PNC Bank v. El Tovar, Inc., 4:13-CV-1073 CAS

CourtUnited States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)
Writing for the CourtCHARLES A. SHAW
Docket NumberNo. 4:13-CV-1073 CAS,4:13-CV-1073 CAS
PartiesPNC BANK, NATIONAL ASSOCIATION, Plaintiff, v. EL TOVAR, INCORPORATED, et al., Defendants.
Decision Date23 April 2014

This closed diversity matter is before the Court on plaintiff PNC Bank, National Association's ("PNC") Motion for Attorneys' Fees and Expenses Together with Taxable Costs, defendants El Tovar Incorporated and Steven D. Parrish's (collectively "Defendants") Motion for Rehearing, PNC's Motion to Strike the Defendants' Motion for Rehearing, and PNC's Motion for Bill of Costs. Defendants did not file an opposition to PNC's Motion for Attorneys' Fees and Expenses or a Reply in support of their Motion for Rehearing within the time permitted to do so.

On March 26, 2014, the Court ordered PNC to file a verified bill of costs in accordance with Local Rule 8.03(A). The Court stated that defendants would be given time to respond and ordered defendants to file their "specific objections, if any" by April 10, 2014. Order of March 26, 2014 (Doc. 107). Defendants did not file specific objections to the verified bill of costs, but instead filed without seeking leave of Court a "Memorandum in Opposition to the Award of Some, if Not All Attorney's Fees and Other Related Expenses" (Doc. 110). Defendants' Memorandum is an untimely opposition to PNC's Motion for Attorneys' Fees and Expenses, and does not mention any of the items of cost sought in PNC's verified bill of costs. The Court could strike defendants' Memorandum from the record as being filed without leave of Court, but will address it.

All of the motions are ready for decision. For the following reasons, the Court will deny PNC's Motion to Strike, deny defendants' Motion for Rehearing, grant in part PNC's Motion for Attorneys' Fees and Expenses, and grant in part PNC's Motion for Bill of Costs.

I. Background

This is an action on a promissory note and personal guaranty. On October 31, 2013, the parties filed a Joint Motion for Modification of the Case Management Order which stated in part that the parties had engaged in a mediation on October 30, 2013 that resulted in the parties' agreement to a Consent Order for Appointment of Receiver (Doc. 58). On November 4, 2013, the Court issued the Consent Order for Appointment of Receiver and appointed SH Equities, LLC as receiver for the real property owned by Defendants and commonly referred to as 1853 S. Spring Avenue, 3803 Shaw Avenue, and 4426-28 Cleveland Avenue, St. Louis, Missouri.

On November 25, 2013, PNC filed a motion for an order to show cause why the Defendants should not be held in contempt of Court for failure to comply with the Consent Order for Appointment of Receiver. PNC asserted in its motion that Defendants failed to comply with the Consent Order for Appointment of Receiver in the following respects, among others:

El Tovar and Parrish were required to turn over any and all records and information it or they have concerning the Collateral [¶13 of the Receiver Order] and turn over all sums related to or pertaining to, or derived from the Collateral [¶14 of the Receiver Order]. The Receiver has requested and did not receive the following: (a) November rents; (b) security deposits; (c) information on the code violations and condemnation notices from the City; (d) information on the pending housing court actions with respect to the Shaw Property; (e) operating & trust account bank statements & account information; (f) operating expense data; (g) occupancy permits (h) maintenance records (this is important because recent repairs were made to the HVAC units and the Receiver wants to be certain the work was completed, done properly by a certified and insured HVAC technician or electrician and the proper permits were issued for the work and inspected); (i) tenant correspondence (tenants have open work orders that need to be addressed which Parrish did not begin or complete, tenants moving out or lease renewals that need to executed); and (j) permits for recent work performed.

PNC's Mot. for Order to Show Cause at 3-4 (Doc. 64). PNC's motion was supported by the Receiver's affidavit.

Following an evidentiary hearing on December 5, 2013, at which Mr. Shawn Henry testified for the Receiver and defendant Parrish testified, the Court granted PNC's motion for order to show cause and issued an Order finding that

the defendants violated the Consent Order Appointing Receiver by failing to turn over to the Receiver all sums under their possession or control as of the date of the Consent Order Appointing Receiver or thereafter, representing November 2013 rents and security deposits for the real properties at issue, in the amount of Eleven Thousand Four Hundred Ninety-Two Dollars and Seventy-Two Cents ($11,492.72).

Memorandum and Order of December 5, 2013 at 1-2 (Doc. 80).1

PNC filed a motion for summary judgment which was granted by Memorandum and Order of February 11, 2014. See Mem. and Order of Feb. 11, 2014 (Doc. 99). The Court entered judgment in favor of PNC and against the defendants, jointly and severally, in the total amount of $600,900.98, dismissed Counts I and II of defendants' Counterclaims with prejudice, and assessed costs against the defendants, jointly and severally. See Judgment and Order of Dismissal (Doc. 100).

PNC timely filed its Motion for Attorneys' Fees and Expenses on February 21, 2014. Defendants did not respond directly to PNC's Motion for Attorneys' Fees and Expenses, but instead filed a Motion for Rehearing that PNC, in turn, moved to strike. As stated above, defendants filed an untimely opposition to the Motion for Attorneys' Fees and Expenses, instead of responding to PNC's verified motion for bill of costs.

II. PNC's Motion to Strike and Defendants' Motion for Rehearing

Defendants do not indicate the procedural basis of their motion for rehearing. In the motion, defendants argue that in the Memorandum and Order of February 11, 2014 granting PNC's motion for summary judgment, the Court (1) "did not consider Defendants [sic] detrimental reliance on the Settlement Agreements reached on or about October 4, 2013 and October 30, 2013," (2) "did not credit Defendants for the monies previously paid into the registry of the Court and rent collected by the court appointed receiver," and (3) "awarded attorney fees which included the cost of Plaintiff defending various Counterclaims and Affirmative Defenses; this was not contractually agreed to and that amount should be deducted from the total amount owed." Mot. for Rehearing at 1.

PNC moves to strike the motion for rehearing, accurately stating that the motion cites no Rule, applicable statute, or case law in support. PNC argues that it should not be required to speculate as to whether defendants seek relief pursuant to Rule 59(e), Rule 60(b), or some other theory. As stated above, defendants did not file a reply in support of their motion for rehearing or respond to PNC's motion to strike it, and therefore have not clarified the procedural basis for their motion or offered legal authority to support it.

Motions to strike are properly directed only to material contained in pleadings. The Federal Rules of Civil Procedure define pleadings as "a complaint and an answer; a reply to a counterclaim . . . ; an answer to a cross claim . . . ; a third-party complaint . . . ; and a third party answer." Fed. R. Civ. P. 7(a). "Motions, briefs or memoranda, objections, or affidavits may not be attacked by the motion to strike." 2 James W. Moore, et al., Moore's Federal Practice §12.37[2] (3rd ed. 2013). This Court has generally restricted the use of motions to strike to material contained in pleadings. See Metropolitan Cas. Ins. Co. v. Combs, 2014 WL 988452, at *2 (E.D. Mo. Mar. 13, 2014) (citingcases). Because defendants' Motion for Rehearing is a motion and not a pleading, PNC's motion to strike it should be denied.

The Court now turns to the merits of defendants' Motion for Rehearing. Any motion that draws into question the correctness of a judgment is functionally a motion under Rule 59(e), whatever it has been titled. Norman v. Arkansas Dep't of Educ., 79 F.3d 748, 750 (8th Cir. 1996) (citations and quotation omitted). The motion questions the correctness of the judgment in this case, so the Court will construe it as a motion under Rule 59(e) to alter or amend the judgment.

A district court has broad discretion in deciding whether to grant a motion under Rule 59(e). Innovative Home Health Care, Inc. v. P.T.-O.T. Assocs. of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998). "Rule 59(e) motions serve the limited function of correcting manifest errors of law or fact or to present newly discovered evidence." United States v. Metropolitan St. Louis Sewer Dist., 440 F.3d 930, 933 (8th Cir. 2006) (internal quotation marks omitted). "Such motions cannot be used to introduce new evidence, tender new legal theories, or raise arguments which could have been offered or raised prior to entry of judgment." Id. (quoting Innovative Home Health Care, 141 F.3d at 1286)). In addition, it is improper to reargue in a Rule 59(e) motion issues that were raised in the complaint under different legal theories. Schoffstall v. Henderson, 223 F.3d 818, 827 (8th Cir. 2000).

The Court finds that defendants are unable to meet the requirements of Rule 59(e) for any of their three arguments. Defendants' first argument, that the Court "did not consider Defendants [sic] detrimental reliance on the Settlement Agreements reached on or about October 4, 2013 and October 30, 2013," was not raised in defendants' opposition to PNC's motion for summary judgment and therefore is not properly before the Court on the Rule 59(e) motion. Further, the Court rejected defendants' related argument raised in opposition to summary judgment: that defendants obtainedalternative financing but PNC failed to cooperate and provide necessary documentation for defendants to secure that financing. See ...

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