UMB BANK v. GAUTHIER

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
UMB BANK NATIONAL ASSOCIATION, 	)
Not in Its Individual Capacity, but Solely 	)
as Legal Title Trustee for LVS TITLE 	)
TRUST XIII, 	)
)
Plaintiff, 	)
)
v. 	) 	2:23-cv-00380-JAW
)
MARGARET L. GAUTHIER, 	)
)
Defendant. 	)
ORDER ON DEFENDANT’S MOTIONS FOR CERTIFICATION FOR
INTERLOCUTORY APPEAL OF RECEIVERSHIP APPOINTMENT
A defendant submits two motions seeking certification for interlocutory appeal
of, among other things, a receivership appointment. 	The court addresses the
remainder of the two certification motions in a separate order and now concludes that
while the receivership appointment is entitled to interlocutory appeal, it is not subject
to certification. 	The court accordingly dismisses the defendant’s motions insofar as
they move the court to certify the receivership appointment for interlocutory appeal.
I. 	BACKGROUND1
On October 5, 2023, U.S. Bank Trust National Association, not in its individual
capacity, but solely as owner trustee of BRAVO Residential Funding Trust 2021-C
(Bravo), filed a complaint against Margaret L. Gauthier seeking an in rem judgment
1 	The Court assumes the parties’ familiarity with the extensive factual and procedural history
and therefore limits its recitation of the procedural background to recent and relevant events.
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of foreclosure and sale pursuant to 14 U.S.C. § 6322 against the property located at
14-16 Melvin Avenue, Old Orchard Beach, Maine 04064 (the Property). Compl. (ECF
No. 1). On March 25, 2024, Bravo moved to appoint Benjamin P. Campo, Jr., Esq. as
receiver for the Property. 	Mot. to Appoint Receiver (ECF No. 12). 	Ms. Gauthier
opposed this motion on April 3, 2024. Def. Margaret Gauthier’s Mem. in Opp’n to Pl.’s
Mot. for Appointment of Receiver (ECF No. 13). Bravo replied on April 9, 2024. Reply
to Opp’n to Mot. to Appoint Receiver (ECF No. 14).
On May 3, 2024, the United States Magistrate Judge filed her recommended
decision 	with 	the 	Court, 	which 	concluded 	that 	the 	receiver 	appointment 	was
warranted. 	Recommended Decision on Mot. to Appoint Receiver (ECF No. 16). 	Ms.
Gauthier filed an objection to the Recommended Decision on May 17, 2024. 	Def.
Margaret Gauthier’s Objs. to Mag.’s R. & R. to Appoint Receiver (ECF No. 17); see also
Additional Attachs. (ECF No. 20). 	Bravo responded to Ms. Gauthier’s objection on
May 31, 2024. Resp. to Obj. by Def. Margaret Gauthier (ECF No. 19). Ms. Gauthier
replied on June 3, 2024. Def. Margaret Gauthier’s Reply to Pl.’s Resp. to Def.’s Objs.
to Mag.’s Recommendations (ECF No. 21).
On November 19, 2024, the Court issued an omnibus order responding to the
many pending motions in this case. 	Omnibus Order (ECF No. 78). 	As part of the
omnibus order, the Court affirmed the Magistrate Judge’s Recommended Decision to
grant Bravo’s motion to appoint Attorney Campo as receiver for the Property, see
Omnibus Order at 38-44, 63, and appointed Attorney Campo as receiver with powers
to determine legal occupancy status, make necessary repairs and maintenance
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expenditures for the overall preservation of the Property, and collect monthly rental
payments from the tenants to be allocated toward expenses for maintenance, property
insurance, and property taxes. 	Id. at 63. 	The omnibus order also granted Bravo’s
motion to substitute UMB Bank, National Association, not in its individual capacity,
but solely as Legal Title Trustee for LVS Title Trust XIII (UMB Bank) as Plaintiff.
Id. at 52-58, 64; Mot. for Substitute of Pl. (ECF No. 36).
On November 20, 2024, Ms. Gauthier filed a motion for certification of order
for interlocutory appeal of the omnibus order. 	Def.’s Mot. for Certification of Order
for Interlocutory Appeal Under 28 U.S.C. § 1292(b) (ECF No. 79) (Def.’s First
Certification Mot.).
Also on November 20, 2024, Ms. Gauthier filed an emergency motion for stay
of receivership order and motion for temporary restraining order (TRO). Emergency
Mot. for Stay of Receivership Order and Mot. for TRO (ECF No. 80). 	On November
21, 2024, the Court ordered the Plaintiff to respond to the emergency motion as soon
as possible and informed the parties the Court would act on the motion before
November 22, 2024 at 5:00pm based on the filings available at that time. Order (ECF
No. 81). 	UMB Bank responded on November 22, 2024. 	Pl.’s Resps. to Def.’s
Emergency Mot. for Stay of Receivership Order and Mot. for TRO [ECF 80] (ECF No.
82). 	The Court issued an order denying Ms. Gauthier’s emergency motion for TRO
and stay on November 22, 2024. 	Order on Emergency Mot. for Stay of Receivership
Order and Mot. for TRO (ECF No. 85). 	On November 24, 2024, Ms. Gauthier
submitted an amended motion for TRO and stay. Def.’s Am. Emergency Mot. for TRO
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and Stay of Receivership Order at 1 (ECF No. 87). The Court denied Ms. Gauthier’s
amended emergency motion for TRO and stay of receivership order on November 26,
2024. 	Order on Def.’s Am. Emergency Mot. for TRO and Stay of Receivership Order
(ECF No. 91).
On November 27, 2024, Ms. Gauthier filed a supplemental memorandum in
support of her motion to certify her appeal of the omnibus order and to certify appeal
of the Court’s denial of her amended motion for emergency TRO. 	Suppl. Mem. in
Support of Mot. to Certify Omnibus Order and Mot. to Certify Denial of Emergency
TRO for Interlocutory Appeal (ECF No. 92) (Def.’s Second Certification Mot.).
On December 4, 2024, the Court ordered the parties to respond to whether 28
U.S.C. 	§ 	1292(a)(2) 	applies 	to 	Ms. 	Gauthier’s 	motion 	for 	order 	certifying 	the
receivership appointment for interlocutory appeal. Order to Respond at 1 (ECF No.
94). The Court ordered the parties to respond by December 6, 2024 as to:
(1) Whether § 1292(a)(2) applies to the Court’s Omnibus Order dated
November 19, 2024 insofar as it grants U.S. Bank’s (now UMB’s)
motion for appointment of Attorney Campo as receiver;
(2) If § 1292(a)(2) applies, whether the certification set forth in § 1292(b)
is necessary or appropriate for that part of the Omnibus Order
dealing with the appointment of a receiver. 	Here the Court is
wondering about the statutory language, “in making in a civil action
an order not otherwise appealable under this section,” in § 1292(b);
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(3) If Ms. Gauthier appeals the order appointing the receiver, whether
the receivership order must be stayed or remains effective pending
final resolution of the appeal and/or the underlying foreclosure;
(4) If Ms. Gauthier appeals the order appointing the receiver, whether
the foreclosure action in its entirety must be stayed or may proceed
forward to trial in February 2025.
Id. at 5-6.
On December 6, 2024, UMB Bank responded to the Defendant’s motion to
certify the receivership appointment and in compliance with the Court’s order. Pl.’s
Resp. to This Ct.’s Order to Respond (ECF No. 96) (Pl.’s Certification Opp’n). 	Ms.
Gauthier did not file a response to the order to respond.
The Court issues this order to address Ms. Gauthier’s motion for order
certifying interlocutory appeal of the receivership appointment; the Court addresses
the remainder of Ms. Gauthier’s certification motions in a separate order issued
simultaneously.
II. 	THE PARTIES’ POSITIONS
A. 	Margaret 	L. 	Gauthier’s 	Motions 	for 	Certification 	of
Receivership Appointment
1. 	The Defendant’s First Certification Motion
Ms. Gauthier first moves the Court to certify the November 19, 2024 Omnibus
Order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b), arguing that the order
“involves controlling questions of law, substantial grounds for difference of opinion,
and 	resolution 	by 	the 	appellate 	court 	will 	materially 	advance 	the 	ultimate
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termination of this litigation.” Def.’s First Certification Mot. at 1. More specifically,
she contends certification is appropriate because: (1) the question of standing is a
controlling issue of law, (2) there are substantial grounds for a difference of opinion
regarding the effect of post-filing assignments and contradictory evidence, and (3)
resolving the jurisdictional issue now will materially advance the litigation by
avoiding unnecessary trial preparation, discovery, and appellate review at a later
stage. Id. at 1-2.
2. 	The Defendant’s Second Certification Motion
Ms. Gauthier’s second certification motion, filed as a supplement to her first
certification motion, additionally moves for an order certifying for interlocutory
appeal the Court’s denial of her amended emergency TRO and stay motion. 	Def.’s
Second Certification Mot. at 1. 	She asserts “[t]he omnibus order and TRO denial
involve overlapping and procedural questions, making combined certification logical
and efficient.” 	Id. 	Further, Ms. Gauthier says the omnibus order and TRO denial
involve controlling questions of law with substantial grounds for difference of opinion,
including: (1) whether the Plaintiff established standing and chain of title under First
Circuit precedent, (2) whether procedural irregularities and unresolved jurisdictional
issues invalidate the Receiver’s authority, and (3) whether the Court properly applied
Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), in denying the
TRO motion. Id. at 1-2.
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B. 	UMB Bank’s Opposition
UMB Bank responded to Ms. Gauthier’s certification motions after the Court
issued its order to respond and its response focuses exclusively on the issue of the
receivership certification. 	See, generally, Pl.’s Certification Opp’n. 	To the Court’s
question of whether 28 U.S.C. § 1292(a)(2) applies to Ms. Gauthier’s motions to certify
the 	receivership 	appointment, 	the 	Plaintiff 	says, 	“[y]es, 	it 	does, 	however 	Ms.
Gauthier’s request for certification is too broad to qualify under this section.” Id. at
1. After reminding the Court of its “inherent equitable power to appoint a receiver to
manage or preserve property pending judgment,” id. at 2 (quoting U.S. Bank Nat’l
Ass’n v. SRA Augusta SPE, LLC, No. 1:16-cv-00410-JDL, 2016 U.S. Dist. LEXIS
159193,WL 6808132, at *10-11 (D. Me. Nov. 17, 2016) (citation amended)), the
Plaintiff argues “[i]t will therefore be difficult, if not impossible, for the Defendant to
overturn the portion of the Omnibus Order related to Atty. Campo’s being appointed
receiver in the limited fashion the Court has outlined (for instance, Atty. Campo has
no right to sell the subject property).” Id.
Further, the Plaintiff argues neither the Court’s receivership order nor the
underlying foreclosure action in its entirety needs be stayed pending final resolution
of Ms. Gauthier’s appeal and/or the underlying litigation. 	Id. at 3-5. 	First, UMB
argues “a stay is not required, and the matter may proceed to trial as this is an in
rem 	proceeding 	against 	the 	asset 	and 	the 	Receiver’s 	authority 	is 	limited 	to
preservation actions and having him in place will help preserve both the asset and
the cash collateral as well as limiting liability.” Id. at 4. Second, after acknowledging
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that generally “filing of a notice of appeal confers jurisdiction on the court of appeals
and divests the district court of control over those aspects of the case involved in the
appeal,” id. (quoting Marese v. American Academy of Orthodontic Surgeons, 470 U.S.
373, 379 (1985)), the Plaintiff argues “it is well established in this circuit that a
district court can proceed, notwithstanding the technical pendency of an appeal, when
it is clear that the appeal constitutes a transparently frivolous attempt to impede the
progress of the case.” Id. (quoting Blob. Naps., Inc. v. Verizon New England, Inc., 489
F.3d 13, 19 (1st Cir. 2007)). “This is such a situation,” the Plaintiff avers. Id. Third,
the Plaintiff urges this case to continue to trial in February 2025 because “the appeal
will not involve the entire case so it also falls under the Griggs principle.” 	Id. at 5
(citing Griggs v. Provident Consumer Discount Co., 459 U.S. 56 (1982)).
The Plaintiff concludes by urging the Court to deny the Defendant’s motions to
certify the receivership appointment.
III. 	DISCUSSION
A. 	Interlocutory 	Appeal 	and 	Certification 	of 	the 	Receivership
Appointment
28 U.S.C. § 1292(a)(2) states: “(a) Except as provided in subsections (c) and (d)
of this section, the court of appeals shall have jurisdiction of appeals from: . . .. (2)
Interlocutory orders appointing receivers, or refusing orders to wind up receiverships
or to take steps to accomplish the purposes thereof, such as directing sales or other
disposals 	of 	property.” 	The 	First 	Circuit 	says, 	“[o]rdinarily, 	we 	do 	not 	have
jurisdiction to review a non-final order.” 	Green Earth Energy Photovoltaic Corp. v.
KeyBank N.A., 51 F.4th 383, 389 (1st Cir. 2022) (citing 28 U.S.C. § 1291). “But . . .
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appellate jurisdiction to review an interlocutory appeal challenging the appointment
of a receiver is explicitly provided in 28 U.S.C. § 1292(a)(2).” 	Id.; see also State St.
Bank & Trust Co. v. Brockrim, Inc., 87 F.3d 1487 (1st Cir. 1996) (“We think [§
1292(a)(2)] is reasonably understood as authorizing appellate jurisdiction in three
discrete situations: 1) the appointment of a receiver, 2) the refusal to wind up a
receivership, 	and 	3) 	the 	refusal 	to 	take 	steps 	to 	accomplish 	the 	purposes 	of
a receivership”).
The First Circuit in United States v. Quintana-Aguayo, 235 F.3d 682 (1st Cir.
2000), further held:
Among other concerns, § 1292(a)(2) applies to appeals from orders
appointing 	federal 	equity 	receivers. 	Such 	receivers 	are 	non-
governmental 	employees, 	often, 	though 	not 	necessarily, 	appointed
pursuant to the court’s inherent equitable powers, at the behest of
private 	parties, 	to 	protect 	purely 	private 	interests 	by 	preserving
property pending judgment.
Quintana-Aguayo, 235 F.3d at 686 (citing In re Klein, 940 F.2d 1075, 1077 n.2 (7th
Cir. 1991) (§ 1292(a)(2) limited to federal equity receivers); In re Memorial Ests., Inc.,
797 F.2d 516, 520 (7th Cir. 1986) (given the procedural safeguards, bankruptcy
trustees are not receivers for purposes of interlocutory appeal).
Furthermore, 	the 	language 	of 	§ 	1292(b)—the 	certification 	subsection—
provides that it applies only “in making in a civil action an order not otherwise
appealable under this section,” and in § 1292(a)(2) receivership orders are subject to
interlocutory appeal. 	Thus, the certification subsection does not by its terms apply
to appeals of receivership orders.
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In line with the plain language of 28 U.S.C. § 1292(a)(2) and First Circuit
precedent, the Court concludes the portion of the omnibus order appointing Attorney
Campo as receiver for the Property is entitled to interlocutory appeal, and the
receivership order is not subject to certification because § 1292(a)(2) plainly states
the courts of appeal “shall have jurisdiction of appeals from: . . .. (2) Interlocutory
orders appointing receivers . . ..” 28 U.S.C. § 1292(a)(2).
B. 	Stay
Federal Rule of Civil Procedure 62(c), “Stay of an Injunction, Receivership, or
Patent Accounting Order,” provides, in relevant part, “[u]nless the court orders
otherwise, the following are not stayed after being entered, even if an appeal is taken:
(1) an interlocutory or final judgment in an action for an injunction or receivership.”
F ED. R. CIV. P. 62(c)(1) (emphasis removed).
The law is clear that a receivership appointment is not automatically stayed
pending appeal. 	Id.; compare F ED. R. C IV. P. 62(c)(1) with F ED. R. CIV. P. 62(a)
(“Automatic Stay. Except as provided in Rule 62(c) and (d), execution on a judgment
and proceedings to enforce it are stayed for 30 days after its entry, unless the court
orders otherwise”) (emphasis in original); see also F ED. R. C IV. P. 8(a)(1) (“A party
must ordinarily move first in the district court for . . . (A) a stay of the judgment or
order of the district court pending appeal . . . or (C) an order suspending, modifying,
restoring, or granting an injunction while an appeal is pending”).
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IV. 	CONCLUSION
Concluding that the portion of the omnibus order appointing Benjamin P.
Campo, Jr. as receiver for the real property located at 14-16 Melvin Avenue, Old
Orchard 	Beach, 	Maine 	is 	subject 	to 	interlocutory 	appeal, 	and 	not 	subject 	to
certification, the Court DISMISSES Defendant’s Motion for Certification of Order for
Interlocutory Appeal Under 28 U.S.C. § 1292(b) (ECF No. 79) and Supplemental
Memorandum in Support of Motion to Certify Omnibus Order and Motion to Certify
Denial of Emergency TRO for Interlocutory Appeal (ECF No. 92), insofar as they
request the Court to certify the receivership appointment. 	As noted, the Court
responds to the remainder of the Defendant’s certification motions in a separate order
issued simultaneously.
The receivership appointment remains in effect, as do all pending deadlines
and scheduling orders. 	The case will proceed to trial during the February term of
court, which commences February 3, 2025.
SO ORDERED.
/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
UNITED STATES DISTRICT JUDGE
Dated this 11th day of December, 2024
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