OCWEN LOAN SERVICING LLC et al v. RANSOM et al

Filing 20

MEMORANDUM OPINION denying Appellant's Motion to Extend Time to Move for Rehearing under Federal Rule of Bankruptcy Procedure 8022, and Motion for Reconsideration and Reargument. An appropriate order follows. Signed by Chief Judge Joy Flowers Conti on 5/15/18. (jdg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
Ocwen Loan Servicing, LLC as servicer for
Deutsche Bank National Trust Company, as
Trustee for Argent Securities, Inc., AssetBacked-Pass-Through Certificates,
Series 2006-M1,

v.

Appellant,

Denae Marie Randolph and Ronda J.
Winnecour, Chapter 13 Standing Trustee,
Appellees.
___________________________________________
Ocwen Loan Servicing, LLC as servicer for
Deutsche Bank National Trust Company, as
Trustee for Argent Securities, Inc., AssetBacked-Pass-Through Certificates,
Series 2006-M1,
Appellant,
Clyde W. Ransom, Betty Jean Ransom, and
Ronda J. Winnecour, Chapter 13 Standing
Trustee,
Appellees.
___________________________________________

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Civil No. 18-21
(Bankruptcy Nos. 15-10895)

Civil No. 18-22
(Bankruptcy No. 15-10886)

MEMORANDUM OPINION
Conti, Chief District Judge
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I. Background
This matter is before the court upon a “Motion to Extend Time to Move for Rehearing
under Federal Rule of Bankruptcy Procedure 8022, and Motion for Reconsideration and
Reargument” filed by Appellant Ocwen Loan Servicing, LLC (“Ocwen”).

Ocwen seeks

reconsideration of a Memorandum Opinion and Order issued by this court on March 2, 2018,
denying Ocwen’s appeal from two underlying bankruptcy cases: In re Denae Marie Randolph,
No. 15-10895 (Bankr. W.D. Pa. 2015); and In re Clyde W. Ransom, et al., 15-10866 (Bankr.
W.D. Pa. 2015).
By way of background, Ocwen, a mortgage servicing company, filed Notices of PostPetition Mortgage Fees, Expenses, and Charges (“PPFNs”) in each of the underlying bankruptcy
cases on April 4, 2016, and April 11, 2016. The bankruptcy court observed that Ocwen had
improperly charged a $400 legal fee for “plan review” in both cases. Although Ocwen agreed to
remove the improper charges from the loans, the bankruptcy court ordered Ocwen to produce the
complete loan histories to the Chapter 13 Trustee for review. That order was entered onto the
docket of both cases on July 26, 2017.
Shortly thereafter, Ronda J. Winnecour, the trustee in both cases (the “Trustee”, and
collectively with the debtors in each case, the “Appellees”), reported to the bankruptcy court that
Ocwen had only provided partial loan histories, rather than the complete loan histories required
by the court’s orders. In an attempt to enforce its July 26, 2017 order, the bankruptcy court held
a hearing on August 31, 2017, and issued supplemental orders on August 15, 2017, September 1,
2017, and December 21, 2017. The last of these orders directed Ocwen and its counsel to appear
at an additional hearing to “show cause for and justify their failure to comply” with the court’s

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previous orders. Rather than comply, Ocwen filed a Notice of Appeal in each case on January 4,
2018.
In a Memorandum Opinion and Order dated March 2, 2018, this court rejected each of
Ocwen’s appeals. The court held that Ocwen was not entitled to an appeal as of right pursuant to
28 U.S.C. § 158(a)(1) because the bankruptcy court’s December 21, 2017 order did not satisfy
the requirements for finality under § 158(a)(1). The court also declined to exercise its discretion
to grant leave of appeal under 28 U.S.C. § 158(a)(3) because Ocwen had failed to identify a
controlling issue of law, an appeal would not materially advance the ultimate termination of the
litigation, and exceptional circumstances warranting the need for immediate review did not exist.
On March 29, 2018, Ocwen filed the instant motions seeking an extension of time to
move for rehearing and reconsideration of the March 2, 2018 order. Appellees have responded
to each motion. This matter is now ripe for review.
II. Standard
Federal Rule of Bankruptcy Procedure 8022 states that, “[u]nless the time is shortened or
extended by order or local rule, any motion for rehearing by the district court or BAP must be
filed within 14 days of entry of judgment on appeal.” Fed. R. Bankr. P. 8022. Once this
deadline has passed, a motion to extend the time for rehearing may only be granted if the “failure
to act was the result of excusable neglect.” Fed. R. Bankr. P. 9006(b)(1).
A motion for rehearing under Bankrupty Rule 8022 “functions, essentially, like a
traditional motion for reconsideration.” Lau v. Bank of America (In re Lau), 684 F. App’x 235,
239 (3d Cir. 2017). The purpose of such a motion is “to correct manifest errors of law or fact or
to present newly discovered evidence.” Max’s Seafood Café v. Quinteros, 176 F.3d 669, 677 (3d
Cir.1999). A motion for reconsideration must therefore rely on one of three grounds: (1) an
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intervening change in the law; (2) the availability of new evidence; or (3) the need to correct
clear error of law or prevent manifest injustice. N. River Ins. Co. v. CIGNA Reinsurance Co., 52
F.3d 1194, 1218 (3d Cir. 1995). A motion for reconsideration is not properly grounded in a
request for a district court to rethink a decision it has already rightly or wrongly made. Williams
v. Pittsburgh, 32 F.Supp.2d 236, 238 (W.D. Pa. 1998). As such, litigants are cautioned to
“ʻevaluate whether what may seem to be a clear error of law is in fact simply a point of
disagreement between the Court and the litigant.’” Waye v. First Citizen’s Nat’l Bank, 846
F.Supp. 310, 314 n.3 (M.D. Pa. 1994) (quoting Atkins v. Marathon LeTourneau Co., 130 F.R.D.
625, 626 (S.D. Miss. 1990).
III. Discussion
A. Excusable Neglect
The court entered final judgment in each of the pertinent bankruptcy appeals on March 2,
2018. Pursuant to Rule 8022 of the Federal Rules of Bankruptcy Procedure, Ocwen had until
March 16, 2018 to file a motion for rehearing or a request to extend the time for rehearing. The
instant motion was not filed until March 29, 2018, approximately two weeks beyond that
deadline. Consequently, Ocwen must demonstrate that its failure to seek rehearing in a timely
manner was the result of “excusable neglect” before this court may grant Ocwen’s motion. Fed.
R. Bankr. P. 9006(b)(1).
“To determine excusable neglect, the court must consider four factors: ‘(1) the danger of
prejudice to the non-movant; (2) the length of the delay and the impact on judicial proceedings;
(3) the reason for the delay, including whether it was within the reasonable control of the
movant; and (4) whether the movant acted in good faith.’” Martinez v. City of Reading Prop.
Maint. Div., No. 16-1290, 2018 WL 1290087, at *7 (E.D. Pa. Mar. 13, 2018). The determination
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is “an equitable one, taking account of all relevant circumstances surrounding the party’s
omission.” Ragguette v. Premier Wines & Spirits, 691 F.3d 315, 324 (3d Cir. 2012). “Although
inadvertence, ignorance of the rules, or mistakes construing the rules do not usually constitute
‘excusable’ neglect, it is clear that ‘excusable neglect’ . . . is a somewhat ‘elastic concept,’ and is
not limited strictly to omissions caused by circumstances beyond the control of the movant.” Id.
(quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 392 (1993)).
“The neglect of both the party as well as the party’s own attorney must be taken into account.”
Id.
Ocwen’s motion completely fails to address the concept of excusable neglect. The only
explanation provided for Ocwen’s failure to request rehearing in a timely manner is that “Duane
Morris was added as co-counsel on March 27, 2018” and “decided to pursue a motion for
rehearing.” (ECF No. 17 at 6.) Ocwen explains that the decision to pursue rehearing “could not
have been made earlier, as Duane Morris was not retained until that date.” Id. Ocwen, however,
failed to cite any caselaw to support the proposition that the retention of additional counsel after
a deadline has expired somehow constitutes “excusable neglect,” particularly where the movant
has been represented by experienced and able counsel at all times throughout the proceedings.
Even if Ocwen intended to allege that prior counsel mishandled its appeal or
misunderstood the applicable rules of bankruptcy procedure – an argument that does not appear
on the face of its motion – Ocwen still failed to establish that the four factors outlined above
entitle it to relief. Ocwen’s choice of counsel was entirely within its control at all times. The
ongoing proceedings in the underlying bankruptcy cases have been placed on hold throughout
the pendency of these bankruptcy appeals and the resolution of this motion, causing delay and
potential prejudice to the debtors and creditors who are seeking finality in those proceedings.

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Finally, Ocwen’s suggestion that it required the addition of another attorney to its roster of
experienced counsel in order to decide whether to pursue a motion for rehearing is hardly
indicative of good faith. Because each of these factors weigh against a finding of excusable
neglect, Ocwen’s untimely petition for an extension of time to seek rehearing must be denied.
B. Rehearing and Reconsideration
Even if Ocwen could demonstrate excusable neglect to justify the untimeliness of its
motion for rehearing, Ocwen still failed to establish that reconsideration of this court’s previous
decision is warranted. The entire basis for Ocwen’s motion for reconsideration is that the
bankruptcy court lacked jurisdiction to conduct the hearing contemplated by the December 21,
2017 order because there was no case or controversy pending at that time. This court squarely
rejected this precise “justiciability” argument in its Memorandum Opinion denying Ocwen’s
bankruptcy appeals:
Ocwen during the hearing raised for the first time the argument that there
is no jurisdiction because there is no case or controversy. See
International Finance Corp. v. Kaiser Group International Inc. (In re
Kaiser Group Int’l Inc.), 399 F.3d 558 (3d Cir. 2005). That issue was
not raised in the bankruptcy court or the briefings and does not bear on
the finality of the orders at issue. Ocwen may raise this issue with the
bankruptcy court on remand.
(ECF No. 12 at 8 n. 2.)
Even if Ocwen were correct in arguing that the bankruptcy court lacked
jurisdiction to enter the December 21, 2017 orders, Ocwen still fails to
explain how this alleged lack of jurisdiction has any bearing on the
finality requirement set forth in § 158(a)(1). Ocwen appears to suggest
that any order issued in the face of a jurisdictional challenge is per se
final and appealable, regardless of the nature of the order itself. Ocwen,
however, cites no caselaw to support this proposition. To the contrary, it
appears well settled that “immediate appeal is not automatically
authorized whenever a party alleges that a . . . court order has permitted a
suit to move forward in the absence of proper subject matter
jurisdiction.” Ashmore v. CGI Group, Inc., 860 F.3d 80, 85 (2d Cir.
2017) (emphasis added).
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Id. at 8.
“A motion for rehearing does not permit parties to recycle cases and arguments which the
District Court already rejected in rendering its original decision.” In re Lau, 684 F. App’x at
239. Ocwen’s recycled objections to the bankruptcy court’s jurisdiction represent a clear attempt
to invite the court to “rethink a decision it has already rightly or wrongly made.” Ins. Co. of
Greater N.Y. v. Fire Fighter Sales & Service Co., No. 11-1078, 2015 WL 4531220, at * 1 (W.D.
Pa. July 27, 2015) (citing Williams v. Pittsburgh, 32 F.Supp.2d 236, 238 (W.D. Pa. 1998)).
Defendants are not entitled to seek a “second bite of the apple” on such issues by way of a
motion for reconsideration. See, e.g., Boone v. Daughtery, No. 12-1333, 2013 WL 5836329, at
*1 (W.D. Pa. Oct. 30, 2013) (“Motions for reconsideration are not designed to provide litigants
with a second bite at the apple.”) (citing Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220,
1231 (3d Cir. 1995)).
IV. Conclusion
For the reasons discussed above, Ocwen’s request for an extension of time to petition for
rehearing and for reconsideration of the court’s March 2, 2018 Memorandum Opinion is denied.
An appropriate order follows.

By the court:
/s/ Joy Flowers Conti
Joy Flowers Conti
Chief United States District Judge
Dated: May 15, 2018

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