Klingenberg et al v. Vulcan Ladder USA, LLC et al--DEFT GP INTERNATIONAL CO LLC TERMED WITH #107 ORDER
ORDER granting in part and denying in part #122 Motion to Stay Execution of Judgment. Execution of judgment shall be stayed for ten days, at which time the stay will be lifted unless Defendants have posted a supersedeas bond in the full judgment amount. Upon the filing by Defendants Vulcan and GP International of a supersedeas bond in the amount of $2,434,000, execution of the judgment shall be stayed until this court has resolved Defendants Vulcan and GP Internationals post-trial motions for a new trial and for judgment as a matter of law. While the stay is in effect, the Klingenbergs may not execute the judgment or institute any proceedings to enforce the judgment. Signed by Magistrate Judge Kelly Mahoney on 10/25/2017. (des)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
JEFFREY KLINGENBERG and
VULCAN LADDER USA, LLC; and
G.P. INTERNATIONAL COMPANY
This case involves claims brought by Plaintiffs Jeffrey and Jennifer Klingenberg
against Defendants Vulcan Ladder USA, LLC (Vulcan) and GP International Company
(GP International) for injuries sustained from a ladder the Defendants manufactured,
designed, distributed, and sold. After a four-day jury trial, the jury found in favor of the
Defendants on Plaintiffs’ design defect claim and in favor of Plaintiffs on their breach of
express warranty claim, and the jury awarded Plaintiffs $2,434,000 in damages. Docs.
115, 117. Judgment in that amount was entered on September 29, 2017 (Doc. 119),
execution of which was automatically stayed for fourteen days under Federal Rule of
Civil Procedure 62(a). Vulcan and GP International now move for a stay of execution
of judgment pending resolution of their to-be-filed post-trial motions and request that the
stay be unsecured. Doc. 122. Plaintiffs resist. Doc. 125. I grant the motion in part
and deny the motion in part.
Under Federal Rule of Civil Procedure 62(b), the court has discretion1 to stay
execution of judgment pending the resolution of post-trial motions “[o]n appropriate
terms for the opposing party’s security.” See also, e.g., Nunley v. Ethel Hedgeman Lyle
Acad., No. 4:08-CV-1664 CAS, 2010 WL 501465, at *1-2 (E.D. Mo. Feb. 8, 2010).
“The district court may only stay execution of judgment pending the disposition of certain
post-trial motions . . . if the court provides for the security of the judgment creditor.”
Peacock v. Thomas, 516 U.S. 349, 359 n.8 (1996).2 “[A] supersedeas bond is the
standard form of security . . . .” S. Wine & Spirits of Nev. v. Mountain Valley Spring
Co., No. 08-6100, 2010 WL 11512359, at *2 (W.D. Ark. Jan. 28, 2010); see also Am.
Family Mut. Ins. Co. v. Miell, No. C04-0142, 2008 WL 746604, at *1 (N.D. Iowa Mar.
19, 2008). The purpose of the security requirement “is to preserve the status quo while
protecting the [opposing] party’s rights.” Am. Family, 2008 WL 746604, at *1. “[T]he
amount of the [supersedeas] bond usually will be set in an amount that will permit
satisfaction of the judgment in full, together with costs, interest, and damages for delay.”
Skrovig v. BNSF Ry. Co., No. CIV. 10-4022, 2012 WL 2505749, at *2 (D.S.D. June
The four-factor test cited by the parties applies only to stays of execution of judgments involving
injunctive or similar relief, not monetary relief. See, e.g., Knutson v. AG Processing, Inc., 302
F. Supp. 2d 1023, 1027, 1032-1035 (N.D. Iowa 2004) (while addressing stay pending appeal,
applying four-factor test only to that part of the judgment ordering that plaintiff’s employment
be reinstated, but not to that part of the judgment involving money damages); see also, e.g.,
Reserve Mining Co. v. United States, 498 F.2d 1073, 1076-77 (8th Cir. 1974) (noting standards
for stays of injunctive relief under Rule 62); Long v. Robinson, 432 F.2d 977, 978-79 (4th Cir.
1970) (applying four-factor test to deny a stay pending appeal of a judgment that declared a
statute unconstitutional and that ordered some prisoners released to other authorities).
Peacock cites the prior version of Rule 62(b), which required the court to issue a stay “on such
conditions for the security of the adverse party as are proper.” 516 U.S. at 359 n.8. “The rule
was amended as part of the general restyling of the Civil Rules,” and “[t]he change was intended
to be stylistic only.” Am. Family Mut. Ins. Co. v. Miell, No. C04-0142, 2008 WL 746604, at
*1 n.1 (N.D. Iowa Mar. 19, 2008) (citing Fed. R. Civ. P. 62 advisory committee’s note to 2007
28, 2012) (alterations in original) (quoting Wright, Miller & Kane, Federal Practice and
Procedure Civil § 2905 at 522).
“Rule 62, taken in its entirety, indicates a policy against any unsecured stay of
execution after the expiration of” the fourteen-day automatic stay in Rule 62(a).
Ssangyong (U.S.A.), Inc. v. Innovation Grp., Inc., No. 3-96-CV-10165, 2000 WL
1339229, at *1 (S.D. Iowa Aug. 10, 2000). “[A] full supersedeas bond should be the
requirement in normal circumstances, such as where there is some reasonable likelihood
of the judgment debtor’s inability or unwillingness to satisfy the judgment in full upon
ultimate disposition of the case and where posting adequate security is practicable.”
Skrovig, 2012 WL 2505749, at *2 (quoting Fed. Prescription Serv., Inc. v. Am. Pharm.
Ass’n, 636 F.2d 755, 760 (D.C. Cir. 1980)).
Nevertheless, the court may, in its
discretion, dispense with the requirement of a supersedeas bond in certain instances. See
id. at *2 (“If a judgment debtor objectively demonstrates a present financial ability to
facilely respond to a money judgment and presents to the court a financially secure plan
for maintaining that same degree of solvency . . . , the court may then exercise [its]
discretion to substitute some form of guaranty of judgment responsibility for the usual
supersedeas bond.” (quoting Poplar Grove Planting & Ref. Co., 600 F.2d 1189, 1190
(5th Cir. 1979))); S. Wine & Spirits, 2010 WL 11512359, at *2 (“Alternative forms of
security have been found appropriate (1) where the judgment debtor’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.” (citing
Olympia Equip. Leasing Co. v. W. Union Tel. Co., 786 F.2d 794, 796 (7th Cir. 1986)));
Am. Family, 2008 WL 746604, at *2 (recognizing that an unsecured stay may be granted
if the defendant affirmatively demonstrates “posting a bond or otherwise providing
adequate security is impossible or impractical” (quoting Int’l Wood Processors v. Power
Dry, Inc., 102 F.R.D. 212, 214 (D.S.C. 1984))); Ssangyong, 2000 WL 1339229, at *1
(“[A] stay without bond may be granted ‘if doing so does not unduly endanger the
judgment creditor’s interest in ultimate recovery.’” (quoting Texaco, Inc. v. Pennzoil
Co., 784 F.2d 1133, 1155 (2d Cir.1986))). The burden is on the party seeking the stay
to prove that a supersedeas bond should not be required. See Am. Family, 2008 WL
746604, at *2; see also Poplar Grove, 600 F.2d at 1191.
For example, in Federal Prescription Services, the D.C. Circuit upheld the district
court’s grant of an unsecured stay of execution of judgment pending appeal3 when the
judgment was for $102,000, and the judgment debtor had a net worth of about 47 times
that amount and was a long-time resident of the District of Columbia. 636 F.2d at 761.
The Seventh Circuit has also upheld an unsecured stay of judgment pending appeal when
a supersedeas bond would have cost almost $2 million, the judgment creditor’s net worth
was five times the judgment amount, the judgment debtor was “[a] public utility . . . in
no financial jeopardy [and] not about to place its assets beyond the reach of th[e] judgment
creditor,” and the judgment debtor was required to submit periodic financial reports to
the court so that it could “monitor the company’s financial health.” N. Ind. Pub. Serv.
Co. v. Carbon Cnty. Coal Co., 799 F.2d 265, 281 (7th Cir. 1986).
More often than granting an unsecured stay, courts grant a stay and require
alternative security other than a supersedeas bond in the full judgment amount. For
example, courts have allowed judgment debtors to post real estate holdings instead of a
supersedeas bond in certain instances. See, e.g., Athridge v. Iglesias, 464 F. Supp. 2d
19, 23-25 (D.D.C. 2006) (allowing defendants to post real estate holdings valued at $7.1
million as security pending appeal for a judgment of about $5.6 million when the
defendants and their insurance company disputed who was responsible for paying the cost
A supersedeas bond is also usually required to obtain a stay of execution of judgment pending
appeal, and similar considerations apply when determining whether to dispense with the bond
requirement pending appeal or pending resolution of post-trial motions.
of a supersedeas bond); Brooktree Corp. v. Advanced Micro Devices, Inc., 757 F. Supp.
1101, 1103-05 (S.D. Cal. 1990) (when a supersedeas bond in the judgment amount would
cost $750,000 and the defendant’s net worth was 20 times the amount of judgment, the
court did not require the defendant to post a supersedeas bond to obtain a stay pending
appeal, but instead required the defendant to provide real property security with a value
of twice the amount of judgment); see also Olympia Equip., 786 F.2d at 795-96, 799
(when plaintiffs obtained a $36 million judgment, a supersedeas bond was not required
for a stay pending appeal when defendants argued they would not be able to obtain such
a bond due to their shaky financial situation, but the court upheld an alternative security
requirement of “a pledge of $10 million in cash, $10 million in accounts receivables, and
a security interest” in physical assets valued at $70 million, as well as ordered that the
defendant could not make cash transfers to its parent company unless the parent company
agreed to be bound by the judgment). A court has also allowed a defendant to post an
irrevocable letter of credit rather than a supersedeas bond when the defendant had great
“financial strength” and could obtain a letter of credit for less than half the cost of a
bond. See Gaus v. Conair Corp., No. 94 Civ. 5693(FM), 2003 WL 542652, at *2
(S.D.N.Y. Feb. 14, 2003). A court has also allowed the posting of a supersedeas bond
in less than the full judgment amount ($500,000 bond for a $1.5 million judgment) when
the defendant’s net worth was $40 million, but his assets were tied up in real estate
holdings. American Family, 2008 WL 746604, at *1-3.
On the other hand, courts also sometimes reject a defendant’s request to post
anything less than a supersedeas bond in the full judgment amount. In Southern Wine,
the court rejected the defendant’s request to post a letter of credit instead of a supersedeas
bond because the court had concerns about the alternative security, and the defendant had
not proven that the cost of a supersedeas bond would place its creditors in undue jeopardy.
2010 WL 11512359, *2-3. In Skrovig, the court held that the $2 million judgment should
be secured by a supersedeas bond, despite evidence that the defendant’s revenues were
more than $3 billion annually, in part because the defendant refused to agree to pay any
judgment affirmed on appeal within thirty days. 2012 WL 2505749, at *1-5. And in
Poplar Grove, the Fifth Circuit reversed the district court’s finding that a $10,000
supersedeas bond could secure a more than $270,000 judgment pending appeal because
the record contained “no evidence which would permit a court to objectively determine
that [the judgment debtor] is presently capable of responding to the judgment” nor that
its “financial condition is so impaired that it would have difficulty in securing a
supersedeas bond in an amount sufficient to fully protect” the judgment creditor’s rights.
600 F.2d at 1190-91.
Here, as in Poplar Grove, no evidence or argument demonstrates that anything
less than a supersedeas bond in the full judgment amount should be required. The only
argument Defendants set forth in support for their request for an unsecured stay is that
the briefing period for post-trial motions is short. Doc. 122-1 at 6. Defendants also state
in their brief that their insurance policy covers only $1,000,000. Doc. 122-1 at 5.
Defendants make no representations regarding their net worth or ability to pay the full
judgment amount, and they do not propose any alternative security options to a
On this record, the Defendants have not demonstrated that an
unsecured stay of execution of judgment should be granted.4 I will grant Defendants’
request for a stay of execution of judgment, but deny Defendant’s request that no security
be required. I will require Defendants to post a supersedeas bond in the full judgment
amount to secure the judgment (I will not require the bond to include post-trial interest
Moreover, Defendant GP International is a Chinese entity, which may make the collection
process difficult. See Skrovig, 2012 WL 2505749, at *3 (complexity of collection process is a
factor to consider); cf. Federal Prescription Services, 636 F.2d at 757-58 (relying in part on fact
that the judgment debtor was a long-time resident of the District of Columbia in upholding an
at this time). I will stay execution of the judgment for ten days from the date of this
order and then, upon filing of a supersedeas bond, until resolution of the anticipated posttrial motions. If a supersedeas bond is not filed within ten days from the date of this
order, the stay shall be lifted until Defendants file a supersedeas bond.
Defendants argue that securing a bond can take up to thirty days, relying on
Ssangyong. In that case, the judgment debtor represented to the court that it was in the
process of obtaining a bond in the full judgment amount, but because the judgment was
so large (more than $7.4 million), its insurance carriers relayed that it would be thirty
days before the full judgment amount could be posted. 2000 WL 1339229, at *1. In the
meantime, the judgment debtor agreed to post a $100,000 bond. Id. at *1 n.1. Here,
Defendants have made no representations regarding the steps they have taken to secure a
bond in the amount of judgment. Neither have they agreed to post a bond in some amount
less than the full judgment amount. Ssangyong is inapplicable.
Defendants’ motion to stay execution of the judgment (Doc. 122) is granted in
part and denied in part. Execution of judgment shall be stayed for ten days, at which
time the stay will be lifted unless Defendants have posted a supersedeas bond in the full
judgment amount. Upon the filing by Defendants Vulcan and GP International of a
supersedeas bond in the amount of $2,434,000, execution of the judgment shall be stayed
until this court has resolved Defendants Vulcan and GP International’s post-trial motions
for a new trial and for judgment as a matter of law. While the stay is in effect, the
Klingenbergs may not execute the judgment or institute any proceedings to enforce the
IT IS SO ORDERED this 25th day of October, 2017.
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