Appeals Court Passes Up Another Opportunity To Clarify When To Stay An Eviction.

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Stop SignIn a June 13, 2011 published decision, the Minnesota Court of Appeals held (again) that a district court has discretion to grant or deny a motion to stay an eviction.  The decision in Federal Home Loan Mortgage Corp. v. Nedashkovskiy did lower courts no favors.  The Court of Appeals has yet again failed to clearly articulate what criteria lower courts should consider when ruling on motions to stay evictions.

Let me offer some suggestions.

Here’s What Happened

When the Nadashkovskiys (I’ll call them the homeowners) failed to make a balloon payment on their mortgage, their lender foreclosed.  The homeowners didn’t reinstate, and didn’t redeem the property from the foreclosure sale.  Therefore, the lender became the fee owner of the property.

Several months after the homeowners’ right of redemption expired, they sued their lender in district court claiming the existence of an oral loan-modification contract, and violations of the Deceptive Trade Practices Act and other statutory standards of conduct.

A month later, the lender brought an eviction action, seeking to evict the homeowners from the property. The homeowners moved to stay the eviction action. The district court refused, and the homeowners were summarily evicted.

Here’s What The Court Of Appeals Said

The Court of Appeals held that the district court did not abuse its discretion when it denied the stay. The Court noted, repeatedly, that the homeowners offered no “reason” why a stay was necessary, and no “support” for their motion for a stay.  The lack of support surely made the Court of Appeals’ decision easier.

Unfortunately, the Court offers little guidance on how district court’s should exercise their discretion in future cases.  This is surprising, in light of the fact that, in a prior “Eviction Stay” case, the Court of Appeals said:

We recognize that existing caselaw provides very little guidance to the district court on exercising its discretion to stay or expand the scope of an eviction proceeding when other litigation is pending that would resolve the issue of possession.

Here are some factors that future courts might consider:

 

  • Has the tenant asserted claims or defenses that concern present possession of the property at issue?

District Courts often fail to recognize that eviction actions are summary proceedings that address only the narrow question of who is entitled to present possession of the property.  They don’t deal with ownership.  So, a district court should be reluctant to stay an eviction action if the tenant’s claims or defenses don’t deal with the right to present possession.  This concept is the very basis of the Court of Appeals decision in Bjorklund v. Bjorklund Trucking, Inc., holding that a district court did abuse its discretion by denying a stay.

  • Are the tenant’s claims or defenses likely to be successful on the merits?

Even if the tenant’s claims deal with present possession, a district court should consider this question.  After all, an eviction action should not be stayed based on an apparently frivolous claim.

  • Has the tenant exhausted other available remedies to protect his interest in the property?

While the Court of Appeals hasn’t come right out and said it, this issue is clearly on its mind.   Its decision in Nedashkovskiy makes clear that a tenant must show that he has exhausted other available remedies before a stay should be granted.

  • Is the tenant able to bear the loss of the property?

This is really an equitable consideration.  Perhaps wealthy tenants or businesses are more able to bear the loss of rental property.  Perhaps a lower-income family with children, less so.

Can you think of any other factors that a court should consider?

Photo by ladybeames.