In re: Jose Antonio Santiago Vazquez v. Banco Bilbao Vizcaya Argentaria Puerto Rico

Opinion

1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF PUERTO RICO 2

3 IN RE:

4 JOSE ANTONIO SANTIAGO VAZQUEZ CASE NO. 09-01574 BKT CHAPTER 7 5

Debtor(s) ADVERSARY NO. 10-0088 6 BANCO BILBAO VIZCAYA ARGENTARIA 7 PUERTO RICO

8 Plaintiff

9 JOSE ANTONIO SANTIAGO VAZQUEZ FILED & ENTERED ON 11/04/2011

Defendant(s) 11

12 OPINION AND ORDER 13 This proceeding is before the Court upon Plaintiff's motion requesting 14 entry of order to amend judgment [Dkt. No. 76], the Defendant's Opposition to the 15 Plaintiffs' motion [Dkt. No. 83], and Plaintiff's sur reply [Dkt. No. 86]. In 16 17 essence, Plaintiff's sur reply is requesting that the Court reconsider its 18 findings of fact and conclusions of law entered on August 31, 2011 [Dkt. No. 74], 19 under FRCP 59(e). For the reasons set forth below, the Plaintiff's motion to 20 amend the judgment is hereby denied. 21 I. PROCEDURAL BACKGROUND 22 On May 24, 2010, Banco Bilbao Vizcaya Argentaria Puerto Rico (“Plaintiff”) 23 filed a complaint to object a discharge under 11 U.S.C. § 727 (a) (2) and (7). On 24 January 4, 2011, during the discovery process, Defendant filed a motion for the 25 dismissal of this adversary proceding and for the imposition of attorneys' fees and costs upon the Plaintiff. In the motion, Defendant alleged that Plaintiff failed to state a claim upon which relief may be granted. Defendant argued that this was a frivolous complaint since the allegations made by Plaintiff, as to the property or transfers in questions or to the time it happened, were based on 1 property of this estate or the debtor [Dkt. No. 36]. On January 12, 2011, the 2 Court allowed Plaintiff thirty (30) days to reply to Defendant’s motion to 3 dismiss [Dkt. No. 37]. Although Plaintiff was granted an extension of five (5) 4 days to reply to Defendant’s motion to dismiss, Plaintiff never replied [Dkt. No. 5 41 and 42]. Therefore, on March 7, 2011, the Court granted Defendant’s motion to 6 dismiss, and Defendant’s attorney was ordered to file a motion within twenty (20) 7 days setting forth his fees and costs [Dkt. No. 44]. 8 On March 24, 2011, in compliance with the Court’s order, Defendant’s 9 10 attorney filed a motion, wherein he described the alleged reasonable and 11 necessary fees and costs incurred in the defense, which amounted to $7,291.38 12 [Dkt. No. 46]. On April 5, 2011, Plaintiff, as requested, was granted an 13 extension until April 25, 2011 to file a reply to Defendant’s motion for 14 attorneys' fees and costs [Dkt. No. 48]. Plaintiff, on the same day said reply 15 was due, requested an additional extension of time and on April 26, 2011, filed 16 its reply opposing Defendants' attorney fees and costs. In the opposition to the 17 imposition of fees and cost, Plaintiff set forth, among other things, the 18 arguments in opposition to the motion to dismiss, even though the motion had 19 already been granted previously [Dkt. No. 50 and 52]. 20 On May 11, 2011, and May 13, 2011, respectively, Defendant was granted its 21 motion for the Leave to File Reply to Plaintiff’s opposition to fees and costs 22 and subsequently its urgent request for additional time to reply [Dkt. No. 54 and 23 56]. On June 15, 2011, Defendant replied to Plaintiff's opposition to fees and 24 25 costs, stating the particular facts in this adversary proceeding and the legal authority which would allow this Court to impose the fees and costs requested [Dkt. No. 60]. On July 1, 2011, Plaintiff was denied an extension of time to sur- reply and Defendant’s motion for fees and costs was granted [Dkt. No. 62]. Upon the issuance of this Court’s order, Plaintiff filed a motion under Federal Rule of Bankruptcy Procedure 7052 to obtain findings of fact and conclusions of law 1 [Dkt. No. 64].1 This Court granted Plaintiff's request, and issued an opinion and 2 order on August 31, 2011 [Dkt. No. 74]. The opinion set forth the legal rationale 3 used by the Court in granting the award of costs and attorney's fees to 4 Defendant. On September 14, 2011, Plaintiff filed its' motion to amend the 5 Court's judgment. In that motion, Plaintiff requested specifically that the award 6 of attorneys' fees and costs be set off against the balance of the mortgage over 7 the residence of Debtor/Defendant. Although the Plaintiff cited FRCP 59 (e), he 8 made no arguments in this regard. It is in the sur reply [Dkt. No. 86] that 9 10 Plaintiff pleads that the Court correct alleged manifest errors of law and fact 11 under either FRCP 59(e) or FRCP 60(b). This opinion follows. 12 This Court has jurisdiction of the subject matter and the parties pursuant 13 to 28 U.S.C. §§ 1334 and 157(a) and the General Order of referral of Title 11 14 Proceedings to the United States Bankruptcy Court for the District of Puerto Rico 15 dated July 19, 1984 (Torruella, C.J.). This is a non-core proceeding in 16 accordance with 28 U.S.C. §157(b). 17 II. STANDARD OF REVIEW 18 “A ‘motion to reconsider’ is not among the motions recognized by the 19 Federal Rules of Civil Procedure.” Van Skiver v. United States, 952 F.2d 1241, 20 1243 (10th Cir.1991). The federal courts have consistently stated that a motion 21 so denominated which challenges the prior judgment on the merits will be treated 22 as either a motion ‘to alter or amend’ under FRCP 59 or a motion for ‘relief from 23 judgment’ under FRCP 60. Equity Security Holders' Committee v. Wedgestone 24 25 Financial, 152 B.R. 786, 788 (Bkrtcy.D.Mass.1993). “These two rules are distinct; they serve different purposes and produce different consequences. Which rule applies depends essentially on the time a motion is served. If a motion is served within ten days of the rendition of judgment, the motion ordinarily will fall

1 On July 15, 2011, Plaintiff filed a Notice of Appeal to the BAP [Dkt. No. 65]. For reasons unknown to this court, on August 16, 2011, Plaintiff withdrew, without prejudice, the appeal filed. On August 26, 2011, the BAP mandate 1 under Rule 59(e).2 If the motion is served after that time it falls under Rule 2 60(b).” Van Skiver, supra, 952 F.2d at 1243 (10th Cir.1991); In re Rodriguez, 233 3 B.R. 212, 218–19 (Bankr.D.P.R.1999). In the instant case, Plaintiffs' motion to 4 amend the judgment was filed fourteen (14) days after the Court's judgment, as 5 per FRCP 6(a) . The Plaintiff argues 'mistake of law or fact' which is a 6 determinative factor under both Rules. Therefore, the motion will be construed as 7 one pursuant to FRCP 59(e) which is made applicable to bankruptcy cases by FRBP 8 9023. In seeking reconsideration, “the moving party must either clearly establish 9 10 a manifest error of law or must present newly discovered evidence.” Marie v. 11 Allied Home Mortgage Corp., 402 F.3d 1, 7 n.2 (1st Cir. 2005) (quoting Pomerleau 12 v. W. Springfield Pub. Sch., 362 F.3d 143, 146 n.2 (1st Cir. 2004)). The First 13 Circuit in Marie also cited a leading treatise, highlighting the following four 14 grounds for granting a motion for reconsideration under Fed. R. Bankr. Pro. 15 59(e): (1) manifest errors of law and fact; (2) newly discovered or previously 16 unavailable evidence; (3) manifest injustice; and, (4) an intervening change in 17 controlling law. 402 F.3d at 7 (citing 11 C. Wright et al., Federal Practice & 18 Procedure § 2810.1 (2d ed. 1995)). Under Rule 59, reconsideration of a judgment 19 is an extraordinary remedy, which is used sparingly and only when the need for 20 justice outweighs the interests set forth by a final judgment. The underlying 21 policy of reconsideration is to provide a court with a means to correct its own 22 errors. White v. New Hampshire Dept. of Employment Sec. , 455 U.S. 445, 450 23 (1982). Conversely, Rule 59(e) does not exist to allow parties a second chance 24 25 to prevail on the merits. Harley-Davidson Motor Co. v. Bank of New England-Old Colony, N.A., 897 F.2d 611, 616 (1st Cir. 1990). Indeed, Rule 59(e) is not an avenue for litigants to reassert arguments and theories that were previously rejected by the Court. Id. at 616 (citing FDIC v. Meyer, 781 F.2d 1260, 1268

2 The Rules now allow for fourteen days instead of ten from the entry of judgment. 1 (7th Cir. 1986)). The party cannot use a Rule 59(e) motion to cure its own 2 procedural failures or to introduce new evidence or advance arguments that could 3 and should have been presented originally to the court. Aybar, et al. v. Crispin– 4 Reyes, 118 F.3d 10, 16 (1st Cir.1997). As the First Circuit noted in Harley- 5 Davidson Motor , the rule is “aimed at reconsideration, not initial 6 consideration.” Id. at 616. (citing New Hampshire Dept. of Employment Sec., 455 7 U.S. at 450). See also , Nat’l Metal Finishing Co. v. 8 BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 1999) (Rule 59(e) 9 10 does not allow losing party to rehash old arguments, previously considered and 11 rejected). 12 III. DISCUSSION 13 Plaintiff prays for the court to amend the judgment pursuant to its powers 14 to fashion remedies under 11 U.S.C. § 105, but provides no arguments in this 15 regard. The bulk of the Plaintiff's sur reply focuses on what they allege are the 16 substantial mistakes of law or fact contained in the court's judgment of August 17 31, 2011 [Dkt. No. 74]. Citing case law which deals with a court sanctioning bad 18 faith on behalf of a party, the Plaintiff argues, for the first time, that the 19 court must find bad faith based on "clear evidence." In re: James Green, 422 B.R. 20 469 (Bkrtcy.S.D.N.Y., 2010). That same case holds that to impose sanctions, 21 either in exercise of its inherent authority or upon unreasonable-and-vexatious- 22 multiplication theory, court must find clear evidence (1) that offending party's 23 claims were entirely without color; and (2) that claims were brought in bad 24 25 faith, i.e., with some improper purpose, such as harassment or delay. In re: James Green, supra. As the First Circuit has confirmed, Rule 59(e), “certainly does not allow a party . . . to advance arguments that could and should have been presented to the district court prior to the judgment.” Crawford v. Clark, 578 F.3d 39, 33 (1st Cir. 2009). Plaintiff failed to make this argument in its opposition to the Defendant's motion for fees and costs filed on April 26, 2011 1 [Dkt. No. 50], instead choosing to defend their position to Defendant's motion t 2 ||dismiss - a matter which had already been adjudicated by this Court and was 3 unappealable. 4 It strikes the Court as unnecessary to re-enter a discussion of the ° arguments advanced by the Plaintiff's that were already rejected in the analysi 6 that resulted in the order awarding attorneys' fees and costs in the instan ’ case. Because the Plaintiff has failed to establish a manifest error of law, this Court finds that the Plaintiff is not entitled to reconsideration under

10 Federal Rules of Bankruptcy Procedure, Rule 9023. WHEREFORE, IT IS ORDERED that Plaintiff’s motion requesting entry of orde 12 to amend the judgment shall be, and it hereby is, DENIED. Hence, Plaintiff and/o 13 attorney is required to satisfy the reasonable attorneys’ fees and costs i 14 ||the amount of $7,291.38 within twenty (20) days. 15 SO ORDERED. 16 San Juan, Puerto Rico, this 04 day of November, 2011. 17 An 18 SHE 19 rian K. Tester U.S. Bankruptcy Judge 20 21 22 23 24 25