Paulsen et al v. Olsen
Filing
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MEMORANDUM Opinion and Order: Appellants' motion for rehearing (reconsideration) 23 is denied. See attached order for details. Signed by the Honorable Iain D. Johnston on 12/6/2023: (yxp, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
WESTERN DIVISION
James D. Paulsen, individually;
Kathleen M. Paulsen, individually; and
James D. Paulsen and Kathleen M.
Paulsen, as Trustees and Beneficiaries
of the Paulsen Family Trust Dated
January 19, 2019,
Case No. 3:22-cv-50111
Honorable Iain D. Johnston
Appellants,
v.
Joseph D. Olsen, Trustee for the
Estate of James D. Paulsen,
Appellee.
MEMORANDUM OPINION AND ORDER
Appellee Joseph D. Olsen sued Appellants James D. Paulsen and Kathleen C.
Paulsen, alleging that the Paulsens had transferred their interests in a property to
avoid paying their debts. After a trial on the merits, the Bankruptcy Court sided with
Mr. Olsen as to the first two counts in Mr. Olsen’s adversarial complaint and sided
with the Paulsens as to the third. The Paulsens appealed, and this Court affirmed
the Bankruptcy Court’s decision on the first two counts and dismissed the appeal for
the third. The Paulsens now move for rehearing under Federal Rule of Bankruptcy
Procedure 8022. For the following reasons, the Court denies the Paulsens’ motion.
STANDARD OF REVIEW
A motion for rehearing under Federal Rule of Bankruptcy Procedure 8022 is
the bankruptcy counterpart to Federal Rule of Civil Procedure 59(e). Griswold v.
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Zeddun, No. 14-cv-718, 2016 U.S. Dist. LEXIS 14403, at *1 (W.D. Wis. Feb. 5, 2016)
(citing In re Grabill Corp., 983 F.2d 773, 775 (7th Cir. 1993)). Under Rule 59(e), a
party can “bring to the Court’s attention any ‘factual and legal errors that may change
the outcome so they can be corrected.’ ”In re Johnson, 480 B.R. 305, 309 (Bankr. N.D.
Ill. 2012). This requires “newly discovered evidence” or “evidence in the record that
clearly establishes a manifest error of law or fact.” Burritt v. Ditlefsen, 807 F.3d 239,
252-53 (7th Cir. 2015). A Rule 59(e) motion does not, however, “allow a party to
introduce new evidence or advance arguments that could and should have been
presented to the district court prior to the judgment.” Bordelon v. Chi. Sch. Reform
Bd. of Trustees, 233 F.3d 524, 529 (7th Cir. 2000) (quoting Moro v. Shell Oil Co., 91
F.3d 872, 876 (7th Cir. 1996)). “A ‘manifest error’ occurs when the district court
commits a ‘wholesale disregard, misapplication, or failure to recognize controlling
precedent.’ ” Burritt, 807 F.3d at 253 (quoting Oto v. Metro. Life Ins., 224 F.3d 601,
606 (7th Cir. 2000)).
DISCUSSION
The Paulsens allege two errors of fact and one error of law. Both alleged errors
of fact relate to the Court’s review of the Bankruptcy Court’s summary judgment
order. Dkt. 23 at 1–2. Although the Court addressed the Paulsens’ arguments
regarding the summary judgment order, that interlocutory order merged with the
judgment after trial because the Bankruptcy Court held a full trial. Paulsen v. Olsen,
No. 22-cv-50111, 2023 U.S. Dist. LEXIS 207386, at *11, *24 n.5 (N.D. Ill. Nov. 20,
2023). The merger alone was sufficient to dismiss the arguments related to the
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summary judgment order. Id. at *11. Because the alleged errors of fact make no
difference as to the outcome of the Court’s judgment, they are not a basis for requiring
the Court to reconsider its judgment. See Johnson, 480 B.R. at 309.
As for the alleged error of law, the Paulsens restate their understanding of the
“sole intent” standard in 735 ILCS 5/12-112, but they provide no argument or
explanation as to how they believe the Court erred. Dkt. 23 at 2. Their
characterization of the “sole intent” standard is an abridged version of what was in
their opening brief, relying on much of the same case law to “note[] the uniqueness of
this standard.” Dkt. 23 at 2–3; see Dkt. 12 at 27–32. The Court explained in its opinion
that the Paulsens’ version of the standard would not be considered because they cited
no authority. Paulsen, 2023 U.S. Dist. LEXIS 207386, at *32. Indeed, the Paulsens
acknowledge as much in their motion for rehearing. Dkt. 23 at 2–3 (“[T]here is no
court case that has expressed the standard in quite this way . . . .”). There is no
misapplication of law or failure to recognize controlling precedent in refusing to adopt
a standard that no court has adopted.
CONCLUSION
With a sense of déjà vu, the Court finds that, although the Paulsens may not
have liked the Court’s judgment, they have failed to show that the Court erred as a
matter of fact or law. The Court denies the Paulsens’ motion for rehearing.
Date: December 6, 2023
___________________ _______
Honorable Iain D. Johnston
United States District Judge
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