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Halprin v. Federal Deposit Insurance Corp.

United States District Court, W.D. Texas, San Antonio Division

July 17, 2017

GREGORY HALPRIN, et al., Plaintiffs,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, et al., Defendants.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE.

         Before the Court in the above-entitled matter is Plaintiffs' Motion to Stay Pending Appeal and Motion for Severance of Dismissed Claims. (Dkt. 233). Having considered the motion and responsive filings thereto, applicable law, and the entire case file, the Court finds Plaintiffs' motion should be and is hereby DENIED.

         I. Background

         Plaintiffs initiated the instant action in state court in 2009. When the case was removed to federal court in 2013, Plaintiffs had already filed five versions of their petition. After Plaintiffs were ordered to amend their petition to conform to the pleading requirements of the Federal Rules of Civil Procedure, Plaintiffs filed a sixth amended complaint, (Dkt. 90), containing fewer plaintiffs and claims than the state court petition. Despite the general rule that amended complaints supersede prior filings, the parties expressed significant confusion as to which parties and claims remained. Accordingly, the Court ordered Plaintiffs to file a notice regarding the plaintiffs and causes of action that remained live in light of the sixth amended complaint. (Dkt. 109). Two sets of plaintiffs filed notices in response. (Dkts. 116, 117). Because three plaintiffs who responded to the Order were not included in the sixth amended complaint, the Court ordered Plaintiffs to file a seventh amended complaint. (Dkt. 118). That complaint was filed in November 2015, (Dkt. 124), two years after the case was removed and more than six years after Plaintiffs initiated the action.

         In July 2016, Plaintiffs filed an opposed motion to amend their complaint. (Dkt. 192). After reviewing the pleadings, the relevant law, and the case file, this Court denied Plaintiffs' motion. (Dkt. 214). The Court then considered several defendants' motions to dismiss, granting those filed by Mike Maldonado, (Dkt. 220); Robert Gandy, (id.); David Rogers, (id.); Michael McCarthy, (id.); Eric Sherer, (Dkt. 223); American Title Group, Inc. (“Land America”), (Dkt. 227); Dan Brown, (id.); and the Federal Deposit Insurance Corporation (“FDIC”), (Dkt. 228) (collectively, “the Dismissed Defendants”). Claims remain pending against Defendants Maria De Rosario Padilla, Carlos Miguel Padilla, Mauro Joe Padilla, Mario Padilla, the Padilla Property Corporation, and HTG Real Property Management (collectively, “the Padilla Defendants”). (Seventh Am. Compl., Dkt. 124, at 5-6).

         Plaintiffs initiated an appeal of the orders described above, but sought a voluntary dismissal of that appeal shortly thereafter. (Dkts. 231, 232). They then filed the instant motion, which asks this Court to (1) sever the claims against the Padilla Defendants so the orders involving the Dismissed Defendants will become appealable; and (2) stay this case pending Plaintiffs' appeal of the Court's orders. (Mot. Stay, Dkt. 233). Several of the Dismissed Defendants oppose Plaintiffs' request. (Maldonado Resp., Dkt. 234; FDIC Resp., Dkt. 235; LandAmerica Resp., Dkt. 236). The Padilla Defendants did not respond.

         II. Motion to Sever

         The decision to grant a severance is subject to the discretion of the district court. Acevedo v. Allsup's Convenience Stores, Inc., 600 F.3d 516, 520-22 (5th Cir. 2010).

         Here, Plaintiffs seek to sever their claims against the Padilla Defendants so they may pursue an appeal of the orders dismissing the other defendants. (Mot. Stay, Dkt. 233, at 4). Several of the Dismissed Defendants object, arguing that (1) the pending claims against the Padilla Defendants, LandAmerica's counterclaims against Plaintiffs, and the dismissed claims “all arise out of the same series of transactions and present common questions of law and fact, ” (LandAmerica Resp., Dkt. 236, at 8); (2) “Plaintiffs have failed to state a viable claim against the [D]ismissed Defendants” and thus “will suffer no irreparable injury and no prejudice if severance is denied, ” (id.); and (3) the presence of the FDIC in this action provides the sole basis for subject matter jurisdiction in this Court, (FDIC Resp., Dkt. 235).

         The Court agrees with the first two points raised by the Dismissed Defendants. The dismissed claims, pending claims against the Padilla Defendants, and counterclaims against Plaintiffs arise out of the same transactions. Severance would therefore be inappropriate, especially because the relief Plaintiffs seek-the ability to pursue an appeal of the Courts' orders dismissing claims against certain Defendants-would more appropriately be accomplished by requesting a Rule 54(b) certification. Plaintiffs seem to acknowledge this fact, as they represent they “will seek consolidation of all the remaining claims for trial” should they prevail on appeal. (Reply, Dkt. 237, at 3). Plaintiffs' request to sever the claims against the Padilla Defendants is therefore DENIED.

         III. Motion to Stay

         A. Legal Standard

         A court may stay an underlying proceeding during the pendency of an appeal. Nken v. Holder, 556 U.S. 418, 433 (2009); United States v. Transocean Deepwater Drilling, Inc., 537 Fed. App'x 358, 360 (5th Cir. 2013). However, the movant bears the “burden of showing that a stay is justified.” Transocean, 537 Fed. App'x at 360. Because “[a] stay is an intrusion into the ordinary processes of administration and justice, ” it “is not a matter of right, even if irreparable injury might otherwise result to the appellant.” Nken, 556 U.S. at 427. A stay is “an exercise of judicial discretion, ” and the propriety of whether it is granted is “dependent upon the circumstances of the particular case.” Id. at 433.

         In considering whether a stay is justified, courts apply a four-factor test. Id. at 434. Those factors include: “(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.” Id. ...


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