Sleater (08-02077) 20090430 (55) - Memorandum In Opposition

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Gary E. Jubber A1758 Douglas J. Payne A4113 Clint R. Hansen A12108 FABIAN & CLENDENIN, a Professional Corporation 215 South State Street, Suite 1200 Salt Lake City, Utah 84111-2323 Telephone: (801) 531-8900 Fax: (801) 596-2814 [email protected] [email protected] [email protected] Attorneys for Gary E. Jubber, Chapter 7 Trustee IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION In re: BEDROCK MARKETING, LLC, Debtor.

GARY E. JUBBER, Chapter 7 Bankruptcy Trustee of Bedrock Marketing, LLC and Enlightened Management, LLC, Plaintiff, v. WESTON WADE SLEATER, an individual, Defendant.

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Bankruptcy No. 08-20308 (Chapter 7)

Honorable William T. Thurman

MEMORANDUM IN OPPOSITION TO DEFENDANT’S MOTION TO ALTER AND AMEND

Adversary No. 08-02077

Plaintiff Gary E. Jubber, Chapter 7 Trustee (“Plaintiff”), hereby submits this Memorandum in Opposition to Defendant West Wade Sleater’s (“Sleater”) Motion to Alter and Amend (“Motion to Amend”):

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I. Rule 59(e) is an Extraordinary Remedy to be Used Only to Address Manifest Errors of Law or Newly Discovered Evidence. “[A] Rule 59(e) motion is normally granted only to correct manifest errors of law or to present newly discovered evidence.” Jennings v. Rivers, 394 F.3d 850, 854 (10th Cir.2005); see also Smith v. U.S., __ F.3d __, 2009 WL 820177, at *4, fn. 8 (10th Cir. 2009). Motions under Rule 59(e) are an extraordinary remedy to be used sparingly and “will not be granted absent highly unusual circumstances.” MacArthur v. San Juan County, D.Utah 2005, 405 F.Supp.2d 1302, 1305; see also Gagliano v. Reliance Standard Life Ins. Co., 547 F.3d 230, (4th Cir. 2008) (Rule 59(e) motion “is a remedy to be used sparingly”). Such motions are not intended to provide litigants with an opportunity for a “second bite at the apple” and “are not vehicles for relitigating old issues.” MacArthur, 405 F.Supp.2d at 1305-06. As the Utah District Court has explained: the scope of rule 59(e) is quite limited: A party should not use a [Rule 59(e) motion] to reargue the motion or present evidence that should have been raised before. Moreover, a party seeking reconsideration must show more than a disagreement with the Court's decision, and recapitulation of the cases and arguments considered by the court before rendering its original decision fails to carry the moving party's burden. When a motion for reconsideration raises only a party's disagreement with a decision of the Court, that dispute should be dealt with in the normal appellate process, not on a motion for reargument under Rule 59(e). Whitmer v. World Financial Network Nat. Bank, 2006 WL 288326, *1 (D.Utah 2006) (slip copy) (internal cites omitted); see also Resolution Trust Corp. v. Greif, 906 F.Supp. 1446, 1456-57 (D.Kan.1995) (holding that a party cannot invoke Rule 59(e) to “rehash arguments previously considered and rejected by the court.”). Sleater has not presented any newly-discovered evidence. The Motion to Amend appears to be suggesting that this Court made a manifest error of law. In fact, as is shown below, this

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Court correctly applied the applicable law to the undisputed facts in granting Plaintiff’s motion for summary judgment. The Motion to Amend is an improper attempt to rehash an argument that has already been considered and rejected by the Court. II. This Court Considered and Rejected Sleater’s Lack of Consideration Argument. Sleater’s Motion to Amend asks the court to revisit his argument that the notes are unenforceable because they lack consideration or “value.”1 The Court already heard and rejected this argument.2 In fact, the Court not only rejected Sleater’s general argument that the notes lacked consideration, but also considered, and rejected, the more specific argument that the notes lacked “value” because the debt was an antecedent debt and that general contract law, not Utah’s Commercial Code (Utah Code Ann. § 70A-1a-101, et seq.) should apply. See Memorandum Decision, entered 4/27/09, Docket No. 53 (“Decision”), at 13 & 19-21. The Court analyzed the notes at issue and correctly found that they are “unconditional, promises to pay a fixed amount, payable to the bearer at a definite time,” being due within three years of execution, and therefore satisfy all the requirements to be considered “negotiable instruments” under Utah law. Id. at 1415. Accordingly, the Court concluded that Chapter 3 of the UCC applies. Id. at 15. The Court then addressed the Defendant’s lack of consideration argument by finding that Utah Code Ann. § 70A-3-303(1)(c) validates past consideration as “value” to support an instrument. Decision at 19. The Court further noted that “There is no dispute that all of the

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The term “value”, as used in the UCC, is synonymous with the term “consideration.” See Utah Code Ann. §70A-3303(2) (“If an instrument is issued for value as stated in subsection (1), the instrument is also issued for consideration.”). 2 See, Mem. in Opp. to Summ. Judgment, at 5-6; Reply Mem. in Supp. of Mot. for Summ. Judgment, at 4-6; Mem. in Opp. to Mot. to Strike, at 5-6; Reply Mem. in Supp. of Mot. to Strike, at 3-4; and Memorandum Decision entered 4/27/09, Docket No. 53, at 19-21.

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money was advanced to Atlas Capital and not the defendant personally.” Id. at 20. The Court could properly make these findings based upon the facts set forth in the Affidavit of John H. Curtis3, which Sleater did not contest. Moreover, Sleater has affirmatively admitted several key facts establishing that value was in fact given. For example, in his Memorandum in Support of Motion for Summary Judgment (“S.J. Memo”),4 Plaintiff provided a Statement of Undisputed Facts as required by Local Rule 56-1(b), and Sleater responded by filing a Memorandum in Opposition (“S.J. Opp.”)5 in which he admitted that value was given to Atlas Capital, LLC (“Atlas”). The following chart shows certain pertinent facts asserted by Plaintiff and Sleater’s response: Plaintiff’s Statement of Undisputed Fact “Beginning in June 2006 Plaintiff advanced funds in excess of $4 million to Defendant or his affiliates.” S.J. Memo at 3, ¶ 1.

Sleater’s Response “Defendant does not contest that beginning in June, 2006 plaintiff advanced funds in excess of $4 million, but disputes the balance of the allegations and disputes that any funds were advanced to Sleater or his affiliate: A) All funds were advanced only to Atlas Capital, LLC . . .” S.J. Opp. at 1-2. “Admit these allegations.” S.J. Opp. at 2.

“Payments were made on the Bedrock Note after March 15, 2007 in an amount totaling $1,764,862.70.” S.J. Memo at 4, ¶ 4. “The balance owed on the Bedrock Note, as of November 30, 2008, was $7,697,079.71.” S.J. Memo at 4, ¶ 5. “From January 2007 to March 15, 2007, Enlightened advanced funds to Defendant totaling $470,000. As of March 15, 2007 the amount owed by Sleater to Enlightened totaled $470,000.” S.J. Memo at 4, ¶ 6. “The balance owed on the Enlightened Note, as of November 30, 2008, is $1,724,276.96.” S.J. Memo at 4, ¶ 9.

“Admit that there was a balance owed as specified, but state that the balance was owed only by Atlas Capital, LLC . . .” S.J. Opp. at 2. “Admit that plaintiffs advanced funds in the amount specified, but only to Atlas Capital, LLC, and not to Sleater and that Sleater has no legal obligation for the funds advanced.” S.J. Opp. at 3. “Admit that there was a balance owed as specified, but state that the balance was owed only by Atlas Capital, LLC, and that nothing was owed by Sleater.” S.J. Opp. at 3.

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Filed 12/1/08, Docket No. 22. “Memorandum in Support of Motion for Summary Judgment,” Docket No. 23, filed 12/1/08. 5 “Memorandum in Opposition to Summary Judgment,” Docket No. 24, filed 12/29/08. 4

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In addition, Sleater has elsewhere in his pleadings admitted the following facts relating to value:

• Sleater is the sole member and manager of Atlas. See Unsworn Declaration of Def. in Supp. of Opp. to Mot. for Summ. J. (“Declaration”),6 at ¶ 2.

• “Beginning in June, 2006 Plaintiff advanced funds to Atlas Capital, LLC. As of March 15, 2007 Atlas Capital, LLC owed Bedrock $3,910,388.71.” Id. at ¶ 4.

• “Beginning in June, 2006, Enlightened advanced funds to Atlas Capital, LLC in the amount of $470,000.00.” Id. at ¶ 5.

•

“All funds advanced by Bedrock and Enlightened were deposited into the account of Atlas Capital, LLC.” Id. at ¶ 12.

• “[M]oney had been loaned to Atlas Capital, LLC, pursuant to an oral agreement between Sleater and Rex Wheeler.” Mem. in Opp. to Mot. to Strike at 8, ¶ 2.

•

“Bedrock and Enlightened desired to and began advancing funds to Atlas Capital, LLC, in June, 2006. From June, 2006, until March, 2007, the agreement between the parties was oral. In March, 2007, counsel for Bedrock and Enlightened sent two notes to Mr. Sleater for signature. [ . . . ] The two notes reflected the terms of repayment originally orally agreed to . . .” S.J. Opp. at 5.

It is clear from the foregoing that the Court’s findings regarding “value” were amply supported by the record, including admissions in the unstricken portions of Sleater’s own 6

Sleater actually filed two declarations which were identical in substance: the “Unsworn Declaration of Weston Wade Sleater In Support of Opposition to Motion for Summary Judgment” (Docket No. 26, filed 12/31/08) and the “Declaration Under Oath of Weston Wade Sleater In Support of Opposition to Motion for Summary Judgment” (Docket No. 24-2, filed 12/28/08). Plaintiff moved to strike both declarations. The Court struck several paragraphs; however, paragraphs 2, 4, 5 and 12 cited in this memorandum were not stricken by the Court. See Decision at 12.

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Declaration. Sleater’s contention that “Plaintiff presented no evidence whatsoever that ‘value’ was presented” (Motion to Amend at 2) is simply not correct. It is also clear from the foregoing that the parties intended that the notes memorialize a prior oral agreement and serve as security for that antecedent debt. The Court has also correctly found that the money given to Atlas was legally sufficient consideration to support Sleater’s personal promise to pay. As set forth in the facts above, it is not disputed that the money given to Atlas was bargained for and given in exchange for a promise. S.J. Opp. at 5; see also Decision at 20. And since Utah law does not require that consideration flow directly to the promisor, the money given to Atlas can constitute valid consideration as to Sleater personally. Decision at 20. Additionally, because Sleater executed the guarantees contemporaneously with the execution of the notes, the consideration given to Atlas is sufficient to support Sleater’s personal guarantees as well. Id. III. Conclusion Sleater wants a second bite at the apple; however, as noted above, Rule 59(e) motions cannot be used for that purpose. MacArthur, 405 F.Supp.2d at 1305-06. Sleater is simply disagreeing with the Court’s Decision and improperly using his Motion to Amend as a means to recapitulate his prior arguments. Whitmer, 2006 WL 288326, *1. Sleater has shown neither a change in the applicable law that would affect the outcome of the case nor a “manifest error of law.” Jennings, 394 F.3d at 854. In fact, the Court’s Decision was entirely correct and properly applied the applicable law to the undisputed facts of this case. For the foregoing reasons, the Court should deny Sleater’s Motion to Amend.

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DATED this 30th day of April, 2009.

/s/ Gary E. Jubber Gary E. Jubber Douglas J. Payne Clint R. Hansen FABIAN & CLENDENIN a Professional Corporation Attorneys for Gary E. Jubber, Chapter 7 Trustee

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CERTIFICATE OF SERVICE I hereby certify that on this 30th day of April, 2009, I caused a true and correct copy of the foregoing MEMORANDUM IN OPPOSITION TO DEFENDANT’S MOTION TO ALTER AND AMEND, to be mailed, first-class postage prepaid, to:

Ronald S. George 218 W. Paxton Ave. Salt Lake City, UT 84101

/s/ Gary E. Jubber

ND: 4845-5566-4643, v. 3

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