Affordable Care, LLC v. McIntyre et al

Filing 52

ORDER denying 47 Motion to Stay Execution of Judgment Pending Appeal and Fixing Bond Amount. Signed by District Judge Taylor B. McNeel on 7/29/2022. (MS)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
AFFORDABLE CARE, LLC
v.

PLAINTIFF
CIVIL ACTION NO. 1:21-cv-85-TBM-RPM

RAELINE K. McINTYRE, DMD and
RAELINE K. McINTYRE, DMD, P.C.

DEFENDANTS

ORDER DENYING MOTION TO STAY EXECUTION OF JUDGMENT
PENDING APPEAL AND FIXING BOND AMOUNT
BEFORE THE COURT is Affordable Care, LLC’s Motion [47] to Stay Execution of the
Judgment and to Fix Bond Amount. For the following reasons, the Court finds that the Motion
should be denied.
After losing in arbitration, Affordable Care sought to set aside the arbitration award. The
Court denied Affordable Care’s motion to vacate the award and granted Defendants’ motion to
confirm the award. [44] at 33. The Court entered a Final Judgment [45] on March 31, 2022, in
favor of Defendants in the amount of $393,598.75, with post-judgment interest accruing at the
North Carolina legal rate of 8% per annum until the judgment is paid in full. Affordable Care filed
a Notice [46] of Appeal on April 22, 2022. Affordable Care requests the Court stay execution of
the Final Judgment pending resolution of the appeal and further requests that the Court set a
supersedeas bond at $393,598.75, which is the amount of the final judgment excluding postjudgment interest. Defendants object to the amount of the supersedeas bond, since Affordable
Care’s requested amount excludes post-judgment interest—which was specifically included in the
arbitration award—and reasonable costs of appeal. [50] at 2.

Federal Rule of Civil Procedure 62(b) provides that:
At any time after judgment is entered, a party may obtain a stay by providing a bond
or other security. The stay takes 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). The purpose of a supersedeas bond is to “preserve the status quo while
protecting the non-appealing party’s rights pending appeal.” Poplar Grove Planting and Refining
Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1190 (5th Cir. 1979).
“Generally, the bonded amount equals the full amount of the judgment.” United States v.
Stanley, 5:11-cv-117 (DCB) (MTP), 2013 WL 6330505, at *2 (S.D. Miss. Dec. 5, 2013) (citing Poplar
Grove, 600 F.2d at 1191). “Ordinarily, such a bond includes the whole amount of the judgment,
costs, interest, and other amounts unless the court finds good cause for fixing a different amount
for the bond or having the judgment debtor furnish alternative security.” Id. at 2, n.1. See Interstate
Fire & Cas. Co. v. Catholic Diocese of El Paso, EP-12-CV-00221-DCG, 2014 WL 12479411, at *2
(W.D. Tex. Dec. 1, 2014) (finding that judgment debtor is entitled to a supersedeas stay only if it
can post a supersedeas bond in the amount of the judgment, “plus post-judgment interest
anticipated to accrue during the course of the appeal”); Halliburton Energy Servs., Inc. v. NL Indus.,
Civ. Act. Nos. H-05-4160, H-06-3504, 2008 WL 2787247, at *1 (S.D. Tex. July 16, 2008) (citing
Poplar Grove, 600 F.2d at 1191) (noting that while Rule 62(d) does not precisely define the
“amounts and conditions of a supersedeas bond” like its predecessor of Rule 74(c), the Fifth
Circuit has read it consistently with the earlier rule). “However, the district court has inherent
discretionary authority to set the amount of the bond.” Stanley, 2013 WL 6330505, at *2 (citing
Poplar Grove, 600 F.2d at 1191).

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“It is the judgment debtor’s burden to demonstrate that posting a full bond is impossible
or impractical; similarly, it is the moving party’s duty to propose a plan that will provide adequate
(or as adequate as possible) security for the judgment creditor.” Stanley, 2013 WL 6330505, at *2
(citing Poplar Grove, 600 F.2d at 1191). “If a court chooses to depart from the usual requirement
of a full security supersedeas bond,” the burden is on the moving party to “objectively
demonstrate” that posting a full bond would impose an undue financial burden. Preston Wood &
Assoc., LLC v. Cameron Architects, Inc., Civ. Act. No. H-16-1427, 2019 WL 2904297, at *2 (S.D.
Tex. Apr. 26, 2019) (quoting Poplar Grove, 600 F.2d at 1191). “Conclusory and self-serving
evidence produced by the judgment debtor is insufficient to satisfy the judgment debtor’s burden
to objectively demonstrate an undue financial burden.” Preston Wood, 2019 WL 2904297, at *2.
“It is not the burden of the judgment creditor to initiate contrary proof.” Poplar Grove, 600 F.2d
at 1191.
In determining whether to waive the usual requirement of the supersedeas bond, the Court
may consider a number of relevant factors, such as “(1) the complexity of the collection process;
(2) the amount of time required to obtain a judgment after it is affirmed; (3) the degree of
confidence that the district court has in the availability of funds to pay the judgment; (4) whether
the [debtor’s] ability to pay the judgment is so plain that the cost of a bond would be a waste of
money; and (5) whether the [debtor] is in such a precarious financial situation that the requirement
to post a bond would place other creditors [] in an insecure position.” Stanley, 2013 WL 6330505,
at *2 (quoting Superior Derrick Serv’s, LLC v. Lonestar 203, Civ. Act. No. 6:09-0484, 2012 WL
4094513, at *2 (W.D. La. Sept. 17, 2012)).

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Here, both the arbitration award and the Court’s Final Judgment—clearly specified that
post-judgment interest would accrue at the North Carolina legal rate of 8% per annum until the
judgment is paid in full. See [16-38] at 115; [45]. So the amount of the judgment is $393,598.75 plus
post-judgment interest. According to Defendants’ calculations, post-judgment interest was
$35,887.57 as of the date of filing, with an additional $25,880.47 of interest accruing through an
estimated appeal period of ten months. [50] at 2. Defendants also request that the bond amount
include the estimated costs of appeal, in the amount of $2,000, as provided in FED. R. APP. P. 7.
Id. In sum, Defendants request that the Court set bond at an amount of $457,366.79, instead of
the amount proposed by Affordable Care, $393,598.75, which excludes post-judgment interest and
any costs associated with the appeal.
In its motion, Affordable Care provides no evidence or support for its request that “the
Court set the bond amount at $393,598.75, or identify another amount or security to enable the
execution of the Judgment to be stayed until the resolution of Affordable’s appeal.” [47] at 2. In
its reply, Affordable Care makes the statement that “Defendants will be more than adequately
protected if Affordable posts a bond equaling the amount of the full judgment.” [51] at 1.
Affordable Care argues that the Defendants have “made no showing or argument that Affordable
is anything other than financially solvent or that they will not be adequately protected pending
resolution of the appeal by the bond amount suggested by Affordable.” Id. Finally, Affordable Care
makes the conclusory statement that its “financial solvency is secure and beyond question.” Id. at
2.
The Court rejects Affordable Care’s proposal for two reasons. First, Affordable Care fails
to submit evidence to justify a departure from the usual requirement of a full security supersedeas

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bond in order to stay execution of the judgment. Affordable Care offered no evidence in support of
its conclusion that its “financial solvency is secure and beyond question.” See Stanley, 2013 WL
6330505, at *2 (holding that defendant failed to show that approval of a bond less than the full
judgment amount would protect the plaintiff’s interests where defendant failed to produce any
evidence as to his present financial condition); Bollore, S.A. v. Import Warehouse, Inc., No. 3-99-cv1196-R, 2004 WL 1873069, at *1 (N.D. Tex. Aug. 19, 2004) (rejecting defendant’s request to
reduce bond where defendant did not produce any evidence such as audited financial statements
and net worth information to demonstrate hardship). Second, the burden is not on the Defendants
to show that Affordable Care is not financially solvent. See Poplar Grove, 600 F.2d at 1191. Rather,
the burden is on Affordable Care to “propose a plan that will provide adequate (or as adequate as
possible) security for the judgment creditor.” Stanley, 2013 WL 6330505, at *2 (citing Poplar
Grove, 600 F.2d at 1191). And Affordable Care’s “[c]onclusory and self-serving” statement that
its “financial solvency is secure and beyond question” is insufficient to satisfy that burden. Preston
Wood, 2019 WL 2904297, at *2; [51] at 2. Therefore, Affordable Care has not sufficiently
demonstrated the need for a departure from the normal supersedeas bond requirement.
For the foregoing reasons, the Court denies Affordable Care’s request to set the bond
amount at $393,598.75 and to stay execution of judgment. However, Affordable Care is entitled to
a supersedeas stay if it posts an amount sufficient to cover the entire amount of judgment—which
here includes interest at the North Carolina rate of 8% per annum—and estimated costs of appeal.
Therefore, the Court shall, in the event Affordable Care wishes to post a full supersedeas bond in
the appropriate amount, grant a stay conditioned upon Affordable Care obtaining the bond. The
Defendants have submitted their calculation of the full amount of the judgment plus costs, which

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would set bond at $457,366.79. It is unclear whether Affordable Care disputes the Defendants’
calculations for post-judgment interest and costs.
IT IS THEREFORE, ORDERED AND ADJUDGED that Affordable Care’s Motion [47]
to Stay Execution of the Judgment and to Fix the Bond Amount is DENIED.
IT IS FURTHER ORDERED AND ADJUDGED that, in the alternative, the Court shall
grant a stay conditioned upon Affordable Care obtaining a full supersedeas bond in the amount of
$393,598.75 plus post-judgment interest—as specified in the Final Judgment—and costs. The
parties are ordered to confer to attempt to reach an agreement on the post-judgment interest
calculation and costs.
THIS, the 29th day of July, 2022.

__________________________________
TAYLOR B. McNEEL
UNITED STATES DISTRICT JUDGE

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