Memorial Medical Center, Inc.

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
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06/10/06
Memorial Medical Center, Inc.
05-14043
Order Denying [48-1] Motion To Reconsider [35-1] Order granting a Stay Pending
Appeal by Memorial Medical Center, Inc.
Received on: 2005-12-07 14:35:43.000
2005-12-07 00:00:00.000
2005-12-08 00:00:00.000
Patti Hennessy
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: Memorial Medical Center, Inc., No. 7-05-14043 ML
Alleged Debtor.
ORDER DENYING MMCI’S MOTION FOR RECONSIDERATION
OF THE COURT’S ORDER GRANTING A STAY PENDING APPEAL
THIS MATTER is before the Court on MMCI’s Motion for Reconsideration of the Court’s
Order Granting a Stay Pending Appeal (“Motion for Reconsideration”), filed December 1, 2005, and
the brief filed in support thereof. The Motion for Reconsideration requests the Court to reconsider and
vacate its Order Granting Petitioning Creditors’ Motion for Entry of Order Staying Order of Dismissing
Involuntary Petition Pending Appeal (“Order”), entered November 21, 2005, and terminate the stay of
the Order pending its appeal. Memorial Medical Center, Inc. (“MMCI”) raises insufficient grounds
upon which to grant relief from the Order; therefore, the Court will deny the Motion for
Reconsideration.
“The Federal Rules of Civil Procedure do not recognize a ‘motion to reconsider.’” Van Skiver
v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991). However, when a motion that seeks to
alter or set aside a judgment or order is filed within ten days of the entry of the judgment or order, the
motion will generally be construed under Rule 59(e), Fed.R.Civ.P., Id. See also, Dalton v. First
Interstate Bank of Denver, 863 F.2d 702-703-04 (10th Cir. 1988) (“This court has consistently held
that regardless of how styled, a motion questioning the correctness of a judgement and timely made
within ten days thereof will be treated under Rule 59(e).”). Because the Motion for Reconsideration
was filed within ten days of the entry of the Order, the Court will construe it under the standards
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applicable to Rule 59(e), Fed.R.Civ.P., made applicable to bankruptcy proceedings by Rule 9023,
Fed.R.Bankr.P.
Motions for reconsideration may be granted to "'correct manifest errors of law or fact or to
present newly discovered evidence.'" In re Hodes, 239 B.R. 239, 242 (Bankr.D.Kan. 1999), aff’d in
part, rev’d in part on other grounds, 289 B.R. 5 (D.Kan. 2003) (quoting In re American Freight
System, Inc., 168 B.R. 245, 246 (D.Kan. 1994)). “Appropriate circumstances for a motion to
reconsider are where the court has obviously misapprehended a party's position on the facts or the law,
or the court has mistakenly decided issues outside of those the parties presented for determination.” In
re Sunflower Racing, Inc., 223 B.R. 222, 223 (D.Kan. 1998). Rule 59(e) does not afford parties
seeking relief an opportunity to raise new arguments, or to “rehash arguments previously considered
and rejected by the court.” Id. See also, Van Skiver, 952 F.2d at 1243 (noting that the district court
“properly recognized that revisiting the issues already addressed ‘is not the purpose of a motion to
reconsider.’”).
The Motion for Reconsideration raises the following arguments: 1) that by imposing a stay
pending appeal, the Court has continued the state of limbo that MMCI has been in since the filing of the
involuntary bankruptcy petition, hampering MMCI’s ability to distribute its remaining assets through the
state court receivership litigation initiated prior to the filing of the involuntary petition and causing undue
delay; 2) that the state court offers petitioning creditors an adequate forum to resolve their disputes; 3)
that petitioning creditors have failed to show the threat of irreparable harm necessary to obtain a stay
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1The Court notes that its citation to In re Lang, 414 F.3d 1191, 1201 (10th Cir. 2005) for the standards relevant
to a determination of a motion for stay pending appeal cites to the Appendix of the opinion, which was the
determination rendered by the Bankruptcy Appellate Panel for the Tenth Circuit.
2The Motion for Reconsideration cites In re Great Barrington Fair & Amusement, Inc., 53 B.R. 237, 240
(Bankr.D.Mass. 1985); In re Dakota Rail, Inc., 111 B.R. 818, 821 (Bankr.D.Minn. 1990); and In re Baldwin United
Corp., 45 B.R. 385, 386 (Bankr.S.D. Ohio 1984), which all find that the threat of mootness during appeal is insufficient
grounds, by itself, to sustain a request for imposition of a stay pending appeal. None of these cases are from within
the Tenth Circuit. In In re Sunflower Racing, Inc., 225 B.R. 225 (D.Kan. 1998), the court acknowledged that several
courts, including those cited by MMCI, have held that the possibility that an appeal may be rendered moot if a stay
is not imposed does not by itself constitute irreparable harm, but nevertheless “recognize[ed] that the likelihood that
an appeal may be moot in the absence of a stay is an important factor in evaluating the potential harm to the
Appellants.”Id. at 228. Two cases cited in Sunflower Racing, In re St. Johnsbury Trucking Co., Inc., 185 B.R. 687,
690 (S.D.N.Y. 1995) and In re Advanced Min. Systems, Inc., 173 B.R. 467, 468-69 (S.D.N.Y. 1994), held that the risk
that an appeal will be mooted absent a stay demonstrated a threat of irreparable injury.
Even the court in Dakota Rail acknowledged that “[i]n most situations, however, the Court will treat these
factors [the four factors relevant to the determination of whether to grant a stay pending appeal] as interests to be
considered and balanced in deciding whether to grant a stay rather than as absolute prerequisites for a stay.” 111
B.R. at 820 (citation omitted). And the court in Great Barrington Fair noted that, although all the factors are
prerequisites, “not all of the four conditions need be given equal weight” and that “[t]he conditions ‘are not to be
applied in a vacuum but instead must be viewed in light of the importance of the right to appeal ...’” Great
Barrington Fair, 53 B.R. at 239 (quoting In re Howley, 38 B.R. 314, 315 (Bankr.D.Minn. 1984)(remaining citation
omitted)).
3The standards for granting a preliminary injunction are the same standards used to evaluate a motion for
stay pending appeal. In re Porter, 54 B.R. 81, 82 (Bankr.N.D.Okla. 1985).
4The Order did not specifically address MMCI’s argument that a stay pending appeal should not be
granted because imposing a stay disturbs the status quo ante. MMCI addressed this argument to the Court at the
final hearing, and the fact that the Court nevertheless determined to impose the stay evidences that the Court was
not persuaded by this argument.
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pending appeal1; 4) that the potential for mootness in itself is insufficient to justify a stay pending
appeal2; and 5) that imposing the stay disturbs the status quo ante, which is disfavored under the law
governing preliminary injunctions.3 All of these arguments were raised at the final hearing on the
petitioning creditors’ Motion for Stay Pending Appeal and were considered by the Court prior to the
entry of its Order.4 Such arguments are, therefore, not sufficient grounds upon which to grant a motion
to alter or amend an order pursuant to Rule 59(e), Fed.R.Civ.P. See Sunflower Racing, 223 B.R. at
223 (“A party cannot invoke Rule 59(e) to . . . rehash arguments previously considered and rejected
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by the court.”); In re American Freight System, Inc., 168 B.R. 245, 246 (D.Kan. 1994) (same). See
also, Voelkel v. General Motors Corp., 846 F.Supp. 1482, 1483 (D.Kan.1994) (“A motion to
reconsider is not a second chance for the losing party to make its strongest case or to dress up
arguments that previously failed.”) (citations omitted).
WHEREFORE, IT IS HEREBY ORDERED that the Motion for Reconsideration is DENIED.
_____________________________________________
MARK B. McFEELEY
United States Bankruptcy Court
I certify that on the date shown on the attached document verification, a true and correct copy of
the foregoing was either electronically transmitted, faxed, delivered or mailed to the listed counsel
and/or parties.
Daniel J. Behles
Attorney for Petitioning Creditors
226-A Cynthia Loop NW
Albuquerque, NM 87114
Morton A. Faller
Ross D. Cooper
Attorneys for Petitioning Creditors
11921 Rockville Pike, 3rd Floor
Rockville, MM 20852
Gail Gottlieb
Christopher A. Holland
Attorneys for MMCI
PO Box 1945
Albuquerque, NM 87103
________________________________
Patti G. Hennessy
Law Clerk
(505) 348-2545
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