Elias v. Sumski (In Re Elias) , 182 F. App'x 3 ( 2006 )

Not For Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 06-1091
IN RE: JACQUES DIMITRI ELIAS,
Debtor.
____________________
JACQUES DIMITRI ELIAS,
Appellant,
v.
LAWRENCE P. SUMSKI, TRUSTEE, ET AL.,
Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul Barbadoro, U.S. District Judge]
Before
Selya, Lynch and Howard,
Circuit Judges.
Leonard G. Deming, II and Deming Law Office, on brief for
appellant.
June 2, 2006
Per Curiam. This is an interlocutory appeal from the
district court's denial of (1) a motion to stay a bankruptcy court
order pending appeal of that order to the district court and (2) a
motion for reconsideration of the denial of the motion to stay.
Although the appellant has not filed a motion for a stay pending
appeal in this court, his brief seeks such relief and alleges that
he will be irreparably harmed without it. Because we find that
this appeal presents no substantial question, see 1st Cir. R.
27(c), we proceed to the merits.
The underlying bankruptcy court order, which the debtor
seeks to stay pending his appeal to the district court, granted a
creditor, Wachovia Bank ("the bank"), relief from the automatic
stay to enable it to foreclose on its mortgage loan to the debtor,
which was secured by the debtor's home. That order was based on
the debtor's pre-petition arrearages1 and his subsequent failure to
comply with an "adequate protection" order requiring him to make
timely monthly payments to the bank in specified amounts.
As the debtor acknowledges, the courts below properly
applied the traditional four-part standard applicable to
preliminary injunctions in determining whether to grant a stay
pending appeal, Acevedo-Garcia v. Vera-Monroig, 296 F.3d 13, 16
(1st Cir. 2002), namely, "(1) whether the applicant has made a
1
According to the bankruptcy court docket, the bank has a
secured claim of $257,458.43, and the pre-petition arrearage on its
mortgage note was $45,144.34.
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strong showing of success on the merits; (2) whether the applicant
will be irreparably harmed absent injunctive relief; (3) whether
issuance of the stay will injure other parties; and (4) where the
public interest lies," id. at 16 n.3. We review the lower courts'
denial of such relief for abuse of discretion or error of law.
Sunshine Dev., Inc. v. FDIC, 33 F.3d 106, 110-11 (1st Cir. 1994).
The debtor's argument that the lower courts should have
given greater weight to the balance of harms--as opposed to the
debtor's likelihood of success on appeal--is foreclosed by our
decisions emphasizing that "'[t]he sine qua non [of the stay
pending appeal standard] is whether the [movants] are likely to
succeed on the merits,'" Acevedo-Garcia, 296 F.3d at 16 (quoting
Weaver v. Henderson, 984 F.2d 11, 12 (1st Cir. 1993)), and that,
accordingly, "'[w]hat matters . . . is not the raw amount of
irreparable harm [a] party might conceivably suffer, but rather the
risk of such harm in light of the party's chance of success on the
merits,'" P.R. Hosp. Supply, Inc. v. Boston Scientific Corp., 426
F.3d 503, 507 n.1 (1st Cir. 2005) (quoting the Massachusetts
standard, which "closely tracks the federal standard").
The debtor's chances of success on the merits of his
appeal to the district court do appear slim. The debtor does not
allege that the bankruptcy court committed any factual errors in
finding that, at the time that the bank filed its affidavit of
noncompliance with the adequate protection order, the debtor's
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payments were short $2,782, approximately one and a half regular
monthly payments, and that some of those payments were late. Nor
could such a claim reasonably be made since, in making those
findings, the bankruptcy court relied on the evidence produced by
the debtor himself, rather than that originally produced by the
bank, which the debtor claims was inaccurate and incomplete.
Nor does the debtor argue that his original delinquency,
coupled with his failure to comply with the adequate protection
order, did not constitute "cause" for granting relief from the
automatic stay under 11 U.S.C. § 362(d). Any such argument would
be unavailing, given the statute's definition of "cause" as
"including the lack of adequate protection of an interest in
property of [a] party in interest." Id. § 362(d)(1).
Rather, the debtor premises his likelihood of success on
the allegedly confusing nature of the adequate protection order,
his good faith, and his substantial compliance with the order. We
see nothing confusing about the adequate protection order, which
specified precisely when and in what amounts the payments were to
be made. And the debtor has cited no authority for the proposition
that his alleged good faith and substantial compliance with the
adequate protection order are legally relevant to whether to grant
relief from the automatic stay to a creditor whose interests are
otherwise inadequately protected. In any event, we see no abuse of
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discretion in refusing to stay an order relieving the bank from the
automatic stay under the circumstances presented here.
Furthermore, we agree with the bankruptcy court that "the
Debtor's demonstrated inability to make timely adequate protection
payments over a period of time renders his contention that the
interests of [the bank] can be protected by the Debtor's ability to
continue making adequate protection payments unpersuasive."
Therefore, even the balance of harms is not clearly in the debtor's
favor.
Because the debtor has not shown that the district court
either abused its discretion or erred as a matter of law in denying
his motions for a stay and for reconsideration, the district
court's orders are affirmed.
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