ABISLAIMAN E HIJOS CORP v. FLORES GALARZA et al

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO

IN RE:

ABISLAIMAN E HIJOS, CORP., : Case No. 03-13726 (GAC)
d/b/a Joyeria Riviera :

Debtor : CHAPTER 11

ABISLAIMAN E HIJOS, CORP.,
d/b/a Joyeria Riviera

Plaintiffs

Vv. : Adv. No. 03-00191
DEPARTMENT OF THE TREASURY
FOR THE COMMONWEALTH OF
PUERTO RICO, et al,

Defendants

DECISION AND ORDER

I. PROCEDURAL HISTORY AND FACTUAL BACKGROUND

Pending before the Court is a Motion requesting clarification
of an Order and/or Reconsideration of Motion Denying Extension of
Time to file Notice of Appeal (Docket #157) filed by the Department
of the Treasury for the Commonwealth of Puerto Rico (“Hacienda”).
On December 19, 2003, Abislaiman e Hijos, Corp. (“Abislaiman”)
filed the instant adversary proceeding alleging that Hacienda and
various individuals employed by Hacienda, violated the automatic
stay under 11 U.S.C. § 362(a); and seeking damages pursuant to 11
U.S.C. § 105(a) and turnover of property of the estate pursuant to

11 U.S.C. SS 542(a), 543(a), 547(b) or 549 and 42 U.S.C § 1983

AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

GPO

1Hacienda later filed a motion requesting that the motion for extension
of time to file the motion for reconsideration be deemed the motion for
reconsideration (Docket #149). Abislaiman opposed Hacienda’s motion arguing
that irrespective of whether it is designated as a motion for extension of
time or one for reconsideration, the motion is untimely and should have been
filed within ten (10) days after the entry of judgment pursuant to Fed. R.
Civ. P. 59(e) (Docket #150). Hacienda’s motion (Docket #149) and Abislaiman’s
Opposition (Docket #150) are currently pending before the Court.
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(Adv. No. 03-00191).
On May 31, 2004, Hacienda filed a motion to dismiss the
complaint and/or motion for summary judgment (Docket #49).
Abislaiman opposed the motion to dismiss (Docket #56). On July 5,
2005, the Court entered a Decision and Order denying Hacienda’s
motion to dismiss and/or motion for summary judgment (Docket #129).
On July 19, 2005, Hacienda filed a Notice of Appeal (Docket
#134); a Statement of Election (Docket #135); and a Motion
requesting an extension of time to file a motion for
reconsideration (Docket #137).1 On July 22, 2005, Abislaiman filed
a Motion to Strike the Notice of Appeal and Statement of Election
(Docket #138); and an Opposition to Hacienda’s motion requesting an
extension of time to file the motion for reconsideration (Docket
#139).
Hacienda filed an Opposition to Abislaiman’s Motion to Strike
(Docket #140); Abislaiman filed a surreply to Abislaiman’s
Opposition (Docket #141); and Hacienda filed an Opposition to
Abislaiman’s surreply (Docket #148).
On August 18, 2005, the Court issued an order denying
Hacienda’s motion in opposition to Abislaiman’s motion to quash the
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notice of appeal and also requesting an extension of time to file
an appeal (Docket #140). Subsequently, Hacienda filed a Motion
requesting that the Court clarify the extent of order and indicate
whether it has granted or denied Abislaiman’s motion to strike the
Notice of Appeal. Furthermore, if the Court grants the motion to
strike, Hacienda requests that the Court reconsider its ruling
denying the extension of time to file the notice of appeal.
II. ARGUMENTS OF THE PARTIES
A. Abislaiman
In its motion to strike, Abislaiman argues that pursuant to
Fed. R. Bankr. P. 8002(a), the notice of appeal was untimely, since
it was not filed within ten (10) days of the entry of the Court’s
order. Moreover, the right to appeal was not preserved by the
filing of a timely request to extend the time for filing an appeal,
which must be filed before the time for filing a notice of appeal
has expired; except upon a showing of excusable neglect if filed
not later than twenty (20) days after the expiration of the time
for filing a notice of appeal. Fed. R. Bankr. P. 8002(c)(2).
Abislaiman further argues that there was no excusable neglect in
the instant case.
In its opposition, Abislaiman argues that pursuant to Fed. R.
Bankr. P. 9023, which makes Fed. R. Civ. P. 59(e) applicable to
bankruptcy cases, a motion to amend or alter the must be served
within ten (10) days of the Court’s order and the court is without
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2Rule 9006(a) provides in relevant part that “[w]hen the period of time
prescribed or allowed is less than 8 days, intermediate Saturdays, Sundays,
and legal holidays shall be excluded in the computation.” Fed. R. Bankr. P.
9006(a).
3Rule 6 provides in relevant part that “[w]hen the period of time
prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays,
and legal holidays shall be excluded in the computation.” Fed. R. Civ. P. 6.
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power to extend the deadline unless the motion is filed before the
ten day period expires.
B. Hacienda
Hacienda admits that it erred in computing the time period to
file a notice of appeal. Specifically, Hacienda avers that instead
of using the Fed. R. Bankr. P. 9006(a),2 it used Rule 6 of the
Federal Rules of Civil Procedure.3 Therefore, the notice of appeal
was filed after the expiration of the time period allowed under the
Federal Rules of Bankruptcy Procedure. Hacienda argues that the
Court should allow this brief extension of time, upon a showing of
excusable neglect since it was filed no later than twenty (20) days
after said expiration. Moreover, the prejudice to Hacienda -
foregoing a revision of the denial of its Qualified Immunity
request - would be greater than any prejudice Abislaiman would
suffer by the granting of an extension of time.
III. DISCUSSION
A. Notice of Appeal under Fed. R. Bankr. P. 8002
Pursuant to Fed. R. Bankr. P. 8002(c)(2), a request to extend
time for filing a notice of appeal must be filed before the time
for filing such a notice of appeal has expired, “except that such
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a motion filed not later than 20 days after the expiration of the
time for filing a notice of appeal may be granted upon a showing of
excusable neglect.” Fed. R. Bankr. P. 8002(c)(2). In the instant
case, it is uncontested that Hacienda’s request for an extension of
time to file its notice of appeal, was not filed within the ten
(10) period allowed to file a notice of appeal. Therefore, in
order for this Court to grant an extension of time to file a notice
of appeal, the Court must find that Hacienda’s failure to request
an extension within the ten-day limit provided in Rule 8002(c)(2),
resulted from excusable neglect.
In Pioneer Inv. Serv. Co. v. Brunswick Assoc. Ltd.
Partnership, the Supreme Court established a test to determine what
sorts of neglect could be considered “excusable,” and stated that
such a decision was an equitable one, taking into consideration
certain relevant factors, including: (1) the length of the delay
and its impact on judicial proceedings; (2) the reason for the
delay; (3) whether the movant acted in good faith; and (4) whether
granting the relief will prejudice the debtor. (emphasis added)
Pioneer Inv. Serv. Co. v. Brunswick Assoc. Ltd. Partnership, 507
U.S. 380, 113 S. Ct. 1489, 1491 (1993).
The Court finds that Hacienda’s failure to file a timely
notice of appeal does not amount to excusable neglect. Although
there is no finding of bad faith and its motion requesting an
extension of time was filed without undue delay; the Court finds on
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balance that the reason for the delay and Hacienda’s failure to
show that it would be prejudiced by the denial of the requested
relief, weighs heavily against it. First, the only reason espoused
by Hacienda for its failure to file a timely notice of appeal, is
that it mistakenly used Rule 6 of the Federal Rules of Civil
Procedure, instead of Fed. R. Bankr. P. 9006(a).
The Supreme Court in Pioneer, addressed this issue and
indicated that “inadvertence, ignorance of the rules or a mistake
in construing the rules does not usually constitute ‘excusable
neglect’.” (emphasis in original) Pioneer, 507 U.S. at 390-92, 113
S. Ct. at 1496. Similarly, the Court in In re Food Barn Stores,
held that counsel’s mistake in calculating time for appeal under
the federal rules of civil Procedure, did not demonstrate excusable
neglect. In re Food Barn Stores, Inc. 214 B.R 197, 200 (B.A.P. 8th
Cir. 1997). The Panel also provided a history of cases, prior to
and after Pioneer, that have held that ignorance or misreading of
the law, particularly in the application of Rule 8002(c), does not
constitute excusable neglect. Id. at 200. Citing Silver Oak Homes
Ltd., 169 B.R. 349 (D. Md. 1994); In re Callahan,211 B.R 131 (N.D.
N.Y 1997); In re Pyramid Energy Ltd., 165 B.R. 249 (Bankr. S.D.
Ill. 1994; In re Auto Specialties Mfg. Co., 133 B.R. 384, 391-92
(Bankr. W.D. Mi. 1991); In re Pernie Bailey Drilling Co., 111 B.R
561 (Bankr. W.D. La. 1989); In re Fisher, 65 B.R. 261 (Bankr. N.D.
Ga. 1986); In re Metro Paper Co., 18 B.R. 831 (Bankr. D. D.C.
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1982)).
The First Circuit has also held that the mistake or
carelessness of a litigant or its counsel does not amount to
excusable neglect. See In re Power Recovery Systems, Inc. 950 F.2d
798 (1st Cir. 1991) (where the Court affirmed the bankruptcy
court’s decision and found that counsel’s failure to notice the
time bar due to his preoccupation with settlement negotiations did
not amount to excusable neglect); See also In re Shepherds Hill
Development Co., LLC, 316 B.R. 406 (B.A.P. 1st Cir. 2004)(where the
Panel affirmed the bankruptcy court’s decision and found that an
attorney’s mistaken belief that the adversary proceeding was
stayed, did not amount to excusable neglect under Rule 60(b)).
Moreover, similar to the case of In re Food Barn Stores, this
Court finds that the delay was solely within the control of
creditor’s counsel; and it was counsel’s responsibility to locate
the relevant rule regarding the time to file an appeal from a
bankruptcy Court’s order, and from the rule to ascertain the
correct date for filing a Notice of Appeal. See In re Food Barn
Stores, 214 B.R. at 201.
Second, Hacienda has also failed to show that it would be
prejudiced by the denial of the relief requested. Hacienda
essentially seeks to appeal an interlocutory order - the Court’s
order denying its motion to dismiss and/or motion for summary
judgment. Hacienda is not foreclosed from appealing the final
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judgment of the instant adversary case. On the other hand, the
bankruptcy estate will be prejudiced by further delays of the
resolution of the instant adversary case on the merits.
B. Motion for Reconsideration under Fed. R. Civ. P. 59(e)
Motions for reconsideration under Fed. R. Civ. P. 59(e), made
applicable in bankruptcy cases by Fed. R. Bankr. P. 9023, are
entertained by courts if they seek to correct manifest errors of
law or fact; present newly discovered evidence; or when there is an
intervening change in the law. Standard Quimica De Venezuela v.
Central Hispano Intern., Inc., 189 F.R.D. 202 (D. P.R. 1999)
(citing Jorge Surillo & Co. v. Falconer Glass Industries, 37 F.3d
25, 29 (1st Cir. 1994); F.D.I. Corp. v. World University, Inc.,
978 F.2d 10, 16 (1st Cir. 1992); Cherena v. Coors Brewing Co., 20
F.Supp.2d 282, 286 (D. P.R. 1998). Motions for reconsideration
must demonstrate why the court should reconsider its prior
decision, and must set forth facts or law of strongly convincing
nature to induce the court to reverse its decision. In Re Pabon
Rodriguez, 233 B.R. 212, 219 (Bankr. D. P.R. 1999). A motion for
reconsideration may not be used to “repeat old arguments previously
considered and rejected, or to raise new legal theories that should
have been raised earlier.” National Metal Finishing Co. v.
Barclays American/Commercial, Inc., 899 F.2d 119, 123 (1st Cir.
1999).
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In the present case, Hacienda has not met its burden of proof
under Fed. R. Bankr. P. 9023, and has simply repeated the same
arguments previously made. In addition, it has not alleged that
there were any manifest errors of law or fact; it did not present
any newly discovered evidence; and it has not presented any
intervening changes in the law which would affect the decision made
by the Court. Therefore, Hacienda’s motion for reconsideration is
denied.
IV. CONCLUSION
In balancing the equities of this case, the Court finds that
although there is no finding of bad faith and Hacienda’s motion
requesting an extension of time was filed without undue delay;
Hacienda’s reason for the delay and its failure to show that it
would be prejudiced by the denial of the requested relief, weighs
heavily against it. Therefore, the Court finds in favor of
Abislaiman and grants its Motion to Strike the Notice of Appeal and
Statement of Election. Moreover, the Court denies Hacienda’s
Motion for Reconsideration.
ORDER
WHEREFORE IT IS ORDERED that the Motion to Strike the Notice
of Appeal and Statement of Election (Docket #138), shall be, and
hereby is GRANTED.
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IT IS FURTHER ORDERED that the Motion requesting
reconsideration of the Court’s order denying an extension of time
to file a notice of appeal (Docket #157), shall be, and hereby is
DENIED.
SO ORDERED.
San Juan, Puerto Rico, this 3rd day of October, 2005.
/s/ Gerardo A. Carlo
Gerardo A. Carlo
U.S. Bankruptcy Judge
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