In Re Alberto

121 B.R. 527, 1990 Bankr. LEXIS 2566, 1990 WL 199414
United States Bankruptcy Court, N.D. Illinois·Decided November 28, 1990·No. 19-01081·Published·Cited by 4 cases

Opinion

*528 MEMORANDUM OPINION

JOHN H. SQUIRES, Bankruptcy Judge.

This matter comes before the Court on the motion of CIT Group/Equipment Financing, Inc. (“CIT”) for reconsideration, or in the alternative, to vacate and defer the holding of the Court’s Memorandum Opinion and Order dated October 12, 1990, finding that CIT willfully violated 11 U.S.C. § 362. For the reasons stated below, the motion is denied.

I.JURISDICTION AND PROCEDURE The Court has jurisdiction to entertain this motion pursuant to 28 U.S.C. § 1334 and General Rule 2.33(a) of the United States District Court for the Northern District of Illinois. This matter constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (0).

II.FACTS AND BACKGROUND

All the relevant facts and background are contained in an earlier Opinion. See In re Alberto, 119 B.R. 985 (Bankr.N.D.Ill.1990). In that decision, the Court ruled, inter alia, that CIT willfully violated the automatic stay imposed by section 362. The Order and Opinion were entered on the docket on October 17, 1990, and accordingly became effective that date pursuant to Federal Rules of Bankruptcy Procedure 5003 and 9021. The motion at bar was served on October 26, 1990, within ten days after entry of the Order and Opinion.

III.ARGUMENTS OF THE PARTIES

CIT first argues that the Court did not specify the precise conduct violative of section 362. Rather, CIT alleges that the Court referenced the allegations made by the Debtor which included CIT’s undisputed post-petition actions taken in a pending district court lawsuit to cite in third parties, obtain a nunc pro tunc order concerning prior orders transferring the Debtor’s interest in certain property, and seeking Rule 11 sanctions against the Debtor and one of his attorneys. CIT contends that the third party citations were not directed against the Debtor or his estate, were conducted under the supervision of the district court, and nunc pro tunc orders merely formalize earlier actions and thus do not violate section 362. Next, CIT asserts that the sanctions were directed at the post-petition Debtor and not the estate, and hence were not violative of section 362(a)(3). The Rule 11 sanctions involved post-petition conduct of the Debtor and his attorney, thus not violating either section 362(a)(1) or (2) because those sections concern only claims or judgments existing prior to the commencement of the bankruptcy. Finally, CIT contends that the Opinion implicitly finds that the disputed property interest over which the Debtor and CIT are also litigating in the Seventh Circuit Court of Appeals is property of the Debtor’s estate pursuant to section 541. Thus, CIT concludes that a portion of the Opinion should be vacated for the following reasons: (1) the pending appeal; (2) the conflict that such implicit finding may create; and (3) the interests of judicial economy and efficiency.

The Debtor opposes the relief sought on several grounds. First, the Debtor argues that CIT’s actions taken in the district court and that court’s post-petition rulings do not insulate CIT from violations of the automatic stay. Second, the Debtor contends that CIT has shown no change in the law, newly discovered evidence, or factual or legal error warranting the relief sought. Last, the Debtor contends that CIT’s alleged reasons stated for pursuing the third party citation proceedings are at odds with its statements on that subject made to the district court.

IV.DISCUSSION

A. FEDERAL RULE OF CIVIL PROCEDURE 59

As a preliminary point, under the Federal Rules of Bankruptcy Procedure and the Federal Rules of Civil Procedure, there is no such pleading as a “motion to reconsider”, except pursuant to Bankruptcy Rule 3008 with respect to reconsideration of orders allowing or disallowing claims against the estate, not applicable to this matter. Moreover, the local rules do *529 not authorize such a motion. The appropriate procedure is to file a motion to alter or amend the judgment. The Seventh Circuit Court of Appeals has directed district courts to treat all substantive post-judgment motions filed within ten days of judgment under Rule 59. Accordingly, the instant motion will be treated as filed under Federal Rule of Bankruptcy Procedure 9023, incorporating Federal Rule of Civil Procedure 59(e) by reference. See Charles v. Daley, 799 F.2d 343, 347 (7th Cir.1986).

Rule 59 provides a procedure whereby the Court can correct manifest errors of law or fact, or consider the import of newly discovered evidence. Publishers Resource, Inc. v. Walker-Davis Publications, Inc., 762 F.2d 557, 561 (7th Cir.1985); Keene Corp. v. International Fidelity Ins. Co., 561 F.Supp. 656, 665 (N.D.Ill.1982), aff'd, 736 F.2d 388 (7th Cir.1984); F/H Industries, Inc. v. Nat. Union Fire Ins. Co., 116 F.R.D. 224, 226 (N.D.Ill.1987). The function of a motion made pursuant to Rule 59(e) is not to serve as a vehicle to reliti-gate old matters or present the case under a new theory. FDIC v. Meyer, 781 F.2d 1260, 1268 (7th Cir.1986); Evans Inc. v. Tiffany & Co., 416 F.Supp. 224, 244 (N.D.Ill.1976). The Court finds that CIT has failed to proffer any newly discovered evidence and has failed to demonstrate any manifest errors made in law or fact.

B. 11 U.S.C. § 362

CIT contends that the third party, post-petition citation proceedings were not directed at the Debtor, had no impact on the estate, and thus, did not violate the automatic stay. CIT cites Greene & Kellogg, Inc. v. Oxford Hospital, Inc., 95 B.R. 26 (E.D.Pa.1989) in support of this proposition. The Court, however, is not bound by such authority. On the contrary, the Court is constrained to follow the authority from this district which notes that attempts to collect a scheduled debt in another forum are impermissible. See In re Ellis, 66 B.R. 821, 823 (N.D.Ill.1986).

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In Re Alberto, 121 B.R. 527, 1990 Bankr. LEXIS 2566, 1990 WL 199414 (Ill. 1990).

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