Balboa Capital Corporation v. Vital Pharmaceuticals, Inc. et al

Filing 124

ORDER APPROVING 119 REPORT OF MAGISTRATE JUDGE; GRANTING IN PART 111 MOTION TO STAY; DENYING 103 , 104 , AND 105 MOTIONS FOR WRIT OF GARNISHMENT WITHOUT PREJUDICE; REQUIRING STATUS REPORTS AS TO THE STATUS OF BANKRUPTCY PROCEEDINGS. Signed by Judge William P. Dimitrouleas on 11/8/2022. See attached document for full details. (caw)

Case 0:18-cv-61125-WPD Document 124 Entered on FLSD Docket 11/09/2022 Page 1 of 5

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
BALBOA CAPITAL CORPORATION,

CASE NO. 18-61125-CIV-DIMITROULEAS

Plaintiff,
vs.
VITAL PHARMACEUTICALS, INC., d/b/a
VPX SPORTS and JOHN OWOC,
Defendants.
_____________________________________/
ORDER APPROVING REPORT OF MAGISTRATE JUDGE; GRANTING IN PART
MOTION TO STAY; DENYING MOTIONS FOR WRIT OF GARNISHMENT
WITHOUT PREJUDICE; REQUIRING STATUS REPORTS AS TO THE STATUS OF
BANKRUPTCY PROCEEDINGS
THIS CAUSE is before the Court upon Plaintiff Balboa Capital Corporation (“Plaintiff”
or “Balboa”)’s Motions to Issue Writs of Garnishment After Judgment (the “Motions for Writ of
Garnishment”) [DE’s 103, 104, 105], filed on July 21, 2022; Defendants Vital Pharmaceuticals,
Inc. d/b/a VPX Sports and John Owoc (collectively, “Defendants”)’s Refiled Motion to Stay
Pending Appeal Without Bond or, in the Alternative, Request for Approval of Supersedeas Bond
(the “Motion to Stay”) [DE 111], filed on July 25, 2022; and the Report and Recommendation of
Magistrate Judge Patrick M. Hunt (the “Report”) [DE 119], dated October 7, 2022. Also before
the Court is the Suggestion of Bankruptcy [DE 120], filed on October 12, 2022. The Court is
otherwise fully advised in the premises.
As a preliminary matter, the Court notes that five days after the Magistrate Judge issued
his Report, Defendant Vital Pharmaceuticals, Inc. filed a Suggestion of Bankruptcy, informing the
undersigned that it has filed a voluntary petition in the United States Bankruptcy Court for the
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Southern District of Florida. See [DE 120]. Because this action is now automatically stayed as to
Defendant Vital Pharmaceuticals, Inc. pursuant to 11 U.S.C. § 362, the Motions [DE’s 103, 104,
105, 111] and the Report [DE 119] are moot as to Defendant Vital Pharmaceuticals, Inc.
Accordingly, the Court will only consider the Motions, the Report, and the Objections as to
Defendant John Owoc.
A party seeking to challenge the findings in a report and recommendation of a United
States Magistrate Judge must file “written objections which shall specifically identify the portions
of the proposed findings and recommendation to which objection is made and the specific basis
for objection.” Macort v. Prem, Inc., 208 F. App’x 781, 783 (11th Cir. 2006) (quoting Heath v.
Jones, 863 F.2d 815, 822 (11th Cir. 1989)). “It is critical that the objection be sufficiently specific
and not a general objection to the report.” Macort, 208 F. App’x at 784 (citing Goney v. Clark,
749 F.2d 5, 7 (3d Cir. 1984)). If a party makes a timely and specific objection to a finding in the
report and recommendation, the district court must conduct a de novo review of the portions of
the report to which objection is made. Macort, 208 F. App’x at 783-84; see also 28 U.S.C. §
636(b)(1). The district court may accept, reject, or modify in whole or in part, the findings or
recommendations made by the Magistrate Judge. Macort, 208 F. App’x at 784; 28 U.S.C. §
636(b)(1). Accordingly, the Court has undertaken a de novo review of the Report [DE 119],
Defendant John Owoc (“Owoc”)’s Objections to Report and Recommendation of Magistrate [DE
121], Plaintiff’s Response [DE 123], and the record herein.
In the Report, Magistrate Judge Hunt found that although Defendants failed to meet the
criteria for the Court to grant a stay, Plaintiff does not object to a stay if Defendants post bond
pursuant to Fed. R. Civ. P. 62(b). See [DE 119]. As such, Magistrate Judge Hunt recommends that
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the Court grant in part the Motion to Stay [DE 111], enter a stay pursuant to the alternative relief
requested upon Defendants’ posting a bond of 110% of the remaining judgment, and deny
Plaintiff’s Motions for Writ of Garnishment without prejudice. See id.
“The standard four-part test to determine a stay requires a court to consider: (1) whether
the stay applicant has made a strong showing that he is likely to succeed on the merits; (2)
whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay
will substantially injure the other parties interest in the proceeding; and (4) where the public
interest lies.” SEC v. Mutual Benefits Corp., No. 04-60573-CIV-MORENO, 2022 WL 3715982,
at *2 (S.D. Fla. Aug. 29, 2022) (citation omitted). Owoc objects to the Report as it relates to the
first, second, and fourth factors, arguing that he has established the elements required to obtain a
stay pending appeal without posting bond.
Having carefully considered Owoc’s Objections, and having reviewed the arguments and
relevant case law, the Court overrules the Objections. The Court agrees with the analysis and
conclusions set forth in Magistrate Judge Hunt’s well-reasoned and thorough Report.
With respect to the first factor, the Court agrees with Magistrate Judge Hunt that Owoc
does “nothing more than provide a cursory argument that the District Court erred.” [DE 119] at 4.
Owoc argues the Report makes no mention that the first factor requires a “probable showing”
rather than a “substantial showing” unless the moving party demonstrates that “the latter three
factors . . . [are] ‘heavily titled’ in favor of a stay.” Sierra Club v. U.S. Army Corps of Eng'rs, No.
3:05–cv–362–J–32TEM, 2007 WL 402830, at *1 (M.D. Fla. Feb. 1, 2007). But Magistrate Judge
Hunt correctly found that Owoc failed to make the requisite showing for two of those three
factors, let alone that those factors heavily tilt in favor of a stay. Moreover, the Court agrees with
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Plaintiff that the “scheduling or oral argument, on its own, does not establish a substantial
likelihood of success on the merits,” and Owoc has failed to point to any authority suggesting
otherwise. [DE 123] at 4. Owoc’s remaining arguments regarding “numerous anomalies in the
original final judgment” are without merit. See [DE 80] (setting forth the pre-judgment interest
rate and including the phrase “for which sum let execution issue forwith”).
As to the second factor, whether the applicant will be irreparably injured absent a stay,
Magistrate Judge Hunt correctly found that Owoc’s claimed reputational and financial harm is
speculative. The Court agrees with plaintiff that “Owoc fails to identify a single harm that would
directly affect him rather than [Vital Pharmaceuticals, Inc.]” [DE 123] at 5.
As to the fourth factor, the Court is unpersuaded by Owoc’s vague and conclusory
argument that allowing a stay without posting bond “will promote judicial efficiency and provide
guidance to the public regarding anomalies in pre-judgment interest awards and proper
implementations of same.” [DE 121] at 5.
In any event, Owoc’s Objections fail to address, let alone demonstrate, either of the two
circumstances where federal courts have found a bond unnecessary to stay execution. See Avirgan
v. Hull, 125 F.R.D. 185, 186 (S.D. Fla. 1989) (noting the two circumstances where posting a bond
is unnecessary to stay execution: (1) “where the defendant’s ability to pay the judgment is so
plain that the cost of the bond would be a waste of money”; and (2) “where the requirement
would put the defendant’s other creditors in undue jeopardy”). Accordingly, the Court does not
find any reason to depart from the usual bond requirement.
Accordingly, it is ORDERED AND ADJUDGED as follows:
1.

The Report [DE 119] is hereby APPROVED insofar as it applies to Defendant
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John Owoc;
2.

Defendant John Owoc’s Objections [DE 121] are OVERRULED;

3.

Defendant Vital Pharmaceuticals, Inc.’s Objections [DE 122] are DISMISSED AS
MOOT;

4.

Defendants’ Motion to Stay [DE 111] is hereby GRANTED IN PART as to
Defendant John Owoc only;

5.

The Court WILL GRANT a stay of execution pending appeal upon notice that
Defendant John Owoc has posted bond for 110% of the remaining judgment
amount in compliance with S.D. Fla. L.R. 62.1;

6.

Plaintiff’s Motions to Issue Writs of Garnishment After Judgment [DE’s 103, 104,
105] are DENIED WITHOUT PREJUDICE; and

7.

Defendant Vital Pharmaceuticals, Inc. shall file a status report as to the status of
the bankruptcy proceedings on December 12, 2022, and every sixty (60) days
thereafter.

DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County, Florida this
8th day of November, 2022.

Copies furnished to:
Counsel of record
Magistrate Judge Hunt

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