United States District Court, D. Arizona
ORDER AND INJUNCTION
G. Campbell United States District Judge
a jury trial, the Court entered judgment in the amount of
$27, 625, 500 in favor of Plaintiff Marc Wichansky and
against Defendants David Zowine, Karina Zowine, Charles
Johnson, Martha Leon, Pat Shanahan, Sarah Shanahan, Michael
Ilardo, and Alisa Ilardo (“Defendants”). Doc.
535. Defendants ask the Court to stay execution of the
judgment without security or with security other than a
supersedeas bond. The Court has reviewed the parties’
briefs (Docs. 542, 543, 545, 546, 547, 549) and heard oral
argument on June 15, 2016 (Doc. 548).
appropriate terms for the opposing party’s security,
the court may stay the execution of a judgment - or any
proceedings to enforce it - pending disposition of”
certain post-trial motions. Fed.R.Civ.P. 62(b). “An
unsecured stay is disfavored under Rule 62(b).” In
re Apollo Grp. Inc. Sec. Litig., No. CV04-02147-PHX-JAT,
2008 WL 410625, at *1 (D. Ariz. Feb. 13, 2008) (citing
Int’l Wood Processors v. Power Dry, Inc., 102
F.R.D. 212, 214 (D.S.C. 1984)). “Nevertheless, while
security should be provided ‘in normal circumstances,
’ a district court in its discretion may grant an
unsecured stay in ‘unusual circumstances, ’ where
the granting of such a stay will not ‘unduly endanger
the judgment creditor’s interest in ultimate
recovery.’” Id. (citing Fed.
Prescription Serv., Inc. v. Am. Pharm. Ass’n, 636
F.2d 755, 760-61 (D.C. Cir. 1980); In re Combined Metals
Reduction Co., 557 F.2d 179, 193 (9th Cir. 1977)).
seek a stay of execution, without security, pending
resolution of post-trial motions. Alternatively, Defendants
ask the Court to permit security totaling $11, 000, 000 (a
$5, 000, 000 bond and a $6, 000, 000 letter of credit), with
no security for the punitive damages portion of the judgment,
or, if the Court requires security in full, that Plaintiff be
granted a security interest in Zowine’s stake in his
company, Zoe Holding Company, Inc. The parties have briefed
and argued various issues the Court will address.
Denial of Rule 62(b) Relief.
argues that the Court must deny Defendants’ Rule 62(b)
request because there are no currently-pending post-trial
motions. As the Court explained during oral argument,
however, Rule 62(b) does not require currently-pending
motions. Indeed, the deadline for filing post-trial motions
has not arrived, see Fed. R. Civ. P. 50(d), 59(b),
and yet Rule 62(b) permits a stay pending disposition of
precisely those motions.
also argues that Defendants must show a likelihood of success
in their post-trial motions, and other elements normally
required for injunctive relief, before they can obtain a
stay. Rule 62(b) imposes no such requirement; it looks
instead to “appropriate terms for the opposing
party’s security” as the basis for granting a
stay. Fed.R.Civ.P. 62(b); see also FINOVA Capital Corp.
v. Richard A. Alredge, Inc., No. CV02-01277-PHX-RCB,
2008 WL 828504, at *4-5 (D. Ariz. Mar. 26, 2008).
district court may “grant an unsecured stay in
‘unusual circumstances, ’ where the granting of
such a stay will not ‘unduly endanger the judgment
creditor’s interest in ultimate recovery.” In
re Apollo Grp. Inc. Sec. Litig., 2008 WL 410625, at *1
(citations omitted). Unsecured stays are disfavored.
have not shown unusual circumstances, or that granting an
unsecured stay would not unduly endanger Plaintiff’s
interest in ultimate recovery. Defendants argue that they are
likely to succeed in their post-trial motions, that they have
encountered difficulty securing a bond to cover the full
judgment amount, and that the judgment likely will be altered
due to post-trial motions or offsets in state court
litigation. The Court does not find that Defendants are
likely to succeed on their post-trial motions, at least not
to the extent of eliminating the jury verdict, and the Court
previously has concluded that it will not anticipate or
attempt to influence the results of the state court
litigation. In addition, mere difficulty in obtaining
security cannot be deemed unusual circumstances, particularly
when Defendant Zowine claims to own more than $100 million in
assets. The Court will not grant Defendants’ request
for an unsecured stay.
supersedeas bond is the typical form of security, but
district courts have discretion to allow alternative forms.
See Townsend v. Holman Consulting Corp., 929 F.2d
1358, 1367 (9th Cir. 1990); Int’l Wood
Processors, 102 F.R.D. at 215. Alternative security must
adequately protect the judgment creditor. See Skydive
Ariz., Inc. v. Quattrocchi, No. ...