Clark v. Wells Fargo Bank, N.A.
5:17-cv-00359
E.D.N.C.Oct 25, 2017Background
- Appellant James A. Clark, Jr. appealed a bankruptcy court order granting Wells Fargo relief from the automatic stay under 11 U.S.C. § 362(d)(4) as to real property at 515 Morgan Trace Lane, Goldsboro, NC.
- Wells Fargo holds a deed of trust on the property; Clark and the property have been involved in multiple (five) prior bankruptcy filings and foreclosure actions.
- The bankruptcy court found Clark’s filing part of a scheme to delay, hinder, or defraud creditors, terminated the stay as to co-debtor Helen P. Clark, authorized Wells Fargo to proceed with foreclosure or other remedies, and barred Clark from filing bankruptcy for one year.
- Clark moved in this Court for a stay pending appeal under Fed. R. Bankr. P. 8007 and later filed a petition for writ of supersedeas under North Carolina Rule 23(e) and a motion for temporary stay.
- The bankruptcy court had previously denied Clark’s stay request, finding no likelihood of success, no irreparable harm, potential harm to Wells Fargo, and no public-interest grounds for a stay.
- The district court considered Wells Fargo’s opposition and denied Clark’s motion to stay and denied the state-rule supersedeas petition as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a stay pending appeal should issue under Fed. R. Bankr. P. 8007 | Clark argued a stay is needed to prevent irreparable harm and preserve appellate jurisdiction; suggested appeal might dispose of all claims | Wells Fargo argued Clark failed to show likelihood of success or irreparable harm and a stay would harm Wells Fargo | Denied — Clark failed to show likelihood of success and irreparable harm; other factors disfavor a stay |
| Whether North Carolina Rule of Appellate Procedure 23(e) supports a supersedeas here | Clark sought a supersedeas under NC Rule 23(e) to stay enforcement of bankruptcy orders | Wells Fargo and the court noted state appellate rules do not apply to federal bankruptcy appeals and the issue belongs in federal stay procedure | Denied as moot — NC appellate rule inapplicable; stay issue properly raised under Fed. R. Bankr. P. 8007 |
| Whether the bankruptcy court abused discretion by not allowing Clark to respond to Wells Fargo’s response to stay motion | Clark asserted denial of opportunity to respond was error and an abuse of discretion | Wells Fargo defended the bankruptcy court’s procedure and rulings on merits | Court treated procedural objection as part of appeal but did not find sufficient grounds to stay pending appeal |
| Whether the Long preliminary-injunction standard governs stay pending appeal of bankruptcy orders in the Fourth Circuit | Clark implicitly contested application of stay standard | Wells Fargo and court applied Fourth Circuit precedent requiring showing similar to preliminary injunction factors | Court applied Long and related Fourth Circuit precedent and required clear showing of all factors; Clark failed to meet them |
Key Cases Cited
- Long v. Robinson, 432 F.2d 977 (4th Cir. 1970) (articulates four-factor standard for stay pending appeal in Fourth Circuit)
- Real Truth About Obama, Inc. v. FEC, 575 F.3d 342 (4th Cir. 2009) (discusses modification of preliminary-injunction standard referenced in stay analyses)