Kripalani v. Wells Fargo N.A.

Filing 13

ORDER DIRECTING APPELLANT TO SHOW CAUSE WHY REQUEST FOR STAY PENDING APPEAL SHOULD NOT BE DENIED FOR FAILURE TO COMPLY WITH RULE 8005; CONTINUING HEARING. Kripalani is directed to show cause, in writing and no later than October 11, 2013, wh y his request for a stay pending appeal should not be denied without prejudice to Kripalani's first seeking such relief from the Bankruptcy Court. The hearing on Kripalani's request for a stay pending appeal is continued to October 18, 2013, at 9:00 a.m. Signed by Judge Maxine M. Chesney on October 7, 2013. (mmclc1, COURT STAFF) (Filed on 10/7/2013)

1
2
3
4
5
6
7
IN THE UNITED STATES DISTRICT COURT

8

FOR THE NORTHERN DISTRICT OF CALIFORNIA

9
For the Northern District of California

United States District Court

10
No. C-13-3624 MMC

11
12

In re

Bankruptcy Case No. 13-30374

13

KISHORE KRIPALANI,

ORDER DIRECTING APPELLANT TO
SHOW CAUSE WHY REQUEST FOR
STAY PENDING APPEAL SHOULD NOT
BE DENIED FOR FAILURE TO COMPLY
WITH RULE 8005; CONTINUING
HEARING

14

Debtor

15

/

16
17
18
19
20
21
22
23
24
25
26
27
28

Before the Court is appellant Kishore Kripalani’s (“Kripalani”) Request for Stay
Pending Appeal, filed September 3, 2013, by which appellant seeks an order staying the
Bankruptcy Court’s order that an unlawful detainer action filed by Wells Fargo Bank, N.A.
(“Wells Fargo”) against Kripalani was not subject to the automatic stay provisions of the
Bankruptcy Code. Wells Fargo has filed opposition, to which Kripalani has replied. Having
read and considered the parties’ respective written submissions, the Court, for the reasons
stated below, will direct Kripalani to show cause why the instant request should not be
denied for failure to comply with Rule 8005 of the Federal Rules of Bankruptcy Procedure.
Rule 8005 provides as follows:
A motion for a stay of the judgment, order, or decree of a bankruptcy judge,
for approval of a supersedeas bond, or for other relief pending appeal must
ordinarily be presented to the bankruptcy judge in the first instance.
Notwithstanding Rule 7062 but subject to the power of the district court and
the bankruptcy appellate panel reserved hereinafter, the bankruptcy judge

1
2
3
4
5

may suspend or order the continuation of other proceedings in the case under
the Code or make any other appropriate order during the pendency of an
appeal on such terms as will protect the rights of all parties in interest. A
motion for such relief, or for modification or termination of relief granted by a
bankruptcy judge, may be made to the district court or the bankruptcy
appellate panel, but the motion shall show why the relief, modification, or
termination was not obtained from the bankruptcy judge. . . .
See Fed. R. Bankr. P. 8005.

6

Under Rule 8005, a district court “has the power to stay an order or judgment of the

7

Bankruptcy Court, or ‘other relief pending appeal,’ as long as such relief was first sought in

8

the Bankruptcy Court.” See In re Petrusch, 14 B.R. 825, 826 n.1 (N.D. N.Y. 1981); see

9

also In re Roberts Farms, Inc., 652 F.2d 793, 795, 798 (9th Cir. 1981) (holding, in

10

interpreting predecessor to Rule 8005, “first step” in obtaining stay pending appeal is to

11

“apply to the bankruptcy judge for a stay”; referring to such requirement as

12

“unambiguous”).1 Consequently, in determining whether an appellant is entitled to a stay

13

pending appeal, the district court does not consider the matter in the first instance, but,

14

rather, reviews the bankruptcy court’s denial of a request for a stay for abuse of discretion.

15

See In re Wilson, 53 B.R. 123, 124 (D. Mt. 1985) (denying motion for stay of bankruptcy

16

court’s order pending appeal, where appellant failed to first seek such relief from

17

bankruptcy court; noting, “the Court will not assume duties which are ordinarily functions of

18

the trial court”); see also In re Wymer, 5 B.R. 802, 808 (B.A.P. 9th Cir. 1980) (holding “rule”

19

requiring appellant to initially seek stay from bankruptcy court is necessary so as not to

20

“distort the delicate balance between trial and appellate levels and deny recognition of their

21

respective roles”).

22

Here, Kripalani, in his motion, does not indicate he sought a stay from the

23

Bankruptcy Court, and a review of the Bankruptcy Court’s docket shows he did not. In his

24

reply, Kripalani concedes he did not seek a stay from the Bankruptcy Court, and asserts he

25

did not because the Bankruptcy Court was “unlikely” to grant a stay given it had found

26
27
28

1

In the predecessor to Rule 8005, the provisions pertaining to stays pending appeal
are in all material respects indistinguishable from those in Rule 8005. Compare id. at 795
n.1 (quoting predecessor to Rule 8005), with Fed. R. Bankr. P. 8005.
2

1

Wells Fargo’s unlawful detainer action was not subject to an automatic stay. (See

2

Appellant’s Reply, filed September 23, 2013, at 1:13-19.)2 Kripalani cites no authority for

3

his assertion that an appellant should be excused from seeking a stay from the bankruptcy

4

court simply because the bankruptcy court found against him on the merits of the issue

5

being appealed. Under Rule 8005, as noted, an appellant “ordinarily” is required to file a

6

motion for a stay with the bankruptcy court, see Fed. R. Bankr P. 8005, and Kripalani fails

7

to show the instant request for a stay is not an “ordinary” request, i.e., a request made by a

8

party appealing an adverse decision, see Wymer, 5 B.R. at 808 (holding “power to stay

9

enforcement of a judgment” is “usually exercised by the trial court” in the first instance;

10

noting, “appellate courts are reluctant to entertain a request for stay unless it is

11

demonstrated that the trial judge is unavailable or that the request was denied by the trial

12

judge”).

13

Accordingly, Kripalani is hereby DIRECTED to show cause, in writing and no later

14

than October 11, 2013, why his request for a stay pending appeal should not be denied

15

without prejudice to Kripalani’s first seeking such relief from the Bankruptcy Court.

16
17
18

Finally, in light of the instant order, the hearing on Kripalani’s request for a stay
pending appeal is hereby CONTINUED to October 18, 2013, at 9:00 a.m.
IT IS SO ORDERED.

19
20

Dated: October 7, 2013
MAXINE M. CHESNEY
United States District Judge

21
22
23
24
25
26
27
28

2

Kripalani also asserts he did not seek a stay from the bankruptcy court because,
according to Kripalani, the bankruptcy court had issued an adverse ruling in the context of
an “adversary proceeding.” (See id. at 1:19-24.) Kripalani fails to state the nature of any
such ruling, and, in any event, the instant appeal does not seek relief from an order issued
in the context of an adversary proceeding.
3