Toni Hardy

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IN THE UNITED STATES BANKRUPTCY COURT 7%, SOS a
NORTHERN DISTRICT OF OHIO CewGE, Ly OO
ees LLL .
Eastern Division as A.
Ck, C
IN RE: Ge
In Proceedings Under Chapter
Toni Hardy, a
Case No.: 10-22287
Debtor.

JUDGE RANDOLPH BAXTER

MEMORANDUM OF OPINION AND ORDER

The matter before this Court is the Trustee’s Motion for Reconsideration (“Motion”).
Although the Trustee failed to cite to any legal authority to support this Motion, motions for
reconsideration are generally brought pursuant to Bankruptcy Rule 9023 Fed.R.BankrP. The
Trustee seeks reconsideration of the Court’s prior order granting the Debtor, Toni Hardy’s,
motion to dismiss her Chapter 7 case. The Debtor filed an objection to the Trustee’s Motion.
Core jurisdiction of this matter is acquired under provisions of 28 U.S.C. § 157(b)(2), 28 U.S.C.
§ 1334, and General Order No. 84 of this district. Upon a duly noticed hearing and an

examination of the pleadings, generally, the following factual findings and conclusions of law

are herein rendered:

The Debtor, Toni Hardy, filed for relief under Chapter 7 of the Bankruptcy Code on
December 21, 2010. In her petition, the Debtor listed one secured creditor, American Honda,
with debt in the amount of $12,560 and twenty-one unsecured creditors with debt in the amount
of $21,337. During the §341 meeting, the Trustee discovered two pre-petition real estate

transfers between the Debtor and several family members (the Hobbses) who later sold those

doer Doc 46 FILED 05/25/11 ENTERED 05/25/11 12:58:54 pad OP eS

properties to third parties. The Debtor later filed a motion to dismiss her Chapter 7 case.

The Trustee opposed said motion in the belief that the Debtor’s creditors would be
prejudiced if the case was dismissed. Although the Trustee did not present any supporting
evidence at the hearing, she argued that the subsequent transfers between Debtor’s family
members and the third parties were fraudulent in nature. The Trustee planned to avoid said
transfer, sell the properties and recover the funds for distribution to the Debtor’s unsecured
creditors. The Trustee further argued that, if the case was dismissed, the unsecured creditors
would not receive a distribution. Notedly, however, she did not support any untoward conduct
committed by the Debtor.

After notice and a hearing, the Court granted the Debtor’s motion over the Trustee’s
opposition. In an attempt to have the Debtor’s case reopened, the Trustee filed a motion for
reconsideration raising the same arguments from her prior motion. In an addendum to the
Motion for Reconsideration, she cites to another bankruptcy case in which the Hobbses were
implicated in fraudulent actions regarding other real estate transfers. In that case, Judge Arthur
Harris granted partial summary judgment in favor of the trustee who sought to recover funds
from the Hobbses in relation to a separate fraudulent conveyance action. Therein, it is noted that
the Hobbs’ liability was imputed after they failed to file a response to the initial summary
judgment motion; an evidentiary hearing was not conducted.

The Debtor opposes the Trustee’s Motion, asserting that the consequences of bankruptcy
outweigh the benefits of continuing her case. She states that she would rather work with her

creditors outside of the bankruptcy process.

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The dispositive issue for this Court’s consideration is whether the Trustee has presented
sufficient evidence to support reconsideration of this Court’s prior order, pursuant to Rule 59,
Fed.R.Bankr.P., to warrant a reopening the Debtor’s bankruptcy case.

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Motions for reconsideration are brought under Bankruptcy Rule 9023. Bankruptcy Rule
9023 provides for the application of Rule 59 of the Federal Rules of Civil Procedure to
bankruptcy proceedings. Although a motion for reconsideration is not mentioned in the Federal
Rules of Civil Procedure, it is often treated as a motion made under Rule 59(e). McDowell v.

Dynamics Corp. of America, 931 F.2d 380 (6th Cir. 1991). The purpose of a motion to alter or

amend judgment under Rule 59(e) is to have the court reconsider matters “properly encompassed
in a decision on the merits.” Generally, “[m]otions to alter or amend judgment may be granted if
there is a clear error of law, newly discovered evidence, an intervening change in the controlling

law, or to prevent manifest injustice.” GenCorp, Inc. v. American Intern. Underwriters, 178 F.3d

804, 834 (6th Cir. 1999)(citations omitted). A motion for reconsideration is not designed to give
a dissatisfied litigant an opportunity to relitigate matters already decided, nor is it a substitute for

appeal. Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir.

1998)(explaining that “[a] motion under Rule 59(e) is not an opportunity to re-argue a case”).

The Trustee, herein, seeks reconsideration of the Court’s prior order dismissing the
Debtor’s Chapter 7 bankruptcy case. Although a debtor does not have the absolute right to
dismiss his or her or her Chapter 7 bankruptcy case, (/n re Sheets, B.R. 254, 255

(Bankr.N.D.Ohio 1994)) motions for dismissal are generally granted unless there is a plain legal

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prejudice to a debtor’s bankruptcy estate. See e.g., In re Komyathy, 142 B.R. 755, 757 (Bankr.E.
D.Va. 1992); In re Higbee, 58 B.R. 71, 72 (Bankr C.D. Ill. 1986). An application of the “plain
legal prejudice” standard requires a balancing of harm between the debtor and the debtor’s
estate. It is usually found to exist where assets that would otherwise be available to creditors are
lost upon dismissal. Jd.

Herein, the Trustee asserts that her main goal in reopening Debtor’s case would be to
pursue a fraudulent conveyance action against third parties, the Hobbses, and recover funds for
distribution to Debtor’s unsecured creditors; a matter in which the Debtor was not implicated by
the Trustee. No new evidence has been presented to support Trustee’s contentions that
continued dismissal of the Debtor’s case would prejudice her creditors. Nor is this a case of
clear error or a change in controlling law. Furthermore, the Trustee has not presented any
persuasive evidence to show that manifest injustice resulted from this Court’s prior order.
Moreover, motions for reconsideration are not the appropriate medium by which to obtain
review of matters of final determination. Supra.

3K 26 ok ok

Accordingly, the Trustee’s Motion for Reconsideration is denied. The Debtor’s
Opposition is hereby sustained. This Court’s ruling, issued on March 29, 2011, stands as

ordered. Each party shall bear its respective costs.

IT IS SO ORDERED.

B o% CA “ JUDGE RAXDOLPH BAXTER
Dated, this day of UNITED STATES BANKRUPTCY COURT
May, 2011
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