V.I.P. Mortgage Incorporated v. Jennifer Gates

• Court: District Court, D. Arizona
• Decided: February 13, 2026
• Docket: 2:24-cv-02865
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 V.I.P. Mortgage Incorporated, No. CV-24-02865-PHX-DWL

10 Plaintiff, ORDER

11 v.

12 Jennifer Gates,

13 Defendant. 14 15 Jennifer Gates (“Gates”) filed an arbitration demand against her former employer, 16 V.I.P. Mortgage, Inc. (“VIP”), for unpaid overtime compensation under the Fair Labor 17 Standards Act (“FLSA”). On July 22, 2024, following a four-day hearing, the arbitrator 18 issued a detailed 25-page decision concluding that although Gates had overstated her 19 hours-worked claims in various respects, Gates was still entitled to overtime compensation, 20 liquidated damages, and attorneys’ fees and costs, resulting in a total award of $650,805.41. 21 (Doc. 1-2.) The order further specified that “[p]ost-judgment interest on this award shall 22 accrue at the same rate as is applicable to matters proceeding to judgment in the U.S. 23 District Court for the District of Arizona.” (Id. at 26.) 24 Following the issuance of the arbitrator’s decision, VIP filed a petition in this Court 25 to vacate or modify the award (Doc. 1) and Gates moved to confirm the award (Doc. 6). 26 In a November 14, 2024 order, the Court affirmed the award in full. (Doc. 12.) Afterward, 27 Gates filed a motion to recover the attorneys’ fees she incurred during the proceedings in 28 this Court. (Doc. 14.) In a December 30, 2024 order, the Court granted the motion and 1 awarded $11,613.73 in fees. (Doc. 20.) 2 VIP filed a notice of appeal from the order confirming the arbitration award (Doc. 3 17) and also moved to stay execution pending appeal (Doc. 21). In support of the stay 4 request, VIP posted a supersedeas bond it had obtained from a surety, Merchants Bonding 5 Company, in the amount of $813,431.76. (Doc. 26.) In a February 5, 2025 order, the Court 6 granted VIP’s stay request. (Doc. 24.) The order clarified: “Upon VIP’s posting of the 7 supersedeas bond with the Clerk of Court, execution on the judgment and fee award shall 8 be stayed pending VIP’s appeal of the judgment to the Ninth Circuit. The stay shall remain 9 in effect until the Ninth Circuit’s mandate issues.” (Id. at 3, citations omitted.) 10 On December 22, 2025, the Ninth Circuit issued an opinion and accompanying 11 memorandum decision affirming this Court’s order upholding the arbitration award in full. 12 (Docs. 29-1, 29-2.) On January 13, 2026, the mandate issued. (Doc. 29.) Following the 13 issuance of the mandate, the parties filed two motions, which are addressed below. 14 I. Motion For Partial Release Of Supersedeas Bond 15 Gates has moved for “an order releasing the supersedeas bond . . . and directing 16 disbursement of the bond proceeds to Gates as the judgment creditor and prevailing party 17 on appeal.” (Doc. 30.) According to Gates, “[o]nce the appellate mandate has issued and 18 the judgment is affirmed, the purpose of the supersedeas bond is fulfilled, and the judgment 19 creditor is entitled to release and disbursement of the bond proceeds.” (Id. at 2.) Gates 20 thus asks the Court to “[d]irect[] that the supersedeas bond posted by [VIP] in the amount 21 of $706,206.50 be partially released, with the portion of the bond corresponding to the 22 undisputed judgment amount disbursed to Gates, and the remaining balance of the bond to 23 remain on deposit with [the surety] as security pending resolution of Plaintiff’s Application 24 for Attorneys’ Fees related to the Ninth Circuit appeal.” (Id. at 2.) Gates calculates this 25 $706,206.50 figure as follows: “As of the date of this Petition, the total amount owed is 26 $706,206.50 ($11,613.73 [attorney fee award] + $650,805.41 [Arbitration Award] + 27 $43,787.34 [interest on the Arbitration Award].” (Id. at 1.) 28 VIP opposes Gates’s motion on the ground that it “is premature” because “[t]he 1 Supersedeas Bond, by its express terms, is intended to secure the full scope of obligations 2 that may arise from this litigation, including” any future award of attorneys’ fees arising 3 from the Ninth Circuit proceedings. (Doc. 32 at 3.) VIP also contends that Gates’s motion 4 “includes post-judgment interest calculations without demonstrating compliance with 28 5 U.S.C. § 1961, including the applicable rate and accrual methodology. The amount of 6 interest owed has not been adjudicated or stipulated and should be confirmed through an 7 agreed accounting before any disbursement is ordered.” (Id. at 4.) 8 In reply, Gates contends: “The sole purpose of the supersedeas bond—protecting 9 Gates during the pendency of the appeal—has been fulfilled. [VIP] does not dispute that 10 the principal judgment and post-judgment interest are presently owed. Instead, it seeks to 11 use the unresolved appellate fee application as a pretext to delay payment of amounts that 12 are already fixed and undisputed.” (Doc. 34 at 2.) Gates also explains how she calculated 13 the post-judgment interest figure: “The [calculation] includes three fixed inputs: the 14 judgment date (July 22, 2024), the judgment amount ($650,805.41), and the interest rate 15 (4.38%). . . . [VIP] has offered no competing calculation and no evidence that Gates’s 16 figures are inaccurate.” (Id. at 3-4.) Gates concludes: “[VIP’s] refusal to permit partial 17 disbursement therefore serves no legitimate business, legal, or equitable purpose. It merely 18 increases its own liability while prolonging payment to Gates.” (Id. at 4.) 19 The Court agrees with Gates that the stay of execution should be lifted and that the 20 surety should be directed to release the sum that is currently owed to her. Although VIP 21 emphasizes that the bond is large enough to cover, and contemplates providing coverage 22 for, not just the sum that is currently owed to Gates but also a potential future award of 23 attorneys’ fees on appeal, this misses the point—now that the appellate proceedings are 24 complete, Gates is entitled to recover the sum that is currently owed to her without further 25 delay. It makes no sense to force her to wait to collect that sum (while post-judgment 26 interest keeps accruing) simply because she may be entitled to recover even more money 27 from VIP in the future. Indeed, in the February 5, 2025 order, the Court clarified that 28 “execution on the judgment and fee award shall be stayed pending VIP’s appeal of the 1 judgment to the Ninth Circuit. The stay shall remain in effect until the Ninth Circuit’s 2 mandate issues.” (Doc. 24 at 3, citations omitted.) The mandate has now issued, so there 3 is no reason to prevent Gates from collecting the sum she is now owed. 4 Unfortunately, the parties are not in agreement as to the size of the currently owed 5 sum, and the Court does not fully agree with the approach set forth in Gates’s motion for 6 calculating interest. As noted, the arbitration award specified that “[p]ost-judgment interest 7 on this award shall accrue at the same rate as is applicable to matters proceeding to 8 judgment in the U.S. District Court for the District of Arizona.” (Doc. 1-2 at 26.) 9 Presumably for that reason, Gates’s motion papers state that the date of the arbitration 10 award—July 22, 2024—is the only relevant entry-of-judgment date for purposes of 11 calculating post-judgment interest on the $650,805.41 arbitration award and that the 12 applicable federal interest rate as of July 22, 2024 is the only relevant interest rate. (Doc. 13 34 at 3-4; Doc. 34-1 at 28.) 14 The Ninth Circuit has explained that “state law provides that pre-judgment interest 15 is available from the date the arbitration panel renders its award. However, once an 16 arbitration award is confirmed in federal court, the rate specified in § 1961 applies.” 17 Fidelity Fed. Bank, FSB v. Durga Ma Corp., 387 F.3d 1021, 1024 (9th Cir. 2004). 18 Therefore, two separate interest calculations are required with respect to the $650,805.41 19 arbitration award: first, there must be a calculation of the interest that accrued between the 20 issuance of the arbitration decision on July 22, 2024 and the issuance of this Court’s 21 judgment affirming the arbitration decision on November 14, 2024; and second, there must 22 be a calculation of the interest that has accrued since the issuance of this Court’s judgment 23 on November 14, 2024. Although the arbitration award understandably referred to the 24 former as “[p]ost-judgment interest,” only the latter qualifies as “post-judgment interest” 25 under 28 U.S.C. § 1961 because the only “judgment” that matters for purposes of § 1961 26 is the federal judgment. In contrast, the interest that accrued between the issuance of the 27 arbitration award and this Court’s judgment is, at least as it relates to these proceedings, 28 pre-judgment interest. Fidelity Fed. Bank, 387 F.3d at 1024. 1 Under this approach, the relevant calculations are as follows. First, as for the pre- 2 judgment interest that accrued between July 22, 2024 and November 14, 2024, the 3 arbitration award specified that the applicable interest rate would be the rate that would 4 otherwise apply under § 1961. And under that statute, “post-judgment interest shall be 5 calculated . . . at a rate equal to the weekly average 1-year constant maturity Treasury yield, 6 as published by the Board of Governors of the Federal Reserve System, for the calendar 7 week preceding the date of the judgment.” Houweling Intellectual Properties Inc. v. 8 Copperstate Farms LLC, 2025 WL 522540, *7 (D. Ariz. 2025) (cleaned up). “Historical 9 interest rate information is located on the Federal Reserve’s website.” Id. at *7 n.11. The 10 data download program available on that website indicates that the daily “Market yield on 11 U.S. Treasury securities at 1-year constant maturity, quoted on investment basis” for the 12 calendar week preceding July 22, 2024 was as follows: 4.85% on July 15, 2024; 4.85% on 13 July 16, 2024; 4.85% on July 17, 2024; 4.86% on July 18, 2024; and 4.86% on July 19, 14 2024. The average of those figures is 4.856%.1 Thus, Gates was entitled to daily simple 15 pre-judgment interest on the arbitration award in the amount of $86.58 (i.e., $650,805.41 16 multiplied by 4.856%, then divided by 365). Additionally, there were 115 days between 17 July 22, 2024 and November 14, 2024. Thus, as of the date of entry of judgment, Gates 18 was entitled to pre-judgment interest in the amount of $9,956.70 (i.e., the daily rate of 19 $86.58 multiplied by 115). This means the overall value of the judgment that Gates 20 obtained on November 14, 2024 was $660,762.11 (i.e., the principal award of $650,805.51 21 plus pre-judgment interest of $9,956.70). 22 Second, as for the post-judgment interest that has accrued since the entry of 23 judgment on November 14, 2024, a new interest rate must be calculated to account for the 24 new entry-of-judgment date. The data download program available on the Federal 25 Reserve’s website indicates that the daily “Market yield on U.S. Treasury securities at 1- 26 year constant maturity, quoted on investment basis” for the calendar week preceding 27

28 1 Gates’s motion states that the applicable interest rate arising from a July 22, 2024 judgment date is 4.38%. (Doc. 34 at 4.) It is unclear how Gates calculated that figure. 1 November 14, 2024 was as follows: 4.25% on November 4, 2024; 4.27% on November 5, 2 2024; 4.31% on November 6, 2024; 4.28% on November 7, 2024; and 4.32% on November 3 8, 2024. The average of those figures is 4.286%. Thus, Gates is entitled to daily simple 4 post-judgment interest in the amount of $77.59 (i.e., $660,762.11 multiplied by 4.286%, 5 then divided by 365).2 Additionally, 456 days have elapsed between November 14, 2024 6 and today, February 13, 2026. Thus, as of today, Gates is owed $35,381.04 in post- 7 judgment interest (i.e., the daily rate of $77.59 multiplied by 456) on top of the $660,762.11 8 judgment. Those figures, together, add up to $696,143.15. 9 Finally, there is also the $11,613.73 fee award. The relevant entry-of-judgment date 10 for that award is also November 14, 2024, even though it was not issued until December 11 30, 2024. Friend v. Kolodzieczak, 572 F.3d 1386, 139-192 (9th Cir. 1995) (“Interest runs 12 from the date that entitlement to fees is secured, rather than from the date that the exact 13 quantity of fees is set.”); Finkelstein v. Bergna, 804 F. Supp. 1235, 1240 (N.D. Cal 1992) 14 (“[A] finding that no interest is available between the judgment on the merits and the 15 determination of the amount of fees would be both incongruous and contrary to the policies 16 governing rate-setting.”). As noted, the relevant post-judgment interest rate for a judgment 17 entered on that date is 4.286%, so Gates is entitled to daily simple post-judgment interest 18 on the fee award in the amount of $1.36 (i.e., $11,613.73 multiplied by 4.286%, then 19 divided by 365). Ands because 456 days have elapsed between November 14, 2024 and 20 today, Gates is owed $621.86 in post-judgment interest (i.e., the daily rate of $1.36 21 multiplied by 456) on top of the $11,613.73 fee award. Those figures, together, add up to 22 $12,235.59. 23 Based on these calculations, Gates is owed a total of $708,378.74 (i.e., $696,143.15 24 plus $12,235.59) as of today, inclusive of post-judgment interest. The Court will direct the 25 surety to award this sum.3 26 2 The Court utilizes $660,762.11, rather than $650,805.51, for purposes of this post- 27 judgment interest calculation because, as discussed above, $660,762.11 was the overall amount owed to Gates (inclusive of pre-judgment interest) at the time of entry of the federal 28 judgment. 3 Should either side disagree with the interest calculations set forth in this order, that 1 Finally, to the extent Gates seeks an order that “[t]he remaining balance of the bond 2 shall remain on deposit with Merchants Bonding Company (Mutual) as security pending 3 resolution of Plaintiff’s Application for Attorneys’ Fees related to the Ninth Circuit appeal” 4 (Doc. 30-1 at 1), this request is denied. The purpose of the bond was to justify the issuance 5 of a stay of execution on the arbitration award and the fee award during the pendency of 6 VIP’s appeal. That appeal is now over, and as discussed above, Gates may now collect the 7 sum that is currently owed to her. Although Gates intends to file a future motion for her 8 attorneys’ fees incurred on appeal, no such motion has been filed and no such award has 9 been issued. In effect, then, Gates’s request amounts to a request to force VIP to post a 10 bond to satisfy a hypothetical future fee award. But this misunderstands the purpose of the 11 bond requirement, which is simply to justify a stay of execution on an already-issued award 12 during the pendency of the losing party’s appeal from that award. See generally 2 Gensler, 13 Federal Rules of Civil Procedure, Rules and Commentary, Rule 62 (2022) (“The stay-by- 14 security process protects both sides of the suit by effectively preserving the financial status 15 quo. It protects the party taking the appeal by suspending payment of the judgment until 16 the conclusion of the appeal. If a party had to pay the judgment in order to appeal, it would 17 be subject to the risk that the money would be gone by the time it won on appeal and tried 18 to get the money back. At the same time, the bond protects the judgment winner by 19 ensuring full payment of the judgment later if it is upheld.”). 20 II. Extension Request 21 The parties have also filed a “joint motion to extend the date for Gates to file her 22 motion for attorney’s fees and costs until 14 days after the Court rules on the petition to 23 release the bond.” (Doc. 33, capitalization omitted.) That request is granted. Gates’s 24 motion is due within 14 days of the issuance of this order. 25 … 26 … 27 party is welcome to file a motion for reconsideration pointing out the perceived error. The 28 Court chose to issue this order without soliciting further feedback from the parties to avoid causing post-judgment interest to continue accruing. 1 Accordingly, 2 IT IS ORDERED that: 3 1. Gates’s motion for partial release of supersedeas bond (Doc. 30) is granted 4|| in part and denied in part. 5 2. Merchants Bonding Company (Mutual) is authorized and directed to disburse 6 || $708,378.74 to Gates by issuing payment via check payable to: 7 Jennifer Gates 8 c/o Jason Barrat, Esq. 9 Weiler Law, PLLC 10 5050 North 40th Street, Suite 260 11 Phoenix, Arizona 85018 12 3. Upon disbursement of the proceeds as ordered herein, Merchants Bonding 13 || Company (Mutual), as surety, and VIP Mortgage Incorporated, as principal, are fully released and discharged from any and all obligations, liabilities, or responsibilities under 15 || the supersedeas bond. 16 4. The parties’ joint extension request (Doc. 33) is granted. Gates’s motion for attorneys’ fees and costs is due within 14 days of the issuance of this order. 18 Dated this 13th day of February, 2026. 19 20 om ee Dominic W. Lanza 22 United States District Judge 23 24 25 26 27 28

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