                  FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

ELIZABETH ALBRIGHT LATSHAW,             
                 Plaintiff-Appellant,
                                              No. 03-57230
                  v.
TRAINER WORTHAM & COMPANY,                     D.C. No.
                                            CV-03-04104-JFW
INC., a corporation; ROBERT J.
                                               OPINION
VILE, a natural person,
              Defendants-Appellees.
                                        
        Appeal from the United States District Court
           for the Central District of California
         John F. Walter, District Judge, Presiding

                  Argued and Submitted
          October 20, 2005—Pasadena, California

                      Filed July 6, 2006

      Before: Harry Pregerson, Richard R. Clifton, and
               Jay S. Bybee, Circuit Judges.

                  Opinion by Judge Clifton




                             7497
7500        LATSHAW v. TRAINER WORTHAM & CO.


                       COUNSEL

Harry Steinberg (argued), Lester Schwab Katz & Dwyer,
LLP, New York, New York, for the plaintiff-appellant.

Daniel J. Tyukody, Robert D. Weber (argued), Clifford
Chance US LLP, Los Angeles, California, for the defendants-
appellees.
             LATSHAW v. TRAINER WORTHAM & CO.            7501
                         OPINION

CLIFTON, Circuit Judge:

   Plaintiff Elizabeth Latshaw appeals the district court’s
denial of her motion under Rule 60(b) of the Federal Rules of
Civil Procedure for relief from a judgment. The judgment
resulted from her acceptance of an offer of judgment under
Rule 68 of the Federal Rules of Civil Procedure. Latshaw
argues that she accepted the offer under coercion from and
based upon fraud by her counsel, who allegedly gave her erro-
neous legal advice and threatened to resign from the case if
Latshaw did not accept the offer. We are not persuaded and
affirm the decision of the district court. Generally speaking,
Rule 60(b) is not intended to remedy the effects of a deliber-
ate and independent litigation decision that a party later
comes to regret through second thoughts or subsequently-
gained knowledge that corrects prior erroneous legal advice of
counsel. The district court’s refusal to relieve Latshaw from
her decision was not an abuse of discretion.

I.   Background

  Latshaw hired Trainer Wortham & Company, Inc., an
investment management firm, to manage approximately $1.65
million of her assets. Robert Vile, a Trainer portfolio man-
ager, was responsible for handling Latshaw’s account.
Latshaw claims that defendants Trainer and Vile failed to fol-
low her stated investment instructions and objectives, ulti-
mately causing her to sustain substantial financial losses.

   Latshaw commenced an action in Los Angeles Superior
Court, claiming over $800,000 in damages. Latshaw was rep-
resented by a Missouri-based attorney, Diane Nygaard, and
local California counsel, David Harrison. Latshaw’s claims
included breach of oral and written contract, breach of fidu-
ciary duty, fraud, constructive fraud, negligence, and negli-
7502            LATSHAW v. TRAINER WORTHAM & CO.
gent supervision. The defendants removed the action to
federal district court.

   Six weeks later, the defendants served Latshaw with a
$15,000 offer of judgment under Rule 68. The events follow-
ing the defendants’ offer and leading up to Latshaw’s accep-
tance of the offer are in some dispute.1 Latshaw contends that
she and her two attorneys initially considered the offer grossly
insufficient. Days later, however, Latshaw was allegedly
informed that her attorneys had lost interest in the case and
hoped to convince her to accept the offer. Latshaw asserts that
when she confronted Nygaard with this information, Nygaard
admitted that she and Harrison intended to resign from the
case and erroneously stated that Latshaw would be liable for
costs and attorneys’ fees, which would be “enormous,” if
Latshaw rejected the offer and the offer exceeded her ultimate
judgment. In fact, Latshaw would have only been liable for
the defendants’ costs, not attorneys’ fees, if she rejected the
offer and the offer exceeded her ultimate judgment. See Fed.
R. Civ. P. 68 (“If the judgment finally obtained by the offeree
is not more favorable than the offer, the offeree must pay the
costs incurred after the making of the offer.”).

   Latshaw contends that erroneously “[b]elieving I was with-
out counsel . . . and would be liable for all Defendants’ attor-
neys fees and costs, and, moreover that I had to sign by
August 4, I reluctantly signed [the acceptance of the offer]
because I felt I had no choice.” After Latshaw completed her
portion of the acceptance, Nygaard signed her own name and
Harrison’s name to the document and arranged for its filing.
Judgment on the agreed-upon terms was entered by the dis-
trict court soon thereafter.
  1
    For purposes of our discussion, we accept Latshaw’s description of the
events. We note that Nygaard and Harrison are not parties to this action
and have not had an opportunity to respond to Latshaw’s charges. We do
not reach any conclusion with regard to the validity of the factual allega-
tions.
              LATSHAW v. TRAINER WORTHAM & CO.              7503
   Latshaw claims that she subsequently learned Nygaard had
deceived her when Latshaw discovered that her California
attorney had not intended to desert the case. Further, Latshaw
learned she would not have been liable for the defendants’
attorneys’ fees had she rejected the offer, also contrary to
Nygaard’s statement.

   Accordingly, two months after entry of the judgment,
Latshaw filed in the district court a Motion to Rescind and
Vacate Acceptance of Defendants’ Offer of Judgment under
Federal Rule of Civil Procedure 60(b). Notably, Latshaw did
not fault the conduct of the defendants, whom she admitted
“were proceeding [with the agreement] in good faith.” Rather,
Latshaw faulted the conduct of her own counsel. Latshaw
contends that she was the victim of Nygaard’s fraud and coer-
cion, as Nygaard, “for her own reasons, misled Latshaw,
inducing her to execute an offer of judgment, contrary to her
interest, and contrary to the advice of record counsel.”
Latshaw cited Rule 60(b)(1), (3), and (6), seeking to set aside
the judgment based upon, respectively, mistake, fraud, and
“any other reason justifying relief.” The district court denied
Latshaw’s requested relief. This appeal followed.

II.   Discussion

   We review the denial of Rule 60(b) motions for an abuse
of discretion. See Molloy v. Wilson, 878 F.2d 313, 315 (9th
Cir. 1989). Under this standard, we can reverse only if a dis-
trict court “does not apply the correct law, rests its decision
on a clearly erroneous finding of a material fact, or applies the
correct legal standard in a manner that results in an abuse of
discretion.” Engleson v. Burlington Northern Railroad Co.,
972 F.2d 1038, 1043 (9th Cir. 1992).

A.    Rule 60(b)(1)

   [1] Rule 60(b)(1) provides, “On motion . . . the court may
relieve a party or a party’s legal representative from a final
7504         LATSHAW v. TRAINER WORTHAM & CO.
judgment, order, or proceeding for . . . mistake, inadvertence,
surprise, or excusable neglect.” Latshaw argues that she is
entitled to relief under subsection (b)(1) because, but for two
mistaken understandings on her part, she would not have
signed the acceptance. These alleged “mistakes,” both pur-
portedly originating from Nygaard, were Latshaw’s erroneous
beliefs (1) that she might be liable for defendants’ attorneys’
fees if she did not sign the offer of judgment, and (2) that both
of her attorneys intended to resign.

   The district court denied relief, noting that Latshaw’s “de-
cision to execute the acceptance, regardless of whether that
decision was founded upon bad advice or misinformation,
created a binding contract,” and that Rule 60(b)(1) relief is
unavailable to parties who simply misunderstand the legal
consequences of their deliberate acts.

   [2] Our court has not yet determined whether such attorney
error can provide grounds to vacate a judgment under the mis-
take ground of Rule 60(b)(1). We have, however, declined
similar requests for relief put forth as “excusable neglect,”
which is another ground to set aside a judgment under subsec-
tion (b)(1). See Casey v. Albertson’s, Inc., 362 F.3d 1254,
1260 (9th Cir. 2004) (“As a general rule, parties are bound by
the actions of their lawyers, and alleged attorney malpractice
does not usually provide a basis to set aside a judgment pursu-
ant to Rule 60(b)(1).”); Engleson, 972 F.2d at 1043 (“Neither
ignorance nor carelessness on the part of the litigant or his
attorney provide grounds for relief under Rule 60(b)(1).”)
(internal quotation marks and citation omitted). We find it
proper to extend our refusal to provide relief on account of
excusable neglect to the alleged attorney-based mistakes of
law at issue here.

  [3] Other circuits have considered this question and have
held likewise. In a case factually similar to ours, the Seventh
Circuit considered whether a Rule 68 offer could be rescinded
where the defendant’s counsel operated under a mistake of
             LATSHAW v. TRAINER WORTHAM & CO.              7505
law, incorrectly assuming that costs and fees would be
included in the offer amount. Webb v. James, 147 F.3d 617
(7th Cir. 1998). The court concluded that the mistake was not
excusable under Rule 60(b)(1), holding that the “district court
was not obliged to relieve [the defendant] of the burden of a
. . . mistake of law regarding the effect of [the governing
Supreme Court case] or the attorney’s fees provision of the
ADA.” Id. at 622; see also Acevedo-Garcia v. Vera-Monroig,
368 F.3d 49, 54 (1st Cir. 2004) (holding that a mistake of law
is not a “mistake” for Rule 60(b)(1) purposes); McCurry ex
rel. Turner v. Adventist Health System/Sunbelt, Inc., 298 F.3d
586, 595 (6th Cir. 2002) (holding “that out-and-out lawyer
blunders — the type of action or inaction that leads to suc-
cessful malpractice suits by the injured client — do not qual-
ify as ‘mistake’ or ‘excusable neglect’ within the meaning of
Rule 60(b)(1)”) (citation and quotation marks omitted); Yapp
v. Excel Corp., 186 F.3d 1222, 1231 (10th Cir. 1999) (“[A]
party who simply misunderstands or fails to predict the legal
consequences of his deliberate acts cannot later, once the les-
son is learned, turn back the clock to undo those mistakes.”);
Cashner v. Freedom Stores, Inc., 98 F.3d 572, 577 (10th Cir.
1996) (“If the mistake alleged is a party’s litigation mistake,
we have declined to grant relief under Rule 60(b)(1) when the
mistake was the result of a deliberate and counseled decision
by the party.”); United States v. Bank of New York, 14 F.3d
756, 759 (2d Cir. 1994) (“When a party makes a deliberate,
strategic choice to settle, she cannot be relieved of such a
choice merely because her assessment of the consequences
was incorrect.”).

   [4] We agree that Rule 60(b)(1) is not intended to remedy
the effects of a litigation decision that a party later comes to
regret through subsequently-gained knowledge that corrects
the erroneous legal advice of counsel. For purposes of subsec-
tion (b)(1), parties should be bound by and accountable for
the deliberate actions of themselves and their chosen counsel.
This includes not only an innocent, albeit careless or negli-
gent, attorney mistake, but also intentional attorney miscon-
7506           LATSHAW v. TRAINER WORTHAM & CO.
duct. Such mistakes are more appropriately addressed through
malpractice claims. See also United States v. Prairie Phar-
macy, Inc., 921 F.2d 211, 214 (9th Cir. 1990).

    [5] Accordingly, neither of Latshaw’s alleged mistakes are
among those that Rule 60(b)(1) is intended to remedy. Even
if Latshaw genuinely believed that her counsel intended to
resign or that she may have been liable for the defendants’
attorneys’ fees, Latshaw’s beliefs do not provide grounds to
rescind her acceptance. These mistakes, if true, arose from
attorney misconduct. A party will not be released from a poor
litigation decision made because of inaccurate information or
advice, even if provided by an attorney. Latshaw’s decision to
accept the offer was deliberate and independent. In such situa-
tions, regret caused by new knowledge does not justify
rescinding a decision.

   Latshaw also contends that her mistaken beliefs entitle her
to Rule 60(b)(1) relief because she did not possess sufficient
understanding to have ever validly accepted the offer.
Latshaw cites a passage from a decision by the Eighth Circuit:
“[W]hen considering a Rule 68 offer, the offeree needs to
have a clear understanding of the terms of the offer in order
to make an informed decision whether to accept it.” Radecki
v. Amoco Oil Co., 858 F.2d 397, 403 (8th Cir. 1988). This
argument lacks merit. Misunderstanding an offer’s terms is
not the same as misunderstanding factors to be weighed in
deciding to accept the offer. Latshaw understood the unam-
biguous settlement terms — that she would receive $15,000
in exchange for terminating the litigation — when signing the
offer of judgment. The district court did not abuse its discre-
tion in denying Latshaw relief under Rule 60(b)(1).

B.     Rule 60(b)(3)

   [6] Rule 60(b)(3) permits relief “from a final judgment . . .
for . . . fraud . . . or other misconduct of an adverse party.”
Citing subsection (b)(3), Latshaw contends that Nygaard com-
              LATSHAW v. TRAINER WORTHAM & CO.               7507
mitted two fraudulent acts sufficient to warrant Rule 60(b)
relief: (1) Nygaard misinformed Latshaw that she could be
liable for the defendants’ legal fees, and (2) Nygaard misin-
formed Latshaw that Harrison intended to resign. Latshaw
argues that Nygaard’s fraud, in part, induced Latshaw to sign
the Rule 68 offer. The district court again denied Latshaw’s
requested relief, noting that Latshaw “expressly instructed her
counsel to file the acceptance,” a situation “clearly” not
among those meriting relief as fraud.

   [7] We agree. Even if it is true that Nygaard committed
fraud, the district court did not abuse its discretion in conclud-
ing that the circumstances failed to warrant Rule 60(b)(3)
relief. Subsection (b)(3) permits relief only when the fraud
was committed by “an adverse party.” See In re Grantham
Bros., 922 F.2d 1438, 1442-43 (9th Cir. 1991) (declining to
apply Rule 60(b)(3) where fraud was committed by the appel-
lant’s clients in part because the rule “is aimed at fraud perpe-
trated by an adverse party”). Thus, in order to prevail on a
Rule 60(b)(3) motion, the defendants must have committed
the fraud at issue. Here, however, Nygaard represented
Latshaw herself, not an adverse party. Meanwhile, the defen-
dants were innocent bystanders. Since Nygaard’s alleged
fraud adversely affected only her own client, Latshaw cannot
satisfy the express “adverse party” requirement of Rule
60(b)(3).

C.   Rule 60(b)(6)

   [8] Rule 60(b)(6) provides that, on motion, “the court may
relieve a party or a party’s legal representative from a final
judgment, order, or proceeding for . . . any other reason [in
addition to those categories specified in Rules 60(b)(1) - (5)]
justifying relief from the operation of the judgment.” Latshaw
argues that we should vacate the Rule 68 judgment pursuant
to Rule 60(b)(6) for two reasons, contending that Nygaard’s
(1) alleged gross negligence, and (2) “fraud on the court” both
“justify relief from the operation of the judgment.”
7508            LATSHAW v. TRAINER WORTHAM & CO.
   The defendants counter that Nygaard’s conduct failed to
meet the savings clause standard. The district court denied
Latshaw’s request for relief under 60(b)(6) without reaching
its merits.2 We will address each of Latshaw’s two arguments
in turn.

   [9] Judgments are not often set aside under Rule 60(b)(6).
Rather, the Rule is “ ‘used sparingly as an equitable remedy
to prevent manifest injustice’ and ‘is to be utilized only where
extraordinary circumstances prevented a party from taking
timely action to prevent or correct an erroneous judgment.’ ”
United States v. Washington, 394 F.3d 1152, 1157 (9th Cir.
2005) (quoting United States v. Alpine Land & Reservoir Co.,
984 F.2d 1047, 1049 (9th Cir. 1993)). Accordingly, a party
who moves for such relief “must demonstrate both injury and
circumstances beyond his control that prevented him from
proceeding with . . . the action in a proper fashion.” Commu-
nity Dental Services v. Tani, 282 F.3d 1164, 1168 (9th Cir.
2002).

   [10] Relying on our decision in Tani, Latshaw first argues
that Nygaard’s alleged gross negligence constitutes an “ex-
traordinary circumstance” meriting relief under Rule 60(b)(6).
In Tani, we held that the plaintiff was entitled to Rule
60(b)(6) relief from a default judgment on account of his
counsel’s gross negligence. There, the attorney ignored court
orders, neglected motions, missed hearings and other court
appearances, failed to file pleadings or serve them on oppos-
ing counsel, and otherwise “virtually abandoned his client by
failing to proceed with his client’s defense despite [repeated]
court orders to do so,” comprehensively amounting to “the
  2
    The district court declined to consider Latshaw’s Rule 60(b)(6) motion
because Latshaw “failed to raise and argue her claim under Rule 60(b)(6)
in her moving papers.” Latshaw argues that she discussed her subsection
(b)(6) claim sufficiently to warrant consideration. Since we conclude that
Latshaw is ineligible for Rule 60(b)(6) relief on the claim’s merits, we
need not determine whether the district court abused its discretion in refus-
ing to consider the claim.
             LATSHAW v. TRAINER WORTHAM & CO.               7509
client’s receiving practically no representation at all.” Id. at
1170-71. Pursuant to Tani, in the context of default judg-
ments, we now distinguish between “a client’s accountability
for his counsel’s neglectful or negligent acts[, which does not
merit Rule 60(b)(6) relief,] and his responsibility for the more
unusual circumstance of his attorney’s extreme negligence or
egregious conduct[, which does].” Id. at 1168.

   Latshaw’s analogy between her factual circumstances and
those in Tani, however, is without merit. Our decision in Tani
was explicitly premised upon the default judgment context of
the case. Id. at 1169 (concluding that “where [a] client has
demonstrated gross negligence on the part of his counsel, a
default judgment against the client may be set aside pursuant
to Rule 60(b)(6),” and, continuing, “[o]ur holding is consis-
tent with the well-established policy considerations that we
have recognized as underlying default judgments and Rule
60(b)”); see Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)
(noting that Rule 60(b), as applied to default judgments, is
“remedial in nature and . . . must be liberally applied. [Default
judgments are] appropriate only in extreme circumstances; a
case should, whenever possible, be decided on the merits.”);
see also TCI Group Life Insurance Plan v. Knoebber, 244
F.3d 691, 699 (9th Cir. 2001).

    [11] Latshaw argues that Rule 68 judgments should be
treated like default judgments, and that we should similarly
act “liberally” to reverse a Rule 68 acceptance and allow full
litigation on the merits. We disagree. Rule 68 judgments and
default judgments are quite different. Default judgments are
disfavored and appropriate only in unique circumstances.
Falk, 739 F.2d at 463. Rule 68 offers and acceptances, how-
ever, are actively supported by courts. Indeed, the very pur-
pose of Rule 68 is to encourage termination of litigation.
United States v. Trident Seafoods Corp., 92 F.3d 855, 860
(9th Cir. 1996). We decline to extend the holding of Tani to
the context of Rule 68 judgments and therefore conclude that
7510          LATSHAW v. TRAINER WORTHAM & CO.
Nygaard’s alleged gross negligence does not provide grounds
to vacate the judgment under Rule 60(b)(6).

   [12] Second, Latshaw argues that the Rule 68 judgment
should be set aside on account of Nygaard’s alleged forgery
of Harrison’s signature on the acceptance of the offer, which
was then submitted to the court. Acts of “fraud on the court”
can sometimes constitute extraordinary circumstances merit-
ing relief under Rule 60(b)(6). See In re Intermagnetics Amer-
ica, Inc., 926 F.2d 912, 916-17 (9th Cir. 1991). Such fraud on
the court “embrace[s] only that species of fraud which does
or attempts to, defile the court itself, or is a fraud perpetrated
by officers of the court so that the judicial machinery can not
perform in the usual manner its impartial task of adjudging
cases that are presented for adjudication.” Alexander v. Rob-
ertson, 882 F.2d 421, 424 (9th Cir. 1989) (quoting 7 J. Moore
& J. Lucas, Moore’s Federal Practice ¶ 60.33, at 515 (2d ed.
1978)).

   Liberal application is not encouraged, as fraud on the court
“should be read narrowly, in the interest of preserving the
finality of judgments.” Toscano v. Comm’r, 441 F.2d 930,
934 (9th Cir. 1971). Our court places a high burden on a
plaintiff seeking relief from a judgment based on fraud on the
court. For example, in order to provide grounds for relief, the
fraud must “involve an ‘unconscionable plan or scheme which
is designed to improperly influence the court in its deci-
sion.’ ” Abatti v. Comm’r, 859 F.2d 115, 118 (9th Cir. 1988)
(quoting Toscano, 441 F.2d at 934).

   [13] Even though it may have been fraud to forge a signa-
ture and the fraud may have reached the court, Nygaard’s
alleged conduct falls far short of “defiling the court itself” and
hardly resembles an “unconscionable plan or scheme which is
designed to improperly influence the court in its decision.”
While Latshaw is left with a Rule 68 judgment with which
she is unhappy, the integrity of the judicial process has not
been impaired. We find it significant that vacating the judg-
             LATSHAW v. TRAINER WORTHAM & CO.               7511
ment would in fact “ ‘punish’ parties who are in no way
responsible for the ‘fraud.’ ” See Alexander, 882 F.2d at 425.
The district court did not abuse its discretion in denying relief
for fraud on the court under Rule 60(b)(6).

   [14] Latshaw knowingly and voluntarily signed the Rule 68
acceptance. Though Latshaw’s decision may have been driven
by inept or erroneous advice or conduct of her counsel, nei-
ther the alleged negligence at issue nor the purported fraud on
the court fall among those exceptional circumstances meriting
Rule 60(b)(6) relief.

III.   Conclusion

   [15] The district court did not abuse its discretion in deny-
ing Latshaw relief under Rule 60(b) from the judgment that
resulted from her acceptance of the Rule 68 offer of judg-
ment.

  AFFIRMED.
