Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-2_03-cv-00217/USCOURTS-almd-2_03-cv-00217-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1452 Removal of claims related to bankruptcy case

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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

 NORTHERN DIVISION

DOYLE H. PIERCE and )

J. HAROLD PIERCE, )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION NO. 2:03cv217-WHA

 )

FIRST COMMERCE LEASING ) (WO)

CORP., BANCPARTNERS LEASING, )

INC., J. WARREN HAWKINS, and )

EQUIFAX CREDIT INFORMATION )

SERVICES, )

 )

Defendants. )

ORDER

This cause is before the court on the Plaintiffs’ Objection (Doc. #56) to the Report and

Recommendation of United States Bankruptcy Judge William R. Sawyer (Doc. #54), and the

Plaintiffs’ Objection (Doc. #67) to the Supplemental Report and Recommendation of United

States Bankruptcy Judge William R. Sawyer (Doc. #64). Having considered the bankruptcy

judge’s Report and Recommendation and Supplemental Report and Recommendation as well as

the objections, parties’ briefs, and the entire file, and after a de novo review, the court finds that

the Plaintiff’s Objections are due to be OVERRULED.

Motion of Bancpartners and Hawkins

First, as to the Recommendation regarding the Motion for Summary Judgment filed by

Defendant Bancpartners Leasing, Inc., formerly known as First Commerce Leasing Corp.

(“Bancpartners”), and Defendant J. Warren Hawkins, the Plaintiffs argue that the bankruptcy

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judge made a procedurally improper sua sponte determination that there was no cause of action

against Bancpartners under §303(i) of the Bankruptcy Code. The Plaintiffs’ argument, however,

is flawed. The Eleventh Circuit has noted that entry of summary judgment sua sponte is

appropriate in “cases involving purely legal questions based on complete evidentiary records.”

Artistic Entertainment, Inc. v. City of Warner Robbins, 331 F.3d 1196, 1201 (11th Cir. 2003). 

The determination of whether §303(i) of the Bankruptcy Code provides an independent cause of

action presents a “purely legal question.” Furthermore, the bankruptcy judge had a complete

procedural history. No additional evidence was necessary to determine this issue, and the

Plaintiffs have made no suggestion that the evidentiary record pertinent to this issue is

incomplete in any respect. Accordingly, the court finds that, in regard to the Plaintiffs’ argument

that the bankruptcy judge’s recommendation for sua sponte summary judgment was procedurally

improper, the Plaintiffs’ Objection is due to be OVERRULED.

The second issue raised in the Plaintiffs’ Objection is that, even if the sua sponte

determination was procedurally sound, the bankruptcy judge’s interpretation of §303(i) of the

Bankruptcy Code is erroneous. After reviewing the Plaintiffs’ Objection and the cases cited to

therein, this court finds no fault in the bankruptcy judge’s determination. Simply stated, the

cases cited do not support the interpretation set forth by the Plaintiffs because each of these cases

is distinguishable from the present case. Even if they were not, however, none of the cited cases

present binding precedent. Moreover, the court finds that the bankruptcy judge relied on a more

pertinent and persuasive case - Raymark Indus., Inc.v. Baron, No. CIV 96-7625, 1997 WL

359333 (E.D. Pa. June 23, 1997) - than the cases cited in the Plaintiffs’ Objection, and this court

agrees with the bankruptcy judge. Accordingly, in regard to the argument that the bankruptcy

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 The court makes no finding in regard to the validity of the time frame set forth by the

bankruptcy judge.

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judge erred in determining that §303(i) of the Bankruptcy Code does not create an independent

cause of action, the Plaintiffs’ Objection is due to be OVERRULED.

The Plaintiffs also object to the Supplemental Report and Recommendation dealing with

this motion on the grounds that (1) the bankruptcy judge erred in determining that the Plaintiffs’

request to reopen the involuntary bankruptcy proceedings under Rule 60(b)(6) of the Federal

Rules of Civil Procedure must be made within one year of entry of the final order dismissing the

case, and (2) because since the Plaintiffs had no reason to seek to reopen the initial involuntary

cases, as they were pursuing other methods of relief, any relief now sought should be deemed

timely. The Plaintiffs’ arguments, however, are unpersuasive.

Considering the Plaintiffs’ objection regarding timing under Rule 60(b)(6), the court

finds that the Plaintiffs’ argument fails, regardless of whether the one year time period set forth

in the Supplemental Report and Recommendation is correct or not. Assuming that the one year

time requirement set forth by the bankruptcy judge is incorrect, as argued by the Plaintiffs,1

 the

result still is the same. Even applying the lesser standard of “reasonableness” sought by the

Plaintiffs, the court finds that the Plaintiffs did not file their petition to reopen the involuntary

bankruptcy case within a “reasonable” time. See Fed. R. Civ. P. 60(b) (“The motion shall be

made within a reasonable time. . . .”). As the bankruptcy judge points out, the involuntary

bankruptcy petitions in question were dismissed on June 12, 2001. The Plaintiffs did not make

any attempt to reopen the case regarding these petitions until November of 2006, at the earliest. 

The Plaintiffs having not acted for over five years in regard to these petitions, the court finds that

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 It must be noted that Plaintiffs do not object on the ground that the bankruptcy judge

erred in his determination that the affidavit contained inadmissible evidence on the grounds of

hearsay and lack of relevance. Instead, the Plaintiffs only object to the bankruptcy judge’s

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the period of “reasonableness” for petitioning the court to reopen the case under the catch-all

provision of Rule 60(b) had long since passed. 

In regard to Plaintiffs’ second ground of objection, the court notes that the Plaintiffs

provide no case law supporting their contention. Furthermore, without any support, the court is

unwilling to agree with the Plaintiffs’ entirely novel idea that, simply because a plaintiff is

seeking a separate form of relief, the time period for which that plaintiff can request other relief

is tolled. Such a concept is too far afield from basic civil procedure concepts for this court to

adopt without some supporting precedent. Accordingly, the Plaintiffs’ Objection to the

Supplemental Report and Recommendation is due to be OVERRULED.

Motion of Equifax Credit Information Services

The part of the Report and Recommendation that referred to this motion recommended

that the motion be granted because the only submission by the Plaintiffs seeking to show

damages caused by Equifax was inadmissible hearsay contained in an affidavit of the Plaintiff

Doyle H. Pierce.

The ground of Plaintiffs’ Objection to the Recommendation that this motion be granted is

that the Defendant did not object to the affidavit of Doyle Pierce submitted in opposition to the

motion, and that, absent any objection from the Defendant, the affidavit evidence must be

considered by the court regardless of its failure to comply with Rule 56(e) of the Federal Rules

of Civil Procedure.2

 The Plaintiffs cite Lacey v. Lumber Mut. Fire Ins. Co., 554 F.2d 1204, 1205

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determination not to consider the inadmissible evidence under Rule 56(e).

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(1 st Cir. 1977) (quoting 10 C. Wright and A. Miller, FEDERAL PRACTICE AND

PROCEDURE § 2738, at 706 (1973) (“A party must move to strike an affidavit that violates

Rule 56(e); if he fails to do so, and in the absence of ‘a gross miscarriage of justice,’ the court

may consider the defective affidavit.”) and Auto Drive-Away Co. Hialeah, Inc. v. I.C.C., 360

F.2d 446, 448-49 (5th Cir. 1966) (“An affidavit that does not measure to the standards of 56(e) is

subject to a timely motion to strike. In the absence of this motion, formal defects in the affidavit

ordinarily are waived.”) The Plaintiffs interpret these cases to mean that, absent an objection

by defendants, a court must consider an affidavit submitted by the plaintiffs despite defects. This

interpretation stretches the cited rule beyond its plain meaning. The cited cases and commentary

merely suggest that a party waives an objection to a defective affidavit (and Auto Drive-Away

refers to a formal defect) if such objection is not raised at the summary judgment stage, and that,

in the absence of “a gross miscarriage of justice”, a district court will not be reversed for

considering it. The rule, however, does not suggest concurrently that a court is required to

consider the defective affidavit absent an objection. The proposition argued by the Plaintiffs is

not supported by the cases or the rule cited. Thus, the Plaintiffs’ argument fails.

Furthermore, the Plaintiffs’ interpretation of the cited rule clearly is at odds with Rule

56(e) of the Federal Rules of Civil Procedure, which states that “[s]upporting and opposing

affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible

in evidence, and shall show affirmatively that the affiant is competent to testify on the matter

stated therein.” FED. R. CIV. PRO. 56(e). Here, the bankruptcy judge ignored the parts of the

affidavit he deemed to be inadmissible hearsay and was well within his authority to do so. 

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Accordingly, in regard to the argument that, absent any objection from the Defendant, the

affidavit evidence submitted in opposition to summary judgment must be considered by the court

regardless of its failure to comply with Rule 56(e), the Plaintiffs’ Objection is due to be

OVERRULED.

Since, however, no objection was made, or motion to strike filed, by the Defendant to the

hearsay nature of the affidavit, so as to call that issue to the attention of the non-movant

Plaintiffs before the bankruptcy judge made his recommendation, the court deems it appropriate

to allow the Plaintiffs to supplement their response to the Defendant’s Motion for Summary

Judgment on the issue of damages before this court rules on the motion. Such supplementation

may take the form of further briefing on whether the hearsay statements in the affidavit of Doyle

Pierce should be considered by the court as evidence in opposition to the Defendant’s motion, or

additional evidence, or both.

Conclusion

Based on the foregoing reasons, it is hereby ORDERED as follows:

1. The Plaintiffs’ Objection to the Report and Recommendation of the Bankruptcy Judge

and Objection to the Supplemental Recommendation of the Bankruptcy Judge are

OVERRULED.

2. The court ADOPTS the Recommendation (Doc. #54) and Supplemental

Recommendation (Doc. #64) of the Bankruptcy Judge insofar as they pertain to the Motion for

Summary Judgment of Bancpartners Leasing, Inc., formerly known as First Commerce Leasing

Corp., and J. Warren Hawkins, and the motion is GRANTED.

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3. The Plaintiffs are given until September 24, 2007, to supplement their response to

the Motion for Summary Judgment of Equifax Credit Information Services in the manner

allowed above. Defendant Equifax is given until October 5, 2007, to reply.

DONE this 10th day of September, 2007.

/s/ W. Harold Albritton 

W. HAROLD ALBRITTON

SENIOR UNITED STATES DISTRICT JUDGE

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