United States District Court, D. Hawaii
ORDER GRANTING REVISED MOTION TO STAY PROCEEDINGS
PENDING NINTH CIRCUIT APPEAL
Derrick K. Watson, United States District Judge
Chad Barry Barnes seeks to stay his appeal of a bankruptcy
matter to the district court, pending a decision by the
United States Court of Appeals for the Ninth Circuit in a
separate matter also involving Barnes, In Re Sea Hawaii
Rafting, LLC, No. 16-15023 (“Ninth Circuit
Appeal”). Because the balance of pertinent factors
weighs in favor of Barnes' request- notably, the
conservation of judicial resources, the potential for
conflicting decisions, and the absence of prejudice to any
other party-the Motion to Stay is GRANTED.
bankruptcy appeal-and several other cases-Barnes contests the
sale of a 2005 Zodiac boat, the M/V Tehani. On May 9, 2016,
the Bankruptcy Court entered an order granting the Motion for
Order Approving Sale. See Order Granting
Trustee's Motion for Order (I) Authorizing Sale of Boat
and Trailer Under Bankruptcy Code § 363, and (II)
Otherwise Granting Relief (the “Order Approving
Sale”), Sea Hawaii Chapter 7 Bankruptcy, Bankr. No.
14-01520 (Bankr. D. Haw. May 9, 2016), Dkt. No. 185. Barnes
appealed the Order Approving Sale, commencing Barnes v.
Field, Civ. No. 16-00230 LEK-KSC. On September 27, 2016,
the Trustee filed a Report of Sale, acknowledging receipt of
$35, 000.00 for the M/V Tehani and its trailer on August 26,
2016, and reporting that he had assigned the M/V Tehani and
its trailer to Aloha Ocean Excursions, LLC on August 30,
2016. See Report of Sale, Sea Hawaii Chapter 7
Bankruptcy, Bankr. No. 14-01520, Dkt. No. 253.
instant bankruptcy appeal challenges the Bankruptcy
Court's Order Granting Motion to Approve Sale of Property
(M/V Tehani Vessel and Trailer) in a related Chapter 13
proceeding. See Barnes v. Henry et al., Bankr. No.
14-01475 (Bankr. D. Haw. Nov. 15, 2016), Dkt. No. 222. That
order approved debtor Kristin Kimo Henry's May 18, 2016
Motion to Approve Sale of Vessel in Related Case of In re
Sea Hawaii Rafting, LLC, 14-01520. In addition to
approval of the sale of the M/V Tehani and trailer from the
Chapter 7 case, Bankr. No. 14-01520, Henry's motion
sought approval to incur additional debt in his Chapter 13
case because he personally guaranteed payment of the sales
price. Barnes appealed the Bankruptcy Court's order
granting Henry's motion to this district court on
November 15, 2016. See Civ. No. 16-00588 DKW-RLP,
Dkt. No. 1 (Notice of Transmittal); Bankr. No. 14-01475, Dkt.
No. 223 (Notice of Appeal).
related Ninth Circuit Appeal, No. 16-15023, likewise involves
ownership of the M/V Tehani-the boat was an asset of the Sea
Hawaii bankruptcy estate and an in rem defendant in
the underlying case Barnes v. Sea Hawaii Rafting, LLC, et
al., Civ. No. 13-00002-ACK-RLP. The Ninth Circuit
Appeal, No. 16-15023, is an interlocutory appeal from Judge
Kay's order which, in relevant part, dismissed the M/V
Tehani for lack of in rem jurisdiction. See
Order Dismissing M/V Tehani for Lack of Jurisdiction, Civ.
No. 13-00002 ACK-RLP (D. Haw. Dec. 22, 2015), Dkt. No. 197.
Ninth Circuit oral argument in that matter is tentatively
scheduled for the week of June 12-16, 2017. See No.
16-15023 (9th Cir. Feb. 24, 2017), Dkt. No. 70. The Court
notes that, on March 14, 2017, the Ninth Circuit denied
Barnes' motion to stay both the instant district court
case and also Barnes v. Field, Civ. No. 16-00230
LEK-KSC, pending resolution of the Ninth Circuit Appeal.
See No. 16-15023 (9th Cir. Mar. 14, 2017), Dkt. No.
77 (denying Barnes' Motion To Stay, Dkt. No. 59).
meantime, the M/V Tehani was sold, pursuant to an Order of
the Bankruptcy Court providing, pursuant to Section 363(m) of
the Bankruptcy Code, 11 U.S.C. § 363(m), that the M/V
Tehani would be sold “free and clear of all liens and
encumbrances, to the maximum extent permitted by the
Bankruptcy Code.” Barnes appealed that Order, but no
stay of the sale Order was obtained, and, on March 14, 2017,
Judge Kobayashi dismissed that appeal of a bankruptcy matter
to district court. See Order Granting Appellee's
Motion to Dismiss Appeal, Barnes v. Field, Civ.
No.16-00230 LEK-KSC (D. Haw. March 14, 2017), Dkt. No. 33.
on January 17, 2017, Judge Seabright stayed proceedings in a
fourth bankruptcy appeal to the district court involving
Barnes and the M/V Tehani. See Friedheim et al. v.
Field, Civ. No. 16-00183 JMS-KJM (D. Haw. Jan. 17,
2017), Dkt. No. 65. That bankruptcy appeal involves an
admiralty action filed by Barnes' attorney, Jay Lawrence
Friedheim, Esq., on Barnes' behalf against Sea Hawaii,
the M/V Tehani, and the boat's owner, which eventually
resulted in sanctions against Friedheim. In the bankruptcy
litigation, the bankruptcy judge awarded sanctions to the
Trustee based upon violations of the automatic stay by Barnes
and his counsel, and the appeal to district court followed.
That district court case is stayed pending resolution of the
Ninth Circuit Appeal. See Civ. No. 16-00183 JMS-KJM,
Dkt. Nos. 64 and 65.
the Court can discern, Barnes asserts that overlapping
questions of law remain to be decided in both the instant
bankruptcy appeal and the pending Ninth Circuit Appeal
relating to the validity of the sale of the M/V Tehani,
including: (1) whether applicable non-bankruptcy law permits
the sale of a boat free and clear of maritime liens for
maintenance and cure; (2) whether Barnes has a maritime lien
on the boat for maintenance and cure; (3) the value of
Barnes' lien against the M/V Tehani; and (4) whether the
district court's automatic referral provisions enabled by
the Bankruptcy Amendments of 1984 are unconstitutional as
written and as applied to an injured seaman seeking
maintenance and cure in Admiralty.
appellee Kristin Kimo Henry nor appellee Trustee Howard M.S.
Hu filed an opposition nor any other statement setting forth
appellees' respective positions on the Motion to Stay.
power to stay proceedings is incidental to the power inherent
in every court to control disposition of the cases on its
docket with economy of time and effort for itself, for
counsel, and for litigants.” Landis v. N. Am.
Co., 299 U.S. 248, 254 (1936). “The exertion of
this power calls for the exercise of sound discretion.”
CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir.
1962); see Clinton v. Jones, 520 U.S. 681, 706
(1997) (“The District Court has broad discretion to
stay proceedings as an incident to its power to control its
own docket.”); Lockyer v. Mirant Corp., 398
F.3d 1098, 1109 (9th Cir. 2005) (“A district court has
discretionary power to stay proceedings in its own
court[.]”). When a stay is requested because of pending
proceedings that bear on the case, the Court may grant a stay
in the interests of the efficiency of its own docket and
fairness to the parties. See Leyva v. CertifiedGrocers of Cal. Ltd., 593 F.2d 857, 863 (9th Cir.
1979); see also MediterraneanEnters., Inc. v.
Ssangyong Corp., 708 F.2d ...