1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF PUERTO RICO 2
3 IN RE: 4 ROYAL CAR RENTAL INC CASE NO. 09-02276 BKT 5
6 Debtor(s) CHAPTER 11 7 ROYAL CAR RENTAL INC 8 Plaintiff ADVERSARY NO. 09-0220 9 WESTERNBANK PUERTO RICO 10 BANCO POPULAR DE PUERTO RICO 11 Defendant(s) FILED & ENTERED ON 06/07/2010 12
13 OPINION AND ORDER 14 15 This proceeding is before the Court upon Plaintiff’s motion for reconsideration of the order 16 granting Defendant’s motion for summary judgment filed on May 11, 2010 [Dkt. No. 68], and the 17 opposition filed by Banco Popular de Puerto Rico on June 2, 2010 [Dkt. No. 76]. For the reasons set 18 19 forth below, the motion for reconsideration is hereby denied. 20 I. PROCEDURAL BACKGROUND 21 On April 23, 2010, the Court entered judgment dismissing this adversary proceeding, finding 22 23 that Defendant, Westernbank de Puerto Rico (“Westernbank”) did not breach the line of credit 24 agreement it entered into with Plaintiff, Royal Car Rental, Inc. (“Debtor”), and that Westernbank did 25 not commit a violation of the Bank Holding Company Act (“BHCA”) [Dkt. No. 54]. The Court
ruled that Westernbank’s disbursement of $921,670.62 to Debtor and its subsequent denial of Debtor’s request for an additional $850,000.00 advance were in accordance with the line of credit agreement. The Court further noted that Debtor defaulted on its payment and waived any claim it 1 had against Westernbank for improper termination of the line of credit pursuant to five additional 2 agreements Debtor entered into to extend the line of credit after May 10, 2008. With respect to the 3 BHCA, the Court held that the condition in the line of credit agreement requiring Debtor to transfer 4 5 its bank accounts to Westernbank was a lawful, traditional banking practice and did not violate any 6 of the BHCA’s tying prohibitions. 7 On May 11, 2010, Debtor filed a motion to reconsider, arguing that the Court incurred in a 8 9 manifest error of law by failing to rule that article 3.17 of the line of credit agreement violated the 10 BHCA. Debtor also submitted several arguments it already presented in its complaint and opposition 11 12 to Westernbank’s motion for summary judgment [Dkt. No’s 1, 35]. 13 This Court has jurisdiction of the subject matter and the parties pursuant to 28 U.S.C. §§ 14 1334 and 157(a) and the General Order of referral of Title 11 Proceedings to the United States 15 16 Bankruptcy Court for the District of Puerto Rico dated July 19, 1984 (Torruella, C.J.). This is a core 17 proceeding in accordance with 28 U.S.C. §157(b). 18 II. DISCUSSION 19 20 Debtor prays for reconsideration pursuant to Federal Rules of Bankruptcy Procedure, Rule 21 9023, which makes Federal Rules of Civil Procedure, Rule 59 (“Rule 59”) applicable. Accordingly, 22 Rule 59 states, “[a]ny motion to alter or amend a judgment must be filed no later than 28 days after 23 24 entry of the judgment.” Fed. R. Civ. P. 59(e). In seeking reconsideration, “the moving party must 25 either clearly establish a manifest error of law or must present newly discovered evidence.” Marie v.
Allied Home Mortgage Corp., 402 F.3d 1, 7 n.2 (1st Cir. 2005) (quoting Pomerleau v. W. Springfield Pub. Sch., 362 F.3d 143, 146 n.2 (1st Cir. 2004)). The First Circuit in Marie also cited a leading treatise, highlighting the following four grounds for granting a motion for reconsideration 1 under Rule 59(e): (1) manifest errors of law and fact; (2) newly discovered or previously unavailable 2 evidence; (3) manifest injustice; and, (4) an intervening change in controlling law. 402 F.3d at 7 3 (citing 11 C. Wright et al., Federal Practice & Procedure § 2810.1 (2d ed. 1995)). 4 5 Under Rule 59 reconsideration of a judgment is an extraordinary remedy, which is used 6 sparingly and only when the need for justice outweighs the interests set forth by a final judgment. 7 The underlying policy of reconsideration is to provide a court with a means to correct its own errors. 8 9 White v. New Hampshire Dept. of Employment Sec., 455 U.S. 445, 450 (1982). Conversely, Rule 10 59(e) does not exist to allow parties a second chance to prevail on the merits. Harley-Davidson 11 12 Motor Co. v. Bank of New England-Old Colony, N.A., 897 F.2d 611, 616 (1st Cir. 1990). Indeed, 13 Rule 59(e) is not an avenue for litigants to reassert arguments and theories that were previously 14 rejected by the Court. Id. at 616 (citing FDIC v. Meyer, 781 F.2d 1260, 1268 (7th Cir. 1986)). As 15 16 the First Circuit noted in Harley-Davidson Motor, the rule is “aimed at reconsideration, not initial 17 consideration.” Id. at 616. (citing New Hampshire Dept. of Employment Sec., 455 U.S. at 450). See 18 also, Nat’l Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 19 20 1999) (Rule 59(e) does not allow losing party to rehash old arguments, previously considered and 21 rejected.) 22 In the case at bar, the Court granted summary judgment in favor of Westernbank pursuant to 23 24 the absence of any material facts in dispute. A fact is considered “material” if it potentially could 25 affect the outcome of the suit. Cortes-Irizarry v. Corporaciòn Insular, 111 F.3d 184, 187 (1st Cir.
1997). It follows that there will only be a “genuine” or “trial worthy” issue as to such a “material fact,” “if a reasonable fact-finder, examining the evidence and drawing all reasonable inferences helpful to the party resisting summary judgment, could resolve the dispute in that party’s favor.” Id. 1 (citing Nat’l Amusements, Inc. v. Town of Dedham, 43 F.3d 731 (1st Cir. 1995)). In a summary 2 judgment, the Court must view the evidence in a light most favorable to the nonmoving party. In re 3 Rijos, 263 B.R. 382, 388 (1st Cir. BAP 2001). As such, summary judgment is “inappropriate if 4 5 inferences are necessary for the judgment and those inferences are not mandated by the record.” Id. 6 at 388. 7 It strikes the Court as unnecessary to reenter a discussion of the arguments advanced by the 8 9 Debtor that were already rejected in the analysis that resulted in the granting of summary judgment 10 on behalf of Westernbank [Dkt. No. 54]. Nevertheless, in support of their motion for 11 12 reconsideration, Debtor avers that the Court made a manifest error of law with respect to article 3.17 13 of the line of credit agreement – requiring Debtor to transfer its bank accounts to Westernbank. 14 Debtor argues that article 3.17 is a tying arrangement which violates the BHCA.
Free access — add to your briefcase to read the full text and ask questions with AI
1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF PUERTO RICO 2
3 IN RE: 4 ROYAL CAR RENTAL INC CASE NO. 09-02276 BKT 5
6 Debtor(s) CHAPTER 11 7 ROYAL CAR RENTAL INC 8 Plaintiff ADVERSARY NO. 09-0220 9 WESTERNBANK PUERTO RICO 10 BANCO POPULAR DE PUERTO RICO 11 Defendant(s) FILED & ENTERED ON 06/07/2010 12
13 OPINION AND ORDER 14 15 This proceeding is before the Court upon Plaintiff’s motion for reconsideration of the order 16 granting Defendant’s motion for summary judgment filed on May 11, 2010 [Dkt. No. 68], and the 17 opposition filed by Banco Popular de Puerto Rico on June 2, 2010 [Dkt. No. 76]. For the reasons set 18 19 forth below, the motion for reconsideration is hereby denied. 20 I. PROCEDURAL BACKGROUND 21 On April 23, 2010, the Court entered judgment dismissing this adversary proceeding, finding 22 23 that Defendant, Westernbank de Puerto Rico (“Westernbank”) did not breach the line of credit 24 agreement it entered into with Plaintiff, Royal Car Rental, Inc. (“Debtor”), and that Westernbank did 25 not commit a violation of the Bank Holding Company Act (“BHCA”) [Dkt. No. 54]. The Court
ruled that Westernbank’s disbursement of $921,670.62 to Debtor and its subsequent denial of Debtor’s request for an additional $850,000.00 advance were in accordance with the line of credit agreement. The Court further noted that Debtor defaulted on its payment and waived any claim it 1 had against Westernbank for improper termination of the line of credit pursuant to five additional 2 agreements Debtor entered into to extend the line of credit after May 10, 2008. With respect to the 3 BHCA, the Court held that the condition in the line of credit agreement requiring Debtor to transfer 4 5 its bank accounts to Westernbank was a lawful, traditional banking practice and did not violate any 6 of the BHCA’s tying prohibitions. 7 On May 11, 2010, Debtor filed a motion to reconsider, arguing that the Court incurred in a 8 9 manifest error of law by failing to rule that article 3.17 of the line of credit agreement violated the 10 BHCA. Debtor also submitted several arguments it already presented in its complaint and opposition 11 12 to Westernbank’s motion for summary judgment [Dkt. No’s 1, 35]. 13 This Court has jurisdiction of the subject matter and the parties pursuant to 28 U.S.C. §§ 14 1334 and 157(a) and the General Order of referral of Title 11 Proceedings to the United States 15 16 Bankruptcy Court for the District of Puerto Rico dated July 19, 1984 (Torruella, C.J.). This is a core 17 proceeding in accordance with 28 U.S.C. §157(b). 18 II. DISCUSSION 19 20 Debtor prays for reconsideration pursuant to Federal Rules of Bankruptcy Procedure, Rule 21 9023, which makes Federal Rules of Civil Procedure, Rule 59 (“Rule 59”) applicable. Accordingly, 22 Rule 59 states, “[a]ny motion to alter or amend a judgment must be filed no later than 28 days after 23 24 entry of the judgment.” Fed. R. Civ. P. 59(e). In seeking reconsideration, “the moving party must 25 either clearly establish a manifest error of law or must present newly discovered evidence.” Marie v.
Allied Home Mortgage Corp., 402 F.3d 1, 7 n.2 (1st Cir. 2005) (quoting Pomerleau v. W. Springfield Pub. Sch., 362 F.3d 143, 146 n.2 (1st Cir. 2004)). The First Circuit in Marie also cited a leading treatise, highlighting the following four grounds for granting a motion for reconsideration 1 under Rule 59(e): (1) manifest errors of law and fact; (2) newly discovered or previously unavailable 2 evidence; (3) manifest injustice; and, (4) an intervening change in controlling law. 402 F.3d at 7 3 (citing 11 C. Wright et al., Federal Practice & Procedure § 2810.1 (2d ed. 1995)). 4 5 Under Rule 59 reconsideration of a judgment is an extraordinary remedy, which is used 6 sparingly and only when the need for justice outweighs the interests set forth by a final judgment. 7 The underlying policy of reconsideration is to provide a court with a means to correct its own errors. 8 9 White v. New Hampshire Dept. of Employment Sec., 455 U.S. 445, 450 (1982). Conversely, Rule 10 59(e) does not exist to allow parties a second chance to prevail on the merits. Harley-Davidson 11 12 Motor Co. v. Bank of New England-Old Colony, N.A., 897 F.2d 611, 616 (1st Cir. 1990). Indeed, 13 Rule 59(e) is not an avenue for litigants to reassert arguments and theories that were previously 14 rejected by the Court. Id. at 616 (citing FDIC v. Meyer, 781 F.2d 1260, 1268 (7th Cir. 1986)). As 15 16 the First Circuit noted in Harley-Davidson Motor, the rule is “aimed at reconsideration, not initial 17 consideration.” Id. at 616. (citing New Hampshire Dept. of Employment Sec., 455 U.S. at 450). See 18 also, Nat’l Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 19 20 1999) (Rule 59(e) does not allow losing party to rehash old arguments, previously considered and 21 rejected.) 22 In the case at bar, the Court granted summary judgment in favor of Westernbank pursuant to 23 24 the absence of any material facts in dispute. A fact is considered “material” if it potentially could 25 affect the outcome of the suit. Cortes-Irizarry v. Corporaciòn Insular, 111 F.3d 184, 187 (1st Cir.
1997). It follows that there will only be a “genuine” or “trial worthy” issue as to such a “material fact,” “if a reasonable fact-finder, examining the evidence and drawing all reasonable inferences helpful to the party resisting summary judgment, could resolve the dispute in that party’s favor.” Id. 1 (citing Nat’l Amusements, Inc. v. Town of Dedham, 43 F.3d 731 (1st Cir. 1995)). In a summary 2 judgment, the Court must view the evidence in a light most favorable to the nonmoving party. In re 3 Rijos, 263 B.R. 382, 388 (1st Cir. BAP 2001). As such, summary judgment is “inappropriate if 4 5 inferences are necessary for the judgment and those inferences are not mandated by the record.” Id. 6 at 388. 7 It strikes the Court as unnecessary to reenter a discussion of the arguments advanced by the 8 9 Debtor that were already rejected in the analysis that resulted in the granting of summary judgment 10 on behalf of Westernbank [Dkt. No. 54]. Nevertheless, in support of their motion for 11 12 reconsideration, Debtor avers that the Court made a manifest error of law with respect to article 3.17 13 of the line of credit agreement – requiring Debtor to transfer its bank accounts to Westernbank. 14 Debtor argues that article 3.17 is a tying arrangement which violates the BHCA. Debtor maintains 15 16 that pursuant to the Supreme Court of Puerto Rico’s holding in Fransechi v. Texaco, article 3.17 is 17 not a proper banking practice because it controls the rights of the borrower to administer its business 18 and property. Fransechi v. Texaco, 3 P.R. Offic. Trans. 1058 (P.R. 1975). The ruling in Fransechi, 19 20 however, is not applicable to the case at bar given that it deals with a mortgagor’s right to dispose of 21 property in a real estate transaction and provides no guidelines with respect to banks, traditional 22 banking practices, lines of credit, or violations of the BHCA. See generally Id. 23 24 Similarly, the findings in Acosta & Rodas, Inc. v. Puerto-Rican American Ins., Co., which 25 Debtor cites to establish the improper conduct of Westernbank, do not provide further insight into
the present dispute. Acosta & Rodas v. Puerto-Rican American Ins., Co., 112 D.P.R. 583 (P.R. 1982). Indeed, Acosta & Rodas deals primarily with the wrongful attachment of the Plaintiff’s personal property by the Defendant insurance company, which is wholly unrelated to the 1 circumstances in the present suit. 2 Debtor further claims that the Court applied an erroneous standard to its interpretation of the 3 BHCA and its reliance on B.C. Recreational Industries v. First Nat’l Bank of Boston, 639 F.2d 828, 4 5 832 (1st Cir. 1981). As was discussed in the opinion and order dated April 23, 2010, the tying 6 prohibitions of the BHCA do not interfere with the conduct of appropriate traditional banking 7 practices. B.C. Recreational, 639 F.2d at 832 (citing Sterling Coal Co. v. United Am. Bank, 470 8 9 F.Supp. 964-65 (E.D. Tenn. 1979)) [Dkt. No. 54]. Pursuant to the ruling in Sterling Coal, 10 “[c]onditioning the grant and extension of credit on the requirement that the bank supervise and 11 12 control the plaintiff’s checking account and other corporate affairs, including veto power over 13 purchases and payment of dividends, was not prohibited by the Act [BHCA].” 470 F.Supp at 965 14 (emphasis added). 15 16 Notwithstanding the fact that Debtor voluntarily agreed to article 3.17 when it entered into 17 the line of credit agreement with Westernbank, Debtor also agreed to extend the line of credit on five 18 occasions – June 25, 2008; August 27, 2008; October 29, 2008; December 24, 2008; and February 19 20 26, 2009 – after it had incurred substantial pre-petition defaults. Accordingly, the Court finds 21 unconvincing Debtor’s argument that Westernbank failed to use ordinary care and good faith. 22 Finally, Debtor appears to make a public policy argument, but in doing so, fails to submit any factual 23 24 underpinnings or case law to support reconsideration. Because Debtor has failed to establish a 25 manifest error of law this Court finds that Debtor is not entitled to reconsideration under Federal
Rules of Bankruptcy Procedure, Rule 9023. 1 WHEREFORE, IT IS ORDERED that PLAINTIFF’s motion for reconsideration shall be, an
4 hereby is, DENIED SO ORDERED. San Juan, Puerto Rico, this 07 day of June, 2010.
8 . Aa
10 Brian K. Tester U.S. Bankruptcy Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25