Kellogg v. Schreiber

• Decision Date: 10 December 1999
• Docket Number: No. 98-5117,98-5117
• Citation: 197 F.3d 1116
• Parties: (11th Cir. 1999) In Re: Christopher G. KELLOGG, Debtor. Christopher G. Kellogg, a.k.a. Chris Kellogg, Plaintiff-Appellant, v. Palmer K. Schreiber, Patricia Dzikowski, Trustee, Defendants-Appellees. Non-Argument Calendar.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1116

197 F.3d 1116 (11th Cir. 1999)

In Re: Christopher G. KELLOGG, Debtor.

Christopher G. Kellogg, a.k.a. Chris Kellogg, Plaintiff-Appellant, v. Palmer K. Schreiber, Patricia Dzikowski, Trustee, Defendants-Appellees.

No. 98-5117

Non-Argument Calendar.

United States Court of Appeals Eleventh Circuit.

Dec. 10, 1999.

[Copyrighted Material Omitted] Appeal from the United States District Court for the Southern District of Florida.(No. 96-8257-CIV-LCN), Lenore C. Nesbitt, Judge.

Before ANDERSON, Chief Judge, and DUBINA and WILSON, Circuit Judges.

WILSON, Circuit Judge:

Christopher Kellogg ("Kellogg"), a bankruptcy debtor, appeals from orders denying his motion for continuance, sustaining objections to his homestead exemption, and denying his motion for rehearing. For the reasons expressed below, we affirm.

BACKGROUND

In 1993, Appellee Palmer Schreiber ("Schreiber ") obtained a judgment lien against Kellogg for $512,863.76; Schreiber has been trying to collect it ever since. In 1995, Kellogg filed a voluntary Chapter 7 bankruptcy petition, claiming a Florida homestead exemption on his Palm Beach oceanfront property. Kellogg stated his homestead was approximately 1.3 "indivisible acres" in size. He valued the exemption at $799,432, the tax assessor's value for the entire parcel.

The bankruptcy trustee (Appellee Patricia Dzikowski) (the "Trustee") and Schreiber objected to Kellogg's claim because it exceeded Florida's exemption for municipal property, which is limited to one-half acre. See Fla. Const. Art. X, 4(a). The bankruptcy court set an evidentiary hearing on the objections. The hearing was continued twice and finally rescheduled for February 2, 1996.

When continuing the hearing to February 2, the judge set explicit deadlines for exchanging witness and exhibit lists and for terminating discovery. Kellogg did not submit witness and exhibit lists; nor did he complete discovery before the cutoff date. Neither did Kellogg respond to Schreiber's interrogatories and requests for admission. Schreiber filed a motion-in-limine seeking to prohibit Kellogg from presenting any evidence at the hearing due to his failure to respond to discovery and noncompliance with the court's scheduling order. Kellogg did not respond.

One day before the hearing, Kellogg's counsel filed a motion to withdraw as counsel due to irreconcilable differences, to continue the hearing, and for an extension of time to conduct further discovery. That same afternoon, Kellogg himself sent the court an ex parte facsimile stating he was dissatisfied with his counsel and did not object to his counsel's withdrawal.

On the day of the hearing, Kellogg did not appear, although his counsel did. The court indicated its intention to conduct the hearing as scheduled. Both Kellogg's counsel and the bankruptcy court stated that they considered the homestead issues to be legal and not factual in nature. The Trustee and Schreiber presented the testimony of the Palm Beach zoning administrator. The administrator testified that Kellogg's property was zoned "R-AA," which is the largest state residential district in the town. For R-AA property, Palm Beach's zoning laws required a minimum parcel size of 60,000 square feet with at least 150 feet fronting a road; therefore, Kellogg could not legally subdivide his 1.3 acre parcel.¹

The bankruptcy court relied on the administrator's testimony in ruling that "there is no legal or practical manner in which to subdivide the Debtor's Homestead Property." The court ruled that Kellogg's property must therefore be sold and the proceeds apportioned between Kellogg and the bankruptcy estate. After the hearing, the bankruptcy judge granted Kellogg's former counsel's motion to withdraw.

After obtaining new counsel, Kellogg filed an amended schedule claiming a homestead exemption of $650,000, 81% of the value of the total real estate parcel. Kellogg also moved for a rehearing and reconsideration of the orders denying a continuance and directing the sale of the property. Kellogg's motion was denied. Kellogg timely appealed to the district court, which affirmed the bankruptcy court. This appeal followed.

JURISDICTION AND STANDARDS OF REVIEW

This court has jurisdiction under 28 U.S.C. 158(d). See In re Englander, 95 F.3d 1028, 1030 (11th Cir.1996) (appellate court has jurisdiction to review decision ordering sale of property claimed exempt as homestead); see also In re England, 975 F.2d 1168, 1172 (5th Cir.1992) (order granting or denying bankruptcy exemption is final and appealable) (citing cases). This court reviews the bankruptcy court's factual findings for clear error and its legal determinations de novo. See In re Englander, 95 F.3d at 1030. Denials of motions for continuance, motions to withdraw, and motions for rehearing are reviewed for abuse of discretion.²

DISCUSSION

The district court determined that the bankruptcy judge did not abuse his discretion in denying Kellogg's motion for continuance and requiring Kellogg's former counsel to represent Kellogg in the February 2, 1996 hearing. Kellogg argues that he should have received a continuance because his differences with his former counsel prevented him from receiving adequate assistance of counsel at the hearing. Further, he argues, the only reason he did not appear at the hearing was because he had no reason to believe that the judge would actually rule on the homestead exemption.

Given that Kellogg had already received one continuance and especially given Kellogg's noncompliance with the judge's scheduling order and failure to respond to discovery, the judge acted well within his discretion in denying a continuance. See, e.g., Arabian American Oil Co. v. Scarfone, 939 F.2d 1472, 1479 (11th Cir.1991) (appellate court will reverse denial of continuance " 'only in extreme cases in which it clearly appears that the moving party was free of negligence.' ") (quoting Grunewald v. Missouri Pacific R.R., 331 F.2d 983, 986 (8th Cir.1964)).

Neither did the bankruptcy judge abuse his discretion in denying Kellogg's motion for reconsideration and rehearing. Because the order directing the sale of Kellogg's property was final, Kellogg's motion should be considered as a motion for new trial or amendment of judgment under Bankruptcy Rule 9023 (incorporating by reference Rule 59, Federal Rules of Civil Procedure). See Matter of Aguilar, 861 F.2d 873, 875 (5th Cir.1988); In re Investors Fla. Aggressive Growth Fund, Ltd., 168 B.R. 760, 768 (Bankr.N.D.Fla.1994). The only grounds for granting Kellogg's motion are newly-discovered evidence or manifest errors of law or fact. See In re Investors, 168 B.R. at 768.

On this appeal, Kellogg seeks reconsideration to present evidence regarding whether his property could lawfully be divided into two parcels. He also wishes to argue that he could have successfully received a variance. We find that Kellogg had plenty of opportunity to present his arguments and evidence in a timely manner at the February 2 hearing, but chose not to. Kellogg may not use a Rule 59(e) motion to raise arguments available but not advanced at the hearing. See Stone v. Wall, 135 F.3d 1438, 1442 (11th Cir.1998). Also, Kellogg has not shown that any of the evidence he belatedly wishes to present was newly discovered. See Mays v. United States Postal Serv., 122 F.3d 43, 46 (11th Cir.1997) ("where a party attempts to introduce previously unsubmitted evidence on a motion to reconsider, the court should not grant the motion absent some showing that the evidence was not available"). Nor was there a manifest error or law or fact to justify altering or amending the judgment. Therefore, the judge did not err in denying Kellogg's motion for reconsideration.³

These preliminary issues being disposed of, we may now turn to the main issue: whether Kellogg must be allowed to carve out a half-acre portion of his waterfront estate to keep as his homestead or whether the bankruptcy court may direct that the property be sold and the proceeds divided.

The purpose of Florida's homestead provision is to protect families from destitution and want by preserving their homes. See, e.g., In re Englander, 95 F.3d 1028, 1031 (11th Cir.1996); Frase v. Branch, 362 So.2d 317, 318 (Fla.Dist.Ct.App.1978). Homestead laws must be liberally construed, but not so liberally that they become "instruments of fraud, an imposition on creditors, or a means to escape honest debts." Frase, 362 So.2d at 319.

Kellogg's property exceeds the one-half acre allowed for municipal homestead. He cannot declare as exempt his entire parcel, but may "select his homestead in any contiguous shape from his qualifying lands." See Frase, 362 So.2d at 320; see also Shone v. Bellmore, 75 Fla. 515, 78 So. 605, 608 (1918) (owner may designate reasonably-shaped contiguous portion of land). Therefore, Kellogg may reasonably designate his one-half acre portion of the property, so long as the remaining portion has legal and practical use. See Englander, 95 F.3d at 1032 (disallowing partition when nonexempt parcel of land had no legal or practical use). The nonexempt parcel would have no legal or practical use to the Trustee because its conveyance would violate local zoning laws. Kellogg does not contest that Palm Beach township zoning regulations prohibit subdividing his land into parcels less than 60,000 square feet. Since Kellogg's property is approximately 1.3 acres, it could not lawfully be subdivided without a variance. Separating Kellogg's land into an exempt and a nonexempt parcel is equivalent to subdividing it, since turning over excess land to the trustee for disposition exposes neighboring landowners to precisely the same evils the zoning laws are intended to prevent-namely, allowing double-building on a parcel of land. If Kellogg could not lawfully divide his land into two parcels before declaring bankruptcy, he should not be allowed to use his homestead exemption to circumvent zoning regulations after filing...