that would change the outcome

of the motion to dismiss this action for failure to state a claim.” Id. at 97. Thus, it is hard

to imagine how appellants will prove prejudice.

       Because the District Court’s injunction of the ongoing state proceedings was

issued to effectuate its prior judgments and to protect appellee from future harassing

litigation, we will affirm the District Court’s February 8, 2005, and March 29, 2005,

orders. Appellant’s request for oral argument is denied.




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