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Clark v. Hidden Valley Lake Association

United States District Court, N.D. California

May 29, 2018

WAYNE CLARK, Plaintiff,
v.
HIDDEN VALLEY LAKE ASSOCIATION, Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO STAY ENFORCEMENT OF JUDGMENT WITHOUT POSTING SUPERSEDEAS BOND, RE: DKT. NO. 227

          SUSAN ILLSTON United States District Judge

         Defendant Hidden Valley Lake Association has filed a motion to stay enforcement of the judgment without posting a supersedeas bond. Dkt. No. 227. The Court finds this matter appropriate for resolution without oral argument pursuant to Civil Local Rule 7-1(b), and VACATES the hearing set for June 1, 2018. For the reasons set forth below, the Court DENIES the motion. The Court ORDERS defendant to post a supersedeas bond equal to 125% of the judgment if it wishes to stay execution of the judgment pending appeal.

         BACKGROUND

         The facts of this case are recited at greater length in the Court's October 31, 2017 order on defendant's special motion to strike and motion for summary judgment, and the Court's April 18, 2018 order on defendant's post-trial motions. See Dkt. Nos. 86, 223. Plaintiff Wayne Clark is a golf professional who was hired in 2011 as the Director of Golf for defendant Hidden Valley Lake Association. Defendant is a homeowners association with approximately 3300 members.

         On January 30, 2018, plaintiff went to trial on his claims. On February 8, 2018, the jury returned a verdict in favor of plaintiff on all claims and awarded actual (lost wages) and noneconomic damages totaling $2 million. Dkt. No. 196 at 15-16. The Court entered judgment in favor of plaintiff and against defendant on February 9, 2018. Dkt. No. 201. Defendant then filed post-trial motions, including a request for a stay of execution of the judgment, which the Court denied. Dkt. Nos. 205, 223. Defendant filed a notice of appeal to the Ninth Circuit on April 24, 2018. Dkt. No. 224.

         On May 10, 2018, defendant filed the present motion to stay enforcement of the judgment without posting a supersedeas bond. Dkt. No. 227. Later that same day, plaintiff filed a proposed writ of execution. Dkt. No. 229. The Court did not act on plaintiff's proposed writ but expedited the briefing schedule on defendant's motion. Dkt. No. 233. The Court now rules as follows.

         LEGAL STANDARD

         An appellant may stay execution of a judgment by posting a supersedeas bond. Cotton ex rel. McClure v. City of Eureka, Cal., 860 F.Supp.2d 999, 1025 (N.D. Cal. 2012). Federal Rule of Civil Procedure 62(d) provides:

Stay with Bond on Appeal. If an appeal is taken, the appellant may obtain a stay by supersedeas bond, except in an action [for an injunction or a receivership or for an accounting in a patent infringement case]. The bond may be given upon or after filing the notice of appeal or after obtaining the order allowing the appeal. The stay takes effect when the court approves the bond.

Fed. R. Civ. P. 62(d). “The posting of a bond protects the prevailing plaintiff from the risk of a later uncollectible judgment and compensates him for delay in the entry of the final judgment.” NLRB v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988).

         The district courts have discretion both in “setting supersedeas bonds” and in “allow[ing] other forms of judgment guarantee.” Cotton, 860 F.Supp.2d at 1027 (quoting Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505 n.1 (9th Cir. 1987) and Int'l Telemeter, Corp. v. Hamlin Int'l Corp., 754 F.2d 1492, 1495 (9th Cir. 1985)). This includes the “broad discretionary power to waive the bond requirement if [the district court] sees fit.” Townsend v. Holman Consulting Corp., 881 F.2d 788, 797-98 (9th Cir. 1989), vacated on other grounds en banc, 929 F.2d 1358 (9th Cir. 1990). “The appellant has the burden to ‘objectively demonstrate' the reasons for departing from the usual requirement of a full supersedeas bond.” Cotton, 860 F.Supp.2d at 1028 (quoting Poplar Grove Planting & Refining Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir. 1979)).

         Although the Ninth Circuit has not identified factors for determining when waiver of the supersedeas bond is merited, courts within the Northern District of California and the Ninth Circuit often employ the five-factor test articulated by the Seventh Circuit in Dillon v. City of Chicago, 866 F.2d 902, 904-05 (7th Cir. 1988). See Kranson v. Fed. Express Corp., No. 11-cv-05826-YGR, 2013 WL 6872495, at *1 (N.D. Cal. Dec. 31, 2013) (citing Cotton, 860 F.Supp.2d at 1028) (explaining “[c]ourts in the Ninth Circuit regularly use the Dillon factors in determining whether to waive the bond requirement”). These factors include

(1) the complexity of the collection process; (2) the amount of time required to obtain a judgment after it is affirmed on appeal; (3) the degree of confidence that the district court has in the availability of funds to pay the judgment; (4) whether the defendant's ability to pay the judgment is so plain that the cost of a bond would be a waste of money; and (5) whether the defendant is in such a precarious financial ...

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