In re American Freight Systems, Inc.
| Decision Date | 19 September 1997 |
| Docket Number | Adversary No. 93-7179,88-41265-11,No. 97-2033-SAC,94-7023.,Bankruptcy No. 88-41050-11,95-4069-SAC,97-2033-SAC |
| Citation | 214 BR 914 |
| Parties | In re AMERICAN FREIGHT SYSTEMS, INC., Debtor. In re ANUHCO, INC. (f/k/a American Carriers, Inc.), Debtor. AMERICAN FREIGHT SYSTEM, INC., Plaintiff, v. Norman R. POWELL, Defendant. Norman R. POWELL, Plaintiff, v. ANUHCO, INC., et al., Defendant. |
| Court | U.S. District Court — District of Kansas |
P. John Brady, Gregory Bentz, James C. Sullivan, Shughart, Thomson & Kilroy, P.C., James R. Hess, Law Offices of Mark R. Rudoff, Kansas City, MO, for American Freight System, Incorporated.
P. John Brady, Gregory Bentz, James C. Sullivan, Shughart, Thomson & Kilroy, Kansas City, MO, for Anuhco, Incorporated.
Bert S. Braud, Dennis E. Egan, The Popham Firm, R. Pete Smith, Jonathan A Margolies, McDowell, Rice, Smith & Gear, Kansas City, MO, for Norman Powell.
In this bankruptcy case Norman R. Powell appealed the adverse rulings of the bankruptcy court to this court. The bankruptcy court's rulings essentially precluded Powell from asserting a multi-million dollar claim against his former employer, American Freight System (AFS). The bankruptcy court, however, granted Powell's motion to remand to allow Powell to pursue any claim which he might have against parties other than AFS — Anuhco, Inc.,1 Timothy P. O'Neil and John P. Bigger.2 For almost two years the parties proceeded to litigate that case in state court. Among other events, Powell named Fred Perillo as an additional defendant.
On December 17, 1996, this court entered a lengthy memorandum and order which affirmed in part and reversed in part the decisions of the bankruptcy court. See In re American Freight System, Inc., 205 B.R. 290 (D.Kan.1996). This court concluded that Powell may assert his contract and tort claims against AFS arising out of his purported post-confirmation incentive agreement. The court also concluded that Powell's claims against AFS should remain in this court to honor Powell's right to a jury trial. The bankruptcy court's decision denying Powell's request for fees and costs associated with the defendants' removal of his state case to federal court was affirmed.
This court also ordered AFS to file within ten days of the date of the December 17, 1996, order a pleading to indicate whether or not it intended to pursue the issue raised in its conditional cross-appeal. In its cross-appeal, AFS raises the issue of whether the bankruptcy court abused its discretion in remanding Powell's claims against Anuhco, Inc., John P. Bigger and Timothy O'Neil to state court. In a footnote, this court commented:
The bankruptcy court file holds no clues as to whether those claims against Anuhco, Inc., John P. Bigger and Timothy O\'Neil were in fact remanded. However, no stay appears in the files, so the court presumes that they have in fact been remanded to state court.
205 B.R. 307, n. 16. On December 27, 1996, AFS filed a pleading entitled "Notice of Intention of American Freight System, Inc. to Pursue Cross-Appeal" (Dk. 24).
On January 16, 1997, Fred Perillo removed Powell's state case against him and the other named defendants to federal court. That case was randomly assigned to Judge Lungstrum. On January 28, 1997, based upon the pending matters in this court, Judge Lungstrum transferred that case, Case No. 97-2033-JWL, entitled Powell v. Anuhco, Inc., et al., to this court. That case now bears Case No. 97-2033-SAC.
These cases come before the court upon the following pleadings and motions:3
The court will address these issues seriatim.
1. Motion of American Freight System, Inc. for Rehearing Pursuant to Bankruptcy Rule 8015 or, in the Alternative, For Leave to File a Motion for Rehearing Pursuant to District Court Local Rule 83.8.10 (Dk. 26).
AFS contends that this court, sitting as an appellate court, exceeded its jurisdiction in finding that the alleged incentive compensation agreement fell within the parameters of paragraph 26 of the Order Confirming the Fifth Amended Joint Plan of Reorganization. Because the bankruptcy court's orders do not mention paragraph 26, it is AFS' contention that this court lacked authority in its appellate role to base its decision in any way upon that paragraph and that at most a remand to the bankruptcy court would have been appropriate. AFS also contends that this court's ruling "creates an ambiguity or inconsistency between the Confirmation Order and the Fifth Amended Plan of Reorganization that must be resolved by the bankruptcy court."
Powell responds, arguing that the court's "December 17, 1996, Order was the result of a thorough review of the law and facts of this very complicated case, and since the Court in December 17, 1996, Order made no new findings of fact, there is no reason for rehearing." Powell suggests that displeasure with the court's rulings is not a justification for rehearing. Powell contends that this court has not made new findings of fact, but instead properly applied the facts in a manner rejected by the bankruptcy court. Powell contends that paragraph 26 is not inconsistent with the rest of the Confirmation order. First, that paragraph is the "law of the case" and has been for approximately six years. Powell notes that the language of paragraph 26 was drafted by AFS' current counsel. Powell contends that paragraph 26 plain and unambiguous and that there are no issues for the bankruptcy court to resolve.
In regard to AFS' request for the court to clarify Powell's position vis-a-vis his testimony, Powell contends that "there is nothing inconsistent about the position Powell takes now, versus what he has always claimed." Powell contends that AFS is inviting the court to act as factfinder — a role that AFS complains that this court took in its December 17, 1996, memorandum and order.
"A motion to reconsider shall be based on (1) an intervening change in controlling law, (2) availability of new evidence, or (3) the need to correct clear error or prevent manifest injustice." D.Kan. Rule 7.3; see Anderson v. United Auto Workers, 738 F.Supp. 441, 442 (D.Kan.1990). Absent extraordinary circumstances, "revisiting the issues already addressed `is not the purpose of a motion to reconsider.'" Van Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir.1991), cert. denied, 506 U.S. 828, 113 S.Ct. 89, 121 L.Ed.2d 51 (1992). "A motion for reconsideration is not to be used as a vehicle for the losing party to rehash arguments previously considered and rejected." Torre v. Federated Mutual Insurance Co., 906 F.Supp. 616, 618 (D.Kan.1995), aff'd, 124 F.3d 218 (10th Cir.1997). A party who fails to present his strongest case in the first instance generally has no right to raise new theories or arguments in a motion to reconsider. Renfro v. City of Emporia, 732 F.Supp. 1116, 1117 (D.Kan.1990), aff'd, 948 F.2d 1529 (10th Cir.1991), cert. dismissed, 503 U.S. 915, 112 S.Ct. 1310, 117 L.Ed.2d 510 (1992). A motion to reconsider advanced for improper purposes "can waste judicial resources and obstruct the efficient administration of justice." United States ex rel Houck v. Folding Carton Administration Committee, 121 F.R.D. 69, 71 (N.D.Ill.1988).
The court notes that AFS' primary argument is essentially raised for the first time in this motion for rehearing. This is improper. In rendering its decision, this court has not latched on to some minute point scarcely raised before the bankruptcy court. The crux of Powell's case before the bankruptcy court and in his appeal to this court was his construction of paragraph 26. At no point prior to the court's December 17, 1996, memorandum and order, did AFS suggest that this court lacked jurisdiction to entertain the primary argument advanced in Powell's appeal. The whole thrust of Powell's appeal was self-evident — yet AFS never hinted that the court's acceptance of that argument would have exceeded this court's appellate jurisdiction.
In any event, the court has not exceeded its appellate jurisdiction. The court has simply reviewed the bankruptcy court's decision in light of the record before it and concluded that the lower court's ruling is inconsistent with the plain language of paragraph 26 of the Order Confirming the Fifth Amended Joint Plan of Reorganization. It is probably worth noting that if AFS has correctly interpreted the scope of appellate court jurisdiction, a lower court could simply ignore the most troubling arguments presented by a party and insure itself that it is immune from reversal — at worst guaranteeing one more chance at the plate following a remand by the appellate court. This is obviously not the case. Appellate court's routinely affirm lower court's decisions under a "right, but for the wrong reason" analysis. See Orner v. Shalala, 30 F.3d 1307, 1309 (10th Cir.1994) () (citing United States v. Roederer, 11 F.3d 973, 977 (10th Cir.1993)); see generally Bolden v. PRC Inc., 43 F.3d 545, 548 (10th Cir.1994) (...
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