Case 1:03-cv-02504-REB-CBS
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UNITED STATES DISTRICT COURT DISTRICT OF COLORADO Civil Action No. 03-cv-02504-REB-CBS PETER HORNICK, an individual, Plaintiff/Counterclaim Defendant, v. GARY BOYCE and JOANNE BOYCE, individuals, Defendants/Counterclaimants. REPLY IN SUPPORT OF DEFENDANTS/COUNTERCLAIMANTS' FORTHWITH RENEWED MOTION FOR STAY OF EXECUTION PENDING APPEAL PURSUANT TO FED. R. CIV. P. 62(d) AND FOR APPROVAL OF SUPERSEDEAS BOND Defendants/Counterclaimants, Gary Boyce and Joanne Boyce (collectively, the "Boyces"), by and through their undersigned counsel, submit the following Reply in Support of Defendants/Counterclaimants' Forthwith Renewed Motion for Interim Stay of Execution Pending Appeal Pursuant To Fed. R. Civ. P. 62(d) and for Approval of Supersedeas Bond (the "Reply"). In support of this Reply, the Boyces advise the Court as follows:1 ARGUMENT 1. A Supersedeas Bond Can Take The Form Of A Letter Of Credit. In his Response to Defendants/Counterclaimants Forthwith Renewed Motion for Interim Stay of Execution Pending Appeal Pursuant To Fed. R. Civ. P. 62(d) and for
For the Court's convenience, Exhibits to this Reply will follow the alphabetical sequencing of those contained in the Motion.
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Approval of Supersedeas Bond (the "Response"), Hornick argues that the Boyces, through seeking to post a irrevocable letter of credit in favor of Hornick are seeking to post something less than a full supersedeas bond. In furtherance of this argument he advances four grounds in opposition to the Motion. None of these arguments provides a factual or legal justification for the Court to deny the Motion. A supersedeas bond can "take the form of a surety bond, a letter of credit, or cash posted with the Clerk of the Court." Secure Engineering Services, Ltd. v. International Technology Corp., 727 F. Supp. 261, 263 (E.D. Va. 1989). See also, Trans World Airlines, Inc. v. Hughes, 515 F.2d 173, 177 (2d Cir. 1975); Ligurotis v. Whyte, 951 F.2d 818, 821 (7th Cir. 1992); State Industries, Inc. v. Mor-Flo Industries, Inc., 124 F.R.D. 613 (E.D. Tenn. 1988); Gaus v. Conair Corp., 2003WL542652 (S.D.N.Y. 2003)(unreported decision).2 Hornick, in his attempt to distinguish Secure Engineering Services, Ltd. v. International Technology Corp., 727 F. Supp. 261 (E.D. Va. 1989), mischaracterizes the court's holding with respect to what form a supersedeas bond can take. As stated, the court clearly held that a supersedeas bond can "take the form of a surety bond, a letter of credit, or cash posted with the Clerk of the Court." (Emphasis added). Id., at 263. Clearly, therefore, the posting of a letter of credit in an amount sufficient to satisfy the requirements set forth in Popular Grove Planting and Refining Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189 (5th Cir. 1979), is a full supersedeas bond. Accordingly, Hornick is incorrect in his assertion that a letter of credit is something less than a full supersedeas bond.
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A copy of this opinion is attached hereto as Exhibit C. 2
Case 1:03-cv-02504-REB-CBS
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Hornick's argument is moot, however, as the Boyces are prepared to comply with Hornick's requirements for a surety supersedeas bond. 2. The Boyces Are Prepared To Comply With Hornick's Request For A Surety Supersedeas Bond And Accordingly This Is An Agreed Motion. In his Response Hornick argues that the letter of credit proposed by the Boyces is not acceptable because the bank which would issue the credit facility is undercapitalized.3 This argument is illogical since the letter of credit would be fully collateralized by a cash deposit equivalent to its face amount. Thus, in the event the letter of credit was drawn on, the bank would withdraw a like amount from the cash account. Accordingly, the level of capitalization of the bank would never be an issue. In making this argument Hornick asserts that "[I]f the $2.5 million in cash can be deposited with the bank, then presumably it can be . . . [used] as security with a corporate surety approved by the Court, in order to obtain the full supersedeas bond required to adequately secure Hornick." Response, p. 5. At significant additional
expense to the Boyces, they are prepared to comply with this request. Conditioned upon Hornick's Judgment lien being simultaneously released, the Boyces have secured a commitment for a surety supersedeas bond in the amount of $2,500,000.00. See Exhibit D. This is 167% of the value of the Judgment, and provides more than
adequate cash security to cover the Judgment, which together with interest through
Interestingly, it should be noted, that after completing the same financial analysis of the American National Bank that Hornick allegedly completed, Bond Safeguard Insurance Company found the capitalization of the bank to be acceptable for purposes of providing adequate security for its surety bond. See Exhibit D, Bond Commitment of Ross & Company, as agent for Bond Safeguard Insurance Company (the "Bonding Company"), dated September 4, 2007. 3
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January 26, 2009 (two years from the date of the parties filing their respective Notices of Appeal the anticipated length the of time for the appeals to be heard4), would be in the amount of $2,446,043.06. As stated in the Response, "Hornick does not dispute that upon filing of a full supersedeas bond, the judgment liens would be released because at that point he would be adequately protected." Response, p. 5. Thus, the Bonding Company's
request that the judgment liens be release should not pose an obstacle to approval of the bond. Accordingly, as Hornick has not challenged the amount of the supersedeas bond proposed by the Boyces he has conceded that a $2,500,000.00 surety supersedeas bond would provide him adequate security, and thus, require him to release the Judgment liens. In addition, because Hornick has objected to the timing and terms proposed by the Boyces in the Motion for the depositing of his release of the Judgment liens with the Court, and for the Boyces to secure and file the supersedeas bond, he has accepted those terms. Therefore, the Boyces have complied with all of Hornick's requirements for a stay of execution pending appeal, and the release of the Judgment liens, and this has become an agreed Motion. CONCLUSION The Boyces are prepared to comply with Hornick's requirements for a surety supersedeas bond and in doing so they have offered collateral that greatly exceeds the It should be noted, however, that the briefing on the appeals is now complete and no party has requested oral argument. Therefore, it is reasonable to expect that a decision with respect to the appeals will be rendered well in advance of January 26, 2009.
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value of the Judgment. Therefore, the relief respectfully requested herein should be granted. WHEREFORE, the Boyces respectfully request that this Court enter an Order (revised proposed Order submitted herewith): 1. Approving the terms and conditions of a surety supersedeas bond as
security for a stay of execution of the Judgment pending appeal, in the form attached hereto as Exhibit E; and permitting the Boyces leave to post said supersedeas bond and stay execution of the Judgment pending appeal. 2. Requiring Hornick to deposit with the Clerk of the Court, within five (5)
business days of entry of its Order, a release of his Judgment liens in the form attached to the Motion as Exhibit B. Said release shall be held by the Court until the Boyces
post the supersedeas bond with the Court at which time the release shall be released to the Boyces for filing with the Clerk and Recorder of Saguache County, Colorado. 3. Entering a stay of enforcement of the Judgment for fifteen (15) business
days to facilitate Hornick's deposit of the release of Judgment liens with the Court, and to allow the Boyces to post a supersedeas bond staying execution of the Judgment pending appeal. 4. If the Boyces do not post said supersedeas bond within the stated fifteen
(15) business day period, the release of Judgment liens deposited with the Court by Hornick shall be returned to Hornick. 5. For such other relief that the Court deems just and proper.
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Respectfully submitted this 6th day of September, 2007. Original Signature on File s/ John G. Lubitz John G. Lubitz, Esq. Scott A. Hyman, Esq. OSTER & MARTIN, LLC 370 17th Street, Suite 4400 Denver, Colorado 80202 Tel: 303.382.1200 Fax: 303.382.1202 Email: [email protected] [email protected] Counsel for Defendants/Counterclaimants Gary Boyce and Joanne Boyce
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Case 1:03-cv-02504-REB-CBS
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CERTIFICATE OF SERVICE I certify that on this 6th day of September, 2007, the foregoing REPLY IN SUPPORT OF DEFENDANTS/COUNTERCLAIMANTS' FORTHWITH RENEWED MOTION FOR STAY OF EXECUTION PENDING APPEAL PURSUANT TO FED. R. CIV. P. 62(d) AND FOR APPROVAL of SUPERSEDEAS BOND was served on all parties and other interested persons electronically via CM/ECF System, addressed to the following: Erich Schwiesow, Esq. Helen Sigmond, Esq. Lester, Sigmond, Rooney & Schwiesow 311 San Juan Avenue, P.O. Box 1270 Alamosa, Colorado 81101 And by depositing a copy of same in the United States Mail, postage prepaid, addressed to the following: Delphine L. Farr, Esq. Lawlis & Bruce, LLC 1875 Lawrence Street, Suite 750 Denver, Colorado 80202 Sheriff Mike Norris Saguache County Sheriff's Office 530 5th Street Saguache, Colorado 81149 Original Signature on File s / Joanne Torre Hyman Joanne Torre Hyman Paralegal
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