In re Richmond
| Decision Date | 29 September 2014 |
| Docket Number | Case No. 14–41678 (CEC) |
| Parties | In re: Eric H. Richmond, Debtor. |
| Court | United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Eastern District of New York |
OPINION TEXT STARTS HERE
Eric H. Richmond, 227 4th Avenue, Brooklyn, New York 11215, Pro-se Debtor.
Glenn P. Warmuth, Esq., Stim & Warmuth, P.C., 2 Eighth Street, Farmingville, New York 11738, Counsel for P.B. # 7 LLC.
DECISION
This matter comes before the Court on the motion of the debtor, Eric H. Richmond, to reconsider and reargue the Court's decision and order granting the motion of P.B. # 7 LLC (“P.B.”) to lift the automatic stay, pursuant to § 362(d)(4).1 Because the motions to reconsider and reargue fail to set forth grounds for relief under Federal Rule of Civil Procedure 59(e), and because they raise arguments already considered and rejected, the motions are denied.
This Court has jurisdiction of this core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(A) and (G), 28 U.S.C. § 1334, and the Eastern District of New York standing order of reference dated August 28, 1986, as amended by order dated December 5, 2012. This decision constitutes the Court's findings of fact and conclusions of law to the extent required by Federal Rule of Bankruptcy Procedure 7052.
This chapter 13 case was filed shortly after the automatic stay was vacated in the single asset real estate chapter 11 case of 231 Fourth Avenue Lyceum (“Lyceum”) (13–42125–CEC), to permit P.B. to pursue foreclosure on real property located at 227–231 4th Avenue, Brooklyn, New York (the “Property”). 2 Eric Richmond, the debtor in this chapter 13 case (the “Debtor”),is the principal and sole shareholder of Lyceum, and is a defendant in P.B.'s foreclosure action. P.B. is the holder of a judgment of foreclosure and sale against both Lyceum and the Debtor (the “Foreclosure Judgment”). The Debtor's and Lyceum's bankruptcy cases were each filed to stay P.B.'s foreclosure of the Property.
In Lyceum's bankruptcy case, the Court granted a motion by P.B. to lift the automatic stay with respect to the Property. In re 231 Fourth Ave. Lyceum, LLC, 506 B.R. 196, 203 (Bankr.E.D.N.Y.2014). The decision to lift the automatic stay was based upon the fact that Lyceum's proposed plan of reorganization was not feasible and that Lyceum was barred from attacking the Foreclosure Judgment in bankruptcy court by reason of the Rooker–Feldman doctrine and principles of res judicata. Id. at 206–208. Lyceum filed a motion seeking reconsideration of the decision to lift the stay, which was denied by decision and order dated July 17, 2014. In re 231 Fourth Ave. Lyceum, LLC, 513 B.R. 25 (Bankr.E.D.N.Y.2014); (Mot. to Reargue or Renew, 13–42125–CEC, ECF No. 92; Decision, 13–42125–CEC, ECF No. 101; Order, 13–42125–CEC, ECF No. 102.)
After the stay was lifted, P.B. sought permission from the state court to file a notice of sale. (Affirmation in Supp., 14–41678–CEC, ECF No. 9 at ¶ 6.) One day before the return date of P.B.'s motion in state court, the Debtor commenced this bankruptcy case.
On April 15, 2014, P.B. filed a motion in this case seeking relief from the automatic stay pursuant to § 364(d)(4) and an affirmation in support (respectively, the “Motion for Relief” and the “Affirmation”). (Mot. for Relief from Stay, 14–41678–CEC, ECF No. 8; Affirmation in Supp., 14–41678–CEC, ECF No. 9.) On May 13, 2014, the Debtor filed an affirmation in opposition to the Motion for Relief (the “Opposition”). (Affirmation in Opp'n, 14–41678–CEC, ECF No. 15.) On May 16, P.B. filed an affirmation in reply and further support (the “Reply Affirmation”). (Affirmation in Reply and Further Supp., 14–41678–CEC, ECF No. 16.)
On July 17, 2014, the Court entered a decision and order granting the Motion for Relief (respectively, the “Decision” and the “Order”). In re Richmond, 513 B.R. 34 (Bankr.E.D.N.Y.2014); (Decision, 14–41678–CEC, ECF No. 55; Order, 14–41678–CEC, ECF No. 57.) In the Decision, the Court found that the Debtor's and Lyceum's bankruptcy were each filed on the eve of significant events in the foreclosure action and that the timing of the filings permitted an inference that the Debtor was attempting to hinder or delay P.B.'s efforts to enforce the Foreclosure Judgment. In re Richmond, 513 B.R. at 38–39. The Court rejected the Debtor's argument that the Rooker–Feldman doctrine and principles of res judicata did not apply to the Foreclosure Judgment. Id. at 39–40. The Court also rejected the Debtor's argument that the Foreclosure Judgment was void because the Kings County Supreme Court entered the Foreclosure Judgment in violation of New York Civil Practice Law and Rules § 3215(c). Id. at 39. Finally, the Court determined that the Debtor had no ability to restructure the debt secured by the Property in his chapter 13 bankruptcy case, as the Property was not property of the Debtor's estate. Id. at 39–41.
On July 28, 2014, the Debtor filed a Motion to Reconsider Lifting of the Stay, and on July 31, 2014, he filed a Motion to Reargue Lifting of the Stay (respectively, the “Motion to Reconsider” and the “Motion to Reargue”; collectively, the “Motions”). (Mot. to Reconsider Lifting of the Stay, 14–41678–CEC, ECF No. 61; Mot. to Reargue Lifting of the Stay, 14–41678–CEC, ECF No. 62.) On August 6, 2014, P.B. filed affirmations in opposition to the Motions (respectively, the “Reconsideration Opposition” and the “Reargument Opposition”). (Affirmation in Opp'n, 14–41678–CEC, ECF No. 63; Affirmation in Opp'n, 14–41678–CEC, ECF No. 65.) On August 11, 2014, the Debtor filed affirmation in further support of the Motions (respectively, the “Reconsideration Affirmation” and the “Reargument Affirmation”). (Affirmation in Further Supp., 14–41678–CEC, ECF No. 67; Affirmation in Further Supp., 14–41678–CEC, ECF No. 68.)
On August 14, 2014, an amended order granting the Motion for Relief was entered, which amended the Order by identifying the block and lot number and legal description of the Property and by including a direction to the New York City Department of Finance Office of the City Register to accept a certified copy of that order for recordation. (Amended Order, 14–41678–CEC, ECF No. 71.) On August 25, 2014, the Debtor filed a motion to reconsider that amended order, and, on August 27, 2014, the Debtor filed a motion to reargue the amended order. (Mot. to Reconsider Decision and Order dated August 13, 2014, 14–41678–CEC, ECF No. 77; Mot. To Reargue Lifting of Automatic Stay, 14–41678–CEC, ECF No. 80.) These motions raise the same factual and legal arguments as the Motion to Reconsider and the Motion Reargue and are also disposed of by this decision.
The Debtor raises four arguments in the Motions: (1) that the Court erred when it determined that the Debtor was a serial filer; (2) that the Court erred when it determined that the Debtor's attempt to collaterally attack the Foreclosure Judgment was barred by res judicata, because the fraud which the Debtor claims was committed by a lawyer in the foreclosure action falls within the extrinsic fraud exception to the doctrine of res judicata; (3) that the Court erred when it determined that the Rooker–Feldman doctrine barred collateral attack of the Foreclosure Judgment, because the entry of the Foreclosure Judgment pursuant to New York Civil Practice Law and Rules § 3215(c) a ministerial, not judicial act; and (4) that the Court erred when it determined that the Rooker–Feldman doctrine barred collateral attack of the Foreclosure Judgment, because, according to the Debtor, he is complaining of injuries not caused by the Foreclosure Judgment.
Rule 59, made applicable to this adversary proceeding pursuant to Bankruptcy Rule 9023, permits a party to make a motion “to alter or amend a judgment.” Fed.R.Civ.P. 59(e). Pursuant to Rule 54(a), made applicable to this matter by Bankruptcy Rule 7054(a), the Order is a “judgment” that may be reconsidered under Rule 59 because it is an “order from which an appeal lies.” Fed.R.Civ.P. 54(a); Fed. R. Bankr.P. 7054. A motion to reconsider must be filed within 14 days of the entry of the judgment. Fed. R. Bankr.P. 9023. The Order was entered on July 17, 2014 and the Motion to Reconsider was filed on July 28, 2014, within the time allowed under Bankruptcy Rule 9023.
Rule 59(e) does not provide specific grounds for amending or reconsidering a judgment. SeeFed.R.Civ.P. 59(e). The Second Circuit has held that “[t]he major grounds justifying reconsideration are an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.” Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.1992) (internal quotations and citation omitted); Doe v. New York City Dep't of Social Servs., 709 F.2d 782, 789 (2d Cir.1983). Under the “clear error” standard, relief is “appropriate only when a court overlooks ‘controlling decisions or factual matters that were put before it on the underlying motion’ and which, if examined, might reasonably have led to a different result.” Corines v. Am. Physicians Ins. Trust, 769 F.Supp.2d 584, 593–94 (S.D.N.Y.2011) (quoting Eisemann v. Greene, 204 F.3d 393, 395 n.2 (2d Cir.2000)). “[R]econsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir.1995). It is well settled that “[a] motion for reconsideration is neither an occasion for repeating old arguments previously rejected nor an occasion for making new arguments that could have been previously advanced.” Associated Press v. U.S. Dep't of Def., 395 F.Supp.2d 17, 19 (S.D.N.Y.2005).
“A motion for reconsideration is ‘an extraordinary remedy to be employed sparingly in the...
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