Thompson v. Shaia
Filing
10
MEMORANDUM OPINION. Signed by District Judge James R. Spencer on 8/29/11. (Copies mailed).(jtho, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
RICHMOND DIVISION
LEVESTER THOMPSON,
v.
HARRY SHAIA, JR.,
Civil Action No. 3:10BCVB919
Appellant,
Appellee.
MEMORANDUM OPINION
THIS MATTER is before the Court on appeal from the United States Bankruptcy
Court for the Eastern District of Virginia. Pro se Appellant Levester Thompson appeals the
bankruptcy court’s order denying his “Order to Block Discharging of Trustee and from
Closing Case” (ECF No. 1). After examining the record and the memoranda filed by both
parties, the Court finds that oral argument is unnecessary because the facts and
contentions are adequately presented and oral argument would not aid in the decisional
process. E.D. Va. Loc. Civ. R. 7(J). For the reasons discussed below, the Court will affirm the
bankruptcy court’s decision.
I. BACKGROUND
This case began as a voluntary Chapter 13 bankruptcy in April 2004. (R. 1).1 In
December 2004, the case was converted to a Chapter 7 bankruptcy and Appellee Harry
Shaia, Jr., was appointed as trustee. (R. 52, 53). Over the course of a number of years, the
Appelle facilitated the liquidation of the Appellant’s assets. On March 29, 2010, the
1 “R. __” refers to the document number in the underlying bankruptcy case.
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Appellee filed a corrected final report, which included all the proposed distributions to
creditors, and an application for compensation for himself and his attorneys. (R. 322). The
final report listed $997,978.83 in total funds and receipts for the estate, $846,364.17 in
actual disbursements, and $151,614.66 in funds available for disbursement. Id. at 2. Also in
that report, the Appellant proposed disbursements of $52,548.94 for his compensation,
$3,147.87 for his expenses, and $9,784.66 for his attorney fees and expenses. Id.
The Appellant filed a number of objections to claims in the report (R. 324–335),
including two the bankruptcy court construed as challenging disbursements of $58,144.25
and $1500.00 to the Appellee’s attorneys. (R. 340, at 1‐2). In a May 11, 2010, order, the
court informed the Appellant that it had approved those interim fees and expenses over his
objections in November 2007. Id. at 2. This May 2010 order overruling the Appellant’s
objections and approving the final report was the final substantive order in the case.
On September 13, 2010, the bankruptcy court entered an “Order Discharging
Trustee and Closing Case.” (R. 346). In that administrative order, the Court noted that the
Appellee had distributed the estate’s cash and “that nothing further remain[ed] to be done
in this matter.” Id. at 1. The Appellant responded to this order with an “Order to Block
Discharging of Trustee and From Closing Case.” (R. 348). In this filing, he claimed that
“there has been no complete accounting of the monies collected from the sale of the real
estate properties that would allow closure of this [b]ankruptcy case, [and that] the allowed
claims are far less than the purchase of the sale.” Id. at 1. He also challenges the amount of
compensation the Appellee received and noted that he “ha[d] not received a cent of the
money from the sale of the real estate property which was sold August 1, 2006.” Id.
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Although no claims were pending before the court, the Appellant also attached a “Notice of
Objection to Claim” to his filing. Id. at 2‐3.
The bankruptcy court construed the Appellant’s September 2010 filing as an
objection to the court’s September 2010 order and overruled it. (R. 351, at 1). In its October
21, 2010, order, the court noted that the Appellant neither sought reconsideration of nor
appealed the May 2010 substantive order approving the Appellee’s final report and
proposed distributions. Id. The court further noted that the final account showed that the
Appellee disbursed to creditors all of the total gross receipts and that unsecured creditors
received an 83% dividend. Id. at 1‐2. Thus, there were “no funds left over for return to the
debtor.” Id. at 2. Finally, the court stated that “[t]he September 13, 2010, order as to which
debtor complains is merely an administrative order necessary to enable the bankruptcy
case to be closed. All substantive matters relating to the Chapter 7 Trustee’s distributions
were previously considered by the court when it approved the corrected final report.” Id.
On October 27, 2010, the Appellant filed another “Order to Block Discharging of
Trustee and From Closing Case.” (R. 353, at 3). This filing stated in its entirety: “In response
to the Trustee’s notice on the 30th day of September 2010, I, Levester Thompson, M.D.,
debtor, am respectfully pleading to the Court stating that I don’t think this case is over.” Id.
The Appellant attached three documents to the filing: another unexplained “Notice of
Objection to Claim,” a copy of the court’s September 2010 order discharging the trustee and
closing the case, and the Appellee’s response to the Appellant’s September 2010 filing
objecting to that order. In a November 4 order, the court construed the Appellant’s filing as
a motion to reconsider the court’s October 21 order and denied the motion for failure to
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present grounds for reconsideration under Rule 59(e) of the Federal Rules of Civil
Procedure. (R. 354).
On November 16, 2010, the Appellant filed his notice of appeal of the November 4
order and of “all prior rulings and orders upon which the final order is based.” (ECF No. 1).
II. JURISDICTION AND STANDARD OF REVIEW
Appeals from core proceedings in the bankruptcy court are governed by 28 U.S.C. §
158, which states that district courts have jurisdiction to hear appeals “from final
judgments, orders, and decrees” and “with leave of the court, from other interlocutory
orders and decrees.” 28 U.S.C. § 158(a). An order is “final” if it “resolve[s] the litigation,
decide[s] the merits, settle[s] liability, establish[es] damages, or determine[s] the rights of .
. . one of the parties.” In re Looney, 823 F.2d 788, 790 (4th Cir. 1987). At issue in this appeal
is a final order that discharged the trustee and closed the case. This Court, therefore, has
jurisdiction to hear the appeal pursuant to 28 U.S.C. §158.
In reviewing a bankruptcy court=s judgment, the district court reviews legal
conclusions de novo and findings of facts for clear error. Tidewater Fin. Co. v. Williams, 498
F.3d 249, 254 (4th Cir. 2007). A finding of fact is clearly erroneous if a court reviewing it,
considering all the evidence, “‘is left with the definite and firm conviction that a mistake has
been committed.’” In re Mosko, 515 F.3d 319, 324 (4th Cir. 2008) (quoting United States v.
United States Gypsum Co., 333 U.S. 364, 395 (1948)). Decisions committed to a bankruptcy
court=s discretion are reviewed for abuse of discretion, however. See, e.g., In re French, 499
F.3d 345, 357 n.11 (4th Cir. 2007).
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III. ANALYSIS
Thompson appeals the bankruptcy court’s November 4, 2010, order construing his
filing as a motion to reconsider and denying that motion. When parties file motions that
request reconsideration of a decision without identifying a legal basis for that
reconsideration, courts apply either Rule 59(e) or Rule 60 of the Federal Rules of Civil
Procedure.2 In re Burnley, 988 F.2d 1, 2‐3 (4th Cir. 1992). The bankruptcy court construed
the Appellant’s October 27, 2010, filing as a motion for reconsideration and decided it
based on the Rule 59(e) standard. The Appellant did not object to the application of Rule
59(e), and he has not raised that issue on appeal. Accordingly, the Court will review the
bankruptcy court’s denial of his motion under Rule 59(e).
Although no specific language in the text of Rule 59(e) establishes the grounds upon
which the court may grant relief, “courts interpreting Rule 59(e) have recognized three
grounds for amending an earlier judgment: (1) to accommodate an intervening change in
controlling law; (2) to account for new evidence not available at trial; or (3) to correct a
clear error of law or prevent manifest injustice.” Hutchinson v. Staton, 994 F.2d 1076, 1081
(4th Cir. 1993). Reconsideration is appropriate where “the [c]ourt has patently
misunderstood a party, or has made a decision outside the adversarial issues presented to
the Court by the parties, or has made an error not of reasoning but of apprehension.” Above
the Belt, Inc. v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983). “Such problems
rarely arise and the motion to reconsider should be equally rare,” however. Id. Finally,
although a clear error of law may be grounds for reconsideration, a plaintiff should not use
2 Rules 9023 and 9024 of the Federal Rules of Bankruptcy Procedure provide that Rules 59 and
60 apply to bankruptcy cases.
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a 59(e) motion simply “to ask the Court to rethink what the Court had already thought
through.” Id.; see also Zdanok v. Glidden Co., 327 F.2d 944, 953 (2d Cir. 1964) (“[W]here
litigants have once battled for the court's decision, they should neither be required, nor
without good reason permitted, to battle for it again.”). A bankruptcy court’s determination
of a Rule 59(e) motion is reviewed for an abuse of discretion. Boryan v. United States, 884
F.2d 767, 771 (4th Cir. 1989).
There is no evidence that the bankruptcy court abused its discretion in denying the
Appellant’s motion. That motion consisted of an objection to a nonexistent claim, the
statement that “I don’t think this case is over,” a copy of the Appellee’s response to an
earlier filing from the Appellant, and a copy of a court order. (R. 353). The filing made no
arguments—legal or otherwise—and failed to meet the requirements of a viable Rule 59(e)
motion. It did not allege a change in controlling law, introduce new evidence, or suggest
that a clear error of law or manifest injustice would result from the court’s failure to alter
or amend the previous order. On appeal, Thompson appears to argue that a manifest
injustice would result if the Appellee and the Appellee’s attorneys were to receive
compensation for their work, which he categorizes as gross mismanagement. He did not,
however, raise this issue in his Rule 59(e) motion; therefore, it is not before that court for
consideration.3 Because the Appellant failed to provide any grounds for the relief he
sought or to meet the standard for Rule 59(e) motions, the bankruptcy court did not abuse
its discretion by denying his filing.
3 Furthermore, given that the bankruptcy court commended the Appellee for his “exemplary”
conduct in this case, it seems unlikely that the court would have overturned the Appellee’s
compensation. (See R. 340, at 4.)
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The Court notes that even if the bankruptcy court had granted the Appellant’s
motion to reconsider, the only outcome would have been the reconsideration of another
order overruling the Appellant’s objection to a strictly administrative order closing a case.
The bankruptcy court entered the last substantive order in this case on May 11, 2010. The
proper time for the Appellant to appeal the issues he raises on appeal here would have
been within fourteen days of that order. Fed. R. Bankr. P. 8002. Thus, to the extent the
Appellant intended to raise those issues in this appeal, they are untimely.
Finally, in his appellate briefs, Thompson also raises a number of substantive claims
that he contends warrant reopening his case. This Court, however, cannot grant Thompson
the relief he seeks, which is a review of the merits of “all prior rulings and orders upon
which the final order is based.” (ECF No. 1). On appeal of a motion to reconsider, a district
court may not review the merits of any underlying orders; rather, it “may only review the
denial of the motion with respect to the grounds set forth” in the applicable rule. Browder v.
Dir., Ill. Dept’ of Corrections, 434 U.S. 257, 263 n.7 (1978); In re Burnley, 988 F.2d at 3. In
other words, Thompson’s appeal of the court order denying his motion to reconsider an
order overruling an objection to a purely administrative order does not reopen the door to
all decisions he disagrees with.4
//
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4 Notwithstanding the Court’s lack of jurisdiction to consider the underlying merits of the
administrative order, it does not appear that the bankruptcy court abused its discretion in
discharging the trustee and terminating the case. As the court noted at that time, all funds had
been distributed to creditors and “nothing further remain[ed] to be done in this matter.” (R.
346).
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IV. CONCLUSION
For the reasons stated above, the Court AFFIRMS the bankruptcy court’s decision.
Let the Clerk send a copy of this Order to all parties of record.
An appropriate Order shall issue.
/s/
James R. Spencer
Chief United States District Judge
ENTERED this _29th day of August 2011.
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