Opinion ID: 201663
Heading Depth: 2
Heading Rank: 3

Heading: The Callahan Appellants and C.R. Amusements, Inc.

Text: 18 We next turn to the claims of the Callahan Appellants. The Callahan Appellants are the minority shareholders of C.R. Amusements, LLC, an entity of which Moneta was the majority shareholder. C.R. Amusements filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Rhode Island on January 14, 1999. As part of the bankruptcy proceedings, the Callahan Appellants, as minority shareholders of C.R. Amusements, intervened in an adversarial proceeding between Acropolis (successor-in-interest to Moneta as majority shareholder) and C.R. Amusements in the bankruptcy court (Acropolis Proceeding), seeking to equitably subordinate the security interest of Acropolis in certain assets of C.R. Amusements. See Acropolis Enters. v. C.R. Amusements ( In re C.R. Amusements ), 259 B.R. 523 (Bankr.D.R.I. 2001). The Callahan Appellants lost their subordination request and appealed to the United States District Court for the District of Rhode Island. While the appeal was pending, the Callahan Appellants received the Notice to Creditors from the Moneta Receiver, and filed a claim with the Moneta Receiver that stated [t]he claims asserted are the same claims as set forth in the [Acropolis Proceeding], and incorporated by reference the arguments and filings made by the Callahan Appellants in that proceeding. After the claim was filed, the Callahan Appellants withdrew their appeal of the adverse decision in the Acropolis Proceeding to the District Court, and the judgment of the bankruptcy court became final. Even though, by their own assertion to the Moneta Receiver, their claims against Moneta were based on the same claims asserted in the Acropolis Proceeding, and those claims had been finally adjudicated against them, the Callahan Appellants did not at this time request leave to file a new claim or to amend its existing claim with the Moneta Receiver. 19 When the Moneta Receiver eventually filed its recommendations for the disposition of the claims against the Moneta Receivership estate (more than two years after the decision in the Acropolis Proceeding became final), it recommended that the claim filed by the Callahan Appellants be denied. The Moneta Receiver supported this denial on the basis that [t]hese issues and claims were finally and conclusively decided in Moneta's favor in [the Acropolis Proceeding], and that [c]laimants are therefore estopped from raising these issues. The District Court approved this recommendation in its Claims Disposition Order. The Callahan Appellants filed a timely objection to the Claims Disposition Order, stating that there were only two issues addressed in the Acropolis Proceeding, and that [c]laimants' claim [with the Moneta Receiver] extends beyond a subrogation claim against Moneta relative to a loan made to CR Amusements, and requesting leave to either amend or otherwise supplement their claim. The Callahan Appellants provided no explanation or legal justification in their memorandum of law in support of the objection to the Claims Disposition Order, beyond the statement that [w]ith [the district court's] proposed denial of various participation interests as set forth in the Receiver's recommendations, uncertainty exists as to Claimants' rights or the Creditors of CR Investments as to returns on their minority interest. 20 On May 27, 2004, the District Court conducted a hearing on pending objections to the Claims Disposition Order. The Callahan Appellants did not attend the hearing (they claim there was a mixup with their attorney) and the District Court denied their objection on the grounds that their claim was res judicata and that the Callahan Appellants were time-barred from filing any new claims. The Callahan Appellants filed a Motion for Reconsideration requesting a new hearing on their objection. In support of their request for a new hearing, the Callahan Appellants simply stated that there existed valid and plausible objections to the Claims Disposition Order. The Callahan Appellants did not explain why they had not requested leave to amend their claim to the Moneta Receiver prior to the claim's denial, and what exactly had changed to convert their denied claim into a viable claim. The District Court denied the Motion for Reconsideration, and the Callahan Appellants filed this timely appeal. 21 On appeal, the Callahan Appellants argue that it was it was an abuse of discretion for the District Court to deny their objection, essentially identifying the error as the court's refusal to allow them to amend their original claim or to file a new claim. The Callahan Appellants do not contend that the District Court erred in denying the claim as originally submitted; that is, on the basis that the claim against the Moneta Receiver was res judicata. Thus, we deem the argument that it was error for the district court to deny the original claim on the basis of res judicata as waived. See, e.g., Smilow v. Southwestern Bell Mobile Sys., Inc., 323 F.3d 32, 43 (1st Cir.2003) (Issues raised on appeal in a perfunctory manner (or not at all) are waived.). 22 Moving to whether the district court erred in denying the Callahan Appellants request for leave to either amend its existing claim or to file a late claim, we note that a District Court acting as a receivership court has broad discretion in determining whether to permit a claimant to file a late claim or to amend a timely filed claim. See Clark, supra, § 652. We thus review the district court's denial of the Callahan Appellants' request to either amend its existing claim or to file a late claim for abuse of discretion. Id. ([T]he court's discretion refusing to allow claims to be filed afterward will not be set aside on review unless plainly wrong.). 23 In their objection to the Claims Disposition Order, the Callahan Appellants provided no explanation, nor legal justification, for their request to amend their existing claim or to file a late claim. They simply made a conclusory statement that the factual circumstances had changed during the time between their original filing of the claim and the district court's denial of their claim. In addition, the Callahan Appellants provided no explanation why they waited until after the claim had been denied to request leave to amend their claim. This is particularly confusing considering that they must have known that factual circumstances had changed at the time they withdrew the appeal of the adverse decision in the Acropolis Proceeding. Furthermore, the Callahan Appellants had an opportunity to argue their case when the district court held a hearing on their objection to the Claims Disposition Order. It was not an abuse of discretion for the District Court to deny the Callahan Appellants' objection to the Claims Disposition Order. 24 The Callahan Appellants had yet another opportunity to present the factual and legal circumstances supporting their request to either amend their existing claim or to file a new claim out of time when they moved for reconsideration of the denial of their objection to the Claims Disposition Order. We review the district court's denial of the motion for reconsideration for abuse of discretion. See Douglas v. York County, 360 F.3d 286, 290 (1st Cir.2004). Once again, the Callahan Appellants presented no cognizable justification for their request for leave to amend their existing claim or to file a late claim, and the district court properly denied their motion for reconsideration.