United States District Court, N.D. Iowa, Western Division
K.E. Mahoney, United States Magistrate Judge.
case involves claims brought by Plaintiffs Jeffrey and
Jennifer Klingenberg against Defendants Vulcan Ladder USA,
LLC (Vulcan) and GP International Company (GP International)
for injuries sustained from a ladder the Defendants
manufactured, designed, distributed, and sold. After a
four-day jury trial, the jury found in favor of the
Defendants on Plaintiffs' design defect claim and in
favor of Plaintiffs on their breach of express warranty
claim, and the jury awarded Plaintiffs $2, 434, 000 in
damages. Docs. 115, 117. Judgment in that amount was entered
on September 29, 2017 (Doc. 119), execution of which was
automatically stayed for fourteen days under Federal Rule of
Civil Procedure 62(a). Vulcan and GP International now move
for a stay of execution of judgment pending resolution of
their to-be-filed post-trial motions and request that the
stay be unsecured. Doc. 122. Plaintiffs resist. Doc. 125.
I grant the motion in part and deny the motion in
Federal Rule of Civil Procedure 62(b), the court has
discretion to stay execution of judgment pending the
resolution of post-trial motions “[o]n appropriate
terms for the opposing party's security.” See
also, e.g., Nunley v. Ethel Hedgeman Lyle
Acad., No. 4:08-CV-1664 CAS, 2010 WL 501465, at *1-2
(E.D. Mo. Feb. 8, 2010). “The district court may only
stay execution of judgment pending the disposition of certain
post-trial motions . . . if the court provides for the
security of the judgment creditor.” Peacock v.
Thomas, 516 U.S. 349, 359 n.8 (1996). “[A]
supersedeas bond is the standard form of security . . .
.” S. Wine & Spirits of Nev. v. Mountain Valley
Spring Co., No. 08-6100, 2010 WL 11512359, at *2 (W.D.
Ark. Jan. 28, 2010); see also Am. Family Mut. Ins. Co. v.
Miell, No. C04-0142, 2008 WL 746604, at *1 (N.D. Iowa
Mar. 19, 2008). The purpose of the security requirement
“is to preserve the status quo while protecting the
[opposing] party's rights.” Am. Family,
2008 WL 746604, at *1. “[T]he amount of the
[supersedeas] bond usually will be set in an amount that will
permit satisfaction of the judgment in full, together with
costs, interest, and damages for delay.” Skrovig v.
BNSF Ry. Co., No. CIV. 10-4022, 2012 WL 2505749, at *2
(D.S.D. June 28, 2012) (alterations in original) (quoting
Wright, Miller & Kane, Federal Practice and Procedure
Civil § 2905 at 522).
62, taken in its entirety, indicates a policy against any
unsecured stay of execution after the expiration of”
the fourteen-day automatic stay in Rule 62(a). Ssangyong
(U.S.A.), Inc. v. Innovation Grp., Inc., No.
3-96-CV-10165, 2000 WL 1339229, at *1 (S.D. Iowa Aug. 10,
2000). “[A] full supersedeas bond should be the
requirement in normal circumstances, such as where there is
some reasonable likelihood of the judgment debtor's
inability or unwillingness to satisfy the judgment in full
upon ultimate disposition of the case and where posting
adequate security is practicable.” Skrovig,
2012 WL 2505749, at *2 (quoting Fed. Prescription Serv.,
Inc. v. Am. Pharm. Ass'n, 636 F.2d 755, 760 (D.C.
Cir. 1980)). Nevertheless, the court may, in its discretion,
dispense with the requirement of a supersedeas bond in
certain instances. See Id. at *2 (“If a
judgment debtor objectively demonstrates a present financial
ability to facilely respond to a money judgment and presents
to the court a financially secure plan for maintaining that
same degree of solvency . . ., the court may then exercise
[its] discretion to substitute some form of guaranty of
judgment responsibility for the usual supersedeas
bond.” (quoting Poplar Grove Planting & Ref.
Co., 600 F.2d 1189, 1190 (5th Cir. 1979))); S. Wine
& Spirits, 2010 WL 11512359, at *2
(“Alternative forms of security have been found
appropriate (1) where the judgment debtor's ability to
pay the judgment is so plain that the cost of the bond would
be a waste of money; and (2) where the requirement would put
the defendant's other creditors in undue jeopardy.”
(citing Olympia Equip. Leasing Co. v. W. Union Tel.
Co., 786 F.2d 794, 796 (7th Cir. 1986))); Am.
Family, 2008 WL 746604, at *2 (recognizing that an
unsecured stay may be granted if the defendant affirmatively
demonstrates “posting a bond or otherwise providing
adequate security is impossible or impractical”
(quoting Int'l Wood Processors v. Power Dry,
Inc., 102 F.R.D. 212, 214 (D.S.C. 1984)));
Ssangyong, 2000 WL 1339229, at *1
stay without bond may be granted ‘if doing so does not
unduly endanger the judgment creditor's interest in
ultimate recovery.'” (quoting Texaco, Inc. v.
Pennzoil Co., 784 F.2d 1133, 1155 (2d Cir.1986))). The
burden is on the party seeking the stay to prove that a
supersedeas bond should not be required. See Am.
Family, 2008 WL 746604, at *2; see also Poplar
Grove, 600 F.2d at 1191.
example, in Federal Prescription Services, the D.C.
Circuit upheld the district court's grant of an unsecured
stay of execution of judgment pending appeal when the judgment
was for $102, 000, and the judgment debtor had a net worth of
about 47 times that amount and was a long-time resident of
the District of Columbia. 636 F.2d at 761. The Seventh
Circuit has also upheld an unsecured stay of judgment pending
appeal when a supersedeas bond would have cost almost $2
million, the judgment creditor's net worth was five times
the judgment amount, the judgment debtor was “[a]
public utility . . . in no financial jeopardy [and] not about
to place its assets beyond the reach of th[e] judgment
creditor, ” and the judgment debtor was required to
submit periodic financial reports to the court so that it
could “monitor the company's financial
health.” N. Ind. Pub. Serv. Co. v. Carbon Cnty.
Coal Co., 799 F.2d 265, 281 (7th Cir. 1986).
often than granting an unsecured stay, courts grant a stay
and require alternative security other than a supersedeas
bond in the full judgment amount. For example, courts have
allowed judgment debtors to post real estate holdings instead
of a supersedeas bond in certain instances. See,
e.g., Athridge v. Iglesias, 464 F.Supp.2d 19,
23-25 (D.D.C. 2006) (allowing defendants to post real estate
holdings valued at $7.1 million as security pending appeal
for a judgment of about $5.6 million when the defendants and
their insurance company disputed who was responsible for
paying the cost of a supersedeas bond); Brooktree Corp.
v. Advanced Micro Devices, Inc., 757 F.Supp. 1101,
1103-05 (S.D. Cal. 1990) (when a supersedeas bond in the
judgment amount would cost $750, 000 and the defendant's
net worth was 20 times the amount of judgment, the court did
not require the defendant to post a supersedeas bond to
obtain a stay pending appeal, but instead required the
defendant to provide real property security with a value of
twice the amount of judgment); see also Olympia
Equip., 786 F.2d at 795-96, 799 (when plaintiffs
obtained a $36 million judgment, a supersedeas bond was not
required for a stay pending appeal when defendants argued
they would not be able to obtain such a bond due to their
shaky financial situation, but the court upheld an
alternative security requirement of “a pledge of $10
million in cash, $10 million in accounts receivables, and a
security interest” in physical assets valued at $70
million, as well as ordered that the defendant could not make
cash transfers to its parent company unless the parent
company agreed to be bound by the judgment). A court has also
allowed a defendant to post an irrevocable letter of credit
rather than a supersedeas bond when the defendant had great
“financial strength” and could obtain a letter of
credit for less than half the cost of a bond. See Gaus v.
Conair Corp., No. 94 Civ. 5693(FM), 2003 WL 542652, at
*2 (S.D.N.Y. Feb. 14, 2003). A court has also allowed the
posting of a supersedeas bond in less than the full judgment
amount ($500, 000 bond for a $1.5 million judgment) when the
defendant's net worth was $40 million, but his assets
were tied up in real estate holdings. American
Family, 2008 WL 746604, at *1-3.
other hand, courts also sometimes reject a defendant's
request to post anything less than a supersedeas bond in the
full judgment amount. In Southern Wine, the court
rejected the defendant's request to post a letter of
credit instead of a supersedeas bond because the court had
concerns about the alternative security, and the defendant
had not proven that the cost of a supersedeas bond would
place its creditors in undue jeopardy. 2010 WL 11512359,
*2-3. In Skrovig, the court held that the $2 million
judgment should be secured by a supersedeas bond, despite
evidence that the defendant's revenues were more than $3
billion annually, in part because the defendant refused to
agree to pay any judgment affirmed on appeal within thirty
days. 2012 WL 2505749, at *1-5. And in Poplar Grove,
the Fifth Circuit reversed the district court's finding
that a $10, 000 supersedeas bond could secure a more than
$270, 000 judgment pending appeal because the record
contained “no evidence which would permit a court to
objectively determine that [the judgment debtor] is presently
capable of responding to the judgment” nor that its
“financial condition is so impaired that it would have
difficulty in securing a supersedeas bond in an amount
sufficient to fully protect” the judgment
creditor's rights. 600 F.2d at 1190-91.
as in Poplar Grove, no evidence or argument
demonstrates that anything less than a supersedeas bond in
the full judgment amount should be required. The only
argument Defendants set forth in support for their request
for an unsecured stay is that the briefing period for
post-trial motions is short. Doc. 122-1 at 6. Defendants also
state in their brief that their insurance policy covers only
$1, 000, 000. Doc. 122-1 at 5. Defendants make no
representations regarding their net worth or ability to pay
the full judgment amount, and they do not propose any
alternative security options to a supersedeas bond. On this
record, the Defendants have not demonstrated that an
unsecured stay of execution of judgment should be
granted. I will grant Defendants' request for a
stay of execution of judgment, but deny Defendant's
request that no security be required. I will require
Defendants to post a supersedeas bond in the full judgment
amount to secure the judgment (I will not require the bond to
include post-trial interest at this time). I will stay
execution of the judgment for ten days from the date of this
order and then, upon filing of a supersedeas bond, until
resolution of the anticipated post-trial motions. If a
supersedeas bond is not filed within ten days from the date
of this order, the stay shall be lifted until Defendants file
a supersedeas bond.
argue that securing a bond can take up to thirty days,
relying on Ssangyong. In that case, the judgment
debtor represented to the court that it was in the process of
obtaining a bond in the full judgment amount, but because the
judgment was so large (more than $7.4 million), its insurance
carriers relayed that it would be thirty days before the full
judgment amount could be posted. 2000 WL 1339229, at *1. In
the meantime, the judgment debtor agreed to post a $100, 000
bond. Id. at *1 n.1. Here, Defendants have made no
representations regarding the steps they have taken to secure
a bond in the amount of judgment. Neither have they agreed to
post a bond in some amount less than the full judgment
amount. Ssangyong is inapplicable.
motion to stay execution of the judgment (Doc. 122) is
granted in part and denied in part.
Execution of judgment shall be stayed for ten days, at which
time the stay will be lifted unless Defendants have posted a
supersedeas bond in the full judgment amount. Upon the filing
by Defendants Vulcan and GP International of a supersedeas
bond in the amount of $2, 434, 000, execution of the judgment
shall be stayed until this court has resolved Defendants
Vulcan and GP International's post-trial motions for a
new trial and for judgment as a matter of law. While the stay
is in effect, the Klingenbergs may not execute the judgment
or institute any proceedings to enforce the judgment.
IS SO ORDERED.