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October 4, 1990


The opinion of the court was delivered by: Glasser, District Judge.


The plaintiff obtained an order of this court directing the defendant HUD to show cause why it should not be directed to (1) pay to the plaintiff the sum of $618,015.88 in full satisfaction of a supplemental judgment against HUD entered on June 6, 1990; (2) pay the costs and attorneys' fees incurred in seeking the relief.

The background of this case leading up to this application is fully set out in a Memorandum and Order issued by this Court on January 12, 1990; the decision of the United States Court of Appeals for the Second Circuit dated May 8, 1990; and that of August 15, 1990, familiarity with which is assumed. HUD has, on August 3, 1990, again filed a notice of appeal seeking a review of the issue of the waiver of HUD's sovereign immunity claims which the Court of Appeals has already ruled on adversely to HUD. That appeal is pending.

Following the entry of the supplemental judgment on June 6, 1990, and the failure of HUD to pay it, the plaintiff, pursuant to Rule 69(a), Fed.R.Civ.P., and Article 54 of the N Y C.P.L.R. (a) served a restraining notice upon the judgment debtor, HUD; (b) served restraining notices and information subpoenas upon the Federal Reserve Bank of New York and seven of the largest commercial banks in the City of New York; (c) served a restraining notice upon the United States Department of the Treasury; and (d) served a deposition subpoena duces tecum upon the Judgment debtor which was returnable on September 10, 1990. The information sought by the subpoena is critical in the light of the per curiam decision of the Court of Appeals of August 15, 1990, which provides in its entirety as follows:

  The Government's petition for rehearing
  misapprehends that our decision will oblige the
  Secretary to satisfy any judgment that might be
  rendered out of Treasury funds. It will not. The
  Secretary will be obliged to satisfy the judgment
  only out of non-Treasury funds that are available
  to him, if any. If no such funds are available,
  the Secretary will have no payment obligation.

C.H. Sanders Co. v. BHAP Housing Dev. Fund Co., 910 F.2d 33.

The subpoena is obviously in aid of learning the extent of non-Treasury funds available to the Secretary. The defendant has elected to ignore the subpoena. Having failed to have its judgment satisfied and having failed to have its subpoena honored, the plaintiff was driven to seek an order from the Court directing HUD to forthwith satisfy its judgment, relying for the relief it seeks upon Rule 69(a), Fed.R.Civ.P., N.Y. C.P.L.R. §§ 5225 and 5240, and the All Writs Act, 28 U.S.C. § 1651.

HUD's sole basis for resisting the relief sought is that the Notice of Appeal it filed operates to divest this Court of jurisdiction to issue any further orders in the proceeding and, in effect, gives rise to an "automatic stay" of the enforcement of the judgment. It is significant to note that in its order of January 12, 1990, this Court denied the defendant's application for a stay pending appeal. For the reasons that follow, the plaintiff's motion for a Turnover Order will be and hereby is granted.

The defendant must be presumed to have recognized the necessity of obtaining a stay of proceedings to enforce the judgment given the fact that it sought one. Indeed, Rule 62(a), Fed.R.Civ.P., and Rule 8(a), Fed.R.App.P., make that necessity manifest. It nevertheless persists in asserting such a stay relying upon the plethora of cases invoking the general rule that an effective notice of appeal divests the district court of jurisdiction over the matter forming the basis for the appeal. It would be an affectation of research to cite the cases which announce that rule. The defendant blithely ignores, however, the plethora of cases which plainly hold that to that general rule there is an exception which is precisely applicable to this motion.

The principle precisely applicable here is stated with exquisite precision in 9 Moore's Federal Practice ¶ 208.03 (2d ed. 1990) as follows:

  A party who desires to appeal is not obliged to
  seek a stay of the judgment pending appeal.
  The only consequence of failing to obtain a stay is
  that the prevailing party may treat the judgment of
  the district court as final, notwithstanding that
  an appeal is pending. If the judgment awards money
  or property, it may be executed upon unless stayed;

(emphasis added).

That exception to the general rule was recognized in N.L.R.B. v. Cincinnati Bronze, Inc., 829 F.2d 585 (6th Cir. 1987), which stated it as follows, at p. 588:

  ". . . the mere pendency of an appeal does not, in
  itself, disturb the finality of a judgment. . . .
  [T]he district Court has jurisdiction to act to
  enforce its judgment so long as the judgment has
  not been stayed or superseded. . . . Although a
  district court may not alter or enlarge the scope
  of its judgment pending appeal, it does retain
  jurisdiction to enforce the judgment.

The court went on to emphasize the crucial difference between expanding upon an order after a notice of appeal has been filed and enforcing such an order, the district court being precluded from expansion but not enforcement.

In Deering Milliken, Inc. v. F.T.C., 647 F.2d 1124 (D.C. Cir. 1978), the court stated it thus, at pp. 1128-29;

  It is well established that the District Court is
  without jurisdiction to alter a judgment of its
  own while an appeal therefrom is ongoing. But it
  is equally clear that the vitality of that
  judgment is undiminished by pendency of the
  appeal. Unless a stay is granted either by the
  court rendering the judgment or by the court to
  which the appeal is taken, the judgment remains

See also, International Paper Co. v. Whitson, 595 F.2d 559 (10th Cir. 1979); Lara v. Secretary of the Interior of the United States, 820 F.2d 1535, 1542-43 (9th Cir. 1987); Island Creek Coal Sales v. City of Gainesville, 764 F.2d 437 (6th Cir. 1985); National Service Industries, Inc. v. Vafla, 694 F.2d 246, 250 (11th Cir. 1982); BGW Associates, Inc. v. Valley Broadcasting Co., 532 F. Supp. 1115 (S.D.N.Y. 1982).

Since no stay has been granted either by this court or by the Court of Appeals, the relief plaintiff seeks must be granted. The defendant is, therefore, hereby directed to obey the subpoena duces tecum previously served and which was returnable on September 10, 1990, on a day to be fixed by the plaintiff upon five days notice and to satisfy the supplemental judgment entered in favor of the plaintiff on June 6, 1990, from non-Treasury funds that are in the possession or under the control of HUD.

The plaintiff seeks an award of the costs and attorneys fees incident to the bringing of this motion. It bases its claim for such relief upon Rule 11, Fed.R.Civ.P., and upon 28 U.S.C. § 2412. A cursory examination of the relevant authorities would have dispelled the possibility of a reasonable belief that the opposition to the plaintiff's motion was warranted by existing law or by a good faith argument that the existing law should be extended, modified or reversed. The conclusion is inescapable that the defendant's papers were interposed for no purpose other than to harass, cause unnecessary delay or needlessly increase the cost of litigation. Rule 11, Fed.R.Civ.P.

In N.L.R.B. v. Cincinnati Bronze, Inc., supra, the Court considered the propriety of imposing sanctions pursuant to Rule 38, Fed.R.App.P., which provides that damages and single or double costs may be awarded to an appellee if the court determines that an appeal "is frivolous." In concluding that sanctions should be imposed, it wrote:

  Frivolity, like obscenity, is often difficult to
  define. With courts struggling to remain afloat in
  a constantly rising sea of litigation, a frivolous
  appeal can itself be a form of obscenity.
  We conclude that the present appeal represents the
  latest in a seemingly endless series of attempts .
  . . to frustrate the [plaintiff's] efforts to
  obtain relief to which it is clearly entitled.

829 F.2d at 591. That observation is peculiarly apposite here.

For the very same reasons, the conclusion is inescapable that the position of the defendant was not substantially justified. 28 U.S.C. § 2412(d)(1)(A).

The plaintiff's application for an award of costs, expenses and attorneys' fees incurred in bringing this motion is hereby granted. The plaintiff's attorney shall submit an affidavit listing the time spent, hourly rate charged and expenses incurred on or before October 15, 1990. The defendant may submit papers in opposition on or ...

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