Jo Ann Howard and Associates, P.C. et al v. Cassity et al

Filing 2447

MEMORANDUM AND ORDER (See Full Order) IT IS HEREBY ORDERED that PNC Bank's Motion to Stay Judgment [ECF No. 2415 ] is GRANTED. Signed by District Judge E. Richard Webber on 7/21/15. (EAB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

JO ANN HOWARD &
ASSOCIATES, P.C., et al.,
Plaintiffs,
vs.
J. DOUGLAS CASSITY, et al.,
Defendants.

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Case No. 4:09CV01252 ERW

MEMORANDUM AND ORDER
This matter comes before the Court on PNC Bank’s Motion to Stay Judgment [ECF No.
2415].
I.

BACKGROUND
Plaintiffs filed suit asserting a wide variety of claims against various defendants,

including, but not limited to, claims for violations of the Racketeer Influenced and Corrupt
Organizations (“RICO”) Act, 18 U.S.C. §§ 1961-1968, violations of the Lanham Act, 15 U.S.C.
§§ 1051-1141n, state law claims concerning intentional and negligent fraudulent
misrepresentations, negligence and gross negligence, breach of fiduciary duties, and violations of
the Texas Receivership Act, Tex. Ins. Code §§ 443.202-443.205 [ECF No. 916]. Only two
defendants, PNC Bank and Forever Enterprises, remained at the start of trial in February, 2015.
The jury returned a verdict for Plaintiffs and against Defendants in the amount of
$391,050,000.00 against PNC Bank and $100,000,000.00 against Forever Enterprises. Judgment
was entered on March 9, 2015 [ECF No. 2306]. Defendant PNC Bank seeks an order staying
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execution or enforcement of the judgment, pursuant to Federal Rule of Civil Procedure
(“FRCP”) 62(b) and 62(d), pending determination of their Rule 50(b) motion for judgment, Rule
59(a) motion for new trial, and Rule 59(e) motion to amend or alter judgment or until such time
as an appeal can be taken.
II.

LEGAL STANDARD
A party may obtain a stay of judgment by posting an adequate supersedeas bond. Am.

Mfrs. Mut. Ins. Co. v. Am. Broadcasting Paramount Theaters, Inc., 87 S.Ct. 1 (1996); Fed. R.
Civ. Pro. 62(b). Rule 62(d) of the Federal Rules of Civil Procedure, provides that:
[i]f an appeal is taken, the appellant may obtain a stay by supersedeas bond,
except in an action described in Rule 62(a)(1) or (2). The bond may be given
upon or after filing the notice of appeal or after obtaining the order allowing
the appeal. The stay takes effect when the court approves the bond.
Fed. R. Civ. P. 62(d). “With respect to money judgments, Rule 62(d) has been interpreted to
mean that an appellant may obtain a stay of the money judgment during the pendency of the
appeal as a matter of right by posting an adequate supersedeas bond.” United States v. Mansion
House Ctr. Redevelopment Co., 682 F. Supp. 446, 449 (E.D. Mo. 1988) (citing Am. Mfrs. Mut.
Ins. Co. v. Am. Broad.-Paramount Theatres, Inc., 87 S. Ct. 1 (1966)). “‘The general rule is for
the district court to set a supersedeas bond in the full amount of the judgment plus interests,
costs, and damages for delay.’” New Access Commc’ns LLC v. Qwest Corp., 378 F. Supp. 2d
1135, 1138 (D. Minn. 2005) (quoting Adzick v. Unum Life Ins. Co. of Am., 2003 WL 21011345,
at *1 (D. Minn. Apr. 16, 2003)). While “[a] full supersedeas bond is the norm,” a district court
does have discretion to waive the bond requirement or to only require a partial bond, while still
implementing a stay of the judgment pending appeal. Mansion House, 682 F. Supp. at 449

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(citing Miami Int’l Realty Co. v. Paynter, 807 F.2d 871, 873 (10th Cir. 1986); see also New
Access, 378 F. Supp. 2d at 1138 (quoting Adzick, 2003 WL 21011345, at *1).
III.

DISCUSSION
A.

National Bank Act

PNC Bank argues a stay of execution of judgment is required by the National Bank Act,
specifically 12 U.S.C. § 91 which states “no attachment, injunction, or execution, shall be issued
against such [national banking] association or its property before final judgment in any suit,
action, or proceeding, in any state, county, or municipal court.” The Supreme Court has held §
91 applies to federal and state courts and all national banks, regardless of their solvency. Pac.
Nat’l Bank of Boston v. Mixter, 124 U.S. 721, 727 (1888); Third Nat’l Bank v. Impac Ltd., Inc.,
432 U.S. 312, 319 (1977).
Case law is mixed on the application of § 91, specifically on the meaning of “final
judgment.” The Fifth Circuit has ruled “final judgment” in § 91 means “a judgment on the
merits which is no longer subject to examination on appeal.” United States v. Lemaire, 826 F.2d
387, 390 (5th Cir. 1987). However, other courts have held “final judgment” means the same as it
does in FRCP 54 which is a judgment is final when it is appealable. Quinones v. Chase Bank
USA, N.A., Civil No. 09CV2748-AJB (BGS), 2012 WL 1473351 at *2 (S.D. Cal. Apr. 27, 2012).
Whereas other courts have determined a supersedeas bond is not prohibited by § 91 because it is
not an attachment, execution, or injunction. United States v. Theos, 709 F. Supp. 1007, 1010 (D.
Colo. 1989). Secondary authority follows the Fifth Circuit and holds § 91 exempts national
banks from federal and state bond requirements. See James R. Brown, Judgment Enforcement §
1.05[A] (3d ed. 2015); Mary Ann Jenkins & George Brandon, Appeals Bond Exemption for
National Banks, 123 Banking L.J. 387, 397 (2006). This Court finds the reasoning of the Fifth
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Circuit persuasive and holds § 91 exempts national banks from posting a bond until the appeals
process is completed. PNC Bank will not be required to post a bond while the enforcement of
the judgment is stayed pending post-judgment motions and appeals.
B.

Waiver of Bond Requirement

Even if this Court concluded § 91 did not apply to judgments pending appeal, PNC Bank
would not be required to post a supersedeas bond because this Court waives it. When deciding
whether to waive a bond, there are several factors for the Court to consider: 1) complexity of the
collection process, 2) amount of time required to obtain a judgment on appeal, 3) degree of
confidence the district court has in the ability of the party seeking waiver to pay the judgment, 4)
whether ability to pay the bond is so plain the cost of the bond would be a waste, and 5) whether
the party seeking waiver is in such a precarious financial situation the bond would place other
creditors in an insecure position. Exec. Air Taxi Corp. v. City of Bismarck, N. Dakota, No. 1:04CV-56, 2007 WL 559819 at *1 (D. N.D. Feb. 14, 2007); see also Dillon v. City of Chicago, 866
F.2d 902, 904 (7th Cir. 1988); Augustin v. Nassau Cnty Sherriff’s Dep’t, 783 F.3d 414, 417-18
(2d Cir. 2015). As a whole, these factors weight in PNC Bank’s favor. The collection process is
fairly simple as PNC Bank is a public traded company, based in the United States. This Court
has confidence PNC bank has the ability to pay the judgment and believes PNC Bank’s ability to
pay the bond is “so plain,” the cost of a bond is a waste. However, the amount of time required
to obtain a judgment on appeal weighs in Plaintiffs’ favor as the appeals process most likely will
take well more than a year to complete. The final factor is inapplicable as the Court has found
PNC Bank has an obvious ability to pay the judgment, it is clearly not in a precarious financial
situation. Weighing these factors, the Court finds PNC Bank is not required to post a bond
pending post-judgment motions and appeals.
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IV.

CONCLUSION
Section 91 of the National Bank Act requires a stay of execution of judgment, without

posting of bond, until the appeals process has been completed. Even if a bond was not
prohibited by the National Bank Act, this Court waives the bond requirement for a stay of
execution of judgment pending disposition of post-trial motions and appeals.
Accordingly,
IT IS HEREBY ORDERED that PNC Bank’s Motion to Stay Judgment [ECF No.
2415] is GRANTED.
So Ordered this 21st day of July, 2015.

E. RICHARD WEBBER
SENIOR UNITED STATES DISTRICT JUDGE

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