Harper v. Heather Hills Amenities, LLC
| Decision Date | 03 March 2023 |
| Docket Number | Case No: 8:21-cv-1057-CEH |
| Parties | David HARPER, et al., Appellants, v. HEATHER HILLS AMENITIES, LLC and Lakeshore Management, Inc., Appellees. |
| Court | U.S. District Court — Middle District of Florida |
Benjamin G. Martin, Benjamin G. Martin, Esq., Sarasota, FL, for Appellant David Harper.
Kathleen Schin McLeroy, Nathaniel G. Foell, Joseph H. Lang, Carlton Fields, PA, Tampa, FL, for Appellees.
Frederic Bennet O'Neal, pro se.
This matter comes before the Court on Appellants’ Motion for Rehearing. Doc. 19. In the motion, Appellants request the Court reconsider the issues on appeal arguing that the Bankruptcy Court lacked subject-matter jurisdiction to enter the orders of dismissal that are on appeal. Appellees filed a memorandum in opposition. Doc. 22. The Court, having considered the motion and being fully advised in the premises, finds that the Court properly has jurisdiction over this appeal and will deny Appellants’ request for reconsideration.
Appellants are lot owners in the Heather Hills Estates subdivision. In this appeal, Appellants challenged the dismissal of their declaratory judgment action by the Bankruptcy Court. Appellants initiated their declaratory action in state court on October 1, 2019. The action sought a declaration that application of the "New Restrictions" to their lots in the Heather Hills Estates subdivision violates Florida Statutes § 712.12. The "New Restrictions" referred to certain covenants burdening the lots in the Heather Hills Estates subdivision that were revived by the Confirmation Plan ("the Plan") in the bankruptcy of debtor, Heather Hills Estates, LLC. The Plan provided that, pursuant to Part III of Chapter 720 of the Florida Statutes, the Heather Hills Estates subdivision lot owners would vote to decide whether to enact the New Restrictions. Doc. 2-7 at 7. In its Confirmation Order, the Bankruptcy Court found that a majority of the Heather Hills Estates subdivision lot owners voted in favor of the New Restrictions. Doc. 2-8 at 2–3.
Appellees removed the state court action to the bankruptcy court and then moved to dismiss Appellants’ complaint in the state court action turned adversary proceeding arguing Appellants’ claims were barred by res judicata because Appellants never timely challenged the Bankruptcy Court's Confirmation Orders.
Appellants responded that res judicata does not apply because there was no final judgment on the merits, because their lots ceased to be governed by the covenants as of October 1, 2018, and because the New Restrictions would unconstitutionally deprive them of rights and property. In granting Appellees’ motion to dismiss the adversary proceeding, the Bankruptcy Court found that Appellants’ claims were barred by res judicata . Additionally, the Bankruptcy Court found no due process violation. Further, the Bankruptcy Court found that the New Restrictions would not "unconstitutionally deprive [the Lot Owners] of rights or property." Doc. 2-2 at 6; Doc. 2-3 at 6. The June 2018 Confirmation Order confirmed the Plan that applied the New Restrictions to Appellants’ lots in the Heather Hills Estates subdivision, Appellants received notice of the Confirmation Order, which was a final Order, and significantly, Appellants never timely appealed or challenged the Confirmation Order.
On April 29, 2021, Appellants appealed to this Court the bankruptcy court's Orders of Dismissal. On appeal, Appellants’ challenge was limited to whether the Bankruptcy Court erred in applying the doctrines of res judicata and equitable mootness. Appellants never challenged the Bankruptcy Court's finding that there was no constitutional deprivation because the Lot Owners received their due process in that they were afforded the opportunity to vote regarding the New Restrictions.
On March 21, 2022, this Court issued an Opinion and Order affirming the Bankruptcy Court's Orders of Dismissal of Appellants’ complaint for declaratory relief. Doc. 18. On April 4, 2022, Appellants moved for rehearing arguing the Bankruptcy Court lacked jurisdiction to enter the Orders of Dismissal and therefore this Court lacked jurisdiction to enter its March 21, 2022 Order. Doc. 19. In response, Appellees submit that subject-matter jurisdiction exists because the Bankruptcy Court has the authority to enforce its own orders and the other state law issues raised do not support reconsideration.
Federal Rule of Bankruptcy Procedure 8022 provides that a party filing any motion for rehearing by the district court must file it within fourteen days after entry of the judgment on appeal and "must state with particularity each point of law or fact that the movant believes the district court has overlooked or misapprehended." Fed. R. Bankr. P. 8022(a). "Bankruptcy Rule 8022 (formerly 8015) is silent regarding the standard for granting a rehearing motion." In re Env't Techs. Int'l, Inc ., No. 8:17-cv-74-VMC, 2017 WL 3124246, at *1 (M.D. Fla. July 21, 2017). However, courts in the Eleventh Circuit have reviewed motions for rehearing in the same manner as a motion for reconsideration. See In re Paris, No. 6:06-cv-1084-PCF, 2006 WL 3628296, at *1 (M.D. Fla. Oct. 30, 2006) (citing In re Envirocon Int'l Corp ., 218 B.R. 978, 979 (M.D. Fla. 1998) ). "To that end, this Court recognizes three grounds warranting reconsideration of a prior order: (1) an intervening change in law, (2) the discovery of new evidence which was not available at the time the Court rendered its decision, or (3) the need to correct clear error or manifest injustice." In re Baumann , No. 6:15-cv-643-PGB, 2016 WL 1755972, at *1 (M.D. Fla. May 3, 2016) (citing Fla. Coll. of Osteopathic Med., Inc. v. Dean Witter Reynolds, Inc ., 12 F. Supp. 2d 1306, 1308 (M.D. Fla. 1998) ).
"A motion for reconsideration must demonstrate why the court should reconsider its prior decision and ‘set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision.’ " Florida Coll. of Osteopathic Med., 12 F. Supp. 2d at 1308 (quoting Cover v. Wal–Mart Stores, Inc. , 148 F.R.D. 294, 295 (M.D. Fla. 1993) ). A motion for reconsideration should not be used to present the Court with arguments already heard and dismissed, or to offer new legal theories or evidence that could have been presented prior to the entry of judgment. See Arthur v. King , 500 F.3d 1335, 1343-44 (11th Cir. 2007) ; O'Neal v. Kennamer , 958 F.2d 1044, 1047 (11th Cir. 1992) ; Pres. Endangered Areas of Cobb's History, Inc. v. U.S. Army Corps of Eng'rs , 916 F. Supp. 1557, 1560 (N.D. Ga. 1995), aff'd 87 F.3d 1242 (11th Cir. 1996) (). Whether to grant a motion for reconsideration is "committed to the sound discretion of the district judge." O'Neal , 958 F.2d at 1047.
Appellants timely move for rehearing of the Court's Order affirming the Bankruptcy Court's Orders of Dismissal. In support of their motion, Appellants argue the Bankruptcy Court lacked jurisdiction to enter the orders of dismissal and therefore this Court was without jurisdiction to issue the order on appeal. A lack of subject-matter jurisdiction may be raised at any time, even for the first time on appeal. See Arena v. Graybar Elec. Co ., 669 F.3d 214, 223 (5th Cir. 2012) (). Thus, regardless of whether Appellants challenged the Court's jurisdiction initially, Appellants may raise the argument now.
Although framed in terms of a jurisdictional challenge, however, Appellants’ thirty-three-page motion spends a mere three pages on their jurisdictional argument and otherwise utilizes the remainder of the motion to collaterally attack the Bankruptcy Court's Confirmation Order and to argue matters previously litigated or which should have been raised earlier. Appellants’ Motion for Rehearing fails to establish that the Bankruptcy Court or this Court lacked subject-matter jurisdiction, and otherwise fails to set forth facts or law of a strongly convincing nature to persuade the Court it should reverse its decision affirming the Bankruptcy Court's Orders of Dismissal.
At issue here is whether the Bankruptcy Court had jurisdiction to dismiss Appellants’ declaratory judgment action questioning the application of the "New Restrictions" to their lots in the Heather Hills Estates subdivision where the Appellant lot owners failed to challenge the Confirmation Order of which they had notice. As part of the Debtor's reorganization, the Confirmation Plan revived and applied certain covenants (the "New Restrictions") to the lots in the Heather Hills subdivision after a vote of the lot owners. In confirming the Plan, the Bankruptcy Court found that the Plan and the New Restrictions were proposed in good faith and that the revival of the restrictions was "integral to the success of the Debtor's reorganization." Doc. 2-8 at 3. Relevant to the dispute below, "[a] bankruptcy court retains post-confirmation jurisdiction to interpret and enforce its own orders, particularly when disputes arise over a bankruptcy plan of reorganization." In re 8 Mile Ranch, LLC , No. 6:12-BK-10227-KSJ, 2015 WL 5307389, at *3 (Bankr. M.D. Fla. Sept. 10, 2015). A bankruptcy court's interpretation of its own orders is entitled to deference upon appellate review. In re Optical Technologies, Inc ., 425 F.3d 1294, 1300 (11th Cir. 2005).
The Eleventh Circuit has held that "[w]hen, in a Chapter 11 case, a...
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