Riley v. Sun Life and Health Insurance et al

Filing 102

ORDER denying 91 the Motion for Protective Order and Renewed Motion to Stay. Ordered by Chief Judge Laurie Smith Camp. (MSS)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
JAMES RILEY,
Plaintiff,
v.
SUN LIFE AND HEALTH INSURANCE
CO., f/k/a GENWORTH
LIFE AND HEALTH INSURANCE
CO., and GROUP LONG TERM
DISABILITY INSURANCE,
Defendants.

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CASE NO. 8:09CV303

MEMORANDUM
AND ORDER

This matter is before the Court on the Motion for Protective Order and Renewed
Motion to Stay (Filing No. 91) filed by Defendant Sun Life and Health Insurance Co. and
Defendant Group Long Term Disability Insurance. The Court has considered the briefs
(Filing Nos. 92, 95, 97, 101) submitted in support of the parties’ positions. For the reasons
discussed below, the Motion will be denied.
PROCEDURAL HISTORY
On August 31, 2009, Plaintiff James Riley filed suit in this Court alleging that the
Defendants inappropriately reduced Riley’s benefits under a long-term disability benefits
plan by deducting the amount of benefits he received from the Veterans Administration.
(Filing No. 1, at ¶¶ 9-19.) On June 18, 2010, this Court entered summary judgment in favor
of the Defendants and dismissed Riley’s Complaint, with prejudice. (Filing Nos. 46, 47.)
Riley appealed, and on October 7, 2011, the Eighth Circuit entered its Opinion and
Judgment, reversing this Court’s decision and remanding for proceedings consistent with
its Opinion. (Filing Nos. 58, 59.) The Eighth Circuit also granted, in part, Riley’s Motion for
Appellate Attorney Fees and Costs. (Filing No. 65.)

On November 22, the Eighth Circuit denied the Defendants’ petition for rehearing
en banc and petition for rehearing by the panel. (Filing No. 63.) On November 29, 2011,
the Eighth Circuit issued its Mandate. (Filing No. 64.) The Defendants filed a Motion to
Stay the Mandate shortly thereafter. The Eighth Circuit construed the Motion to Stay the
Mandate as a motion to recall the mandate, and denied the Motion. (Filing No. 66.)
On December 1, 2011, this Court entered its Judgment in favor of Riley and ordered
the Defendants to pay Riley’s appellate fees and costs. (Filing No. 67.) On January 19,
2012, the Court denied the Defendants’ request to stay the Judgment while they petitioned
the United States Supreme Court for a writ of certiorari. (Filing No. 85, at 2; see Filing No.
87, at 2.) On February 15, 2012, the Defendants filed their petition with the United States
Supreme Court, and on February 17, 2012, the petition was placed on the Supreme Court’s
docket. (Filing No. 96.)
Also on February 17, 2012, the Defendants filed the present Motion. In their Motion,
the Defendants seek a protective order preventing the Deposition of Sun Life.1 The
Defendants also request that the Court stay the Judgment while their petition with the
Supreme Court is pending, or until the Supreme Court decides the Defendants’ motion to
stay the judgment. (Filing No. 91.) Nothing in the record indicates that the Defendants
have filed a motion to stay with the Supreme Court. The Defendants have indicated that
they obtained a supersedeas bond in the amount of $100,000.00. (Filing No. 93-3, Ex. C.)

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Riley has withdrawn his Notice to Take Deposition (Filing Nos. 89, 98), rendering
moot the portion of the Defendants’ Motion that seeks a protective order.
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STANDARD
Federal Rule of Civil Procedure 62(d) states that “[i]f an appeal is taken, the
appellant may obtain a stay by supersedeas bond . . . 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). “A party must ordinarily
move . . . in the district court. . . for . . . approval of a supersedeas bond.” Fed. R. App. P.
8(a). Generally, “a party taking an appeal from the District Court is entitled to a stay of a
money judgment as a matter of right if he posts a bond in accordance with Fed. R. Civ. P.
62(d).” Am. Mfrs. Mut. Ins. Co. v. Am. Broad.-Paramount Theatres, Inc., 87 S. Ct. 1, 3
(1966); see also Brinkman v. Dep’t of Corrections of the State of Kan., 815 F. Supp. 407,
408 (D. Kan. 1993) (citing Hebert v. Exxon Corp., 953 F.2d 936, 938 (5th Cir.1992); Am.
Mfrs. Mut. Ins. Co., 87 S.Ct. at 2) (“Under Rule 62(d), an appellant has a right to stay the
enforcement of a money judgment upon posting a supersedeas bond.”); El-Tabech v.
Clarke, No. 4:04CV3231, 2009 WL 3352829, *1 (D. Neb, Oct. 16, 2009) (citing Fed. R. Civ.
P. 62(d)) (“Under the federal rules, a party is entitled to a stay if a supersedeas bond is
posted.”); 1 Charles Alan Wright et al., Federal Practice and Procedure § 2905 (2d ed.
2011). However, “‘[a] supersedeas bond is a privilege extended the judgment debtor as a
price of interdicting the validity of an order to pay money.’” See Brinkman, 815 F. Supp.
at 410 (alteration in original) (quoting Poplar Grove v. Bache Halsey Stuart, Inc., 600 F.2d
1189, 1191 (5th Cir.1979)).
Because “[a] supersedeas bond secures the appellee from loss resulting from the
stay of execution . . . courts normally require a full supersedeas bond.” Id. at 408 (citing
Miami Intern. Realty Co. v. Paynter, 807 F.2d 871, 873 (10th Cir.1986)). If a party does not
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post a supersedeas bond in accordance with Rule 62(d), it “may move that the district court
employ its discretion to waive the bond requirement.” Dillon v. City of Chicago, 866 F.2d
902, 904 (7th Cir. 1988) (citing N. Ind. Pub. Serv. Co. v. Carbon Cnty. Coal Co., 799 F.2d
265, 281 (7th Cir. 1986)); see also El-Tabech, 2009 WL 3352829, at *1 (citing Dillon, 866
F.2d at 904).
DISCUSSION
The Defendants contend that the $100,000.00 supersedeas bond they obtained is
sufficient to secure Riley from any loss that might result from staying the execution of the
Judgment because the bond exceeds the $89,429.59 the Defendants owe pursuant to the
Judgment, and allows interest to accrue and still be secured by the bond. The Judgment
indicates that the Defendants owe Riley approximately $89,000.00 to compensate him for
previously unpaid benefits and to pay for the attorney’s fees and costs he incurred during
the course of this litigation, together with post-judgment interest on all unpaid amounts from
the time the Judgment was entered. The Judgment, however, also indicates that the
Defendants must continue to pay Riley the benefits due him under the plan without any
offset for the benefits he receives from the Veteran’s Administration, assuming Riley meets
the terms and conditions for receipt of the benefits under the plan. (Filing No. 88.) It is
unclear whether the supersedeas bond takes into account the Defendants’ continuing
obligation to pay Riley benefits under the plan; therefore, it is also unclear whether the bond
is adequate to protect Riley from the loss that would result if execution of the Court’s
Judgment were stayed, especially if the Defendants have failed to resume making monthly
benefit payments as Riley has indicated. (Filing No. 101, at 4.)

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As a result, this Court will not approve the Defendants’ supersedeas bond, see Fed.
R. Civ. P. 62(d); see also Brinkman, 815 F. Supp. at 410, or “employ its discretion to waive
the bond requirement.” Dillon, 866 F.2d at 904 (citing Carbon Cnty. Coal, 799 F.2d at 281);
see also El-Tabech, 2009 WL 3352829, at *1 (citing Dillon, 866 F.2d at 904). Whether the
Defendants would obtain a larger bond if requested to do so does not change this result.
Unlike a direct appeal, review on certiorari is not a matter of right, and such reviews are
rarely granted. Both the Eighth Circuit and this Court already have denied motions to stay,
and for Riley to forego receipt of the benefits at issue pending the Supreme Court’s review
of the Defendants’ petition for certiorari likely would work a hardship on him. As the
Defendants are aware, they may seek a stay of judgment with the Supreme Court. See 11
U.S.C. § 2101(f); Sup. Ct. R. 23.
Accordingly,
IT IS ORDERED that the Motion for Protective Order and Renewed Motion to Stay
(Filing No. 91) is denied.
DATED this 7th day of March, 2012.
BY THE COURT:

s/Laurie Smith Camp
Chief United States District Judge

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