United States District Court, N.D. Alabama, Southern Division
IN RE JOANN WAID, LENNIS L. WAID, et al., Appellants,
MISSION COAL COMPANY, LLC, et al., Appellees.
OWEN BOWDRE, CHIEF UNITED STATES DISTRICT JUDGE
matter comes before the court on Appellants JoAnn Waid,
Lennis L. Waid, and other Waid Claimants' (“Waid
Claimants”) “Motion to Stay Pending
Appeal.” (Doc. 5). This action originated in the
Bankruptcy Court, in which Debtor Mission Coal Company, LLC,
and its debtor affiliates (collectively “Mission
Coal”) filed for Chapter 11 bankruptcy. On April 15,
2019, the Bankruptcy Court entered an order approving the
sale of the acquired assets free and clear of claims, liens,
interests and encumbrances; approving the assumption and
assignment of certain executory contracts and unexpired
leases; and granting related relief. (Doc. 1-2). That same
day, the Bankruptcy Court also entered an order confirming
the Fourth Amended Chapter 11 Plan of Mission Coal. (Doc.
1-3). The Waid Claimants then appealed both orders to this
court, and now move this court to stay the effect of the
Bankruptcy Court's orders while the appeal is pending.
For the reasons discussed below, the court will DENY the
motion to stay pending appeal.
current action stems from two underlying actions: the state
court action and the bankruptcy court action. On September
22, 2004, the Waid Claimants filed a lawsuit in the Circuit
Court of Jefferson County, Alabama. In this state court
action, the Waid Claimants alleged that Mission Coal's
mining operations and the Concord Coal Preparation Plant
caused airborne contaminants or particulates to be released
into the air and onto the Waid Claimants' real and
personal property, causing damage.
parties to that action subsequently entered into a settlement
agreement, which the state court approved on April 12, 2017.
The settlement provided for Mission Coal to make monthly
payments totaling $4, 250, 000.00, with the final payment due
on December 31, 2019. The amount of each payment is
determined by the coal production from the Concord Coal
Preparation Plant each month until the total amount of the
monthly payments equaled a set amount for each year. In
return, Mission Coal received 225 conditional, revocable
easements that allowed Mission Coal to release airborne
particulates or contaminants into the air and onto the Waid
Claimants' real and personal property. A default in the
payments, after notice and an opportunity to cure the
default, would nullify and void the easements. The easements
noted that they will “automatically cease and
terminate, be deemed null and void, and be of no further
force and effect if a default by the Grantees occurs . . . .
[If Grantees default, ] all of the provisions of this
Easement and Release above shall cease and terminate, be null
and void, and be of no further force and effect.” (Doc.
5-3 at 2).
state court's Amended Final Order incorporated the
settlement agreement into the order. The order included the
following language regarding a default on payments:
Per the Parties' settlement, if the Defendants do not
timely make a payment or fail to make a payment pursuant to
the terms of the Settlement Agreement, then, after reasonable
notice and an opportunity to cure, then the Waid Plaintiffs .
. . shall have the unilateral right to file an affidavit with
the Office of the Judge of Probate of Jefferson County,
Bessemer Division certifying that the Defendants' default
has occurred and is continuing, in which event, all of the
provisions of the Easements for the Waid Plaintiffs shall
cease and terminate, be null and void, and be of no further
force or effect. . . . The Parties agree that if the
Easements are declared or determined to be null and void and
be of no further force or effect because of a default by the
Defendants, that part shall be excluded from the Settlement
Agreement, but the validity of the remaining parts, terms, or
provisions shall not be affected thereby, and the said
Easements shall be deemed not to be a part of the Settlement
(Doc. 5-1 at 5). The Amended Final Order was also filed in
the Probate Court of Jefferson County, Alabama, to give
notice to the world that the easements could be revoked upon
October 14, 2018, Mission Coal voluntarily filed for Chapter
11 bankruptcy. (Br. Doc. 1).
2018,  Mission Coal failed to make payments
totaling at least $320, 059.03. As of March 1, 2019, Mission
Coal is in default for failing to make payments totaling
$820, 059.03. Further, the settlement agreement requires
Mission Coal to make additional payments until it has paid
$500, 000.00 in 2019. So, Mission Coal must pay $1, 320,
059.03 under the settlement agreement by December 31, 2019.
April 15, 2019, the Bankruptcy Court entered the Sale Order
authorizing the sale of nearly all Mission Coal's assets
to Murray Metallurgical Coal Holdings, LLC and its
affiliates. This sale included the sale of the easements on
the Waid Claimants' land. The Bankruptcy Court also
confirmed Mission Coal's Fourth Amended Joint Chapter 11
Plan (“the Plan”). Mission Coal claims that the
“[s]ale to Murray was a critical component, indeed the
sine qua non, of the Plan.” (Doc. 15 at 6).
April 26, 2019, the Waid Claimants filed a notice of appeal
from the Order Approving Sale and the Order Confirming the
Fourth Amended Chapter 11 Plan. That same day, they also
filed a non-emergency motion in the Bankruptcy Court seeking
a stay of the orders pending the appeal.
April 30, 2019, Mission Coal closed the sale to Murray.
Pursuant to the sale agreement, Mission Coal sold its
easements to Murray Oak Grove, LLC, free and clear of all
liens, claims, and encumbrances. Because the sale closed, the
Plan Effective Date occurred on April 30, 2019. Additionally,
the Waid Claimants' notice of appeal was docketed in this
court on April 30, 2019. (Doc. 1).
3, 2019, the transfer of the easements was recorded in the
Probate Court of Jefferson County, Alabama.
8, 2019, the Bankruptcy Court held a hearing on the motion to
stay pending appeal. The Bankruptcy Court denied the motion,
finding that (1) the Waid Claimants failed to show they were
likely to succeed on the merits of their appeal; (2) the Waid
Claimants failed to show that they would suffer irreparable
harm without a stay; (3) the entry of a stay would be
confusing and have no practical effect because the sale had
been consummated; and (4) the public interest is best served
by the closing of the sale and confirmation of the Plan.
the Bankruptcy Court's denial of the motion to stay, the
Waid Claimants next moved this court for a stay pending the
appeal in this court on May 23, 2019, which is now before
Standard of Review
pending appeal is akin to a preliminary injunction. See
Matter of Forth-Eight Insulations, Inc., 115
F.3d 1294, 1300 (7th Cir. 1997) (“These factors mirror
the factors to be considered in ruling on an application for
preliminary injunction, in which context we have more fully
explained how the factors are to be applied and
balanced.”). The Eleventh Circuit explained the
A stay pending appeal is an “extraordinary
remedy” and the party seeking it must show: “(1)
a substantial likelihood that [the movant] will prevail on
the merits of the appeal; (2) a substantial risk of
irreparable injury to the[m] unless the [stay] is granted;
(3) no substantial harm to other interested persons; and (4)
no harm to the public interest.”
In re Woide, 730 Fed.Appx. 731, 737 (11th Cir. 2018)
(quoting Touchston v. McDermott, 234 F.3d 1130, 1132
(11th Cir. 2000)), cert. denied sub nom., Woide
v. Fed. Nat'l Mortg. Ass'n, 139 S.Ct. 481
(2018). The party seeking the stay bears the burden of
proving each element, “but the court may give greater
weight to any of the elements in its discretion depending
upon the circumstances of the case.” In re
Powers, No. 15-03267-JJR13, 2018 WL 5255295, at *3 (N.D.
Ala. Oct. 15, 2018).
the party must first move the bankruptcy court to stay the
judgment, order, or decree. Fed.R.Bankr.P. 8007(a)(1). But,
the party can instead directly move the district court
hearing the case on appeal to stay the judgment, order, or
decree under one of two circumstances: (1) the party
“show[s] that moving first in the bankruptcy court
would be impracticable, ” or (2) “if a motion was
made in the bankruptcy court, [the party] either state[s]
that the court has not yet ruled upon the motion, or state[s]
that the court has ruled and set out any reasons given for
the ruling.” Id. at 8007(b)(2).
case, Mission Coal contends that, while the Waid Claimants
moved the Bankruptcy Court for a stay, that motion to stay
was different from the motion to stay filed before this
court. Mission Coal alleged that the Waid Claimants sought a
stay of the initial transfer of ...