Hrobuchak v. Navistar Financial Corporation et al

Filing 35

MEMORANDUM (Order to follow as separate docket entry) re 27 MOTION for Reconsideration re 26 Order on Motion to Stay, Order on Motion to Lift Stay,, Order filed on January 29, 2016 filed by Stephen P. Hrobuchak, Jr. Signed by Honorable A. Richard Caputo on 9/30/16. (jam)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
STEPHEN P. HROBUCHAK, Jr.,
CIVIL ACTION NO. 3:15-CV-777

Appellant,

(JUDGE CAPUTO)
v.
Chapter 7
NAVISTAR FINANCIAL CORPORATION
and NAVISTAR LEASING COMPANY,

Bankruptcy: 5:14-bk-02098-JJT

Appellees.
MEMORANDUM
Presently before me is Appellant, Stephen P. Hrobuchak, Jr.’s (“Hrobuchak”) Motion
for Reconsideration (Doc. 27) of this Court’s Order denying Hrobuchak’s Appeal and
affirming rulings of the Bankruptcy Court. (Doc. 26). Specifically, Hrobuchak argues that a
newly-discovered Opinion in an unrelated case warrants reconsideration. Because the
Opinion is neither relevant nor controlling, and Hrobuchak fails to demonstrate any grounds
necessary to warrant reconsideration, I will deny his motion.
I. Background
Hrobuchak was the president of Transcontinental Refrigerated Lines, Inc. (“TRL”).
(Doc. 4-4, ¶ 15.) An involuntary bankruptcy action was commenced under Chapter 7 of the
Bankruptcy Code against TRL on February 29, 2008 in the United States Bankruptcy Court
for the Middle District of Pennsylvania. (Id.) The case was converted to a Chapter 11
bankruptcy on March 31, 2008. (Id.) Hrobuchak was listed as a co-debtor in the bankruptcy
on some of TRL’s debts. (Doc. 4-3, 3 ¶ 12.) On November 16, 2008, a First Amended Plan
of Reorganization was confirmed. (Id. at ¶ 14.) Lawrence V. Young (“Mr. Young”) was
appointed as liquidating agent and vested with control of all property and assets of the TRL
Bankruptcy. (Id. at ¶ 15.) On February 26, 2010, TRL through Mr. Young, commenced an

action in the bankruptcy court in an attempt to liquidate claims against several individuals
and entities with Hrobuchak and Cherry Marine, LLC,1 among them. (Id. at ¶ 17.) The core
bankruptcy proceedings were transferred to the U.S. District Court of the Middle District of
Pennsylvania. (Id. at ¶¶ 18-19.) In that litigation, which is still pending, TRL, through Mr.
Young, made allegations that bankruptcy assets of TRL were improperly shifted to
Hrobuchak and Cherry Marine, LLC., among others. (Id. at ¶ 19.)
On October 30, 2008, a default judgment was entered against Hrobuchak in favor
of Appellees Navistar Financial Corporation (“NFC”) and Navistar Leasing Company (“NLC”,
which together with NFC are, collectively, “Navistar”). (Id. at ¶ 20.) In fact, Navistar holds
two judgments against Hrobuchak together totaling $7,642,521.15. (Doc. 4-4, at ¶ 16.)
Hrobuchak has not personally made any payments to Navistar but Navistar has received
payments from the TRL Bankruptcy. (Doc. 4-4, at ¶ 16.)
On May 1, 2014, Navistar filed a Chapter 7 Involuntary Bankruptcy Petition
(“Involuntary Petition”) in the Bankruptcy Court of the Middle District of Pennsylvania against
Hrobuchak. (Doc. 4-1) On May 23, 2014, Hrobuchak filed a Response and a Motion to
Dismiss the Involuntary Bankruptcy Petition. On June 17, 2014, Orix Financial Services,
Incorporated (“Orix”) was joined in the Involuntary Petition. (Doc. 4-2.) Judge John J.
Thomas (“Judge Thomas”) denied Hrobuchak’s motion to dismiss. On September 9, 2014,
Navistar filed a Motion for Summary Judgment. (Doc. 4-4.) Following a hearing on October
23, 2014, Judge Thomas granted Navistar's Motion for Summary Judgment and ordered
that Hrobuchak be adjudicated a Chapter 7 Debtor pursuant to 11 U.S.C. § 303 (Doc. 1-1).
On November 10, 2014, following Judge Thomas’s Order, Hrobuchak filed a Motion
for Reconsideration (Doc. 9-1.) and a Motion to Stay. (Doc. 4-11.) On December 9, 2014,
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Cherry Marine, LLC., owns a yacht named Cherry Bomb that is up for sale and Navistar
contends is an asset of Hrobuchak’s. The involuntary petition was purportedly filed to prevent
the dissipation of Hrobuchak’s alleged asset. (Doc. 4-4, ¶¶ 5, 17-20.)
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after a hearing, Judge Thomas orally denied the Motion for Stay (Doc. 1-2.), and on April
8, 2015, he denied Hrobuchak’s Motion for Reconsideration. See In Re: Hrobuchak, 5-14bk-2098, 2015 WL 1651974 (M. D. Pa., April 8, 2015).
Hrobuchak filed a Notice of Appeal from Bankruptcy Court with this Court on April
21, 2015 (Doc. 1.), and on June 23, 2015, he filed a Motion to Stay the Bankruptcy Case.
(Doc. 9.)
On January 29, 2016, I entered an Opinion affirming the Bankruptcy Court’s grant
of summary judgment to Navistar and adjudicating Hrobuchak a Chapter 7 debtor. In the
Opinion, I concluded that: (1) there was no evidence that Navistar filed the Involuntary
Petition in bad faith; and (2) there was no evidence that Hrobuchak had twelve or more
creditors.2 I referenced in my Opinion another case where Hrobuchak is a defendant,
Transcon. Refrigerated Lines, Inc. v. New Prime, Inc., 2014 U.S. Dist. LEXIS 75320, 2014
WL 2471936 (M. D. Pa. June 3, 2014) (hereinafter “TRL I"). In that case, Chief Judge
Christopher C. Conner issued an Opinion overruling certain attorney-client privileges
asserted by Hrobuchak and the law firm which assisted Hrobuchak with the fraudulent
transfers at issue in that litigation. Specifically, after an in camera review of these
attorney-client communications, Judge Conner overruled Hrobuchak’s purported privilege

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As 11 U.S.C.A. § 303 provides:
(b) An involuntary case against a person is commenced by the filing with the
bankruptcy court of a petition under chapter 7 or 11 of this title-(1) by three or more entities, each of which is either a holder of a claim against
such person that is not contingent as to liability or the subject of a bona fide
dispute as to liability or amount, or an indenture trustee representing such a
holder, if such noncontingent, undisputed claims aggregate at least $15,325
more than the value of any lien on property of the debtor securing such claims
held by the holders of such claims;
(2) if there are fewer than 12 such holders, excluding any employee or insider
of such person and any transferee of a transfer that is voidable under section
544, 545, 547, 548, 549, or 724(a) of this title, by one or more of such holders
that hold in the aggregate at least $15,325 of such claims.
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under the crime-fraud exception, noting evidence that Hrobuchak utilized counsel to “funnel
funds to foreign bank accounts” and to fraudulently transfer assets which “helped
Hrobuchak enrich himself” at the expense of his creditors. Id. at *10.
On February 12, 2016, Hrobuchak filed the instant Motion for Reconsideration. He
argues that a new Opinion by Judge Conner in Transcon. Refrigerated Lines v. New Prime,
Inc., 2016 U.S. Dist. LEXIS 1105 (M. D. Pa. Jan. 6, 2016) (hereinafter “TRL II”), “rejected”
TRL I and warrants a conclusion that Navistar’s Involuntary Petition was filed in bad faith.
(Doc. 28). Hrobuchak’s motion is fully briefed and ripe for disposition.
II. Legal Standard
The purpose of a motion for reconsideration is to correct manifest errors of law or
fact or to present newly discovered evidence. See Harsco Corp. v. Zlotnicki, 779 F.2d 906,
909 (3d Cir. 1985). A motion for reconsideration may be granted if the movant establishes:
(1) an intervening change in controlling law; (2) the availability of new evidence that was not
available when the court decided the motion; or (3) the need to correct a clear error of law
or fact or to prevent manifest injustice. Max's Seafood Café, by Lou–Ann, Inc., v. Quinteros,
176 F.3d 669, 677 (3d Cir. 1999).
"A motion for reconsideration is not to be used as a means to reargue matters
already argued and disposed of or as an attempt to relitigate a point of disagreement
between the Court and the litigant." Ogden v. Keystone Residence, 226 F. Supp. 2d 588,
606 (M.D. Pa. 2002). Reconsideration motions also may not be used to raise new
arguments or present evidence that could have been raised prior to the entry of judgment.
Hill v. Tammac Corp., Civ. A. No. 05–1148, 2006 WL 529044, at *2 (M.D. Pa. Mar. 3, 2006).
Lastly, reconsideration is an extraordinary remedy, and should be granted sparingly.
D'Angio v. Borough of Nescopeck, 56 F. Supp. 2d 502, 504 (M.D. Pa. 1999).

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III. Discussion
In its Response in Opposition to Hrobuchak's Motion for Reconsideration, Navistar
argues that Hrobuchak "fails to provide any procedural or substantive grounds for its
consideration . . . [and] has failed to allege any change in law or newly discovered facts.
Instead, Hrobuchak's Motion is premised on a blatant misreading of an irrelevant opinion
in a completely different lawsuit that made no findings whatsoever pertinent to this
bankruptcy proceeding." (Doc. 29, at 9). I agree.
TRL II does not affect the core findings of my summary judgment disposition.
Hrobuchak claims that in TRL II, the court “rejected [the plaintiff’s] reliance on [TRL I] as
abdication of its summary judgment obligations and rejected [the plaintiff’s] unsubstantiated
allegations that [Hrobuchak] devised an intricate scheme to fraudulently transfer
Transcontinental’s assets to Defendants, Janis Hrobuchak, Nicole Hrobuchak, John
Hrobuchak and Stephen Hrobuchak (not the Appellant), by granting a Motion for Summary
Judgment in favor of the Defendants.” (Doc. 28 at 3). Putting aside the fact that Hrobuchak
mischaracterizes TRL II,3 that decision is irrelevant to the instant case.
TRL II in no way suggests that Navistar’s Involuntary Petition was filed in bad faith,
which is at issue here. Navistar was not a party to that litigation nor is TRL II related to the
Involuntary Petition, Hrobuchak, Cherry Marine LLC, the yacht or “bad faith” in general. TRL
II granted summary judgment to three individuals based upon lack of evidence of receipt
of fraudulently-transferred real estate proceeds. Hrobuchak fails to explain what connection,
if any, TRL II has to whether or not Navistar’s Involuntary Petition was filed in bad faith.
More importantly, Hrobuchak’s failure to prove he had twelve or more creditors was alone

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TRL II did not “reject” TRL I. TRL II noted merely that TRL I correctly used the crime-fraud
exception to overrule asserted privilege, but that the plaintiff had simply failed to provide
evidence that the three individuals had received fraudulent transfers of real estate
proceeds.
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a sufficient basis for me to affirm the Bankruptcy Court’s ruling.
More fundamentally, Hrobuchak’s argument that my January 29, 2016 Order should
be vacated and reconsidered because of an unrelated ruling by a separate district court
pertaining to different individuals fails to demonstrate any of the grounds necessary to
warrant reconsideration. See Max's Seafood Café, 176 F.3d 677. Unless new evidence has
come to light which, had such evidence been discovered previously, could have affected
my decisions, or unless the law on an issue has changed since my consideration of that
issue, a motion for reconsideration is not proper. Id. Hrobuchak cites to no manifest error
of law or fact, nor does he cite to new evidence or claim any change in controlling law. The
lone case he references, TRL II, is not “controlling law.” It granted no relief to Hrobuchak,
made no findings as to Cherry Marine LLC, and made no reference to Navistar or the
Involuntary Petition. It has no bearing on my finding that Hrobuchak was properly placed in
Chapter 7 bankruptcy by Navistar. TRL II does not bring Hrobuchak any closer to
ascertaining that he had twelve or more creditors or supporting his argument that Navistar’s
Involuntary Petition was filed in bad faith, the core issues which I found merited the grant
of summary judgment.
Hrobuchak is incorrect to think that he can endlessly revisit issues that have been
carefully reviewed, adjudicated, and reconsidered multiple times. As such, his motion will
be dismissed.
III. Conclusion
For the above-stated reasons, Hrobuchak’s Motion for Reconsideration (Doc. 27) of
the January 29, 2016 Memorandum and Order (Docs. 25, 26) will be denied.
An appropriate order follows.

September 30, 2016
Date

/s/ A. Richard Caputo
A. Richard Caputo
United States District Judge
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