Free Notice of Appeal - District Court of Colorado - Colorado

Case 1:03-cv-02504-REB-CBS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Case No. 03-CV-02504-REB-CBS PETER HORNICK, Plaintiff v. GARY BOYCE AND JOANNE BOYCE, Defendants

PLAINTIFF HORNICK'S RESPONSE TO MOTION TO STAY JUDGMENT PENDING DETERMINATION OF POST-TRIAL MOTIONS

Plaintiff Peter Hornick, by and through his undersigned attorneys, files the following Response to Defendants' Motion to Stay Judgment Pending Determination of Post-Trial Motions. While Plaintiff has no objection to a stay of judgment upon the posting of a sufficient bond, Plaintiff does object to the sufficiency of the security proposed by Defendants, upon the following grounds:

1.

Defendants have proposed that this Court issue a stay on enforcement of the Judgment entered September 6, 2006, pursuant to Fed. R. Civ. P. 62(b) until the time for filing an appeal has run. Defendants propose to post no bond for such a stay, rather asserting that the judgment lien recorded by Plaintiff is sufficient

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security to ensure Plaintiff from loss resulting from delay.

2.

The general requirement for a stay pursuant to Fed. R. Civ. P. 62(d) (supersedeas on appeal) is that the stay be conditioned upon a full supersedeas bond in the amount of the judgment. Miami International Realty Co. v. Paynter, 807 F.2d 871, 873 (10th Cir. 1986) ("the purpose of a supersedeas bond is to secure an appellee from loss resulting from the stay of execution and. . . a full supersedeas bond should be the requirement in normal circumstances"). Certainly, district courts have discretion in setting supersedeas bonds for stays pursuant to Rule 62(d), and bonds for stays pursuant to Rule 62(b). However, only in unusual circumstances is it appropriate not to require a full bond. Such circumstances may include a defendant's showing of lack of sufficient assets to obtain a bond in the full amount, or other impracticality in obtaining such a bond. 807 F. 2d at 873, 874.

3.

A stay pursuant to Rule 62(b) pending a determination of a Motion to Amend Judgment is presumably of much shorter duration than a stay for purposes of appeal pursuant to Rule 62(d), but there is no reason not to protect the appellee from loss pursuant to the same rationale contained in the entirety of Rule 62. There is scant case law concerning the proper amount of bond for a stay issued pursuant to Rule 62(b). However, a few courts have considered the matter, and

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concluded that a full bond amount is appropriate. In International Wood Processors v. Powder Dry, Inc., 102 F.R.D. 212 (D. S. C. 1984), for instance, the District Court required a bond in the full amount of the judgment, plus interest at the post-judgment rate for three months before issuing a stay pursuant to Rule 62(b), concluding that Rule 62, taken in its entirety, indicates a policy against unsecured stays of execution after the automatic stay has lapsed.

4.

Defendants have not asserted that they are unable to obtain a bond in the full amount, or that doing so is impractical. There is no indication that this case is not within the realm of the normal, where a bond in the full amount would be a condition of a stay. Miami International Realty Co., supra, and see Poplar Grove Planting and Refining Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir. 1979) (stating that the burden is on the moving party to demonstrate objectively the reasons for departure from the full bond requirement; the judgment creditor need not initiate contrary proof). Courts generally consider several factors in determining whether to waive the full supersedeas bond requirement: a. b. The complexity of the collection process; The amount of time required to obtain a judgment after it is affirmed on appeal; c. The degree of confidence the district court has in the availability of funds

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to pay the judgment; d. Whether the appellant's ability to pay the judgment is so plain that the cost of a bond would be a waste of money; e. Whether the appellant is in such a precarious financial situation that the requirement to post a bond would place appellant's other creditors at risk. Dillon v. City of Chicago, 866 F.2d 902, 904-905 (7th Cir. 1988)(waiving a bond requirement because the City demonstrated the existence of previously appropriated and available funds for the purpose of paying judgments without substantial delay or other difficulty). In this case, there has been no assertion that posting a bond in the full amount would impinge upon any of these factors in a negative way. As further discussed below, the failure to require a full bond as a condition of a stay pursuant to Rule 62(b) will adversely affect Mr. Hornick.

5.

Defendants' proposed security of merely leaving in place Plaintiff's judgment lien is inadequate for several reasons: a. The only asset Defendants have identified that is subject to the judgment lien is the Villa Grove Ranch, which Defendants acknowledge is encumbered by a deed of trust in favor of First Southwest Bank in an amount exceeding one million dollars. Although it is true that there is $1.125 million on deposit in the Court Registry pursuant to Saguache County District Court Case No. 05CV53, those funds are subject to

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disposition only pursuant to Court Order, and there is no guarantee that they would become available to Plaintiffs even if the case were dismissed.

b.

While Mr. Hornick valued the Villa Grove Ranch at $4 million as of December 2001, Gary Boyce valued the ranch at $2.25 million as of January 2005. Real property values are currently in decline, as interest rates rise. There has been no indication of the present value of the ranch. Certainly, where Mr. Boyce is requesting that the ranch be used as security in lieu of the generally required cost bond, he should be bound by his lower estimate of ranch value.

c.

Real estate is subject to substantial delay and transaction costs in being converted into money. Thus, even were the Villa Grove Ranch held by Defendants free and clear, and even were its present value equal to the five million dollar judgment (with accrued interest) in place against Defendants (a high value for which there is no evidence), the market risk of the value declining over the near future means that the Villa Grove Ranch is not sufficient to secure Mr. Hornick against loss stemming from delay in satisfying his judgment.

d.

Gary Boyce is a defendant in Saguache County District Court Case No. 05CV45, where Plaintiff Vaca Partners, L.P. is seeking damages in excess of $1.2 million. See Vaca's Colo. R. Civ. P. 26(a)(1) Disclosures in

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that case, attached as Exhibit 1. That case has pending motions for partial and complete summary judgment, and is scheduled for a three day trial commencing December 6, 2006. Any delay in securing and executing upon assets of Gary Boyce could thus result in significant prejudice to Peter Hornick. 6. Following the rationale set forth in International Wood Processors, supra, 102 F.R.D. at 216, n.2, an appropriate bond would be calculated as follows: a. b. c. d. e. Amount of the Judgment Pre-judgment interest Costs Post Judgment interest (3 mos.) Total Bond $3,500,000 $1,520,539 $ $ 1,881 63,659

$5,086,079

CONCLUSION For the reasons stated above, Plaintiff requests that this Court deny Defendants' Motion for a stay pursuant to Fed. R. Civ. P. 62(b), or that it condition any such stay upon the posting of a bond in the full amount of the judgment, plus interest running for three months from the date of the judgment, calculated to be $5,086,079.

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Respectfully Submitted this 6th day of October, 2006

s/ Erich Schwiesow Erich Schwiesow Lester, Sigmond, Rooney & Schwiesow P.O. Box 1270 Alamosa, Colorado 81101 Telephone: (719) 589-6626 FAX (719) 589-5555 Email: [email protected] Attorney for Plaintiff, Peter Hornick

CERTIFICATE OF SERVICE I hereby certify that on the 3rd day of August, 2006, I electronically filed the foregoing Plaintiff Hornick's Trial Brief with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: [email protected] [email protected] [email protected]

s/ Erich Schwiesow

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