Buzulencia v. Ohio Bell Telephone Co.

964 F. Supp. 2d 854, 2013 WL 4049679, 2013 U.S. Dist. LEXIS 112638
CourtDistrict Court, N.D. Ohio
DecidedAugust 9, 2013
DocketCase No. 4:11CV2293
StatusPublished
Cited by1 cases

This text of 964 F. Supp. 2d 854 (Buzulencia v. Ohio Bell Telephone Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buzulencia v. Ohio Bell Telephone Co., 964 F. Supp. 2d 854, 2013 WL 4049679, 2013 U.S. Dist. LEXIS 112638 (N.D. Ohio 2013).

Opinion

MEMORANDUM OF OPINION AND ORDER [Resolving ECF No. 38]

PEARSON, District Judge.

On May 1, 2013, the Court granted Plaintiffs Motion to Reopen and Substitute Michael Buzulencia, Trustee as Plaintiff. See Order (ECF No. 35). On May [857]*85729, 2013, Defendant filed a Rule 59(e) Motion for Reconsideration or, in the Alternative, for Certification and . Stay to File Interlocutory Appeal (ECF No. 38).

After notice to the parties, the Court held a hearing on the record. See Transcript of Proceedings (ECF No. 45). The Court has been advised, having reviewed the parties’ briefs and evidentiary submissions, and the applicable law. The Court has also considered the oral arguments of counsel, the testimony of Plaintiff Michael D. Buzulencia, Trustee of the Bankruptcy Estate, and James R. Grope, III, as well as the entire record in this matter, and being otherwise advised in the premises, herein grants the motion , for reconsideration, but adheres to its prior ruling, and denies the alternative request for certification and stay.

I.

Rule 59(e) allows district courts to alter, amend, or vacate a prior judgment. See Huff v. Metropolitan Life Insur. Co., 675 F.2d 119, 122 (6th Cir.1982). The purpose of Rule 59(e) is “to allow the district court to correct its own errors, sparing the parties and appellate courts the burden of unnecessary appellate proceedings.” Howard v. United States, 533 F.3d 472, 475 (6th Cir.2008) (quoting York v. Tate, 858 F.2d 322, 326 (6th Cir.1988)). It permits district courts to amend judgments where there is: “(1) a clear error of law; (2) newly discovered evidence; (3) an intervening change in controlling law; or (4) a need to prevent manifest injustice.” Intera Corp. v. Henderson, 428 F.3d 605, 620 (6th Cir.2005).

The Sixth Circuit has explained that “Rule 59(e) motions cannot be used to present new arguments that could have been raised prior to judgment.” Howard, 533 F.3d at 475. See also Roger Miller Music, Inc. v. Sony/ATV Publ’g, LLC, 477 F.3d 383, 395 (6th Cir.2007); Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir.1998). Indeed, “Rule 59(e) allows for reconsideration; it does not permit parties to effectively ‘re-argue a case.’ ” Howard, 533 F.3d at 475 (quoting Sault Ste. Marie Tribe, 146 F.3d at 374). The grant or denial of a Rule 59(e) motion is within the informed discretion of the district court. Huff, 675 F.2d at 122; 11 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2810.1 (3d ed.).

In the recently decided case of Stephenson v. Malloy, 700 F.3d 265 (6th Cir.2012), the Court of Appeals for the Sixth Circuit expressly held that the doctrine of judicial estoppel does not apply to the bankruptcy trustee. Id. at 271-72. Defendant argues that this case is outside of the Stephenson ruling because Grope executed an exemption in his bankruptcy case1 that limits the amount of damages2 flowing to creditors. [858]*858In making this argument, Defendant contends that the value of the exemption exceeds the value of the case at bar. See ECF No. 41 at PagelD # : 412-13; ECF No. 47 at PagelD #: 508. The Court disagrees.

The bankruptcy trustee becomes the real party in interest when the bankruptcy is filed. Stephenson, 700 F.3d at 272. The trustee has authority, as the representative of the estate, to commence and prosecute any action or proceeding on behalf of the estate with or without court approval under 11 U.S.C. § 323(a) and Fed. Bankr. R.P. 6009. See In re McKenzie, No. 08-16378, 2011 WL 3439081, at *10 (Bkrtcy.E.D.Tenn. August 5, 2011) (citing Hays and Co. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 885 F.2d 1149,1154 n. 6 (3d Cir.1989)). In Stephenson, the Sixth Circuit clearly ruled that, absent some wrong doing by the trustee, judicial estoppel3 does not apply to a bankruptcy trustee. 700 F.3d at 272. The Stephenson Court explained that, “[e]ven if the trustee were deemed to stand in [the debtor’s] shoes for judicial-estoppel purposes, White v. Wyndham Vacation Ownership, Inc., 617 F.3d 472 (6th Cir.2010) would not dictate dismissal of this case.” Id. In Stephenson, the Court applied the three-prong test,4 as expanded in White, and concluded by finding there had been no bad faith and, therefore, the omission of the asset was inadvertent.

Expanded Three Prong Test

The Court applies the expanded three-prong test to the case at bar. First, it is undisputed that Grope’s prior position is contrary to the trustee’s current position. Second, the bankruptcy court adopted the contrary position either as a preliminary matter or as part of a final disposition. These findings are not, however, as problematic as they might first appear.

Regarding the third prong — mistake or inadvertence, the Court finds that Grope did not omit an existing asset when he initially filed his bankruptcy petition.5 This finding requires an explanation.

[859]*859A. Lack of Knowledge

In February 2010, Plaintiff filed his Chapter 7 Trustee’s Report of No Distribution (ECF No. 11 in Bankruptcy Case No. 09-44845-kw), in which he reported: that I have neither received any property nor paid any money on account of this estate; that I have made a diligent inquiry into the financial affairs of the debtor(s) and the location of the property belonging to the estate; and that there is no property available for distribution from the estate over and above that exempted by law. Pursuant to Fed. R. Bank. P. 5009, I hereby certify that the estate of the above-named debtors) has been fully administered. I request that I be discharged from any further duties as trustee. Meeting of creditors held and concluded. Key information about this case as reported in schedules filed by the debtor(s) or otherwise found in the case record: This case was pending for 2 months. Assets Abandoned(without deducting any secured claims): $ 51900.00, Assets Exempt: $ 41810.00, Claims Scheduled: $ 174378.59, Claims Asserted: Not Applicable, Claims scheduled to be discharged without payment (without deducting the value of collateral or debts excepted from discharge): $ 174378.59. Docket Entry dated February 25, 2010 (emphasis in original).

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Cite This Page — Counsel Stack

Bluebook (online)
964 F. Supp. 2d 854, 2013 WL 4049679, 2013 U.S. Dist. LEXIS 112638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buzulencia-v-ohio-bell-telephone-co-ohnd-2013.