ENRIQUE S. LAMOUTTE, Bankruptcy Judge.
This case is before the court upon the Debtor's Motion for Reconsideration and/or Determination of Additional Facts Under Fed. R. Civ. Proc. R. 59; 52 (Fed. R. Bankr. Proc. 9023, 7052) (Docket No. 478), Lord's Opposition to Debtor's Motion for Reconsideration and Determination of Additional Facts (Docket No. 2655), the Debtor's Response to Lord's Opposition to Debtor's Motion for Reconsideration (Docket No. 2657) and Lord's Sur-Reply to Debtor's Response to Lord's Opposition to Motion for Reconsideration (Docket No. 2663). The Debtor's Motion for Reconsideration and/or Determination of Additional Facts Under Fed. R. Civ. Proc. R. 59; 52 (Fed. R. Bankr. Proc. 9023, 7052) is hereby denied.
"Motions to reconsider are not recognized by the Federal Rules of Civil Procedure or the Federal Rules of Bankruptcy Procedure in haec verba."
In the instant case, Debtor's Motion for Reconsideration was filed within fourteen (14) days of the entry of the Opinion and Order (Docket No. 2652). Therefore, it will be considered under Fed. R. Civ. P. 59(e), applicable to bankruptcy proceedings through Fed. R. Bankr. P. 9023.
Fed. R. Civ. P. 59(e) itself does not state the grounds on which relief under the rule may be granted. Therefore, trial courts have considerable discretion in deciding whether to grant or deny a motion to alter or amend under Fed. R. Civ. P. 59(e).
Generally, in order for a motion for reconsideration to proceed under Fed. R. Civ. P. 59(e), the movant must clearly establish a manifest error of law or fact or present newly discovered evidence that could not have been diligently found during the case.
"A motion for reconsideration `does not provide a vehicle for a party to undo its own procedural failures and it certainly does not allow a party to introduce new evidence or advance arguments that could or should have been presented to the district court prior to the judgment."
For a motion for reconsideration to succeed, "the movant must demonstrate either that newly discovered evidence (not previously available) has come to light or that the rendering court committed a manifest error of law."
Fed. R. Civ. P. 52(b), applicable to bankruptcy proceedings through Fed. R. Bankr. P. 7052, allows "the correction of any manifest errors of law or fact that are discovered, upon reconsideration, by the trial court."
"The primary purpose of Rule 52(b) is to enable the appellate court to obtain a correct understanding of the factual issues determined by the trial court as a basis for the conclusions of law and the judgment entered thereon". Wright and Miller, 9C
On its Motion for Reconsideration and/or Determination of Additional Facts Under Fed. R. Civ. Proc. R. 59; 52 (Fed Rule Bankr. Proc. 9023, 7052), the Debtor alleges one principal issue related to its interpretation of the Opinion and Order (Docket No. 2652), and requests the court to include additional findings of fact and to amend an alleged factual finding of the court, as follows:
The court finds that the Debtor has failed to meet the standard of Fed. R. Civ. P. 59(e) and 52(b). The Debtor readdresses in its Motion for Reconsideration and/or Determination of Additional Facts Under Fed. R. Civ. Proc. R. 59; 52 (Fed Rule Bankr. Proc. 9023, 7052) the overpayment allegation, arguing that the court validated the 15% footnote for the calculation of the interests but did not to recognize the overpayment pursuant to the same footnote. However, the court extensively discussed the application of the judicial estoppel doctrine to the Debtor based on its actions and claims to the court. "The doctrine of judicial estoppel is equitable in nature. It operates to prevent a litigant from taking a litigation position that is inconsistent with a litigation position successfully asserted by him in an earlier phase of the same case or in an earlier court proceeding."
In the present case, the court concluded that ". . . both Lord and Redondo have fallen short in the application of the three factors that are generally required for the applicability of the doctrine of judicial estoppel to the legal record of this case. Both parties refer to documentation such as the Liquidating Agreement, the Debtor's attorney memorandum, and the Trust Administrator's Memorandum, which were never presented to the court in order to persuade it to accept a particular position. Notwithstanding, the court finds that Redondo's position regarding the subcontractor claims pertaining to the record of the case in adversary proceeding 03-00194 are inconsistent with the arguments it brings forth in this contested matter."
The court analyzed the allegations of the Debtor during the adversary proceeding filed in December 23, 2003 (Adv. Proc. 03-00194); the Debtor's post-trial memorandum filed on November 9, 2007; and how the Decision and Order issued by the court on August 31, 2009, dealt with the subcontractor claims as alleged by the Debtor. Furthermore, it described how the court, in February 10, 2010, entered a Decision and Order related to the Defendant's challenge to the Debtor's assertion of the subcontractor claims. The matter, as described thoroughly in the court's decision, was appealed to the district court. The district court affirmed. The issue whether Redondo had standing to assert the subcontractor claim was further appealed to the First Circuit, and the district court was affirmed. Furthermore, on June 12, 2012, the Debtor filed a Motion for an Order Directing Withdrawal of Funds which included the claims for Lord and Remoldeco. The court analyzed the Memorandum prepared by the Litigation Trust Administrator, which was approved by all four members of the RCC Litigation Trust Board, and which prompted the issuance of Lord's payment for $1,395,381.00. The court concluded that, "[a]fter conducting a thorough analysis of Redondo's position regarding the subcontractor pass-through claims of Lord and Remoldeco, which it initially brought forth in its complaint and then further explained in its post-trial memorandum and resulted in one of the legal issues which was discussed in three (3) Opinions and Orders, this court finds that the doctrine of judicial estoppel applies to the Debtor in the instant case regarding the validity and the amounts distributed to the subcontractor pass-through claim."
When the court stated that the parties did not present certain documents for the court to assume a certain position, the statement was made in the context of evaluating the trajectory of the Debtor's position since the filing of the adversary proceeding in which Redondo included Lord's subcontractor pass-through claim. The court was not placed in a position to evaluate or consider the documents included in this contested matter. The court explained: "Redondo collected monies from the complaint against PRHTA for the PR-2 Mayaguez project, which included the principal of the subcontractor claims (Lord and Remoldeco). The Debtor represented to the courts that the claims of Lord and Remoldeco were pass-through claims and that Redondo had legal standing to assert the same against the PRHTA. The Debtor all throughout this proceeding has failed to clarify to the courts and to the PRHTA, which was the entity that eventually ended up paying these monetary damages, that Lord and Remoldeco would receive 15% of the total recovery of the project claim in conformity with the Liquidating Agreement (notwithstanding its claim), which simply meant that the Debtor would profit from the subcontractor claims since the filing of the complaint, meaning that the pass-through claims, probably factored in the contractor's mark-up."
The doctrine of judicial estoppel is intended to protect the judicial system, rather than the litigants.
In its Opinion and Order, the court thoroughly described why the doctrine of judicial estoppel was applied to the Debtor. This court relied on the Debtor's position before the court as to being the party entitled to represent the subcontractors and its claims, and considering the claims to be pass-through and not a profit to the Debtor. Additionally, the court explained the inconsistencies in the different factors the Debtor weighted-in when "determining" the amount of the alleged overpayment. Hence, the court concluded the Debtor was estopped to make such allegation. Furthermore, the court determined that the Debtor did not satisfy its burden of proof in proving that an error was made in the payment of the principal amount of Lord's subcontractor claim. Thus, the determination of the court is not a validation or invalidation of the footnote at the Supplement of the Plan, as the Debtor intends to construe the Opinion and Order.
The court further concluded that Lord is entitled to the interest award for its pass-through claim. The court stated that ". . . the parties have not placed the court in a position to be able to determine the specific amount interest award component should be. In the case of Lord, the Debtor has changed positions regarding both the principal amounts of the pass-through claim and the interest component that corresponds to Lord for its subcontractor claim." Therefore, the court ordered the parties to compute "how the interest component must be distributed "[a]s per the agreement of August 15, 1994, as amended, with Continental Lord, Inc. ("CLI"), CLI is entitled to a 15% pass through from the recovery by Debtor, less proportionate expenses," pursuant to the principles of contractual interpretation premised upon articles 1233-1241 of the PR Civil Code, 31 L.P.R.A. §§3141
Furthermore, the court extensively described and discussed the relevant facts in relation to the matters upon the court's consideration and concluded that the Debtor was estopped to claim the overpayment and had fallen short on proving a payment error. Therefore, the court concludes that the requests for additional facts and/or amended facts is unwarranted.
The court finds that the Motion for Reconsideration and/or Determination of Additional Facts does not meet the Fed. R. Civ. P. 59(e) and 52(b) standards, as it rehashes the arguments alleged by the Debtor and adjudicated by the Court in its Opinion and Order (Docket No. 2652).
In view of the foregoing, the Motion for Reconsideration filed by Redondo Construction Corporation is hereby denied.
SO ORDERED.