In re Williams

• Decision Date: 24 October 1995
• Docket Number: Bankruptcy No. 90-12125. Adv. No. 91-1047.
• Parties: In re Lawrence G. WILLIAMS, Debtor. Lawrence G. WILLIAMS, Plaintiff, v. UNITED STATES of America, Internal Revenue Service, et al., Defendants.
• Court: U.S. Bankruptcy Court — District of Rhode Island

188 B.R. 721 (1995)

In re Lawrence G. WILLIAMS, Debtor.

Lawrence G. WILLIAMS, Plaintiff, v. UNITED STATES of America, Internal Revenue Service, et al., Defendants.

Bankruptcy No. 90-12125. Adv. No. 91-1047.

United States Bankruptcy Court, D. Rhode Island.

October 24, 1995.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Dennis L. Stein, Gerard Riso, Kurtzman, Haspel & Stein, Spring Valley, NY, John Boyajian, Andrew Richardson, Boyajian, Harrington & Richardson, Providence, RI, for Debtor/Plaintiff.

D. Patrick Mullarkey, Chief, Civil Trial Section, Northern Region, Tax Division, Peter Sklarew, Gerald Miller, Janet Reno, Attorney General of the United States, Robert Rubin, Secretary of the Treasury of the United States, U.S. Department of Justice, Charles J. Cannon, Trial Attorney, Tax Division, U.S. Department of Justice, Washington, DC, for the United States.

Michael Iannotti, U.S. Attorney's Office, Providence, RI, for the Internal Revenue Service.

Sheryl Serreze, Office of the U.S. Trustee, Providence, RI.

DECISION AND ORDER GRANTING IN PART AND DENYING IN PART THE GOVERNMENT'S MOTION TO VACATE, ALTER, OR AMEND ORDER AND JUDGMENT

ARTHUR N. VOTOLATO, Bankruptcy Judge.

This adversary proceeding was brought by the Debtor, Lawrence Williams, for a determination that he has no federal tax liability. The Internal Revenue Service says he owes $22 Million Dollars. Before us for consideration today is the Motion of "Defendant United States of America, of Charles J. Cannon, Esq., of William Blagg, Esq., and of Janet Reno, Attorney General of the United States, and Robert Rubin, Secretary of the Treasury of the United States of America,¹ to Vacate, to Alter or Amend Order or Judgments, or for a New Trial" regarding our April 14, 1995 Decision and Order, Williams v. United States (In re Williams), 181 B.R. 1 (Bankr. D.R.I.1995). The Movants seek

an order reconsidering, vacating, altering, or amending the order dated April 14, 1995. . . . In the alternative, the movants seek either a new trial or hearing or leave to reopen and to supplement the record with additional evidence, including testimony, on the sanctions issue.

(Motion to Vacate, to Alter, or Amend, at 1.)

For the reasons discussed below, the Motion is GRANTED in part (see pages 8, 9, 12, 13, and 23), and DENIED as to the rest.

DISCUSSION

The Movants take serious issue with an April 14, 1995 Decision and Order (hereinafter "Decision") wherein this Court granted the Plaintiff's Motion for Sanctions under Fed.R.Civ.P. 37(b), and inter alia, ordered the Internal Revenue Service to pay the Plaintiff's reasonable legal fees and expenses incurred in forcing compliance with prior discovery orders. As an additional sanction, based upon findings and conclusions made at the end of a lengthy hearing, Messrs. Blagg and Cannon were ordered "to each pay personally $750 to the Clerk of the Bankruptcy Court, for deposit into the General Fund." Williams, 181 B.R. at 5.

It is the $750 in personal sanctions that has generated a deluge of literary overkill by the Movants that exceeds anything previously seen by this Court. In their effort to obtain a reversal of the personal sanctions, and to extract an apology from the Court for its allegedly wrong call here, the Movants have filed motions, memoranda, affidavits, declarations, and other documents totaling approximately 260 pages, with over 200 footnotes.² The Movants could and should have delivered their message in far less time and space. Such voluminous filings are burdensome and unfair to courts and litigants who are required to read, analyze, and respond to them, and to prevent similar future excesses in this and other cases, we have belatedly promulgated Administrative Order 082195 which, inter alia, sets page limits and footnote type size requirements. Having said that, but also in fact having closely examined all of the Movant's papers in these proceedings, we will try to cull out the rhetoric and address the merits of the Government's arguments.

I. Standards to Alter or Amend Judgment/New Trial

The grounds for a new trial or amendment of judgment are set forth in Fed.R.Civ.P. 59(a), which is made applicable in bankruptcy by Fed.R.Bankr.P. 9023.³ The scope of review under Rule 9023 extends only to errors of law or fact, and to cases where evidence is newly discovered. In re Neill, 158 B.R. 93, 97 (Bankr.N.D.Ohio 1993); Fontenot v. Mesa Petroleum Co., 791 F.2d 1207 (5th Cir.1986) (analyzing Rule 9023's equivalent under Fed.R.Civ.P. 59 & 52(b)). More to the point in this case, a motion to alter or amend judgment "cannot be considered `a vehicle for raising issues or citing authorities a party could or should have presented prior to the court's ruling. It is not a vehicle for rehashing arguments previously made or refuting the court's prior ruling.'" In re Bank of New England Corp., 142 B.R. 584, 587 (D.Mass.1992), quoting, In re Grand Builders, Inc., 122 B.R. 673, 675-76 (Bankr. W.D.Pa.1990).

Recently, in In re Almacs, Inc., 181 B.R. 143 (Bankr.D.R.I.1995), we discussed the standard for reconsideration⁴ under the Federal Rules of Bankruptcy Procedure:

"To succeed on a motion to reconsider, `the Court requires that the moving party show newly discovered evidence or a manifest error of fact or law.\'" Champagne v. Equitable Credit Union (In re Champagne), 146 B.R. 506, 508 (Bankr.D.R.I. 1992) (quoting In re Wedgestone Financial, 142 B.R. 7, 8 (Bankr.D.Mass.1992)); In re Bank of New England Corp., 142 B.R. 584, 587-88 (D.Mass.1992). In Champagne we adopted the bankruptcy judge\'s remarks in In re Armstrong Store Fixtures Corp., 139 B.R. 347, 350 (Bankr. W.D.Pa.1992) . . . :

initial arguments are not to be treated as a dress rehearsal for a second attempt to prevail on the same matter. Counsel is also expected to `get it right\' the first time and to present all the arguments which counsel believes support its position. Arguments which counsel did not present the first time or which counsel elects to hold in abeyance until the next time will not be considered.

139 B.R. at 350; see also Champagne, 146 B.R. at 508.

In re Almacs, 181 B.R. at 143-44. With these principles in mind, we will address the specifics of the motion now under consideration.

II. Reconsideration of Findings of Fact

To begin with, there is no newly discovered evidence, and this leads us straight to the Cannon and Blagg Declarations (Docket Nos. 47 & 48), and much of the writing submitted on their behalf by Peter Sklarew, Esq., which contain mostly self-serving pronouncements of the allegedly righteous manner in which IRS attorneys relate to opposing counsel — none of which is in the record, however. The Movants have also described at length the private thought processes of Government lawyers, to show why they conducted their part of the January 1995 Rule 37(b) hearing as they did.

Mr. Blagg, for example, explains that he was "very uncomfortable" on cross examination and that this caused him "to limit some of . . . his answers." He also says "having thoroughly reviewed the files since the Decision, my recollection has been refreshed in several areas in which I was not able to recall events fully at the hearing." These are meritless afterthoughts, at best. So is Mr. Cannon's lament that "had I the slightest idea that the Court was considering sanctions against me personally, I would have taken the witness stand and offered many of the following facts at the hearing. . . ." He then goes on for more than twenty pages describing the high points of his legal career, to demonstrate that he could not have conducted himself as this Court found him to have behaved in this litigation. These after-the-fact reminiscences are not deserving of a time-consuming response, and we simply refer the Movants to Rule 37(b).⁵

The Government is also reminded of its own stipulation in the Proposed Joint Pretrial Order, that one of the issues of law to be determined was "whether the appropriate sanction to be imposed against the Government, under the circumstance, should be the striking of the Government's pleadings and the entry of judgment in favor of the plaintiff and against the Government, or some other sanction pursuant to Rule 37(b) of the Federal Rules of Civil Procedure and Rule 7037(b) of the Bankruptcy Rules." (Proposed Joint Pre-Trial Order Submitted By the Government, at 12. (emphasis added).) Mr. Cannon made an informed, tactical decision not to testify, after being specifically queried by the Court as to his intentions, immediately upon his arrival at the hearing on January 23, 1995. (See Transcript, Jan. 23, 1995, at 23-24.) The reams of information now proffered by the Movants were all available at the time of the hearing which lasted three days, and where both sides were given wide latitude to fully develop and present their positions. Based on the record and the applicable law, the Declarations of Charles Cannon and William Blagg, as well as those portions of Mr. Sklarew's arguments not based on the record are rejected and stricken, as impermissible second bites at the apple.

Several arguments by the Movants do have merit, however, and as to those we agree that corrections and amendments are in order, i.e., the Decision under scrutiny states: "On January 7, 1992, after even further hearing, we overruled its objection and ordered the IRS to produce all requested documents within 45 days. (See Joint Exhibit 1, January 14, 1992 Order.) Again, IRS did nothing. . . ." Williams, 181 B.R. at 3. The Movants correctly point out that the IRS did produce some documents, on February 28, 1992. We acknowledge the misstatement, apologize, and strike from the Decision the words "again, IRS did nothing."⁶

We also retract and delete footnote 4 which states "it is as though the IRS never heard of response/objection deadlines, the Federal Rules of Civil Procedure, or the Rules of Bankruptcy Procedure." Williams, 181 B.R. at 3 n. 4. By this redaction we...