Gens v. Kaelin

Filing 7

ORDER DENYING 4 MOTION FOR STAY PENDING APPEAL. Signed by Judge Beth Labson Freeman on 7/18/2017.(blflc1S, COURT STAFF) (Filed on 7/18/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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TIMOTHY GENS,
Appellant,

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ORDER DENYING MOTION FOR
STAY PENDING APPEAL

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v.

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DORIS KAELIN,

[Re: ECF 4]

Appellee.

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United States District Court
Northern District of California

Case No. 17-cv-03616-BLF

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Appellant Timothy Gens appeals an order issued in his wife’s bankruptcy case: Order

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Granting Trustee’s Motions to (1) Sell Real Property and Pay Fees, Costs, Taxes, and

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Commissions, Other than the Lien of Wells Fargo, and (2) Sell Free and Clear of Claims, Liens,

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and Interests (“Sale Order”). See Notice of Appeal, ECF 1-1. Appellant seeks a stay of that order

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pending appeal. Although styled as an application for temporary restraining order (“TRO”),

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Appellant’s motion asserts that Appellant will suffer “immediate and concrete irreparable harm . .

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. if a stay of the Sale Order pending appeal is not issued.” Appellant’s Ex Parte Emergency

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Application for a TRO Pending Appeal (“Stay Motion”) at 2, ECF 4. Appellant’s Stay Motion is

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DENIED for the reasons discussed below.

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I.

BACKGROUND
Appellant filed this pro se appeal of the bankruptcy court’s Sale Order on June 19, 2017.

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See Notice of Appeal, ECF 1-1. He also filed an application for TRO pending appeal. See

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Application for TRO, ECF 1-5. The appeal and TRO application initially were referred to the

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Bankruptcy Appellate Panel, but subsequently they were transferred to this Court pursuant to a

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Statement of Election filed by the Chapter 7 Trustee. See Notice of Referral to Bankruptcy

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Appellate Panel, ECF 1-4; Statement of Election, ECF 1-3. This Court denied the TRO

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application without prejudice on the basis that Appellant had not presented the TRO application to

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the bankruptcy court in the first instance as required by Federal Rule of Bankruptcy Procedure

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8007. See Order Denying Application for TRO, ECF 3. Appellant subsequently filed a TRO

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application in the bankruptcy court, which the bankruptcy court construed as a stay motion and

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denied by written order on July 14, 2017. See Bankruptcy Court’s Order Denying Timothy Gens’

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Motion for Stay Pending Appeal, ECF 416 in Case No. 15-br-53563. On the same date, Appellant

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filed the present Stay Motion in this Court. See Stay Motion, ECF 4. The Stay Motion was

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docketed and received by the undersigned on July 17, 2017.

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II.

LEGAL STANDARD
A motion for a stay pending appeal ordinarily must be brought in the bankruptcy court in

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United States District Court
Northern District of California

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the first instance. Fed. R. Bankr. P. 8007(a). If a party moves for such relief in the district court,

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“[t]he motion must: (A) show that moving first in the bankruptcy court would be impracticable;

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or (B) if a motion was made in the bankruptcy court, either state that the court has not yet ruled on

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the motion, or state that the court has ruled and set out any reasons given for the ruling.” Fed. R.

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Bankr. P. 8007(b)(2).

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Where the bankruptcy court has denied a motion for a stay pending appeal, the district

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court may grant a stay only if it determines that the bankruptcy court’s denial was an abuse of

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discretion. See In re Wymer, 5 B.R. 802, 808 (9th Cir. B.A.P. 1980) (“It is . . . important to the

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properly functioning bankruptcy court that the trial judge’s rulings on stays pending appeal be

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disturbed only in the event of error or abuse of discretion.”); In re North Plaza, LLC, 395 B.R.

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113, 119 (S.D. Cal. 2008) (“Where the bankruptcy court has already denied a stay . . . the

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appellate court’s review is limited to a simple determination of whether the bankruptcy court

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abused its discretion.”). “The abuse of discretion standard on review of the bankruptcy court’s

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order denying a stay encompasses a de novo review of the law and a clearly erroneous review of

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the facts with respect to the underlying issues.” In re North Plaza, 395 B.R. at 119.

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III.

DISCUSSION

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A.

Requirements of Rule 8007

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Appellant has complied with Rule 8007 only in part. Although he states in his Stay
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Motion that he first sought relief in the bankruptcy court, and that the bankruptcy court denied his

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motion, he does not “set out any reasons given for the ruling” of the bankruptcy court. Fed. R.

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Bankr. P. 8007(b)(2). Because it can access the bankruptcy court’s Order Denying Timothy Gens’

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Motion for Stay Pending Appeal, this Court will not deny Appellant’s Stay Motion based on his

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failure to comply fully with Rule 8007.

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B.

The Bankruptcy Court did not Abuse its Discretion in Denying a Stay

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As set forth above, this Court’s consideration of Appellant’s motion for a stay is limited to

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determining whether the bankruptcy court’s denial of a stay was an abuse of discretion. See In re

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Wymer, 5 B.R. at 808; In re North Plaza, 395 B.R. at 119. In making that determination, this
Court reviews the bankruptcy court’s conclusions of law de novo and its factual findings for clear

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United States District Court
Northern District of California

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error. In re North Plaza, 395 B.R. at 119.

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Before turning to that review, the Court observes that Appellant does not acknowledge or

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discuss the abuse of discretion standard. All of his arguments focus on asserted errors in the

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bankruptcy court’s rationale for granting the Sale Order. However, the issue presented by

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Appellant’s motion for a stay is not whether the bankruptcy court erred in issuing that order, but

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whether the bankruptcy court abused its discretion in denying Appellant’s motion for a stay

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pending appeal of the order. For the reasons discussed below, this Court concludes that the

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bankruptcy court did not abuse its discretion in denying a stay.

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1.

The Bankruptcy Court Applied the Correct Legal Standards

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In order to conduct a de novo review of the bankruptcy court’s conclusions of law, this

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Court must determine the correct legal standards and then decide whether the bankruptcy court

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applied those legal standards in denying Appellant’s motion for a stay.

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The Court first addresses the standard applicable to a motion for a stay pending appeal.

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When considering such a motion, a court must consider four factors: “(1) whether the stay

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applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the

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applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will

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substantially injure the other parties interested in the proceeding; and (4) where the public interest

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lies.” Nken v. Holder, 556 U.S. 418, 434 (2009) (internal quotation marks and citation omitted).
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The first two factors are the most critical. Id. However, “[t]he party moving for a stay has the

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burden of proof on each of these elements, and the movant’s failure to satisfy one prong of the

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standard dooms the motion.” In re Silva, No. 9:10-bk-14135-PC, 2015 WL 1259774, at *4 (C.D.

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Cal. Mar. 17, 2015); see also In re Rivera, No. 5:15-cv-04402-EJD, 2015 WL 6847973, at *2

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(N.D. Cal. Nov. 9, 2015) (“a failure on any one factor dooms the motion”) (internal quotation

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marks and citation omitted).

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“A stay is not a matter of right, even if irreparable injury might otherwise result.” Nken,

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556 U.S. at 433 (internal quotation marks and citation omitted). “It is instead an exercise of

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judicial discretion, and the propriety of its issue is dependent upon the circumstances of the
particular case.” Id. (internal quotation marks, citation, and brackets omitted). The party seeking

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United States District Court
Northern District of California

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a stay bears the burden of showing that the circumstances justify a stay. Id. at 433-34.

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The bankruptcy court applied this standard in evaluating Appellant’s motion for stay,

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citing Nken in its written order and reciting the four-factor test set forth therein. See Bankruptcy

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Court’s Order Denying Timothy Gens’ Motion for Stay Pending Appeal at 2-3, ECF 416 in Case

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No. 15-br-53563. Moreover, with respect to the first Nken factor, the bankruptcy court stated

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correctly that the movant must show, at a minimum, that he has a “substantial case for relief on the

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merits.” Id. at 3 (quoting Leiva-Perez v. Holder, 640 F.3d 962, 968 (9th Cir. 2011)).

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2.

The Bankruptcy Court’s Factual Findings are not Clearly Erroneous

Having determined that the bankruptcy court applied the correct legal standards, the Court

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next must determine whether the bankruptcy court’s factual findings are clearly erroneous. The

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bankruptcy court determined that Appellant had not shown a substantial case for relief on the

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merits of his appeal because his stay motion was “almost entirely composed of copied-and-pasted

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text” from previous filings. Bankruptcy Court’s Order Denying Timothy Gens’ Motion for Stay

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Pending Appeal at 4, ECF 416 in Case No. 15-br-53563. The bankruptcy court found that

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Appellant’s stay motion was “a simple rehash of arguments that were explicitly rejected in the

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Bankruptcy Court’s Sale Orders,” and that Appellant “neither advance[d] any new arguments nor

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suggest[ed] any previously unasserted error in the Bankruptcy Court’s reasoning.” Id. With

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respect to Appellant’s lien validity argument, the bankruptcy court concluded that the argument
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was waived because it had not been raised in opposition to the motions that resulted in the Sale

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Order. Id. at 3. The bankruptcy court also noted that it repeatedly had ruled that the lien validity

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argument was untenable when it was raised in other contexts throughout the case. Id. at 4.

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The bankruptcy court’s characterization of Appellant’s stay motion is supported by the

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record and, in particular, Appellant’s Objection to Motion for Authority to (I) Enter into Purchase

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and Sale Agreement for Real Property, Subject to Overbid; (II) Pay Fees, Costs, Taxes and

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Commissions Related to Sale of Real Property, ECF 331 in Case No. 15-br-53563; the bankruptcy

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court’s Order Overruling Objections to Claims of Wells Fargo Bank, ECF 109 in Case No. 15-br-

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53563; and the bankruptcy court’s Order Granting Wells Fargo’s Second Motion for Allowance of
Postpetition Attorney’s Fees and Costs, ECF 368 in Case No. 15-br-53563. Repetition of

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United States District Court
Northern District of California

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arguments previously made and rejected is insufficient to satisfy the first Nken factor. See Griffen

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v. Harrington, No. CV 10-08753-VBF-SP, 2013 WL 3873958, at *3 (C.D. Cal. Jan. 18, 2013)

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(first Nken factor not satisfied where “respondent’s brief in support of a stay pending appeal

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merely reasserts arguments . . . which this Court discussed and rejected” in a prior order).

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Based on the record before it, the Court concludes that there is ample support for the

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bankruptcy court’s factual finding that Appellant’s stay motion was merely a rehash of arguments

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previously made and rejected. That factual finding supports the bankruptcy court’s determination

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that Appellant failed to show a likelihood of success on the merits. Failure to satisfy even one

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factor of the four-factor test dooms a motion for a stay. See In re Silva, 2015 WL 1259774, at *4;

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In re Rivera, 2015 WL 6847973, at *2. Accordingly, the Court need not reach the other factors to

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conclude that the bankruptcy court did not abuse its discretion in denying Appellant’s motion for a

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stay pending appeal.

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Appellant clearly is desperate to prevent the sale of his home, and his arguments reflect a

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strong belief that the bankruptcy court erred in issuing the Sale Order that is the subject of his

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appeal. However, those arguments are misplaced here. This Court’s task is limited to determining

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whether the bankruptcy court abused its discretion in denying a stay pending appeal. Appellant

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has not demonstrated – or even argued – that the bankruptcy court did abuse its discretion and

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therefore he cannot prevail on his motion.
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IV.

ORDER
Appellant’s motion for a stay pending appeal is DENIED.

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Dated: July 18, 2017
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BETH LABSON FREEMAN
United States District Judge

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United States District Court
Northern District of California

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