Favre v. Lyndon Property Insurance (In Re Favre) , 342 F. App'x 5 ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 1, 2009
No. 08-61003 Charles R. Fulbruge III
Summary Calendar Clerk
In the Matter of: SCOTT M FAVRE
Debtor
-----------------------------------------------------------
SCOTT M FAVRE
Appellant
v.
LYNDON PROPERTY INSURANCE COMPANY
Appellee
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 1:07-CV-1261
Before JOLLY, BENAVIDES, and HAYNES, Circuit Judges.
PER CURIAM:*
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 08-61003
Scott Favre challenges the entry of partial summary judgment in favor of
Lyndon Property Insurance Company (“Lyndon”). For the following reasons, we
affirm.
I.
Favre was the President, sole director, and sole stockholder of Panther
Utilities of Mississippi, Inc. (“Panther”). Lyndon issued payment and
performance bonds in connection with two construction projects in Mississippi,
with Panther as the principal under each of the bonds. In consideration for the
bonds, Favre executed a General Agreement of Indemnity, which created an
express trust for contract related funds. The contract funds were to be used “to
promptly pay all lawful claims of subcontractors, materialmen and laborers for
labor performed and material furnished . . . .” Favre then disbursed trust funds
in the amount of $810,348.10 to himself and to repay loans owed by Panther to
its creditors.
On November 20, 2000, Favre filed a voluntary petition for relief under
Chapter 7 of the United States Bankruptcy Code. On June 1, 2005, Lyndon filed
a motion for partial summary judgment with the bankruptcy court, asserting
that Favre was indebted to Lyndon in the amount of $810,348.10 and that this
debt was non-dischargeable because Favre had committed a defalcation while
in a fiduciary capacity under 11 U.S.C. § 523(a)(4). The bankruptcy court
granted the motion for partial summary judgment, based in part on its
conclusion that the documentation submitted by Favre in opposition to Lyndon’s
motion did not meet the standards of Rule 56 of the Federal Rules of Civil
Procedure. Favre filed a motion to reconsider, which the bankruptcy court
denied. The bankruptcy court then certified the partial summary judgment as
final pursuant to Federal Rule of Civil Procedure 54(b) and Federal Rule of
Bankruptcy Procedure 7054. Favre appealed the bankruptcy court’s judgment
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No. 08-61003
to the district court, which affirmed the bankruptcy court in all respects. The
district court’s decision is the subject of this appeal.
II.
Favre asserts that the exhibits and affidavits he submitted in opposition
to Lyndon’s motion for summary judgment met the evidentiary requirements of
Rule 56 and should have been considered by the bankruptcy court. We review
a trial court’s decision not to consider evidence offered in opposition to a motion
for summary judgment for abuse of discretion. Tex. E. Transmission Corp. v.
Amerada Hess Corp., 145 F.3d 737, 741 (5th Cir. 1998).
We conclude that the bankruptcy court did not abuse its discretion by
excluding the exhibits and affidavits submitted in opposition to Lyndon’s motion
for summary judgment. The Cardin and Johnson affidavits were not notarized,
do not indicate that they were given under oath, and were not made “under
penalty of perjury.” See 28 U.S.C. § 1746; Nissho-Iwai Am. Corp. v. Kline, 845
F.2d 1300, 1306 (5th Cir. 1988) (“It is a settled rule in this circuit that an
unsworn affidavit is incompetent to raise a fact issue precluding summary
judgment.”). The Cardin affidavit also gave no indication that she had any
personal knowledge of the matters set forth therein. See F ED . R. C IV. P ROC.
56(e)(1) (“A supporting or opposing affidavit must be made on personal
knowledge . . . .”). The Favre Affidavit was sworn, but merely summarized and
expressed his agreement or disagreement with the preceding exhibits, and
otherwise offered his opinions regarding the obligations of Lyndon. Because
Favre’s affidavit was comprised of nothing more than conclusonal allegations
and legal arguments, the bankruptcy court was well within its discretion in
striking it from the record. See Clark v. Am.’s Favorite Chicken Co., 110 F.3d
295, 297 (5th Cir. 1997) (“Unsupported allegations or affidavit or deposition
testimony setting forth ultimate or conclusory facts and conclusions of law are
insufficient to defeat a motion for summary judgment.”). Exhibits 3, 7, 10, and
3
No. 08-61003
14 were properly excluded because they were not authenticated. See King v.
Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (“Unauthenticated documents are
improper as summary judgment evidence.”). Favre admitted the evidentiary
deficiencies described above to the bankruptcy court in his motion for
reconsideration, which stated that “[t]he Reply Brief of Lyndon adequately,
correctly, and succinctly summarized the deficiencies, pursuant to Rule 56(e) .
. . in the Statement of Material facts of Favre and the Affidavits submitted in
support of his Statement of Material Facts.” The exhibits and affidavits
submitted in opposition to Lyndon’s motion for summary judgment were
properly excluded.
In the district court, Favre presented as a separate issue the question of
whether Lyndon’s summary judgment evidence was sufficient to support the
bankruptcy court’s judgment. Favre has made no similar attempt to argue to
this court that summary judgment was not appropriate in the absence of the
deficient evidence described above. 1 Instead, Favre asserts that the bankruptcy
court was obligated to reconsider, amend, or set aside its decision under Rules
54(b) and 60(b) of the Federal Rules of Civil Procedure.2 The denial of a motion
1
To the extent that Favre raises such an issue, he has failed to provide any citations
to the record or case law. Accordingly, this issue is waived as inadequately briefed. See, e.g.,
Adams v. Unione Mediterranea Di Sicurta, 364 F.3d 646, 653 (5th Cir. 2004) (“Issues not
raised or inadequately briefed on appeal are waived.”). Further, Lyndon did provide evidence
of a fiduciary relationship giving rise to a duty to use trust funds only to pay subcontractors
and certain others on the project. It also provided evidence that such funds were, instead,
used to pay back loans allegedly made to Panther by Favre and his friends.
2
Rule 54(b) governs judgments in cases involving multiple claims and states that an
“order or other form of decision . . . that adjudicates fewer than all the claims . . . does not end
the action as to any of the claims or parties and may be revised at any time before the entry
of a judgment adjudicating all the claims and all the parties’ rights and liabilities.” Rule
60(b)(1) states that a district court may grant relief from a final judgment for “mistake,
inadvertence, surprise, or excusable neglect” on a motion made within one year of the
judgment. Favre asserts that both Rules 54(b) and 60(b) apply to his motion for
reconsideration. Lyndon argues that Rule 60(b) relief is not available for judgments governed
by Rule 54(b). We need not resolve this issue because we conclude that the bankruptcy court
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for reconsideration is reviewed for abuse of discretion. Warfield v. Byron, 436
F.3d 551, 555 (5th Cir. 2006). “Reconsideration of a judgment after its entry is
an extraordinary remedy which should be used sparingly.” Templet v.
HydroChem, Inc., 367 F.3d 473, 479 (5th Cir. 2004). “[S]uch a motion is not the
proper vehicle for rehashing evidence, legal theories, or arguments that could
have been offered or raised before the entry of judgment.” Id. at 478.
We conclude that the bankruptcy court did not abuse its discretion. Favre
was represented by counsel at all stages of the litigation and had ample
opportunity to respond to Lyndon’s motion for partial summary judgment. Favre
waited almost eight months after the bankruptcy court issued its opinion
granting partial summary judgment to address the evidentiary deficiencies
discussed above. Then, even after admitting that the evidence he offered in
response to Lyndon’s motion for partial summary judgment was defective, Favre
failed to correct those deficiencies or offer admissible evidence that would create
a question of material fact.3 Moreover, Favre has made no attempt to explain to
this court how that evidence, which is entirely hypothetical for purposes of our
review, would change the result in this case.4
Finally, although not raised below or briefed in this appeal, Favre’s
statement of issues includes a challenge to the bankruptcy court’s award of a
did not abuse its discretion under either rule.
3
While Favre’s motion for reconsideration implicitly requested the opportunity to
supplement the summary judgment record, it failed to identify what new evidence would be
offered.
4
Favre also invokes Rule 56(e)(1) as a basis for reversal. Rule 56(e)(1) states that the
“court may permit an affidavit to be supplemented or opposed by depositions, answers to
interrogatories, or additional affidavits,” but the operation of the rule is discretionary. See
Barker v. Norman, 651 F.2d 1107, 1128-29 (5th Cir. Unit A 1981). In addition, Rule 56(e)(1)
has no direct application following the entry of a judgment absent a successful motion for
reconsideration. Similarly, 11 U.S.C. § 105(a) merely grants the bankruptcy court the power
to “prevent an abuse of process.”
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No. 08-61003
specific amount of damages without holding an evidentiary hearing. This issue
has been waived. See N. Alamo Water Supply Corp. v. City of San Juan, 90 F.3d
910, 916 (5th Cir. 1996).5 Favre also argues that the bankruptcy court was
without power to render a monetary judgment because this court had not
rendered a decision approving of such authority until our decision in In re
Morrison, 555 F.3d 473, 479-80 (5th Cir. 2009). The bankruptcy court did not err
by correctly predicting this court’s interpretation of the then existing bankruptcy
statutes.
III.
Accordingly, the judgment of the district court is AFFIRMED.
5
In any event, the amount awarded comes straight from the amounts proven in
Lyndon’s motion for partial summary judgment as being payments from trust funds for
purposes not authorized by the trust fund requirements.
6