In re Wymer

• Decision Date: 16 June 1980
• Docket Number: BAP No. 80-0001,Bankruptcy No. 79-23464-WH,Adv. No. 79-0008.
• Citation: 5 BR 802
• Parties: In re Joseph P. WYMER, Jr., Debtor. Joseph P. WYMER, Jr., Defendant-Appellant, v. Rhonda B. WYMER, Plaintiff-Appellee.
• Court: U.S. Bankruptcy Appellate Panel, Ninth Circuit

5 B.R. 802 (1980)

In re Joseph P. WYMER, Jr., Debtor Joseph P. WYMER, Jr., Defendant-Appellant, v. Rhonda B. WYMER, Plaintiff-Appellee.

BAP No. 80-0001, Bankruptcy No. 79-23464-WH, Adv. No. 79-0008.

United States Bankruptcy Appellate Panels of the Ninth Circuit.

May 27, 1980.

Concurring Opinion June 16, 1980.

Raymond P. Van Stockum, Jones & Pittullo, P.C., Upland, Cal., for appellant.

Stephen M. Shirley, Shirley, Johnson & Shirley, Pomona, Cal., for appellee.

Before KATZ, GEORGE and HUGHES, Bankruptcy Judges.

OPINION AND ORDER

HUGHES, Bankruptcy Judge.

Appellant has obtained two orders from this panel, the first specifically staying an execution sale scheduled for the following day and the second generally staying enforcement of the judgment pending appeal. Having reexamined the record and reviewed applicable law, we conclude that by granting the second stay the panel departed from fundamental principles of appellate review and unnecessarily assumed responsibilities that ordinarily are reserved to the trial court.

Accordingly, we now vacate that order on the ground that appellant has failed to demonstrate any abuse of discretion by the trial judge and on the further ground that he failed to show that he was unable to obtain relief from the trial judge.

Termination of the stay of enforcement is postponed 10 days from entry of this order to permit appellant, if he choses, to post a supersedeas bond of $12,500 as previously approved by the trial judge.

Appellant has deposited $3500 with the clerk of the bankruptcy court as a condition of the stay that is now being vacated. These funds are to remain on deposit, subject to such disposition as the trial court in its discretion shall order.

Nothing in this order should be read as limiting the trial court's discretion to modify the amount of the supersedeas bond, or to fashion an alternative bond involving proceeds of an execution sale.

I. Background

A state court judgment was entered in favor of appellee creditor against appellant debtor in 1974. A writ of execution was issued on that judgment in the amount of $8146.05 on September 26, 1979. Thereafter, on October 29, 1979, the Marshal of San Bernardino County seized four motor vehicles belonging to debtor.

Debtor moved the state court unsuccessfully on November 9, 1979, to claim the vehicles exempt and to quash the writ. Four days later he filed bankruptcy, effectively staying the execution sale. In early December, creditor appellee commenced an action to determine the dischargeability of the state court judgment. Trial concluded on January 16, 1980, and a judgment holding the state court judgment nondischargeable was entered by Judge William H. Hyer on January 22, 1980. This judgment was appealed and is pending before this panel.

On or about January 22, debtor filed a motion for stay of judgment pending appeal, as well as the notice of appeal. On January 31, 1980, the trial judge accepted the stipulation of the parties and fixed the amount of the supersedeas bond at $12,500.

The bond was not posted. However, on February 25, 1980, appellant brought an emergency motion to this panel in which he prayed "that the Bankruptcy Appellate Panel issue a stay order halting the sale scheduled by the Marshal, San Bernardino County, California, for 10:00 a.m. on February 26, 1980." In presenting the motion to this panel, debtor alleged that the "grounds for this emergency motion were presented to the Honorable David Naugle in the absence of Judge Hyer on Friday, February 22, 1980, at which time Judge Naugle denied the motion."

We granted relief and the Marshal's sale was cancelled. On the afternoon of February 26, the panel heard arguments of counsel by conference telephone call and granted a stay pending appeal on condition appellant post a $3500 supersedeas bond. That order, dated February 28 and filed March 3, is the subject of this memorandum.

II. Stays Pending Appeal

Federal courts (whether trial or appellate) have statutory or inherent power to stay judgments and orders pending appeal. All Writs Act, 28 U.S.C. § 1651; 11 Wright & Miller pp. 331-32.

The propriety of a stay order, however, depends on rules of procedure and judicially established standards. Of primary consideration are Rules 62(a), (c), (d) and (g) of the Federal Rules of Civil Procedure, Rules 7 and 8(a) and (b) of the Federal Rules of Appellate Procedure and Rule 805 of the Federal Rules of Bankruptcy Procedure.

The various rules and standards taken together, establish three types of stays, one that issues as a matter of right, another that is discretionary and a third that combines features of the first two.

The matter-of-right stay is confined largely to money judgments and is often known as the supersedeas stay because of reference to the supersedeas bond in FRCP 62(d). Supersedeas, the bond that supercedes the right of enforcement, has no universal meaning. In the federal system, a "true supersedeas operates only as to a money judgment from which a writ of execution can issue." Hovey v. McDonald, 109 U.S. 150, 3 S.Ct. 136, 27 L.Ed. 888 (1883). But the term is sometimes used with reference to stays of non-money judgments on appeal. See, e.g., City of Shelbyville v. Glover, 184 F. 234, 240 (6th Cir. 1910). In California, supersedeas has had the opposite meaning, namely discretionary stays of non-money judgments. See generally, 6 Witkin California Procedure 2d Ed. For purposes of this memorandum, supersedeas refers to the matter-of-right stay provided by FRCP 62(d).

In addition to the Rule 62(d) supersedeas stay, a matter-of-right stay of enforcement of a money judgment is granted automatically by FRCP 62(a). This rule stays execution of judgment for 10 days from entry of judgment.

All other stays, including any stay of enforcement of a money judgment that departs from Rule 62(d), are discretionary. FRCP 62(c), (g); FRAP 8(a), (b); FRBP 805. See generally, 11 Wright & Miller pp. 306-34, 16 Wright & Miller, Cooper & Gressman pp. 380-3.

The present appeal is not from a money judgment as such but from a judgment of the bankruptcy court holding that a state court money judgment is unaffected by debtor's discharge in bankruptcy and therefore is not stayed by the provisions of 11 U.S.C. § 362 or 11 U.S.C. § 524. Thus, while true supersedeas is not before us because the writ of execution appellee relies upon issued from the state court and not from the bankruptcy court, "the doctrines which apply to a supersedeas can . . . be brought in by way of analogy." Hovey v. McDonald, supra, 160, 3 S.Ct. 142.

III. Supersedeas Stays

The matter-of-right stay of money judgments was at one time provided by statute, more recently by rule. See discussion in In re Federal Facilities Realty Trust, 227 F.2d 651 (7th Cir. 1955) at p. 654. It has been said:

"A supersedeas, like an appeal, is a matter of right, and its allowance does not rest in the sound discretion of court or judge . . . The cases in which the writ or the appeal . . . is a supersedeas are determined by acts of Congress, and not by the opinion or discretion of the judge or justice. His only function is to determine whether or not the security offered is good and sufficient. If it is, it is his duty to take it, and upon his acceptance of it the execution of the judgment or decree is stayed . . . The law itself works the supersedeas."

McCourt v. Singers-Bigger, 150 F. 102, 104-5 (8th Cir. 1906). Thus, upon filing a bond that is approved by the trial court, enforcement of a money judgment is automatically stayed without further order. FRCP 62(d); 11 Wright & Miller p. 326.

The non-discretionary supersedeas turns largely on approval of the amount of the bond by the trial court. Although no present rule of Federal Procedure provides standards for fixing the amount, "former Rule 73(d) described what always has been good practice on a supersedeas bond, and, except as the matter now is regulated by local rules in a particular district, it is still a useful guide in these matters." 11 Wright & Miller p. 327. (There is no local rule governing the amount of a supersedeas bond in the Central District of California, either in the District or Bankruptcy Court. There is such a local rule in the Southern District of New York. As described in Trans World Airlines Inc. v. Hughes, 314 F.Supp. 94 (S.D.N.Y. 1970), aff'd 515 F.2d 173 (2d Cir. 1975), the rule requires that the supersedeas bond be 111% of the judgment plus $250 to cover costs on appeal). Thus former FRCP Rule 73(d), which did not survive adoption of the Federal Rules of Appellate Procedure, established a standard that exists today. "Rule 8(b) of the Federal Rules of Appellate Procedure has superseded, but not annulled that former Rule, and the law thereunder. Hence the law as above stated has lost none of its validity or vitality." Tully v. Kerguen, 304 F.Supp. 1225, 1227 (D.V.I. 1969). Accord: Poplar Grove Planting and Refining Co., Inc. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir. 1979).

Former Rule 73(d) described the form of the supersedeas bond and its amount. In form, the "bond shall be conditioned for the satisfaction of the judgment in full together with costs, interest and damages for delay, if for any reason the appeal is dismissed or if the judgment is affirmed, and to satisfy in full such modification of the judgment and such costs, interest, and damages as the appellate court may adjudge and award."

"The amount of the bond shall be fixed at such sum as will cover the whole amount of the judgment remaining unsatisfied, costs on the appeal, interest, and damages for delay, unless the court after notice and hearing and for good cause fixes a different amount or orders security other than the bond."

The standard for supersedeas bonds under Rule 62(d) thus incorporates former Rule 73(d) and may be summarized:

1. The non-discretionary, matter-of-right stay requires a bond in sufficient amount to cover the...