Pacifica Park Apartments, LLC v. U.S. Bank National Association

Filing 8

ORDER DENYING Motion for Stay, signed by District Judge Anthony W. Ishii on 3/1/13. (Hellings, J)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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In re: PACIFICA PARK
APARTMENTS, LLC.

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Debtor.
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_________________________________)
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PACIFICA PARK APARTMENTS, )
LLC.,
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Appellant,
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v.
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U.S. BANK NATIONAL
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ASSOCIATION,
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Appellee.
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_________________________________)

DISTRICT COURT CASE
NO. CIV-F-13-0164 AWI
BANKRUPTCY COURT CASE
NO. 12-60039-B-11
ORDER DENYING MOTION FOR STAY

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I. History
Appellant Pacifica Park Apartments filed a Chapter 11 bankruptcy on December 6, 2012.

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As part of the filing, Appellant listed as an asset an interest in the Citrus Plaza Shopping Center

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in Exeter, CA (“Property”). Appellee U.S. Bank National Association is a secured creditor who

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also has an interest in the Property. Appellee made a motion for relief from the automatic stay

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lifted to allow foreclosure on the Property. Bankr. Case, Doc. 21. Appellant made a motion for

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authority to use cash collateral. Bankr. Case, Doc. 9. Bankruptcy Judge Richard Lee heard both

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motions, denying Appellant’s motion and granting Appellee’s motion. Bankr. Case, Docs. 59 and

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61. On January 31, 2012, the entire bankruptcy was dismissed. Bankr. Case, Doc. 69. Later that
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same day, Appellant filed this appeal, seeking review of the two specific, limited decisions (relief

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from automatic stay and cash collateral). Bankr. Case, Doc. 71. Appellant has not appealed the

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dismissal of the bankruptcy case. Appellant then made a motion to stay the relief from automatic

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stay pending appeal. Bankr. Case, Doc. 82. Judge Lee denied the motion. Bankr. Case, Doc. 89.

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Appellant now makes a motion to stay in district court. Doc. 3. Appellee opposes the
motion. Doc. 6.

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II. Legal Standards
“An appellant seeking a discretionary stay pending appeal under Bankruptcy Rule 8005

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must prove: (1) appellant is likely to succeed on the merits of the appeal; (2) appellant will suffer

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irreparable injury; (3) no substantial harm will come to appellee; and (4) the stay will do no harm

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to the public interest.” Universal Life Church v. United States, 191 B.R. 433, 444 (E.D. Cal.

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1995), citations omitted. “The party moving for a stay has the burden on each of these

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elements.” In re Shenandoah Realty Partners, L.P., 248 B.R. 505, 510 (W.D. Va. 2000).

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“Movant’s failure to satisfy one prong of the standard for granting a stay pending appeal dooms

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the motion.” In re Deep, 288 B.R. 27, 30 (N.D.N.Y. 2003), citations omitted; accord In re Pon,

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No. C-93-2745 MHP, 1994 U.S. Dist. LEXIS 2559, at *6 (N.D. Cal., February 25 1994).

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Under Federal Rules of Bankruptcy 8005, “A motion for a stay of the judgment, order, or

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decree of a bankruptcy judge...pending appeal must ordinarily be presented to the bankruptcy

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judge in the first instance....A motion for such relief, or for modification or termination of relief

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granted by a bankruptcy judge, may be made to the district court or the bankruptcy appellate

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panel, but the motion shall show why the relief, modification or termination was not obtained

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from the bankruptcy judge.” Review of the bankruptcy judge’s decision is limited. “[A]ppellate

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courts are reluctant to entertain a request for stay unless it is demonstrated that the trial judge is

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unavailable or that the request was denied by the trial judge. Nevertheless, only in the former

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situation does the appellate tribunal normally exercise its own discretion; in other instances (such

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as where the trial court has denied the stay) the appellate court simply determines whether the

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trial court abused its discretion.” In re Wymer, 5 B.R. 802, 807 (B.A.P. 9th Cir. 1980). “When a
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bankruptcy court has ruled on the issue of a stay of its order pending appeal, the district court,

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sitting as an appellate court, reviews that decision for abuse of discretion.” Universal Life Church

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v. United States, 191 B.R. 433, 444 (E.D. Cal. 1995). “Discretion will be found to have been

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abused when the judicial action is arbitrary, fanciful or unreasonable which is another way of

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saying that discretion is abused only where no reasonable man would take the view adopted by

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the trial court. If reasonable men could differ as to the propriety of the action taken by the trial

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court, then it cannot be said that the trial court abused its discretion. It is equally well-established

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that on appeal to the district court from bankruptcy court, issues of law are reviewed de novo

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while the district court is constrained to accept the bankruptcy court’s findings of facts unless

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they are clearly erroneous.” In re Blackwell, 162 B.R. 117, 119 (E.D. Pa. 1993).

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III. Discussion

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Judge Lee has already denied Appellant’s motion to stay. Thus, the proper role of this

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court is to review Judge Lee’s order on an abuse of discretion standard. In denying the motion

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for stay, Judge Lee stated that the subsequent dismissal of the overall bankruptcy case

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independently ended the automatic stay for all of Appellant’s assets, including the Property:

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“Even if the appellate court were to reverse the Stay Relief Order, the case would remain

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dismissed and the stay would have terminated by operation of law upon dismissal.” Bankr. Case,

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Doc. 89, 2:5-7. The bankruptcy case was dismissed on January 31, 2013. Under Fed. Rule

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Bankr. Proc. 8002, Appellant had fourteen days from entry of that order to file an appeal. No

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notice of appeal has been filed in the bankruptcy case; a review of the district court clerk’s office

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files reveals no appeal either. The dismissal is final. The automatic stay in bankruptcy

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terminates at the time the case is dismissed. 11 U.S.C. § 362(c)(2)(B). Appellant does not

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address this issue in its briefing. Judge Lee’s reasoning is sound. Even if the court were to find

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in favor of Appellant, staying the relief from automatic stay would not prevent the foreclosure as

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the underlying automatic stay has been ended. Appellant’s appeal does not encompass the

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dismissal of the bankruptcy case.

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IV. Order

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Appellant’s motion for stay pending appeal is DENIED.
IT IS SO ORDERED.

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Dated:
0m8i78

March 1, 2013
SENIOR DISTRICT JUDGE

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