Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-5_13-cv-00671/USCOURTS-alnd-5_13-cv-00671-2/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 (BA

---

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

NORTHERN DIVISION

HUNTSVILLE GOLF

DEVELOPMENT, INC.

Appellant,

v.

WHITNEY BANK,

Appellee.

)

)

)

)

)

)

)

)

)

)

Case No.: 5:13-CV-671-VEH

 

MEMORANDUM OPINION AND ORDER

INTRODUCTION

The appellant (Huntsville Golf) has filed a Motion for Rehearing under Federal

Rule of Bankruptcy Procedure 8015. Doc. 22. Huntsville Golf asks this court to

reexamine its decision affirming the lower bankruptcy court’s opinion granting the

Appellee’s “Motion for Payment of Claims and Appointment of a Disbursing Agent”

(doc. 2-9). 

There were five appealed issues that the court addressed in its Memorandum

Opinion affirming the lower court’s opinion. Huntsville Golf asks that the court

reconsider only one ofthem– namely, whether the Appellee (WhitneyBank)released

any claim to the Chatelain bankruptcy estate when it formed a “Sharing Agreement”

FILED

 2014 Jun-27 PM 03:54

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 1 of 9
with the Estate of Robert Brindley, Sr. (the Brindley Estate). Huntsville Golf argues

that this court misconstrued Louisiana law in finding that Whitney Bank had not

created a general partnership with the Brindley Estate when it consented to the

Sharing Agreement. Moreover, Huntsville Golf contends that this court wrongly

determined facts in reaching this issue. The company asks the court to remand the

matter to the bankruptcy court so that the latter may conduct an evidentiary hearing

and formally make factual findings on the partnership issue. 

This court finds that the existence of a partnership vel non between Whitney

Bank and the Brindley Estate is an issue unnecessary to resolving the matters

Hunstville Golf appealed to this court. Accordingly, the court will DENY the Motion

for Rehearing.

STANDARD OF REVIEW

Federal Rule of Bankruptcy Procedure 8015 provides:

Unless the district court or the bankruptcy appellate panel by local rule or by

court order otherwise provides, a motion for rehearing may be filed within 14

days after entry of the judgment ofthe district court orthe bankruptcy appellate

panel. If a timely motion for rehearing is filed, the time for appeal to the court

of appeals for all partiesshall run fromthe entry of the order denying rehearing

or the entry of subsequent judgment.

Fed. R. Bankr. P. 8015. “Rule 8015 does not provide a standard for evaluating a

motion for rehearing.” In re Daniels, No. 1:12-CV-4181-WSD, 2014 WL 547176, at

2

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 2 of 9
*3 (N.D. Ga. Feb. 10, 2014). “Courts in this Circuit have applied the same standard

to motions for rehearing under Bankruptcy Rule 8015 as is applied to motions for

reconsideration." Id. (citing In re Steffen, 405 B.R. 486, 488 (M.D. Fla. 2009); Cover

v. Wal-Mart Stores, Inc., 148 F.R.D. 294, 295 (M.D. Fla. 1993)).1

The court will grant a motion for reconsideration where there is:

• newly discovered evidence;

• an intervening development or change in controlling law; or

• a need to correct a clear error of law or fact. 

Id. (citations omitted). “A motion for reconsideration should not be used to present

the Court with arguments already heard and dismissed, or to offer new legal theories

or evidence that could have been presented in the previously-filed motion.” Id.

(citations omitted). “Whether to grant a motion for reconsideration is within the

sound discretion of the district court.” Id. (citation omitted).

DISCUSSION

In its MemorandumOpinion, the court addressed Huntsville Golf’s partnership

arguments because the court considered the partnership issue material to two issues

“Other courts have considered Rule 40 of the Federal Rules of Appellate Procedure 40 1

(‘Rule 40') when applying Rule 8015.” Id. (citations omitted). Rule 40 states that “a petition for

panel rehearing” following entry of judgment “must state with particularity each point of law or

fact that the petitioner believes the court has overlooked or misapprehended.” Fed. R. App. P.

40(a)(2).

3

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 3 of 9
central to the resolution of this action:

• whether res judicata applied; and

• whether Whitney Bank constructively released any claim it had to the

bankruptcy estate when it formed the Sharing Agreement with the

Brindley Estate. 

The court has again reviewed the record below and the arguments presented before

this court. It now findsthe partnership issue irrelevant to its disposition of the present

action. The lower bankruptcy court’s 1993 Confirmation Order was res judicata 

regardless of whether Whitney Bank and the Brindley Estate formed a general

partnership or joint venture under Louisiana law. Similarly, even if such a

relationship existed between the two entities, Whitney Bank cannot be said to have

released its claim to the Chatelain bankruptcy estate.

I. Res Judicata Applies Regardless of Any Partnership Relationship.

This court found that the lower bankruptcy court’s 1993 Confirmation Order

was res judicata. Doc. 19 at 26. Res judicata requires inter alia an identity of parties

– or their privies – between a former and current cause of action. See E.E.O.C. v.

Pemco Aeroplex, Inc., 383 F.3d 1280, 1285 (11th Cir. 2004) (“Simply put, before the

doctrines of either res judicata or collateral estoppel may be asserted against a party,

it must be established that the party in the second action was either a party in the

previous action or a privy of the party in that action.”). The “identity of parties”

4

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 4 of 9
element of this analysis thus encompasses two sets of actors:

• those who were actual parties in the original action; and

• those who are or were in privity with the parties to the original action.

See id. Privity is a legal concept requiring some elaboration. The Eleventh Circuit has

explained privity in the following manner:

Privity is a flexible legal term, comprising several different types of

relationships and generally applying when a person, although not a party, has

his interests adequately represented by someone with the same interests who

is a party. Adequate representation can arise in a number of circumstances. For

example, a judgment that is binding on a guardian or trustee may also bind the

ward or the beneficiaries of a trust. The judgment in a class action may be

binding on members of that class. Or, where a special remedial scheme exists

expressly foreclosing successive litigation by nonlitigants, as for example in

bankruptcy or probate, legal proceedings may terminate preexisting rights if

the scheme is otherwise consistent with due process.

Id. at 1286 (internal quotation marks and citations omitted).

One of the parties to the 1992-93 bankruptcy proceedings identified itself as

Whitney Bank. The party that reopened this case in 2012 and appears here as an

appellee identifies itself as WhitneyBank. The two partiesthus appear identical. But,

Huntsville Golf argues that this appearance is deceptive. Huntsville Golf states that,

on December 2, 2011, Whitney Bank and the Brindley Estate formed a general

partnership (or, at least, a joint venture) under Louisiana law. According to Huntsville

Golf, as a result, the actual appellee before this court is a new and different entity –

5

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 5 of 9
namely, the “Whitney/Brindley partnership.” E.g., Doc. 7 at 40.

Even if this were so, it would not preclude the application of res judicata

because the formation of such a partnership (or joint venture) would not disrupt the

required “identity of parties.” Under Huntsville Golf’s theory, Whitney Bank and the

Brindley Estate formed a partnership (or joint venture) exclusively composed of

themselves. It was allegedly established for the limited purpose of obtaining and

sharing the bankruptcy proceeds Whitney Bank was designated to pursue from the

Chatelains and Huntsville Golf. If true, this “Whitney-Brindley” partnership would

be a privy of Whitney Bank – one of the two partners in the purported partnership.

That is, WhitneyBank can be said to have “adequately represented” the partnership’s

interests in the earlier litigation. See Shapiro v. United States, 951 F. Supp. 1019,

1023-24 (S.D. Fla. 1996) (holding that, for purposes of res judicata, taxpayerplaintiffs were in privity with limited partnership, which was party in prior action, by

virtue of their status aslimited partners). Thus, the partnership between Whitney and

the Brindley Estate vel non does not sway the court’s determination that the 1993

Confirmation order was res judicata.

II. Evenifthere were a Whitney-Brindley partnership, Brindley’s preexisting

release would not bind it.

The partnership issue is similarly inconsequential to resolving Huntsville

6

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 6 of 9
Golf’s release argument. Huntsville Golf and a collection of entities associated with

Robert Brindley (the Brindley Group) entered into their Settlement Agreement on

November 28, 2011. Part of this agreement included a release “whereby [the Brindley

Group] completely and irrevocably released [Huntsville Golf] from any and all past,

present or future claims whether known or unknown arising out of the litigation

between the parties ‘and any other dealings between [Huntsville Golf] and [the

Brindley Group] as of the date of [that] Agreement.” Doc. 7 at 39 (quotation omitted).

The Brindley Estate (one entity within the Brindley Group) formed its Sharing

Agreement with Whitney Bank on December 2, 2011 – that is, four days after the

Settlement Agreement. The Sharing Agreement did not mention anything about a

release of claims. Nevertheless, Huntsville Golf alleges that the Sharing Agreement

created a general partnership between Whitney Bank and the Brindley Estate.

Huntsville Golf then uses this “partnership” to argue that the Brindley Estate

imported sub silentio the BrindleyGroup’s preexisting release of Huntsville Golf into

its (later) partnership agreement with Whitney Bank.

Assuming arguendo a Whitney-Brindley partnership, this is not a tenable

interpretation of Louisiana law. Hunstville Golf argues that “an obligation contracted

by a partner binds the partnership if the partnership benefits by the transaction or the

transaction involves matters in the ordinary course of business.” Id. (citing La. Civ.

7

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 7 of 9
Code Art. 2816; Darden v. Cox, 123 So. 2d 68, 74-75 (1960)). This is accurate.

Huntsville Golf overlooks, though, the premise ofthisstatement. The LouisianaCode

and relevant case law presume an existing partnership when a given partner contracts

such an individualized obligation. See, e.g., Darden, 123 So. 2d at 74-75 (holding that

a managing partner who obtained loans and bonds for the partnership not only bound

himself individually but also his junior partner). The court cannot find – and

Huntsville Golf does not provide – any authority for the notion that a partner who

incurs a preexisting, individualized obligation prior to the creation of a partnership

automatically subjects the later-formed partnership to that obligation. This is

particularly so where, as here, the preexisting obligation goes entirely unmentioned

in the ostensible partnership agreement. Louisiana law does not support such implicit,

retroactive assumption of pre-partnership obligations.

Huntsville Golf tries to skirt this obvious discrepancy in its argument by

highlighting the allegedly collusive negotiations between Whitney Bank and the

Brindley Estate that occurred before, during, and after the Settlement Agreement.

Doc. 7 at 38-39. Huntsville Golf does not maintain, however, that Whitney Bank and

the Brindley Estate formed their supposed partnership until after the settlement. This

concession is dispositive. Even assuming a Whitney-Brindley partnership, the

Brindley Group (of which the Brindley Estate was a part) executed its release against

8

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 8 of 9
Huntsville Golf before it was formally associated with Whitney Bank. Under

Louisiana law, the release was thus not “[a]n obligation contracted for the

partnership.” La. Civ. Code Art. 2816.

CONCLUSION

For these reasons, the court findsthat it need not reach the question of whether

or not Whitney Bank and the Estate of Robert Brindley, Sr., formed a partnership

under Louisiana law on December 2, 2011. As a corollary, the court concludes that

the bankruptcy court below need not have issued formal factual findings on the issue.

The court thus DENIES the present Motion for Rehearing. 

DONE and ORDERED this the 27th of June, 2014.

 

 VIRGINIA EMERSON HOPKINS

United States District Judge

9

Case 5:13-cv-00671-VEH Document 24 Filed 06/27/14 Page 9 of 9