Primo Broodstock, Inc. v. American Mariculture, Inc. et al

Filing 596

OPINION and ORDER denying 587 Defendants' Motion to Stay Execution of Judgment Pending Appeal. Signed by Judge John E. Steele on 2/15/2023. (TLP)

Case 2:17-cv-00009-JES-NPM Document 596 Filed 02/15/23 Page 1 of 10 PageID 22321

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
TB FOOD USA, LLC, a
Delaware Limited Liability
Company,
Plaintiff,
v.

CASE NO. 2:17-cv-9-FtM-29NPM

AMERICAN MARICULTURE, INC.,
a Florida Corporation,
AMERICAN PENAEID, INC., a
Florida Corporation, and
ROBIN PEARL,
Defendants.
AMERICAN MARICULTURE, INC.,
a Florida Corporation,
Third-Party Plaintiff,
v.
PB LEGACY, INC. a Texas
Corporation,
Third-Party Defendant.

OPINION AND ORDER
This matter comes before the Court on review of defendants’
Motion to Stay Execution of Judgment Pending Appeal (Doc. #587)
filed

on

December

22,

2022.

Plaintiff

filed

Opposition (Doc. #591) on January 18, 2023.
forth below, the motion is denied.

a

Response

in

For the reasons set

Case 2:17-cv-00009-JES-NPM Document 596 Filed 02/15/23 Page 2 of 10 PageID 22322

I.
After

several

years

of

litigation,

a

14-day

jury

trial

culminated in a verdict on November 19, 2021. (Doc. #465.)

No

party prevailed on all of its claims, and all parties prevailed on
some claims.

In due course an Amended Judgment (Doc. #554) was

filed which, in relevant part, awarded plaintiff TB Food USA, LLC
(Plaintiff

or

TB

Food)

$10,500,000.00

in

damages

against

defendants American Penaeid, Inc. (API) and Robin Pearl (Pearl)
for

defamation,

trade

secret

misappropriation,

and

unfair

competition; was in favor of defendant American Mariculture, Inc.
(AMI) as to TB Food’s breach of contract claim; and was in favor
of all defendants as to TB Food’s unfair competition claims under
Florida law. (Id., p. 4.)
On August 31, 2022,

defendants

AMI, API, and

Mr. Pearl

(collectively Defendants) filed a Notice of Appeal as to the
Amended Judgment. (Doc. #560.)

On the same day, TB Food filed a

Notice of Appeal. (Doc. #561.)
TB Food has begun post-judgment efforts to execute on the
Amended Judgment.

This includes engaging in discovery related to

Defendants’ assets after being informed that API and Mr. Pearl
have no assets to satisfy the Amended Judgment. (Doc. #591-1.)
Defendants now request that the Court stay execution on the
Amended Judgment, without requiring the posting of a supersedeas
bond, until the disposition of Plaintiff’s appeal is complete.

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(Doc. #587, p. 2.)

Defendants argue in essence that there is an

automatic stay of execution when a prevailing party files an appeal
of

its

underlying

judgment.

Defendants

also

rely

upon

the

“acceptance of benefits doctrine,” arguing that TB Food should not
be allowed to accept the benefits of the Amended Judgment by
attempting to collect on it, while at the same time challenging
the Amended Judgment on appeal. (Id., pp. 5-10.)
TB Food responds that there is no automatic stay just because
a prevailing party filed an appeal, and that its particular appeal
does not conflict with the enforcement of the Amended Judgment.
TB Food maintains that it is not seeking to invalidate any of the
relief awarded to it in the Amended Judgment, but rather seeks
additional

damages,

expanded

equitable

issues on which it did not prevail.

relief,

and

review

of

TB Food further asserts that

Defendants are not entitled to a stay of execution, and even if
they were, have not met the heavy burden under Federal Rule of
Civil

Procedure

62(b)

of

showing

they

are

entitled

to

the

extraordinary remedy of waiver of the bond requirement. (Doc. #591,
pp. 2-8.)
II.
“The filing of a notice of appeal generally divests a district
court of jurisdiction as to those issues involved in the appeal.”
U.S. Commodity Futures Trading Comm'n v. Escobio, 946 F.3d 1242,
1251 (11th Cir. 2020). A district court has jurisdiction, however,

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to determine whether a stay of execution of a judgment should be
granted, even after a notice of appeal has been filed.

Federal

Rule of Appellate Procedure 8 states,
A party must ordinarily move first in the district
court for the following relief:
(A) a stay of the judgment or order of a
district court pending appeal;
(B) approval of a bond or other security
provided to obtain a stay of judgment; or
(C) an order suspending, modifying, restoring,
or granting an injunction while an appeal is
pending.
Fed. R. App. P. 8.

A district court also retains the authority to

aid in the execution of a judgment that has not been superseded.
Showtime/The Movie Channel, Inc. v. Covered Bridge Condo. Ass'n,
Inc., 895 F.2d 711, 713 (11th Cir. 1990).

Similarly, “[a]bsent

entry of a stay, a district court retains jurisdiction to enforce
its judgment—via contempt or other means—during the pendency of an
appeal.”

Escobio, 946 F.3d at 1251.

“[A]n appeal does not automatically stay the enforcement of
a judgment.”

Escobio, 946 F.3d at 1251.

Rather, “[a] party can

move to have the judgment stayed upon appeal. Fed. R. Civ. P. 62;
Fed. R. App. P. 8.”

Id.

Federal Rule of Civil Procedure 62(b)1

provides: “At any time after judgment is entered, a party may
obtain a stay by providing a bond or other security. The stay takes

1

Prior to 2018 amendments, the rule was found at Rule 62(d).

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effect when the court approves the bond or other security and
remains in effect for the time specified in the bond or other
security.”

Fed. R. Civ. P. 62(b). “Without a stay, a judgment may

be executed upon, even after an appeal is filed.” United States v.
Peters, 783 F.3d 1361, 1363 n.3 (11th Cir. 2015) (citing Nat'l
Serv. Indus., Inc. v. Vafla Corp., 694 F.2d 246, 249–50 (11th Cir.
1982)).
The Eleventh Circuit has described the common scenario and
the role of a supersedeas bond:
When a judgment is appealed, both the winning
and losing parties face risk in the period
between the time judgment is entered and the
time it is affirmed or reversed. The winning
party seeks immediate satisfaction of the
judgment because assets available at the time
judgment is entered might disappear by the
time it is affirmed. And the losing party
seeks delayed satisfaction of judgment for a
parallel reason: Assets available at the time
judgment is entered might disappear by the
time it is reversed. A supersedeas bond
insures both parties against these respective
risks. It permits a judgment debtor to “avoid
the risk of satisfying the judgment only to
find that restitution is impossible after
reversal
on
appeal”
and
“secures
the
prevailing party against any loss sustained as
a result of being forced to forgo execution on
a judgment during the course of an ineffectual
appeal.” Poplar Grove Planting & Ref. Co. v.
Bache Halsey Stuart, Inc., 600 F.2d 1189, 1191
(5th Cir. 1979).
Alliant Tax Credit 31, Inc v. Murphy, 924 F.3d 1134, 1141 (11th
Cir. 2019).

“It is within the court's discretion to fashion a

security arrangement that protects the rights of both the judgment

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creditor and the judgment debtor.”

Prudential Ins. Co. v. Boyd,

781 F.2d 1494, 1498 (11th Cir. 1986). “Because of Rule 62[(b)]’s
dual protective role, a full supersedeas bond should almost always
be required.” Hamlin v. Charter Twp. Of Flint, 181 F.R.D. 348, 352
(E.D. Mich. 1998)(citing Poplar Grove, 600 F.2d at 1190).
III.
Defendants argue that a district court has discretion to stay
execution of the Amended Judgment without requiring a supersedeas
bond. (Doc. #587, p. 4.) While there is a split of authority as to
whether a supersedeas bond is required, the Eleventh Circuit has
held

that

the

court

has

discretion

“to

fashion

a

security

arrangement that protects the rights of both the judgment creditor
and the judgment debtor.”
“security

arrangement”

Boyd, 781 F.2d at 1498.

could

include

the

absence

In theory, a
of

a

bond.

Indeed, district courts have found that a judge may depart from
the general rule and allow the stay of execution without the
posting of such a bond under special circumstances.

See, e.g.,

St. Luke's Cataract & Laser Inst., P.A. v. Sanderson, No. 8:06cv-223-T-MSS, 2008 U.S. Dist. LEXIS 142452, at *5-6 (M.D. Fla.
Sep. 18, 2008); Frasca v. NCL (Bahamas) Ltd., 2014 U.S. Dist. LEXIS
117859, 2014 WL 4206697, at *10 (S.D. Fla., Aug. 25, 2014);
Chmielewski v. City of St. Pete Beach, 8:13-cv-3170-T-27MAP, 2016
WL 7438432, 2016 U.S. Dist. LEXIS 186168, at *2-3 (M.D. Fla. Sep.
16, 2016).

Defendants, however, have not discussed Rule 62(b) or

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any “security arrangement,” therefore they can obtain no relief
under that Rule.
Defendants’ request to stay the execution of the judgment
without making any security arrangement is premised on two related
arguments.

First, Defendants argue that TB Food’s filing of a

notice of appeal results in an automatic stay until its appeal is
resolved.

Second, Defendants argue that even if there is not an

automatic stay, in this case TB Food cannot execute on the judgment
under the acceptance of benefits theory.

The Court rejects each

argument.
First, relying upon Bronson v. La Crosse & M.R. Co., 68 U.S.
405, 409-10 (1863), Defendants contend in essence that where the
prevailing party appeals the judgment in its favor, the appeal
automatically suspends execution on the judgment. (Id., pp. 5,
15.)

See also TVA v. Atlas Mach. & Iron Works, Inc., 803 F.2d

794, 797 (4th Cir. 1986)(interpreting Bronson to mean that "where
the prevailing party is the first to take an appeal, no supersedeas
bond can be required of the losing party when it subsequently files
its own appeal, because the execution of the judgment has already
been superseded by the prevailing party's appeal.").
The statement relied upon in Bronson was dicta, and was made
long

before

the

promulgation

of

the

Federal

Rules

Procedure in general and Rule 62(b) in particular.

of

Civil

Additionally,

as noted above, the Eleventh Circuit has held that “an appeal does

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not automatically stay the enforcement of a judgment.”
946 F.3d at 1251.

Escobio,

This rule is no different where the notice of

appeal was filed by the prevailing party, or as here, notices of
appeal were filed by all parties.

Additionally, unlike TVA, TB

Food was not the first to take an appeal in this case.

Thus, the

Court concludes that the mere filing of a notice of appeal by a
prevailing

party

does

not

enforcement of a judgment.

result

in

an

automatic

stay

of

This is confirmed by the Eleventh

Circuit’s acceptance of benefits cases, discussed below.
Defendants argue that TB Food has done more than just appeal
the Amended Judgment.

Defendants argue that the issues TB Food

will be raising are inconsistent with the validity of the Amended
Judgment.

Therefore, Defendants assert, TB Food should not be

able to enforce the Amended Judgment as valid while attacking it
on appeal without violating the federal common law acceptance of
benefits rule.
The acceptance of benefits doctrine “provides that a party
who voluntarily and knowingly accepts the benefits of judgment or
decree cannot seek a reversal of the judgment or decree on appeal.”
Padurjan v. Aventura Limousine & Transp. Serv., No. 08-20128-CIVHUCK/B, 2011 WL 13174298, 2011 U.S. Dist. LEXIS 161569, at *5-6
(S.D. Fla. June 3, 2011).

Some courts have held that that a lower

court judgment may be stayed without bond when the relief sought
by the prevailing party on appeal is inconsistent with enforcement

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of the lower court's judgment. See, e.g., Enserch Corp. v. Shand
Morahan & Co., 918 F.2d 462 (5th Cir. 1990); BASF Corp. v. Old
World Trading Co., 979 F.2d 615 (7th Cir. 1992); Trustmark Ins.
Co. v. Gallucci, 193 F.3d 558, 559 (1st Cir. 1999).

Defendants

have cited no Eleventh Circuit case which has so held.
The Eleventh Circuit has been careful both in determining
when there is an accepted benefit and when an appeal issue is
inconsistent with a judgment.

The Eleventh Circuit has “accepted

the principle that when a court adjudicates separable or divisible
controversies, the appealing party may accept the benefit of the
divisible feature in his favor and challenge the portion adverse
to him.”

Crawford v. Andrew Sys., Inc., 39 F.3d 1151, 1153 (11th

Cir. 1994).

Additionally, “[i]n the Eleventh Circuit, a party

cannot be deemed to have accepted the benefits of a judgment unless
his

counterparty

has

offered

a

benefit

for

him

to

accept

—

generally in the form of payment in the judgment amount.” Palmer
Ranch Holdings Ltd. v. Comm’r, 812 F.3d 982, 995 (11th Cir. 2016).
“It is a generally accepted rule of law that where a judgment is
appealed on the ground that the damages awarded are inadequate,
acceptance of payment of the amount of the unsatisfactory judgment
does not, standing alone, amount to an accord and satisfaction of
the entire claim.”

Crawford, 39 F.3d at 1153.

Finally, Crawford

suggests that if acceptance of the benefits is established, it is

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the appeal which is barred, not the execution on the judgment.
Id.
Defendants have not established that any of the issues which
TB Food is anticipated to raise will be inconsistent with the
Amended Judgment.

Defendants have also not established that any

benefits have been conferred on TB Food.

Furthermore, Defendants

have not cited any Eleventh Circuit authority establishing that
the remedy is staying enforcement of the Amended Judgment, as
opposed to forfeiture of an issue(s) on appeal. Defendants’ motion
is therefore denied.
Accordingly, it is hereby
ORDERED:
Defendants’ Motion to Stay Execution of Judgment Pending
Appeal (Doc. #587) is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
February, 2023.

Copies:
Counsel of Record

10

15th

day of