THE SOCIETY OF LLOYD'S, Plaintiff, vs. WALLACE R. BENNETT, GRANT R. CALDWELL, CALVIN P. GADDIS, DAVID L. GILLETTE, STEPHEN M. HARMSEN, KELLY C. HARMSEN, JAMES R. KRUSE, EDWARD W. MUIR, and KENT B. PETERSEN, Defendants.

 

Case No. 2:02-CV-204TC

 

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

 

2003 U.S. Dist. LEXIS 25476

 

March 17, 2003, Decided

March 18, 2003, Filed

 

 

DISPOSITION:  [*1]  Defendant Bennett's motion to stay orders pending appeal and for relief from posting supersedeas bond denied.

 

COUNSEL: For SOCIETY OF LLOYD'S, THE, plaintiff: James A. Boevers, Mr., Michael N. Zundel, Mr., Thomas R. Barton, PRINCE YEATES & GELDZAHLER, SALT LAKE CITY, UT.

 

For WALLACE R. BENNETT, defendant: David D. Bennett, SCIENCE & LAW CONSULTANTS, SALT LAKE CITY, UT.

 

For GRANT R. CALDWELL, CALVIN P. GADDIS, DAVID L. GILLETTE, JAMES R. KRUSE, EDWARD W. MUIR, defendants: Alan L Sullivan, Mr., Matthew L. Lalli, Brett P. Johnson, SNELL & WILMER LLP, SALT LAKE CITY, UT. Theodore W. Grippo, Jr, LINDENBAUM COFFMAN KURLANDER BRISKY & GRIPPO LTD, CHICAGO, IL.

 

For STEPHEN M. HARMSEN, KELLY C. HARMSEN, defendants: Steven A. Wuthrich, MONTPELIER, ID.

 

For KENT B. PETERSEN, defendant: Alan L Sullivan, Mr., Matthew L. Lalli, SNELL & WILMER LLP, SALT LAKE CITY, UT. Theodore W. Grippo, Jr, LINDENBAUM COFFMAN KURLANDER BRISKY & GRIPPO LTD, CHICAGO, IL.

 

For STEPHEN M. HARMSEN, KELLY C. HARMSEN, cross-claimants: Steven A. Wuthrich, MONTPELIER, ID.

 

For CALVIN P. GADDIS, cross-defendant: Alan L Sullivan, Mr., Matthew L. Lalli, Brett P.  [*2]  Johnson, SNELL & WILMER LLP, SALT LAKE CITY, UT. Theodore W. Grippo, Jr, LINDENBAUM COFFMAN KURLANDER BRISKY & GRIPPO LTD, CHICAGO, IL.

 

JUDGES: TENA CAMPBELL, United States District Judge.

 

OPINIONBY: TENA CAMPBELL

 

OPINION: ORDER

 

This matter is before the court on several objections and motions concerning the court's November 12, 2002 Order granting the Society of Lloyd's ("Lloyd's") motion for summary judgment (the "Summary Judgment Order"). Specifically, the Defendants have objected to the form of the proposed judgments, Professor Wallace R. Bennett has moved for a stay pending appeal and for relief from posting a supersedeas bond, and Lloyd's has moved to strike portions of Professor Bennett's affidavits. The court's decision as to each of these objections and motions is set forth in this Order.

BACKGROUND n1

 

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n1 The court's Summary Judgment Order and December 18, 2002 Order denying Professor Bennett's motion to alter or amend the Summary Judgment Order discuss the procedural background of this case in more detail.

 

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The court on November 12, 2002 granted summary judgment in favor of Lloyd's on Lloyd's action to enforce judgments entered in England (the "English Judgments") against the Defendants. On December 2, 2002, Professor Bennett filed a motion to alter or amend the Summary Judgment Order (the "Motion to Alter or Amend"), pursuant to Federal Rule of Civil Procedure 59(e). The court denied this motion on December 18, 2002.

 

Lloyd's served the Defendants with proposed final United States Judgments and Partial Satisfactions of Judgments ("Partial Satisfactions") on December 10, 2002. (See Pl.'s Mem. Opp'n Bennett's Mot. Stay ("Pl.'s Bennett Opp'n") at 2.) Lloyd's subsequently served the Defendants with revised Partial Satisfactions, which corrected certain errors in the original Partial Satisfactions and reflected subsequent payments made by some of the Caldwell Defendants. n2 (See id. at 2 n.2.) The Defendants object to Lloyd's proposed United States Judgments. n3 (See Harmsen Defs.' Objection, Doc. 107; Caldwell Defs.' Objection, Doc. 114.)

 

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n2 The "Caldwell Defendants," who are represented by the same counsel, consist of Grant R. Caldwell, Calvin P. Gaddis, David L. Gillette, James R. Kruse, Edward W. Muir, and Kent B. Peterson. [*4] 

 

n3 Both the Harmsens and the Caldwell Defendants filed objections to the form of judgments. The court proceeds under the assumption that Professor Bennett objects to the form of judgments, as well.

 

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On January 6, 2003, Professor Bennett moved (1) to stay the November 12, 2002 and December 18, 2002 Orders pending appeal, and (2) for relief from posting a supersedeas bond. Lloyd's opposes Professor Bennett's motions and has moved to strike portions of Professor Bennett's affidavits.

 

ANALYSIS

 

I. The Form of Judgments

 

A. What Postjudgment Interest Rate Applies to the United States Judgments?

 

The Defendants object to the form of the proposed judgments. Specifically, the Harmsens argue that Lloyd's "should be burdened by the interest rate that is applicable to Utah judgments," (Harmsen Defs.' Objection at 1), while the Caldwell Defendants contend that 28 U.S.C. 1961 (2002) dictates the postjudgment interest rates in this case, (see Caldwell Defs.' Objection at 1). Lloyd's argues that due to the choice of English law provisions in the General Undertaking [*5]  and principles of comity, the United States Judgments should continue to accrue interest at eight percent per year--the undisputed applicable English postjudgment rate.

 

28 U.S.C. 1961(a) governs the postjudgment interest rate for money judgments recovered in federal district courts. n4 See Everaard v. Hartford Accident & Indem. Co., 842 F.2d 1186, 1193-94 (10th Cir. 1988) (applying section 1961's postjudgment interest rate in a diversity action despite the different rate imposed by state law). Courts have observed that "the language of 1961 is mandatory . . . . Its terms do not permit the exercise of judicial discretion in its application." In re Carte Blanche (Singapore) Pte., Ltd., 888 F.2d 260, 269 (2d Cir. 1989) (quoting Akermanis v. Sea-Land Serv., Inc., 521 F. Supp. 44, 57 (S.D.N.Y. 1981), rev'd on other grounds, 688 F.2d 898 (2d Cir. 1982)). Section 1961, however, "shall not be construed to affect the interest on any judgment of any court not specified in [section 1961]." 28 U.S.C. 1961(c)(4).

 

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n4 28 U.S.C. 1961(a) provides in part,

 

Interest shall be allowed on any money judgment in a civil case recovered in a district court. . . . Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.

 

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In the present case, the court granted summary judgment on Lloyd's action to enforce money judgments it obtained against the Defendants in England. The English Court that entered judgments in favor of Lloyd's on March 11, 1998 is not a court that is "specified" in 28 U.S.C. 1961. See 28 U.S.C. 1961(c)(4). Consequently, section 1961 does not affect the postjudgment interest rate for the English Judgments. See id. Section 1961 similarly does not dictate which postjudgment interest rate applies for the judgments issued in the present case, as these United States Judgments merely enforce the English Judgments, English postjudgment interest rate and all. Further, when the Defendants signed Lloyd's General Undertaking, they agreed that English law would govern disputes arising between them and Lloyd's.

 

In sum, because this action involves enforcement of English Judgments and because the Defendants agreed that English law would govern any disputes that arose between them and Lloyd's, Lloyd's is entitled to eight percent postjudgment interest even after this court enters its Judgments.

 

B. Should the United States Judgments Reflect [*7]  a Net Sum?

 

The Harmsens also object to the method by which the court should determine the judgment principal. They contend that the United States Judgments should be in the net amount owing after application of the Partial Satisfactions, because "the precise amount of accrued interest is unclear and undetermined." (Harmsen Defs.' Objection at 2.)

 

Entering "net" judgments is not proper in this case. In order to enforce the English Judgments, the United States Judgments are in the amount of the English Judgments. Given the choice of law and forum provisions in the General Undertaking, any disputes concerning credits, offsets, or payments must be settled in the English courts.

 

II. Is Professor Bennett Entitled to a Stay Pending Appeal?

 

A. Professor Bennett's Motion to Stay and For Relief From Posting a Supersedeas Bond

 

Professor Bennett moves to stay the court's Orders pending appeal and for relief from posting a supersedeas bond. n5 Federal Rule of Civil Procedure 62 authorizes district courts to stay proceedings to enforce a judgment under certain circumstances. See Fed. R. Civ. P. 62. Rule [*8]  62(d) provides for a stay upon appeal. See Fed. R. Civ. P. 62(d). Specifically, Rule 62(d) provides that

 

when an appeal is taken the appellant by giving a supersedeas bond may obtain a stay subject to the exceptions contained in subdivision (a) of this rule. The bond may be given at or after the time of filing the notice of appeal or of procuring the order allowing the appeal, as the case may be. The stay is effective when the supersedeas bond is approved by the court.

 

Fed. R. Civ. P. 62(d). "Rule 62(d) has been interpreted to mean that an appellant may obtain a stay of the money judgment during the pendency of the appeal as a matter of right by posting an adequate supersedeas bond." Manildra Milling Corp. v. Ogilvie Mills, Inc., 887 F. Supp. 249, 250 (D. Kan. 1995) (quoting United States v. Mansion House Ctr. Redevelopment Co., 682 F. Supp. 446, 449 (E.D. Mo. 1988)); see also In re Fremond Sheep Co., 110 F.3d 73, available at 1997 WL 174116, at **1 (10th Cir. 1997) (referring to "the mandatory provisions of Federal Rule of Civil Procedure 62(d) [*9]  " and not addressing an appellant's Rule 62(d) argument for a "stay as a matter of right" because the appellant did not raise that argument in front of the district court) (unpublished decision). But see Hellebust v. Brownback, 824 F. Supp. 1524, 1530 (D. Kan. 1993) (listing requirements, including likelihood of success on the merits of appeal, for granting a motion to stay pending appeal under Rule 62(d)), aff'd and remanded, 42 F.3d 1331 (10th Cir. 1994); Endress + Hauser, Inc. v. Hawk Measurement Sys. Pt. Ltd., 932 F. Supp. 1147, 1148 (S.D. Ind. 1996) (same).

 

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n5 Professor Bennett seeks a stay pursuant to Federal Rule of Civil Procedure 62(c), which provides for an injunction pending an appeal which is taken "from an interlocutory or final judgment granting, dissolving, or denying an injunction." Fed. R. Civ. P. 62(c). Lloyd's analyzes Professor Bennett's motion to stay pursuant to Federal Rule of Civil Procedure 62(d), which governs a "stay upon appeal" when an appellant gives a supersedeas bond. See Fed. R. Civ. P. 62(d). This Order analyzes both possible sources for a stay.

 

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The Tenth Circuit has explained that under Rule 62(d), "a full supersedeas bond should be the requirement in normal circumstances." Miami Int'l Realty Co. v. Paynter, 807 F.2d 871, 873 (10th Cir. 1986). Case law makes clear, however, that courts may dispense of the supersedeas bond requirement if a judgment debtor offers adequate alternate security. See Endress, 932 F. Supp. at 1149 (stating that "the court may in its discretion approve an alternate security arrangement"); see also Paynter, 807 F.2d at 873-74 (stating that district courts "have inherent discretionary authority in setting supersedeas bonds" and finding no error where a district court granted a stay without a supersedeas bond for the full amount of a judgment). As one district court has stated, "the power of the court to waive the supersedeas bond requirement is exercised only in extraordinary circumstances, and only where alternative means of securing the judgment creditor's interest are available." Endress, 932 F. Supp. at 1149 (internal quotation omitted). It is the burden of the party seeking a stay "to demonstrate that posting a full bond is impossible [*11]  or impracticable, and to propose a plan that will provide adequate security" for the judgment creditor. Id.

 

Next, Federal Rule of Civil Procedure 62(c) governs injunctions pending appeal. See Fed. R. Civ. P. 62(c). Rule 62(c) provides in part,

 

When an appeal is taken from an interlocutory or final judgment granting, dissolving, or denying an injunction, the court in its discretion may suspend, modify, restore, or grant an injunction during the pendency of the appeal upon such terms as to bond or otherwise as it considers proper for the security of the rights of the adverse party.

 

Fed. R. Civ. P. 62(c). To obtain a stay pursuant to Rule 62(c), a movant must establish: "(1) a likelihood of success on appeal; (2) the threat of irreparable harm if the stay or injunction is not granted; (3) the absence of harm to the opposing party; and (4) the public interest is not adverse to the stay." Desktop Images, Inc. v. Ames, 930 F. Supp. 1450, 1451 (D. Colo. 1996) (quoting Colorado Public Utillities Comm'n v. Yellow Cab Coop. Ass'n, 192 B.R. 555, 557 (D. Colo. 1996)). [*12] 

 

As an initial matter, Professor Bennett claims that he is financially unable to post a full supersedeas bond. n6 See Fed. R. Civ. P. 62(d) (requiring an appellant to give a supersedeas bond). Even assuming Professor Bennett is impecunious, he has not satisfied his burden of proposing a plan to provide adequate alternate security for Lloyd's. See Endress, 932 F. Supp. at 1149. Professor Bennett therefore is not entitled to a stay as a matter of right pursuant to Rule 62(d).

 

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n6 Lloyd's has moved to strike portions of Professor Bennett's affidavits. As explained below, Lloyd's motions are denied as moot.

 

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Further, Professor Bennett is not entitled to an injunction pending appeal pursuant to Rule 62(c) because he has not shown that he is likely to succeed on the merits of his appeal. See Desktop Images, 930 F. Supp. at 1452 (discussing requirements for a stay pursuant to Rule 62(c) and stating that "the true test is whether the movant has [*13]  made a substantial case on the merits"). Professor Bennett's arguments in support of his likelihood of success on appeal are the same ones that the court rejected in issuing the Summary Judgment Order and the Order denying Professor Bennett's Motion to Alter or Amend. Professor Bennett's "mere recitation of arguments previously made and rejected" is not enough to persuade the court that he is likely to succeed on appeal. Endress, 932 F. Supp. at 1149. Because Professor Bennett has not persuaded the court that he is likely to succeed on appeal, the court will not discuss the other factors in the Rule 62(c) analysis.

 

In sum, Professor Bennett is not entitled to a stay upon appeal pursuant to Rule 62(d) because he insists that he is financially unable to post a supersedeas bond for the amount of the judgment yet has offered no alternate security to protect Lloyd's interest in collecting its judgment. Further, Professor Bennett has failed to demonstrate a likelihood of success on the merits of his appeal, as required for a Rule 62(c) injunction pending appeal. Therefore, Professor Bennett's motion to stay and for relief from posting supersedeas bond is DENIED.

 

B. Lloyd's [*14]  Motions to Strike

 

Lloyd's moves to strike portions of Professor Bennett's affidavits. (See Mot. Strike of 1/24/03, Document ("Doc.") 134; Mot. Strike of 2/18/03, Doc. 149.) Lloyd's contends that the statements in question, which primarily concern Professor Bennett's stock holdings and financial status, are unfounded, conclusory, speculative, and vague opinions not based on personal knowledge. However, because Professor Bennett has not proposed a plan to provide adequate alternate security for Lloyd's, Lloyd's motions to strike are DENIED as moot.

 

Further, on December 20, 2002, Lloyd's moved to strike portions of Professor Bennett's affidavit in support his Motion to Alter or Amend. (See Mot. Strike of 12/20/02, Doc. 112.) On December 18, 2002,--before Lloyd's filed its motion to strike--the court denied Professor Bennett's Motion to Alter or Amend. Accordingly, Lloyd's December 20, 2002 motion to strike is DENIED as moot.

 

ORDER

 

For the foregoing reasons, the court holds that Lloyd's is entitled to postjudgment interest at a rate of eight percent per year. Further Professor Bennett's motion to stay orders pending appeal and for relief from posting a supersedeas bond [*15]  is DENIED. Last, Lloyd's motions to strike are DENIED as moot.

 

DATED this 17 day of March, 2003.

 

BY THE COURT:

TENA CAMPBELL

United States District Judge