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Dublin Eye Associates, P.C. v. Massachusetts Mutual Life Insurance Co.

United States District Court, E.D. Kentucky, Central Division, Lexington

April 13, 2015

DUBLIN EYE ASSOCIATES, P.C., et al., Plaintiffs,


DANNY C. REEVES, District Judge.

This matter is pending for consideration of Plaintiffs Dublin Eye Associates, P.C. ("DEA"), Dr. Roger D. Smith, and Dr. James Y. Jones' motion to stay the enforcement of the Judgment pending appeal and waive supersedeas bond. [Record No. 433] As discussed more fully below, the motion is not well taken and will be denied.


On July 12, 2013, summary judgment was granted in favor of Defendants Massachusetts Mutual Life Insurance Company ("Mass Mutual"), Thomas Ackerman, Qualified Plan Services, Inc. ("QPS"), Catherine Chatfield, and Kimberly Shea. [Record Nos. 352, 353] Thereafter, on March 24, 2014, the defendants' motions for attorneys' fees [Record Nos. 358, 359] were granted and the matter was referred to United States Magistrate Judge Edward B. Atkins for issuance of a Report and Recommendation regarding the specific amount of fees to be awarded. [Record No. 372] The Court adopted, in part, and rejected, in part, the Report and Recommendation. On January 20, 2015, the Court awarded attorneys' fees in the following amounts: (1) Defendant Mass. Mutual ($694, 612.80); (2) Defendant Ackerman ($336, 205.39); and (3) Defendants QPS, Chatfield, and Shea ($155, 151.00 and $5, 830.80 for travel).[1] [Record Nos. 429, 430] The plaintiffs appealed the Court's rulings regarding the award of attorneys' fees on February 13, 2015. [Record No. 431]

The plaintiffs now seek to stay enforcement of the Judgment pending appeal and requests a waiver of the supersedeas bond requirement. [Record No. 433] They first assert that Plaintiffs Dr. Roger D. Smith and Dr. James Y. Jones have prosecuted this case on behalf of the DEA Pension Plan in their official capacity as trustees and cannot be held individually responsible for the Judgment. [Record No. 433-1, pp. 4-5] Further, they argue that a waiver of the supersedeas bond should be granted because DEA does not have the financial ability to post the bond and that requiring them to do so would put their other creditors in undue jeopardy. [ Id., pp. 5-6] Conversely, the defendants contend that the plaintiffs are jointly and severally liable for the Judgment and that there are no extraordinary circumstances that would justify waiving the bond requirement. [Record No. 435]


Federal Rule of Civil Procedure 62(d) provides:

If an appeal is taken, the appellant may obtain a stay by supersedeas bond, except in an action described in Rule 62(a)(1) or (2). 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 purpose of [Rule 62(d)]... is to ensure that the prevailing party will recover in full, if the decision should be affirmed, while protecting the other side against the risk that payment cannot be recouped if the decision should be reversed.'" Cohen v. Metro. Life Ins. Co., 334 F.Appx. 375, 378 (2d Cir. 2009) (quoting Cleveland Hair Clinic, Inc. v. Puig, 104 F.3d 123, 125 (7th Cir. 1997).

For the appellee, Rule 62(d) effectively deprives him of his right to enforce a valid judgment immediately. Consequently, the appellant is required to post the bond to provide both insurance and compensation to the appellee. The supersedeas bond protects the non-appealing party from the risk of a later uncollectible judgment and also provides compensation for those injuries which can be said to be the natural and proximate result of the stay. Therefore, Rule 62(d) establishes not only the appellant's right to a stay, but also the appellees right to have a bond posted. Because of Rule 62(d)'s dual protective role, a full supersedeas bond should almost always be required.

Hamlin v. Charter Twp. of Flint, 181 F.R.D. 348, 351 (E.D. Mich. 1998) (citations and internal quotation marks omitted).

Pursuant to Rule 62(d), a party that files a supersedeas bond is entitled to a stay of a money judgment as a matter of right. Arban v. W. Pub. Corp., 345 F.3d 390, 409 (6th Cir. 2003). However, "the Rule in no way necessarily implies that filing a bond is the only way to obtain a stay. It speaks only to stays granted as a matter of right, it does not speak to stays granted by the court in accordance with its discretion." Id. (internal quotation marks omitted). Thus, a district court may, "in its discretion, modify or even waive the full bond requirement." Hamlin, 181 F.R.D. at 353.

Although courts may waive the bond requirement, "[t]he Sixth Circuit has not defined a specific test to guide the Court's discretion when considering whether to grant an unsecured stay." Buckhorn Inc. v. Orbis Corp., No. 3: 08-cv-459, 2014 WL 4377811, at *1 (S.D. Ohio Sept. 3, 2014). In the absence of appellate guidance, district courts within the Sixth Circuit have required a party seeking waiver to demonstrate "extraordinary circumstances." See, e.g., Pucci v. Somers, 834 F.Supp.2d 690, 706-07 (E.D. Mich. 2011); Hamlin, 181 F.R.D. at 353. "[E]xtraordinary circumstances" include "a showing by the appellant that his ability to pay the judgment is so plain that the cost of the bond would be a waste of money, ' or that the bond requirement would put [appellant's] other creditors in undue jeopardy.'" Lim v. Terumo Corp., No. ...

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