Mantiply v. Horne et al

Filing 88

ORDER granting 77 Motion for stay of execution of judgment. The supersedeas bond previously filed by the Appellant shall remain in the bankruptcy court during the pendency of the appeal. If during the pendency of the appeal Appellant seeks to sel l, convey, transfer, mortgage, assign, or otherwise encumber the real property to which the judgment lien has attached, she shall be required to file an additional supersedeas bond equal to 105% of the attorney's fee judgment. Signed by Senior Judge Charles R. Butler, Jr on 5/22/2014. copies to parties. emailed USCA, Bankruptcy, Appeals Clerk, and Butler CRD. (sdb)

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IN  THE  UNITED  STATES  DISTRICT  COURT  FOR  THE   SOUTHERN  DISTRICT  OF  ALABAMA   SOUTHERN  DIVISION     In  Re:             )                 )   RICHARD  D.  HORNE  and         )   PATRICIA  NELSON  HORNE,       )               )       Debtors,       )               )   MARY  BETH  MANTIPLY,       )               )   CIVIL  ACTION  NO.  13-­‐00258-­‐CB-­‐B       Plaintiff/Appellant,     )               )   v.             )               )   RICHARD  D.  HORNE  and       )   PATRICIA  NELSON  HORNE,       )               )       Defendants/Appellees.   )     ORDER       This  matter  is  before  the  Court  on  a  “Motion  to  Stay  Proceedings  to  Enforce   Judgment”  filed  by  Appellant  Mary  Beth  Mantiply.    (Doc.  77.)    The  Appellees  have   filed  a  reply  brief.    (Doc.  83.)    Upon  careful  review  and  consideration,  the  Court  finds   that  the  motion  to  stay  enforcement  of  the  judgment  during  the  pendency  of  the   appeal  is  due  to  be  granted  and  that  no  additional  security  should  be  required  at  this   time.     A  brief  review  of  the  pertinent  facts  is  necessary.    The  bankruptcy  court   below  found  that  Mantiply  had  violated  both  the  automatic  stay  and  discharge   injunction  by  filing  and  pursuing  a  civil  action  against  debtor  Richard  D.  Horne.    The   court  also  found  that  both  debtors  suffered  emotional  distress  and  mental  anguish   as  a  result  of  these  violations  and  imposed  compensatory  and  punitive  damages  as   well  as  attorney’s  fees  totaling  more  than  $80,000.    Mantiply  appealed  and  sought  a   stay  of  the  judgment  from  the  bankruptcy  court.    Ultimately,  Mantiply  posted  a  cash   bond  equal  to  105%  of  the  judgment,  and  the  stay  was  granted.    On  appeal,  this   court  affirmed  the  Magistrate  Judge’s  order  and  judgment  and  also  granted   Appellees’  motion  for  attorney’s  fees  on  appeal,  which  totaled  more  than  $34,000.     Appellees  recorded  the  attorney’s  fee  judgment  as  a  lien  against  real  property   owned  by  Mantiply.1    Mantiply  has  filed  a  notice  of  appeal,  and  seeks  a  stay  of  this   Court’s  attorney’s  fee  judgment  as  well  as  the  bankruptcy  court’s  judgment  and   requests  that  no  additional  security  be  required.    Appellees  object,  arguing  that  the   stay  of  judgment  should  be  denied  unless  additional  security  is  posted  for  the   amount  of  the  attorney’s  fee  judgment  plus  an  additional  amount  for  projected   attorney’s  fees  to  be  incurred  on  appeal.     Thus,  the  issue  now  before  this  Court  is  whether  the  stay  should  be  granted   without  requiring  additional  security.  Whether  to  grant  a  stay  pending  intermediate   appeal  (i.e.,  from  the  district  court  or  bankruptcy  appellate  panel  to  the  circuit   court),  is  governed  by  Rule  8017.    That  rule  sets  out  no  specific  criteria  for  granting   or  denying  a  stay,  stating  only  that  a  stay  may  be  extended  “for  good  cause  shown”   and  that  “[a]  bond  or  other  security  may  be  required  as  a  condition  to  the  grant  or   continuation  of  a  stay.”    Fed.  Bankr.  R.  8017(b).         Three  types  of  stays  may  be  applied  to  an  intermediate  appeal—one  fully   secured  by  a  supersedeas  bond,  another  that  is  unsecured  and  discretionary,  and  “a                                                                                                                   1  Based  on  a  search  of  the  Baldwin  County  property  records,  this  lien   (recorded  January  10,  2014)  remained  in  effect  as  of  May  19,  2004.  See  Baldwin   County  Probate  Deeds  &  Records  Ref.  No.  1436988,  (search   Public  Records,  Probate  Deeds  &  Records).     2   third  that  combines  features  of  the  first  two.”    In  re  Wymer,  5  B.R.  802,  804  (9th  Cir.   BAP  1980).2    A  discretionary  stay,  which  is  part  of  the  court’s  inherent  power  to   preserve  the  status  quo,  is  in  the  nature  of  a  preliminary  injunction.  Id.  at  806.      A   party  seeking  to  a  stay  of  judgment  that  cannot  be  secured  by  a  supersedeas  bond   must  meet  the  criteria  applicable  to  a  motion  for  preliminary  injunction.    Cf.  In  re   First  South  Sav.  Ass’n,  820  F.2d  700,  704  (5th  Cir.  1987)  (applying  injunctive  test  to   motion  for  stay  of  bankruptcy  court’s  superpriority  order).3    When  a  monetary   judgment  is  fully  secured  by  a  supersedeas  bond,  the  injunctive  test  is  unnecessary   because  the  status  quo  is  maintained.    See  In  re  Lambert  Oil,  375  B.R.  197,  200  (W.D.   Va.  2007);  see  also  In  re  Mirranne,  94  B.R.  413,  415  (E.D.  La  1988).     The  instant  appeal  falls  into  the  middle  ground  because  it  involves  a   partially-­‐secured  monetary  judgment.    The  supersedeas  bond  filed  in  the   bankruptcy  court  secures  the  amount  of  the  bankruptcy  court’s  judgment;  however,   no  supersedeas  bond  has  been  posted  to  secure  the  attorney’s  fee  judgment  issued   by  this  Court.    Moreover,  Mantiply  contends  that  none  is  necessary  because  the   attorney’s  fee  judgment  is  adequately  secured  by  the  lien  on  her  real  property.    The   Court  agrees  that  Appellee’s  judgment  lien  on  Appellant’s  real  property  provides   sufficient  security  for  the  attorney’s  fee  judgment.    Therefore,  pursuant  to   Fed.Bankr.R.  8017,  the  Court  finds  “good  cause”  for  a  stay  pending  appeal  is  satisfied                                                                                                                   2At  the  time  Wymer  was  decided,  a  different  version  of  the  Bankruptcy  Rules   was  in  effect  and  Rule  8017  had  not  been  adopted.  The  Wymer  court    interpreted   and  applied  Fed.  R.  Civ.  P.  62  and  Fed.  R.  App.  P.  41,  the  rules  upon  which  Rule  8017   was  based.    See  Fed.  Bankr.  R.  8017  advisory  committee’s  note.   3  The  party  seeking  the  stay  must  demonstrate  the  following:    (1)  a  likelihood   of  success  on  the  merits;  (2)  irreparable  injury  to  the  movant  if  the  stay  is  not   granted;  (3)  no  substantial  harm  to  the  opposing  party  if  a  stay  is  granted;  and  (4)  a   stay  would  serve  the  public  interest.    Id.  at  709.       3   by  the  supersedeas  bond  posted  in  the  bankruptcy  court  and  the  judgment  lien  filed   against  Appellant’s  property.       For  the  reasons  set  forth  above,  the  motion  for  stay  of  execution  of  judgment   is  GRANTED.    The  supersedeas  bond  previously  filed  by  the  Appellant  shall  remain   in  the  bankruptcy  court  during  the  pendency  of  the  appeal.    If  during  the  pendency   of  the  appeal  Appellant  seeks  to  sell,  convey,  transfer,  mortgage,  assign,  or   otherwise  encumber  the  real  property  to  which  the  judgment  lien  has  attached,  she   shall  be  required  to  file  an  additional  supersedeas  bond  equal  to  105  %  of  the   attorney’s  fee  judgment.     DONE  and  ORDERED  this  the  22nd  day  of  May,  2014.                                               s/Charles  R.  Butler,  Jr.       Senior  United  States  District  Judge   4  

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