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Gens v. Kaelin

United States District Court, N.D. California, San Jose Division

July 18, 2017

LAURA A. GENS, Appellant,
v.
DORIS KAELIN, Appellee.

          ORDER DENYING DEBTOR'S MOTION FOR STAY PENDING APPEAL [RE: ECF 4]

          BETH LABSON FREEMAN United States District Judge.

         Debtor Laura Gens has filed four separate bankruptcy cases in the past seven years in an effort to prevent foreclosure of her multi-million dollar home located in Palo Alto, California.[1]Her fourth bankruptcy, from which the present appeal arises, was filed as a Chapter 11 case in November 2015 and converted to a Chapter 7 case over Debtor's objection in February 2017. The bankruptcy court's conversion order is the subject of a separate appeal pending before this Court in Case No. 17-cv-01001-BLF. In the present case, Debtor appeals two orders of the bankruptcy court: Order Granting Trustee's Motions to (1) Sell Real Property and Pay Fees, Costs, Taxes, and Commissions, Other than the Lien of Wells Fargo, and (2) Sell Free and Clear of Claims, Liens, and Interests (“Sale Order”); and Order Granting Trustee's Motion to Expunge, or, Alternatively, Sell Real Property Free and Clear of Lis Pendens (“Expungement Order”). See Notice of Appeal, ECF 1-1.

         Debtor seeks a stay of those orders pending appeal. Although styled as an application for temporary restraining order (“TRO”), the motion asserts that Debtor will suffer “immediate and concrete irreparable harm . . . if a stay of the Sale Order pending appeal is not issued.” Debtor's Ex Parte Emergency Application for a TRO Pending Appeal (“Stay Motion”) at 2, ECF 4. Debtor's Stay Motion is DENIED for the reasons discussed below.

         I. BACKGROUND

         Debtor filed this pro se appeal of the bankruptcy court's Sale Order and Expungement Order on June 19, 2017. See Notice of Appeal, ECF 1-1. She also filed an application for TRO pending appeal. See Application for TRO, ECF 1-5. The appeal and TRO application initially were referred to the Bankruptcy Appellate Panel, but subsequently they were transferred to this Court pursuant to a Statement of Election filed by the Chapter 7 Trustee. See Notice of Referral to Bankruptcy Appellate Panel, ECF 1-4; Statement of Election, ECF 1-3. This Court denied the TRO application without prejudice on the basis that Debtor had not presented the TRO application to the bankruptcy court in the first instance as required by Federal Rule of Bankruptcy Procedure 8007. See Order Denying Application for TRO, ECF 3. Debtor subsequently filed a TRO application in the bankruptcy court, which the bankruptcy court construed as a stay motion and denied by written order on July 14, 2017. See Bankruptcy Court's Order Denying Debtor's Motion for Stay Pending Appeal, ECF 417 in Case No. 15-br-53563. On the same date, Debtor filed the present Stay Motion in this Court. See Stay Motion, ECF 4. The Stay Motion was docketed and received by the undersigned on July 17, 2017.

         II. LEGAL STANDARD

         A motion for a stay pending appeal ordinarily must be brought in the bankruptcy court in the first instance. Fed.R.Bankr.P. 8007(a). If a party moves for such relief in the district court, “[t]he motion must: (A) show that moving first in the bankruptcy court would be impracticable; or (B) if a motion was made in the bankruptcy court, either state that the court has not yet ruled on the motion, or state that the court has ruled and set out any reasons given for the ruling.” Fed.R.Bankr.P. 8007(b)(2).

         Where the bankruptcy court has denied a motion for a stay pending appeal, the district court may grant a stay only if it determines that the bankruptcy court's denial was an abuse of discretion. See In re Wymer, 5 B.R. 802, 808 (9th Cir. B.A.P. 1980) (“It is . . . important to the properly functioning bankruptcy court that the trial judge's rulings on stays pending appeal be disturbed only in the event of error or abuse of discretion.”); In re North Plaza, LLC, 395 B.R. 113, 119 (S.D. Cal. 2008) (“Where the bankruptcy court has already denied a stay . . . the appellate court's review is limited to a simple determination of whether the bankruptcy court abused its discretion.”). “The abuse of discretion standard on review of the bankruptcy court's order denying a stay encompasses a de novo review of the law and a clearly erroneous review of the facts with respect to the underlying issues.” In re North Plaza, 395 B.R. at 119.

         III. DISCUSSION

         A. Requirements of Rule 8007

         Debtor has complied with Rule 8007 only in part. Although she states in her Stay Motion that she first sought relief in the bankruptcy court, and that the bankruptcy court denied her motion, she does not “set out any reasons given for the ruling” of the bankruptcy court. Fed.R.Bankr.P. 8007(b)(2). Because it can access the bankruptcy court's Order Denying Debtor's Motion for Stay Pending Appeal, this Court will not deny Debtor's Stay Motion based on her failure to comply fully with Rule 8007.

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

         As set forth above, this Court's consideration of Debtor's motion for a stay is limited to determining whether the bankruptcy court's denial of a stay was an abuse of discretion. See In re 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 error. In re North Plaza, 395 B.R. at 119.

         Before turning to that review, the Court observes that Debtor does not acknowledge or discuss the abuse of discretion standard. All of her arguments focus on asserted errors in the bankruptcy court's rationale for granting the Sale Order and Expungement Order. However, the issue presented by Debtor's motion for a stay is not whether the bankruptcy court erred in issuing those orders, but whether the bankruptcy court abused its discretion in denying Debtor's motion for a stay pending appeal of the ...


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