Opinion
Bankruptcy No. 87-04169bf
03-06-2012
In re CANOE MANUFACTURING CO., INC. Debtor
STATEMENT OF REASONS IN SUPPORT OF ORDER
AND NOW, Mr. M. Robert Ullman, having filed on February 17, 2012 a "motion to reconsider" this court's order dated February 1, 2012, which order sustained objections thereto and denied Mr. Ullman's motion to reopen this closed chapter 7 case under 11 U.S.C. § 350(b),
And the instant motion for reconsideration is opposed by Joseph H. Jones, Esq. and the law firm of Williamson, Friedberg and Jones—the objectors to the previous motion to reopen,
And Fed. R. Bankr. P. 9023 incorporates in large part Fed. R. Civ. P. 59 into bankruptcy cases. However, Rule 9023 contains a 14-day deadline for motions seeking to alter or amend bankruptcy judgments or final orders. (Rule 59 contains a 28-day deadline.) As the instant motion for reconsideration was filed 16 days after entry of the February 1st order, the provisions of Rule 9023 are inapplicable. See, e.g., Allen v. Chapter 7 Trustee, 223 Fed. Appx. 770 (10th Cir. 2007); In re Alchar Hardware Co., Inc., 759 F.2d 867, 869 (11th Cir. 1985); see also, e.g., Fullman v. Postmaster General of U.S., 388 Fed.Appx. 89 (3d Cir. 2010) (non-precedential) (motion filed beyond the deadline cannot be considered under Rule 59(e)),
Effective December 1, 2009, the Rule 9023 deadline was increased from 10 days to 14 days. The 28-day deadline found in Rule 59(e), however, was not incorporated, owing to the shorter deadline for taking an appeal from a bankruptcy court decision. See Advisory Committee Note (2009). I also note that in 1995, the language of Rule 59(e) was changed so that the deadline is met by filing the motion with the court, and not by its service upon an opposing party.
And as the instant motion was filed within one year of the order complained of, I shall treat the motion as if seeking relief under Fed. R. Bankr. P. 9024, which procedural rule incorporates Fed. R. Civ. P. 60. See, Ahmed v. Dragovich, 297 F.3d 201,209 (3d Cir. 2002),
Indeed, the objectors have assumed that Mr. Ullman was seeking relief under Rule 9024. See Response to Motion, at 3 (unpaginated).
And Rule 60(a) does not apply in these circumstances, as there is no suggestion that the February 1st order was entered due to a clerical error,
And Rule 60(b) provides that a "court may relieve a party . . . from a final judgment, order or proceeding, for the following reasons:
1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud . . ., misrepresentation, or other misconduct of an adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or
(6) any other reason justifying relief from the operation of the judgment.
And a hearing need not be held to determine a motion for relief under Rule 9024. See United States v. 8136 S. Dobson Street, 125 F.3d 1076, 1086 (7th Cir. 1997) (federal court has "substantial discretion in determining whether to conduct an evidentiary hearing on a Rule 60(b) motion"); Atkinson v. Prudential Property Co., 43 F.3d 367, 374 (8th Cir. 1994) (same); see also Mincev v. Head, 206 F.3d 1106, 1124 (11 th Cir. 2000) (Rule 59(e) motion denied without a hearing),
And the purpose of Rule 60(b) is "to strike a proper balance between the conflicting principles that litigation must be brought to an end and that justice must be done." Moss v. Potter, 2007 WL 1726519, at *1 (W.D. Pa. 2007) (quoting Boughner v. Secretary of Health, Education, and Welfare, 572 F.2d 976, 977 (3d Cir. 1978)). The decision to grant or deny relief pursuant to Rule 60(b) is committed to the discretion of the trial court. See, e.g., Ibarra v. W.Q.S.U. Radio Broadcast Org., 218 Fed. Appx. 169 (3d Cir. 2007) (non-precedential) (and cases cited),
And Mr. Ullman asserts that the memorandum accompanying the February 1, 2012 order contained "errors of fact and law." In so contending, he does not present "newly discovered evidence" in support of his motion for reconsideration,
And newly discovered evidence refers to evidence that: (1) is material and not merely cumulative; (2) was not discoverable before trial through the exercise of reasonable diligence; and (3) would probably have changed the outcome of the trial. Compass Technology, Inc. v. Tseng Laboratories, Inc., 71 F.3d 1125, 1130 (3d Cir. 1995). The movant bears a "heavy burden," which requires "more than a showing of the potential significance of the new evidence." Bohus v. Beloff, 950 F.2d 919, 930 (3d Cir. 1991) (quoting Plisco v. Union R. Co.. 379 F.2d 15, 17 (3d Cir. 1967)). Relief should only be granted when "extraordinary justifying circumstances are present." Id,
And all of the exhibits attached to the instant motion were available to the movant prior to the February 1st adjudication, and most, if not all, of the exhibits were previously presented to this court and reviewed in connection with the February 1st ruling. To the extent Mr. Ullman is attaching copies of additional documents, he was fully aware of those documents when he filed his motion to reopen this bankruptcy case. As the objectors now contend in their response, ¶ 15, Mr. Ullman has not presented new evidence within the narrow scope of that phase,
And thus relief under Rule 60(b)(2) has not been demonstrated. See, e.g., Aquino v. U.S.. 2011 WL 2462936, at *2 (M.D. Pa. 2011),
In addition, as will be discussed below, none of the documents attached to the motion for reconsideration would alter the outcome of the challenged ruling.
And, for the following reasons, Mr. Ullman has not demonstrated that any other provisions of Rule 60(b) justify relief from the February 1st order denying reopening of this closed chapter 7 case,
And 11 U.S.C. § 350(b) permits a bankruptcy court to reopen a closed case,
And whether to reopen a bankruptcy case under 11 U.S.C. § 350(b) is subject to the discretion of the bankruptcy court. See, e.g., Donaldson v. Bernstein, 104 F.3d 547, 551 (3d Cir. 1997); Judd v. Wolfe, 78 F.3d 110, 116 (3d Cir. 1996); Matter of Case, 937 F.2d 1014, 1018 (5th Cir. 1991). The burden of demonstrating circumstances sufficient to justify the reopening is placed upon the moving party. See, e.g., In re Saunders, 2011 WL 671765, at *2 (Bankr. M.D. Ga. 2011); In re Redcay, 2007 WL 4270378, at *2 (Bankr. E.D. Pa. 2007); In re Cloninger. 209 B.R. 125, 126 (Bankr. E.D. Ark. 1997); In re Nelson, 100 B.R. 905 (Bankr. N.D. Ohio 1989),
And in exercising that discretion, a court should consider a variety of factors:
A bankruptcy judge may consider a number of nonexclusive factors in determining whether to reopen, including (1) the length of time that the case has been closed; (2) whether the debtor would be entitled to relief if the case were reopened; and (3) the availability of nonbankruptcy courts, such as state courts, to entertain the claims.Redmond v. Fifth Third Bank, 624 F.3d 793 798 (7th Cir. 2010); see, e.g., In re Antonious, 373 B.R. 400, 405-06 (Bankr. E.D. Pa. 2007),
And the February 1st order denying Mr. Ullman's motion to reopen this chapter 7 bankruptcy case that had been closed in 1995 was based primarily upon a determination that Mr. Ullman was seeking relief from this court, via reopening, that could not be provided. See, e.g., In re Rashid, 2004 WL 2861872, at *5 (E.D. Pa. 2004). In essence, he was seeking to overturn a state court summary judgment ruling that was entered against him and in favor of Mr. Jones and the law firm of Williamson, Friedberg and Jones in December 2005. This summary judgment was later affirmed by the Pennsylvania Superior Court, and further review was denied by the Pennsylvania and United States Supreme Courts,
And in seeking to overturn the state court judgment Mr. Ullman had focused his disagreement with the state court's interpretation of 11 U.S.C. § 554, which provision addresses abandonment of assets of the debtor. This court's February 1st ruling, however, emphasized that the state court's statutory interpretation of section 554 of the Bankruptcy Code was only a secondary basis for the state court's ruling adverse to Mr. Ullman. Its primary ground for granting summary judgment against Mr. Ullman was that his state law tort claims against Mr. Jones and his law firm were premised upon Mr. Ullman's contention that a letter dated March 31, 1986, sent by Meridian Bank to Mr. Ullman on behalf of Canoe, was a legal binding commitment to lend funds to Canoe. The state court, however, concluded that the March 31, 1986 letter was not a binding commitment to lend under Pennsylvania law, and accordingly the tort claims raised by Mr. Ullman were without foundation,
And my February 1st memorandum explained that this bankruptcy court had no power to review or reverse such a ruling,
And in Mr. Ullman's instant motion for reconsideration, the errors of fact and law of which he now complains concern the failure of this bankruptcy court to recognize that the March 31, 1986 letter was indeed a commitment letter. In other words, in his original motion to reopen, Mr. Ullman unsuccessfully tried to persuade me to review the state court's interpretation of section 554. In his present motion to reopen, he now shifts his focus to the state court's ruling that Canoe never received a commitment letter,
And in support of his instant contention that the state court wrongfully decided that the March 31, 1986 letter was not a commitment letter, Mr. Ullman makes reference to a Pennsylvania Superior Court Memorandum, dated January 2004, which memorandum refers to the March 31, 1986 correspondence as a commitment letter, and a petition filed with the Pennsylvania Supreme Court by Mr. Jones and his law firm in April 2004 that makes the same reference. Motion, at 5-6. Mr. Ullman also attaches a copy of the March 31, 1986 correspondence and copies of other documents that he now argues demonstrate that the state court erred in concluding otherwise. Motion, at 8-10,
And although the alleged error by the state court complained of in the present motion for reconsideration differs from the previous error asserted in the original motion, Mr. Ullman's intent in seeking to reopen this bankruptcy case remains unchanged: to have such alleged errors made in the state court's 2005 adjudication against him corrected in this forum,
And as I discussed in detail in the February 1st memorandum, at pp. 20-21, a bankruptcy court has no power to sit in review and correct purported errors of law made by a state court in litigation over which the state court properly exercised jurisdiction. See, e.g., In re Highway Truck Drivers & Helpers Local Union #107, 888 F.2d 293, 298-99 (3d Cir. 1989). Thus, Mr. Ullman's latest contention that the March 31, 1986 correspondence was a binding loan commitment letter does not warrant reconsideration of this court's denial of his motion to reopen this closed bankruptcy case under section 350(b) of the Bankruptcy Code, where the relief sought in reopening is a futile attempt to relitigate the state court issues. See Matter of Property Management and Inv. Inc., 19 B.R. 202, 204 (Bankr. M.D. Fla. 1982) (Rule 60(b) is not a basis for a federal bankruptcy court to overturn a valid order entered in state court),
And, viewed in the context of Rule 60(b), the February 1st order was entered after careful review of the submissions made by Mr. Ullman and the objectors. The present motion, albeit with a different focus, makes the same argument as Mr Ullman's prior motion (and without newly discovered evidence): the state court erred in granting summary judgment against him and this court should correct its erroneous judgment. This does not warrant relief under Rule 60(b)(6), see, e.g., Holland v. Holt, 409 Fed. Appx. 494, 497 (3d Cir. 2010) (non-precedential):
"[A] party seeking Rule 60(b)(6) relief must demonstrate the existence of 'extraordinary circumstances' that justify reopening the judgment." Budget Blinds, Inc. v. White, 536 F.3d 244, 255 (3d Cir. 2008) (footnote omitted). Holland showed no extraordinary circumstances. Indeed, he merely reargued the merits of his claim and reasserted his contention that he can proceed under § 2241.
And, moreover, the provisions of Rule 60(b)(3)-(5) are clearly inapplicable,
And as to Rule 60(b)(1), were this issue not foreclosed,1 am not persuaded that this court committed a mistake in ruling that a bankruptcy court has no power to review and reverse a validly entered state court judgment,
Under Third Circuit precedent, since legal errors are reviewable on appeal, once the appeal period has expired such errors cannot be reviewed by the trial court as "mistakes" under Rule 60(b)(1). Page v. Schweiker, 786 F.2d 150, 154-55 (3d Cir. 1986); see, e.g., Holland v. Holt, 409 Fed. Appx. at 497 n.4; James v. Virgin Islands Water and Power Authority, 119 Fed. Appx. 397, 401 (3d Cir. 2005) (non-precedential). Here, the appeal period under Fed. R. Bankr. P. 8002(a) expired before the instant motion was filed.
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Accordingly, an order will be entered denying the instant motion for reconsideration. See Ibarra v. W.Q.S.U. Radio Broadcast Org.
______________________
BRUCE FOX
United States Bankruptcy Judge