Martin v. Zmani-Zadeh (In re Zmani-Zadeh)

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In re: RAMIN ZAMANI-ZADEH, Debtor.

TAEKI MARTIN, Plaintiff, v. RAMIN ZAMANI-ZADEH, Defendant.

No. 20-11939-t7

Adv. No. 20-1077-t

United States Bankruptcy Court, D. New Mexico

June 30, 2023

OPINION

Hon David T. Thuma, United States Bankruptcy Judge.

Before the Court is Defendant's motion to reconsider the declaratory judgment entered in this proceeding, declaring that Defendant's judgment debt to Plaintiff is nondischargeable. As the Court believes the judgment was correct, the request will be denied for the most part. However, the Court will amend one of its findings and will clarify that the judgment is not a money judgment. The nondischargeable amount will not be altered and all other requested relief will be denied. A. Facts.

To rule on the motion to reconsider, the Court incorporates its findings of fact in the opinion entered on May 11, 2023. Capitalized terms not otherwise defined in this opinion have the meanings ascribed to them in the earlier opinion. In addition, the Court finds:^[1] On May 14, 2010, an Oregon state court entered a judgment of $1,001,865.51 in favor of Plaintiff against Defendant under Oregon's Abuse of Vulnerable Person statute.^[2] The judgment included $233,955.17 in "economic damages," $100,000.00 in "non-economic" damages, and trebled both. Defendant filed this no-asset chapter 7 case on October 7, 2020 and was granted a discharge on August 17, 2021. Plaintiff filed this adversary proceeding on December 20, 2020, seeking a ruling that the judgment debt is nondischargeable under § 523(a)(2)(A).^[3], ^[4]

The Court tried the proceeding on March 2, 2023. The Court heard testimony from the Defendant, reviewed Plaintiff's testimony from the state court action, and examined the admitted documentary evidence.^[5] On May 11, 2023, the Court held that the entire state court judgment debt was nondischargeable and entered a declaratory judgment to that effect.

Defendant filed the motion to reconsider on May 25, 2023. Attached to the motion is Defendant's affidavit, purporting to give additional evidence about how the money he borrowed from Plaintiff was spent.

Plaintiff did not respond to the motion or question the propriety of the post-trial affidavit. The matter is now ripe for adjudication.

B. Motions to Reconsider.

Neither the Federal Rules of Civil Procedure ("Rules") nor the Federal Rules of Bankruptcy Procedure ("Bankruptcy Rules") recognize motions for "reconsideration." See, e.g., Hatfield v. Board of Cnty. Comm'rs for Converse Cnty., 52 F.3d 858 861 (10th Cir. 1995) ("The Federal Rules of Civil Procedure recognize no 'motion for reconsideration.'"), citing Van Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991)); see also In re Sandia Resorts, Inc., 2016 WL 3150998, at *4 (Bankr. D.N.M.) (same but includes the Bankruptcy Rules also). Motions denominated as such typically are brought under Rules 52(b), 59(e), or 60(b).

1. Motion to Alter or Amend Findings (Rule 52(b)).

Under Fed.R.Civ.P. 52(b), a court "may amend its findings-or make additional findings-and may amend the judgment accordingly. The motion may accompany a motion for a new trial under Rule 59." [Rule 52(b)] "A motion made pursuant to Rule 52(b) will only be granted when the moving party can show either manifest errors of law or fact, or newly discovered evidence; it is not an opportunity for parties to relitigate old issues or to advance new theories." [Blann v. Rogers, Case No. 11-2711-CM, 2014 WL 6895592, *1 (D. Kan. Dec. 5, 2014) (citations omitted)].

Retiree, Inc. v. Anspach, 95 F.Supp.3d 1303, 1307 (D. Kan. 2015) (footnotes inserted into the text), aff'd in part, rev'd in part, 660 Fed.Appx. 582 (10th Cir. 2016). "The standard[s] for a District Court to review a Rule 52(b) motion and a Rule 59(e) motion are essentially the same." Handley v. United States, 2021 WL 5195814, at *1 (N.D. Ala.), quoting Access 4 All, Inc. v. Atl. Hotel Condo. Ass'n, Inc., 2006 WL 8431635, at *1 (S.D. Fla.); see also Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1219 (5th Cir. 1986) (the purpose of Rule 52(b) motions to amend is to correct

manifest errors of law or fact or, in some limited situations, to present newly discovered evidence).

2. Motion to Alter or Amend Judgment (Rule 59(e)).

Rule 59(e) permits a party to request reconsideration of a final judgment. [Rule 59(e)]. "Grounds warranting a motion to reconsider include (1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice." [Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000).] "[A] motion for reconsideration is appropriate where the court has misapprehended the facts, a party's position, or the controlling law." [Id.; see also Phelps v. Hamilton, 122 F.3d 1309, 1324 (10th Cir. 1997). A motion to alter or amend a judgment should be granted only "'to correct manifest errors of law or to present newly discovered evidence.'" [Phelps, 122 F.3d at 1324 (citations and quotations omitted)]. "Neither a Rule 59(a) nor a Rule 59(e) motion is the appropriate avenue to revisit issues already considered or to argue matters not raised in prior briefs." [Blann v. Rogers, 2014 WL 6895592 at *2 (D. Kan.) (citing Servants of the Paraclete, 204 F.3d at 1012; Waugh v. Williams Cos., Inc. Long Term Disability, 323 Fed.Appx. 681, 684-85 (10th Cir. 2009)].

Anspach, 95 F.Supp.3d at 1307-08 (footnotes inserted into the text).

Because reconsideration of a judgment after its entry is an extraordinary remedy, requests pursuant to [Rules 52 and 59] are to be granted "sparingly," Maldonado v. Lucca, 636 F.Supp. 621 (D.N.J. 1986), and only when "dispositive factual matters or controlling decisions of law" were brought to the court's attention, but not considered. Pelham v. United States, 661 F.Supp. 1063, 1065 (D.N.J. 1987).

Gutierrez v. Ashcroft, 289 F.Supp.2d 555, 561 (D.N.J. 2003), aff'd on other grounds sub nom, 125 Fed.Appx. 406 (3d Cir. 2005).

In the Tenth Circuit and elsewhere, grounds for relief under Rule 59(e) are: "(1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice." Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000), citing Brumark Corp. v. Samson Resources Corp., 57 F.3d 941, 948 (10th Cir. 1995).

If a "motion to reconsider" is filed within 14 days after a judgment is entered,^[6] most courts treat it as a Rule 59(e) motion. See, e.g., In re McCaull, 494 B.R. 81, at *2 (10th Cir. BAP 2009) (unpublished) (construing Debtor's motion to reconsider, filed nine days after the order in question was entered, as a Rule 59(e) motion); Buchanan v. Sherrill, 51 F.3d 227, 230 n.2 (10th Cir. 1995) ("we construe a post-judgment motion filed within [14] days challenging the correctness of the judgment as a motion under Rule 59(e)."). Since Defendant filed the motion to reconsider 14 days after entry of the declaratory judgment, the Court will treat it as a request to amend findings of fact under Rule 52(b) and/or to alter the judgment (Rule 59(e). Rule 60(b) need not be addressed.

C. Plaintiff's Failure to Respond.

For reasons unknown, the Plaintiff did not respond to the Motion. Failure to respond to a motion is grounds for the Court to grant the requested relief. See NM LBR 7007-1; see also Lucero v. HSBC Bank USA, N.A., 837 Fed.Appx. 655, 656 (10^th Cir. 2021) (affirming the New Mexico district court's dismissal of a case because plaintiff did not respond to defendant's motion to dismiss); Chamberlin v. City of Albuquerque, 2005 WL 2313475, at *1 (D.N.M.) (discussing a similar local rule for the New Mexico District Court). A party failing to object to a motion does so at his own peril. Nevertheless, the Court is not required to grant an unopposed motion to reconsider. See, e.g., Belhomme v. Gibson, 2015 WL 6393814, at *4 (D.N.M.) (citing Phelps, 122 F.3d at 1324) (trial courts have wide discretion in ruling on a motion to reconsider).

The Court will not punish Plaintiff for her counsel's lack of diligence. The failure to respond is consistent with the half-hearted litigation approach taken by Plaintiff's counsel since filing the complaint. In view of the significant efforts counsel made in the 2010 state court trial, the Court expected more of counsel. Instead, he has consistently put forth the minimum effort or, as here, no effort at all. That is too bad, but it is not Plaintiff's fault.

D. Defendant's Post-Trial Affidavit.

Attached to the Motion is Defendant's affidavit, accounting for money Defendant allegedly spent getting the restaurant project off the ground. The evidence, now 15 years old, clearly was available at the time of the trial. It is not newly discovered. Had Defendant thought it important, he should have introduced it at trial. The affidavit testimony cannot be the basis for altering or amending the Court's findings, conclusions, or judgment. See, e.g., Committee for the First Amendment v. Campbell, 962 F.2d 1517, 1523 (10th Cir. 1992) (quoting Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985)) (a motion under Rule 59(e) to alter or amend the judgment should only be granted "'. . . to present newly discovered evidence.'"); Adams v. James, 526 F.Supp. 80, 86 (M.D. Ala. 1981); Evans, Inc. v. Tiffany & Co., 416 F.Supp. 224, 244 (N.D. Ill. 1976) (the purpose of 59(e) and 52(b) motions is to correct manifest errors of law or fact using evidence not available at trial).

E. The Challenged Findings.

In the motion, Defendant argues that the Court misapprehended the facts because it assumed that that allegations in the 2010 state court complaint were correct. Defendant also argues that the Court relied on...