1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3
4 SAFECO INSURANCE COMPANY OF Case No. 2:22-cv-01133-ART-EJY ILLINOIS, 5 ORDER GRANTING IN PART Plaintiff, MOTION TO SET SUPERSEDEAS 6 v. BOND AND TEMPORARY STAY (ECF Nos. 34; 35) 7 MIDWEST FAMILY MUTUAL INSURANCE CO., AND DOES I-X, 8 INCLUSIVE; AND ROE CORPORATIONS I-X, INCLUSIVE 9 Defendants. 10 11 Before the Court is Defendant Midwest Family Mutual Insurance (“MFMI”)’s 12 motion to set supersedeas bond pursuant to Fed. R. Civ. P. 62 sections (b) and 13 (d) and temporary stay pending order of court. (ECF Nos. 34; 35.1) In this motion, 14 Defendant asks the Court to waive the requirement of a supersedeas bond under 15 rule 62(b), or in the alternative, to set a supersedeas bond amount in the amount 16 of the judgment, pre-judgment interest, and interest for 180 additional days. 17 Additionally, Defendant asks the Court to issue a temporary stay pending the 18 setting of the supersedeas bond. Plaintiff filed a response in opposition. (ECF Nos. 19 39; 40.) Defendant did not file a reply. 20 For the reasons set forth below, the Court grants in part Defendant’s 21 motion. The Court denies Defendant’s request to waive the requirement for a 22 supersedeas bond but grants Defendant’s request for a stay of execution of 23 judgment on the condition that the Defendant posts a full supersedeas bond. 24 I. WAIVER OF SUPERSEDEAS BOND 25 A. LEGAL STANDARD 26 Rule 62(b) provides that “At any time after judgment is entered, a party 27
28 1 While docketed separately, these motions are identical. 1 may obtain a stay by providing a bond or other security. The stay takes effect 2 when the court approves the bond or other security and remains in effect for the 3 time specified in the bond or other security.” Section (d) of Rule 62 further 4 provides for a stay upon appeal if a bond is posted. A party appealing a judgment 5 of a federal district court is entitled to a stay of monetary judgment if they post a 6 bond in accordance with Rule 62(d). American. Mfrs. Mut. Ins. Co. v. Am. Broad.- 7 Paramount Theatres, Inc., 87 S. Ct. 1, 3 (1966); Matter of Combined Metals 8 Reduction Co., 557 F.2d 179, 193 (9th Cir. 1977); Am. Civ. Liberties Union of 9 Nevada v. Masto, 670 F.3d 1046, 1066 (9th Cir. 2012). The amount of a 10 supersedeas bond or the decision to waive the requirement to post a bond is at 11 the court’s discretion. See Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505 12 n.1 (9th Cir. 1987). 13 In determining whether an appellant has met their burden of showing a 14 need to deviate from the usual requirement of posting a full supersedeas bond, 15 the Ninth Circuit considers a five-factor test. Securities and Exch. Comm'n v. 16 Beasley, No. 222CV00612CDSEJY, 2024 WL 1199593, at *2 (D. Nev. Mar. 19, 17 2024); Kranson v. Fed. Express Corp., No. 11-CV-05826-YGR, 2013 WL 6872495, 18 at *1 (N.D. Cal. Dec. 31, 2013) (discussing the factors used in Dillon v. City of 19 Chicago, 866 F.2d 902, 904-05 (7th Cir. 1988)). The factors considered are: “1) 20 the complexity of the collection process; (2) the amount of time required to obtain 21 a judgment after it is affirmed on appeal; (3) the degree of confidence that the 22 district court has in the availability of funds to pay the judgment; (4) whether the 23 defendant's ability to pay the judgment is so plain that the cost of a bond would 24 be a waste of money; and (5) whether the defendant is in such a precarious 25 financial situation that the requirement to post a bond would place other 26 creditors of the defendant in an insecure position.” Kranson, 2013 WL 6872495, 27 at *1 (citing Dillion, 866 F.2d 902 at 904-05). It is the appellant’s burden to 28 demonstrate reasons for departing from the standard requirement to pay a full 1 supersedeas bond. Cotton ex rel. McClure v. City of Eureka, Cal., 860 F. Supp. 2d 2 999, 1028 (N.D. Cal. 2012). 3 B. ANALYSIS 4 Defendant argues that the requirement for a supersedeas bond should be 5 waived because (1) there will be little difficulty in the collection process as both 6 parties are insurance companies; (2) the amount of time required to obtain 7 judgment will be nominal because the two insurance companies should be able 8 to ensure timely payment; (3) the Court should have confidence in MFMI’s ability 9 to pay the judgment because MFMI writes Nevada insurance policies and meets 10 the state’s compliance requirements as an active insurer; (4) “the ability of an 11 insurer to pay the judgment is evident and requiring the posting of the bond is a 12 waste of money,” and (5) there is no evidence that MFMI is in a precarious 13 financial position and no other creditors are affected. (ECF No. 34 at 5-6.) 14 Despite these assurances, Defendant has failed to show that waiver of the 15 supersedeas bond is justified here. Defendant’s argument is supported only by 16 a declaration from counsel for MFMI. (Id. at 11-12.) The only statement material 17 to Defendant’s ability to pay is that “Midwest Family Mutual Insurance Company 18 is licensed in the State of Nevada and writes policies of insurance in Nevada and 19 is financially stable and should the appeal be unsuccessful is prepared to pay the 20 judgment ordered by this Court.” (Id. at 11.) “[U]ntil there is absolute certainty 21 that the [entity] has agreed unconditionally to pay the judgment in this case, the 22 mere existence of such possibility is an unacceptable substitute for the 23 guarantees provided by a supersedeas bond.” Cotton, 860 F. Supp. 2d at 1028 24 (quoting Perez Rodriguez v. Rey Hernandez, 304 F.Supp.2d 227, 231 (D.P.R. 25 2004)). While Defendant states that the ability of an insurer to pay this judgment 26 is “evident,” Defendant cites no evidence other than this declaration to support 27 these contentions of financial stability. Therefore, the Court cannot determine 28 with certainty that Defendant’s ability to pay the judgment is “so plain that the 1 cost of a bond would be a waste of money.” Id. (internal quotations omitted); see 2 also Hardesty v. Sacramento Metro. Air Quality Mgt. Dist., No. 3 210CV02414KJMKJN, 2019 WL 2715616, at *4 (E.D. Cal. June 28, 2019) 4 (declining to waive supersedeas bond requirement where evidence did not show 5 with certainty that the entity would be able to pay the bond requirement and 6 distinguishing from Safeco Ins. Co. of Am. v. Cnty. of San Bernardino, No. EDCV 7 05-194-VAP(OPX), 2007 WL 9719254 (C.D. Cal. July 27, 2007), in which evidence 8 of annual revenues showed that the judgment amount was just 1 percent of the 9 defendant’s annual revenue). Additionally, given the history of this case, and the 10 fact that Defendant has previously contested the amount of the judgment (See 11 ECF No. 24) the Court is not absolutely certain that MFMI’s statement is an 12 unconditional agreement to pay the judgment in this case should the judgment 13 be affirmed by the Ninth Circuit. See Cotton, 860 F. Supp. 2d at 1028-29 (N.D. 14 Cal. 2012) (declining to waive supersedeas bond requirement where declarations 15 failed to state that funds would unconditionally satisfy the judgment). The Court 16 thus declines to exercise its discretion to waive the requirement for a supersedeas 17 bond. 18 II.
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1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3
4 SAFECO INSURANCE COMPANY OF Case No. 2:22-cv-01133-ART-EJY ILLINOIS, 5 ORDER GRANTING IN PART Plaintiff, MOTION TO SET SUPERSEDEAS 6 v. BOND AND TEMPORARY STAY (ECF Nos. 34; 35) 7 MIDWEST FAMILY MUTUAL INSURANCE CO., AND DOES I-X, 8 INCLUSIVE; AND ROE CORPORATIONS I-X, INCLUSIVE 9 Defendants. 10 11 Before the Court is Defendant Midwest Family Mutual Insurance (“MFMI”)’s 12 motion to set supersedeas bond pursuant to Fed. R. Civ. P. 62 sections (b) and 13 (d) and temporary stay pending order of court. (ECF Nos. 34; 35.1) In this motion, 14 Defendant asks the Court to waive the requirement of a supersedeas bond under 15 rule 62(b), or in the alternative, to set a supersedeas bond amount in the amount 16 of the judgment, pre-judgment interest, and interest for 180 additional days. 17 Additionally, Defendant asks the Court to issue a temporary stay pending the 18 setting of the supersedeas bond. Plaintiff filed a response in opposition. (ECF Nos. 19 39; 40.) Defendant did not file a reply. 20 For the reasons set forth below, the Court grants in part Defendant’s 21 motion. The Court denies Defendant’s request to waive the requirement for a 22 supersedeas bond but grants Defendant’s request for a stay of execution of 23 judgment on the condition that the Defendant posts a full supersedeas bond. 24 I. WAIVER OF SUPERSEDEAS BOND 25 A. LEGAL STANDARD 26 Rule 62(b) provides that “At any time after judgment is entered, a party 27
28 1 While docketed separately, these motions are identical. 1 may obtain a stay by providing a bond or other security. The stay takes effect 2 when the court approves the bond or other security and remains in effect for the 3 time specified in the bond or other security.” Section (d) of Rule 62 further 4 provides for a stay upon appeal if a bond is posted. A party appealing a judgment 5 of a federal district court is entitled to a stay of monetary judgment if they post a 6 bond in accordance with Rule 62(d). American. Mfrs. Mut. Ins. Co. v. Am. Broad.- 7 Paramount Theatres, Inc., 87 S. Ct. 1, 3 (1966); Matter of Combined Metals 8 Reduction Co., 557 F.2d 179, 193 (9th Cir. 1977); Am. Civ. Liberties Union of 9 Nevada v. Masto, 670 F.3d 1046, 1066 (9th Cir. 2012). The amount of a 10 supersedeas bond or the decision to waive the requirement to post a bond is at 11 the court’s discretion. See Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505 12 n.1 (9th Cir. 1987). 13 In determining whether an appellant has met their burden of showing a 14 need to deviate from the usual requirement of posting a full supersedeas bond, 15 the Ninth Circuit considers a five-factor test. Securities and Exch. Comm'n v. 16 Beasley, No. 222CV00612CDSEJY, 2024 WL 1199593, at *2 (D. Nev. Mar. 19, 17 2024); Kranson v. Fed. Express Corp., No. 11-CV-05826-YGR, 2013 WL 6872495, 18 at *1 (N.D. Cal. Dec. 31, 2013) (discussing the factors used in Dillon v. City of 19 Chicago, 866 F.2d 902, 904-05 (7th Cir. 1988)). The factors considered are: “1) 20 the complexity of the collection process; (2) the amount of time required to obtain 21 a judgment after it is affirmed on appeal; (3) the degree of confidence that the 22 district court has in the availability of funds to pay the judgment; (4) whether the 23 defendant's ability to pay the judgment is so plain that the cost of a bond would 24 be a waste of money; and (5) whether the defendant is in such a precarious 25 financial situation that the requirement to post a bond would place other 26 creditors of the defendant in an insecure position.” Kranson, 2013 WL 6872495, 27 at *1 (citing Dillion, 866 F.2d 902 at 904-05). It is the appellant’s burden to 28 demonstrate reasons for departing from the standard requirement to pay a full 1 supersedeas bond. Cotton ex rel. McClure v. City of Eureka, Cal., 860 F. Supp. 2d 2 999, 1028 (N.D. Cal. 2012). 3 B. ANALYSIS 4 Defendant argues that the requirement for a supersedeas bond should be 5 waived because (1) there will be little difficulty in the collection process as both 6 parties are insurance companies; (2) the amount of time required to obtain 7 judgment will be nominal because the two insurance companies should be able 8 to ensure timely payment; (3) the Court should have confidence in MFMI’s ability 9 to pay the judgment because MFMI writes Nevada insurance policies and meets 10 the state’s compliance requirements as an active insurer; (4) “the ability of an 11 insurer to pay the judgment is evident and requiring the posting of the bond is a 12 waste of money,” and (5) there is no evidence that MFMI is in a precarious 13 financial position and no other creditors are affected. (ECF No. 34 at 5-6.) 14 Despite these assurances, Defendant has failed to show that waiver of the 15 supersedeas bond is justified here. Defendant’s argument is supported only by 16 a declaration from counsel for MFMI. (Id. at 11-12.) The only statement material 17 to Defendant’s ability to pay is that “Midwest Family Mutual Insurance Company 18 is licensed in the State of Nevada and writes policies of insurance in Nevada and 19 is financially stable and should the appeal be unsuccessful is prepared to pay the 20 judgment ordered by this Court.” (Id. at 11.) “[U]ntil there is absolute certainty 21 that the [entity] has agreed unconditionally to pay the judgment in this case, the 22 mere existence of such possibility is an unacceptable substitute for the 23 guarantees provided by a supersedeas bond.” Cotton, 860 F. Supp. 2d at 1028 24 (quoting Perez Rodriguez v. Rey Hernandez, 304 F.Supp.2d 227, 231 (D.P.R. 25 2004)). While Defendant states that the ability of an insurer to pay this judgment 26 is “evident,” Defendant cites no evidence other than this declaration to support 27 these contentions of financial stability. Therefore, the Court cannot determine 28 with certainty that Defendant’s ability to pay the judgment is “so plain that the 1 cost of a bond would be a waste of money.” Id. (internal quotations omitted); see 2 also Hardesty v. Sacramento Metro. Air Quality Mgt. Dist., No. 3 210CV02414KJMKJN, 2019 WL 2715616, at *4 (E.D. Cal. June 28, 2019) 4 (declining to waive supersedeas bond requirement where evidence did not show 5 with certainty that the entity would be able to pay the bond requirement and 6 distinguishing from Safeco Ins. Co. of Am. v. Cnty. of San Bernardino, No. EDCV 7 05-194-VAP(OPX), 2007 WL 9719254 (C.D. Cal. July 27, 2007), in which evidence 8 of annual revenues showed that the judgment amount was just 1 percent of the 9 defendant’s annual revenue). Additionally, given the history of this case, and the 10 fact that Defendant has previously contested the amount of the judgment (See 11 ECF No. 24) the Court is not absolutely certain that MFMI’s statement is an 12 unconditional agreement to pay the judgment in this case should the judgment 13 be affirmed by the Ninth Circuit. See Cotton, 860 F. Supp. 2d at 1028-29 (N.D. 14 Cal. 2012) (declining to waive supersedeas bond requirement where declarations 15 failed to state that funds would unconditionally satisfy the judgment). The Court 16 thus declines to exercise its discretion to waive the requirement for a supersedeas 17 bond. 18 II. AMOUNT OF BOND 19 Defendant argues that if the Court does set a bond, it should comprise the 20 amount of judgment and awarded prejudgment interest, plus interest for 180 21 days. Plaintiff argues that any bond set by the Court should include additional 22 interest which will accrue during a further stay of execution. 23 Rule 62 is silent as to the amount required for a supersedeas bond. 24 However, Rule 62(d) has been read consistently with its predecessor, Rule 73(d), 25 which “directed that the amount of the bond be computed by the district court to 26 include ‘the whole amount of the judgment remaining unsatisfied, costs on the 27 appeal, interest, and damages for delay, unless the court after notice and hearing 28 and for good cause shown fixes a different amount or orders security other than 1 || the bond.” Cotton, 860 F. Supp. 2d at 1029 (quoting Poplar Grove Planting and 2 || Refining Co., Inc. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1191 (Sth Cir. 3 || 1979)). “Although practices vary among judges, a bond of 1.25 to 1.5 times the 4 || judgment is typically required.” WMCV Phase 3, LLC v. Shushok & McCoy, Inc., 5 || No. 2:10-CV-0661-GMN-NJK, 2016 WL 234816 at *2 (D. Nev. Jan. 20, 2016) 6 || (citing Cotton, 860 F. Supp. 2d at 1029). 7 Following other Courts in this Circuit, the Court will grant a stay of 8 || execution of the judgment pending appeal if Defendant posts a supersedeas bond 9 || equal to 125% of Plaintiffs’ $298,006.60 judgment, in the total amount of 10 || $372,508.25. See Cotton, 860 F. Supp. 2d at 1029 (N.D. Cal. 2012) (requiring a 11 || supersedeas bond equal to 125% of judgment); WMCV Phase 3, 2016 WL 234816, 12 || at *2 (approving of bond amount roughly 50% higher than the judgment amount); 13 || KST Data, Inc. v. DXC Tech. Co., No. 2:17-CV-07927-SJO-SK, 2020 WL 2841402, 14 || at *2 (C.D. Cal. Mar. 20, 2020) (requiring supersedeas bond in the amount of 15 || 1.25 times of amount of judgment); ThermoLife Intl., LLC v. Myogenix Corp., No. 16 |} 13-CV-651 JLS (MDD), 2018 WL 1001095, at *2 (S.D. Cal. Feb. 21, 2018) 17 || (requiring supersedeas bond equal to 125% of judgment). 18 III. CONCLUSION 19 It is therefore ordered that Defendant’s motion to set supersedeas bond 20 || and temporary stay (ECF Nos. 34; 35) is GRANTED IN PART. 21 It is further ordered that a stay of execution of judgment is GRANTED on 22 || the condition that Defendant post a supersedeas bond in the amount of 23 || $372,508.25 within twenty days of entry of this order. 24 Dated this 21st day of January, 2025. 25 26 Ana Posed de 27 ANNE R. TRAUM 28 UNITED STATES DISTRICT JUDGE