Opinion
CASE NO. 05-13794-H11.
November 20, 2006
On October 25, 2006, judgment was entered against T. Edward Malpass ("Malpass") requiring him to disgorge the amount of $80,843.00 to the Chapter 11 trustee, Richard M. Kipperman. The findings of fact and law supporting the judgment are set forth in a written Memorandum Decision dated October 4, 2006 (the "MD").
Malpass filed an Emergency Motion for Stay of Enforcement of Order, For Modification of Order Regarding Terms of Payments, to Set Hearing and Briefing Schedule on Motion to Vacate, and For Related Relief on November 6, 2006 (the "Emergency Motion") and a Motion to Vacate order, For New Hearing, For Alteration of Findings and Modification or Amendment of Order, For Stay of Enforcement, For Related Relief also on November 6, 2006 (the "Motion to Vacate") [see docket #172, 173].
Subsequently, Malpass and the United States Trustee ("UST") entered into a stipulation to stay the enforcement of the judgment until November 17, 2006, to allow this Court an opportunity to review his Motion to Vacate and subsequently filed supplement (the "November 13 Motion") and Supplement to the Emergency Motion and attached declaration (the "November 15 Motion" or "November 15 Declaration") [see docket #175 and #179].
Malpass brings his motions pursuant to Federal Rules Bankruptcy Procedure ("FRBP") 7052, 7062, 9023 and 9024 and 11 U.S.C. § 105(a). Pursuant to this Court's internal practice and procedure, the Court reviews post-judgment motions such as these on the merits before setting them for hearing. The Court has reviewed the various pleadings and finds it inappropriate to set a hearing for the reasons stated herein.
I. REQUEST FOR NEW HEARING; EVIDENTIARY HEARING
In the Emergency Motion, Motion to Vacate, November 13 Motion, and November 15 Motion, Malpass repeatedly states that he was never given the opportunity for an evidentiary hearing with respect to his employment under 11 U.S.C. § 327 or his request for nunc pro tunc employment. He also argues that he was denied an evidentiary hearing with respect to the United States Trustee's ("UST") disgorgement motion.
As noted in the MD, several hearings were held regarding Malpass' employment and the UST's motion, and the issues relating to both were fully briefed. At the July 18, 2006, hearing, the Court instructed Malpass to file a declaration by September 15, 2006, as to why the matters may not be submitted on the pleadings. [see Minute Order docket #120]. Thus, the Court gave Malpass almost two months to proffer evidence as to why he needed an evidentiary hearing and the Court set the date well beyond the final date imposed upon the UST and Malpass for filing additional briefs.
In Malpass' September 15, 2006, declaration entitled "Declaration of T. Edward Malpass Regarding Hearing on Fee Matters," he stated "To attempt to comply with my understanding of the Court's instructions regarding the filing of this Declaration, I do not think that the Court needs to conduct any further hearings. . . ." [see docket #149 2:15-22]. Malpass then further declares at paragraph 10, "If the Court is going to proceed further, I request that I be given an opportunity to present evidence and be heard. My position is that the Court does not need to conduct additional proceedings and should exercise its discretion not to do so. If it does conduct additional proceedings, I want an opportunity to address particular matters where I have notice of what I need to respond to and an opportunity to present evidence and argument." [Id. at 4:23-28]. Malpass declares in paragraph 13 "If the Court is going to conduct further proceedings, it should provide specification of what they are and allow them to proceed in an orderly fashion with notice." [Id. 5:16-17].
Malpass' declaration appeared to be directed at requesting the Court to simply defer ruling on the matter and, therefore, no additional hearings would be necessary. Evidently, if the Court did not defer its rulings on the issues which were already fully briefed, Malpass wanted the Court to conduct additional hearings and specify what the hearings would be about.
The Court's directions to Malpass were clear, yet nowhere in Malpass' declaration does he mention that he wants to testify, cross examine the UST, Tiffany Carroll, or his client. Nowhere in Malpass' declaration does he discuss the merits of an evidentiary hearing. It was not up to the Court to set additional hearings and "specify" what the hearings would be about. Accordingly, the Court noted in its MD that Malpass "has not proffered any facts which demonstrate why an evidentiary hearing would be necessary and the Court cannot find any." [See MD 19:15-28; 20:3-8].
The Court can not understand why Malpass would need to testify when he has submitted numerous declarations in connection with his employment and disgorgement. see In re Adair, 965 F.2d 777 (9th Cir. 1992) (allows declaration in lieu of testimony).
Malpass' various motions and declaration fail to set forth any grounds for an evidentiary hearing at this late date. Malpass contends that he wants an opportunity to file additional declarations, an opportunity to testify on his own behalf, and to present witnesses, including testimony from his former client and, if necessary, from Ms. Carroll, creditors, with regard to both waiver of conflict and the value of his services, and other evidence as may be necessary to address the issues the Court addressed, and to present additional evidence on the grounds discussed in the motion. [see November 15 Motion 2:15-26; November 13 Motion: 6:21-22]. Malpass also requests the Court to conduct a hearing and determine, and clarify and amend its Order, with regard to whether money paid by Malpass to the Chapter 11 Trustee is property of the estate in the Harlan's case.
This Court previously gave Malpass numerous opportunities to file additional pleadings and present evidence. Malpass has not argued that he has any "new" evidence. Moreover, the Court cannot find that testimony from Mr. Harlan or creditors regarding either waiver of conflict and the value of his services are relevant to the issues at hand. Lastly, it is unnecessary at this juncture, and within the context of Malpass' various motions, for this Court to determine whether the disgorged funds are property of the estate since the Harlans and the Chapter 11 Trustee have entered into a stipulation regarding the funds. [see docket #143]. To the extent the UST objects to the debtors' disclosure statement because it conflicts with this Court's MD and subsequent order, those issues can be addressed at the hearing for the disclosure statement.
The Court therefore denies Malpass' request for an evidentiary hearing.
II. MOTION TO VACATE ORDER; FOR ALTERATION OF FINDINGS AND MODIFICATION OR AMENDMENT OF ORDER
A. Federal Rule Bankruptcy Procedure 7052(b); Federal Rule Bankruptcy Procedure 9023
Federal Rule Bankruptcy Procedure 7052(b), which incorporates Federal Rule Civil Procedure ("FRCP") 52, provides in part:
On a party's motion filed no later than 10 days after entry of judgment, the court may amend its findings or make additional findings — and may amend the judgment accordingly. The motion may accompany a motion for a new trial under Rule 59.
Malpass filed his Emergency Motion and Motion to Vacate within the 10 day period. [see docket #172, 173]. The UST and Malpass stipulated that he could supplement his Motion to Vacate by November 13, 2006. The stipulation was signed by the Court. [see docket #175].
"To warrant alteration or amendment of court's decision, moving party must show: (a) manifest error of law and fact, or (b) existence of newly discovered evidence which was not available at time of original hearing." Weiner v. Perry, Settles Lawson, Inc. (In re Weiner), 208 B.R. 69, 72 (B.A.P. 9th Cir. 1997) rev'd on other grounds 161 F.3d 1216 (9th Cir. 1998).
Federal Rule 9023, which incorporates FRCP 59 provides in part:
(a) Grounds. A new trial may be granted to all or any of the parties and on all or part of the issues . . . (2) in an action tried without a jury, for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of the United States . . . the court may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment.
(e) Motion to Alter or Amend Judgment. Any motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment.
The "reasons" for granting a motion for a new trial under FRCP 59(a)(2) is appropriate if the moving party demonstrates a manifest error of fact, a manifest error of law, or newly discovered evidence. Janas v. Marco Crane Rigging Co. (In re JWJ Contracting Co.), 287 B.R. 501, 514 (B.A.P. 9th Cir. 2002). Similarly, under FRCP 59(e), a party may move the court to alter or amend its judgment, so long as: (1) the court is presented with newly discovered evidence, (2) the court committed clear error or the initial decision was manifestly unjust, or (3) there is an intervening change in controlling law. Circuit City Stores, Inc. v. Mantor, 417 F.3d 1060, 1064 at n. 1 (9th Cir. 2005) (citation omitted); see also Brown v. Wright, 588 F.2d 708, 710 (9th Cir. 1978) (the three grounds generally acknowledged for granting a motion for reconsideration are: (1) manifest error of law; (2) manifest error of fact; or (3) newly discovered evidence). Thus, under either FRBP 7052 or 9023, Malpass must show either a manifest error of fact or law or the existence of newly discovered evidence.
Malpass' arguments appear to be based on perceived errors of fact or law and not on the existence of newly discovered evidence. Malpass' arguments focus in three general areas: 1) his employment under 11 U.S.C. § 327; 2) his employment on a nunc pro tunc basis; and 3) the value of his services.
The Court has reviewed Malpass' motions and declaration and its MD. The Court is of the opinion that there has been no error of law or fact. The Court's findings were based on the record, which was fully developed, and its interpretation of legal authorities. Malpass reargues points already made or raises new arguments that should have been made earlier. One Court noted: "Initial arguments are not to be treated as a dress rehearsal for a second attempt to prevail on the same matter. Counsel is also expected to `get it right' the first time and to present all the arguments which counsel believes support its position." Wall Street Plaza LLC v. JSJF Corp. (In re JSJF Corp.), 344 B.R. 94, 103 (B.A.P. 9th Cir. 2006); see also Hale v. United States Trustee (In re Basham), 208 B.R. 926, 934 (B.A.P. 9th Cir. 1997) (merely restating the same arguments that were previously raised and rejected by court not sufficient); Matter of McDaniel,
The Court considered all the evidence, but had no obligation to mention all the evidence it considered in the MD. Tevis v. Wilke, Fleury, et al. (In re Tevis), 347 B.R. 679, 696 (B.A.P. 9th Cir. 2006).
217 B.R. 348, 350 (Bankr. N.D. Ga. 1998) (Rule 59(e) "is not designed to furnish a vehicle by which a disappointed party may reargue matters already argued and disposed of, nor is it aimed at providing a mechanism by which new arguments or legal theories, which could and should have been raised prior to the issuance of judgment, can be later advanced") (citations omitted).
The Court, therefore, denies Malpass' request to vacate its order and for alteration of findings and modification or amendment of order under FRBP 9023 and 7052.
B. Federal Rule Bankruptcy Procedure 9024
Federal Rule Bankruptcy Procedure 9024 incorporates FRBP 60 entitled "Relief from Judgment or Order." There are numerous grounds for relief from a judgment or order set forth in 60(b), none of which are mentioned or analyzed by Malpass. This Court will not attempt to guess at what subsection under 60(b) Malpass seeks relief.
III. STAY OF ENFORCEMENT
Federal Rule Bankruptcy Procedure 7062(b), incorporates FRCP 62(b). Rule 62 provides in pertinent part:
(b) Stay on Motion for New Trial or for Judgment: In its discretion and on such conditions for the security of the adverse party as are proper, the court may stay the execution of or any proceedings to enforce a judgment pending the disposition of a motion for a new trial or to alter or amend a judgment made pursuant to Rule 59, or of a motion for relief from a judgment or order made pursuant to Rule 60, . . ., or of a motion for amendment to the findings or for additional findings made pursuant to Rule 52(b).
"Rule 62(b) grants authority to the district court to stay a judgment while it considers and disposes of Rule 60 motions." In re Zapata Gulf Marine Corp., 941 F.2d 293, 295 (5th Cir. 1991). It appears to the Court that the plain text of Rule 62(b) permits the Court to issue a stay of proceedings to enforce a judgment in situations such as this where the party against whom enforcement is sought is challenging the validity of the underlying judgment pursuant to Federal Rules of Bankruptcy Procedure 9052, 9023 and 9024.
Having denied Malpass' motions under FRBP 7052, 9023 and 9024, his request for a stay under FRBP 7062 is moot.
In his supplemental declaration, Malpass sets forth arguments regarding his financial condition and ability to pay. While sympathetic to his situation, the Court finds that exercising its equitable powers under § 105 would be inappropriate under these circumstances. There is nothing that prohibits Malpass from negotiating a payment plan with the Chapter 11 trustee.
IV. CONCLUSION
The Court denies the relief requested by Malpass in its entirety.
IT IS SO ORDERED.