Barnes v. Field

Filing 40

ORDER DENYING MOTION TO RECONSIDER ORDER GRANTING APPELLEE'S MOTION TO DISMISS APPEAL re 34 Motion for Reconsideration re 1 Bankruptcy Appeal, filed by Chad Barry Barnes, re 35 Amended MOTION for Reconsiderat ion re 33 Order. Signed by JUDGE LESLIE E. KOBAYASHI on 06/26/2017. (eps, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
In re:

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SEA HAWAII RAFTING, LLC,
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Debtor.
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_____________________________ )
CHAD BARRY BARNES,
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Appellant,
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vs.
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DANE S. FIELD, TRUSTEE,
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Appellee.
_____________________________ )

CIVIL 16-00230 LEK-KSC

ORDER DENYING MOTION TO RECONSIDER ORDER
GRANTING APPELLEE’S MOTION TO DISMISS APPEAL
On March 31, 2017, Appellant Chad Barry Barnes
(“Appellant”) filed a Motion to Reconsider Order Granting
Appellee’s Motion to Dismiss Appeal (“Motion for
Reconsideration”), and later the same day he filed an errata
(“Errata”).1
1

[Dkt. nos. 34, 35.]

On April 14, 2017, Appellee

The Court notes that, in the Motion for Reconsideration,
Appellant states that he “will be filing an Errata to amend
spelling errors, punctuation, with no substantial changes, and a
final table of authorities. We were unable to get this done
before the CM/ECF systems closed at 6:00 p.m. on 03/31/2017.”
[Mem. in Supp. of Motion for Reconsideration at 1 (emphasis
omitted).] While the Court has concerns about Appellant’s
willingness to submit an incomplete filing, as well as his
inability to complete the Motion for Reconsideration in a timely
manner, the Court will consider the motion. However, given
Appellant’s representation that the substance of the Motion for
Reconsideration and the Errata is the same, the Court will cite
(continued...)

Dane S. Field, Trustee for the bankruptcy estate of Sea Hawai`i
Rafting, LLC (“Appellee”), filed a memorandum in opposition.
[Dkt. no. 37.]

Appellant filed his reply on April 28, 2017, and

on April 30, 2017, he filed an errata to the reply.
38, 39.]

[Dkt. nos.

The Court finds this matter suitable for disposition

without a hearing pursuant to Local Rule 7.2(e) of the Local
Rules of the United States District Court for the District of
Hawai`i.

After careful consideration of the motion, supporting

and opposing memoranda, and the relevant legal authority, the
Motion for Reconsideration is HEREBY DENIED for the reasons set
forth below.
STANDARD
This Court has previously stated that a motion for
reconsideration
“must accomplish two goals. First, a motion for
reconsideration must demonstrate reasons why the
court should reconsider its prior decision.
Second, a motion for reconsideration must set
forth facts or law of a strongly convincing nature
to induce the court to reverse its prior
decision.” See Davis v. Abercrombie, Civil No.
11-00144 LEK-BMK, 2014 WL 2468348, at *2 (D.
Hawai`i June 2, 2014) (citation and internal
quotation marks omitted). This district court
recognizes three circumstances where it is proper
to grant reconsideration of an order: “(1) when
there has been an intervening change of
controlling law; (2) new evidence has come to
light; or (3) when necessary to correct a clear
error or prevent manifest injustice.” Tierney v.

1

(...continued)
to the Errata for the purposes of the instant Order.
2

Alo, Civ. No. 12-00059 SOM/KSC, 2013 WL 1858585,
at *1 (D. Hawaii May 1, 2013) (citing School
District No. 1J v. ACandS, Inc., 5 F.3d 1255, 1262
(9th Cir. 1993)). “Mere disagreement with a
previous order is an insufficient basis for
reconsideration.” Davis, 2014 WL 2468348, at *3
n.4 (citations and internal quotation marks
omitted).
Riley v. Nat’l Ass’n of Marine Surveyors, Inc., Civil No. 1400135 LEK-RLP, 2014 WL 4794003, at *1 (D. Hawai`i Sept. 25,
2014).
DISCUSSION
On September 27, 2016, Appellee filed a Motion to
Dismiss Appeal (“Motion to Dismiss”), [dkt. no. 14,] which the
Court granted in an Order filed on March 14, 2017 (“3/14/17
Order”) [dkt. no. 33].2

The Motion to Dismiss was granted

pursuant to 11 U.S.C. § 363(m) because Appellant failed to
provide any support for his argument that the sale was not made
in good faith.

3/14/17 Order, 2017 WL 988655, at *2.

Appellant

does not provide any reason for the Court to reconsider its
ruling in the 3/14/17 Order.
First, Appellant does not cite any change in the law
that is relevant to this appeal.

Second, although hard to

decipher at times, any argument Appellant makes about clear error
or manifest injustice is inapposite.

Appellant states that he

sought a stay of the bankruptcy court’s order pending appeal,

2

The 3/14/17 Order is also available at 2017 WL 988655.
3

[Errata at 20,] but he does not dispute that a stay was never
granted.

As the Court explained in the 3/14/17 Order:
[11 U.S.C. §] 363(m), sometimes referred to as the
bankruptcy mootness rule, “applies when an
appellant has failed to obtain a stay from an
order that permits a sale of a debtor’s assets.
Whether an order directly approves the sale or
simply lifts the automatic stay, the mootness rule
dictates that the appellant’s failure to obtain a
stay moots the appeal.” Onouli-Kona Land Co. v.
Estate of Richards (In re Onouli-Kona Land Co.),
846 F.2d [1170,] 1171 [(9th Cir. 1988)] (citation
omitted).

3/14/17 Order, 2017 WL 988655, at *2.

Further, Appellant appears

to argue that In re Onouli-Kona Land Co. is distinguishable from
this case because the bankruptcy court was “not empowered to sell
the vessel free and clear of all liens.” [Errata at 20.]
this Court has already addressed this issue.

Again,

See 3/14/17 Order,

2017 WL 988655, at *2 n.4 (“Finally, there was no maritime lien
against the Boat or the Trailer during the bankruptcy
proceedings.” (citations omitted)).
Next, Appellant seems to assert that the Court’s
treatment of his argument regarding good faith was in error.

In

the 3/14/17 Order, the Court explained that, “aside from
expressing disagreement with the bankruptcy court’s sale prices
for the Boat and the Trailer, Appellant does not present any
factual allegations to support a claim of fraud or that the
bankruptcy court” erred in determining that, for the purposes of
§ 363(m), the vessel was being sold to a good faith purchaser.

4

Id. at *2.

To support his position that the Court erred,

Appellant provides an additional declaration and cites the
bankruptcy court’s refusal to let him go forward with discovery
in a separate bankruptcy case.

[Errata at 22.]

First, the

additional evidence is a declaration by a Hawai`i Island attorney
that explains his familiarity with “the sale or purchase of
business entities holding commercial and mooring permits in
Hawaii State harbors.”

[Errata, Decl. of Joseph Fagundes III

(“Fagundes Decl.”) at ¶ 3.]

Appellant provides no reason why the

Fagundes Declaration could not have been submitted with his
memorandum in opposition to the Motion to Dismiss, and a motion
for reconsideration may “only be granted upon discovery of new
material not previously available.”

Sulak v. Am. Eurocopter

Corp., CV No. 09-00135 DAE-KSC, 2009 WL 3425155, at *2 (D.
Hawai`i Oct. 26, 2009) (citation omitted).

Moreover, Appellant

made this argument in his memorandum in opposition to the Motion
to Dismiss, see dkt. no. 23 at 4-6, and it is no more convincing
here.3

Second, Appellant laments the bankruptcy court’s

3

In the memorandum in opposition to the Motion to Dismiss,
Appellant argued that “[t]he purpose of this appeal is to obtain
the maximum value of the object being sold for the bankruptcy
estate. The transfer of the permit for the vessel . . . can be
accomplished legally by selling the [Sea Hawai`i Rafting, LLC]
business and [the] vessel, along with the State of Hawaii
permit.” [Dkt. no. 23 at 4-5.] Appellees point out that,
“[u]nder state law, Sea Hawaii’s commercial use permit is nontransferrable.” [Mem. in Opp. to Motion for Reconsideration at
11 (emphasis in original).] In fact, to transfer the permit, the
(continued...)
5

discovery order in a different case.

See Errata at 22-23

(explaining that Appellant’s attorney flew to Hawai`i Island in
April 2016 to depose Kris Henry, only to have the bankruptcy
court grant a motion for a protective order and cancel the
deposition); see also Henry v. Hu (In re Henry), Bk. No. 14-01475
(Bankr. D. Hawai`i), dkt. no. 157 (Motion for Protective Order);
id., dkt. no. 164 (Order Granting in Part and Denying in Part
Motion for Protective Order).

Anything related to this separate

bankruptcy case, including discovery and whether or not the
debtor complied with the bankruptcy court’s order to produce
certain documents, is not relevant to the instant appeal.4
In short, Appellant does not provide any reason for the
Court to grant his Motion for Reconsideration.

Instead, he

3

(...continued)
relevant parties would have to agree “to transfer the company
itself.” [Id. at 11.] Here, the underlying bankruptcy
proceeding was brought pursuant to Chapter 7 of the bankruptcy
code, under which Appellee, as the trustee of the estate, does
not own the equity in the company and cannot transfer it. [Id.]
The Fagundes Declaration provides an overview of the permittransfer process. See Fagundes Decl. at ¶ 9. The Fagundes
Declaration does not provide any explanation or analysis of how
this process applies to the instant case, nor does it address how
the options for selling a vessel may be affected by a bankruptcy
filing.
4

The Court notes that the In re Henry debtor, Kristin Kimo
Henry, is the former owner of Sea Hawai`i Rafting, LLC and the
current owner of Aloha Ocean Excursions, LLC. 3/14/17 Order,
2017 WL 988655, at *2. In re Henry, however, is a personal
bankruptcy under Chapter 13 of the bankruptcy code. Appellant
does not assert that a protective order was filed in Sea Hawai`i
Rafting, LLC’s bankruptcy that impeded his discovery efforts.
6

repeats arguments that he already made in opposition to the
Motion to Dismiss, cites a declaration that is neither newly
discovered nor persuasive, and requests relief that the Court has
already denied.

See, e.g., Errata at 20, 27 (requesting a stay

of the proceedings until the Ninth Circuit Court of Appeals rules
on an appeal from a separate case decided by this district
court); dkt. no. 32 (Entering Order denying Appellant’s Motion to
Stay Proceedings Pending Ninth Circuit Appeal).

Any other

arguments raised by Appellant in the Motion for Reconsideration
are irrelevant because, as the Court explained in the 3/14/17
Order:

“Because the Buyer was a good faith purchaser, under 11

U.S.C. § 363(m) the sale may not be modified or set aside on
appeal unless the sale was stayed pending appeal.

It was not,

and the court thus cannot grant any effective relief.”

2017 WL

988655, at *3 (quoting Ewell v. Diebert (In re Ewell), 958 F.2d
276, 282 (9th Cir. 1992)).

Accordingly, Appellant’s Motion for

Reconsideration is HEREBY DENIED.
CONCLUSION
On the basis of the foregoing, the Motion to Reconsider
Order Granting Appellee’s Motion to Dismiss Appeal, filed by
Appellant Chad Barry Barnes on March 31, 2017, is HEREBY DENIED.
The Court DIRECTS the Clerk’s Office to enter final judgment and
close this case immediately.
IT IS SO ORDERED.

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DATED AT HONOLULU, HAWAII, June 26, 2017.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

CHAD BARRY BARNES VS. DANE S. FIELD, TRUSTEE; CIVIL 16-00230 LEKKSC; ORDER DENYING MOTION TO RECONSIDER ORDER GRANTING APPELLEE’S
MOTION TO DISMISS APPEAL

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