TP, Inc. v. Bank of America, N.A. (In re TP, Inc.)

486 B.R. 698, 2013 WL 620471, 2013 Bankr. LEXIS 616, 57 Bankr. Ct. Dec. (CRR) 160
CourtUnited States Bankruptcy Court, E.D. North Carolina
DecidedFebruary 19, 2013
DocketBankruptcy No. 10-01594-8-SWH; Adversary No. H-11-00112-8-AP
StatusPublished
Cited by2 cases

This text of 486 B.R. 698 (TP, Inc. v. Bank of America, N.A. (In re TP, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
TP, Inc. v. Bank of America, N.A. (In re TP, Inc.), 486 B.R. 698, 2013 WL 620471, 2013 Bankr. LEXIS 616, 57 Bankr. Ct. Dec. (CRR) 160 (N.C. 2013).

Opinion

ORDER REGARDING MOTION TO RECONSIDER

STEPHANIW. HUMRICKHOUSE, Bankruptcy Judge.

Pending before the court is the chapter 7 trustee’s motion to reconsider the Order Denying Motion to Dismiss and Granting in Part Motion to Stay, entered by this court on September 26, 2012, with respect to the court’s conclusion in that order that “Bank of America, N.A. (hereinafter “BOA”) has not waived its right to arbitration and, alternatively, that TP, Inc.’s claim under Chapter 75 of the North Carolina General Statutes is subject to a contractual arbitration provision.” A hearing was held in Raleigh, North Carolina, on December 6, 2012. For the reasons that follow, the motion will be denied.

In support of his motion, the trustee cites Bankruptcy Rules 7054, 9023, and 9024, and Rules 54(b), 59(e) and 60(b) of the Federal Rules of Procedure. Rule 59(e) (made applicable by Rule 9023 of the Federal Rules of Bankruptcy Procedure) permits alteration or amendment of an order in certain instances, and Rule 60(b) of the Federal Rules of Civil Procedure (made applicable in bankruptcy by Rule 9024 of the Federal Rules of Bankruptcy Procedure) provides that the court “may relieve a party or its legal representative from a final judgment, order, or proceeding [due to] mistake, inadvertence, surprise, or excusable neglect,” as well as “any other reason that justifies relief.”1 Fed.R.Civ.P. 60(b)(1) and (6).

Pursuant to these rules, a bankruptcy court will “deny a motion to reconsider unless the movant can make a showing of one of the enumerated grounds for relief, which are: (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or manifest injustice.” In re L.L. Murphrey Co., 2012 WL 4855355, at *2 (Bankr.E.D.N.C.2012). As the Murphrey court also noted, reconsideration is “an extraordinary remedy which should be used sparingly, and a motion for reconsideration is not intended to allow a party to relitigate matters the court has previously heard.” Id. at *2 (quoting Pacific Ins. Co. v. Am. Nat’l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir.1998)). The motion to reconsider contends generally that the court’s order of September 26, 2012 (“September 26 Order”) contains errors of law.

The trustee perceives errors in connection with the court’s conclusion that BOA did not waive its contractual right to arbitration, and also with the court’s determination that the debtor’s state law claim asserting violations of North Carolina’s Unfair and Deceptive Trade Practices Act (the “UDTPA” claim) could appropriately be resolved in arbitration. The court will review each in turn.

I. Prejudice to TP and Waiver of Arbitration Rights

First, the trustee contends,

It appears that the Court’s decision to measure BOA’s delay from TP’s filing of the adversary complaint was based on its impression that the adversary claims were “substantially different” from the [701]*701issues in the original state-court litigation. However, the Trustee respectfully asks the Court to reconsider this decision in light of its later conclusion that TP’s claims in the present adversary proceeding are in fact “substantially similar” to the original counterclaims.
Accordingly, BOA’s delay should be measured relative to the filing of BOA’s original complaint, or at the latest TP’s initial state-court counterclaims, rather than from TP’s filing of this adversary proceeding.

Trustee’s Motion to Reconsider Denying Motion to Dismiss and Granting In Part Motion to Stay (Oct. 16, 2012) at 4-5.

On review of the September 26 Order, it appears that the trustee inadvertently mistook the nature of the distinctions made in that order. The September 26 Order states that the adversary complaint, which was filed by the debtor, “raised issues significantly different from those raised by BOA in its initial state court action.” September 26 Order at 8 (emphasis added). The order also states that the counterclaims presented in the state court action by the debtor, TP, are “substantially similar to the claims asserted by TP in this adversary proceeding.” Id. at 14. In other words, the debtor’s complaint in the adversary proceeding raises issues that are significantly different from those raised by BOA in BOA’s state court action, which was geared toward collecting a debt, and substantially similar to those originally asserted by the debtor as counterclaims in the state court action. There is no discrepancy or mistake.

The trustee also reiterated his arguments that because BOA was on notice that there was an “actual controversy about the validity of its alleged debt” as a result of the counterclaims the debtors filed in state court and then dismissed without prejudice, BOA has waived its arbitration rights. The trustee does not assert any new law or specific mistake on the part of the court in connection with the September 26 Order; rather, the trustee rephrases his original arguments.

Specifically, the trustee contends that the

determination by the Court that TP was not prejudiced by BOA’s delay in seeking arbitration because BOA acted within 34 days of TP filing its adversary complaint, resulting in the allowance of BOA’s motion to stay pending arbitration, would itself demonstrate that the consensual dismissal of the state-court counterclaims did in fact actually and materially prejudice TP and benefit BOA. Despite BOA’s notice of TP’s counterclaims in the state-court action for two years — a time that courts have found so lengthy as to strongly support a finding of waiver — this period of delay would be effectively erased by TP refiling those counterclaims as agreed by the parties to the consent order. In other words, BOA benefitted from, and TP was harmed by, a reset clock.

Trustee’s Motion at 5.

This argument already has been presented to the court, and a motion to reconsider must serve as more than simply another bite at the decisional apple. Other than the trustee’s suggestion that the September 26 Order was internally inconsistent (addressed above), the trustee articulates no specific basis upon which the court should review this aspect of its prior holding: Instead, the trustee simply argues, again, that a litigant may dismiss its claims without prejudice, assert them two years later, and then attribute to the other party a waiver of that party’s ability to assert a right that it “could and should” have asserted in response to those claims, as if they had not been withdrawn. “Had BOA not obtained the dismissal without preju[702]

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Cite This Page — Counsel Stack

Bluebook (online)
486 B.R. 698, 2013 WL 620471, 2013 Bankr. LEXIS 616, 57 Bankr. Ct. Dec. (CRR) 160, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tp-inc-v-bank-of-america-na-in-re-tp-inc-nceb-2013.