Pavlock v. Golden Investment Acquisitions, LLC
Filing
35
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT. The Court AFFIRMS the Bankruptcy Court, DISMISSES the appeal, and DENIES as moot Pavlock's Motion for Rehearing 29 The Court DIRECTS the Clerk to enter a separate judgment order and to remove this case from the Court's active docket. Signed by District Judge Irene M. Keeley on 1/27/2017. (kd)(Copy pro se party/cmrrr) (Additional attachment(s) added on 1/27/2017: # 1 Certified Mail Return Receipt) (kd).
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
MICHAEL J. PAVLOCK,
Appellant,
v.
CIVIL ACTION NO. 1:15CV131
CIVIL ACTION NO. 1:15CV132
// CIVIL ACTION NO. 1:15CV191
(Judge Keeley)
GOLDEN INVESTMENT
ACQUISITIONS, LLC,
Debtor,
Appellee.
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
Pending are appeals of certain rulings in the Chapter 7
bankruptcy of Golden Investment Acquisitions, LLC (“Debtor”), being
administered in the United States Bankruptcy Court for the Northern
District of West Virginia.1 The pro se appellant, Michael J.
Pavlock (“Pavlock”), appeals two orders entered by the Honorable
Patrick M. Flatley, United States Bankruptcy Judge (“Bankruptcy
Court”), on July 10, 2015, in Bankruptcy Case No. 1:07-BK-746
(“Chapter
7
Case”)
and
Adversary
Proceeding
No.
1:09-ap-36
(“Adversary Proceeding”).2
1
On April 27, 2016, after giving the appellant several
extensions of time to file his brief, the Court dismissed these
appeals pursuant to Fed. R. Bankr. P. 1018(a)(4) (Dkt. No. 26).
Thereafter, the appellant sought another extension, which was
granted in part, and the Court reopened the case (Dkt. No. 30).
2
Throughout this order, citations to documents
cases will be denoted respectively as “BK Dkt. No. X”
No. X.” Pavlock failed to file a designation of
included on the record for his appeal, prompting the
in these two
and “AP Dkt.
items to be
Clerk of the
PAVLOCK V. GOLDEN INVESTMENT
1:15CV131
1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
I. JURISDICTION AND STANDARD OF REVIEW
Title 28 U.S.C. § 158(a) provides that the district courts
have jurisdiction to hear appeals “from final judgments, orders,
and decrees . . . of bankruptcy judges.” To be “final,” an order
must “resolve the litigation, decide the merits, settle liability,
establish damages, or determine the rights” of a party to the
bankruptcy case. In re Looney, 823 F.2d 788, 790 (4th Cir. 1987).
When a district court reviews a bankruptcy court’s decision,
it reviews “findings of fact for clear error and conclusions of law
de novo.” In re Kielisch, 258 F.3d 315, 319 (4th Cir. 2001)
(quoting In re Deutchman, 192 F.3d 457, 459 (4th Cir. 1999)). A
finding of fact is clearly erroneous only if the Court is “left
with ‘a firm and definite conviction that a mistake has been
committed.’” In re Taneja, 743 F.3d 423, 429 (4th Cir. 2014)
(quoting Klein v. PepsiCo, Inc., 845 F.2d 76, 79 (4th Cir. 1988)).
Denial of a motion under Fed. R. Civ. P. 59(e) is reviewed for
abuse of discretion. Robinson v. Wix Filtration Corp. LLC, 599 F.3d
403, 407 (4th Cir. 2010). An abuse of discretion occurs when the
United States Bankruptcy Court of the Northern District of West
Virginia to itemize and file documents related to Pavlock’s notice
of appeal (Civil No. 1:15cv131, Dkt. No. 15). The Court has
considered those documents as well as other Bankruptcy Court docket
entries to which it has access.
2
PAVLOCK V. GOLDEN INVESTMENT
1:15CV131
1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
court fails to take relevant factors into account or acts under
legal or factual misconceptions. Pac. Ins. Co. v. Am. Nat’l Fire
Ins. Co., 148 F.3d 396, 402-03 (4th Cir. 1998).
II. BACKGROUND
Several
of
the
Bankruptcy
Court’s
prior
rulings
are
particularly relevant to these appeals. First, in August 2012, that
court concluded that Pavlock did not have standing to participate
in the Chapter 7 Case because he is not a party in interest.
Pavlock is not a member of the Debtor - a fact he admitted - and
never filed a proof of claim in the Chapter 7 Case (BK Dkt. No. 385
at 3-4; Civil No. 1:15cv131, Dkt. No. 36-3).
In the same order, the Bankruptcy Court also reasoned that
Pavlock did not have standing to represent Robert Konchesky’s
supposed equitable interest in the “DeWitt property.” Id. at 5.3 At
that
time,
the
Bankruptcy
Court
also
disposed
of
Pavlock’s
contentions, reasserted later (BK Dkt. No. 665 at 13), that the
money to purchase the DeWitt property was provided by Mr. Konchesky
on
Pavlock’s
behalf
(BK
Dkt.
No.
385
at
4-5).
Pavlock
unsuccessfully attempted to appeal these rulings.
3
Pavlock participated in the hearing on these issues by
telephone (BK Dkt. No. 385 at 2-3).
3
PAVLOCK V. GOLDEN INVESTMENT
1:15CV131
1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
Later, in March 2014, the Bankruptcy Court denied Pavlock’s
request to remove the Trustee, echoing its prior reasoning and
again concluding that Pavlock lacked standing to participate in the
Chapter 7 Case (BK Dkt. No. 605 at 4-5). The Bankruptcy Court also
denied Pavlock’s subsequent motion to reconsider the ruling (BK
Dkt. No. 627). Pavlock did not appeal either of the orders.
III. DISCUSSION
Pavlock now appeals the Bankruptcy Court’s denial of four
motions, discussed in more detail below. The only error that
Pavlock specifically assigns, however, is that the Bankruptcy Court
should not have ignored his allegations that the Chapter 7 Case has
been “corrupted” (Civil No. 1:15cv131, Dkt. No. 33 at 3). He
presents a factual narrative concerning alleged misconduct by Craig
Golden, the Debtor’s former managing member, as well as other
individuals.
In
addition,
Pavlock
renews
his
arguments,
all
familiar to the Bankruptcy Court, that the allegedly improper
investigation and prosecution of his criminal case “has upended any
integrity within” the Debtor’s bankruptcy case. Id. at 7. He
asserts that the Assistant United States Attorney who prosecuted
his criminal case engaged in a “cover up of malfeasance within” the
4
PAVLOCK V. GOLDEN INVESTMENT
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1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
Debtor, which has led to improper rulings by the Bankruptcy Court.
Id. at 5.
These assertions reflect what the Court has noted in the past:
“Every motion Pavlock files, regardless of the title, contains the
same or similar information regarding an alleged scheme by the
government to defraud him” (Criminal No. 1:10cr7-1, Dkt. No. 684 at
3). The allegations of misconduct and fraud, however, had no
significant bearing on the Bankruptcy Court’s rulings, and they are
irrelevant to the issues on appeal.
For relief, Pavlock seeks remand to the Bankruptcy Court,
requests the initiation of evidentiary proceedings to investigate
alleged fraud, and asks the “Court to acknowledge the possibility
that a cascade of fraudulent acts were committed” by various
parties (Civil No. 1:15cv131, Dkt. No. 33 at 7). For the reasons
that follow, the Court AFFIRMS the Bankruptcy Court.
A.
Motion to Reconsider
On November 3, 2014, Pavlock moved to stay all proceedings in
both the Chapter 7 Case and the Adversary Proceeding pending a
United States Department of Justice (“DOJ”) investigation that he
anticipated would commence after he filed a complaint with both the
DOJ’s Public Integrity Section of the Criminal Division and its
5
PAVLOCK V. GOLDEN INVESTMENT
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1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
Office of Professional Responsibility (BK Dkt. No. 630; AP Dkt. No.
529). In the alternative, he asked the Bankruptcy Court to use “its
inherent powers to order an evidentiary hearing” to investigate
alleged malfeasance. Id. at 43.
The Bankruptcy Court denied that motion on March 27, 2015 (BK
Dkt. No. 650; AP Dkt. No. 552), reasoning that Pavlock’s three
pending appeals did not justify a stay because Pavlock had not
shown a likelihood that he would succeed on the merits of his
appeals. Id. at 3-4.4 The Bankruptcy Court also declined to stay
the
cases
pending
a
possible
DOJ
investigation,
as
such
an
investigation could proceed independent of the court. Id. at 5.
Finally, because the case was nearing completion and Pavlock’s
fraud allegations were by no means novel, the Bankruptcy Court
decided not to exercise its statutory and inherent powers to
undertake an investigation of alleged malfeasance. Id. at 5-6.
On April 20, 2015, pursuant to Fed. R. Bankr. P. 9023, Pavlock
moved the Bankruptcy Court to reconsider its denial of his motion
to stay (“Motion to Reconsider”) (BK Dkt. No. 654; AP Dkt. No.
557). He asserted that “new evidence” of his standing, which he
4
Indeed, on August 10, 2015, this Court affirmed the
Bankruptcy Court in each of those three appeals (Civil Nos.
1:14cv207, 1:14cv208, 1:14cv209).
6
PAVLOCK V. GOLDEN INVESTMENT
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1:15CV132
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MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
attached to a separate motion, would convince the Bankruptcy Court
to reverse its prior decision. Id. at 1-2. In support, he claimed
that presentation of the newly discovered evidence “was impeded by
Craig Golden’s previous concealment of records.” Id. at 2.
The Bankruptcy Court denied Pavlock’s Motion to Reconsider on
July 10, 2015 (BK Dkt. No. 670; AP Dkt. No. 577). Although noting
that it did have the authority to reconsider an order on the basis
of new evidence, the Bankruptcy Court declined to do so. “Other
than broadly stating that the documents were concealed from him by
Craig Golden, Mr. Pavlock ha[d] not demonstrated that the documents
were not available” prior to the Bankruptcy Court’s order denying
his motion for a stay. Id. at 3.
Fed. R. Bankr. P. 9023 incorporates Fed. R. Civ. P. 59(e),
which permits parties to file “[a] motion to alter or amend a
judgment.” A judgment may be amended to accommodate a change in
law, to account for new evidence, or to correct a clear error of
law. Hutchinson v. Staton, 994 F.2d 1076, 1081 (4th Cir. 1981). To
rely on “newly discovered evidence in [a] Rule 59(e) motion,” there
must be a “legitimate justification for not presenting the evidence
during the earlier proceeding.” Pac. Ins. Co., 148 F.3d at 403
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PAVLOCK V. GOLDEN INVESTMENT
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1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
(quoting Small v. Hunt, 98 F.3d 789, 798 (4th Cir. 1996)) (internal
quotation omitted).
After reviewing the allegedly “new” evidence, the Court has
not identified any error in the Bankruptcy Court’s finding that
Pavlock failed to demonstrate that the evidence was previously
unavailable. The most recent documents that Pavlock provided are
from 2011 (BK Dkt. No. 655-2 at 35),5 and the substantial majority
are from prior to 2010, stretching as far back as 1994. Moreover,
in this appeal, Pavlock has not presented a single argument, much
less a “legitimate justification,” concerning why he could not have
presented the evidence when he originally moved to stay the case.
See Pac. Ins. Co., 148 F.3d at 403. Therefore, the Court AFFIRMS
the Bankruptcy Court’s denial of Pavlock’s Motion to Reconsider (BK
Dkt. No. 670; AP Dkt. No. 577).
B.
Motion to Intervene and Motion to Supplement
On April 20, 2015, Pavlock filed a motion styled “Motion for
Intervention; Right To Be Heard, Pursuant to Federal Rules of Civil
Procedure Rule 24(a)(2); Which Is Incorporated for Bankruptcy
Actions by Federal Rules of Bankruptcy Procedure Rule 2018; and
5
This excludes certain 2012 correspondence involving Pavlock
himself (BK Dkt. No. 655-2 at 41-50).
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PAVLOCK V. GOLDEN INVESTMENT
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1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
Pleading
Special
Matter
Pursuant
to
Federal
Rules
of
Civil
Procedure Rule 9(b); Which Is Incorporated for Bankruptcy Actions
by Federal Rules of Bankruptcy Procedure Rule 7009" (“Motion to
Intervene”) (BK Dkt. No. 655; AP Dkt. No. 558). On July 10, 2015,
in
the
same
order
in
which
it
denied
Pavlock’s
Motion
to
Reconsider, the Bankruptcy Court denied his Motion to Intervene (BK
Dkt. No. 670; AP Dkt. No. 577),6 concluding that, because he was
already a party to the Adversary Proceeding, there was no basis for
Pavlock to intervene in that proceeding under Fed. R. Civ. P. 24 or
Fed. R. Bankr. P. 7024. Id. at 3.7 It reaffirmed its prior rulings
that Pavlock lacked standing to participate in the Chapter 7 Case,
and it further reasoned that he did not have an economic interest
that would permit him to intervene under Fed. R. Bankr. P. 2018(a).
Id. at 4-5.
On appeal, Pavlock does not make any legal argument concerning
the
Bankruptcy
Court’s
ruling.
Instead,
he
asserts
that
the
6
Pavlock also moved to supplement his Motion to Intervene
with additional evidence of alleged fraud (BK Dkt. No. 665; AP Dkt.
No. 569), but the Bankruptcy Court denied that motion when it
denied his Motion to Intervene for lack of standing or any economic
interest (BK Dkt. No. 670; AP Dkt. No. 577).
7
It is clear that Pavlock cannot intervene in the Adversary
Proceeding to which he is already a party, and he makes no argument
to the contrary on appeal.
9
PAVLOCK V. GOLDEN INVESTMENT
1:15CV131
1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
Bankruptcy Court failed to properly account for his allegations of
fraud and corruption (Civil No. 1:15cv131, Dkt. No. 33 at 3). The
Court has not identified any error in the Bankruptcy Court’s
ruling. To have standing in a bankruptcy proceeding, one must be a
“party in interest.” A party in interest is any person “whose
pecuniary
interests
are
directly
affected
by
the
bankruptcy
proceedings.” In re Hutchinson, 5 F.3d 750, 756 (4th Cir. 1993). In
the orders on appeal, the Bankruptcy Court relied heavily on its
previous rulings that Pavlock lacks such standing.
Those rulings are final orders that determined Pavlock’s
rights
in
the
litigation.
He
either
failed
to
challenge
or
unsuccessfully challenged them on appeal, and they now stand as the
law of the Chapter 7 Case. Agostini v. Felton, 521 U.S. 203, 236
(1997) (noting that, under the law of the case doctrine, “a court
should not reopen issues decided in earlier states of the same
litigation”). In the absence of evidence that those rulings were
“clearly erroneous [or] would work a manifest injustice,” id., the
Bankruptcy Court properly applied its prior decisions to conclude
that Pavlock does not have standing as a party in interest to
intervene in the Chapter 7 Case.
10
PAVLOCK V. GOLDEN INVESTMENT
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1:15CV132
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MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
Moreover, the Bankruptcy Court properly concluded that Pavlock
cannot intervene in the Chapter 7 Case under Fed. R. Bankr. P.
2018(a). Under that rule, the Bankruptcy Court may permit an
interested party to intervene if it establishes, among other
things, that it “has an economic or similar interest in the
matter.” Pasternak & Fidis, P.C. v. Wilson, 2014 WL 4826109 (D. Md.
2014) (citing In re Ionosphere Clubs, Inc., 101 B.R. 844, 853
(Bankr. S.D.N.Y. 1989)) (unpublished memorandum opinion).
In his Motion to Intervene, Pavlock appeared to assert that,
regardless of his lack of standing, he had economic interests
warranting intervention. He argued that he had an interest in the
“Gratz Matter,” a claim made by the Chapter 7 Trustee in the
Adversary Proceeding, and apparently again sought to pursue claims
for Robert Konchesky (BK Dkt. No. 659 at 4-5).
Initially, because Pavlock is not a party in interest in the
Chapter 7 Case, and will in no event share in its distribution, it
is impossible for him to have an economic interest in a recovery by
the Chapter 7 Trustee in the Adversary Proceeding. In addition, the
Bankruptcy Court properly concluded that Pavlock has no economic
interest by reason of Mr. Konchesky’s purported interest. Not only
were Mr. Konchesky’s claims in the Chapter 7 Case disallowed (BK
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PAVLOCK V. GOLDEN INVESTMENT
1:15CV131
1:15CV132
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MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
Dkt. No. 570; Civil No. 1:15cv131, Dkt. No. 36-3 at 7-8), but the
Bankruptcy Court previously ruled that Pavlock lacked standing to
pursue his interests (BK Dkt. No. 670 at 4). This too stands as the
law of the case, and the Bankruptcy Court properly applied it.
Therefore, the Court AFFIRMS the Bankruptcy Court’s denial of
Pavlock’s Motion to Intervene and his motion to supplement (BK Dkt.
No. 670; AP Dkt. No. 577).
C.
Objections to Trustee’s Final Report
On February 13, 2015, the Chapter 7 Trustee filed his final
report in the Chapter 7 Case (BK Dkt. No. 639). On March 16, 2015,
Pavlock objected to the final report and requested a hearing on his
objections (BK Dkt. Nos. 647; 648). In an order dated July 10,
2015, the Bankruptcy Court overruled Pavlock’s objections and
denied his motion for a hearing (BK Dkt. No. 671). It did so
because Pavlock lacked standing as a party in interest. Id. at 2-3.
Again, for the reasons discussed above, the Bankruptcy Court
properly applied its prior rulings on Pavlock’s standing to his
persistent
attempts
Therefore,
the
to
Court
participate
AFFIRMS
the
in
the
Chapter
Bankruptcy
Court
7
Case.
decision
overruling Pavlock’s objections, as well as its denial of his
simultaneous request for a hearing (BK Dkt. No. 671).
12
PAVLOCK V. GOLDEN INVESTMENT
1:15CV131
1:15CV132
1:15CV191
MEMORANDUM OPINION AND ORDER AFFIRMING BANKRUPTCY COURT
IV. CONCLUSION
For the foregoing reasons, the Court AFFIRMS the Bankruptcy
Court, DISMISSES these appeals, and DENIES as moot Pavlock’s Motion
for Rehearing filed in Civil Action Nos. 1:15cv131 (Dkt. No. 31),
1:15cv132 (Dkt. No. 29), and 1:15cv191 (Dkt. No. 17).
It is so ORDERED.
The Court DIRECTS the Clerk to transmit copies of this Order
to counsel of record and to the pro se appellant by certified mail,
return receipt requested. It further DIRECTS the Clerk to enter a
separate judgment order and to remove this case from the Court’s
active docket.
DATED: January 27, 2017.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
13
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