Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_03-cv-02164/USCOURTS-azd-2_03-cv-02164-0/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

In the Matter of

Michael Harvey Lynn,

Debtor

_______________________________

Michael Harvey Lynn,

Appellant,

vs.

Metwest Mortgage Services, Inc. 

Appellee. 

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No. CV03-2164-PHX-DGC

BK 00-08572 PHX GBN

ORDER

 Pending before t he Court are Appellant's (1) motion to vacate the order entered on

October 23, 2005 that affirmed the Bankruptcy Court's dismissal of his claim, (2) motion for

clarificat ion of the April 26, 2005 Order denying Appellant's Rule 60 motion to reconsider,

(3) motion to extend time to file notice of appeal, and (4) mot ions requesting contempt

charges against Appellee. Docs. ##32, 34, 35, 33, 36. Also before the Court is Appellee's

motion for award of attorneys fees and costs pursuant to 28 U.S.C. §1927. Doc. #29. 

Background

This case comes before the Court on appeal from Bankruptcy Judge George

Nielsen's October 23, 2003 decision denying Appellant's motion for reconsideration of the

dismissal of his case. On March 31, 2005, the Court affirmed t he Bankruptcy Court's

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October 23, 2003 decision. Doc. #27. On April 26, 2005, the Court denied Appellant's Rule

60 motion to reconsider. Doc. #31. 

Discussion

A. Appellant's Motion for Clarification of the April 26, 2005 Order. 

 Appellant seeks clarificat ion of the April 26 order that denied his motion for relief

from the order entered on March 31. Doc. #31. Ap p ellant appears to question (1) why he

does not satisfy the Rule 60(b) requirements when he has not raised any issues different

from those present in either his opening or reply brief and (2) why the Court will not

consider his supplemental evidence from Dr. Sayegh, supp ort ing his "extraordinary

circumstances" claim, when the "issue of extraordinary circumstances was raised in [both]

the Bankruptcy Court and in Appellant's opening and reply briefs.” Doc. #34. 

As stated in the April 26 order, motions for reconsideration are disfavored and are

not the place for parties to make new arguments not raised in their original briefs. See

Northwest Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 925-26 (9th Cir. 1988).

Nor is it the time to ask the Court to rethink what it has already considered. See United

States v. Rezzonico, 32 F. Supp. 2d 1112, 1116 (D. Ariz. 1998). The Court may grant a

motion for relief from judgment pursuant to Rule 60(b) only “upon a showing of (1) mistake,

surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void

judgment; (5) a satisfied or discharged judgment; or (6) extraordinary circumst ances which

would justify relief.” Id. at 1263; see Fed. R. Civ. P. 60(b); Allmerica Fin. Life Ins. &

Annuity Co. v. Llewellyn, 139 F.3d 664, 666 (9t h Cir. 1997) (stating that party must show

“extraordinary circumstances” to obtain relief under Rule 60(b)(6)). 

Appellant raised no new issues in his motion for reconsideration. Doc. #34.

Ap p ellant admits that the Court had already considered the "issue of extraordinary

circumstances. . . raised in the Bankruptcy Court and in Appellant's opening and reply

briefs." Id. at 2. Because t here was no newly discovered evidence presented in the

motion, and the Court had already considered and ruled against Appellant's "extraordinary

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circumstances" argument, the Appellant's motion for relief from the order entered on March

31, 2005 was properly denied. Doc. #31. No further clarification is required. 

B. Appellant's Motions to Reconsider.

On May 4, 2005, Appellant filed a motion to vacate the Court's March 31, 2005 order.

Doc. #32. Appellant also filed two mot ions asking the Court to hold Appellee's in

contempt for Appellee's violation of bankruptcy code §524, for damages and punitive

damages and for Rule 11 sanctions. Docs. #33, 36. In the present motions, Appellant is

merely asking the Court t o again reconsider what the Court has already considered. 

Because there was no trial, the Court will construe all three of Appellant’s motions as

motions to alter or amend judgment pursuant to Rule 59(e) and for relief from judgment

pursuant to Rule 60(b). 

Appellant raises no new issues that have not already been raised and considered

by the Court. The March 31, 2005, order held that (1) "the bankruptcy court did not err in

finding that Appellee did not violate bankruptcy code §524 because Appellee's did not

seek fees and sanctions against Appellant in his individual capacity," (2) the bankrup tcy

court did not "abuse its discretion in denying Appellant's motion for reconsideration," and

(3) the bankruptcy court did not abuse its discretion in refusing t o entertain issues

previously adjudicated by the Maricopa County Superior Court. Doc. #27 at 3-4. In fact,

the Court’s April 26, 2005 order has already rejected a request to reconsider t hese issues.

Doc. #31. Ap pellant, again tills the ground he did on appeal and in his previous motion for

reconsideration and has satisfied none of the grounds for relief set forth in Rules 59(e) and

60(b). T he Court will deny Appellant’s motion to vacate and his motions for contempt

against Appellee.

C. Appellee's Motion for Attorneys Fees, Pursuant to 28 U.S.C. § 1927.

Appellee seeks an order p ursuant to 28 U.S.C. §1927 awarding it attorneys fees and

costs incurred as a result of Appellant's ap p eal from bankruptcy court. Doc. #37. Section

1927 provides that any "attorney [or pro se litigant] who so multiplies the proceeding in

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any case unreasonably and vexatiously may be required by the court to satisfy personally

the excess costs, expenses, and attorneys' fees reasonably incurred because of such

conduct." 28 U.S.C. §1927; see Wages v. IRS, 915 F.2d 1230, 1235-36 (9th Cir. 1990). The

imp osit ion of sanctions under § 1927 requires a finding of bad faith. See In re Keegan

Mgmt. Co., Sec. Litig,. 78 F.3d 431, 436 (9th Cir. 1996). Bad faith is assessed under a

subjective standard. See MGIC Indem. Corp. v. Moore, 952 F.2d 1120, 1121-22 (9th Cir.

1991). "Bad faith is present when an attorney knowingly or recklessly raises a frivolous

argument or argues a meritorious claim for the purpose of harassing an opponent." Estate

of Blas v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986) (observing that a finding of bad faith

is crucial because a frivolous argument by itself is insufficient to support an award of

sanctions under §1927); see Wages, 915 F.2d at 1235-36. 

The Appellee asserts that Appellant acted in bad faith because he unreasonably

and vexatiously multiplied the proceedings through "calculat ed legal maneuvers . . .

spanning the years of 1999-2004, in three different courts, whereby Ap p ellant has made

concerted efforts to continually evade Appellee's actions to determine collectibility and

ultimately to execute a judgment and two separate orders for sanctions." Doc. #37.

Appellee complains that Appellant 's "six year litigation campaign against [it]" has forced

it to invest significant "t ime and labor in planning the appeal strategy, researching the legal

issues, and drafting the resp onse to Appellant's Opening Brief, Motion in Limine, and

Motion to Strike" for which they should be reimbursed. Doc. # 37. 

App ellee seeks attorneys fees as a sanction against Appellant for the filing of his

appeal in this Court. Appellee does not seek reimbursement for fees and costs arising

subsequent to the Court's March 31 order, including Appellant's mot ion t o vacate,

Appellant's contempt motions against Appellee, or Ap p ellant 's motion to extend time to

file notice of appeal. While the Court is sympathetic to the lengthy litigation between the

parties, § 1927 limits a federal court 's ability to sanction an attorney for conduct occurring

in another court. See Grid Sys. Corp. v. John Fluke Mfg. Co., Inc., 41 F.3d 1318 (9th Cir.

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1994) (holding that a suit filed in state court is an entirely separate action and not subject

to the sanctioning power of the dist rict court, and that § 1927 cannot reach the conduct of

a party who is not involved in an action before the sanctioning court at the time of the

conduct.) Therefore, despite Appellee's citation to Appellant's litigious behavior in both

the state and bankrup t cy courts, this Court will consider only whether Appellant's appeal

constituted bad faith. Doc. #37. 

Appellant has a right to appeal from a judgment, order, or decree of a bankruptcy

judge to a district court, pursuant to Rule 8001 of the Federal Rules of Bankruptcy

Procedure. Appellant, on appeal, asserted that t he bankruptcy court had abused its

discretion by (1) granting Appellee's Rule 59(a) motion to reconsider, (2) denying

appellant's motion for reconsideration, and (3) refusing to exercise jurisdiction over

Appellant's ERISA claim previously adjudicated by the Maricopa County Superior Court.

Doc. #9. The Court cannot conclude that Appellant's exercise of his right of appeal was

so vexatious and frivolous as to rise t o t he level of bad faith, sufficient to warrant § 1927

sanctions. Even t hough the Court was not persuaded by Appellant's argument on appeal,

Ap p ellant was entitled to appellate review. See Fed. R. Bankr.P. 8001. Therefore, because

§ 1927 sanctions requires a finding of bad faith, the Court will deny Appellee's request for

attorneys fees. 

D. Appellant's Motion to Extend Time to File his Notice of Appeal.

On May 25, 2005, Appellant filed a timely mot ion t o extend time to file his notice of

appeal pursuant to Rule 4 of t he Federal Rules of Appellate Procedure. Doc. #35. Notices

of appeal generally "must be filed wit h the district clerk within 30 days after the judgement

or order appealed from is entered." Fed. R. Ap p . P. 4(a). Rule 4(a)(4)(B), however, tolls the

time within which Appellant must file his appeal providing in pertinent part: 

If a party files a notice of appeal after the court announces or enters a

judgment – but before it disposes of any motion listed in [FRAP]

4(a)(4)(A) – the notice becomes effective to appeal a judgment or

order, in whole or in part, when the order disposing of the last such

remaining motion is entered. 

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Fed. R. App. P. 4(a)(4)(B)(i)(emphasis added). Moreover, a district court may extend the

time for filing a notice of ap p eal up on a showing of excusable neglect or good cause if the

party moves for an extension no later than t hirt y days after the appeal time has expired. Fed.

R. App. P. 4(a)(5)(A). 

Appellant filed his first motion for reconsideration on April 19, 2005, within the

required ten days of the March 31, 2005 order that denied him relief on appeal from

bankruptcy court. Docs. ## 27-28. Within thirty days of t he Court's denial of Appellant's

first motion for reconsideration on April 26, 2005, he filed a timely motion request ing an

extension of time for his appeal, in compliance with Rule 4(a)(5)(A) of the Federal Rules of

Appellate Procedure. Doc. #31. Therefore, because Appellant's motion for extension was

timely, the Court must decide whether or not Appellant has met his burden and shown

"excusable neglect" or "good cause" sufficient to justify granting his extension. See Rule

4(a)(5)(A)(ii).

Factors relevant to an excusable-neglect decision in a motion to extend the t ime for

filing a notice of appeal include "the danger of prejudice t o t he moving party, length of the

delay and its potential imp act on judicial proceedings, reason for the delay, including

whether it was within the reasonable control of the movant and whether movant acted in

good faith." Bishop v. Corsentino, 371 F.3d 1203 (10t h Cir. 2004) (quoting City of Chanute

v . Williams Natural Gas Co., 31 F.3d 1041, 1045 (10th Cir, 1994)). The concept of good

cause is applied to a narrow class of cases in which "there is no fault – excusable or

otherwise . . . and t he need for an extension is usually occasioned by something that is not

within the control of the movant." Fed. R. App. P. 4(a)(5) advisory committee's note (2002

Amendments). 

Appellant argues that if he filed his notice of appeal within the thirty days as required

by Rule 4(a), then this Court would have been divested of jurisdict ion over the motions

pending at the time. Doc. #35. At the time of Appellant's filing of his motion to extend time

for appeal, the pending motions included: (1) Appellee's "motion for an award of attorney s

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fees and non-t axable costs," (2) Appellant's "motion for appellee and its attorneys to be

held in contempt of court and for Rule 11 sanctions," (3) Appellant's "motion to vacate this

court's order entered on March 31, 2005," and (4) Ap p ellant's motion for "clarification of the

order entered on April 26, 2005 ." 

In effect, Appellant argues that the appeal time should be extended so that this Court

can consider his repeated motions for reconsideration and his motions for sanctions against

Appellee. While the Court might be more inclined to grant such an extension to a pro se

litigant unfamiliar with court procedures and relevant arguments, Appellant is an at t orney.

Alt hough not currently practicing, Appellant has legal training and is familiar with the court

procedures. Appellant chose t o file repetitive motions in district court instead of filing a

t imely notice of appeal. He knowingly assumed the risk that this Court might deny his

request for an extension of time for lack of good cause or excusable neglect. 

The Court concludes that Appellant’s repetitive motions and request for sanctions

do not constitute good cause or excusable neglect for ext ending the time for appeal. When

the motions were filed the Court had already addressed the merits of Ap p ellant’s arguments

twice. Appellant should have filed a timely notice of appeal if he intended t o seek ap pellate

review rather than cont inuing to litigate repetitively and unnecessarily in district court.

Because Ap pellant has failed to show circumstances beyond his control or other good

cause or excusable neglect that prevented him from filing a t imely notice, the Court will deny

his request for an extension of time to file a notice of appeal. 

IT IS ORDERED:

1. Appellant's Motion to Vacate Court's Order filed 3/31/05 (Doc. #32) is denied.

2. Appellee's Motion for Attorney Fees and Costs (Doc. #29) is denied.

3. Appellant's Motion for Clarification of this Court 's Order Entered April 26,

2005 (Doc. #34) is granted.

4. Appellant's Motion to Extend Time to File Notice of Appeal (Doc. #35) is

denied. 

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5. Appellant's Motion for Appellee and it s counsel to be held in contempt of

court for its violation of Bankrup t cy Code Section 524, for damages and punitive damages,

and for Rule 11 sanctions (Doc. # 33) is denied.

6. Appellant's motion for entry of order holding the appellee and its attorneys

in contempt of court and entering judgment against them for damages and punitive damages

(Doc. #36) is denied. 

7. Appellee's Motion to Strike (Doc. #39) is denied as moot.

8. Appellant's Motion to Strike Appellee's Reply to Resp onse M otion (Doc. #46)

is denied as moot.

Dated this 28th day of September, 2005.

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