Akhya N. Witherspoon

1 I allowed Debtor to file a brief in lieu of closing arguments. The Letter Brief in
Support of Motion for Reconsideration (“Letter Brief”) was filed on June 13, 2006 , and the
Reconsideration Motion is therefore ripe for adjudication.
2 Debtor testified that she had the money and was prepared to make the Trustee
payments but her former lawyer John McClain prepared a letter to her employer terminating the
attachment. (Counsel’s ability to unilaterally terminate wage orders has since been ceased.)
While she acknowledges signing the letter, she stated that it was not supposed to be sent without
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UNITED S TATES B ANKRUPTCY COURT
FOR T HE E ASTERN DISTRICT O F PENNSYLVANIA
In re 	: 	Chapter 13
:
AKHYA N. WITHERSPOON, 	: 	Bankruptcy No. 06-10813DWS
:
Debtor 	:
ORDER
AND NOW this 21st day of June 2006, upon consideration of the Debtor’s Motion
to Reconsider (the “Reconsideration Motion”) Order Denying Motion to Extend the
Automatic Stay (the “Order”);
And after notice and hearing on June 1, 2006; 1
And the Court finding that (1) Debtor’s last case was dismissed for lack of payment
to the Trustee notwithstanding a wage order which Debtor attributed to her counsel’s
terminating the wage order contrary to her wishes;2 (2) Debtor filed a Motion to Extend the
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her approval but he did so when he found she was behind on the payments she was required to
make to the mortgagee under a stipulation settling relief from the stay. McClain did not appear
but disputes the Debtor’s account, advising the Trustee that the termination was authorized.
2
Stay (“Extension Motion”) pursuant to §362(c)(3) contending that her financial condition had
improved in that in addition to her salary from Blockbusters that she had received in the last
unsuccessful case, her expenses were now less because her sister was providing child care
without charge; (3) on March 30, 2006 I entered an Order (“March Order”) extending the
stay for 30 days based on Debtor’s representation to the Court and the Chapter 13 trustee (the
“Trustee”) that she would submit to a wage order that would assure timely current payments
to the Trustee; (3) the March 30 stay extension was time limited in order to allow Debtor’s
counsel to investigate why the prior case wage order was terminated since the Court, upon
recommendation of the Trustee, would only allow a further stay extension on the condition
that a wage order was in place; (4) on April 19, Debtor’s counsel filed an application for a
wage order directed to Blockbuster’s, the employer identified in Debtor’s Schedule I; (5) a
hearing was scheduled for April 25, 2006 to consider a further extension of the stay for the
duration of the case depending on the outcome of the wage order investigation; (6) at the
April 25 hearing upon examination of the Debtor by the Trustee, it was discovered that
Debtor had been terminated from her employment prior to this Court’s March 30, 2006
hearing but had not disclosed that fact to her attorney or the Court because she was
“embarrassed” and thought she would quickly find another job; (7) while not disclosing the
termination prior to the March hearing, on April 20 Debtor advised Steven Axelrod, Esquire
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3 Debtor was represented at the first hearing by Chi B. Chung, Esquire (“Chung”).
When I scheduled a further hearing, she advised me that she would be on vacation. Since the
stay would expire, I could not continue the hearing further and stated that she should get Stephen
Axelrod, Esquire (“Axelrod”), the head of the firm she was affiliated with, to cover for her and
to make sure he was briefed on the issues. She agreed and was not involved in the events that
followed. Axelrod seeks to distance himself from the matter by contending Debtor was not his
client. See note 8 infra. From her testimony, it is clear that Debtor thought otherwise.
4 Axelrod stood there silently listening to the Trustee tell me that the wage order had been
docketed and that based on that assurance, she had no objection to the Extension Motion. He
claims he did not hear her state that position.
5 An Income Contribution Affidavit was signed on May 31, 2006, by Dene D. Silver,
Debtor’s sister, committing to monthly payments of $325.00. She appeared at the June 1 hearing
and testified that she learned a couple of weeks previously about Debtor’s bankruptcy when she
was requested to sign the Affidavit. She has had her babysitting business and concomitant
income for 3 months. Notably there was no representation in the Extension Motion or at either
the March 30 or April 25 that Debtor’s sister would contribute income to her plan.
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(“Axelrod”) 3 that she did not have a job; (8) on April 25 Debtor appeared with Axelrod and
neither advised the Court that Debtor was unemployed and that the wage order was
accordingly ineffective;4
And a hearing having been held on the Reconsideration Motion on June 1, 2006 at
which the Debtor testified that she was terminated by Blockbuster’s on March 15, 2006 but
was now receiving unemployment of $351 per week as well as assistance from her sister of
$325.00 per month;5
And a motion for reconsideration is governed by Federal Rule of Civil Procedure
(“Fed.R.Civ.P.”) 59(e) which is applicable in bankruptcy cases pursuant to Federal Rule of
Bankruptcy Procedure 9023;
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6 The purpose of a Rule 59(e) motion is to allow the court to
reevaluate the basis of its decision. ... Motions for reconsideration
are not at the disposal of an unsuccessful party to "rehash" the
same arguments and facts previously presented.
Keyes v. National Railroad Passenger Corporation, 766 F.Supp. 277, 280 (E.D. Pa. 1991)
(citations omitted).. See also Reich v. Compton 834 F.Supp. 753, 755 (E.D. Pa. 1993), aff’d in
part, rev’d in part on other grounds, 57 F.3d 270 (3rd Cir. 1995). The court in Durkin v. Taylor,
444 F.Supp. 879, 889 (E.D. Va. 1977) stated that "[w]hatever may be the purpose of Rule 59(e)
it ... [was not] ... intended to give the unhappy litigant one additional chance to sway the judge".
7 To constitute newly discovered evidence for which a new trial may
be granted under Rule 59(a), the evidence must pertain to facts in
existence at the time of the trial, and not to facts that have occurred
subsequently. ... To warrant a new trial the evidence must not
have been known to the movant at the time of the trial; and,
moreover, the movant must have been excusably ignorant of the
facts, i.e., the evidence must be such that it was not discoverable
by diligent search.
6A Moore, Moore's Federal Practice ¶59.08[3], at 59-101 to 59-102 (2d ed. 1995) (citations
omitted). There is no newly discovered evidence in this case.
4
And "the purpose of a motion for reconsideration is to correct manifest errors of law
or fact or to present newly discovered evidence," Harsco Corp. v. Zlotnicki, 779 F.2d 906,
908 (3d Cir. 1985), cert. denied, 476 U.S. 1171 (1986); 6
And “[f]ederal district courts should grant such motions sparingly because of their
strong interest in finality of judgment,” Seleras v. M/V Cartagena de Indias, 959 F. Supp. 270
(E.D. Pa. 1997) (quoting Continental Cas. Co. v. Diversified Indus., Inc., 884 F.Supp. 937,
943 (E.D. Pa. 1995));
And a party may not submit evidence that is not newly discovered in support of a
motion for reconsideration. Harsco, 779 F.2d at 9097;
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8 The only mistake of fact that I made was my assumption that Chung was still an
associate of Axelrod’s firm, Safe Haven Legal Services, Inc. as opposed to their having a new
relationship wherein Axelrod’s firm is “of counsel” to her. However, Ms. Chung never told me
otherwise. Indeed I specifically asked her whether someone from her office could appear, “like
Mr. Axelrod? Does he, you’re still with him, aren’t you?” she responded, “Yes.” Axelrod, with
Chung’s support, seeks to excuse himself from the failure at the April 25 hearing to disclose the
material change of Debtor’s circumstances of which he was previously advised by claiming that
he was not her lawyer but merely substituting for Chung on a very limited basis.
Rule 3.3 of the Pennsylvania Rules of Professional Conduct provides that “[a] lawyer
shall not knowingly ...fail to correct a false statement of material fact or law previously made to
the tribunal by the lawyer.” Chung now argues in her Letter Brief that Axelrod made no false
statement (it was made by Chung) so he had no duty to correct it. Chung also argues on behalf
of Axelrod that I concluded to report the ethical violation, presumably to disciplinary authorities,
and that was an unfair response to his “mistake, inadvertence and excusable neglect” where no
further hearing was held. Suffice it to say that I never stated that I intended to make a referral
but rather that I would consider further action by me to address what I believed then and still
believe was lack of candor to this Court. Axelrod was advancing a position (albeit one framed
by Chung on incorrect facts) that he knew was invalid. I accept that he did not intend to mislead
the Court, but in fact he did and should have known that he did. By stepping in for Chung in the
prosecution of the Debtor’s request for further relief past the 30 day extension, he was required
to correct the false statement upon which the Court was relying in entering a further order.
While Chung may have agreed that Axelrod should appear as a “courtesy” and could limit his
role, I specifically directed Chung to brief him on all issues and expected him to conduct himself
as any lawyer seeking relief from this Court- fully, knowledgeably and responsibly. Unless
making clear to the Court a limitation in a court appearance, a substituting lawyer has the same
responsibilities as the lawyer of record: to be prepared by knowing the facts of the case, the relief
sought and the basis therefore. In short, I reject Axelrod’s justification and Chung’s belief that
the views I expressed on this subject were erroneous as a matter of fact or law. Axelrod advises
that he is about to retire and requests that I excuse his conduct out of deference to his many years
of unblemished service. I do not excuse his conduct but I conclude that my comments to him
about this episode are a sufficient sanction and no further action is necessary given his imminent
cessation of the practice of law.
5
And in support of the Reconsideration Motion, Debtor averring that (1) there were
errors in fact8 and in law; (2) the granting of the Order resulted from mistake and
inadvertence and that in the interests of justice the Order and/or findings should be vacated;
And §362(c)(3)(C)(i)(III), applicable here, requires a debtor to present evidence at a
hearing to be completed 30 days after the filing of the petition to rebut the presumption of
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9 At the end of the March 30 hearing I extended the stay for thirty days, a limiting
condition. (With respect to the contention that the hearing was completed, perhaps suggesting
that I could rule no more, I would remind counsel that the stay expired after the 30 th day of my
Order and on that theory, could not be extended further. ) The change of circumstance I found
on March 30 th was that in addition to the continued employment at Blockbusters which would
secure Trustee payments through a wage order, Debtor had reduced her child care expenses.
Because the wage order which I find a material factor in my assessment of “whether a confirmed
plan will be performed, did not work in the last case, I wanted to assure that it would in this case.
Debtor attributed its failure to her prior attorney and I asked the Trustee and counsel to
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bad faith resulting from the fact that a case was dismissed within the year and there has not
been a substantial change in circumstances in the personal or financial affairs of the debtor
since the dismissal or any other reason to conclude that a confirmed plan will be performed;
And Debtor arguing in her Letter Brief that I erred in not extending the stay for the
duration of the case because I did not find bad faith at the March 30 hearing, that I completed
the hearing, that there was no condition of the March 30 Order that a wage order be entered,
that a wage order, being prospective, cannot be relevant to good faith at the time the petition
was filed, and that I found that there was a change of circumstance;
And the representations that the Debtor made at the March 30 and April 25 hearing
being false, and the March 30 Order extending the stay as to all creditors being based on (1)
false or misleading testimony, (2) schedules no longer correct and (3) the erroneous
conclusion that the presumption of bad faith was rebutted with consent to a wage order that
would assure that a confirmed plan would be performed;
And 	the 	Court 	refusing 	to 	extend 	the 	stay 	further 	upon 	learning 	of 	the
misrepresentations and finding nothing in this record that indicates that the ruling was
erroneous;9
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investigate. Thus, on March 30 I found good faith established on facts that were subsequently
found to be false- that she had a wage and a wage order could be implemented. The notion that
the Court is bound to findings that were based on false information is a startling one and one that
goes beyond the realm of proper advocacy. In any event, in limiting the stay extension to 30
days, it should have been apparent to counsel that a further extension was still an open issue.
10 The new case that Debtor seeks to present is too little, too late. Debtor was required to
complete the hearing on the Extension Motion within 30 days and is not permitted to make a new
case on reconsideration. Thus her evidence that the combination of her unemployment
compensation and sister’s contribution exceed her income when she was employed is not
relevant. In any event, neither the income from her sister’s business started in the past few
months nor her unemployment (that strangely exceeds her wages) provide the assurance of a
wage attachment which was the basis of the original extension. Moreover, the statement in her
letter brief that she is now employed is an improper attempt to amend the record.
11 Chung has represented that the mortgage company has no opposition to the Extension
Motion. As I do not know whether it is aware of the facts elicited in these hearings since it did
not appear, I cannot conclude that its position is based on a knowing consent. However, if the
mortgage company (versus all creditors), is agreeable to supporting further bankruptcy relief, the
Debtor may file a complaint to reinstate the stay as to that creditor only, attaching this Order and
serving it under applicable adversary rules. The Court will consider a limited stay with the
creditor’s expressed agreement to the relief requested or under a stipulated settlement.
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And the Court concluding that what the Debtor seeks to do is to present a totally new
case for extending the stay and have this Court give it retroactive effect;10
And the Court finding that to do so would be contrary to the Bankruptcy Code as well
as the interests of justice since the need for the new case is a result of the false case presented
earlier;
It is hereby ORDERED that the Motion is DENIED.11
DIANE WEISS SIGMUND
Chief U.S. Bankruptcy Judge
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