Bk. No. 92-20550United States Bankruptcy Court, W.D. New York
March 31, 1992
JOHN NINFO, Chief Judge, Bankruptcy
This matter came before the Court on the motion of David R. Beaver, the owner of 504-508 Atlantic Avenue, Rochester, New York, the location at which the debtor, Wellington Talent International, Ltd. (the “Debtor”) conducts its business, to terminate the automatic stay to permit Beaver to proceed to enforce its rights to obtain exclusive possession of the Atlantic Avenue premises as granted to him by a March 8, 1991 amended final judgment of the New York State Supreme Court, granted by Justice Richard D. Rosenbloom.
The pleadings of the parties demonstrated that Justice Rosenbloom’s amended final judgment awarding exclusive possession of the premises to David Beaver had been affirmed on appeal by the Appellate Division, Fourth Department and that a motion for leave to appeal to the Court of Appeals of the State of New York had been denied by such Court of Appeals.
The Debtor’s response in connection with the motion included copies of a motion and notice of motion filed with the New York State Supreme Court requesting that, among other relief, Justice Rosenbloom grant the Debtor relief from his March 8, 1991 judgment pursuant to the Court’s discretionary powers in the interest of justice and/or on the grounds of excusable neglect, fraud, concealment and newly discovered evidence.
At a hearing on the Beaver motion held by this Court on March 23, 1992, this Court was advised that the motion before Justice Rosenbloom was scheduled to be heard on Friday, March 27, 1992.
After thoroughly reviewing the submissions of the parties in connection with the Beaver motion and hearing oral argument on March 23, 1991, this Court granted the Beaver motion to terminate the automatic stay so as to allow Beaver to enforce his rights under the Supreme Court’s March 8, 1991 judgment awarding exclusive possession of the premises in question to Beaver. This Court based its decision essentially on resjudicata finding that the issue of the Debtor’s right to possession of the premises in question had been fully litigated and determined in State Court, and that therefore, Debtor’s rights to possession of the property in question had been legally and fully terminated as part of the filing of the Debtor’s petition.
In order to afford Debtor an opportunity to plead its case before the New York State Supreme Court on March 27, 1992, this Court lifted the automatic stay effective after 5:00 p.m. on March 27, 1992.
Having been unsuccessful before Judge Rosenbloom on March 27, 1992, Debtor now comes before this Court to request a stay pending an appeal of this Court’s order terminating the automatic stay.
The law is well settled in this Circuit and other circuits that a request for stay pending appeal, governed by Rule 8005 of the Rules of Bankruptcy Procedure which adopts Rule 62 of the Federal Rules of Civil Procedure, requires that this Court, in determining whether to grant such a stay in its discretion, evaluate four factors, as follows:
1. The likelihood that the party seeking the stay will prevail on appeal;
2. The prospect of irreparable injury to the moving party which might result without the stay;
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3. The relative certainty that no substantial harm will come to other parties if the stay were issued; and
4. The relative absence of harm to the public interest if the stay were granted.
In this case, given that the issue of possession of the premises in question was fully litigated prepetition in New York State court at all trial and appellate levels, and that Justice Rosenbloom, an experienced and well respected jurist, refused on March 27, 1992 to vacate his prior order, after hearing all of the arguments of the parodies made before this Court, this Court believes that the likelihood that the Debtor will succeed on appeal is extremely remote.
In addition, this Court believes that the owner, Mr. Beaver, who has been prevented by the Debtor from obtaining possession of his property for in excess of a year now, and who has incurred substantial expenses in connection with this litigation, will be harmed if the stay is imposed under these circumstances, he is required to incur additional expense, and is further prevented from gaining possession of his property. The Debtor, on the other hand, has shown in this Court’s opinion that it will be irreparably harmed if the stay is not continued in these circumstances, since the Debtor certainly could relocate its business, there being nothing unique about the property in question. In addition, in this case there clearly is no public interest to be balanced.
In summary, this Court in balancing the required factors believes that the inability of the Debtor to show any likelihood of success on the merits is an overriding factor, and therefore in its discretion, denies the Debtor’s motion for stay pending appeal. In a very similar case,In Re Pagoda International, 26 Bankruptcy Ct. Rptr., 18, Bkty. District Md. 1982, the Court denied a motion for stay pending appeal where the debtor’s right to possession as a tenant of certain property had similarly been fully litigated in the State Court.