Rosbottom v. Schiff et al

Filing 25

ORDER denying 20 Motion for Rehearing Pursuant to Federal Rule of Bankruptcy Procedure 8022 re 19 Memorandum Ruling. Signed by Judge Elizabeth E Foote on 9/1/2016. (crt,Keifer, K)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
HAROLD ROSBOTTOM, JR.

CIVIL ACTION NO. 15-758

VERSUS

JUDGE ELIZABETH ERNY FOOTE

GERALD SCHIFF AND LESLIE FOX

MAGISTRATE JUDGE HORNSBY

ORDER
Before the Court is a Motion To Vacate Judgment on Writ of Habeas Corpus. for
Rehearing Pursuant to Federal Rule of Bankruptcy Procedure 8022, filed by the Appellee
Gerald H. Schiff ('Schiff"). Record Document 20. For the reasons provided below, the
Court DENIES Schiff's motion.
This matter comes to the Court on appeal from the United States Bankruptcy Court
for the Western District of Louisiana. Appellant Harold Rosbottom Jr. ('Rosbottom'') sought
a reversal of the bankruptcy court's decision that a condominium held in trust is actually
part of Rosbottom's bankruptcy estate. The Court, in a Memorandum Ruling issued on
June 28, 2016, reversed the bankruptcy court, finding that the trust at issue was validly
formed under Louisiana law. Record Document 19. Specifically, the Court held that even
though Rosbottom and his wife at the time, Leslie Fox ('Fox''), executed donations of their
respective community shares in a residence ("The Railsback Property'') on separate
documents, the donations did not violate Louisiana community property law because they
were part of a single transaction in which both spouses donated the entire residence,
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precluding a third party from ever becoming part of the community. Record Document 19,
pp. 12-14. In its motion before the Court, Schiff argues thatthe Court erred in this finding
and should consequently grant a motion for rehearing under Bankruptcy Rule 8022.
According to at least one district court:
Rule 8022 does not state a standard by which a court determines whether
a rehearing is warranted. Furthermore, the Court is not aware of any Fifth
Circuit guidance on the issue. 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.
In re Coleman, No. ADV 14-1046, 2015 WL 7101129, at *1 (E.D. La. Nov. 13, 2015) (citing
In re Hessee Indus., Inc., 295 B.R. 372, 375 (9th Cir. 2003); 2 Bankruptcy Litigation§ 9:94
(2015)). Even under this relatively permissive standard, however, the Court finds no
reason to rehear this ·appeal.

Schiff argues that the Court's ruling "is in direct

contravention to Louisiana law and if allowed to stand would allow spouses to derogate
from Louisiana's matrimonial regimes law out of want." Record Document 20, p. 5. Schiff,
however, does not persuasively explain whythe Court's holding will bring about the legal
pandemonium that it describes. He argues that by interpreting the two donations of the
Railsback Property as a single transaction, the Court "effectively changed the character of
the Railsback Property from community property to co-owned property at the time of the
Rosbottom Donation." Record Document 20, p. 8. The Court cannot agree. As the Court
explained in its Memorandum Ruling, construing the two donations as being part of a single
transaction meant that the donations did not violate article 2337 of the Louisiana Civil
Code's prohibition against the alienation of an undivided share of community property to

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a third party because at no point did a third party own a share of community property, i.e.,
before the transaction the entire Railsback Property was community property, and after the
transaction the entire Railsback Property was co-owned by third parties in trusts. The
Court's holding did not "effectively change[] the character of the Railsback Property from
community property to co-owned property atthe time of the Rosbottom Donation." The
Court therefore set no precedent that would allow a spouse to alienate his share of
community property to a third party, in violation of Article 2337. Consequently, the Court
denies Schiff's motion for rehearing.
THUS .DONE AND SIGNED in Shreveport, Louisiana, this 1st day of September,

2016.

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ELIZABETA'ERb!>r'i=OOTE
UNITEDDISTRICT JUDGE

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