In Re: 155 Chambersfood, Inc.

25-472-bk In re: 155 Chambersfood, Inc. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. 1 At a stated term of the United States Court of Appeals for the Second 2 Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in 3 the City of New York, on the 26th day of November, two thousand twenty-five. [4] 5 Present: [6] 7 JOHN M. WALKER, JR., 8 SUSAN L. CARNEY, 9 WILLIAM J. NARDINI, 10 Circuit Judges. 11 _____________________________________ 12 In re: 155 Chambersfood, Inc., 13 Debtor. 14 ____________________________________ [15] 16 MANHATTAN REALTY CO. 1, LP, [17] 18 Creditor-Appellant, [19] 20 v. No. 25-472-bk [21] 22 155 CHAMBERSFOOD, INC., [23] 1 Debtor-Appellee. * 2 _____________________________________ [3] 4 For Creditor-Appellant: ROBERT R. MOORE, JR. (Andrew 5 Goodman, on the brief), 6 Kucker Marino Winiarsky & 7 Bittens, LLP, New York, NY. [8] 9 For Debtor-Appellee: No Appearance. [11] 12 Appeal from a judgment of the United States District Court for the Eastern District 13 of New York (Merchant, J.) entered on February 3, 2025. 14 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, 15 AND DECREED that the judgment of the District Court is AFFIRMED. 16 This appeal arises from an eviction dispute between a commercial landlord, 17 Manhattan Realty Co. 1, LP (“Manhattan Realty”) and its tenant, 155 Chambersfood, Inc. 18 (“155 Chambers”). In 2023, 155 Chambers, which operated a small pizzeria in lower 19 Manhattan, faced eviction for failure to pay several months’ rent. Five days prior to the 20 scheduled eviction, 155 Chambers filed a voluntary bankruptcy petition under Chapter 21 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of New 22 York. This triggered an automatic bankruptcy stay that had the effect of enjoining the 23 eviction. See 11 U.S.C. § 362 (a). *Pursuant to Federal Rule of Appellate Procedure 43(c)(2), the Clerk of Court is respectfully directed to amend the caption as reflected above. [2] 1 Manhattan Realty then moved under Section 362(d) of the Bankruptcy Code to lift 2 the automatic stay with respect to its pending eviction proceeding. On such a request, 3 the Bankruptcy Code requires the Bankruptcy Court to conduct a preliminary hearing 4 within thirty days, and a final hearing no later than thirty days thereafter, unless this 5 period is extended on consent of the parties or the court finds that “compelling 6 circumstances” require a further extension. Id. § 362(d)-(e). During hearings on 7 September 26, 2023, October 24, 2023, and December 5, 2023, the Bankruptcy Court 8 declined to adjudicate the motion. On December 18, 2023, Manhattan Realty filed an 9 interlocutory appeal with the U.S. District Court for the Eastern District of New York, 10 arguing that the Bankruptcy Court had not complied with the procedure and timeline set 11 forth in Section 362, and that the stay had therefore automatically terminated pursuant 12 to Section 362(e)(1). Four months later, on April 8, 2024, the Bankruptcy Court lifted the 13 automatic stay and allowed Manhattan Realty to evict 155 Chambers. 14 On August 6, 2024, 155 Chambers moved to voluntarily dismiss its Chapter 11 15 case, and the Bankruptcy Court granted that motion on September 27, 2024. By 16 judgment entered on February 3, 2025, the District Court dismissed Manhattan Realty’s 17 pending interlocutory appeal as moot. 18 On appeal from the District Court’s dismissal of its interlocutory appeal, 19 Manhattan Realty argues the case is not moot. We assume the parties’ familiarity with [3] 1 the underlying facts, the procedural history, and the issues on appeal, to which we refer 2 only as necessary to explain our decision to affirm. 3 I. Discussion 4 We “review questions of mootness and standing de novo because they are 5 questions of law.” Fund for Animals v. Babbitt, 89 F.3d 128 , 132 (2d Cir. 1996). 6 A. The District Court Properly Dismissed the Appeal as Moot 7 To avoid mootness, a case must present an “actual controversy” through which 8 the parties can obtain some relief from the court, and that controversy must exist 9 “through all stages of the litigation.” Already, LLC v. Nike, Inc., 568 U.S. 85, 90-91 (2013) 10 (internal quotation marks omitted). “A case becomes moot . . . when the issues 11 presented are no longer live or the parties lack a legally cognizable interest in the 12 outcome.” Id. at 91 (internal quotation marks omitted). 13 As a threshold matter, Manhattan Realty’s appeal was mooted by the Bankruptcy 14 Court’s lifting of the stay on April 8, 2024. This is all the relief that Manhattan Realty 15 sought when it moved in the Bankruptcy Court to lift the stay, and when it appealed to 16 the District Court. Once Manhattan Realty received all the relief that it sought in its 17 appeal to the District Court, that appeal became moot – and hence the present appeal is 18 moot, as well. As we have explained, “no live controversy remains where a party has 19 obtained all the relief [it] could receive on the claim through further litigation.” Ruesch [4] 1 v. Comm’r of Internal Revenue, 25 F.4th 67, 70 (2d Cir. 2022) (internal quotation marks and 2 citation omitted). 3 Manhattan Realty argues that the case is nevertheless justiciable for two reasons. 4 We address each in turn. 5 B. The Challenged Action Is Not “Capable of Repetition, Yet Evading 6 Review” 7 Manhattan Realty first argues that the case falls within the “capable of repetition, 8 yet evading review” exception to mootness. “For this exception to apply, (1) the plaintiff 9 must have a ‘reasonable expectation’ that it will be subject to the same challenged action 10 again, and (2) the challenged conduct must be of ‘too short [a duration] to be fully 11 litigated’ before its cessation.” Exxon Mobil Corp. v. Healey, 28 F.4th 383, 395 (2d Cir. 12 2022). 13 The dispute in this case is not “capable of repetition, yet evading review.” Our 14 Court has held that this exception generally applies only where “the[] same parties are 15 reasonably likely to find themselves again in dispute over the issues raised in th[e] 16 appeal.” Dennin v. Conn. Interscholastic Athletic Conf., Inc., 94 F.3d 96, 101 (2d Cir. 1996) 17 Indeed, the Bankruptcy Court dismissed 155 Chambers’ underlying bankruptcy petition 18 on September 27, 2024, thereby foreclosing the possibility of any further dispute between 19 the parties in the case at bar. And Manhattan Realty has not demonstrated that it [5] 1 otherwise has a “reasonable expectation” of finding itself embroiled in a future dispute 2 with 155 Chambers, let alone a dispute over whether an automatic stay in a bankruptcy 3 proceeding has been terminated by operation of law by virtue of a bankruptcy court’s 4 alleged failure to comply with the timeline provided by Section 362(e). 5 Even assuming arguendo that a future dispute need not be with the same adversary 6 in order to invoke this exception, Manhattan Realty has not shown that it has a 7 “reasonable expectation” that it will again be involved in a future proceeding where a 8 bankruptcy judge will decline to adjudicate a motion to lift a stay in a way that is 9 allegedly inconsistent with Section 362(e). Manhattan Realty notes that it is a landlord 10 with “twenty-four mixed use properties,” and we agree that it is possible that it might be 11 involved in future bankruptcy litigation with other tenants. But the mere possibility of 12 such litigation does not rise to the level of a “reasonable expectation” that such litigation 13 will occur and will trigger the automatic stay under Section 362, or that such a 14 hypothetical future bankruptcy proceeding would involve repeated continuances 15 without adjudication of a motion to lift the automatic stay. Manhattan Realty’s 16 purported injury is thus far too “speculative and theoretical” to implicate this exception. 17 Van Wie v. Pataki, 267 F.3d 109 , 114 (2d Cir. 2001). [6] 1 We also reject Manhattan Realty’s suggestion that our dismissal of this appeal as 2 moot would enable the rulings of bankruptcy courts to “evade review.” Appellant’s Br. 3 at 20. Litigants subject to bankruptcy stays can seek to have their appeals expedited; 4 they may also have other appellate remedies, such as, in an exceptional scenario, seeking 5 a writ of mandamus. See, e.g., Satter v. KDT Indus., Inc., 28 B.R. 374, 375 (S.D.N.Y. 1982) 6 (considering, though ultimately denying, mandamus petition in bankruptcy proceeding 7 for bankruptcy judge’s alleged failure to comply with timeliness requirements of Section 8 362). 9 C. Self-Interest in Seeking Attorneys’ Fees Does Not Avoid Mootness 10 Second, Manhattan Realty argues that its case qualifies for the “collateral 11 consequence” doctrine, which is typically reserved for use in the criminal context. See 12 Nowakowski v. New York, 835 F.3d 210, 218 (2d Cir. 2016) (noting that the “continuing 13 collateral consequences” presumption recognized in Sibron v. New York, 392 U.S. 40 14 (1968), does not apply “when the defendant does not challenge a criminal conviction”). 15 Specifically, Manhattan Realty argues that it “not only was damaged by [the Bankruptcy 16 Court’s] unlawful refusal to issue a decision on the Motion, but continues to be damaged 17 because there is no procedural mechanism whereby [it] could interpose a counterclaim [7] 1 for attorney’s fees where the complaint was dismissed and appealed from.” Appellant’s 2 Br. at 27. 3 We agree with the District Court that Manhattan Realty’s purported interest in 4 recovering attorneys’ fees has no bearing on whether its appeal in this case is moot. 5 Manhattan Realty took an appeal to the District Court not from a denial of attorneys’ fees, 6 but from a refusal to adjudicate a motion seeking one thing: to terminate the automatic 7 stay. Neither the Bankruptcy Court’s initial failure to rule on the termination motion, 8 nor the District Court’s dismissal of the appeal from such a failure, has had any bearing 9 on whether Manhattan Realty could or could not seek attorneys’ fees. The only issue 10 before the District Court was whether to order the Bankruptcy Court to adjudicate the 11 motion to terminate the automatic stay; that request was overtaken by events. 12 At this point, Manhattan Realty cannot ask this Court to adjudicate a dispute that 13 is no longer live, solely in the hopes of giving rise to a right to request attorneys’ fees. 14 As the Supreme Court has explained, “[a]n interest in attorney's fees is . . . insufficient to 15 create an Article III case or controversy where none exists on the merits of the underlying 16 claim.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 107 (1998) (“The litigation must 17 give [Manhattan Realty] some other benefit besides reimbursement of costs that are a 18 byproduct of the litigation itself.”). Put another way, Manhattan Realty’s interest in [8] 1 obtaining a declaration that the automatic stay terminated as a matter of law under 2 Section 362(e)(1), even if such a declaration could give it a right to seek attorneys’ fees 3 from the Debtor, is insufficient to create a live dispute. 4 * * * 5 We have considered Manhattan Realty’s remaining arguments and conclude that 6 they are without merit. Accordingly, for the reasons set forth above, we AFFIRM the 7 judgment of the District Court. [9] 10 FOR THE COURT: 11 Catherine O’Hagan Wolfe, Clerk of Court