O'Connell v. DeMartino (In re DeMartino)

484 B.R. 550, 84 Fed. R. Serv. 3d 574, 68 Collier Bankr. Cas. 2d 1786, 2012 WL 6701742, 2012 Bankr. LEXIS 5922
CourtUnited States Bankruptcy Court, E.D. New York
DecidedDecember 26, 2012
DocketBankruptcy No. 1-09-40443-jf; Adversary No. 1-09-01367-jf
StatusPublished
Cited by3 cases

This text of 484 B.R. 550 (O'Connell v. DeMartino (In re DeMartino)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
O'Connell v. DeMartino (In re DeMartino), 484 B.R. 550, 84 Fed. R. Serv. 3d 574, 68 Collier Bankr. Cas. 2d 1786, 2012 WL 6701742, 2012 Bankr. LEXIS 5922 (N.Y. 2012).

Opinion

DECISION DENYING MOTION UNDER FED. R. CiV. p. 60(b) FOR RELIEF FROM ORDER DENYING DISCHARGE

JEROME FELLER, Bankruptcy Judge.

On May 6, 2011, the Debtor was denied a discharge pursuant to 11 U.S.C. § 727(a)(3) and 11 U.S.C. § 727(a)(4)(A) (“Order Denying Discharge”). The facts and circumstances underlying the determination to grant the Plaintiffs’ motion for summary judgment (“Plaintiffs’ Motion”) and to deny the Debtor a discharge are set forth in O’Connell v. DeMartino (In re DeMartino), 448 B.R. 122 (Bankr.E.D.N.Y.2011). The Court assumes familiarity with that decision.

Before the Court is the Debtor’s motion for relief from the Order Denying Discharge pursuant to Fed.R.Civ.P. 60(b) (“Rule 60(b)”), made applicable to this proceeding by Fed. R. Bankr.P. 9024 (“Debt- or’s Motion”). ECF No. 40. The Debtor’s main contention is that his prior counsel’s failure to submit an E.D.N.Y. LBR 7056-1 counterstatement of material facts in dispute in opposition to the Plaintiffs’ Motion constitutes “excusable neglect” under Rule 60(b)(1). In connection with the relief sought under Rule 60(b), the Debtor separately moves to reopen his Chapter 7 bankruptcy case.

The Order Denying Discharge was entered after extensive litigation in which the Debtor was at all times vigorously represented by counsel. A motion under Rule 60(b) requires a movant to demonstrate exceptional circumstances warranting relief. Yet the Debtor does not provide a plausible explanation for why he did not submit adequate opposition to the Plaintiffs’ Motion. The Debtor does not explain why this motion was made months after the Order Denying Discharge was entered. See Fed. R. Bankr.P. 8002(a) (“The notice of appeal shall be filed with the clerk within 14 days of the date of the entry of the judgment, order, or decree appealed from.”). He does not cite the controlling or relevant law of this Circuit. And he does not offer evidence to support his motion.

As described herein, the Debtor did not demonstrate excusable neglect under Rule 60(b)(1). Accordingly, the Debtor’s Motion is denied.

I.

Thomas Albert DeMartino filed a petition for relief under Chapter 7 of Title 11 of the United States Code on January 23, 2009. At the time, he was represented by Stuart P. Gelberg, Esq. On September 23, 2009, Richard J. O’Connell, the Chapter 7 Trustee of the Debtor’s estate (“Trustee”), and creditor Centennial Insurance Company (“Centennial”) commenced separate adversary proceedings objecting to the Debt- or’s discharge under various provisions of 11 U.S.C. § 727(a). In May 2010, Centennial’s action was dismissed pursuant to a stipulation and order, and the Trustee and Centennial (“Plaintiffs”) filed an amended complaint in this proceeding as co-plaintiffs. ECF Nos. 13, 16. The Debtor, represented by Vivian M. Williams, Esq. (“Williams”), filed an answer to the amended complaint on May 18, 2010. ECF No. 17.

On September 7, 2010, the Plaintiffs filed a motion for summary judgment, as well as a statement pursuant to E.D.N.Y. [554]*554LBR 7056-1, supported by various exhibits. ECF Nos. 19, 20. On October 1, 2010, the Debtor filed opposition together with a cross-motion for costs and attorney’s fees pursuant to 28 U.S.C. § 1927 (“Opposition Papers”). ECF No. 25. The Opposition Papers did not include an E.D.N.Y. LBR 7056-1 counterstatement of material facts in dispute or an affidavit from the Debtor. On December 7, 2010, the Court heard oral argument on the Plaintiffs’ Motion and reserved decision.

The Order Denying Discharge was entered in both the Debtor’s Chapter 7 case and this adversary proceeding on May 6, 2011. The Debtor did not appeal the Order Denying Discharge, and on August 12, 2011, his bankruptcy case was closed without the issuance of a discharge. On October 5, 2011, the Debtor, no longer represented by Williams, but now represented by a new lawyer, Lawrence F. Morrison, Esq. (“Morrison”), filed a motion for relief from the Order Denying Discharge, only to withdraw that motion on December 19, 2011. ECF Nos. 36, 39. On February 9, 2012, the Debtor, by Morrison, filed the instant motion and a supporting memorandum of law. ECF Nos. 40, 41. He separately filed a motion to reopen the Chapter 7 case.

The Debtor’s Motion is not supported by an affidavit from Williams or other evidence. Attached to the memorandum of law is a “verification” by the Debtor attesting that the “statements contained therein are true to the best of [the Debtor’s] knowledge, information and belief.” ECF No. 41. On May 15, 2012, Centennial filed opposition. ECF No. 45. That same day, the Trustee filed a declaration of joinder in Centennial’s opposition. ECF No. 47. The Debtor filed a reply on June 14, 2012. ECF No. 51.

The Court held a hearing on the Debt- or’s Motion on June 19, 2012, at which counsel for the Debtor, Centennial, and the Trustee appeared and were heard. At the hearing, the Court asked the parties for briefing on the issue of whether the faulty “handling of litigation by counsel [can] constitute a basis for relief from an order” or judgment under Rule 60(b)(1) “and if so, under what circumstances.” ECF No. 55 at 12:8-10.

On July 13, 2012, the Debtor filed a memorandum of law purporting to respond to the Court’s query. ECF No. 54. Centennial and the Trustee each filed separate responses. ECF Nos. 60, 63. The Court held a final hearing on the Debtor’s Motion on November 29, 2012, at which counsel for the Debtor, Centennial, and the Trustee appeared and were heard, and the Court reserved decision.

II.

Rule 60(b) provides that “[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:”

(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or
(6) any other reason that justifies relief.

Fed.R.Civ.P. 60(b). Whether relief under Rule 60(b) is warranted is a matter of the [555]*555court’s sound discretion. See Stevens v. Miller, 676 F.3d 62, 67 (2d Cir.2012).

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484 B.R. 550, 84 Fed. R. Serv. 3d 574, 68 Collier Bankr. Cas. 2d 1786, 2012 WL 6701742, 2012 Bankr. LEXIS 5922, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oconnell-v-demartino-in-re-demartino-nyeb-2012.