David v. Summit Community Bank

Filing 10

MEMORANDUM OPINION AND ORDER. It is hereby ORDERED that the Court's Memorandum Opinion (Dkt. 8) be amended to AFFIRM the Bankruptcy Courts findings raised on this appeal in their entirety, without need for remand; and it is FURTHER ORDERED that Appellant's Motion (Dkt. 9) is DENIED (see Order for details). Signed by District Judge Rossie D. Alston, Jr on 2/1/2022. (nneb)

Case 1:20-cv-00721-RDA-JFA Document 10 Filed 02/01/22 Page 1 of 8 PageID# 7495

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
BYRON F. DAVID,
Appellant,
v.
SUMMIT COMMUNITY BANK,
Appellee.

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Civil Action No. 1:20-cv-00721 (RDA/JFA)

MEMORANDUM OPINION AND ORDER
This matter comes before the Court on Appellant Byron F. David’s (“Appellant”) Motion
for Rehearing (“Motion”) (Dkt. 9) with respect to this Court’s Memorandum Opinion (“Opinion”)
filed on May 4, 2021 (Dkt. 8). Considering Appellant’s Motion and the corresponding arguments
contained therein, this Court amends the Opinion to AFFIRM the Bankruptcy Court’s findings
raised on this appeal in their entirety, without need for remand and DENIES Appellant’s Motion.
I. BACKGROUND
A. Procedural Background
On July 10, 2018, Appellant filed a Chapter Seven bankruptcy petition with the Bankruptcy
Court. Dkt. 5-13, 157. Thereafter, Appellee filed the five Claims against Appellant’s bankruptcy
estate—Claim Numbers 3-3, 4-3, 5-3, 6-3, and 7-3. Id. at 17-64. Appellant objected to each of
those Claims. Id. at 81-98. On April 10, 2019, the Bankruptcy Court converted Appellant’s
Chapter Seven bankruptcy action to one under Chapter 11. Id. at 10.
Subsequently, Appellant filed a Motion of Summary Judgment with the Bankruptcy Court,
which Appellee opposed, and the Bankruptcy Court denied. Dkt. Nos. 5-1, 87-120; 5-5, 52-78; 512, 110-11. After denying Appellant’s Motion for Summary Judgment, on October 9, 2019, the

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Bankruptcy Court held an Evidentiary Hearing on Appellant’s Objections to Appellee’s Claims.
Dkt. Nos. 5-12 at 163-189; 5-13 at 1-154. Following the parties’ briefings, on May 4, 2021, this
Court issued its Opinion affirming in part, reversing in part and remanding in part the issues
presented in this appeal from the decision of the Bankruptcy Court. Dkt. 8. On May 18, 2021,
Appellant timely filed a Motion for Rehearing pursuant to Federal Rule of Bankruptcy Procedure
8022 (“Rule 8022”). Dkt. 9. This Court did not request a response brief from Appellee and
therefore no response was filed pursuant to Rule 8022(3).
B. Factual Background
At the Evidentiary Hearing, it was established that on July 6, 1991, Appellant married Lisa
David (“Ms. David”). Dkt. 5-13, 7. On August 29, 2012, Ms. David took her life following a
conversation that she and Appellant had regarding finances. Id. at 8-11.
From 2004 to 2012, Appellant partially owned Blue Ridge Technical Services,
Incorporated (“BRTS”), which provided “consulting network services.” Id. at 6-7. And from 2005
until her death in 2012, Ms. David also worked for BRTS. Id. at 8. There, she “wrote [BRTS’s] .
. . tax returns,” handled “expense checks[,]” and “help[ed] [ ] review contracts . . . [and] benefits.”
Id. In addition to those responsibilities, Ms. David was involved in three real estate ventures (the
“David Entities”), in which Appellant seemed to have had no involvement. Id. at 15-17.
Over a period of time, Appellee issued five loans to the David Entities, which formed the
basis of the dispute before the Bankruptcy Court. The chart below sets forth the loans that Appellee
issued to the David Entities and to which Appellee filed Claims during the pendency of the
bankruptcy proceedings. Dkt. 5-1 at 17-64.

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Loan Number
359186

Date of Loan
Agreement
September 15,
2005

358003

June 27, 2005

358367
360540

July 15, 2005
January 5,
2006

362232

April 28, 2006

Entity to which
Loan was Issued
David-Cantrall
and Associates,
Inc.
David-Cantrall
and Associates,
Inc.
DCF I, LLC
David-Cantrall
and Associates,
Inc.
Luck Homes,
LLC

Principle Loan
Amount
$2,160,000.00

Related Claim
Number
Claim 3-3

$300,000.00

Claim 4-3

$660,000.00
$300,000.00

Claim 5-3
Claim 6-3

$199,750.00

Claim 7-3

According to Appellant, he did not know about the loans until after Ms. David died. Dkt.
5-13 at 17-18. However, Appellee maintained that Appellant was listed as the guarantor for each
of the loans, as reflected by a series of notary-acknowledged Guarantees and Allonges.1 See e.g.,
id. at 134-35. During the Evidentiary Hearing, Appellant called Victoria Melby (“Ms. Melby”)2
and Kerry Self (“Ms. Self”), who Appellee contended were two of the notaries that acknowledged
the documents supporting its Claims. Id. at 132-34. Ms. Self and Ms. Melby testified that they
did not recall those specific documents or remember seeing Appellant sign those documents on
the particular days in question. In light of Ms. Self’s and Ms. Melby’s testimony, Appellant
maintained that he did not sign the Guarantees and Allonges that supported Appellee’s Claims and
contended that Ms. David forged his signature on the Allonges and Guarantees without his
knowledge. Id. at 144.

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The Allonges and Guarantees in this case appear to have been an agreement that certain
terms of the loans that are at issue would be modified.
In some instances in the record, Ms. Melby is referred to as “Victoria DeMeza,” as
“DeMeza” was her maiden name. For consistency, throughout this Opinion, this Court will refer
to her as Ms. Melby.
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In further support of his theory, Appellant also called Ellen G. LoCascio (“Ms. LoCascio”),
a retired Central Intelligence Agency (“CIA”) officer and longtime family friend of Appellant and
Ms. David. Dkt. 5-12 at 212. Ms. LoCascio testified that she went to Appellant’s home on August
29, 2012, after she learned that Ms. David had died. Id. at 213-14. Ms. LoCascio further explained
that after learning that Ms. David had taken her life, she “started going through [ ] [Ms. David’s]
professional and personal things” in an effort to determine why she had done so. Id. at 214. Upon
doing so, she observed “hundreds of documents” that were “shredded” in Ms. David’s home office.
Id. at 215. Many of the documents, Ms. LoCascio claimed, were “altered and manipulated” and
in Ms. LoCascio’s opinion, it appeared that someone had “cut and paste” certain documents. Id.
Among other items, Ms. LoCascio recalled seeing papers that concerned “six or seven property
loans,” and certain BRTS “technical documents” that had been altered. Id. Appellant argued that
LoCascio’s testimony supported a finding of fraud. Dkt. 5-13 at 146.
At the conclusion of the Evidentiary Hearing, the Bankruptcy Court took the matter under
advisement, id. at 150, and on January 27, 2020, issued a Memorandum Opinion and Order
(“Opinion”) concerning Appellant’s Objections to Appellee’s Claims. Id. at 156-170. Therein,
the Bankruptcy Court overruled Appellant’s Objection to Claim Number 4-3 and sustained his
Objections to Claim Numbers 3-3, 5-3, 6-3, and 7-3. Id. at 170.
Appellant moved to alter or amend the Bankruptcy Court’s determinations twice. See id.
at 171-89. After those two motions had been briefed, and the Bankruptcy Court conducted a
hearing on the Second Motion to Amend, the Bankruptcy Court denied the motions and Appellant
then appealed the Bankruptcy Court’s determination as to Claim Number 4-3. Dkt. 5-3 at 171272.

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II. STANDARD OF REVIEW
A motion for rehearing under Bankruptcy Rule 8022 must state with particularity each
point of law or fact that the movant believes the district court has overlooked or misapprehended.
Fed. R. Bank. P. 8022(a)(2).3 Although the Rule does not specify a standard of review, the Court
employs the same standard as for a motion to alter or amend the judgment brought pursuant to
Federal Rule of Civil Procedure 59(e). See Maines v. Wilmington Sav. Fund Soc’y, No. 3:15-cv00056, 2016 WL 6462141, at *1-2 (W.D. Va. Oct. 31, 2016) (“Petitions for rehearing function to
ensure that the court properly considered all relevant information in reaching its decision; they
should not be used to simply reargue the plaintiff's case or assert new grounds.” (internal quotation
marks and citations omitted)); Gillis v. Wells Fargo Home Mortg., No. 20-1047, 2020 WL
2768841, at *1 (4th Cir. May 28, 2020) (affirming the use of these Federal Rules of Civil Procedure
as the standard for evaluating a request for a rehearing under Rule 8022); Dandridge v. Scott, Tr.
for Estate of Dandridge, No. 3:18-cv-51, 2019 WL 4228457, at *1 (W.D. Va. Sept. 5, 2019)
(“Although Rule 8022 is silent as to the appropriate standard for granting a motion for rehearing,
district courts in this circuit have applied the same standard applicable to motions for
reconsideration under Rule 59(e) of the Federal Rules of Civil Procedure.”).
Accordingly, the motion may be granted on three limited grounds: (1) to accommodate an
intervening change in controlling law; (2) to account for new evidence not previously available;
or (3) to correct a clear error of law or prevent manifest injustice. See United States ex rel. Becker
v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir. 2002) (citing Pac. Ins. Co. v.

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Because Federal Rule of Bankruptcy Procedure 8022(a)(2) does not permit oral
argument, Appellant’s Motion is not in violation of this Court’s Local Rule 7(E), which ordinarily
would require that the moving party set the motion for hearing or arrange with opposing counsel
the waiver of oral argument.
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Am. Nat’l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998)). The motion “may not be used to
relitigate old matters, or to raise arguments or present evidence that could have been raised prior
to the entry of judgment.” Pac. Ins. Co., 148 F.3d at 403 (quoting 11 Wright et al., Federal Practice
and Procedure § 2810.1, at 127-28 (2d ed. 1995)). “In general, ‘reconsideration of a judgment
after its entry is an extraordinary remedy which should be used sparingly.’” Id. (quoting Wright
et al., supra, § 2810.1, at 124); Mayfield v. Nat’l Ass’n for Stock Car Auto Racing, 674 F.3d 369,
378 (4th Cir. 2012).
III. ANALYSIS
Appellant raises two issues in his Motion. First, Appellant seeks an amendment to this
Court’s Opinion if this Court disagrees with Appellant’s other argument. Dkt. 9 at 4-6. Second,
Appellant reargues that the Bankruptcy Court committed reversible error in overruling Appellant’s
objection to Appellee’s Claim 4-3 because Appellee failed to properly authenticate the Claim 4-3
Guarantee and therefore this Court should recast its Opinion on that score. Id. at 6-12.
The Court will address each of these concerns in turn.
A. Amending the Opinion’s Disposition
As correctly identified in Appellant’s Motion, remand to the Bankruptcy Court is
unnecessary under the Court’s Memorandum Opinion. Per the Opinion’s analysis, the Bankruptcy
Court was correct in finding Appellee had not committed an act of spoliation and was not “arbitrary
and irrational” in its decision to find that the Claim 4-3 Guarantee was authentic. Dkt. 8 at 8-14.
Moreover, this Court held that it was not reversible error for the Bankruptcy Court to rely on
Appellant’s Answers to Requests for Admissions in a separate state court proceeding despite the
potential error under Federal Rule of Civil Procedure 36(b). Id. at 15-17. As a result, there is

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nothing further for the Bankruptcy Court to decide with respect to the three issues raised by
Appellant on this appeal.
B. Admission of the Claim 4-3 Guarantee
Next, Appellant seeks to relitigate the admissibility and proper authentication of the Claim
4-3 Guarantee in light of the evidence relied upon by the Bankruptcy Court. However, Appellant
provides no reasonable basis to find that this Court’s Opinion triggered any of the three standards
by which this circuit considers grounds for rehearing: (1) to accommodate an intervening change
in controlling law; (2) to account for new evidence not previously available; or (3) to correct a
clear error of law or prevent manifest injustice. See United States ex rel. Becker v. Westinghouse
Savannah River Co., 305 F.3d 284, 290 (4th Cir. 2002) (citing Pac. Ins. Co. v. Am. Nat'l Fire Ins.
Co., 148 F.3d 396, 403 (4th Cir. 1998)). A Rule 8022 motion “may not be used to relitigate old
matters, or to raise arguments or present evidence that could have been raised prior to the entry of
judgment.” Pac. Ins. Co., 148 F.3d at 403 (quoting 11 Wright et al., Federal Practice and
Procedure § 2810.1, at 127-28 (2d ed. 1995)).
This Court’s Opinion has already disposed of the issues Appellant raised on appeal. A
Rule 8022 motion is not to be used as perfunctory vehicle for causing an otherwise reasonable
opinion to be reevaluated. Rather it is meant to be filed in the face of unusual or extraordinary
circumstances. Id. (quoting Wright et al., supra, § 2810.1, at 124). For the reasons articulated in
this Court’s Opinion, the Bankruptcy Court’s evidentiary rulings on admissibility and
authentication were not “arbitrary and irrational” because they relied on well-founded findings in
the record. Dkt. 8 at 11-14; United States v. Cole, 631 F.3d 146, 153 (4th Cir. 2011).

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IV. CONCLUSION
Accordingly, for the reasons provided above, it is hereby ORDERED that the Court’s
Memorandum Opinion (Dkt. 8) be amended to AFFIRM the Bankruptcy Court’s findings raised
on this appeal in their entirety, without need for remand; and it is
FURTHER ORDERED that Appellant’s Motion (Dkt. 9) is DENIED.
It is SO ORDERED.
Alexandria, Virginia
February 1, 2022

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