Blachy v. Butcher

190 F.R.D. 428, 83 A.F.T.R.2d (RIA) 1584, 1999 U.S. Dist. LEXIS 3327, 1999 WL 628288
CourtDistrict Court, W.D. Michigan
DecidedMarch 10, 1999
DocketNo. 1:91-CV-979
StatusPublished
Cited by2 cases

This text of 190 F.R.D. 428 (Blachy v. Butcher) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blachy v. Butcher, 190 F.R.D. 428, 83 A.F.T.R.2d (RIA) 1584, 1999 U.S. Dist. LEXIS 3327, 1999 WL 628288 (W.D. Mich. 1999).

Opinion

OPINION

QUIST, District Judge.

The Court has before it the following: (1) Motion of all Defendants, except the United States (the “Butcher Defendants”), for reconsideration of the Court’s Opinion and Order dated December 14, 1998; (2) the Butcher Defendants’ supplemental motion for reconsideration of the Court’s December 14, 1998, Opinion and Order; (3) the United States’ Motion to Alter or Amend or at Least to Clarify the Opinion and Order dated December 14, 1998; and (4) Correspondence from Plaintiffs’ counsel dated January 5, 1999, which the Court will deem Plaintiffs’ response to the Butcher Defendants’ motion for reconsideration. For the reasons stated below, the Court will deny the Butcher Defendants’ motion and supplemental motion for reconsideration and grant and deny in part the United States’ motion to alter, amend, or clarify.

I. Supplemental Motion for Reconsideration

The Court will first address the Butcher Defendants’ supplemental motion for reconsideration because it relates to the February 1, 1999, Order for service on Rosemary Butcher, which the Court issued in response to the motion for reconsideration. In their motion for reconsideration, the Butcher Defendants argue that the Court’s December 14,1998, Opinion and Order were not binding on Rosemary because she was not yet a defendant in this action and, therefore, the Court was without personal jurisdiction over her. The Court agreed and issued its February 1, 1999, Order for service. The Butcher Defendants contend in their supplemental motion that Rosemary should be relieved from the Court’s December 14, 1998, Order because the Court had no authority to assert personal jurisdiction over Rosemary after entering a final Order. The other Butcher Defendants argue that they are entitled to relief from the Court’s December 14, 1998, Order because they had no interest in the property.

The Court rejects both arguments. With regard to Rosemary’s argument, the December 14, 1998, Order was not a final order that deprived the Court of jurisdiction because the Butcher-Defendants’ motion for reconsideration affected the finality of the Court’s Order. Such a “motion eliminates the finality of, and reopens, the earlier judgment.” 12 James Wm. Moore et al., Moore’s Federal Practice § 59.32[1] (3d ed.1998). Thus, because the Order was not final, the Court had the authority to subject Rosemary to its jurisdiction by ordering that Rosemary be served with process. Moreover, Rosemary was added as a defendant because Alexander’s interest in the property, which is the subject of this suit, was transferred to her during the course of this litigation. [430]*430Thus, under Fed.R.Civ.P. 25(c), Rosemary was properly added as a defendant. “Rule 25(c) ‘does not require that anything be done after an interest has been transferred.’” Luxliner P.L. Export, Co. v. RDI/Luxliner, Inc., 13 F.3d 69, 71 (3d Cir.1993) (quoting 7C Wright, Miller & Kane, Federal Civil Procedure § 1958 at 555 (2d ed.1986)). Furthermore, “[although substitution [under Rule 25(c)] is usually effected during the course of litigation, substitution has been upheld even after litigation has ended as long as the transfer of interest occurred during the pen-dency of the case.” Id. Thus, despite her protestations, Rosemary could have been added as a defendant even after this case is closed.

The Court also rejects the other Butcher Defendants’ argument that they are entitled to relief from the Court’s Order on the basis that they do not have any interest in the property. A constructive trust over all the Butcher Defendants was proper because they were involved in the acts and transactions that gave rise to the need for a constructive trust. Therefore, they were properly named as defendants over whom a constructive trust should be imposed.1

II. Motion for Reconsideration

In its February 1, 1999, Order, the Court also required Rosemary to file a brief addressing why a constructive trust should not be imposed over her interest in the property in accordance with the Court’s prior Opinion and Order. Therefore, the Court will treat the arguments raised by Rosemary in her brief as her response to Plaintiffs’ motion for summary judgment to the extent that she has raised any new arguments that were not raised by the other Butcher Defendants in response to Plaintiffs’ motion.

A. Subject Matter Jurisdiction

Most of Rosemary’s and the other Butcher Defendants’ arguments regarding subject matter jurisdiction were addressed by the Court in its previous opinion and require no substantial discussion. For example, the Butcher Defendants argue that the Court lacks subject matter jurisdiction over the action because Plaintiffs are attempting to enforce prepetition claims against property that Rosemary acquired postpetition from Alexander. The Butcher Defendants raised the same argument in response to Plaintiffs’ motion and the Court rejected it on the basis that Plaintiffs are not attempting to enforce debts against the property, but rather are seeking to impose a constructive trust on the property interest that Rosemary received from Alexander. Plaintiffs do not contend that Rosemary owes them a debt. The Court rejected the argument in a footnote. See Blachy v. Butcher, 35 F.Supp.2d 554, 559 n. 3 (W.D.Mich.1998). The Butcher Defendants have not presented any basis to persuade this Court that it was wrong.

One of the few new arguments presented by Rosemary is that the Court lacks subject matter jurisdiction because the Sixth Circuit has exclusive jurisdiction based upon the Butcher Defendants’ appeal. The argument assumes that the December 19, 1998, Order was final. As discussed above, the Order was not final because the Butcher Defendants and the United States filed motions for reconsideration and to alter or amend, which affected the finality of the Order. Both motions were pending at the time the appeal was filed. Thus, the Butcher Defendants’ appeal was premature.

Rosemary and the Butcher Defendants continue to assert that the Court is precluded from imposing a constructive trust upon the property because the property is part of Rosemary’s bankruptcy estate. The Court rejected this same argument in its Opinion and Order and finds no basis to conclude that its analysis was wrong. The Butcher Defendants’ persistence in making this argument is puzzling in light of their own assertion in the bankruptcy court that “[o]ne-half of the subject property was exempt from Debtor’s bankruptcy estate under the provision of 11 U.S.C. § 522(b)(2)(B) because the deed of October 30, 1991, was not signed within six months of Debtor’s March 1,1991 filing date, and, [Alexander] did not die until December [431]*43126, 1991.” (Resp. of Rosemary C. Butcher, Debtor, to Trustee’s Mot, for Summ. J. at 2, H 4, Pis.’ Br. Opp’n Butcher Defs.’ Mot. Summ. J. Ex.

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190 F.R.D. 428, 83 A.F.T.R.2d (RIA) 1584, 1999 U.S. Dist. LEXIS 3327, 1999 WL 628288, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blachy-v-butcher-miwd-1999.