MARASEK et al v. U.S. BANK CUST FOR PRO CAPITAL I, LLC

Filing 30

MEMORANDUM OPINION filed. Signed by Judge Michael A. Shipp on 5/5/2015. (kas, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

In re JAN MARASEK and JOAN BYRON
MARAS EK

Bankruptcy Action No. 08-30919 (MBK)

JAN MARASEK, et al.,
Appellants,
v.

U.S. BANK CUST FOR PRO CAPITAL I,
LLC,

ON APPEAL FROM THE
BANKRUPTCY COURT OF THE
DISTRICT OF NEW JERSEY
Civil Action No. 14-5213 (MAS)
MEMORANDUM OPINION

Appellee.

SHIPP, District Judge

This matter comes before the Court on Appellants/Debtors Jan and Joan Marasek's
("Appellants") emergency application for a temporary restraining order ("TRO") and motion for
reconsideration of the Court's denial of Appellants' bankruptcy appeal.

After careful

consideration, and for the reasons set forth below, the Court denies both Appellants' TRO
application and motion for reconsideration.
I.

Background

On April 16, 2015, the Court denied Appellants' bankruptcy appeal and a related motion,
which sought to overturn the decision of the United States Bankruptcy Court for the District of
New Jersey ("Bankruptcy Court") granting Appellee U.S. Bank Cust for Pro Capital I LLC's
("Appellee" or "Pro Capital") request for relief from an automatic stay. (ECF Nos. 25, 26.)
Appellants requested that the Court reverse the Bankruptcy Court's decision granting Pro Capital

relief from an automatic stay, so that foreclosure proceedings commenced with respect to real
property owned by them could be stalled. As set forth more fully in the Court's prior decision,
Pro Capital purchased a tax lien on Appellants' property at a municipal auction during the
pendency of the bankruptcy proceedings and thus requested relief from the stay in order to
foreclose on the property.
Appellants now move for reconsideration of the Court's prior decision, asserting that the
Court erred in denying their appeal, and for injunctive relief. Appellants' principal assertion, as
set forth in their motion for reconsideration, is that the tax lien entitling Pro Capital to foreclose
on their property was procured by fraud and in connection with an alleged anticompetitive bidrigging conspiracy for which several companies and individuals have been criminally prosecuted
and which is the subject of a civil class action before the Undersigned. Appellants have also filed
an emergency application for a TRO, requesting that the Court enjoin foreclosure proceedings on
their property. 1 The Court will first address Appellants' request for reconsideration.

II.

Reconsideration
In the District of New Jersey, a motion for reconsideration of a decision resolving a

bankruptcy appeal is governed by Local Civil Rule 7.l(i). See In re Purington, No. 12-4135, 2013
WL 322572, at *2 (D.N.J. Jan. 28, 2013) (recognizing that that Federal Rules of Bankruptcy
Procedure incorporate Federal Civil Rule 59(e) and applying Local Civil Rule 7 .1 in

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Appellants' motion for reconsideration is not yet returnable. (The motion is set for June 1, 2015.)
Appellants' emergency application, which requests the same relief as Appellants' appeal and
motion for reconsideration, must be decided on an expedited basis. Accordingly, the Court decides
both the motion and application simultaneously, and to the extent this action conflicts with Local
Civil Rule 7 .1, which governs motions days, the rule is relaxed pursuant to Local Civil Rule 83 .2,
in the interests of efficiency and preservation of judicial resources. See United States v. Eleven
Vehicles, 200 F.3d 203, 215 (3d Cir. 2000) ("[A] district court can depart from the strictures of its
own local procedural rules where (1) it has a sound rationale for doing so, and (2) so doing does
not unfairly prejudice a party who has relied on the local rule to his detriment.").
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reconsideration of bankruptcy appeal decision). Under Rule 7.l(i), "[t]he movant has the burden
of demonstrating either: '(1) an intervening change in controlling law; (2) the availability of new
evidence that was not available when the court issued its order; or (3) the need to correct a clear
error oflaw or fact or to prevent manifest injustice."' Id. (quoting Max's Seafood Cafe v. Quintero,
176 F.3d 669, 677 (3d Cir. 1999)). "The standard for reconsideration is high, and reconsideration
is to be granted only sparingly." Richardson v. Treacy, Schaffel, Moore & Mueller, No. 05-501,
2007 WL 1321201, at *1 (D.N.J. May 4, 2007) (citing United States v. Jones, 158 F.R.D. 309, 314
(D.N.J. 1986)). Arguments previously considered by the Court are not a proper basis for a motion
for reconsideration. In re Gabapentin Patent Litig., 432 F. Supp. 2d 461, 463 (D.N.J. 2006)
("Local Rule 7 .1 (i) governing reconsideration does not contemplate a recapitulation of arguments
considered by the court before rendering its decision."). "Rather, the rule permits reconsideration
only when 'dispositive factual matters or controlling decisions of law' were presented to the court
but were overlooked." Id.
Here, Appellants rehash the same arguments previously asserted in their brief and
considered by the Court in rendering its decision. As noted, the primary thrust of Appellants'
argument, with respect to both the merits of the appeal and the motion for reconsideration, is that
Appellee' s tax lien should be set aside because it was procured by fraud. In their motion for
reconsideration, Appellants attach and describe a pleading from a civil class action alleging a
conspiracy to violate the antitrust laws, guilty pleas entered by individuals indicted in connection
with the aforementioned antitrust conspiracy, and various other documents.

The antitrust

conspiracy plead in the civil action refers to conduct occurring between January 1998 and February
2009. The plea agreements provided admit to anticompetitive conduct occurring between 1998
and approximately February 2009. As previously asserted by Appellee and considered by the

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Court, the period covered by the antitrust conspiracy detailed in these documents occurred prior to
Appellee' s acquisition of the tax lien associated with Appellants' property, which occurred in
2011.
More importantly, Appellants' arguments and introduction of new evidence in support of
their affirmative defenses are not properly before this Court on appeal. The Court, sitting in its
appellate role, cannot appropriately consider materials that were not presented to the Bankruptcy
Court, and discovery that could have been obtained while in the Bankruptcy Court is not
appropriately request while on appeal to the District Court. See Smith v. Manasquan Sav. Bank,
No. 12-85, 2012 WL 4339561, at *5 (D.N.J. Sept. 20, 2012) (citing In re WebSci Tech., Inc., 234
F. App'x 26, 31 (3d Cir. 2007)). Contrary to Appellants' assertions, an unresolved issue of fact
does not entitle Appellants to a favorable decision; rather, the burden was on Appellants to present
evidence in support of their counterclaims in the first instance before the Bankruptcy Court. See

In re Dennison, 50 B.R. 950, 954-55 (Bankr. E.D. Pa. 1985).

III.

Injunctive Relief
Appellants also request that the Court enter a TRO, enjoining state-court foreclosure

proceedings that have been brought against them by Appellee.

Injunctive relief is an

"extraordinary remedy, which should be granted only in limited circumstances." Perring Pharm.,

Inc. v. Watson Pharm., Inc., 765 F.3d 205, 210 (3d Cir. 2014) (internal quotation marks omitted).
In determining whether to grant a temporary restraining order, courts look to several factors:
(1) whether the movant has a reasonable probability of success on the merits;
(2) whether the movant will be irreparably harmed by denying the injunction;
(3) whether there will be greater harm to the nonmoving party if the injunction is
granted; and (4) whether granting the injunction is in the public interest.

DePinto v. Bayonne Bd. of Educ., 514 F. Supp. 2d 633, 635 (D.N.J. 2007) (quoting Sypniewski v.
Warren Hills Reg'! Bd. of Educ., 307 F.3d 243, 252 (3d Cir. 2002)); see also NLRB v. 710 Long

4

Ridge Rd Operating Co.

IL LLC, No. 14-1542, 2014 WL 1155539, at *1 (D.N.J. Mar. 21, 2014)

(applying the same factors in the context of a motion for a stay pending appeal of a bankruptcy
court order). The moving party bears the burden of showing entitlement to injunctive relief.
Perring Pharm., 765 F .3d at 21 O; see also 710 Long Ridge Rd, 2014 WL 1155539, at* 1 ("A party

seeking a stay bears the burden of sufficiently establishing the required factors.").
Here, Appellants cannot obtain a temporary restraining order. The Court has already
affirmed the Bankruptcy Court's decision and denied Appellants' motion for reconsideration.
Accordingly, Appellants cannot show an entitlement to injunctive relief.
IV.

Conclusion

For the reasons set forth above, both Appellants' motion for reconsideration and
application for a temporary restraining order are denied.
Memorandum Opinion will be entered.

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Dated: May.:)____, 2015

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An order consistent with this