United States District Court, N.D. Texas, Dallas Division
ANNETTE M. LALL, Appellant/Debtor,
THOMAS POWERS and HEENA HIRANI, Appellees.
MEMORANDUM OPINION AND ORDER
J. BOYLE UNITED STATES DISTRICT JUDGE
the Court is Appellant Annette Lall's motion to stay the
bankruptcy court order pending the outcome of her appeal.
Doc. 3. The Court DENIES her request.
Lall appeals an order from the bankruptcy court denying her
motion to vacate that court's order dismissing her
Chapter 13 case with prejudice for five years and her motion
to reinstate her case. Doc. 1-1, Notice of Appeal, 3
(bankruptcy court order). After holding a hearing and
accepting arguments and evidence from the parties, the
bankruptcy court dismissed Lall's case on the motion of
trustee Thomas Powers. The court dismissed the case because
it found that this was the fourth bankruptcy Lall had filed
in a short period of time, that she had not made payments on
her mortgage in eleven years, and that she was not proceeding
in good faith to work with her lenders to establish a payment
plan. Doc. 3, Mot. to Stay (Ex. 3), 28 (transcript of hearing
on motion to stay). After the bankruptcy court dismissed her
case, Lall moved to reinstate her case and vacate the
dismissal order. The bankruptcy court denied her motion
because she failed to show good cause for the relief
requested. Doc. 1-1, Notice of Appeal, 3.
proceeded to timely file her notice of appeal of this order.
Doc. 1, Notice of Appeal. In the interim, Lall first sought a
stay of that order in the bankruptcy court. Doc. 3, Mot. to
Stay (Ex. 1), 11-17 (motion made to bankruptcy court). The
bankruptcy court held a hearing on that motion and denied it.
Id. (Exs. 2 & 3). Lall now seeks the same relief
in this Court.
Rule of Bankruptcy Procedure 8007 governs the procedure for
stays of bankruptcy court orders pending appeal. This rule
states that a party ordinarily must first move for a stay of
a bankruptcy court judgment or order in the bankruptcy court.
Fed.R.Bankr.P. 8007(a)(1)(A). The rule also provides that a
motion for a stay may be made in the district court where the
appeal is pending. Id. 8007(b)(1). If the motion
under 8007(a)(1)(A) was originally made in the bankruptcy
court, the motion in the district court must “either
state that the [bankruptcy] court has not yet ruled on the
motion, or state that the court has ruled and set out any
reasons given for the ruling.” Id.
8007(b)(2)(B). The motion must also include “(A) the
reasons for granting the relief requested and the facts
relied upon; (B) affidavits or other sworn statements
supporting facts subject to dispute; and (C) relevant parts
of the record.” Id. 8007(b)(3)(A)-(C).
decision of a bankruptcy court to deny a stay pending appeal
will be reviewed for abuse of discretion.” 18
Audubon Place, LLC v. SBN V FNBC LLC, 2018 WL 5831231,
at *1 (E.D. La. Nov. 7, 2018) (quoting In re Permian
Producers Drilling, Inc., 263 B.R. 510, 514 (W.D. Tex.
2000)). “A bankruptcy court abuses its discretion if it
seriously errs in its determination of whether the moving
party has established a case meriting injunctive
relief.” Id. “A district court reviews a
bankruptcy court's conclusions of law de novo
and findings of fact for clear error.” Id.
(citing In re First S. Savings Ass'n, 820 F.2d
700, 711 (5th Cir. 1987)). “A finding is ‘clearly
erroneous' when although there is evidence to support it,
the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been
movant seeking a stay of a bankruptcy court order pending
appeal has the burden of satisfying four factors: “(1)
whether the stay applicant has made a strong showing that
[s]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.” Saldana v. Saldana,
2015 WL 5021415, at *2 (N.D. Tex. Aug. 25, 2015) (quoting
Hilton v. Braunskill, 481 U.S. 770, 776 (1987);
Nken v. Holder, 556 U.S. 418, 426 (2009)).
“The first two of these factors are the most
critical.” Id. (citing Nken, 556 U.S.
at 434). Regarding the first factor, the Fifth Circuit has
explained that “the movant need not always show a
‘probability' of success on the merits; instead,
the movant need only present a substantial case on the merits
when a serious legal question is involved and show that the
balance of equities weighs heavily in favor of granting the
stay.” Id. (quoting In re First S. Savings
Ass'n, 820 F.2d at 709 n.10 (quoting Ruiz v.
Estelle (“Ruiz I”), 650 F.2d 555, 565 (5th
Cir. Unit A June 1981))). However, a likelihood of success is
required in the usual case. Id. “Only if the
balance of equities (i.e. consideration of the other
three factors) is . . . heavily tilted in the
movant's favor will we issue a stay in its absence, and,
even then, the issue must be one with patent substantial
merit.” Id. (emphasis and alterations in
original) (quoting Ruiz v. Estelle (“Ruiz
II”), 666 F.2d 854, 857 (5th Cir. 1982)).
first brought her motion for a stay pending appeal in the
bankruptcy court. After that court denied her motion, Lall
reasserted it here. Doc. 3, Mot. to Stay. As Lall points out
in her current motion, the bankruptcy court denied the
initial motion because it found that: (1) Lall did not show
there was a substantial case on the merits; and (2) a stay
would work substantial harm on third parties. Id. at
2 (citing to the bankruptcy court's order). The Court
finds that Lall has met the initial requirements of her Rule
8007 motion, and will go on to review whether the bankruptcy
court abused its discretion in denying a stay pending appeal.
Likelihood of Success on the Merits
appeal argues that the bankruptcy court erred in denying her
motion to reinstate her Chapter 13 proceeding because the
court gave no reasons for denying her motion and was biased
against her. Doc. 3, Mot. to Stay, 3-5. Lall claims that the
bankruptcy court should have addressed her arguments in her
motion to reinstate with an opinion that included findings of
fact and conclusions of law on the issues she raised
regarding the ownership of the note on her home mortgage.
Id. at 4-5. Lall further asserts that the bankruptcy
court was biased towards her because the court questioned
whether she ...