Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-02343/USCOURTS-casd-3_06-cv-02343-0/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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UNITED STATES DISTRICT COURT

Southern District of California

WILLARD WESTFALL, individually and on

behalf of the Purported Class,

Appellant,

v.

MII LIQUIDATION INC.,

Appellee. 

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No. 06-CV-02343-BEN (NLS)

ORDER DENYING MOTION TO STAY

PROCEEDINGS PENDING APPEAL

[Dkt.Nos. #14, 17, 18, 25, 27, 30]

Appellant Willard Westfall (“Appellant”) appeals a Bankruptcy Court’s order denying the

class portion of one of Appellant’s claims submitted in the underlying bankruptcy case. Appellant

filed his Notice of Appeal on October 19, 2006. The following day, Appellant filed a Motion to

Stay Proceedings Pending Appeal in the Bankruptcy Court. After a full hearing on the issue, the

Bankruptcy Court denied Appellant’s request on December 20, 2006. 

Appellant now seeks the same relief from this Court and requests that this Court grant

Appellant’s Motion to Stay Proceedings Pending Appeal. “An appellant seeking a discretionary stay

pending appeal under Bankruptcy Rule 8005 must prove: (1) appellant is likely to succeed on the

merits of the appeal; (2) appellant will suffer irreparable injury; (3) no substantial harm will come to

appellee; and (4) the stay will do no harm to the public interest.” In re Irwin, 338 B.R. 839, 843

(E.D. Cal. 2006) (internal quotation and citation omitted). “The party moving for a stay has the

Case 3:06-cv-02343-BEN-NLS Document 34 Filed 05/02/07 Page 1 of 3
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Case No. 06 CV 02343-BEN (NLS)

Page No. 2

burden on each of these elements.” Id. (internal quotation and citation omitted). The failure to

meet any one of these four elements requires denial of the motion. See id.

“When a bankruptcy court has ruled on the issue of a stay of its order pending appeal, the

district court, sitting as an appellate court, reviews that decision for abuse of discretion.” Id.

(internal quotation and citation omitted) Discretion is only abused when the judicial action is

arbitrary, fanciful, or unreasonable; or put another way, discretion is abused only where no

reasonable person would take the view adopted by the trial court. See id.

Here, Appellant is unable to show that a stay is warranted. The Bankruptcy Judge found that

issuing a stay would destroy the pending settlement process and the existing momentum would be

lost resulting in substantial harm to the estate. (Transcript of December 8, 2006, Hearing at 41:7-

18, Appellant’s Ex. C.) The Bankruptcy Judge’s findings are entitled to substantial deference and

should not be set aside under the abuse of discretion standard. See In re Irwin, 338 B.R. at 843-44. 

Therefore, for the reasons discussed above, Appellant’s Motion to Stay Proceedings Pending

Appeal is DENIED. Further, Appellant’s Motion for Leave to File a Supplemental Memorandum in

Support of Motion to Stay Proceedings Pending Appeal and Appellant’s Ex Parte Application for

Order Shortening Time to Respond to Motion for Leave to File a Supplemental Memorandum in

Support of Motion to Stay Proceedings Pending Appeal are both DENIED as moot. Appellee’s

Motion for Leave to File Additional Documents in Response to Appellant’s Reply to Memorandum

of Points and Authorities in Support of Motion to Stay Proceedings Pending Appeal is also

DENIED as moot. Lastly, Official Indemnities Committee’s Motion to Intervene or in the

Alternative, for Amicus Curiae Status and their Ex Parte Motion to Shorten Time are both DENIED

as moot. 

IT IS SO ORDERED.

DATED: May 2, 2007

Hon. Roger T. Benitez

United States District Judge

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Case No. 06 CV 02343-BEN (NLS)

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