Terminating the Appellate Court Stay: Creditors Can Stop the Delay When Borrowers File an Appeal
Lucas B. RocklinJanuary 22, 2020
Borrowers Seek to Delay Foreclosure and Collection Actions
Borrowers sued in foreclosure and collection actions often try to delay the entry and enforcement of judgment. Borrowers have an interest in delaying, as enforcement of the judgment is typically loss of property in a foreclosure action, and money in a collection action. One way borrowers attempt to delay, is by appealing the judgment. An appeal of a Connecticut state court judgment causes an automatic stay, preventing the judgment from being carried out until the appeal is completed and denied. This can cause significant delay to a creditor’s ability to execute on their judgment, given that appeals in Connecticut take on average over one year from the filing date to when the appeal is decided.
What can creditors do to combat this delay? Creditors who obtain judgments only to see their borrowers file frivolous appeals should consider filing a Motion to Terminate the Stay. If granted, the creditor is permitted to immediately enforce their judgment, despite the borrower’s pending appeal. Obtaining an order terminating the stay can also result in (i) borrowers abandoning their appeals, especially if the appeal was filed solely for the purposes of delay, (ii) borrowers desiring to settle, and (iii) mooting of the appeal in certain circumstances (e.g. if the foreclosure is completed after termination of the stay and prior to the outcome of the appeal).
Procedure to Terminate Appellate Court Stay
The procedure to terminate the stay is set forth in Connecticut Practice Book Section 61-11. Subsection (d) provides two grounds for the court to terminate the automatic stay caused by an appeal: (1) the court finds that the “appeal is filed only for delay” or (2) the court finds that “the due administration of justice” requires that the stay be terminated. In determining whether the due administration of justice warrants termination of the stay, courts typically consider the following four factors: (1) the likelihood of success on appeal, (2) irreparable harm if the stay is lifted, (3) effect of the stay on other parties to the proceeding, and (4) the public interest. Griffin Hospital v. Commission on Hospitals and Health Care, 196 Conn. 451, 458-60 (1985).
Subsection (e) of Practice Book Section 61-11 provides that the motion to terminate the stay is filed with the appellate court but decided by the trial court judge who entered the judgment being appealed. The trial court’s discretion whether to terminate the stay is broad. Yanow v. Teal Industries, Inc., 196 Conn. 579, 583 (1985).
Creditors Should Seek to Terminate the Appellate Court Stay
Filing a motion to terminate the stay is recommended for creditors whose judgment are appealed by their borrowers. Saving the creditor time and money, terminating the stay allows the creditor to immediately enforce their judgment without waiting until the conclusion of the appeal.