United States District Court, W.D. Texas, San Antonio Division
PITMAN UNITED STATES DISTRICT JUDGE.
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.
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.
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).
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.
Motion to Sever
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).
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).
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.
Motion to Stay
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.
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. ...