No. CV 15-1222 PA Bankruptcy Case No. 2:12-bk-12597-WB Adversary Proceeding No. 2:14-ap-1046-WB
OPINION ON APPEAL FROM BANKRUPTCY COURT
Before the Court is an appeal filed by Philip E. Koebel ("Koebel"). In the course of his Chapter 13 bankruptcy, Koebel initiated an adversary proceeding against Federal Home Loan Mortgage Corporation ("Freddie Mac"), Ocwen Loan Servicing LLC ("Ocwen"), and Nationstar Mortgage LLC ("Nationstar") (collectively, "Appellees"). Koebel now challenges the decision by the United States Bankruptcy Court for the Central District of California to dismiss, without leave to amend, the Complaint and First Amended Complaint in the adversary proceeding, as well as the decision to deny his Motion for Reconsideration of those rulings. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court finds that this matter is appropriate for decision without oral argument.
On June 23, 2008, Koebel executed and delivered a promissory note for $360,000 to Taylor, Bean & Whitaker Mortgage Corporation ("TBW"). (Excerpt of Records ("ER") 8:758-60.) As security for the note, Koebel also executed a deed of trust against his property at 255 Robinson Road, Pasadena, California (the "Property"), naming Mortgage Electronic Registration Systems, Inc. ("MERS") as the beneficiary solely as a nominee for TBW and its successors and assigns. (ER 4:281-94.) On October 27, 2011, the deed of trust was assigned to Ocwen. (ER 4:299-301.) Subsequently, on May 16, 2013, the deed of trust was assigned to Nationstar. (ER 4:374-75.)
In early 2009, Koebel applied for a loan modification from TBW. (Appellant's Opening Brief ("AOB"), 20.) When no modification agreement was reached, Koebel defaulted on his loan and a notice of default was recorded on June 1, 2009. (ER 4:296.) Koebel continued to negotiate a loan modification with Ocwen, the servicer of the loan at the time. (AOB, 20.) Koebel believed that after a series of trial payments he had entered into a permanent loan modification beginning December 1, 2010. (Id.) However, on May 9, 2011, a foreclosure sale of the Property took place. (ER 4:313.)
On May 23, 2011, Koebel filed a complaint in Los Angeles Superior Court Case No. GC047411 (the "State Court Action"), asserting nine causes of action for: (1) Declaratory Relief; (2) Wrongful Foreclosure; (3) Fraud; (4) Unjust Enrichment; (5) Violation of California Business and Professions Code Section 17200 et seq.; (6) Recession; (7) Quiet Title; (8) Breach of the Implied Covenant of Good Faith and Fair Dealing; and (9) Negligence. (ER 4:310.) The complaint sought to unwind the foreclosure sale that occurred on May 9, 2011. (ER 4:313.) Koebel contended that the foreclosure sale should not have occurred because he had successfully entered into a loan modification, and because Ocwen had instructed the trustee to cancel the foreclosure sale following the successful modification. (Id.) In response, Ocwen demurrered to Koebel's complaint. (Appellee's Excerpt of Records ("AER") 1:2-23.) The demurrer was sustained with leave to amend, but Koebel failed to file an amended complaint within the allotted time. (AER 2:24-25.) As a result, the State Court Action was dismissed with prejudice. (Id.)
After the State Court Action was dismissed with prejudice, Koebel filed an action in the United States District Court for the Central District of California, under the name Koebel v. MTC Financial Inc., et al., No. 8:11-cv-01978-AG (ANx). In that proceeding, Koebel sought a Temporary Restraining Order ("TRO") to prevent a foreclosure sale of the Property. Although the TRO was granted, a subsequent hearing revealed that Koebel had lied under oath in both his verified complaint and in a declaration filed in support of the TRO. Quickly thereafter, Koebel filed a voluntary dismissal of the case. Despite Koebel's voluntary dismissal, the District Court issued terminating sanctions and referred the matter to the United States Attorney's Office for prosecution.
The Court takes judicial notice of the June 14, 2012 Minute Order Denying Motion for Preliminary Injunction, Docket No. 49, filed in Koebel v. MTC Financial Inc., et al, No. 8:11-cv-01978-AG (ANx). See Fed. R. Evid. 201; Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006).
The Bankruptcy Court did not afford any preclusive effect to the terminating sanctions imposed in the District Court action, and on appeal Appellees have not relied on it for purposes of res judicata. (See ER 6:436; Appellee's Brief, 3 n. 4.)
On January 25, 2012, Koebel filed the Chapter 13 bankruptcy proceeding which serves as the basis for this appeal. (ER 9:766.) Before a Chapter 13 Plan was confirmed, Ocwen filed a proof of claim ("Claim 8-1") asserting a secured interest in the Property. (ER 8:737.) Koebel filed a motion for disallowance of Claim 8-1. (AER 3:26-42.) On June 26, 2013, as part of the discovery related to Claim 8-1, Appellees produced Koebel's uniform residential loan application, which Koebel averred contained a forgery of his signature and falsified occupation information (the "Forged Application"). (AOB, 21.) On April 25, 2014, the Bankruptcy Court denied Koebel's motion for disallowance on the basis that the State Court Action acted as res judicata for Claim 8-1. (ER 5:406.)
Prior to the Bankruptcy Court's decision on Claim 8-1, Koebel initiated an adversary proceeding which, on the basis of the Forged Application, asserted four claims styled as: (1) Disallow Mortgage Claim as Void Ab Initio Due to Fraud and/or Criminal Scheme; (2) Avoid Mortgage Claim as Actually Fraudulent Obligation; (3) Deem Mortgage Claim Unsecured and Disallow or Subordinate; and (4) Bifurcate Mortgage Claim. (ER 7:692.) As relief, Koebel sought a determination that the mortgage claim was void due to fraud, that any amount owed under the mortgage was unsecured or disallowed in its entirety, and to quiet title in the Property. (ER 7:706.) Appellees filed a motion to dismiss, which was granted by the Bankruptcy Court on April 23, 2014. (ER 6:419-21.) The Bankruptcy Court dismissed the first, second, and fourth causes of action with prejudice, but granted leave to amend as to the third cause of action. (Id.) Koebel subsequently filed a First Amended Complaint ("FAC"), against which Appellees filed a motion to dismiss. (ER 5:390-403.) The Bankruptcy Court granted the motion to dismiss, this time without leave to amend. (ER 3:202-03.) Koebel filed a motion for reconsideration of these rulings, which the Bankruptcy Court denied. (ER 1:80-99; ER 1:55-56.) Koebel now appeals the Bankruptcy Court's orders granting the motions to dismiss, denying leave to amend, and denying the motion for reconsideration.
This Court possesses appellate jurisdiction over a Bankruptcy Court's final orders dismissing a complaint without leave to amend, and denying a motion for reconsideration. 28 U.S.C. § 158(a); In re Belice, 461 B.R. 564, 571 (B.A.P. 9th Cir. 2011).
III. Standard of Review
The Bankruptcy Court's legal conclusions are reviewed de novo, while factual findings are reviewed for clear error. Greene v. Savage, 583 F.3d 614, 618 (9th Cir. 2009). "A court's factual determination is clearly erroneous if it is illogical, implausible, or without support in the record." In re Retz, 606 F.3d 1189, 1196 (9th Cir. 2010).
As such, this Court reviews an order dismissing a complaint under Federal Rule of Civil Procedure 12(b)(6) de novo. See In re JMC Telecom LLC, 416 B.R. 738, 741 (C.D. Cal. 2009). Decisions to deny leave to amend are reviewed under an abuse of discretion standard. Leadsinger, Inc. v. BMG Music Pub'g, 512 F.3d 522, 532 (9th Cir. 2008). The denial of a motion for reconsideration is also reviewed for an abuse of discretion. Sch. Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993). An abuse of discretion occurs when a court "misapprehend[s] the law with respect to the underlying issues in the litigation," or "rests its conclusions on clearly erroneous findings of fact." Chalk v. United States Dist. Court, 840 F.2d 701, 704 (9th Cir. 1988).
The Bankruptcy Court's decision may be affirmed on any ground finding support in the record. In re Frontier Properties, Inc., 979 F.2d 1358, 1364 (9th Cir. 1992).
Koebel contends that the Bankruptcy Court improperly dismissed the Complaint and First Amended Complaint in the adversary proceeding because the State Court Action did not act as res judicata for the asserted claims. However, as explained below, the Bankruptcy Court did not err because both the State Court Action and the Bankruptcy Court's ruling on Claim 8-1 precluded the claims asserted in the adversary proceeding. Additionally, the Bankruptcy Court correctly concluded that Koebel's claims were barred by the three year statute of limitations for claims sounding in fraud.
A. The State Court Action
In determining the preclusive effect of a state court judgment, federal courts follow the state's rules of preclusion. Kremer v. Chem. Constr. Corp., 456 U.S. 461, 481-82, 102 S. Ct. 1883, 1898, 72 L. Ed. 2d 262 (1982). A federal court "must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered." Migra v. Warren City Sch. Dist. Bd. of Ed., 465 U.S. 75, 81, 104 S. Ct. 892, 896, 79 L. Ed. 2d 56 (1984); White v. City of Pasadena, 671 F.3d 918, 926 (9th Cir. 2012). "The preclusive effect of a judgment is defined by claim preclusion and issue preclusion, which are collectively referred to as 'res judicata.'" Taylor v. Sturgell, 553 U.S. 880, 892, 128 S. Ct. 2161, 2171, 171 L. Ed. 2d 155 (2008).
Under California's claim preclusion doctrine, "'a valid, final judgment on the merits precludes parties or their privies from relitigating the same 'cause of action' in a subsequent suit.'" San Diego Police Officers' Ass'n v. San Diego City Emps. Ret. Sys., 568 F.3d 725, 734 (9th Cir. 2009) (quoting Le Parc Cmty. Ass'n v. Workers' Comp. Appeals Bd., 2 Cal. Rptr.3d 408, 415 (2003)). "Thus three requirements have to be met: (1) the second lawsuit must involve the same 'cause of action' as the first one, (2) there must have been a final judgment on the merits in the first lawsuit and (3) the party to be precluded must itself have been a party, or in privity with a party, to that first lawsuit." Id.
However, "the res judicata effect of a judgment of dismissal . . . after the sustaining of a demurrer is of limited scope." Wells v. Marina City Properties, Inc., 632 P.2d 217, 221 (Cal. 1981). The judgment is only "on the merits to the extent that it adjudicates that the facts alleged do not constitute a cause of action . . . . If, on the other hand, new or additional facts are alleged that cure the defects in the original pleading, it is settled that the former judgment is not a bar to the subsequent action whether or not plaintiff had an opportunity to amend his complaint." Id. (citing Keidatz v. Albany, 249 P.2d 264, 265 (Cal. 1952)).
1. Same Cause of Action
In California, "a final judgment precludes further proceedings if they are based on the same cause of action." Maldonado v. Harris, 370 F.3d 945, 952 (9th Cir. 2004); Mycogen Corp. v. Monsanto Co., 51 P.3d 297, 301-02 (Cal. 2002). California law defines a "cause of action" for purposes of the res judicata doctrine by analyzing the primary right at stake. Mycogen, 51 P.3d at 306-07. "That concept 'is indivisible: the violation of a single primary right gives rise to but a single cause of action.'" San Diego Police Officers' Ass'n v. San Diego City Emps. Ret. Sys., 568 F.3d 725, 734 (2009) (quoting Crowley v. Katleman, 881 P.2d 1083, 1090 (Cal. 1994)). That is, "if two actions involve the same injury to the plaintiff and the same wrong by the defendant then the same primary right is at stake even if in the second suit the plaintiff pleads different theories of recovery, seeks different forms of relief and/or adds new facts supporting recovery." Id. (quoting Eichman v. Fotomat Corp., 197 Cal. Rptr. 612, 614 (1983)). In determining which primary rights are implicated, "[w]hat is critical to the analysis 'is the harm suffered; that the same facts are involved in both suits is not conclusive.'" Id. (quoting Agarwal v. Johnson, 603 P.2d 58, 72 (Cal. 1979)).
In the State Court Action, Koebel's complaint contended that a successful loan modification prevented a foreclosure sale of the Property, and accordingly sought to quiet title and prevent a wrongful foreclosure. (See ER 4:313.) Thus, Koebel sought to protect the primary rights of freedom from wrongful foreclosure and to clear title in the Property. See People v. Superior Court of Los Angeles Cty., 234 Cal. App. 4th 1360, 1377, 184 Cal. Rptr. 3d 809, 821 (2015) (citing Beronio v. Ventura Cty. Lumber Co., 61 P. 958 (Cal. 1900)).
In the adversary proceeding, both the Complaint and the FAC sought to void or otherwise nullify Koebel's obligations under his mortgage for the Property, as well as a declaration that Koebel "holds quiet title to the subject real property." (ER 7:706, 5:402.) Although the adversary proceeding asserted new legal theories under which Koebel could void the mortgage and have clear title in the Property, it sought to protect the same primary rights from the same injury as in the State Court Action. Because California follows the primary rights approach, "[e]ven when multiple legal theories for recovery exist, one injury gives rise to only one claim for relief." Eichman, 759 F.2d at 1438 (citing Slater v. Blackwood, 543 P.2d 593, 594-95 (Cal. 1975)). Other than alternate legal theories, Koebel fails to identify any new injuries or primary rights which were part of the adversary proceeding but were not also part of the State Court Action.
Indeed, Koebel admits that his note-splitting theory of the case, which seeks to void the mortgage, is in fact an "alternate theory in the original Complaint and the First Amended Complaint." (AOB, 34.)
Although Koebel raises a plethora of colorful theories under which to avoid the obligations of his mortgage, his briefing largely fails to address the issue of res judicata until its fifty-seventh page. There, Koebel explains that he now "realizes that he would have been wiser to formally dismiss the irrelevant state court action instead of allowing it to be dismissed with prejudice, but only claims related to dual tracking were included in the state court complaint and thus only those dual tracking claims are precluded." (AOB, 58.) Therefore, Koebel concedes that the State Court Action serves, at least partially, as res judicata for his bankruptcy proceeding. His error, however, is in construing the scope of the preclusive effect as being limited to the dual tracking of the loan modification. The State Court Action precludes relitigation of any primary right implicated by the claims in the State Court Action, including the claims for quiet title and wrongful foreclosure. Accordingly, because the adversary proceeding and the State Court Action each alleged the same injuries to the same primary rights, they were based on the same "cause of action" for purposes of res judicata.
2. Final Judgment on the Merits
The State Court Action ended in a final judgment after a demurrer was sustained with leave to amend and Koebel proffered no amendment. "A judgment upon the facts pleaded and confessed by demurrer is no less effectual as a bar to the subsequent action than a judgment based upon a verdict." Morrison v. Willhoit, 145 P.2d 707, 711 (Cal. 1944). Therefore, the judgment in the State Court Action qualifies as a final judgment on the merits.
3. Same Party or Those in Privity
Privity exists when there is a "mutual or successive relationship to the same rights of property, or to such an identification in interest of one person with another as to represent the same legal rights." Clemmer v. Hartford Ins. Co., 587 P.2d 1098, 1102 (Cal. 1978). Ocwen is the only appellee which was a party to both the State Court Action and the bankruptcy proceeding. Therefore, for the preclusive effect of the State Court Action to extend to Nationstar and Freddie Mac, they must be found to be in privity with Ocwen. During the State Court Action, Ocwen was the servicer of Koebel's loan. (ER 4:311.) Nationstar is the successor servicer of Koebel's loan, and the assignee of Claim 8-1. (ER 7:696-97.) Freddie Mac is the successor-in-interest to the original lender, TBW. (Id.) These relationships are sufficient to find that Nationstar and Freddie Mac are in privity with Ocwen because they have a mutual or successive relationship to the same rights in the Property. See Zaragosa v. Craven, 202 P.2d 73, 75 (Cal. 1949) ("The term 'privity' denotes mutual or successive relationship to the same rights or property."); see also Caballero v. Doan, No. 13-CV-05756-BLF, 2014 WL 3950899, at *6 (N.D. Cal. Aug. 11, 2014) (holding that a loan servicer and the holder of the deed of trust are in privity for purposes of res judicata).
4. Koebel Has Not Identified Any New Facts Curing His Pleading Defects
Because the State Court Action acted as res judicata for the claims asserted in the adversary proceeding, Koebel's only recourse was to plead new or additional facts which would bring his bankruptcy proceeding outside of the State Court Action's preclusive effect. See Wells, 632 P.2d at 221. The only allegedly new facts pleaded by Koebel were that: (1) TBW committed fraud by altering information related to Koebel's credit worthiness in the Forged Application; (2) neither TBW nor MERS could have conveyed the deed of trust to Ocwen because the assignment would have occurred after TBW went bankrupt, and therefore Ocwen could not have validly assigned its interest to Nationstar; and (3) Nationstar's objection to the confirmation of the Chapter 13 Plan revealed that it, rather than Freddie Mac, held the note. (AOB, 36-37, 41-44.) However, none of these facts cure the deficiencies in the State Court Action.
The primary basis for the complaint in the adversary proceeding, and the fact most heavily relied on in Koebel's oppositions to Appellee's two motions to dismiss, was the Forged Application. (See ER 6:455-459.) Although the Forged Application is a new fact which was not part of the State Court Action, it is not a new fact which would have cured Koebel's pleading defects. Koebel has failed to show how the Forged Application harmed him, or how any fraud was perpetrated against him such that his obligations under the mortgage should be voided. Any false representations made by TBW regarding Koebel's credit-worthiness were made to, and subsequently only could have harmed, Freddie Mac, the purchaser of his loan. As such, Koebel failed to plead facts which stated a claim for fraud. See Small v. Fritz Companies, Inc., 65 P.3d 1255, 1258 (Cal. 2003). It follows that these allegations, which were defective in and of themselves, could not have cured the pleading defects in the State Court Action. Instead, the Forged Application and the associated claims to void the mortgage are simply another alternate legal theory asserted to avoid foreclosure of the Property. As such, Koebel failed to allege new facts which could satisfy the Wells standard, and the adversary proceeding continued to be barred under the doctrine of res judicata.
Specifically, Koebel contended that the "Forged Application transformed the character of the mortgage from a bad deal stupidly executed by the witless Plaintiff into a tool of illegality used in a criminal enterprise that could not, by law, be valid consideration for any contract or a legal purpose for the contract." (ER 6:456.) --------
Koebel's other "new facts," pleaded for the first time in his motion for reconsideration, were that Ocwen had not validly obtained its interest to the deed of trust and that Nationstar had claimed that it, rather than Freddie Mac, was the Note holder. (See ER 1:86-87.) Because these facts were raised for the first time in a motion for reconsideration, Koebel bore the additional burden of explaining why these facts could not have been previously discovered through due diligence. Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003) (noting that a motion for reconsideration "may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation"). The Bankruptcy Court denied the motion for reconsideration because Koebel failed to establish that the evidence could not have been discovered through due diligence or was of such magnitude that earlier production would have been likely to change the disposition of the case. (ER 1:65.) This was the proper conclusion because Koebel's own pleadings revealed that these facts were discoverable as of August 10, 2011. (ER 1:93.) Additionally, Nationstar's claim regarding holding the note was corrected through a notice of errata. (ER 1:70-71.) Accordingly, the Bankruptcy Court properly concluded that these new facts failed to bring the adversary proceeding outside of the scope of the preclusive effect of the State Court Action.
B. Claim 8-1
The Bankruptcy Court denied Koebel's motion to disallow Claim 8-1 on April 25, 2014, and entered its rulings on the motions to dismiss the Complaint and First Amended Complaint in the adversary proceeding on May 7, 2014, and August 11, 2014. In the motion to disallow Claim 8-1, Koebel once again argued that he had successfully entered into a loan modification agreement which precluded foreclosure of the Property. As a result, the Bankruptcy Court denied the motion on the basis of res judicata. Koebel initiated an appeal of the Bankruptcy Court's ruling on Claim 8-1, but the appeal was dismissed for a lack of prosecution.
Appellees contend that the Bankruptcy Court's rulings on Claim 8-1 preclude Koebel's claims in the adversary proceeding. "The law of the case principle is analogous to, but less absolute a bar than, res judicata." Moore v. James H. Matthews & Co., 682 F.2d 830, 833 (9th Cir. 1982). Under the law of the case doctrine, "a court is generally precluded from reconsidering an issue previously decided by the same court, or a higher court in the identical case. For the doctrine to apply, the issue in question must have been decided explicitly or by necessary implication in [the] previous disposition." Milgard Tempering, Inc. v. Selas Corp. of Am., 902 F.2d 703, 715 (9th Cir. 1990) (internal citation and quotation omitted; alteration in original). "A court properly exercises its discretion to reconsider an issue previously decided in only three instances: (1) the first decision was clearly erroneous and would result in manifest injustice; (2) an intervening change in the law has occurred; or (3) the evidence on remand was substantially different." Id.
The primary relief sought in the adversary proceeding was a finding that any amount owed under the mortgage was unsecured or disallowed in its entirety. (ER 5:401-402.) In denying the motion for disallowance of Claim 8-1, the Bankruptcy Court explicitly decided that the State Court Action was res judicata for any assertion of a loan modification agreement, and concluded that Appellees could validly pursue state law remedies to collect the unpaid sum owed under the note and deed of trust. Between the Bankruptcy Court's ruling on the motion to disallow Claim 8-1 and its rulings on the motions to dismiss, Koebel did not provide any facts or advance any arguments that would have justified reconsideration of those determinations. Similarly here, Koebel, who did not file a reply brief in this appeal, has advanced no arguments as to why Claim 8-1 did not establish the law of the case. Accordingly, the Court concludes that the Bankruptcy Court's ruling on Claim 8-1 established the law of the case and was thus another reason why the claims in the adversary proceeding were precluded.
C. Statute of Limitations
The claims asserted in the adversary proceeding, which were largely based on the Forged Application, all sound in fraud. The statute of limitations for an action grounded in fraud is three years. Cal. Civ. Proc. Code § 338(d). Here, the note and deed of trust for the Property were executed on June 23, 2008, and the bankruptcy proceeding was initiated more than three years later, on January 25, 2012. The Bankruptcy Court applied the three year statute of limitations for claims sounding in fraud and concluded that Koebel's claims were time-barred. (ER 6:434.) Koebel contends that the proper statute of limitations was four years under California Code of Civil Procedure § 337(1) or, in the alternative, that the statute of limitations should not have begun to run until his discovery of the Forged Application. Neither contention is correct.
California Code of Civil Procedure § 337(1) provides a four year statute of limitations for actions based on a written instrument. However, where a borrower asserts fraud related to a mortgage, courts have consistently applied the three year statute of limitations for claims sounding in fraud rather than the four year statute of limitations for claims based on a written instrument. E.g., Zadrozny v. Bank of New York Mellon, 720 F.3d 1163, 1173 (9th Cir. 2013); Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 971 (N.D. Cal. 2010); In re Menjivar, 2014 WL 308912, at *8 (B.A.P. 9th Cir. Jan. 28, 2014). Similarly, courts have refused to allow borrowers the benefit of the discovery rule where, as here, the alleged fraud was contained on the face of the loan documents, and there were no allegations of any misrepresentations made to the borrower. See Hubbard v. Fid. Fed. Bank, 91 F.3d 75, 79 (9th Cir. 1996); Perez v. Am. Home Mortgage Servicing, Inc., No. C 12-00932 WHA, 2012 WL 1413300, at *4 (N.D. Cal. Apr. 23, 2012). Accordingly, the Bankruptcy Court applied the proper three year statute of limitations in concluding that Koebel's claims were time-barred.
D. Motion for Reconsideration and Leave to Amend
Leave to amend is properly denied where "it is clear that granting leave to amend would have been futile." Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 368 F.3d 1053, 1061 (9th Cir. 2004). Having correctly concluded that the claims in the adversary proceeding were barred by res judicata and the statute of limitations, the Bankruptcy Court did not abuse its discretion in denying leave to amend because any further amendment would have been futile.
Similarly, the Bankruptcy Court did not abuse its discretion in denying the motion for reconsideration. A motion to reconsider "may not be used to raise arguments or present evidence for the first time when they reasonably could have been raised earlier in the litigation." Carroll, 342 F.3d at 945. As discussed above, Koebel's motion for reconsideration was based on evidence which could have been discovered earlier, and was insufficient to cure his pleading defects. Accordingly, the Bankruptcy Court did not abuse its discretion in denying the motion for reconsideration.
For all of the foregoing reasons, the Court affirms the Bankruptcy Court's dismissal of Koebel's Complaint and First Amended Complaint, without leave to amend, and its subsequent denial of the Motion for Reconsideration. DATED: January 27, 2016
UNITED STATES DISTRICT JUDGE cc: Bankruptcy Court