C.H. Sanders Co. v. BHAP Housing Development Fund Co.

750 F. Supp. 67, 1990 U.S. Dist. LEXIS 15057, 1990 WL 176990
CourtDistrict Court, E.D. New York
DecidedNovember 9, 1990
Docket87-CV-3874
StatusPublished
Cited by18 cases

This text of 750 F. Supp. 67 (C.H. Sanders Co. v. BHAP Housing Development Fund Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
C.H. Sanders Co. v. BHAP Housing Development Fund Co., 750 F. Supp. 67, 1990 U.S. Dist. LEXIS 15057, 1990 WL 176990 (E.D.N.Y. 1990).

Opinion

MEMORANDUM AND ORDER

GLASSER, District Judge.

The plaintiff obtained an order of this court directing the defendant HUD to show cause why it should not be directed to (1) pay to the plaintiff the sum of $618,015.88 in full satisfaction of a supplemental judgment against HUD entered on June 6, 1990; (2) pay the costs and attorneys’ fees incurred in seeking the relief.

The background of this case leading up to this application is fully set out in a Memorandum and Order issued by this Court on January 12, 1990; the decision of the United States Court of Appeals for the Second Circuit dated May 8, 1990; and that of August 15, 1990, familiarity with which is assumed. HUD has, on August 3, 1990, again filed a notice of appeal seeking a review of the issue of the waiver of HUD’s sovereign immunity claims which the Court of Appeals has already ruled on adversely to HUD. That appeal is pending.

Following the entry of the supplemental judgment on June 6, 1990, and the failure of HUD to pay it, the plaintiff, pursuant to Rule 69(a), Fed.R.Civ.P., and Article 54 of the N.Y. C.P.L.R. (a) served a restraining notice upon the judgment debtor, HUD; (b) served restraining notices and information subpoenas upon the Federal Reserve Bank of New York and seven of the largest commercial banks in the City of New York; (c) served a restraining notice upon the United States Department of the Treasury; and (d) served a deposition subpoena duces tecum upon the Judgment debtor which was returnable on September 10, 1990. The information sought by the subpoena is critical in the light of the per curiam decision of the Court of Appeals of August 15, 1990, which provides in its entirety as follows:

The Government’s petition for rehearing misapprehends that our decision will oblige the Secretary to satisfy any judgment that might be rendered out of Treasury funds. It will not. The Secretary will be obliged to satisfy the judgment only out of non-Treasury funds that are available to him, if any. If no such funds are available, the Secretary will have no payment obligation.

C.H. Sanders Co. v. BHAP Housing Dev. Fund Co., 910 F.2d 33.

The subpoena is obviously in aid of learning the extent of non-Treasury funds available to the Secretary. The defendant has elected to ignore the subpoena. Having failed to have its judgment satisfied and *69 having failed to have its subpoena honored, the plaintiff was driven to seek an order from the Court directing HUD to forthwith satisfy its judgment, relying for the relief it seeks upon Rule 69(a), Fed.R.Civ.P., N.Y. C.P.L.R. §§ 5225 and 5240, and the All Writs Act, 28 U.S.C. § 1651.

HUD’s sole basis for resisting the relief sought is that the Notice of Appeal it filed operates to divest this Court of jurisdiction to issue any further orders in the proceeding and, in effect, gives rise to an “automatic stay” of the enforcement of the judgment. It is significant to note that in its order of January 12, 1990, this Court denied the defendant’s application for a stay pending appeal. For the reasons that follow, the plaintiff’s motion for a Turnover Order will be and hereby is granted.

The defendant must be presumed to have recognized the necessity of obtaining a stay of proceedings to enforce the judgment given the fact that it sought one. Indeed, Rule 62(a), Fed.R.Civ.P., and Rule 8(a), Fed.R.App.P., make that necessity manifest. It nevertheless persists in asserting such a stay relying upon the plethora of cases invoking the general rule that an effective notice of appeal divests the district court of jurisdiction over the matter forming the basis for the appeal. It would be an affectation of research to cite the cases which announce that rule. The defendant blithely ignores, however, the plethora of cases which plainly hold that to that general rule there is an exception which is precisely applicable to this motion.

The principle precisely applicable here is stated with exquisite precision in 9 Moore’s Federal Practice ¶ 208.03 (2d ed. 1990) as follows:

A party who desires to appeal is not obliged to seek a stay of the judgment pending appeal. The only consequence of failing to obtain a stay is that the prevailing party may treat the judgment of the district court as final, notwithstanding that an appeal is pending. If the judgment awards money or property, it may be executed upon unless stayed;

(emphasis added).

That exception to the general rule was recognized in N.L.R.B. v. Cincinnati Bronze, Inc., 829 F.2d 585 (6th Cir.1987), which stated it as follows, at p. 588:

"... the mere pendency of an appeal does not, in itself, disturb the finality of a judgment.... [T]he district Court has jurisdiction to act to enforce its judgment so long as the judgment has not been stayed or superseded.... Although a district court may not alter or enlarge the scope of its judgment pending appeal, it does retain jurisdiction to enforce the judgment.

The court went on to emphasize the crucial difference between expanding upon an order after a notice of appeal has been filed and enforcing such an order, the district court being precluded from expansion but not enforcement.

In Deering Milliken, Inc. v. F.T.C., 647 F.2d 1124 (D.C.Cir.1978), the court stated it thus, at pp. 1128-29;

It is well established that the District Court is without jurisdiction to alter a judgment of its own while an appeal therefrom is ongoing. But it is equally clear that the vitality of that judgment is undiminished by pendency of the appeal. Unless a stay is granted either by the court rendering the judgment or by the court to which the appeal is taken, the judgment remains operative.

See also, International Paper Co. v. Whitson, 595 F.2d 559 (10th Cir.1979); Lara v. Secretary of the Interior of the United States, 820 F.2d 1535, 1542-43 (9th Cir.1987); Island Creek Coal Sales v. City of Gainesville, 764 F.2d 437 (6th Cir.1985); National Service Industries, Inc. v. Vafla, 694 F.2d 246, 250 (11th Cir.1982); BGW Associates, Inc. v. Valley Broadcasting Co., 532 F.Supp. 1115 (S.D.N.Y.1982).

Since no stay has been granted either by this court or by the Court of Appeals, the relief plaintiff seeks must be granted. The defendant is, therefore, hereby directed to obey the subpoena duces tecum

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750 F. Supp. 67, 1990 U.S. Dist. LEXIS 15057, 1990 WL 176990, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ch-sanders-co-v-bhap-housing-development-fund-co-nyed-1990.