SMITH v. MANASQUAN BANK
Filing
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OPINION filed. Signed by Judge Anne E. Thompson on 6/13/2018. (mps)
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NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
RECEIVED
JUN 13 2018
LYNN SMITH,
AT 8:30
WILLIAM T. WALSH
CLERK
Appellant,
M
v.
Civ. No. 18-0048
MANASQUAN BANK,
OPINION
Appellee.
THOMPSON. U.S.D.J.
INTRODUCTION
This matter comes before the Court upon a motion to stay district court appeal pending
Third Circuit appeal by Appellant Lynn Smith ("Appellant"). (ECF No. 66.) Trustee Andrea
Dobin ("Trustee") opposed. (ECF No. 69.) The Court has decided this Motion on the
submissions of the parties without oral argument. See Local Civil Rule 78.l(b). For the reasons
stated herein, Appellant's Motion is denied.
BACKGROUND
This case is an appeal of a bankruptcy court decision by the Honorable Michael B.
Kaplan, U.S.B.J. Appellant seeks review of Judge Kaplan's order converting her case from a
Chapter 13 to Chapter 7 proceeding. (See Op. at 3, 3 n.1, ECF No. 36.) Relevant to the instant
Motion, on April 30, 2018, the Court denied reconsideration of its earlier decision not to stay
bankruptcy proceedings pending appeal in the district court (ECF Nos. 54, 55); on May 9, 2018,
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the Court denied Appellant's motion to retain law firms for representation and asset recovery
(ECF Nos. 59, 60); and on May 22, 2018, the Court issued a letter order addressing a docketing
discrepancy and indicating that Appellant was not permitted to file a second amended reply brief
(ECF No. 63). Appellant appealed these decisions to the U.S. Court of Appeals for the Third
Circuit on May 24, 2018 and.moved this Court to stay this appeal pending the Third Circuit
appeal (ECF No. 66.) Appellant's husband and Interested Party Brian Smith filed abrief in
support of the Motion on June 5, 2018. (ECF No. 68.) With the Court's leave, Trustee opposed
on June 13, 2018. (ECF No. 69.)
LEGAL STANDARD
The power to stay a proceeding pending appeal is derived from the inherent power of a
court to efficiently manage its own docket. Ford Motor Credit Co. v. Chiorazzo, 529 F. Supp.
2d 535, 541-42 (D.N.J. 2008) (citing Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936)).
Courts employ the preliminary injunction factors to determine whether equity warrants a stay:
(1) whether the stay applicant has made a strong showing that he is likely to
succeed on the merits; [] (2) whether the applicant will be irreparably injured
absent a stay;[] (3) whether issuance of the stay will substantially injure the other
parties interested in the proceeding; and [] (4) where the public interest lies.
HR Staffing Consulting, LLCv. Butts, 2015 WL 3561618, at *1-2 (D.N.J. June 4, 2018); see also
Aleynikov v. Goldman Sachs Grp., Inc., 2013 WL 12161863, at *2 (D.N.J. Oct. 29, 2013). A
· stay is considered an extraordinary remedy, and the requesting party bears the burden of showing
that the circumstances justify exercise of the court's discretion. Conestoga Wood Specialties
Corp. v. Sec'y of U.S. Dep't ofHealth &Human Servs., 2013 WL 1277419, at *1 (3d Cir. Feb. 8,
2013); A/dshev v. Kapustin, 23 F. Supp. 3d 440, 449 (D.N.J. 2014) (citing Nken v. Holder, 556
U.S. 418, 433-34 (2009); Landis, 299 U.S. at 255)).
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DISCUSSION
Appellant asserts that the disposition of a Third Circuit appeal will "significantly
enhance" her reply brief for the bankruptcy appeal, and "address many of the problems in
bankruptcy court [the Court] has failed to address." (Appellant's Mot. at 1, ECF No. 66.)
Trustee opposes, asserting that this Motion is procedurally improper 1 and that the Court has
already decided this issue by denying two motions to stay bankruptcy proceedings. (Tr. Opp'n,
ECF No. 69.) Each order and/or opinion Appellant has appealed and the factors for a stay are
discussed below.
I.
Denial of Motion for Law Firm Representation (ECF Nos. 59, 60)
As a threshold matter, a court of appeals has jurisdiction to review "final decisions of the
district courts." 28 U.S.C. § 1291. "A final, appealable decision is one 'by which a district court
disassociates itself from a case."' Knick v. Twp. ofScott, 862 F .3d 310, 316 (3d Cir. 2017)
(quoting Gelboim v. Bank ofAm. Corp., 135 S. Ct. 897, 902 (2015)). The collateral order
doctrine also allows courts to entertain appeals of limited "collateral rulings," or "decisions that
are conclusive, that resolve important questions separate from the merits." Mohawk Indus., Inc.
v. Carpenter, 558 U.S. 100, 106 (2009) (quoting Swint v. Chambers Cty. Comm 'n, 514 U.S. 35,
42 (1995)). The Third Circuit has expressly held that "the denial of a motion for counsel is not
immediately appealable." Catanzaro v. Collins, 447 F. App'x 397, 399 (3d Cir. 2011) (citing
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The Court notes that the cases on which Trustee relies are factually distinct: both Truong v.
Kartzman, 2001WL1816048 (D.N.J. June 22, 2007), and Secianovic v. Jacobson, 2006 WL
2376922 (D.N.J. Aug. 16, 2006), involve the initial appeal of a bankruptcy order to the district
court. While Federal Rule of Bankruptcy Procedure 8007(a) provides that motions to stay
should be filed with the bankruptcy court in the first instance, this Motion concerns the appeal of
the district court's decision in a bankruptcy appeal to the Third Circuit. Accordingly, Appellant
has appropriately moved this Court for a stay. See Fed. R. App. P. 8(a)(l) ("A party must
ordinarily move first in the district court for ... a stay of the judgment or order of a district court
pending appeal.").
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Smith-Bey v. Petsock, 741 F.2d 22, 26 (3d Cir. 1984)). Because the Third Circuit does not have
jurisdiction to hear an appeal of the Court's denial of her motion for law firm representation,
Appellant cannot succeed on the merits of this appeal. Thus, it is not an appropriate basis on
which to order a stay.
II.
Letter Order (ECF No. 63)
Like the issue oflaw firm representation, this letter order meets neither criterion for an
appealable matter: it is a not a final judgment, nor does it conclusively resolve an important
question related to the merits. This is a purely procedural matter regarding Appellant's ability to
file a second amended reply brief, where the Court exercised its inherent discretion in managing
its docket by denying leave to amend again. Accordingly, Appellant again cannot succeed on the
merits of the appeal with respect to this order, and again, is not entitled to a stay.
III.
Denial of Reconsideration on Stay of Bankruptcy Proceedings (ECF Nos. 54, 55)
A district court's denial of a stay pending bankruptcy proceedings may practically be
considered final and appealable. See In re Revel AC, Inc., 802 F.3d 558, 566-67 (3d Cir. 2015).
For this Motion, therefore, the Court will consider the same four factors it considered on the
decision of whether to stay bankruptcy proceedings. (See Op. at 4 n.2, ECF No. 54; Op. at 9,
ECF No. 36.) Once again in this respect, Appellant has not met the standard for a stay.
First, Appellant repeatedly emphasizes the wrongful state court judgments against her
and money-due, which the Court construes to be an argument that her debt picture justifies
conversion back to Chapter 13. (See Appellant's Mot. at 7 ("My husband submitted a sworn
statement to this court that there is up to $617 million in cash and up to $5 billion in hard assets
that can be seized for 201 families[.]").) The articles, letters, and other exhibits Appellant has
attached to her pleadings are not sufficient evidence for the Court to conclude that these
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judgments will be reversed on appeal. In raising this argument, Appellant also asks the Court to
examine the merits of her state proceedings, which it cannot do. (Op. at 3, ECF No. 59.)
Second, she repeatedly describes Trustee's misconduct and her alleged attempts to obstruct this
appeal, but other than referencing another individual in bankruptcy before Judge Kaplan and
with Trustee, she again provides no concrete evidence on which to determine that there is
misconduct affecting her appeal. (See Appellant's Mot. at 3.)
Next, Mr. and Mrs. Smith highlight the danger that their daughter and family will suffer
due to the sale of their home, as she is ''violated by predators of a different sort." (Id.; see also
Smith Br. at 3.) The automatic stay pursuant to 11 U.S.C. § 362 is still in effect in Appellant's
bankruptcy proceedings, Judge Kaplan has not granted relief from the stay, and therefore
Appellant's home is not subject to a sheriffs sale. (Op. at 5, ECF No. 36.) And, "the Court
cannot conclude that a stay will alleviate or avoid harm." (Op. at 5, ECF No. 54.)
Finally, Appellant underscores the alleged "inhumane and unjudicial behavior on the part
of Judge Kaplan," which this Court has "countenanced" in denying her previous motions.
(Appellant's Mot. at 2.) The Court has already concluded that Judge Kaplan's conduct does not
demonstrate partiality or bias under a reasonable person standard to warrant his disqualification.
(See Op. at 7-8, ECF No. 36.) Moreover, Appellant misunderstands the clearly delineated lines
of the Court's jurisdiction. This Court cannot rule on motions, approve pay-off o~ers, or
endorse proposed plans that may be presented to Judge Kaplan; it can only address those final
orders and judgments that have been appealed. See, e.g., Shareholders v. Sound Radio, Inc., 109
F.3d 873, 880 (3d Cir. 1997). (Cf Appellant's Mot. at 4, 5; Smith Br. at 2.)
This analysis recapitulates the Court's conclusion on Appellant's original motion to stay
bankruptcy proceedings and on reconsideration thereof: Appellant cannot demonstrate a
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likelihood of success on her underlying bankruptcy appeal-the conversion from Chapter 13 to
Chapter 7 proceedings. Accordingly, because Appellant now appeals the denial of that
reconsideration, the Court cannot conclude that she demonstrates a strong showing of success on
the merits of her Third Circuit appeal. For this reason, as well as Appellant's failure to show
irreparable harm that will result absent a stay, a stay of her district court appeal is not warranted.
CONCLUSION
For the reasons stated herein, Appellant's Motion is denied. An accompanying Order
will follow.
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