Opinion
CASE NO. 18-31237
03-03-2020
IN THE MATTER OF: MARIO LAMONT SIMS Debtor
NOT INTENDED FOR PUBLICATION CHAPTER 13
REG/jd DECISION AND ORDER ON MOTION FOR STAY PENDING APPEAL
On March 03, 2020
By an order issued on January 24, 2020, the court relieved the Bank of New York of the automatic stay so that it could continue to foreclose upon real estate constituting the debtor's residence. It did so because the debtor defaulted in the performance of his obligations to the bank under the confirmed plan in this Chapter 13 case. The debtor has appealed and has asked the court to stay its order pending the outcome of that appeal. This decision addresses the issues raised by that request.
A motion for a stay pending an appeal is addressed to the court's discretion. In exercising that discretion the court considers and balances four different factors: the movant's likelihood of success on appeal, the harm to the movant absent a stay, the harm to the appellee if a stay is granted and finally the public interest. See, Nken v. Holder, 129 S.Ct 1749, 1760-61 (2009), Matter of Forty-Eight Insulations, Inc., 115 F.3d 1294, 1300 (7th Cir. 1997). In this instance, considering these factors leads the court to conclude that the debtor's motion for stay should be denied.
To evaluate the movant's likelihood of success requires the court to review the arguments advanced on appeal. Mr. Sims motion identifies two, but does so only in a conclusory fashion without any explanation of how or why they require reversal of the court's decision. See, Forty-Eight Insulations, 115 F.3d at 1304 (conclusory arguments do not establish a strong showing of success).
In a reply to the bank's objection to the motion, the debtor adds several more issues and attempts to elaborate upon his original arguments. This is not proper. See, Harper v. Vigilant Ins. Co., 433 F.3d 521, 528 (7th Cir. 2005) ("The argument is more developed in [the] reply brief, but this is too little, too late, for 'arguments raised for the first time in a reply brief are [also] waived.'"). See also, James v. Sheahan, 137 F.3d 1003, 1008 (7th Cir. 2000) ("Arguments raised for the first time in a reply brief are waived.").
Mr. Sims' first issue relates to Judge Dees having recused himself from all aspects of the debtor's case back in March of 2019. See, Order of Recusal, dated Mar. 5, 2019, Docket No. 109. He is complaining not because Judge Dees recused himself but, apparently, because he did so on his own initiative and without ruling on the debtor's motion for recusal, which was filed in a separate adversary proceeding. See, Adv. Pro. 19-3012, Sims v. Miller, Motion to Recuse, filed Feb. 27, 2019, ECF No. 7. How any of that relates to a decision made almost a year later by a different judge is unexplained.
The debtor's second complaint is that the court refused to allow him to depose the bank's counsel, Mr. Bengs. The court sustained the bank's motion for a protective order and denied the debtor's motion to compel that deposition following a hearing in July 2019. See, Order Dated July 18, 2019, ECF No. 167. Decisions concerning discovery are matters committed to the court's discretion, Kalis v. Colgate-Palmolive Co., 231 F.3d 1049, 1056 (7th Cir. 2000); Olive Can Co., Inc. v. Martin, 906 F.2d 1147, 1152 (7th Cir. 1990), and nothing in the debtor's motion for stay indicates how the court might have abused its discretion in connection with its ruling on that discovery dispute. More significantly, that ruling was made in connection with disputes that pre-date confirmation of the debtor's Chapter 13 plan (August 22, 2019, ECF No. 171), the amended motion for relief from stay (filed October 31, 2019, ECF No. 173), and the events that led the court to terminate the stay (the debtor's default under the confirmed plan). How a discovery decision rendered months before the filing of the motion at issue, made in connection with a different dispute, can constitute a basis for a reversal of the court's decision in another matter is unexplained.
To the extent the debtor is complaining about the court's order of January 22, 2020 (ECF No. 183) that order denied his motion to continue the trial scheduled for January 23, 2020 (ECF No. 182), not any requested discovery.
A decision terminating the automatic stay is a matter committed to the court's discretion. Matter of McWilliams, 114 F.3d 544, 546 (7th Cir. 1998); Matter of Holtcamp, 669 F.2d 505, 507 (7th Cir. 1982). The debtor's motion for stay fails to mention that standard. It also fails to mention the underlying reasons the court terminated the stay: its finding that the debtor had defaulted in the performance of his obligations to the bank under the confirmed plan and its conclusion that such a default constituted cause for termination of the stay. See, In re Borm, 508 B.R. 104, 106 (8th Cir. BAP 2014); In re Carona, 254 B.R. 364, 367 (Bankr. S.D. Tex. 2000) (default under a confirmed plan can constitute cause to terminate the stay). The debtor's arguments on appeal do not challenge the court's interpretation of the confirmed plan or question the court's finding that the debtor had failed to fulfill those obligations or its conclusion that such a failure constituted cause for termination of the automatic stay. Given the absence of any arguments that even touch upon those fundamental issues, the debtor has failed to demonstrate any likelihood of success on appeal.
Debtor argues the failure to stay the court's order will result in the loss of his home and that constitutes irreparable harm. While the court is willing to accept this as a working hypothesis, that harm must be balanced against the harm to the appellee if a stay is granted. The debtor offers nothing to compensate the bank for such a stay. No payments, no security, no additional collateral. In essence the debtor wants something for nothing. Under the circumstances presented here, that is not acceptable.
The debtor has no personal liability to the bank and its claims against him are in rem only. Its collateral - the debtor's residence - is worth less that the balance due on the mortgage and so there is no source from which the bank can be compensated for the additional amounts that will accrue during the appeal. --------
The final factor to be balanced is the public interest. In this regard, the court notes that the bank received its judgment of foreclosure almost seven years ago and it has been delayed in the enforcement of those rights by litigation of one kind or another ever since. The court concludes that the public interest lies in ending further delay. See, In re Smith, 501 B.R. 332, 337 (Bankr. E.D. Mich. 2013) ("there is a public interest in preventing debtors from using the bankruptcy process to unduly delay creditors"); In re Pertuset, 2012 WL 7991693 *5 (Bankr. S.D. Ohio 2012).
Balancing the factors the court is required to consider in connection with the motion for stay pending appeal leads the court to conclude that the balance weighs decisively against any kind of stay. Debtor's motion is therefore DENIED.
SO ORDERED.
/s/ Robert E . Grant
Chief Judge, United States Bankruptcy Court