THE DISTRICT OF PUERTO RICO 2
3 IN RE: CORP. CASE NO. 11-02270 BKT _____________________________________ Chapter 11 6
CORP. 8 ADV. NO.: 11-100 PLAINTIFF 9 VS. 10
12 DEFENDANT FILED & ENTERED ON 07/26/2012 13
16 This proceeding is before the court upon Defendant’s Motion Requesting 17 Reconsideration of Order Denying Motion for Summary Judgment [Dkt. No. 62] and 18 the Plaintiff/Debtor’s Opposition to PREPA’s Motion for Reconsideration for 19 Failure to comply with either F.R.C.P. 59 or F.R.C.P. 60 [Dkt. No. 63]. In 20 essence, the Defendant requests that the court reconsider its ruling entered on 21 June 1, 2012 [Dkt. No. 55], under the Federal Rules of Civil Procedure, Rule 22 59(e). For the reasons set forth below, the Defendant’s Motion Requesting 23 Reconsideration of Order Denying Motion for Summary Judgment is hereby DENIED. 24 25 On April 26, 2011, San Juan Bautista Medical Center (“Plaintiff”) filed a complaint against the Puerto Rico Electric Power Authority (“Defendant”) for declaratory judgment under 28 U.S.C. § 2201, and injunctive relief under 11 U.S.C. § 362 and 11 U.S.C. § 105 [Dkt. No.1]. Defendant, Plaintiff and Intervenor: Escuela de Medicina San Juan Bautista filed simultaneous Motions for Summary Judgment [Dkt. No. 43, 44 & 45]. Plaintiff filed Debtor’s statement on 1 supplemental briefing beyond the simultaneous Motions for Summary Judgment 2 already filed [Dkt. No. 49] and Defendant filed an Opposition to Debtor’s Motion 3 for Summary Judgment and Memorandum of Law in support thereof [Dkt. No. 50]. 4 The motions for summary judgment were denied. The court found that there 5 was a disputed material fact that exists for trial. Specifically, whether the 6 funds consigned in the amount of $400,000 by the San Juan Bautista School of 7 Medicine with the Caguas Court of First Instance are property of the estate [Dkt. 8 No. 55]. 9 Defendant argues in its motion for reconsideration that there is no 10 material fact in dispute with respect to the funds consigned in the amount of 11 $400,000 by the San Juan Bautista School of Medicine with the Caguas Court of 12 13 First Instance. The Defendant alleges that the funds were not part of the estate 14 because the funds were consigned with the court by a party different from the 15 Plaintiff, who has not filed for bankruptcy, and was not protected by the 16 automatic stay at the time of the consignation. Defendant also argues in the 17 alternative that if Article 1134 of the Puerto Rico Civil Code was applicable to 18 the factual events in this case, Plaintiff would have been able to withdraw the 19 funds consigned and returned them to the estate, which the Plaintiff made no 20 effort to do. Both of these theories were previously proffered and rejected by 21 this court. 22 “The Federal Rules of Civil Procedure do not specifically provide for the 23 filing of motion for reconsideration.” Sanchez–Perez v. Sanchez–Gonzalez, 717 24 F.Supp.2d 187 (D. Puerto Rico, 2010). The federal courts have consistently stated 25 that a motion so denominated which challenges the prior judgment on the merits will be treated as either a motion ‘to alter or amend’ under FRCP 59 or a motion for ‘relief from judgment’ under FRCP 60. Equity Security Holders' Committee v. Wedgestone Financial, 152 B.R. 786, 788 (Bkrtcy.D.Mass.1993). “These two rules are distinct; they serve different purposes and produce different consequences. 1 Which rule applies depends essentially on the time a motion is served. If a 2 motion is served within ten days of the rendition of judgment, the motion 3 ordinarily will fall under Rule 59(e).1 If the motion is served after that time 4 it falls under Rule 60(b).” In re Rodriguez, 233 B.R. 212, 218–19 (Bankr.D.Puerto 5 Rico 1999). In the instant case, Defendant's motion to amend the judgment was 6 filed ten (10) days after the Court's judgment, as per Fed. R. Civ. P. 6(a). The 7 Defendant argues ‘mistake of law or fact' which is a determinative factor under 8 both Rules. Therefore, the motion will be construed as one pursuant to FRCP 59(e) 9 which is made applicable to bankruptcy cases by FRBP 9023. In seeking 10 reconsideration, “the moving party must either clearly establish a manifest error 11 of law or must present newly discovered evidence.” Marie v. Allied Home Mortgage 12 13 Corp., 402 F.3d 1, 7 n.2 (1st Cir. 2005) (quoting Pomerleau v. W. Springfield 14 Pub. Sch., 362 F.3d 143, 146 n.2 (1st Cir. 2004)). The First Circuit in Marie 15 also cited a leading treatise, highlighting the following four grounds for 16 granting a motion for reconsideration under Fed. R. Civ. P. 59(e): (1) manifest 17 errors of law and fact; (2) newly discovered or previously unavailable evidence; 18 (3) manifest injustice; and, (4) an intervening change in controlling law. 402 19 F.3d at 7 (citing 11 C. Wright et al., Federal Practice & Procedure § 2810.1 (2d 20 ed. 1995)). Under Rule 59, reconsideration of a judgment is an extraordinary 21 remedy, which is used sparingly and only when the need for justice outweighs the 22 interests set forth by a final judgment. The underlying policy of 23 reconsideration is to provide a court with a means to correct its own errors. 24 White v.New Hampshire Dept. of Employment Sec., 455 U.S. 445, 450 (1982). 25 Conversely, Rule 59(e) does not exist to allow parties a second chance 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
1 The Rules now allow for fourteen days instead of ten from the entry of judgment. 1 |] Court. Id. at 616. The party cannot use a Rule 59(e) motion to cure its o 2 ||procedural failures or to introduce new evidence or advance arguments that coul 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., 45 7 U.S. at 450).
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THE DISTRICT OF PUERTO RICO 2
3 IN RE: CORP. CASE NO. 11-02270 BKT _____________________________________ Chapter 11 6
CORP. 8 ADV. NO.: 11-100 PLAINTIFF 9 VS. 10
12 DEFENDANT FILED & ENTERED ON 07/26/2012 13
16 This proceeding is before the court upon Defendant’s Motion Requesting 17 Reconsideration of Order Denying Motion for Summary Judgment [Dkt. No. 62] and 18 the Plaintiff/Debtor’s Opposition to PREPA’s Motion for Reconsideration for 19 Failure to comply with either F.R.C.P. 59 or F.R.C.P. 60 [Dkt. No. 63]. In 20 essence, the Defendant requests that the court reconsider its ruling entered on 21 June 1, 2012 [Dkt. No. 55], under the Federal Rules of Civil Procedure, Rule 22 59(e). For the reasons set forth below, the Defendant’s Motion Requesting 23 Reconsideration of Order Denying Motion for Summary Judgment is hereby DENIED. 24 25 On April 26, 2011, San Juan Bautista Medical Center (“Plaintiff”) filed a complaint against the Puerto Rico Electric Power Authority (“Defendant”) for declaratory judgment under 28 U.S.C. § 2201, and injunctive relief under 11 U.S.C. § 362 and 11 U.S.C. § 105 [Dkt. No.1]. Defendant, Plaintiff and Intervenor: Escuela de Medicina San Juan Bautista filed simultaneous Motions for Summary Judgment [Dkt. No. 43, 44 & 45]. Plaintiff filed Debtor’s statement on 1 supplemental briefing beyond the simultaneous Motions for Summary Judgment 2 already filed [Dkt. No. 49] and Defendant filed an Opposition to Debtor’s Motion 3 for Summary Judgment and Memorandum of Law in support thereof [Dkt. No. 50]. 4 The motions for summary judgment were denied. The court found that there 5 was a disputed material fact that exists for trial. Specifically, whether the 6 funds consigned in the amount of $400,000 by the San Juan Bautista School of 7 Medicine with the Caguas Court of First Instance are property of the estate [Dkt. 8 No. 55]. 9 Defendant argues in its motion for reconsideration that there is no 10 material fact in dispute with respect to the funds consigned in the amount of 11 $400,000 by the San Juan Bautista School of Medicine with the Caguas Court of 12 13 First Instance. The Defendant alleges that the funds were not part of the estate 14 because the funds were consigned with the court by a party different from the 15 Plaintiff, who has not filed for bankruptcy, and was not protected by the 16 automatic stay at the time of the consignation. Defendant also argues in the 17 alternative that if Article 1134 of the Puerto Rico Civil Code was applicable to 18 the factual events in this case, Plaintiff would have been able to withdraw the 19 funds consigned and returned them to the estate, which the Plaintiff made no 20 effort to do. Both of these theories were previously proffered and rejected by 21 this court. 22 “The Federal Rules of Civil Procedure do not specifically provide for the 23 filing of motion for reconsideration.” Sanchez–Perez v. Sanchez–Gonzalez, 717 24 F.Supp.2d 187 (D. Puerto Rico, 2010). The federal courts have consistently stated 25 that a motion so denominated which challenges the prior judgment on the merits will be treated as either a motion ‘to alter or amend’ under FRCP 59 or a motion for ‘relief from judgment’ under FRCP 60. Equity Security Holders' Committee v. Wedgestone Financial, 152 B.R. 786, 788 (Bkrtcy.D.Mass.1993). “These two rules are distinct; they serve different purposes and produce different consequences. 1 Which rule applies depends essentially on the time a motion is served. If a 2 motion is served within ten days of the rendition of judgment, the motion 3 ordinarily will fall under Rule 59(e).1 If the motion is served after that time 4 it falls under Rule 60(b).” In re Rodriguez, 233 B.R. 212, 218–19 (Bankr.D.Puerto 5 Rico 1999). In the instant case, Defendant's motion to amend the judgment was 6 filed ten (10) days after the Court's judgment, as per Fed. R. Civ. P. 6(a). The 7 Defendant argues ‘mistake of law or fact' which is a determinative factor under 8 both Rules. Therefore, the motion will be construed as one pursuant to FRCP 59(e) 9 which is made applicable to bankruptcy cases by FRBP 9023. In seeking 10 reconsideration, “the moving party must either clearly establish a manifest error 11 of law or must present newly discovered evidence.” Marie v. Allied Home Mortgage 12 13 Corp., 402 F.3d 1, 7 n.2 (1st Cir. 2005) (quoting Pomerleau v. W. Springfield 14 Pub. Sch., 362 F.3d 143, 146 n.2 (1st Cir. 2004)). The First Circuit in Marie 15 also cited a leading treatise, highlighting the following four grounds for 16 granting a motion for reconsideration under Fed. R. Civ. P. 59(e): (1) manifest 17 errors of law and fact; (2) newly discovered or previously unavailable evidence; 18 (3) manifest injustice; and, (4) an intervening change in controlling law. 402 19 F.3d at 7 (citing 11 C. Wright et al., Federal Practice & Procedure § 2810.1 (2d 20 ed. 1995)). Under Rule 59, reconsideration of a judgment is an extraordinary 21 remedy, which is used sparingly and only when the need for justice outweighs the 22 interests set forth by a final judgment. The underlying policy of 23 reconsideration is to provide a court with a means to correct its own errors. 24 White v.New Hampshire Dept. of Employment Sec., 455 U.S. 445, 450 (1982). 25 Conversely, Rule 59(e) does not exist to allow parties a second chance 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
1 The Rules now allow for fourteen days instead of ten from the entry of judgment. 1 |] Court. Id. at 616. The party cannot use a Rule 59(e) motion to cure its o 2 ||procedural failures or to introduce new evidence or advance arguments that coul 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., 45 7 U.S. at 450). See also, Nat’l Metal Finishing Co. v. BarclaysAmerican/Commercial, 8 Inc., 899 F.2d 119, 123 (1st Cir. 1999) (Rule 59(e) does not allow losing part 9 Lo to rehash old arguments, previously considered and rejected). 11 In its motion to reconsider, Defendant does not “clearly establish 12 manifest error of law or... present newly discovered evidence” in its motion t 13 alter or amend judgment. Marie v. Allied Home Mortgage Corp., 402 F.3d 1, 7 n.2 14 (lst Cir. 2005) (quoting Pomerleau v. W. Springfield Pub. Sch., 362 F.3d 143, 146 15 (lst Cir. 2004)). Because Defendant fails to establish any of the factors 16 ||required, this court finds that the Defendant is not entitled to reconsideration. 17 WHEREFORE, IT IS ORDERED that the Defendant’s Motion Requestin 18 Reconsideration of Order Denying Motion for Summary Judgment shall be, and it 19 . hereby is, DENIED. 20 IT IS SO ORDERED. 21 San Juan, Puerto Rico this 26 day of July, 2012. 22 23 . aD 24 rian - Tester 25 U.S. Bankruptcy Judge ce: ALL CREDITORS