532 B.R. 425
Bankr. D.P.R.2015Background
- Defendants filed Expedited Motion for Stay Pending Appeal seeking to stay the adversary proceeding while appealing the court’s denial of their motion to set aside a default judgment (Docket No. 116).
- The court previously addressed some arguments, including that prior counsel abandoned defendants, in a December 10, 2014 Opinion and Order; the court will not revisit those arguments here.
- The new argument is that without a stay, defendants will become insolvent due to their status as Florida homeowners’ associations operating as nonprofits.
- Defendants contend the judgment’s enforcement would cause irreparable harm by rendering the three entities insolvent given their financial condition.
- The court applies the four-part preliminary injunction standard for a stay pending appeal and evaluates likelihood of success on the merits, irreparable harm, harm to others, and public interest.
- The motion is denied based on insufficiency of likelihood of success on the merits and other factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the stay pending appeal should be granted. | Defendants lack likelihood of success and face irreparable harm if no stay. | Without a stay, insolvency and irreparable harm to nonprofits justify relief. | Denied all four factors; stay denied. |
Key Cases Cited
- Acevedo-García v. Vera-Monroig, 296 F.3d 13 (1st Cir.2002) (sine qua non is likelihood of success on the merits; stay is extraordinary)
- Hilton v. Braunskill, 481 U.S. 770 (Supreme Court 1987) (four-factor framework for stays; public interest considerations)
- Nken v. Holder, 556 U.S. 418 (U.S. 2009) (likelihood of success is central to stay analysis; first two factors critical)
- In re Turner, 207 B.R. 373 (BAP 1997) (analogous stay standards in bankruptcy appeals)
- In re Bijan-Sara Corp., 203 B.R. 358 (2nd Cir. BAP 1996) (four-factor test governs stay pending appeal)
- Damiani v. R.I. Hosp., 704 F.2d 12 (1st Cir.1983) (staff reliance on attorney actions not imputing to client; irreparable harm not sole determinant)