Ward et al v. Cross Keys Bank et al

Filing 22

MEMORANDUM RULING re 20 MOTION for Re-Hearing re 19 Judgment filed by Ronnie D Ward, Sharon Denise Albritton Ward. Signed by Judge Terry A Doughty on 9/22/2021. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION
RONNIE WARD, ET AL.

CIVIL ACTION NO. 3:21-cv-01629

VERSUS

JUDGE TERRY A. DOUGHTY

CROSS KEYS BANK, ET AL.

MAG. JUDGE KAYLA D. MCCLUSKY
RULING

Before the Court is Appellants Ronnie Ward and Sharon Ward’s Motion for Rehearing
[Doc. No. 20] pursuant to Federal Rule of Bankruptcy Procedure 8022 of this Court’s Ruling and
Judgment [Doc. Nos 18, 19], affirming the judgment of the Bankruptcy Court entered June 7,
2021. For the reasons that follow, the Motion is DENIED.
I.

BACKGROUND
The primary issue in this bankruptcy appeal is whether the Bankruptcy Court had subject

matter jurisdiction over a First Adversary.
Appellant Ronnie Ward was a principal in several automobile-related businesses that had
substantial loans from Cross Keys Bank (“Cross Keys”), including Karcredit, LLC (“Karcredit”),
in which he owned a 75% interest. On May 22, 2019, Cross Keys filed a Petition in the Fourth
Judicial District Court, Ouachita Parish, Louisiana, No. 19-1665 (the “State Court Action”),
against Karcredit and Appellants Ronnie Ward and Sharon Ward. Cross Keys sought judgment
against the defendants, in solido, for amounts allegedly due under a promissory note executed by
Karcredit in the principal amount of $3,197,829.42. Cross Keys alleged that the Wards personally
guaranteed the amounts due under the note pursuant to written guaranty agreements that each of
them signed.

Over the next year, various responsive pleadings, amended pleadings, re-conventional
demands, interventions, and third-party demands were filed in the State Court Action.
On July 17, 2020, Cross Keys filed an Involuntary Petition Against a Non-Individual with
the Bankruptcy Court, Case No. 20-30681, against Karcredit. Cross Keys asserted its claim in the
Involuntary Petition, that under the Note, Karcredit owed it at least $2,738,031.63 in principal plus
accrued but unpaid interest, plus prepetition attorneys’ fees, expenses, and other amounts allowed
by the Note or any other loan documents.
Later that same day, Cross Keys filed a Notice of Removal in the United States District
Court for the Western District of Louisiana (“District Court”) to remove the pending State Court
Action, No. 19-1665 (which became the “First Adversary”), based on its relation to the Bankruptcy
Case.
From that point forward, the issue of “related to” subject matter jurisdiction has been
extensively litigated in the Bankruptcy Court, and in the appeal to this Court. Appellants argue
that the Bankruptcy Court does not have subject matter jurisdiction over Cross Keys’ claims
against them in the First Adversary. They contend that Cross Keys initiated the proceedings in
Bankruptcy Court in bad faith by filing a petition to liquidate an already liquidated debtor.
Cross Keys, on the other hand, submits that subject matter jurisdiction does exist, in part
because of allegations that within the year prior to the filing of the Bankruptcy Case, Appellant
Ronnie Ward misappropriated and/or diverted funds or caused funds to be misappropriated or
diverted from Karcredit and Cross Keys, in an amount totaling at least $142,763.92.
After considering the thoroughly briefed arguments of the parties, this Court denied the
appeal. This Court concluded that the Bankruptcy Court had subject matter jurisdiction of the First
Adversary, that Appellants failed to establish that Cross Keys filed the bankruptcy in bad faith to

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obtain an advantage in litigation, and that the Bankruptcy Court was correct in finding that
Appellants consented to the Bankruptcy Court’s entry of a final judgment on Cross Keys’ claims
against them in the First Adversary [Doc. Nos. 18, 19].
II.

ANALYSIS
Federal Rule of Bankruptcy Procedure 8022(a)(1) allows a party to a bankruptcy appeal to

file a motion for rehearing within fourteen days of the district court's order. With respect to
content, Rule 8022(a)(2) provides that a motion for rehearing “must state with particularity each
point of law or fact that the movant believes the district court ... has overlooked or misapprehended
and must argue in support of the motion.” Fed. R. Bankr. Proc. 8022(a)(2). Although Rule
8022 does not provide a standard for determining whether rehearing is appropriate, the Fifth
Circuit, in an unpublished opinion, has recognized that “such a motion may be granted to correct
a ‘mistaken use of facts or law’ in the prior decision.” In re Mar. Commun./Land Mobile, L.L.C.,
745 F. App’x 561, 562 (5th Cir. 2018) (per curiam) (internal citations omitted); see also In re
Coleman, No. 15-569, 2015 WL 7101129, at *1 (E.D. La. Nov. 13, 2015) (“The Court is of the
opinion that the standard is simply whether the Court would have reached a different result had it
been aware of its mistaken use of facts or law.”).
Here, Appellants have failed to identify a mistake of law or fact and, instead, simply rehash
prior arguments. They once again argue that the Bankruptcy Court had no subject matter
jurisdiction, that the bankruptcy was filed in bad faith, and that they did not consent to the entry
of a judgment by the Bankruptcy Court. The Court has previously considered all of the arguments
they are making in their Motion for Rehearing and has rejected them. Although Appellants
disagree with the Court’s determination in this case, the Court finds no reason to grant a rehearing.

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III.

CONCLUSION
For these reasons, Appellants’ Motion for Rehearing [Doc. No. 20] is DENIED.
Monroe, Louisiana, this 22nd day of September, 2021.

TERRY A. DOUGHTY
UNITED STATES DISTRICT JUDGE

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