Free Motion for Reconsideration - District Court of Arizona - Arizona

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Michael Simes (Arizona Bar No. 016021) MICHAEL SIMES, LLC 903 South Rural Road Suite 101--323 Tempe, Arizona 85281 Telephone: 480-699-3636 Facsimile: 480-659-2943 Email: [email protected] Attorney for Solinvest Group, Ltd.

IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA

) ) In re: ) ) TECHNOLOGY SYSTEMS ) INTERNATIONAL, INC. , a Nevada ) Corporation; ) ) Debtor. ______________________________________ ) ) SOLINVEST GROUP, LTD., a British Virgin ) ) Islands entity; ) ) Plaintiff, ) ) v. ) ) TECHNOLOGY SYSTEMS ) INTERNATIONAL, INC., a Nevada ) Corporation; TSI ACQUISITION ) CORPORATION, formerly known as ) TECHNOLOGY SYSTEMS ) INTERNATIONAL, INC., an Arizona ) Corporation; ALANCO TECHNOLOGIES, ) INC., an Arizona Corporation; ) GREG OESTER and LYNDA OESTER, Case 2:02-cv-02641-ROS
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United States District Court For the District of Arizona Case No. CIV02--2641 PHX ROS United States Bankruptcy Court For the District of Arizona Case No. 2--03--BK--21187--EWH United States Bankruptcy Court For the District of Arizona Case No. 2--04--AP--00019--EWH United States Bankruptcy Court Fort the District of Arizona Case No. 2--05--BK--07799--EWH

MOTION FOR RECONSIDERATION

(Relates to Docket # 62) (Oral Arguments Requested) Filed 09/19/2005 Page 1 of 6

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) ) ) ) ) ) Defendants. ) ) ______________________________________ ) ) ) ) GREG OESTER and LYNDA OESTER, ) husband and wife; ) ) Third-Party Plaintiffs, ) ) v. ) ) EVERT EGGINK, ) ) Third-Party Defendant. ______________________________________ ) husband and wife; JOHN DOE I-X; JANE DOE I-X; ABC PARTNERSHIP I-X; and XYZ CORPORATION I-X;

Pursuant to Rule 59(e) of the Federal Rules of Civil Procedure ("FRCP"), Plaintiff
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Solinvest Group, Ltd. ("Solinvest"), hereby respectfully moves this Court to reconsider its Order, dated September 9, 2005 ("Fee Order")(Docket # 62). In the Fee Order this Court denied the Motion for the Award of Attorneys' Fees and Costs, filed January 12, 2005 ("Motion for Fees")(Docket # 45). The Motion for Fees was supported by the Comprehensive Supplement to the Motion for the Award of Attorneys' Fees and Costs, filed September 7, 2005 ("Comprehensive Supplement")(Docket # 59).

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This Court denied the Motion for Fees because it held that it was not timely filed. See Fee Order, at 2:3. More specifically, this Court held that the Motion for Fees was not timely filed because it was not filed within 180 days of October 6, 2003. See Fee Order, at 2:2. This Court held that the 180 day time-period commenced to run on October 6, 2003, because on this date all the

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claims of Solinvest, except for the award of attorneys' fees and costs against Defendant Technology Systems International, Inc., a Nevada corporation ("TSI"), were resolved. See Judgment by Default Against Technology Systems International, Inc., filed May 29, 2003 ("Judgment")(Docket # 12); Order of Dismissal Without Prejudice, filed October 6, 2003 ("Order of Dismissal")(Docket # 29). This Court then established the 180 day time period by analyzing the interrelationship of FRCP Rule 54(d)(2)(B), FRCP Rule 58(b)(2)(B), and the Judgment.1 The Motion for Fees was timely filed. More specifically, the Motion for Fees was

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filed one hundred sixteen (116)2 days after October 6, 2003. This analysis starts with the benchmark of the entry of the Order of Dismissal by this Court on October 6, 2003. Then ninety-three (93) days later, or on January 7, 2004, this Court stayed this matter. See Comprehensive Supplement, at ¶ 10. This matter remained stayed until this Court lifted its stay on December 20, 2004. See

Comprehensive Supplement, at ¶ 18. Then twenty-three (23) days later, or on January 12, 2005, Solinvest filed its Motion for Fees. See Comprehensive Supplement, at ¶ 19.

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The Motion for Fees was also timely filed under an alternative analysis. Under this alternative analysis, the Motion for Fees was filed eighty-nine (89)3 days after October 6, 2003.

This Court did not analyze the filing of the Motion for Fees and the Comprehensive Supplement under FRCP Rule 54(d)(2)(E). Because Solinvest has sought the award of attorneys' fees and costs under the alternative theory of sanctions against TSI, the time period of FRCP Rule 54(d)(2)(B) is not applicable. See Comprehensive Supplement, at ¶ 61.
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116 = 93 + 23 89 = 58 + 31 Case 2:02-cv-02641-ROS
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Starting again with the benchmark of the Order of Dismissal, fifty-eight (58) days later, or on December 3, 2003, TSI filed a Voluntary Petition for bankruptcy protection in its First Bankruptcy.4 See Motion for Fees, at ¶ 15; Comprehensive Supplement, at ¶ 8. As a result of this filing, the automatic stay of 11 U.S.C. § 362(a)(1) stayed this matter pending resolution of the First Bankruptcy.

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The automatic stay of the First Bankruptcy remained in effect until the Plan of Reorganization for TSI was confirmed on December 12, 2004. See Comprehensive Supplement, at ¶ 15. Then thirtyone (31) days later Solinvest filed its Motion for Fees. If final judgment was entered pursuant to FRCP Rule 58(b)(2)(B) while the automatic stay of 11 U.S.C. § 362(a)(1) in the First Bankruptcy was in effect, then the final judgment would be void. See Schwartz v. U.S. (In re Schwartz), 954 F.2d 569, 571 (9th Cir. 1992). In the Fee Order, this Court also addressed the issue of the award of attorneys' fees

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and costs to Solinvest for "both work done in this action and in proceedings in Bankruptcy Court." This Court then held that it "expresses no opinion on whether Solinvest may move for attorneys' fees in the Bankruptcy Court." See Fee Order, at 2:7--2:9. At the present time, the issue of the award of attorneys' fees and costs is exclusively before this Court. More specifically, the Bankruptcy Court has held that this Court "shall determine which court shall hear and determine which portions of the attorney's fee application filed by

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Solinvest Group, Ltd." See Order Regarding Attorney's Fee Claim of Solinvest Group, Ltd., filed April 14, 2005 (First Bankruptcy Docket # 159). Finally, this Court has the authority to award all the attorneys' fees and costs sought by Solinvest in the Motion for Fees and the Comprehensive Supplement pursuant to the Judgment, FRCP Rule 11, and 28 U.S.C. § 1927. If this Court is considering splitting the issue of the award of

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For the convenience of the Court, Solinvest hereby incorporates all the defined terms in the Comprehensive Supplement herein. Case 2:02-cv-02641-ROS
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attorneys' fees and costs to Solinvest between itself and the Bankruptcy Court, then Solinvest respectfully request that this Court grant it an opportunity to full brief this issue. Solinvest

respectfully request this because the splitting argument was first raised by the Old Board of TSI and Attorney Proper in its response in opposition to the Motion for Fees. See Reply In Support of Motion

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for the Award of Attorneys' Fees and Costs, filed January 9, 2005 (Docket # 49), at ¶ 7. The splitting argument should be rejected for numerous reasons including that the Old Board of TSI and Attorney Proper deliberately misrepresented the law to support its argument which is yet another basis for this Court to award Solinvest its attorneys' fees and costs. See Premier Commercial Corp. v. FMC Corp., 139 F.R.D. 670, 674 (N.D. Cal. 1991). In conclusion, Solinvest respectfully request that this Court reconsider its Fee Order and grant Solinvest all the attorneys' fees and costs sought by it in the Motion for Fees and

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Comprehensive Supplement. RESPECTFULLY SUBMITTED this 19th day of September, 2005.

MICHAEL SIMES, LLC
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/s/ Michael Simes Michael Simes Attorney for Solinvest Group, Ltd.

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ORIGINAL ELECTRONICALLY FILED this 19th day of September 2005 with: Clerk of the Court United States District Court District of Arizona Sandra Day O'Connor Court House 401 West Washington Street Phoenix, Arizona 85003 COPY mailed this 19th day of September 2005 to: Jeffrey M. Proper Jeffery M. Proper, PLLC 3550 North Central Avenue; Suite 1200 Phoenix, Arizona 85012 Telephone: 602-235-9555 Facsimile: 602-235-9223 Jill H. Ford Chapter 7 Bankruptcy Trustee P.O. Box 5845 Carefree, Arizona 85377 Telephone: 480-575-8250 COURTESY COPY mailed this 19th day of September 2005 to: Clerk of the Court United States District Court District of Arizona Sandra Day O'Connor Court House 401 West Washington Street Phoenix, Arizona 85003 The Honorable Roslyn O. Silver United States District Court District of Arizona Sandra Day O'Connor Court House 401 West Washington Street Phoenix, Arizona 85003 Telephone: 602-322-7520 Facsimile: 602-322-7529

COURTESY COPY mailed this 19th day of September 2005 to: The Honorable Eileen W. Hollowell United State Bankruptcy Court District of Arizona 110 South Church Avenue Tucson, Arizona 85701 Telephone: 520-620-7500 x 262 Facsimile: 520-620-7467

/s/ Michael Simes

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