UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

NORTHERN DIVISION 

UNITED STATES OF AMERICA, 

 Plaintiff, Case No. 15-cv-10040 

v Honorable Thomas L. Ludington 

JAMES C. CORDES and 

CROSSING CONSULTING GROUP, LLC, 

 Defendants. 

__________________________________________/ 

ORDER DENYING MOTION FOR RECONSIDERATION, STRIKING RESPONSE TO 

MOTION FOR RECONSIDERATION, DENYING MOTION FOR LEAVE TO FILE, 

CANCELLING HEARING, AND DENYING AS MOOT MOTION TO ADJOURN 

 On January 7, 2015, the United States filed suit against Defendant James Cordes (and, 

later, against Crossing Consulting Group, LLC), seeking a judgment for his tax liabilities in the 

amount of $3,245,374.48 plus statutory additions. Because there is currently a parallel 

proceeding in bankruptcy court addressing several of the same issues present in the instant case, 

the Court stayed the proceedings pending resolution of certain related issues in the bankruptcy 

proceeding. 

 On May 28, 2015, the United States filed a motion for reconsideration of the Court’s May 

20, 2015 Order. In its motion for reconsideration, the United States request the Court to (1) 

reconsider its decision to stay the proceedings; (2) appoint a receiver pendent lite; and (3) 

reconsider consolidation of the case. Because the United States has not identified a palpable 

error in the Court’s May 20, 2015 Order, the motion for reconsideration will be denied. 

I.

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The Local Rules of the Eastern District of Michigan provide that any motion for 

reconsideration must be filed within fourteen days after entry of the judgment or order. E.D. 

Mich. L.R. 7.1(h)(1). No response to the motion or oral argument shall be allowed unless the 

court orders otherwise. E.D. Mich. L.R. 7.1(h)(2). Pursuant to Rule 7.1(h)(3) “the court will not 

grant motions for rehearing or reconsideration that merely present the same issues ruled upon by 

the court, either expressly or by reason of implication.” E.D. Mich. L.R. 7.1(h)(3). In a motion 

for reconsideration, the movant must demonstrate that the court and the parties were misled by a 

“palpable defect.” E.D. Mich. L.R. 7.1(h)(3). A “palpable defect” is a defect that is obvious, 

clear, unmistakable, manifest, or plain. Witzke v. Hiller, 972 F. Supp. 426, 427 (E.D. Mich. 

1997). The movant must also show a palpable defect which, if corrected, would result in a 

different disposition of the case. E.D. Mich. L.R. 7.1(h)(3). A motion for reconsideration is not 

a vehicle to re-hash old arguments, or to proffer new arguments or evidence that the movant 

could have presented earlier. Sault Ste. Marie v. Engler, 146 F.3d 367, 374 (6th Cir. 1998) 

(motions under Federal Rule of Civil Procedure 59(e) “are aimed at re consideration not initial 

consideration”) (citing FDIC v. World Universal Inc., 978 F.2d 10, 16 (1st Cir. 1992)). 

II. 

 As noted above, the United States makes three requests in its motion for reconsideration: 

(1) reconsider the decision to stay the proceedings; (2) appoint a receiver pendent lite; and (3) 

reconsider consolidation of the case. 

 First, the United States requests that the case not be stayed because “if the Court stays the 

District Court action, it is effectively postponing the suit to collect over $90,000 in recent 

liabilities that Cordes does not claim were discharged while the parties litigate the 

dischargeability of older tax liabilities.” Mot. Recons. 4. The United States represents that 

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Defendants agreed with the request to lift the stay to the extent that the alter ego issue could be 

decided. Id. at 10. 

 The United States has not, however, identified a palpable defect in the Court’s May 20, 

2015 Order staying the case. Although the parties prefer to have two proceedings occurring 

simultaneously, mere disagreement with the prior Order is insufficient to warrant 

reconsideration. Because the United States has not identified a palpable defect in the decision to 

stay the case, the request to lift the stay will be denied. 

 Second, the United States requests that a receiver pendent lite be appointed to manage the 

collection of income and the disbursement of business expenses for Crossing Consulting. This 

issue was not previously addressed or briefed; the United States raised it for the first time in its 

motion for reconsideration. A motion for reconsideration is not an appropriate method to raise 

new issues, and therefore this request will be denied. 

 Lastly, the United States requests that this Court consolidate the two proceedings 

currently before the Court—United States v. Cordes (14-cv-10040) and In re Cordes (15-cv10727): “[T]he United States requests that the Court reconsider whether the relationship between 

the issues before the District Court and Bankruptcy Court calls for consolidation and thus 

overrides any interest in having bankruptcy courts determine dischargeability in run-of-the-mill 

dischargeability cases.” Once again, however, the United States has not identified a palpable 

defect in the prior Order, and disagreement with the prior Order is insufficient to prevail on a 

motion for reconsideration. Therefore the request will be denied. 

III. 

 Accordingly, it is ORDERED that the United States of America’s Motion for 

Reconsideration (ECF No. 25) is DENIED. 

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 It is further ORDERED that Defendants’ Response to the Motion for Reconsideration 

(ECF No. 28) is STRICKEN pursuant to Eastern District of Michigan Local Rule 7.1(h)(2). 

 It is further ORDERED that the United States of America’s Motion for Leave to File 

(ECF No. 29) is DENIED. 

 It is further ORDERED that the July 2, 2015 motion hearing is CANCELLED. 

 It is further ORDERED that Defendants’ Motion to Adjourn the July 2, 2015 motion 

hearing is DENIED AS MOOT. 

 

s/Thomas L. Ludington 

 THOMAS L. LUDINGTON 

 United States District Judge 

Dated: July 7, 2015 

 

PROOF OF SERVICE 

The undersigned certifies that a copy of the foregoing order was served 

upon each attorney or party of record herein by electronic means or first 

class U.S. mail on July 7, 2015. 

 s/Karri Sandusky 

 Karri Sandusky, Acting Case Manager 

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