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Wells Fargo Bank, N.A., As Trustee For the Registered Honorable Joseph v. Ccc Atlantic

February 15, 2012

WELLS FARGO BANK, N.A., AS TRUSTEE FOR THE REGISTERED HONORABLE JOSEPH E. IRENAS HOLDERS OF CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES, SERIES 2007-C5,
PLAINTIFF,
v.
CCC ATLANTIC, LLC, DEFENDANT.



The opinion of the court was delivered by: Irenas, Senior District Judge:

OPINION

Presently pending is Defendant CCC Atlantic's Motion to Stay this case pending the interlocutory appeal of this Court's Order granting Plaintiff Wells Fargo's Motion to Appoint a Receiver and denying CCC Atlantic's Motion to Dismiss for lack of diversity of citizenship. For the reasons stated herein, the Motion to Stay will be denied; however, the Court will issue a temporary stay to allow CCC Atlantic to submit a stay application to the Court of Appeals.*fn1

I.

The underlying facts of this commercial foreclosure case are recited at length in this Court's opinion available at Wells Fargo, N.A., Trustee v. CCC Atlantic, LLC, No. 12-521, ___ F. Supp.2d ___, 2012 WL 5866216 (D.N.J. Nov. 20, 2012). The following procedural history is relevant to the instant Motion.

After this Court granted Wells Fargo's Motion to Appoint a Receiver, and denied CCC Atlantic's jurisdictional motion, CCC Atlantic filed an interlocutory appeal pursuant to 28 U.S.C. § 1292(a)(2). That appeal seeks review of both the determination that a receiver should be appointed and the jurisdictional holding.*fn2

Importantly, in response to defense counsel's request at oral argument on the motions, this Court did not immediately enter Wells Fargo's proposed order appointing a receiver. Instead it merely granted Wells Fargo's Motion to Appoint a Receiver, and scheduled a hearing concerning the proposed receivership order.

Prior to the scheduled hearing, CCC Atlantic filed its Notice of Appeal. Initially, this Court sua sponte adjourned the hearing concerning the proposed receivership order in light of the pending appeal. However, it then came to the Court's attention that,

[a]n interlocutory appeal does not divest the district court of jurisdiction to act on the case. See U.S. v. Price, 688 F.2d 204, 215 (3d Cir. 1982). Moreover, a district court may modify or clarify the order which is the subject of the interlocutory appeal, so long as the district court's action will not materially alter the matters presented for appellate review. See Federal Trade Com'n v. Enforma Natural Products, Inc., 362 F.3d 1204, 1216 n.11 (9th Cir. 2004) (explaining in an appeal from an order granting a preliminary injunction, "[w]e have recognized an exception to the general rule that the filing of a notice of appeal divests the trial court of jurisdiction where the district court action aids this court in its review. The appellate court is entitled to review a fixed, rather than a mobile, record. Additional findings that move the target are disfavored. Additional findings that merely set the target in place, however, are acceptable.") (internal citations and quotations omitted); Dixon v. Edwards, 290 F.3d 699, 709 n.14 (4th Cir. 2002) (stating that "the district court retained authority to act" to remedy imprecise wording of preliminary injunction order even after an interlocutory appeal of the order was filed).

(Order of November 28, 2012; Docket Entry # 48) Accordingly, the Court rescheduled the receivership hearing.

CCC Atlantic then moved to stay the case pending the disposition of its interlocutory appeal. However, just prior to oral argument on the Motion to Stay, CCC Atlantic filed for bankruptcy. Thus, in light of the automatic stay, the case was administratively terminated on December 7, 2012, and the Motion to Stay was mooted.

CCC Atlantic's bankruptcy case was dismissed without prejudice on February 8, 2013. On February 11, 2013 this Court issued an Order reopening the case and reinstating the instant Motion to Stay.

II.

Federal Rule of Civil Procedure 62 provides in relevant part, "unless the court orders otherwise," "an interlocutory . . . judgment in an action for a receivership" is "not stayed after being entered, even if an appeal is taken." Fed. R. Civ. P. 62(a)(2).

The Court may, in its discretion, "order otherwise", Fed. R. Civ. P. 62(a)(2), upon concluding that (1) "the stay applicant has made a strong showing that ...


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