In re Howard

• Decision Date: 15 January 2010
• Docket Number: Bankruptcy No. 08-22224JAD.,Adversary No. 09-02127JAD.
• Citation: 422 B.R. 593
• Parties: In re John W. HOWARD, Debtor. Carlota M. Bohm, (Trustee for the Bankruptcy Estate of John W. Howard), Plaintiff, v. Victoria M. Howard, Defendant.
• Court: U.S. Bankruptcy Court — Western District of Pennsylvania

422 B.R. 593

In re John W. HOWARD, Debtor.

Carlota M. Bohm, (Trustee for the Bankruptcy Estate of John W. Howard), Plaintiff, v. Victoria M. Howard, Defendant.

Bankruptcy No. 08-22224JAD.

Adversary No. 09-02127JAD.

United States Bankruptcy Court, W.D. Pennsylvania.

January 15, 2010.

Carlota Bohm, Pittsburgh, PA, Chapter 7 Trustee.

Mary-Jo Rebelo, Pittsburgh, PA, for Chapter 7 Trustee.

Avrum Levicoff, Beckley, WV, for Victoria M. Howard.

Robert O. Lampl, Pittsburgh, PA, for John W. Howard.

MEMORANDUM OPINION

JEFFERY A. DELLER, Bankruptcy Judge.

The matters¹ before the Court are the Trustee's Motion to Compel Compliance With December 1 and 10, 2009 Orders of Court and for Contempt and Sanctions (the "Motion to Compel"), the Defendant's Motion for Stay of Orders Pending Appeal (the "Motion for Stay Pending Appeal"), and the Defendant's Motion to Clarify Victoria Howard's Motion to Stay and Victoria Howard's Response to the Trustee's Motion for Contempt and/or Sanctions (the "Motion to Clarify").² For the reasons set forth below, an order shall be entered which grants the Trustee's Motion to Compel. This order shall also deny both the Defendant's Motion for Stay Pending Appeal and the Defendant's Motion to Clarify.

I. Background

The Court writes primarily for the parties who are familiar with the background of this case, which is set forth more fully in this Court's Memorandum Opinion dated December 10, 2009. See Bohm v. Howard (In re Howard), 422 B.R. 568, 2009 WL 4729674 (Bankr.W.D.Pa.2009).

Each of these motions before the Court concern the Defendant's failure to comply with two orders of this Court. Those two orders consist of a bench order of December 1, 2009 and this Court's written order of December 10, 2009.

The two orders at issue, which granted partial summary judgment in favor of the Trustee in this adversary proceeding, determined that (a) certain Mineral Rights located in Greene County, Pennsylvania (and associated proceeds relating to the same) constitute property of this bankruptcy estate in which the Trustee holds a superior interest, (b) any interest claimed by Ms. Howard in the Mineral Rights and associated proceeds is void, (c) such property is protected by the automatic stay of 11 U.S.C. § 362(a), (d) Ms. Howard violated the automatic stay by unilaterally taking control of property of the estate and conveying the same to her without consent of the Trustee and without an order of this Court, (e) the Defendant, Ms. Howard, is required to immediately turnover the proceeds of the Mineral Rights to the Trustee, and (f) the Defendant, Ms. Howard, is liable for all Mineral Rights' proceeds that she has dissipated and for damages as a result of her willful violation of the automatic stay.

After the Court issued its December 1, 2009 bench order, but before the issuance of both the Court's December 10, 2009 written order and associated Memorandum Opinion, the Defendant filed a notice of appeal. No motion for stay pending appeal was immediately filed by the Defendant; nor did the Defendant relinquish possession and control of the approximately $471,000 of Mineral Rights' proceeds to the Trustee.³

After this Court issued its December 10, 2009 Memorandum Opinion and written order, Ms. Howard continued to refuse to turnover the $471,000 of proceeds. As a result, on December 16, 2009, the Trustee filed her Motion to Compel.

On December 18, 2009, the Defendant filed her written objection to the Trustee's Motion to Compel. On that same date, the Defendant also filed her Motion for Stay Pending Appeal. Thereafter, on December 22, 2009, the Court held a hearing on the Motion to Compel and the Motion for Stay Pending Appeal.

In response to the Motion to Compel, the Defendant makes two arguments as to why the Motion to Compel should not be granted. First, the Defendant argues that the Motion to Compel was prematurely filed pursuant to Fed.R.Civ.P. 62 as incorporated into Fed.R.Bankr.P. 7062. Second, the Defendant argues that the Motion to Compel is without merit because the Defendant is allegedly entitled to a stay pending appeal pursuant to Fed. R.Bankr.P. 8005.⁴ Naturally, the Trustee disputes these contentions.

II. The Request for Stay Pending Appeal

Because Ms. Howard is utilizing the Motion for Stay Pending an Appeal as a defense to the Motion to Compel, the Court will first address the merits of the Motion for Stay Pending Appeal.

The Court must consider four factors when ruling on the motion for stay pending an appeal. Those factors are: (1) whether the movant is likely to succeed on the merits of the appeal; (2) whether the movant will suffer irreparable injury if a stay is not granted; (3) whether a stay would substantially harm other parties in the litigation; and (4) whether a stay is in the public interest. See In re Countrywide Home Loans, Inc., 387 B.R. 467, 471 (Bankr.W.D.Pa.2008)(citing cases, including Republic of Philippines v. Westinghouse Elec. Corp., 949 F.2d 653, 658 (3d Cir.1991)).

The Court notes that the failure to satisfy any one of the four factors set forth above might not necessarily be fatal to a motion for stay pending appeal. Rather, to determine whether a stay pending appeal is warranted, the Court is to balance each of the factors at issue and examine individualized considerations relevant to the case. Id.

A. Likelihood of Success on the Merits

Several approaches have been utilized by various courts when analyzing whether a movant seeking a stay has a likelihood of succeeding on appeal. For example, some courts focus on the strength of the case the movant will present on appeal. See id. (citing In re Polaroid Corp., 2004 WL 253477 *1 (D.Del.2004)). As my colleague Judge Thomas Agresti noted: "Taking this approach does put a court in the somewhat awkward, though not impossible, position of trying to objectively assess the likelihood that its ruling will be upheld on appeal." Id.

To avoid the difficulties imposed by this form of self-assessment, other courts have focused "on whether the movant seeks to raise issues on appeal that are substantial, serious, and doubtful so as to make them fair ground for litigation." Id. (citing In re Lickman, 301 B.R. 739, 743 (Bankr. M.D.Fla.2003)).

In addition, a few other courts have adopted a "sliding scale" measure under which a court will examine the strength of the case on appeal, relative to the hardships to be suffered if a stay is not granted. Id. at 472 (citing In re Cujas, 376 B.R. 480, 486 (Bankr.E.D.Pa.2007)).

Under any of these approaches, this Court finds that Ms. Howard has not shown a likelihood of success on appeal.

From the outset, the Court notes that Ms. Howard's Motion for Stay Pending Appeal does not really discuss how Ms. Howard's appeal will be successful. Rather, the motion merely recites the issues she will present on appeal without much of any legal analysis. See Motion for Stay Pending Appeal, Dkt. #70, at pp. 5-9.⁵ The Court can only divine under these circumstances that Ms. Howard is relying upon her submissions in support of her opposition to the Trustee's summary judgment motion as proof that Ms. Howard has a likelihood of success on appeal. However, the arguments of Ms. Howard were previously rejected by the Court in its December 1, 2009 bench ruling and in its December 10, 2009 Memorandum Opinion. As such, Ms. Howard has not demonstrated that her appeal has any likelihood of success.

Even if this Court were to consider the alleged "errors" cited by Ms. Howard, the Court is not convinced that the Defendant has sustained her burden of persuasion.

By way of example, the Defendant asserts this Court erred by concluding that the Debtor's interest in the Mineral Rights was not effectively transferred to Ms. Howard as a result of the "1990 Agreement" (See Dkt. # 61, p. 3, ¶ 1, A.). The Defendant, however, repeatedly admits on the record that the "1990 Agreement" was executed in Florida, (See Dkt. # 52, Exhibit G at p. 11, lines 1-22), and was not recorded until after the Debtor commenced this bankruptcy case, which is more than eighteen years after the date the "1990 Agreement" was executed. (See Dkt. # 52, Exhibit F and Dkt. # 52, Exhibit G at pp. 6-7; p. 43, lines 13-20; p. 51, lines 18-25). Given these circumstances, the Trustee clearly maintains a superior interest in the real property to that of the Defendant because the Defendant's interest is void by operation of applicable law, including 11. U.S.C. § 362(a), 11 U.S.C. § 549, and 11 U.S.C. § 544 (which gives the Trustee rights under 21 P.S. §§ 351, 356 and 445).⁶

The Defendant insists this Court erred by failing to recognize her status as an alleged "tenant in common" with the Debtor, (See Dkt. # 61, p. 3, ¶1. C), and her alleged entitlement to an "undivided one half interest" in the Mineral Rights. (See Dkt. # 61, p. 3, ¶ 1, D). The alleged basis for her purported status as a "tenant in common" rests on the assumption that the Debtor and Defendant owned the real property at issue as "tenants by entireties" prior to their divorce.⁷ This assumption is not supported by the record.

In her Brief in Support of Motion for Summary Judgment, the Defendant contends that title to the relevant parcels was conveyed to her and John W. Howard by way of two different deeds: one dated April 5, 1984⁸ and another dated December 29, 1989. (See Dkt. # 27, p. 4, ¶ 5.) Neither of those deeds, however, convey a property interest to Victoria Howard. As to the 1984 deed, the Defendant has never disputed the fact that the grantees were John W. Howard and his spouse at that time, Peggy J. Howard. Victoria Howard is not even a party to the transaction. Indeed, Victoria Howard and John W. Howard were not married at the time of the 1984 deed, having not been married until December 1987. As to the deed dated December 29, 1989, the real property was conveyed by the Debtor, John W. Howard, and his former wife, Peggy J. Howard, to the Debtor alone. (See Dkt. # 31,...