Farm Credit Service v. Fremont Sheep Corp.

• Court: Court of Appeals for the Tenth Circuit
• Decided: April 10, 1997
• Docket: 96-8010
• Status: Unpublished

Opinion

F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS APR 10 1997 FOR THE TENTH CIRCUIT PATRICK FISHER Clerk

IN RE: FREMONT SHEEP COMPANY, a Wyoming corporation,

Debtor, No. 96-8010 (D.C. No. 95-MC-58) (D. Wyo.) FARM CREDIT SERVICES OF THE MIDLANDS, PCA,

Appellant, v.

FREMONT SHEEP CORPORATION, a Wyoming Corporation,

Appellee.

ORDER AND JUDGMENT *

Before TACHA, EBEL, and BRISCOE, Circuit Judges.

* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f) and 10th Cir. R. 34.1.9. The case is

therefore ordered submitted without oral argument.

Creditor Farm Credit Services of the Midlands, PCA, appeals the district

court’s denial of a stay pending appeal of the confirmation of debtor Fremont

Sheep Corporation’s Chapter 11 reorganization plan. Because the district court

did not abuse its discretion in denying the stay, we affirm.

On November 13, 1995, the bankruptcy court entered an order confirming

debtor’s reorganization plan in its second bankruptcy proceeding. Creditor filed a

notice of appeal, and moved the bankruptcy court for a stay of the confirmation

order pending appeal, which was denied. Creditor then sought a stay pending

appeal in the district court, pursuant to Bankruptcy Rule 8005. The district court

denied the stay, and this appeal followed.

Before addressing the merits of this case, we are obligated to examine the

basis for our jurisdiction. Title 28 U.S.C. § 1292(a)(1) authorizes us to review

“[i]nterlocutory orders of the district courts of the United States . . . granting,

continuing, modifying, refusing or dissolving injunctions.” “The term

‘injunction’ . . . is not to be read narrowly but includes all equitable decrees

compelling obedience under the threat of contempt.” Consumers Gas & Oil, Inc.

-2- v. Farmland Indus., Inc., 84 F.3d 367, 370 (10th Cir. 1996) (quotations omitted).

Here, the stay, had it been granted, would have enjoined implementation of the

reorganization plan pending appeal, conveying with it the threat of sanctions.

Further, as the stay would have halted proceedings in a court other than the court

from which it issued, it would have been an “injunction” within the meaning of

28 U.S.C. § 1292(a)(1). See Castanho v. Jackson Marine, Inc., 650 F.2d 546, 548

(5th Cir. 1981) (holding “[i]f a district court acts to halt proceedings in another

court, its action is indeed an injunction within the meaning of section

1292(a)(1)”) (emphasis in original). We have jurisdiction, therefore, to review

the district court’s denial of the stay pending appeal. See Rochman v. Northeast

Utils. Serv. Group (In re Public Serv. Co.), 963 F.2d 469, 472 & n.9 (1st Cir.

1992) (noting § 1292 would have provided jurisdiction for interlocutory appeal

from denial of, or inaction on, motion for stay pending appeal of confirmation

order).

Creditor argues that the district court erred in not issuing the stay under

either (1) the mandatory provisions of Federal Rule of Civil Procedure 62(d), as

adopted by Federal Rule of Bankruptcy Procedure 7062, or (2) the discretionary

provisions of Federal Rule of Bankruptcy Procedure 8005. The record does not

demonstrate, however, that creditor raised its argument regarding Rule 62(d) to

the district court. Creditor’s motion for a stay cited only to Bankruptcy Rule

-3- 8005, and its supporting brief argued only that it satisfied the four-pronged test

for a stay under Rule 8005. See Appellant’s App. at 9-25. Nowhere did creditor

mention Rule 62(d) as authority for its motion or argue that its offer of a

supersedeas bond entitled it to a stay as a matter of right. Moreover, after the

district court denied the stay under Rule 8005, creditor did not file a motion

bringing to the court’s attention its alleged failure to rule on creditor’s entitlement

to a stay under Rule 62(d). Because creditor’s entitlement to a mandatory stay

was not raised or preserved before the district court, we will not address it for the

first time on appeal. See, e.g., Kenworthy v. Conoco, Inc., 979 F.2d 1462, 1468

(10th Cir. 1992); United States v. Donnes, 947 F.2d 1430, 1434 n.6 (10th Cir.

1991).

We review the district court’s denial of creditor’s motion for an abuse of

discretion. See Aberdeen & Rockfish R.R. v. Students Challenging Regulatory

Agency Procedures (SCRAP), 409 U.S. 1207, 1218 (1972) (reviewing denial of

stay pending appeal by three-judge panel for abuse of discretion); Beverly v.

United States, 468 F.2d 732, 740 n.13 (5th Cir. 1972) (holding denial of stay

pending appeal reviewed for abuse of discretion). To obtain a stay pending

appeal, a party must establish the following: (1) a strong likelihood of success on

the merits; (2) a threat of irreparable injury absent a stay; (3) no danger of

substantial injury to the other parties if the stay is granted; and (4) issuance of a

-4- stay is not contrary to the public interest. See Hilton v. Braunskill, 481 U.S. 770,

776 (1987); In re Crabtree, 113 B.R. 723, 723 (W.D. Okla. 1990).

Here, the district court concluded that creditor had not shown a strong

likelihood of success on appeal because the appeal challenges factual findings

subject to the clearly erroneous standard of review. We perceive no abuse of

discretion in this conclusion. To prevail on appeal, creditor must demonstrate

clear error in one of the following factual findings by the bankruptcy court: that

debtor’s case and plan were filed in good faith; that the reorganization plan is

feasible; that debtor is not in default; that the plan does not unfairly discriminate

against creditor; or that creditor will receive the indubitable equivalent of its

claim. Based on the record provided to us, creditor has not shown a strong

likelihood that any of these findings is so unsupported by the evidence that it will

be reversed on appeal. This is especially true in light of the fact that creditor will

receive the exact amounts, on the exact dates, that it was scheduled to receive

under the 1988 reorganization plan. The district court, therefore, did not abuse its

discretion in denying creditor’s motion for a stay pending appeal. See, e.g., Hunt

v. Bankers Trust Co., 799 F.2d 1060, 1067 (5th Cir. 1986) (holding stay pending

appeal not warranted because movant failed to show likelihood that district

court’s factual findings would be set aside as clearly erroneous); Green Point

Bank v. Treston, 188 B.R. 9, 12 (S.D.N.Y. 1995) (denying stay pending appeal

-5- because debtor had not shown likelihood of success on appeal based on failure to

show clear error in bankruptcy court’s factual findings).

The order of the district court is AFFIRMED.

Entered for the Court

Mary Beck Briscoe Circuit Judge

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