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Ocwen Loan Servicing, LLC v. Randolph

United States District Court, W.D. Pennsylvania

May 15, 2018

Ocwen Loan Servicing, LLC as servicer for Deutsche Bank National Trust Company, as Trustee for Argent Securities, Inc., Asset-Backed-Pass-Through Certificates, Series 2006-M1, Appellant,
v.
Denae Marie Randolph and Ronda J. Winnecour, Standing Trustee, Appellees. Ocwen Loan Servicing, LLC as servicer for Deutsche Bank National Trust Company, as Trustee for Argent Securities, Inc., Asset-Backed-Pass-Through Certificates, Series 2006-M1, Appellant, Clyde W. Ransom, Betty Jean Ransom, and Ronda J. Winnecour, Standing Trustee, Appellees.

          MEMORANDUM OPINION

          JOY FLOWERS CONTI, CHIEF UNITED STATES DISTRICT JUDGE

         I. Background

         This matter is before the court upon a “Motion to Extend Time to Move for Rehearing under Federal Rule of Bankruptcy Procedure 8022, and Motion for Reconsideration and Reargument” filed by Appellant Ocwen Loan Servicing, LLC (“Ocwen”). Ocwen seeks reconsideration of a Memorandum Opinion and Order issued by this court on March 2, 2018, denying Ocwen's appeal from two underlying bankruptcy cases: In re Denae Marie Randolph, No. 15-10895 (Bankr. W.D. Pa. 2015); and In re Clyde W. Ransom, et al., 15-10866 (Bankr. W.D. Pa. 2015).

         By way of background, Ocwen, a mortgage servicing company, filed Notices of Post-Petition Mortgage Fees, Expenses, and Charges (“PPFNs”) in each of the underlying bankruptcy cases on April 4, 2016, and April 11, 2016. The bankruptcy court observed that Ocwen had improperly charged a $400 legal fee for “plan review” in both cases. Although Ocwen agreed to remove the improper charges from the loans, the bankruptcy court ordered Ocwen to produce the complete loan histories to the Chapter 13 Trustee for review. That order was entered onto the docket of both cases on July 26, 2017.

         Shortly thereafter, Ronda J. Winnecour, the trustee in both cases (the “Trustee”, and collectively with the debtors in each case, the “Appellees”), reported to the bankruptcy court that Ocwen had only provided partial loan histories, rather than the complete loan histories required by the court's orders. In an attempt to enforce its July 26, 2017 order, the bankruptcy court held a hearing on August 31, 2017, and issued supplemental orders on August 15, 2017, September 1, 2017, and December 21, 2017. The last of these orders directed Ocwen and its counsel to appear at an additional hearing to “show cause for and justify their failure to comply” with the court's previous orders. Rather than comply, Ocwen filed a Notice of Appeal in each case on January 4, 2018.

         In a Memorandum Opinion and Order dated March 2, 2018, this court rejected each of Ocwen's appeals. The court held that Ocwen was not entitled to an appeal as of right pursuant to 28 U.S.C. § 158(a)(1) because the bankruptcy court's December 21, 2017 order did not satisfy the requirements for finality under § 158(a)(1). The court also declined to exercise its discretion to grant leave of appeal under 28 U.S.C. § 158(a)(3) because Ocwen had failed to identify a controlling issue of law, an appeal would not materially advance the ultimate termination of the litigation, and exceptional circumstances warranting the need for immediate review did not exist.

         On March 29, 2018, Ocwen filed the instant motions seeking an extension of time to move for rehearing and reconsideration of the March 2, 2018 order. Appellees have responded to each motion. This matter is now ripe for review.

         II. Standard

         Federal Rule of Bankruptcy Procedure 8022 states that, “[u]nless the time is shortened or extended by order or local rule, any motion for rehearing by the district court or BAP must be filed within 14 days of entry of judgment on appeal.” Fed.R.Bankr.P. 8022. Once this deadline has passed, a motion to extend the time for rehearing may only be granted if the “failure to act was the result of excusable neglect.” Fed.R.Bankr.P. 9006(b)(1).

         A motion for rehearing under Bankrupty Rule 8022 “functions, essentially, like a traditional motion for reconsideration.” Lau v. Bank of America (In re Lau), 684 Fed.Appx. 235, 239 (3d Cir. 2017). The purpose of such a motion is “to correct manifest errors of law or fact or to present newly discovered evidence.” Max's Seafood Café v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999). A motion for reconsideration must therefore rely on one of three grounds: (1) an intervening change in the law; (2) the availability of new evidence; or (3) the need to correct clear error of law or prevent manifest injustice. N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995). A motion for reconsideration is not properly grounded in a request for a district court to rethink a decision it has already rightly or wrongly made. Williams v. Pittsburgh, 32 F.Supp.2d 236, 238 (W.D. Pa. 1998). As such, litigants are cautioned to “ʻevaluate whether what may seem to be a clear error of law is in fact simply a point of disagreement between the Court and the litigant.'” Waye v. First Citizen's Nat'l Bank, 846 F.Supp. 310, 314 n.3 (M.D. Pa. 1994) (quoting Atkins v. Marathon LeTourneau Co., 130 F.R.D. 625, 626 (S.D.Miss. 1990).

         III. Discussion

         A. Excusable Neglect

         The court entered final judgment in each of the pertinent bankruptcy appeals on March 2, 2018. Pursuant to Rule 8022 of the Federal Rules of Bankruptcy Procedure, Ocwen had until March 16, 2018 to file a motion for rehearing or a request to extend the time for rehearing. The instant motion was not filed until March 29, 2018, approximately two weeks beyond that deadline. Consequently, Ocwen must demonstrate that its failure to seek rehearing in a timely manner was the result of “excusable neglect” before this court may grant Ocwen's motion. Fed.R.Bankr.P. 9006(b)(1).

         “To determine excusable neglect, the court must consider four factors: ‘(1) the danger of prejudice to the non-movant; (2) the length of the delay and the impact on judicial proceedings; (3) the reason for the delay, including whether it was within the reasonable control of the movant; and (4) whether the movant acted in good faith.'” Martinez v. City of Reading Prop. Maint. Div., No. 16-1290, 2018 WL 1290087, at *7 (E.D. Pa. Mar. 13, 2018). The determination is “an equitable one, taking account of all relevant circumstances surrounding the party's omission.” Ragguette v. Premier Wines & Spirits,691 F.3d 315, 324 (3d Cir. 2012). “Although inadvertence, ignorance of the rules, or mistakes construing the rules do not usually constitute ‘excusable' neglect, it is clear that ‘excusable neglect' . . . is a somewhat ‘elastic concept, ' and is not limited strictly to omissions caused by circumstances beyond ...


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