Credit Solutions SC

Filing 7

ORDER signed by Judge J P Stadtmueller on 1/23/15 that the Court having sua sponte reconsidered its prior order and judgment, the Court's prior order 4 and judgment 5 in each of the cases under review are VACATED; the bankruptcy court's decision from which this appeal arises is VACATED and this matter is hereby REMANDED for further proceedings; and denying as moot 6 Appellant's Motions to Stay pending appeal. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
In re: SHARON C. WARD.
Case No. 14-CV-882-JPS
CREDIT SOLUTIONS,
Appellant.
In re: CANDACE R. SIMPSON.
Case No. 14-CV-883-JPS
CREDIT SOLUTIONS, S.C.,
Appellant.

ORDER

On December 29, 2014, the Court entered an order affirming the
decisions of the bankruptcy court below and dismissing these actions.
(Docket #4, #5).1 Mere days later, on January 9, 2015, the Seventh Circuit
issued a decision in In re: Sweports, Ltd., that directly contradicts the
reasoning that this Court adopted. No. 14-2423, --- F.3d ----, 2015 WL 127384
(7th Cir. Jan. 9, 2015). Specifically, the Seventh Circuit held that bankruptcy
courts retain “clean-up” or “ancillary” jurisdiction to award fees to
bankruptcy attorneys from a debtor’s estate even after dismissal of a petition.
Id., 2015 WL 127384, at *3. This undermines the Court’s prior order, as well
as the bankruptcy court’s order that this Court was reviewing.
The appellant (the debtors’ attorney in the bankruptcy cases under
review) has now requested that the Court stay the effect of its order pending
appeal to the Seventh Circuit. (Docket #6).

1

The docket sheets in both cases under review are practically identical, so
the Court’s citations to a single docket entry number apply equally to both cases.

Rather than take that step and require the appellant to go through an
appeal that will only drain further time and resources, the Court will instead
vacate its prior order and judgment. Rule 59(e) of the Federal Rules of Civil
Procedure allows for reconsideration of a trial court’s previous order when
there has been an “intervening change in the controlling law,” as occurred
here. See, e.g., Romo v. Gulf Stream Coach Co., 250 F.3d 1119, 1121 n. 3 (7th Cir.
2001) (citing Cosgrove v. Bartolotta, 150 F.3d 729, 732 (7th Cir. 1998)). And,
while “Rule 59(e) is silent on the power of a court to alter or amend a
judgment on its own initiative,” several courts have found such action
permissible, so long as the court acts within Rule 59(e)’s time limit. See, e.g.,
12-59 Moore's Federal Practice Civil § 59.33 (citing Dunn v. Savage, 524 F.3d
799, 803 (6th Cir. 2008); Burnam v. Amoco Container Co., 738 F.2d 1230, 1232
(11th Cir. 1984); Bateman v. Donovan, 131 F.2d 759, 764 (9th Cir. 1942); Bryant
v. New Jersey Dep’t of Transp., 998 F. Supp. 438, 442 (D.N.J. 1998)); Daniels v.
Milwaukee Bd. of Sch. Dirs., 2012 U.S. Dist. LEXIS 164154, at *1–*2 (E.D. Wis.
November 16, 2012). Moreover, the Seventh Circuit has stated that a purpose
of Rule 59(e) is to “allow the district court to correct its own errors, sparing
the parties and the appellate courts the burden of unnecessary appellate
proceedings,” Charles v. Daley, 799 F.2d 343, 348 (7th Cir. 1986); that
reasoning applies directly to the circumstance now before the Court. Thus,
the Court finds it appropriate to sua sponte reconsider and vacate its prior
order and judgment.
In accordance with In re Sweports, it is clear that the bankruptcy court’s
decision was also in error. Compare In re Sweports, 2015 WL 127384, with In re
Ward, 511 B.R. 909 (Bankr. E.D. Wis. 2014). The Court will, therefore,

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vacate the bankruptcy court’s decision and remand this matter for further
proceedings consistent with the Seventh Circuit’s decision in In re Sweports.
Finally, the Court having determined that this matter should be
reversed and remanded without the need for appeal, the appellant’s motions
to stay pending appeal (Docket #6) effectively moot. The Court will deny
them as such.
Accordingly,
IT IS ORDERED that the Court having sua sponte reconsidered its
prior order and judgment, pursuant to In re Sweports, 2015 WL 127384 and
Rule 59(e) of the Federal Rules of Civil Procedure, the Court’s prior order
and judgment in each of the cases under review (Docket #4, #5) be and the
same are hereby VACATED;
IT IS FURTHER ORDERED that, in light of In re Sweports, 2015 WL
127384, the bankruptcy court’s decision from which this appeal arises be and
the same is hereby VACATED and this matter be and the same is hereby
REMANDED for further proceedings consistent with In re Sweports, 2015 WL
127384; and
IT IS FURTHER ORDERED that the appellant’s motions to stay
pending appeal (Docket #6) be and the same are hereby DENIED as moot.
The Clerk is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 23rd day of January, 2015.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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