Court Opinion

ID: 9649373
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:51:09.44739+00
Date Added: 2024-06-11T18:12:09.991298
License: Public Domain

GEORGE, Bankruptcy Judge,
concurring.
Although I also favor a vacation of our stay of March 3,1980,1 cannot bring myself to join in the reasoning of the instant order. I feel that it adopts an unwarranted, unjust, and dangerously inflexible procedural approach not intended by any of the federal rules cited by the majority.
On February 25, 1980, this Panel was faced with an extremely troubling dilemma. An appellant, who had failed to take advantage of the order of the trial court setting his supersedeas bond amount at $12,500 — an amount to which his counsel had originally stipulated — was seeking to stay an execution sale which was to be held the following day as a result of his inaction. The principal reason given by him for not having initially posted the bond was that he had not been able to raise the sum himself, and that no bonding company was willing to stand as his surety. The Appellant’s purpose in coming before the Panel for relief was three-fold. First, he felt that the personal property to be sold was of such a unique quality and character that it warranted the preservation of title in his name pending the outcome of this appeal. Second, counsel for the Appellant had recently become aware of certain actions which were being taken by the District Attorney of Los Angeles County, California, which seemed to contradict conclusions reached by the trial court and evidence given by a key witness for the Plaintiff at trial. This gave further assurance to counsel as to the potential for success in his appeal. Finally, an effort to contact the trial judge had proven ineffective, as had an attempt to obtain emergency relief from the other bankruptcy judge sitting in that area of the district. Hence, counsel felt that his duty to go first to the trial judge for a modification of his stay, see, Federal Bankruptcy Rule 805, had been mitigated by the judge’s unavailability.
In examining the factual portrayal given us by counsel for both parties, it was felt by the Panel that a modification of the trial judge’s supersedeas order was necessary and proper in order to give this appeal some sort of meaning aside from its possible impact upon future litigants, or its use as fuel for esoteric debates among bankruptcy scholars. See generally Land Oberoesterreich v. Gude, 93 F.2d 292, 293 (2d Cir. 1937); Williams v. Sawyer Bros., Inc., 51 F.2d 1004, *8091006 (2d Cir. 1931). Quite in line, I felt, with the quantitative bonding determination made by Bankruptcy Judge William H. Hyer, we decided to allow the United States Marshal’s Office to hold the subject personal property and to insist that the Appellant post a bond in the amount of $3,500 with the bankruptcy court. Between the sale value of the execution property and the amount of the bond, we assumed that the Appellee would be adequately protected, at least to the extent of the bonding requirement set by Judge Hyer. The purpose of this arrangement was not to discredit the supersedeas determination of Judge Hyer,1 but to accommodate the real needs of the Appellant to that determination and to the appellate rights of the Appellee. And, other than with respect to an inadvertent placement of the costs of storage upon the Appellee — an error which has not been remedied by the Appellant despite the admonitions of this Panel — no one has criticized the general fairness or intrinsic appropriateness of our order. Even with regard to the above-mentioned storage costs, criticism came only from within the Panel, itself. No motion to modify our March 3rd order has ever been submitted to the Panel.
Nevertheless, my brethren have decided sua sponte to find a departure “from fundamental principles of appellate review” in our March 3rd order, along with an unnecessary assumption of “responsibilities that ordinarily are reserved to the trial court.” In disagreeing with this position, I find that the procedural norm has been mistaken for the procedural rule in this case. Accordingly, I do not, for the most part,2 disagree with the general legal analysis found in the majority’s opinion. They are absolutely correct in their assertion that the use of an appellate body’s power to issue stays has been severely limited, by rule and case law, in ordinary circumstances where a return to the trial court for relief remains a reasonable possibility. See, e. g., Federal Bankruptcy Rule 805; F.R.A.P. Rule 8(a); Cumberland Telephone & Telegraph Co. v. Louisiana Public Service Commission, 260 U.S. 212, 43 S.Ct. 75, 67 L.Ed. 217 (1922). Two principal bases exist for this curb upon an appellate court’s injunctive authority, one being an oft-expressed matter of practicality, the other a seldom-admitted application of the principle of comity to relationships among the various areas of responsibility in the federal judiciary.
With respect to the first of these fundamental concerns, the United States Supreme Court noted in the Cumberland case, supra, that non-mandatory stays often require a court to ascertain and balance the benefits and costs involved in maintaining the status quo during an appeal. It further observed that “the court which is best and most conveniently able to exercise the nice discretion needed to determine this balance of convenience is the one which has considered the case on its merits, and therefore is familiar with the record.” Id. at 219, 43 S.Ct. at 77. Consequently, “[wjithout abdicating [its] unquestioned power to grant” such stays, the Cumberland court refused to issue an injunction pending an appeal where the trial court had not been properly given an opportunity to stay its own actions. Id. F.R.A.P. Rule 8(a) and, hence, Federal Bankruptcy Rule 805, simply codify the restrained policy adopted by the Supreme Court in Cumberland. 9 J. Moore, B. Ward & J. Lucas, Moore’s Federal Practice ¶ 208.04, at 8-12 (2d ed. 1980).
A second practical concern which has been educed by appellate courts in referring injunctive matters back to trial courts, and which my brethren have aptly recognized in their opinion, deals with the relative abilities of trial and appellate courts to supervise their respective decrees. See 11 C. Wright & A. Miller, Federal Practice and *810Procedure § 2904, at 325 & n. 51 (1973). This consideration is magnified in cases involving a debtor in bankruptcy, where the trial court has held a controlling role not only with respect to the pertinent litigation, but also over the general debt relationship between the parties.
Bolstering these reasons of practicality and serving, I feel, as an additional impetus for the action of my brethren, is the broader, though often proper fear held by appellate courts that, in many instances their post-judgment injunctive decrees might unreasonably reflect negatively upon the competence of a trial judge. Some might think, for example, that our modification of Judge Hyer’s original supersedeas order was done pursuant to a finding of error in his determination of the potential cost to the Appel-lee of this appeal or of impotence as to his lawful ability to respond to the Appellant’s needs.
Neither of these notions, however, entered into the reasoning process which resulted in our March 3, 1980 decision. The Panel simply chose to believe the uncontra-dicted assertions of the Appellant’s counsel that Judge Hyer was unavailable and that he could not, therefore, act upon this matter. Trial court unavailability is the most commonly recognized exception to the requirement that an appellant go first to that court for a stay pending an appeal. See 13 Collier on Bankruptcy ¶ 805.08, at 8-56 through 8-57 (14th ed. 1979);3 9 J. Moore, B. Ward & J. Lucas, supra ¶ 208.07, at 8-26 through 8-27 & n. 4. My brethren have attempted to mute this point by exaggerating the importance of our having issued two distinct orders, one to stay the immediate sale, the other to effect a modification in the general supersedeas arrangement in this case. The inference which we are undoubtedly to draw from this dichotomy is that while Judge Hyer’s absence might excuse our first order (a proposition which the majority still disputes), it would not justify a later expansion upon that act. This reasoning, however, disregards the realities of Mr. Wymer’s contacts with this Panel.
Whether merely staying the February 26th execution sale, or completely rearranging the Appellant’s supersedeas security requirements for a more extended period of time, we were in fact modifying the earlier order of Judge Hyer. We were presuming to utilize our inherent injunctive powers to maintain the status quo in anticipation of a further examination of Mr. Wymer’s appellate cause. In this regard, the initial stay was totally incidental to our general review of the Appellant’s emergency motion. We simply needed additional time in which to decide whether a continued modification of Judge Hyer’s stay was advisable. And, neither the Appellant, nor the Appellee, could assure us that Judge Hyer would be available to handle this matter in a more expeditious fashion than could the Panel.
Once he was properly before us, I do not think it fair that we should have expected Mr. Wymer to keep an anxious eye cocked in the direction of Judge Hyer’s temporarily vacant bench. We had assumed the power to act upon this motion. We had already used our injunctive powers to clear the way for our action on the motion. One uncon*811tested assertion of trial court unavailability should have been quite sufficient to permit the Panel to act pursuant to Federal Bankruptcy Rule 805, at least during the few days which were consumed by our actions in the present case. If counsel for the Appel-lee had felt differently on this point, he should have let us know that we could have remanded the matter to Judge Hyer’s immediate attention. No such request was ever made. Consequently, it would be patently unjust to vacate our protective order now, if done simply because we are presently able to look back and see that recourse might have been had to Judge Hyer’s court following our initial stay of the February 26th sale.
As a further point, the Panel fully understood at the time it issued its stay that effective resort could not be made to Judge David N. Naugle, since he was unwilling to vary the terms of an order of his fellow bankruptcy judge. To begin with, it should be noted that nothing in Federal Bankruptcy Rule 805, or in any other federal rule of procedure, requires that an appellant seek relief from every other trial court judge in his district before he can approach the appellate court for relief. A plain reading of Rule 805 mandates only that he return to the judge who rendered the order or decree from which he has made his appeal. The rule says that “[a] motion for a stay of the judgment or order of a [bankruptcy judge], for approval of a supersedeas bond, or for other relief pending appeal must ordinarily be made in the first instance to the [bankruptcy judge].” (Emphasis supplied). This makes sense. Under ordinary circumstances, a second bankruptcy judge will be no better informed than the appellate panel as to the facts of a particular case or appeal. Moreover, although his jurisdiction to act might be beyond question, a second bankruptcy judge must literally live with the effect of his decision upon his relationship with the judge whose order he presumes to modify. This relationship severely impairs, in turn, this second bankruptcy judge’s ability to supervise the enforcement of his in-junctive decree. I cannot, therefore, fault Judge Naugle for refusing to alter an order entered in a case alien to his own personal docket. I do feel, however, that we should recognize the burden which his decision placed upon our shoulders to act responsibly with respect to this order. We were not asked to evaluate Judge Naugle’s refusal to countermand Judge Hyer’s order, but rather to act under our own lawful volition. Given the evidence we had of Judge Hyer’s absence, I feel that we were properly empowered to assume this function.
In ascertaining the general propriety of our final action (if given the power to act in the first instance), my brethren acknowledge that a court may go so far as to reduce the coverage of a bond below that court’s appraisal of the potential loss sufferable by the appellee, even with respect to a non-discretionary supersedeas stay, where a showing of impaired financial ability to post such a bond has been made. See Poplar Grove Planting and Refining Co. v. Bache Halsey Stuart, Inc., 609 F.2d 1189, 1191 (5th Cir. 1979). If a court can significantly reduce the amount of a supersedeas bond upon a definite showing of poverty, a forti-ori, it can use another security arrangement in such a situation, which fully compensates for the value of the replaced bonding device. See, e. g., Trans World Airlines, Inc. v. Hughes, 515 F.2d 173 (2d Cir. 1975), cert. denied, 424 U.S. 934, 96 S.Ct. 1147, 47 L.Ed.2d 341 (1976) (approving the use of a secured letter of credit in lieu of a superse-deas bond). The Federal Rules of Bankruptcy Procedure do not preclude such a substitution. In fact, Federal Bankruptcy Rule 805 specifically allows that “[t]he [appellate panel] may condition the relief it grants under this rule upon the filing of a bond or other appropriate security with the [bankruptcy judge].” (Emphasis supplied).
At no time in these proceedings has the Appellant’s alleged inability to post the $12,500 bond ordered by Judge Hyer been seriously questioned by the Appellee or by the Panel. And, again, I believe that our security arrangement in this case has been roughly equivalent to the bond required by Judge Hyer. Given the latter’s unavailability, we did not act imprudently or improper*812ly in granting the Appellant both immediate relief from the impending Marshal’s sale and ongoing protection from any further sale during the period of this appeal.
In an appropriate case, I can see how wisdom might dictate that an appellate panel issue only a temporary stay to permit counsel to renew their contact with the trial court in order to obtain more long-term relief. Still, having acted lawfully, as we did in the present proceeding, I think that the Panel has made much too large an issue out of the propriety of its long-past actions. And, I fear that the policy now adopted by this Panel has effectively emasculated the already limited injunctive powers given to appellate panels under Federal Bankruptcy Rule 805. If the facts before us would not allow the action taken, then there would appear to be very few, if any, instances in which we could feel good about utilizing the authority recognized by this rule to stay a judgment or order from which an appeal to us has been taken. All that remains is a troubling spectre of distraught appellants, unable to locate trial judges, or to convince appellate judges that procedural property rights are of greater importance than judicial etiquette. Certainly, more noble causes than this exist for the rending of our garments in humility.
Nevertheless, due to the apparent unwillingness of the Appellant to take any action to alleviate the improperly situated burden of paying the rather significant costs of storing his personal property, I would sign a more limited order of vacation in this matter.

. I can conceive of no criticism which could have been raised against Judge Hyer’s $12,500 supersedeas bonding requirement, the parties having voluntarily stipulated to the propriety of this sum.

. The majority does appear to overlook the extraordinarily discretionary nature of a super-sedeas stay in bankruptcy, see 13 Collier on Bankruptcy H 805.05, at 8-54 through 8-55 (14th ed. 1979), applying instead the usual F.R. Civ.P. Rule 62(d) standard to such stays.

. The cited passage from Collier states as follows:
“The first sentence of Rule 805 provides:
‘A motion for a stay . . must ordinarily be made in the first instance to the Referee.’

“The third sentence contemplates that the motion may be made to the district court.

“Similar provisions are contained in Rule 8, F.R.A.P., from which Rule 805 was adapted. Relief under this rule can usually be obtained more effectively and more speedily by motion to the Referee since he is already familiar with the case and may be more accessible. It is desirable that the relief be sought from the Referee in the first instance because the decision to grant or deny the relief often will involve a delicate balancing of the equities that only the Court familiar with the case is able to make.
“But the Referee may be unavailable or it may be obvious to the appellant that from the nature of what occurred in the Referee’s court, relief from the Referee is improbable.”
(Emphasis supplied) (Footnotes omitted).
I fail to see how the hypothetical situation of unavailability here cited as warranting recourse to the appellate court is any different from that found in the instant case.