United States District Court, D. Hawaii
ORDER DENYING DEFENDANT BRENDA L. STATON'S MOTION
FOR LEAVE TO FILE AN INTERLOCUTORY APPEAL
C. KAY UNITED STATES DISTRICT JUDGE.
reasons discussed below, the Court DENIES Defendant Brenda
Staton's Motion for Leave to File an Interlocutory
purposes of the current motion, the Court discusses only
those facts of particular relevance to Defendant Brenda
Staton's (“Mrs. Staton”) Motion for Leave to
File an Interlocutory Appeal (the
“Motion”). ECF No. 297.
Court issued an Order Granting Plaintiff's Motion for
Summary Judgment on the Third Claim in the Complaint on
August 31, 2015. ECF No. 157. That same day, the Court issued
an Order of Foreclosure and Judicial Sale (“Foreclosure
Order”) of the Staton's home (the
“Residence”). ECF No. 158. On September 1, 2015,
however, Defendant Ronald Staton (“Mr. Staton”)
filed a petition for relief under 11 U.S.C. § 301 in the
United States Bankruptcy Court for the District of Hawaii.
ECF No. 160-1. In view of Mr. Staton's bankruptcy
petition, the Court stayed this case. ECF No. 161. The court
reinstated the Foreclosure Order on December 7, 2015, in
response to the Bankruptcy Court's Order Granting United
States' Motion for Relief from Automatic Stay. ECF No.
November 16, 2016, Mr. Staton filed a second petition for
relief under 11 U.S.C. § 301 in the United States
Bankruptcy Court for the District of Hawaii. ECF No. 208.
Again, in view of Mr. Staton's bankruptcy petition, the
Court stayed this case. ECF No. 209. Mr. Staton's second
petition for relief under 11 U.S.C. § 301 was dismissed,
however, and on April 24, 2017, the Court reinstated its
Foreclosure Order and directed the parties to proceed in
accordance therewith. ECF No. 212.
before the scheduled foreclosure sale auction, on June 20,
2017, Mrs. Staton filed a petition for relief under 11 U.S.C.
§ 301 in the United States Bankruptcy Court for the
District of Hawaii. ECF No. 214. Based on Mrs. Staton's
bankruptcy petition, the Court stayed this case. ECF No. 215.
following month, on August 7, 2017, the Plaintiff United
States (the “Government”) filed a Motion for
Relief from Automatic Stay in the Bankruptcy Court. The
Bankruptcy Court entered an order on October 6, 2017,
granting the Government's Motion for Relief from
Automatic Stay. Accordingly, the Court unstayed this case and
reinstated its Foreclosure Order, directing the parties to
proceed in accordance therewith. ECF No. 219.
foreclosure sale of the Residence was set for December 20,
2017. ECF No. 230. But on December 8, 2017, Mr. Staton filed
an Emergency Motion to Strike Notice of Lis Pendens (NOPA),
ECF No. 226, along with a Supplement to the Emergency Motion,
ECF No. 227. Mr. Staton represented that he obtained
financing in the amount of $1, 032, 000-sufficient to satisfy
all liens on the property-with a closing date set for
December 8, 2017. ECF No. 226. The Court held a hearing on
this matter on December 11, 2017 and ordered the parties to
have a settlement conference with Magistrate Judge Chang. ECF
December 18, 2017, Magistrate Judge Chang held the settlement
conference, which he ended when the Statons could not produce
a loan commitment from the lender for the above-described
financing. ECF No. 244. The Statons filed an Emergency Motion
Regarding Foreclosure and Request for a Hearing and Stay
Pending Hearing later that day. ECF No. 241. And- still on
December 18, 2017-the Court held a hearing on the
Statons' motion, concluding that the foreclosure of the
Residence would proceed on December 20, 2017. ECF No. 243.
before the foreclosure sale, on December 19, 2017, the
Statons filed a Notice Re: Conditional Loan Approval Letter
and requested a stay of the foreclosure sale. ECF No. 245. The
Court held a hearing the morning of December 20, 2017
regarding the Statons' Notice. ECF No. 251. The Court
denied the request for a stay and ordered the foreclosure
sale to proceed. Id.
foreclosure sale occurred on December 20, 2017 around 12:00pm
on the steps of the United States District Court for the
District of Hawaii. Following the foreclosure sale, on
December 21, 2017, the Commissioner filed a Notice of Sale,
informing the Court that the Residence was sold to a
third-party bidder one day earlier for $1, 135, 000.00,
subject to confirmation by the Court. ECF No. 254.
December 21, 2017, however, the Government filed a Notice of
Defendant Ronald Staton's Bankruptcy Case, which stated
that: (1) Mr. Staton filed a new bankruptcy case on December
20, 2017 and (2) the Government intended to seek relief from
the stay in that case so that the Commissioner's sale
could be confirmed. ECF No. 253.
December 22, 2017, Mrs. Staton filed a Notice of Pendency of
Action (“notice of lis pendens”), asserting that
she was contesting the validity of the foreclosure sale as
having been filed in violation of Mr. Staton's
bankruptcy, which she contended was filed at 11:54 a.m.
before the foreclosure sale. ECF No. 255. She also asserted
that the foreclosure sale failed “to protect defendant
interests in the property.” ECF No. 255 at 2. The Court
entered a minute order on January 5, 2018, setting a hearing
on Mrs. Staton's claim for January 31, 2018 and directing
the parties to file briefs. ECF No. 258.
January 17, 2018, the Statons filed a Brief in Support of
Claim of Failure to Protect Defendant Interests in Real
Property. ECF No. 260. On January 23, 2018, the United States
filed a Memorandum in Response to the Statons' December
22, 2017 and January 17, 2018 briefs. ECF No. 261. On January
24, 2018, Defendants Navy Federal Credit Union and Capstead
Mortgage Corporation (together, the “Lender
Defendants”) filed a Response to Brenda Staton's
Brief in Support of Claim of Failure to Protect Defendant
Interests in Real Property. ECF No. 262.
Bankruptcy Court granted the Government's Motion for
Relief from Automatic Stay on January 31, 2018, and applied
the lifting of the stay retroactively to December 20, 2017.
This Court continued the hearing on Mrs. Staton's claim
originally scheduled for January 31, 2018 until February 16,
2018 because the Government: (1) did not seek a waiver of the
14-day stay provided under Fed.R.Bankr.P. 4001(a)(3) in Mr.
Staton's bankrupty case; and (2) failed to record the
Bankruptcy Court's Order in Mrs. Staton's prior
bankruptcy case granting relief from the stay, which provided
for “‘in rem' relief, i.e. this order is
binding with respect to the subject property for 240 days
after the date of the entry of this order in any other
bankruptcy case that has been or may be filed.” ECF No.
268. The Government subsequently recorded the Bankruptcy
Court's in rem Order with the Hawaii Bureau of
Conveyances. ECF No. 296 at 3 (citing ECF No. 294-1).
February 12, 2018, Mr. Staton filed a Motion to Vacate,
Alter, or Amend Order Granting Relief from Automatic Stay
Retroactive to December 20, 2017 in the Bankruptcy Court. On
February 15, 2018, the Bankruptcy Court denied this Motion.
On that same date, Mr. Staton filed a Notice of Appeal of the
Bankruptcy Court's Order and its subsequent denial of his
Motion to Vacate, Alter, or Amend.
Court held a hearing on February 16, 2018 (after expiration
of the 14-day stay provided under Fed.R.Bankr.P. 4001(a)(3))
to consider Defendant Brenda Staton's assertion that
there has been a failure “to protect defendant
interests in the property.” Following the February 16,
2018 hearing, the Court entered an Order Finding Defendant
Brenda Staton's Claim that the Foreclosure Sale Fails to
Protect Her Interest in the Property to be Without Merit (the
“February 16, 2018 Order”). ECF No. 276.
March 19, 2018, Mrs. Staton filed a notice of appeal, ECF No.
297, appealing from the Court's February 16, 2018 Order,
ECF No. 276. The Court entered a minute order on March 21,
2018, construing Mrs. Staton's notice of appeal as a
motion for leave to file an interlocutory appeal, as well as
setting a briefing schedule and hearing on the Motion. ECF
No. 299. The Government filed its Opposition to the Motion on
March 23, 2018, ECF No. 303, to which the Lender Defendants
and Defendant State of Hawaii joined, ECF Nos. 304, 305. The
Statons filed a Memorandum in Support of Brenda L.
Staton's Motion to Certify Interlocutory Appeal
(“Staton Mem.”) on March 27, 2018. ECF No. 312.
Lender Defendants then filed an opposition to Mrs.
Staton's memorandum in support on March 29, 2018. ECF.
on March 26, 2018, the Statons filed a Motion for Continuance
of Hearings Scheduled for March 29, 2018 and April 6, 2018.
ECF No. 307. The Government filed an opposition on March 28,
2018. ECF No. 309. By Minute Order entered March 28, 2018,
the Court denied the Statons' motion for a continuance
and directed that the hearings set for March 29, 2018, and
April 6, 2018, would be held as scheduled. ECF No. 311. The
Court, however, granted Mrs. Staton permission to appear at
the March 29, 2018 hearing by telephone. Id. The