United States District Court

for the

Southern District of Florida

In re: 

Josue Cepero and Leticia Cepero, 

Debtors.

Hammocks Community Association 

Inc., and Marglli Gallego, Appellants,

v.

Josue Cepero and Leticia Cepero, 

Appellees.

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Civil Action No. 22-22686-CivScola 

Bankruptcy Case No. 17-20358-

LMI

Order Denying Motion for Rehearing 

This matter is before the Court on the motion for rehearing filed by the 

Appellee (and Debtors below), Josue and Leticia Cepero. (Mot., ECF No. 37.) 

Neither of the Appellants has responded, and the time to do so has passed. After 

careful consideration of the motion, the record, and the relevant legal authorities, 

the Court denies the Appellees’ motion for rehearing. (ECF No. 37.)

1. Background

On June 23, 2023, the Court issued an opinion and order in this 

bankruptcy appeal, largely affirming the bankruptcy court’s orders on appeal but 

reversing and remanding for the limited issue of determining whether Appellant 

Hammocks Community Association, Inc. (“Hammocks”) could be found liable for 

punitive damages for violation of the bankruptcy court’s prior orders relating to 

an incident in May 2019, between Appellant Marglli Gallego (who was at the time

Hammocks’ president) and the Appellees. (Op. & Order at 9-10.) Specifically, the 

Court determined that there was insufficient evidence in the record to support a 

finding that Gallego was acting in her official capacity at the time of the incident, 

so the Court remanded for a resolution of that particular issue. (Id.) 

Now, the Appellees seek rehearing of the portion of the order reversing and 

remanding the imposition of punitive damages against Hammocks for several 

reasons. First, the Appellees argue that the Court failed to address whether the 

Appellants waived or appropriately preserved for appeal the issue of Hammocks’

liability for Gallego’s conduct. (Mot. at 1-12.) The Appellees also argue that the 

Court improperly cited to matters outside the record, wrongly considered 

Hammocks’ reply brief, and wrongly determined that the bankruptcy court 

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applied the wrong legal standard in holding Hammocks liable for punitive 

damages. (Id. at 12-15.) 

2. Legal Standards

A motion for rehearing under Federal Rule of Bankruptcy Procedure 8022 

is reviewed under the same standard as a motion to reconsider. Tucker v. 

Mukamal, No. 13-MC-23425, 2015 WL 10986356, at *1 (S.D. Fla. Feb. 11, 2015)

(Marra, J.), aff’d, 616 F. App’x 969 (11th Cir. 2015). In addressing a motion to 

reconsider a prior decision, two opposing policies must be balanced: on the one 

hand, the desirability of finality, and on the other, the public interest in reaching 

the right result. Civil Aero. Bd. v. Delta Air Lines, Inc., 367 U.S. 316, 321 (1961). 

To balance these competing principles, courts generally permit reconsideration 

where there is newly discovered evidence, a manifest error of law or fact, or where 

justice so requires. See In re Kellogg, 197 F.3d 1116, 1119 (11th Cir. 1999); Vila 

v. Padron, 2005 WL 6104075, at *1 (S.D. Fla. Mar. 31, 2005) (Altonaga, J.). A

motion for reconsideration is not appropriately used as a vehicle to “relitigate old 

matters, raise arguments or present evidence that could have been raised prior to 

the entry of [the order].” Michael Linet, Inc. v. Vill. of Wellington, 408 F.3d 757, 763

(11th Cir. 2005). “Motions for reconsideration are left to the sound discretion of 

the district court and are to be decided as justice requires.” Belmont Holdings 

Corp. v. SunTrust Banks, Inc., 896 F. Supp. 2d 1210, 1222–23 (N.D. Ga. 2012).

3. Analysis

The Plaintiff’s motion for rehearing wrongly attempts to relitigate the 

Court’s decision in its order and opinion. Michael Linet, Inc., 408 F.3d at 763. The 

Appellees argue that the Court failed to consider or analyze their arguments that 

Hammocks waived any right to appeal the imposition of punitive damages below. 

The Court did, in fact, find that Hammocks did not waive this argument below, 

although the Appellees fail to acknowledge this in their motion. The Appellees 

quote the first portion of the Court’s relevant finding but not the reasoning 

supporting it. The Court determined that “[t]he motion to strike is without merit: 

although Hammocks applies different legal reasoning in its Reply Brief than 

originally submitted in its Initial Brief, the point made remains the same, and 

was argued (perhaps unartfully) below.” (Op. & Order at 8 (emphasis added).) 

Therefore, the Court has already considered and rejected the waiver argument. 

Further, it appears that the Appellees’ arguments here fails to distinguish

between asserting that Hammocks waived its right to appeal the bankruptcy 

court’s finding of contempt against it on the basis of Gallego’s actions and 

asserting that Hammocks waived its right to appeal the imposition of punitive

damages against it on the basis of Gallego’s actions. (Mot. at 3-5.) The former

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issue was not argued at all on appeal, and the Court therefore never addressed it. 

(See generally Op. & Order.) It is, accordingly, irrelevant here. 

Rather, the Court addressed only the imposition of punitive damages 

against Hammocks based on Gallego’s conduct. (Op. & Order at 7-10.) In doing

so, the Court rejected the argument that the bankruptcy court was “compelled” to 

impose punitive damages against Hammocks under the Schropp standard. The

Appellees continue to push that same incorrect understanding of the standard 

that they asserted both below and on appeal. (Ans. Brief at 12-13; Op. & Order at 

7-10.) But Florida law, as confirmed in Schropp, implicitly requires that a

“managing agent’s conduct which gave cause for punitive damages must have 

occurred during the course of the managing agent’s employment.” (Op. & Order at 

9 (citing Schropp v. Crown Eurocars, Inc., 654 So. 2d 1158, 1159-61 (Fla. 1995)

and Bankers Mult. Line Ins. Co. v. Farish, 464 So. 2d 530, 533 (Fla. 1985)).) The 

bankruptcy court made no factual findings that would be sufficient to support a 

finding that Gallego was acting in the course of her duties at the time of the 

incident at issue here. For that reason, the Court reversed and remanded only the 

imposition of punitive damages against Hammocks specifically related to Gallego’s 

conduct in the May 2019 Incident. (Op. & Order at 7-10.) The Appellees’ renewed 

arguments therefore do not present any new evidence, a manifest error or fact or 

law, or an injustice. They instead only rehash arguments the Court has already 

considered and rejected.

Next, while the Court did indeed cite to matters outside the record—for the 

express purpose of explaining why, in this matter, Hammocks was suddenly 

submitting a reply brief independently from Gallego—it did not consider or rely on 

those matters in making its decision here. The Court did consider evidence on 

appeal that was not in front of the bankruptcy court and it did not reverse the 

bankruptcy court’s imposition of punitive damages against Hammocks “on the 

basis of facts not in the record.” Garcia v. Am. Marine Corp., 432 F.2d 6, 8 (5th 

Cir. 1970); In re Lewis, 211 B.R. 970, 973 (N.D. Ala. 1997), aff’d, 137 F.3d 1280 

(11th Cir. 1998). Instead, the Court reviewed and considered only the matters in 

the record in making its decision. (Op. & Order at 7-10.) 

Nor did the Court wrongly determine that it could consider Hammocks’

reply brief. As the Court has already addressed above, it determined in its opinion 

and order that Hammocks was continuing to assert arguments that it had made 

both below and on appeal against the imposition of punitive damages. (Op. & 

Order at 8.) Further, the Court noted that even if it had rejected Hammocks’

reply brief and granted the motion to strike, it still would have found that the 

bankruptcy court lacked clear and convincing evidence supporting a finding of 

punitive damages against Hammocks. (Id. at 8 n.2 (“The Court notes, however, 

that even if it had struck Hammocks’ reply brief, it still would have found that the 

finding of contempt against Hammocks for the May 2019 Incident was not

Case 1:22-cv-22686-RNS Document 38 Entered on FLSD Docket 07/20/2023 Page 3 of 4
supported by clear and convincing evidence.”).) Accordingly, the Court denies the 

motion for rehearing. 

4. Conclusion

For the reasons set out above, the Court denies the Plaintiff’s motion for 

rehearing. (ECF No. 37.)

Done and ordered in Miami, Florida, on July 19, 2023.

________________________________

Robert N. Scola, Jr.

United States District Judge

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