Opinion
Case No. 5:16-cv-04920-EJD
09-28-2016
IN RE: MOHAMMAD TAYARANI-BEEGHAM, Debtor/Appellant.
ORDER DENYING EX PARTE MOTION FOR STAY PENDING APPEAL
Re: Dkt. No. 4
Appellant Mohammad Tayarani-Beegham ("Appellants") appeals from bankruptcy court orders granting the Trustee's motion requiring him to surrender and turn over possession of certain real property, and denying his motion to reconsider a request to set an evidentiary hearing on the value of that same property. Dkt. No. 1. He now moves ex parte for a stay of these orders pending appeal after a motion for similar relief was denied by the bankruptcy court. Dkt. No. 4.
Indeed, Appellant was required to present either a stay application to the bankruptcy court in the first instance, or explain why doing so would have been impracticable. Fed. R. Bankr. P. 8007. --------
Having considered this matter, the court finds, concludes and orders as follows:
1. Pursuant to Federal Rule of Bankruptcy Procedure 8007(b), a motion for stay pending appeal may be made to the district court sitting in review. The district court applies the same standard as would the court of appeals. See In re Crystal Props. Ltd., L.P., 268 F.3d 743, 755 (9th Cir. 2001) (noting that the district court functions as an appellate court in reviewing a bankruptcy court's decision).
2. The legal principles relevant to a stay motion "have been distilled into consideration of four factors: '(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.'" Nken v. Holder, 556 U.S. 418, 434 (2009) (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)).
3. "The first two factors . . . are the most critical." Id. However, a failure on any one factor "dooms the motion." In re Irwin, 338 B.R. 839, 843 (E.D. Cal. 2006) (quoting In re Deep, 288 B.R. 27, 30 (N.D.N.Y. 2003)). Moreover, because a stay pending appeal is an extraordinary remedy, the court must examine the factors with obligatory restraint. See In re Smith, 397 B.R. 134, 136 (Bankr. D. Nev. 2008) (citing In re Fullmer, 323 B.R. 287, 293 (Bankr. D. Nev. 2005)).
4. Alternatively, "'serious questions going to the merits' and a hardship balance that tips sharply towards the plaintiff" can support the issuance of injunctive relief, "so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest." Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011). This articulation represents "one alternative on a continuum" under the "'sliding scale' approach to preliminary injunctions employed" by the Ninth Circuit. Id. at 1131-32.
5. Appellant has not shown that he is likely to succeed on the merits of the appeal. For a stay pending appeal, the "likelihood of success" element requires a bankruptcy debtor to establish "at a minimum, that she has a substantial case for relief on the merits." Leiva-Perez v. Holder, 640 F.3d 962, 968 (9th Cir. 2011). "[I]t is not enough that the likelihood of success on the merits is 'better than negligible' or that there is a 'mere possibility of relief.'" Lair v. Bullock, 697 F.3d 1200, 1204 (9th Cir. 2012) (quoting Nken, 556 U.S. at 434). Here, Appellant simply declares, without citation to the record or relevant legal authority, that the Trustee has never been able to establish any value in the property for the benefit of the parties at interest. However, the bankruptcy court examined this exact argument when it considered a similar stay motion from Appellant and observed that his position was contrary to that of the Ninth Circuit, as explained in In re Hyman, 967 F.2d 1316, 1320 (9th Cir. 1992). Appellant makes no effort to address Hyman in the instant application, nor has Appellant convincingly established why an evidentiary hearing on valuation is necessary before the bankruptcy merely requires a debtor to cooperate with efforts to market and sell a property. Moreover, and in any event, the court notes that the bankruptcy court has not foreclosed Appellant from challenging any proposed sale of the property because it is fully encumbered; to the contrary, it specifically indicated it will permit Appellant to raise this issue if and when the Trustee files a motion to approve a sale under 11 U.S.C. § 363.
6. In addition, Appellant has not demonstrated he will be irreparably injured in the absence of a stay. "[B]oth the Supreme Court and the Ninth Circuit have raised the bar on the showing of irreparable injury, now requiring a showing that 'an irreparable injury is the more probable or likely outcome' if the stay is not granted . . . ." In re Red Mountain Mach. Co., 451 B.R. 897, 900 (Bankr. D. Ariz. 2011). Speculation describing possible injury will not suffice. See Caribbean Marine Servs. Co. v. Baldrige, 844 F.2d 668, 674 (9th Cir. 1988). Again without citation to authority, to the record, or to any supporting evidence, Appellant surmises the effect of the bankruptcy court's orders is to render him homeless. In response to this representation, the bankruptcy court explained the displacement of Appellant was not necessarily permanent, and was dependent on the whether the property was saleable. The bankruptcy court also pointed out that the need for the order turning over possession to the Trustee arose due to Appellant's "steadfast unwillingness to cooperate." For those reasons, the bankruptcy court found that irreparable injury would not result in the absence of a stay. This court agrees that Appellant's speculative and unsupported arguments fails to demonstrate likely rather than speculative harm.
Because his presentation of the two most critical factors is deficient, Appellant is not entitled to the extraordinary relief he seeks. Accordingly, the ex parte motion for a stay pending appeal (Dkt. No. 4) is DENIED.
IT IS SO ORDERED. Dated: September 28, 2016
/s/_________
EDWARD J. DAVILA
United States District Judge