In re Cook

• Decision Date: 06 November 2012
• Docket Number: No. 7 - 04-17704 - SA,7 - 04-17704 - SA
• Parties: In re: Daniel William Cook and Yolanda T. Cook, Debtors.
• Court: U.S. Bankruptcy Court — District of New Mexico

In re: Daniel William Cook and Yolanda T. Cook, Debtors.

No. 7 - 04-17704 - SA

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF NEW MEXICO

Date entered on docket: November 6, 2012

MEMORANDUM OPINION ON DEBTOR DANIEL W. COOK'S

MOTION TO ALTER OR AMEND FINAL DECREE, OR ALTERNATIVELY

VACATE [FINAL DECREE], REINSTATE AUTOMATIC STAY, AND TO

RETAIN JURISDICTION FOR ALL MATTERS RELATED TO THE

BANKRUPTCY TO AFFORD CONSTITUTIONAL RIGHTS GRANTED BY

ART 1, SECTION 8, CLAUSE 4 OF THE U.S. CONSTITUTION

This matter is before the Court¹ on Debtor Daniel W. Cook's Motion to Alter or Amend Final Decree, or Alternatively Vacate [Final Decree], Reinstate Automatic Stay, and to Retain Jurisdiction for All Matters Related to the Bankruptcy to Afford Constitutional Rights Granted by Art 1, Section 8, Clause 4 of the U.S. Constitution (doc 941) as amended and supplemented by doc 942 (together the "Motion"). Mr. Cook is self-represented. For the reasons set forth below, the Motion will be denied.²

The thrust of the Motion is that Mr. Cook claims that the estate was not fully administered and should not have been closed by the final decree. In his argument, he admits that section 350³ would allow him to seek a reopening of the case after the two appeals he has pending in the Tenth Circuit Court of Appeals are (presumably) decided in his favor. However, he believes it would be better to simply reopen the case now and leave it open, allow the Chapter 7 Trustee to be discharged and to have his bond cancelled, so that he and he alone can administer estate assets. Mr. Cook insists that the estate has damage claims from stay violations "and other causes" against Wells Fargo Bank and the Garretts that have a "supportable value" of $5.5 billion. He argues that granting this relief will eliminate the issues pending before the Tenth Circuit, so that Court would no longer need to address them. Alternatively, vacating the final decree and re-imposing the automatic stay would reestablish the status quo until the Tenth Circuit (presumably) rules in his favor and refers the case back to this Court for further processing of the "violations and causes." He also wants the Court to retain jurisdiction over all matters to afford him the (unspecified) rights granted by Art. 1, section 8, clause 4 of the U.S. Constitution. Finally, he argues that the closing of this casehas denied him a fresh start because if the case is not open he cannot pursue "possible lien avoidance" for his exempt property.

THE ARTICLE I ARGUMENT

The Constitution states that "Congress shall have the Power to ... establish ... uniform Laws on the subject of Bankruptcies throughout the United States." U.S. CONST. art. I, § 8. Not only is there no constitutional right to file bankruptcy, but Congress need not even create a bankruptcy law. In fact, there was (with three short unsuccessful exceptions) no bankruptcy law for more than the first 100 years of our history. See generally Charles Warren, Bankruptcy in United States History 60-85 (1935); 1 James Wm. Moore et al., Collier on Bankruptcy ¶ 0.04 (14th ed. 1974). Thus, any "right" to file bankruptcy is statutory, not constitutional.

Thomas G. Kelch and Michael K. Slattery, the Mythology of Waivers of Bankruptcy Privileges, 31 Ind. L.Rev. 897, 900 (1998)(Footnotes incorporated into quoted text.) See also United States v. Kras, 409 U.S. 434, 444-45 (1973)(The interest in filing bankruptcy does not rise to the same constitutional level as the ability to obtain a divorce; no fundamental interest is gained or lost depending on the availability of a discharge in bankruptcy.) Mr. Cook's claims do not rise to the constitutional level.

STANDARDS APPLICABLE TO THIS MOTION

Mr. Cook's Motion is a Motion for Reconsideration of the entry of the Final Decree (doc 940) in his eight year old no asset chapter 7 case. The Tenth Circuit Court of Appeals has stated when a reconsideration motion is proper:

[A] motion to reconsider filed within ten⁴ days after entry of judgment is considered a Fed.R.Civ.P. 59(e) motion. SeeVan Skiver [v. United States], 952 F.2d [1241] at 1243 (10th Cir. 1991). Grounds warranting a motion to reconsider include (1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice. See Brumark Corp. v. Samson Resources Corp., 57 F.3d 941, 948 (10th Cir. 1995). Thus, a motion for reconsideration is appropriate where the court has misapprehended the facts, a party's position, or the controlling law. Cf. Fed.R.App.P. 40(a)(2)(grounds for rehearing). It is not appropriate to revisit issues already addressed or advance arguments that could have been raised in prior briefing. SeeVan Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991).

Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). "Rule 59(e) cannot be used to expand a judgment to encompass new issues which could have been raised prior to issuance of the judgment." Steele v. Young, 11 F.3d 1518, 1520 n.1 (10th Cir. 1993)(Citation omitted.) Accord Fábrica de Muebles J.J. Álvarez, Inc. v. Inversiones Mendoza, Inc., 682 F.3d 26, 31 (1st Cir. 2012):

"The granting of a motion for reconsideration is 'an extraordinary remedy which should be used sparingly.' " Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir. 2006) (quoting 11 Charles Alan Wright et al., Federal Practice and Procedure § 2810.1 (2d ed. 1995)). The moving party "must 'either clearly establish a manifest error of law or must present newly discovered evidence.'" Marie v. Allied Home Mortg. Corp., 402 F.3d 1, 7 n.2 (1st Cir. 2005) (quoting Pomerleau v. W. Springfield Pub. Sch., 362 F.3d 143, 146 n.2 (1st Cir.2004)). A motion for reconsideration "does not provide a vehicle for a party to undo its own procedural failures, and it certainly does not allow a party to introduce new evidence or advance arguments that could and should have been presented to the district court prior to the judgment." Aybar v. Crispin-Reyes, 118 F.3d 10, 16 (1st Cir. 1997) (quoting Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th Cir. 1996)) (internal quotation marks omitted).

A reconsideration motion must present new evidence in support of the motion, or point out "manifest errors." Illinois Central Gulf Railroad Company v. Tabor Grain Co., 488 F.Supp. 110, 122 (N.D. Ill. 1980). Furthermore, a court will not find "injustice" when a party could have easily avoided the outcome of a case, but instead elected not to act until after a final order has been entered. Ciralsky v. Central Intelligence Agency, 355 F.3d 661, 673 (D.C. Cir. 2004). As explained below, all Mr. Cook had to do to avoid his current situation was to timely file a simple objection to the Trustee's Rule 5009 certification.

The Court will deny Mr. Cook's Motion for Reconsideration. As in Tabor Grain, Mr. Cook has not provided new evidence that would have delayed closing the case nor has he pointed out any manifest errors in the case closure. Rather, as developed more fully below, Cook's Motion appears to be

no more than an expression of a view of the law contrary to that set forth in [all of this Court's and the Bankruptcy Appellate Panel's opinions]. Whatever may be the purpose of Rule 59(e) it should not be supposed that it is intended to give an unhappy litigant one additional chance to sway the judge. Since the plaintiff has brought up nothing new excepthis displeasure this Court has no proper basis upon which to alter or amend the order previously entered. Similarly, the matters [Cook] raises by this motion already have been fully litigated. This rehash of the arguments previously presented affords no basis for a revision of the Court's order.

Tabor Grain, 488 F.Supp. at 122.

CASE CLOSING

Bankruptcy Code section 350 governs case closing and reopening. It states:

(a) After an estate is fully administered and the court has discharged the trustee, the court shall close the case.

(b) A case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause.

Bankruptcy Rule 5009 provides procedures for case closing. It states:

(a) Cases under chapters 7, 12, and 13.

If in a chapter 7, chapter 12, or chapter 13 case the trustee has filed a final report and final account and has certified that the estate has been fully administered, and if within 30 days no objection has been filed by the United States trustee or a party in interest, there shall be a presumption that the estate has been fully administered.

(Emphasis added.)

Rule 5009 sets up a "default rule" that authorizes the Clerk of the Bankruptcy Court to close a case when a thirty-day period has run after the trustee files a no-asset report and no parties in interest file an objection that would bring the case back to the attention of the judge. In re Schoenewerk, 304 B.R. 59, 63 (Bankr. E.D. N.Y. 2003). This rule was designed to fit in withthe Bankruptcy Code enacted in 1978 which intended to relieve bankruptcy judges from the burden of case administration and tedious bureaucratic tasks such as entering closing orders in no asset cases. Id. at 62.

Rule 5009 serves a bureaucratic function, has nothing to do with the debtor and it grants a debtor no substantive rights or interests. Id. at 64. "Moreover, under Section 350 and Rule 5009, the final act of administration could very well be a purely ministerial act of which the debtor and other parties would receive no notice." Id. n.11. (Citing Korvettes v. Sanyo Electric (In re Korvettes), 42 B.R. 217, 221 (Bankr. S.D. N.Y. 1984), reversed on other grounds, In re Korvettes, 67 B.R. 730 (S.D. N.Y. 1986)).

Furthermore, bankruptcy courts do not keep cases open on the chance that a party might need the court's jurisdiction in the future. In re Johnson, 402 B.R. 851, 856 (Bankr. N.D. Ind. 2009) (Citing Fed.R.Bankr.P. 3022⁵ , Advisory Committee Note (1991)("The court should not keep the case open only because of the...