Overstreet v. Joint Facilities Management, L.L.C. (In Re Crescent Resource, L.L.C.)

Case: 11-51141 Document: 00512047490 Page: 1 Date Filed: 11/08/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 8, 2012
No. 11-51141 Lyle W. Cayce
Summary Calendar Clerk
In the matter of: CRESCENT RESOURCE, L.L.C.,
Debtor
R. PERRY OVERSTREET; GEORGE RANDALL,
Appellants
v.
JOINT FACILITIES MANAGEMENT, L.L.C.,
Appellee
Appeal from the United States District Court
for the Western District of Texas
USDC No: 1:11-cv-00298-SS
Before KING, CLEMENT, and HIGGINSON, Circuit Judges.
PER CURIAM:*
R. Perry Overstreet and George Randall (together, the “Appellants”)
appeal the district court’s orders (1) affirming the bankruptcy court’s dismissal
of their claims against Joint Facilities Management (“JFM”) and (2) denying
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
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No. 11-51141
their subsequent motion seeking to alter or amend the judgment. We lack
jurisdiction to hear the appeal from the district court’s order affirming the
bankruptcy court and affirm the district court’s order denying reconsideration.
FACTS AND PROCEEDINGS
In 1998, Rim Golf signed a ninety-nine year net ground lease with FP Real
Estate One, LLC to pay rent for its use of certain tracts of land in Gila County,
Arizona. Two years later, Appellant Overstreet sold back his interest in FP Real
Estate One, LLC to the company in exchange for its right to receive rent under
the lease. Six years after that, Rim Golf assigned its tenant rights under the
lease to Appellee JFM, while FP Real Estate One, LLC assigned its remaining
rights as landlord to JFM, as well. These transactions made JFM both landlord
and tenant under the lease, although Overstreet retained the right to collect rent
from it. JFM paid rent for three years before, acting on behalf of itself as both
landlord and tenant, terminating the lease in 2009.
The day after terminating the lease, JFM filed for bankruptcy. It listed
the lease in its schedule of unexpired leases. Overstreet made unsecured claims
for his right to receive rent under the lease and served on the Committee of
Unsecured Creditors during bankruptcy proceedings. Within a year, the
bankruptcy court confirmed JFM’s Chapter 11 plan.
Eight months later, Appellants sought revocation of the order confirming
the plan.1 They claimed that, notwithstanding their representations during the
bankruptcy proceedings, their right to receive rent from the tenant was secured
by the land owned by the landlord. They further argued that JFM’s failure to
list this interest as a secured obligation during bankruptcy proceedings was a
1
We echo the district court’s perplexity: “Although it is not important to the resolution
of this appeal, the Court notes it has no idea who Appellant Randall is, or how he is in any way
related to this case. There does not appear to be any specific mention of Randall’s role in any
of the relevant events and, apart from some vague general statements about ‘plaintiffs’ in
Appellants’ complaint, his interest in this case is a mystery.”
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fraud on that court, requiring the court to set aside the plan or find that their
interest was not disposed of by the plan.
JFM filed a motion to dismiss in bankruptcy court, arguing, among other
things, that Overstreet’s participation in the bankruptcy proceedings negated
any inference of fraud, the claims against it were equitably moot, and
Appellants’ right to receive rent was unsecured as a matter of law. After a
hearing, the bankruptcy court granted JFM’s motion to dismiss. It rejected
Appellants’ fraud claim, finding that Overstreet actively participated in the
bankruptcy proceedings and had actual knowledge that JFM was treating his
interest as unsecured in those proceedings. It concluded that Appellants’
interest was extinguished by the plan and their claim was equitably moot.
Deciding the case on these bases, it did not reach the issue of whether
Appellants’ rights were unsecured as a matter of law.
Appellants sought review in the district court. The court affirmed the
bankruptcy court, ruling that its factual findings were not clearly erroneous and
its conclusions of law were correct based on these facts. It went on to decide that
Appellants’ claim was unsecured as a matter of law. After reviewing the
relevant Arizona legal precedents, it concluded that “Appellants have failed to
provide any convincing legal or logical support for their position that an
assignment of the right to receive rent payments creates a security interest in
the real property generating the rent. Accordingly, the Court finds their debt
was unsecured.”
After unsuccessfully seeking post-judgment relief through a motion to
alter or amend the judgment under Federal Rule of Civil Procedure 59(e),
Appellants filed their notice of appeal to this court.
DISCUSSION
Appellants argue that JFM deprived them of their security interest in
JFM’s real property during bankruptcy proceedings. They also contend that the
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district court erred in denying their motion seeking to alter or amend its
judgment affirming the bankruptcy court. Fed. R. Civ. P. 59(e). JFM responds
that Appellants’ notice of appeal of the order affirming the bankruptcy court was
untimely and that the motion to alter or amend the judgment was properly
denied.
Standard of Review
On appeal, we review questions of fact for clear error. Davis Oil Co. v.
Mills, 873 F.2d 774, 777 (5th Cir. 1989). We review the denial of a motion to
alter or amend the judgment under Rule 59(e) for abuse of discretion. Schiller
v. Physicians Res. Grp. Inc., 342 F.3d 563, 566 (5th Cir. 2003).
Timeliness of Appeal
Generally, a notice of appeal must be filed within 30 days after the entry
of the judgment or order being appealed. Fed. R. App. P. 4(a). This requirement
is jurisdictional; courts are without authority to make exceptions to it. Bowles
v. Russell, 551 U.S. 205, 214 (2007). Rule 4(a)(4), however, provides that certain
post-judgment motions extend the time for filing a notice of appeal until 30 days
after the order disposing of such a motion. A timely Rule 59(e) motion filed
within 28 days of a final judgment will extend this window for filing a notice of
appeal. Chacon v. York, 434 F. App’x 330, 331 (5th Cir. 2011). An untimely Rule
59(e) motion, on the other hand, will not toll the notice of appeal period, even if
the district court addressed the late-filed motion on the merits. See Browder v.
Dir., Dep’t. of Corr. of Ill., 434 U.S. 257, 262, 264-65 (1978) (concluding that it
had no jurisdiction to review the underlying order in such circumstances);
Lizardo v. United States, 619 F.3d 273, 278 (3d Cir. 2010); Garcia-Velazquez v.
Frito Lay Snacks Caribbean, 358 F.3d 6, 11 (1st Cir. 2004); see also Camacho v.
City of Yonkers, 236 F.3d 112, 116-17 (2d Cir. 2000) (disclaiming the opposing
view taken in an earlier case, City of Hartford v. Chase, 942 F.2d 130, 134 (2d
Cir. 1991), and limiting that case to its facts).
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Appellants filed a notice of appeal on November 12, 2012, within 30 days
of the order denying this motion to alter or amend the judgment but 44 days
after the underlying order affirming the bankruptcy court. The timeliness of
Appellants’ notice of appeal depends on whether their Rule 59(e) motion was
timely.
According to the district court, Appellants’ motion to alter or amend the
judgment was filed 29 days after the court entered its judgment. This finding
is not clearly erroneous. Although the district court declined to make a
“definitive” determination of timeliness, the motion was untimely and the period
for filing a notice of appeal ran from the entry of the order affirming the
bankruptcy court rather than from the order denying Appellants’ motion for
reconsideration. Because Appellants’ notice of appeal was untimely with respect
to entry of the order affirming the bankruptcy court, we have no jurisdiction to
review that underlying order.
Denial of Motion to Alter or Amend the Judgment
The district court’s denial of Appellants’ Rule 59(e) motion, on the other
hand, is properly before us. Rule 59(e)’s deadline is court-fashioned and thus
non-jurisdictional. See United States v. Martinez, 496 F.3d 387, 388 (5th Cir.
2007) (“[The Supreme Court in Bowles] drew a distinction between statutory
time requirements and court-fashioned time requirements, finding that only the
former could be properly characterized as ‘jurisdictional.’”); see also Nat’l
Ecological Found. v. Alexander, 496 F.3d 466, 474 (6th Cir. 2007) (concluding
“that the time limits set by Rules 6 and 59(e) constitute an affirmative defense
to an untimely Rule 59(e) motion, which the party opposing the motion is
capable of forfeiting”). By not challenging the motion’s timeliness, JFM waived
this objection to the motion itself.
After reviewing the district court’s resolution of this motion, we hold that
the district court did not abuse its discretion in denying Appellants’ request.
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“[A] motion to alter or amend the judgment under Rule 59(e) ‘must clearly
establish either a manifest error of law or fact or must present newly discovered
evidence’ and ‘cannot be used to raise arguments which could, and should, have
been made before the judgment issued.’” Rosenzweig v. Azurix Corp., 332 F.3d
854, 863 (5th Cir. 2003) (quoting Simon v. United States, 891 F.2d 1154, 1159
(5th Cir. 1990)). Although Appellants reordered their arguments in their Rule
59(e) motion, they are essentially the same allegations made in their initial brief
to the district court: (1) they possess a security interest in JFM’s property (the
land of the landlord stands as a security for the payment of rent by the tenant);
(2) JFM committed fraud upon the court; (3) their participation in the Chapter
11 proceedings did not excuse JFM’s fraud; (4) their claim is not equitably moot;
(5) their lien passed through the Chapter 11 proceedings. They produce no new
evidence to support these arguments, nor do they establish any manifest legal
or factual error. Thus, the district court noted the proper standard and did not
abuse its discretion in concluding that the Appellants did not meet it.
CONCLUSION
For the reasons given above, Appellants’ appeal of the district court’s order
affirming the bankruptcy court is dismissed as untimely and the district court’s
denial of Appellants’ motion seeking to alter or amend the judgment is affirmed.
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