LNV Corporation v. Gebhardt (TV3)

Filing 91

ORDER that defendants motions to recuse 84 , 85 and 90 and motion to reconsider 65 are hereby DENIED. The proposed intervenors motions to intervene 72 , 73 and 74 and motion for relief from judgment 75 are also hereby DENIED. The Court notes that the proposed intervenors filed several motions for judicial notice [Docs. 76, 77, 78, 79, 80], and plaintiff requested additional time to respond to these and other motions 82 . In light of the Courts previous findings, all of these motions are hereby DENIED as moot. Signed by Chief District Judge Thomas A Varlan on 6/16/14. (c/m) (ABF)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
LNV CORPORATION,
Plaintiff,
v.
CATHERINE GEBHARDT,
Defendant.

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No.: 3:12-CV-468-TAV-HBG

MEMORANDUM OPINION AND ORDER
This civil action is before the Court on several motions: (1) defendant’s Objection
to Memorandum Opinion and Final Order of Judgment [Doc. 65] in which defendant
requests that the order granting plaintiff’s motion of summary judgment [Doc. 54] be
reversed;1 (2) three motions to intervene filed by Denise Subramaniam, Joann Breitling,
and Cammy Depew (the “intervenors” or “proposed intervenors”) [Docs. 72, 73, 74]; (3)
the proposed intervenors’ Motion for Relief from Order and Summary Judgment
Favoring LNV Corporation by Vacating a Void Judgment [Doc. 75]; (4) numerous
motions for judicial notice [Docs. 75, 77, 78, 79, 80]; and (5) defendant’s motions to
recuse [Docs. 84, 85, 90], in which defendant seeks to recuse both the undersigned and
the magistrate judge in this case. Plaintiff has submitted a response in opposition to
defendant’s motion for reconsideration [Doc. 83], as well as objections to the proposed

1

The Court treats defendant’s motion as one for reconsideration under Rule 59(e) of the
Federal Rules of Civil Procedure. See Mullins v. Marshall, No. 08-286-JCB, 2010 WL 2331038,
at *1 (E.D. Ky. June 10, 2010) (treating a pro se plaintiff’s motion to appeal summary judgment
as a motion for reconsideration).

intervenor’s motions [Doc. 82]. For the reasons set forth herein, and after considering the
relevant law, defendant’s motions [Docs. 64, 84, 85, and 90] will be denied, and the
Court will also deny the proposed intervenors’ motions to intervene [Docs. 72, 73, and
74] and motion for relief from judgment [Doc. 75].
I.

Background2
Plaintiff, LNV Corporation, filed suit against defendant for defaulting on a Note

under which defendant was obligated to repay a home loan that had been assigned to
plaintiff. Plaintiff subsequently moved for summary judgment and defendant filed a
motion requesting leave to file a counter-complaint and a third-party complaint [Docs. 8,
22]. On March 18, 2014, the Court granted plaintiff’s motion for summary judgment and
denied defendant’s motion to file a counter-complaint and a third-party complaint [Docs.
53, 54]. The Court entered an Order of Judgment on April 15, 2014, in the amount of
$389,509.83 [Doc. 59].

Defendant subsequently filed the instant motion for

reconsideration [Doc. 65], which was followed by the proposed intervenors’ motions to
join this case [Docs. 72, 73, 74] and defendant’s motions to recuse [Docs. 84, 85, 90].
II.

Analysis
A.

Motions for Recusal

In her motions to recuse, defendant argues that both Magistrate Judge Guyton and
the undersigned are subject to having their impartiality questioned, based both on their
past experiences and on past decisions. Defendant specifically argues that as both the

2

Although discussed to the extent relevant, the Court presumes familiarity with the
underlying facts of this case.
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undersigned and the magistrate judge previously worked for law firms who have or may
have represented financial institutions unrelated to this case, and as both have ruled
adversely to pro se parties in the past, they are not neutral in their decisionmaking.
Therefore, defendant requests that the Court remove Magistrate Judge Guyton and the
undersigned from this case and that another judge be assigned to hear the matter.
“Any justice, judge, or magistrate judge of the United States shall disqualify
himself in any proceeding in which his impartiality might reasonably be questioned.” 28
U.S.C. § 455(a). “It has long been the law of this circuit that ‘a judge must recuse
[himself] if a reasonable, objective person, knowing all of the circumstances, would have
questioned the judge’s impartiality.’” United States v. Sammons, 918 F.2d 592, 599 (6th
Cir. 1990) (quoting Hughes v. United States, 899 F.2d 1495, 1501 (6th Cir. 1990)). As
the Sixth Circuit has observed, the standard for disqualification of a judge is an objective
one, “hence, the judge need not recuse himself based on the ‘subjective view of a party’
no matter how strongly that view is held.” Id. (quoting Browning v. Foltz, 837 F.2d 276,
279 (6th Cir. 1988), cert. denied, 488 U.S. 1018 (1989)). Furthermore, the Supreme
Court has observed that bias that requires recusal must be personal or extrajudicial.
Liteky v. United States, 510 U.S. 540, 548 (1994); Sammons, 918 F.2d at 599. “Personal
bias is prejudice that emanates from some source other than participation in the
proceedings or prior contact with related cases.” United States v. Nelson, 922 F.2d 311,
319-20 (6th Cir. 1990) (quotations omitted). The basis for recusal under § 455(a),
therefore, cannot be a judge’s prior ruling.
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Besides defendant’s own subjective belief that disqualification is warranted,
defendant has given no grounds upon which the undersigned or Judge Guyton should be
disqualified from hearing this case.

Defendant’s motions are based on the alleged

representations of the law firms the undersigned and Judge Guyton worked for some time
ago, which are unrelated to this case, as well as previous decisions, without noting the
context, circumstances or bases in which those decisions were made. She has given no
specific examples of incompetence, impartiality, or bias, and she has not explained why
any previous rulings against her indicated personal bias against her. See Nelson, 922
F.2d at 319-20. Moreover, defendant has given no reason why a reasonable person
would question Magistrate Judge Guyton or this Court’s ability to remain impartial.
Accordingly, defendant’s motions for recusal [Docs. 84, 85, and 90] will be denied, and
the Court will proceed to analyze the remaining motions before it.
B.

Motion to Reconsider

“A district court may grant a Rule 59(e) motion to alter or amend judgment only if
there is: ‘(1) a clear error of law; (2) newly discovered evidence; (3) an intervening
change in controlling law; or (4) a need to prevent manifest injustice.’” Henderson v.
Walled Lake Consol. Schs., 469 F.3d 479, 496 (6th Cir. 2006) (quoting Intera Corp. v.
Henderson, 428 F.3d 605, 620 (6th Cir. 2005)). Rule 59 motions are not “intended as a
vehicle to re-litigate previously considered issues; should not be utilized to submit
evidence which could have been previously submitted in the exercise of reasonable
diligence; and are not the proper vehicle to attempt to obtain a reversal of a judgment by
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offering the same arguments previously presented.” Kenneth Henes Special Projects
Procurement v. Cont’l Biomass Indus., Inc., 86 F. Supp. 2d 721, 726 (E.D. Mich. 2000)
(emphasis and citation omitted); see also Sault Ste. Marie Tribe of Chippewa Indians v.
Engler, 146 F.3d 367, 374 (6th Cir. 1998) (noting that a Rule 59(e) motion “is not an
opportunity to re-argue a case” nor an avenue to raise arguments that “could have, but
[were] not” raised before (citation omitted)); Al-Sadoon v. FISI*Madison Fin. Corp., 188
F. Supp. 2d 899, 902 (M.D. Tenn. 2002) (noting that a Rule 59 motion is not an
opportunity for a party to “reargue its prior position with the hope that the court will
change its mind.”).
Defendant’s motion does not present the Court with an intervening change in the
controlling law or newly discovered evidence, nor does defendant argue that the
conclusions reached in the Court’s Memorandum Opinion [Doc. 53] regarding plaintiff’s
motion for summary judgment constitute clear legal error or otherwise result in manifest
injustice. Rather, defendant’s motion merely quotes portions of the Court’s opinion that
she states are “not well taken” [Doc. 65], which, the Court finds, is insufficient to grant
defendant’s requested relief. Some of the portions quoted by defendant include the
standard of review for pro se parties and explanatory footnotes containing collateral
matters that had little bearing on the Court’s decision and otherwise do not constitute a
change in law.
With regard to defendant’s contention that she pled sufficient facts to allege fraud,
the Court finds this argument similarly unavailing.
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The evidence which defendant

identifies to support her claim of fraud is not newly discovered evidence, and even were
the Court to find this evidence was newly discovered and consider it on the merits, it
would fall short of the standards required by Rule 9 of the Federal Rules of Civil
Procedure.

In addition, the Court notes defendant does not argue that the Court’s

conclusions as to her motion to file a counterclaim constituted clear error. Rather,
defendant merely re-argues her prior position, which the Court finds is insufficient to
meet the requirements of a Rule 59 motion, even giving her arguments the liberal
construction afforded pro se parties. In addition, in reviewing the record of this case, the
Court finds that none of the grounds for relief are present in this case. Defendant’s
motion [Doc. 65], accordingly, will be denied.
C.

Motions to Intervene

The proposed intervenors have moved to intervene in the present case as of right
pursuant to Federal Rules of Civil Procedure Rule 24(a)(2), or in the alternative,
permissively under Rule 24(b) [Docs. 72, 73, 74].
1.

Intervention of Right

Intervention as of right under Rule 24(a)(2) requires the intervening party to
establish four elements: “(1) timeliness of the application to intervene, (2) the applicant’s
substantial legal interest in the case, (3) impairment of the applicant’s ability to protect
that interest in the absence of intervention, and (4) inadequate representation of that
interest by the parties already before the court.” Mich. State AFL-CIO v. Miller, 103 F.3d
1240, 1245 (6th Cir. 1997) (citing Cuyahoga Valley Ry. Co. v. Tracy, 6 F.3d 389, 395
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(6th Cir. 1993)). The Sixth Circuit has adopted an “‘expansive notion of the interest
sufficient to invoke intervention of right.’” Davis v. Lifetime Capital, Inc., No. 11-442,
2014 WL 1011430, at *6 (6th Cir. Mar. 18, 2014) (quoting Miller, 103 F.3d at 1245)).
However, this liberal construction is not without limit; the Sixth Circuit requires a
“‘direct, substantial interest’ in the litigation which must be ‘significantly protectable.’”
Purnell v. City of Akron, 925 F.2d 941, 947 (6th Cir. 1991) (citations omitted).
Here, the intervenors argue that their motions to intervene are timely because they
were filed less than one year after final judgment was entered in favor of plaintiff and
because defendant’s notice of appeal has been filed and is pending [Docs. 72, 73, 74].
Even assuming that the intervenors’ motion is timely under Rule 24(a), the Court finds
that the intervenors have not shown that their interest in this case, if any, is substantial or
direct. The intervenors argue that they have “a substantial legal interest in the subject
matter of the action because it involves claims of violations of the First and Fourteenth
Amendment rights of due process under the Constitution of the United States specific to
deprivation of property; and claims of violation of Fourteenth Amendment rights to equal
protection of the law under the Constitution of the United States” [Docs. 72 ¶ 3; 73 ¶ 3;
74 ¶ 3]. The intervenors have not alleged that they are parties to the contract that is the
basis of the underlying dispute between plaintiff and defendant, or that they have any
other interest in the underlying contract. Rather, they generally allege that this case
“implicates stare decisis concerns that warrant the intervention of other victims whose
cases will be affected by the outcome of this case” [Docs. 72 ¶4; 73 ¶4; 74 ¶ 4]. The
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Court finds that such discrete interests, asserted by parties to wholly separate agreements
in different jurisdictions, fail to establish the necessary “direct, substantial interest” in the
underlying breach of contract suit required by Rule 24(a)(2), and thus cannot establish
they may intervene as of right.3
2.

Permissive Intervention

In the alternative, the proposed intervenors move to intervene pursuant to Rule
24(b) of the Federal Rules of Civil Procedure which allows for permissive intervention.
Under Rule 24(b), a district court has the “discretionary power to permit intervention if
the motion is timely, and if the ‘applicant’s claim or defense and the main action have a
question of law or fact in common.’” Bradley v. Milliken, 828 F.2d 1186, 1193 (6th Cir.
1987) (internal citations omitted) (quoting Fed. R. Civ. P. 24(b)(2)). The rule “also
provides that ‘in exercising its discretion, the court shall consider whether the
intervention will unduly delay or prejudice the adjudication of the rights of the original
parties.’” Id. at 1193–94.
Again, assuming that the motion to intervene is timely, the Court nonetheless
concludes that the proposed intervenors have not alleged at least one common question of
law or fact. See Fed. R. Civ. P. 24(b)(2). The proposed intervenors broadly allege that
they have been involved in litigation with plaintiff and have been prejudiced by
plaintiff’s fraud, abuse of courts, and fraud upon the courts [See Docs. 72, 73, 74]. None

3

Because the Court finds that the intervenors cannot meet an essential element of
establishing intervention as of right, the Court need not further analyze the remaining factors
under Rule 24(a)(2).
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of the proposed intervenors, however, have specifically identified a claim or defense that
shares a common question of fact or law with the underlying breach of contract dispute
between plaintiff and defendant.4

Additionally, it does not appear that any of the

proposed intervenors have causes of actions with plaintiff that are currently being
litigated [See id.]. Accordingly, the Court finds that the proposed intervenors have failed
to set out the claim or defense for which intervention is sought as required by Fed. R.
Civ. P. 24(c).
Assuming the Court could find that the proposed intervenors have shown common
questions of fact or law sufficient to justify permissive intervention, the Court is still
required to weigh such finding against any undue prejudice to the parties. See Fed. R.
Civ. P. 24(b)(3). Here, although defendant has filed a notice of appeal, the proposed
intervenors waited until the Court entered an order granting summary judgment to
plaintiff [Doc. 53] and entered a final order and judgment [Doc. 59]. Allowing the
proposed intervenors to intervene at this stage of the proceedings will unduly prejudice
plaintiff who will be forced to re-litigate claims that have already been disposed of in its
favor. See Simmons v. Countrywide House Loans, No. 3:11-00476, 2012 WL 610002, at
*2 (M.D. Tenn. Feb. 24, 2012), report and recommendation adopted sub nom. Simmons
v. Countrywide House Loans, No. 3-11-0476, 2012 WL 859591 (M.D. Tenn. Mar. 13,

4

To the extent that the intervenors argue common questions of law or fact based on
defendant’s proposed counter complaint and third-party complaint [Doc. 22-1] alleging fraud and
various other claims, the Court notes that those issues are not implicated in this case based on the
Court’s order denying defendant’s motion to file those claims [See Doc. 54].
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2012) (finding that defendants were unduly prejudiced when intervenor waited until after
the magistrate judge had issued a Report and Recommendation to dismiss the case).
For these reasons, the Court declines to exercise its discretion to allow permissive
intervention in this case.
D.

Motion for Relief from Judgment

The proposed intervenors have also moved for relief from the Court’s order
granting judgment to plaintiff [Doc. 75]. In light of the Court’s holding denying the
motions to intervene, the Court finds that the proposed intervenors are without standing
to challenge the Court’s grant of summary judgment to plaintiff. Accordingly, this
motion [Doc. 75] will similarly be denied.5
III.

Conclusion
For the reasons previously discussed, defendant’s motions to recuse [Docs. 84, 85,

90] and motion to reconsider [Doc. 65] are hereby DENIED. The proposed intervenors’
motions to intervene [Docs. 72, 73, 74] and motion for relief from judgment [Doc. 75]
are also hereby DENIED.
IT IS SO ORDERED.

s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE

5

The Court notes that the proposed intervenors filed several motions for judicial notice
[Docs. 76, 77, 78, 79, 80], and plaintiff requested additional time to respond to these and other
motions [Doc. 82]. In light of the Court’s previous findings, all of these motions are hereby
DENIED as moot.
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