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In re Romanzi

United States District Court, E.D. Michigan, Southern Division

March 27, 2017

In re Craig S. Romanzi, Debtor.
v.
Kenneth A. Nathan, Appellee. Fieger & Fieger P.C, et al., Appellants,

          R. Steven Whalen, United States Magistrate Judge

          OPINION AND ORDER DENYING MOTION FOR RECONSIDERATION [19]

          Gershwin A. Drain, United States District Court Judge

         I. Introduction

         Fieger & Fieger, P.C. and Geoffrey N. Fieger ("Appellants" or "Defendants") filed a Notice of Appeal with this Court on November 10, 2016, regarding the Bankruptcy Court's denial of their Motion for Abstention. Dkt. No. 1. The bankruptcy trustee of Craig S. Romanzi ("Debtor"), Kenneth A. Nathan ("Appellee" or "Trustee") moved to dismiss this appeal from the denial of a motion for abstention because it constitutes an improper interlocutory appeal and appellants did not properly seek leave to appeal. Dkt. No. 4. On January 30, 2017, this Court entered an Order granting the Motion to Dismiss. Dkt. No. 17.

         Presently before the Court is Appellants' Motion for Reconsideration. Dkt. No. 19. Upon consideration of the arguments presented by Appellants, the Court will deny their Motion for Reconsideration [19].

         II. Factual And Procedural Background

         An involuntary Chapter 7 bankruptcy case was filed against Debtor Craig S. Romanzi on March 16, 2016 in Case Number 16-43857-mbm (the “Bankruptcy Case”). Dkt. No. 10, p. 203 (Pg. ID 413). Id. Kenneth A. Nathan was appointed trustee over the bankruptcy estate. Id. Among the assets allegedly owed to the estate is a portion of attorney fees retained by Debtor's prior employers, Appellants.

         Debtor had previously filed a lawsuit in Oakland County Circuit Court to recover these fees, but voluntarily dismissed them in July 2016. Dkt. No. 10, p. 148 (Pg. ID 358). Less than a week later, Trustee filed a five-count adversary complaint against Appellants in the bankruptcy proceeding (hereinafter referred to as the “Adversary Proceeding”). See Dkt. No. 10, pp. 203-13 (Pg. ID 413-23). Appellants filed a motion for abstention on August 29, 2016. Dkt. No. 10, p. 95 (Pg. ID 305). Appellants argued for both mandatory abstention, pursuant to 28 U.S.C. § 1334(c)(2), and permissive abstention, pursuant to 28 U.S.C. § 1334(c)(1). Id. at 83, 88 (Pg. ID 293, 298).

         The bankruptcy court held a hearing on the motion on October 25, 2016 and issued an order denying the motion the following day. Dkt. No. 10, p. 11 (Pg. ID 221); Dkt. No. 10, p. 10 (Pg. ID 220).

         On November 10, 2016, Appellants filed a Notice of Appeal to this Court. Dkt. No. 1. Shortly thereafter, Trustee filed a Motion to Dismiss Appeal. Dkt. No. 4. The Court granted Appellee's motion on January 30, 2017. Dkt. No. 17. Appellants now seek reconsideration. Dkt. No. 19.

         III. Legal Standard

         Local Rule 7.1(h)(3) of the Local Rules of the United States District Court for the Eastern District of Michigan provides:

Generally, and without restricting the Court's discretion, the Court will not grant motions for rehearing or reconsideration that merely present the same issues ruled upon by the Court, either expressly or by reasonable implication. The movant must not only demonstrate a palpable defect by which the Court and the parties and other persons entitled to be heard on the motion have been misled but also show that correcting the defect will result in a different disposition of the case.

E.D. Mich. LR 7.1(h)(3). “A ‘palpable defect' is ‘a defect that is obvious, clear, unmistakable, manifest, or plain.' ” United States v. Lockett, 328 F.Supp.2d 682, 684 (E.D. Mich. 2004) (citing United States v. Cican, 156 F.Supp.2d 661, 668 (E.D. Mich. 2001)). “[A] motion for reconsideration is not properly used as a vehicle to re-hash old arguments or to advance positions that could have been argued earlier but were not.” Smith ex rel. Smith v. Mount Pleasant Pub. Sch., 298 ...


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