Zalewski et al v. T.P. Builders, Inc. et al

Filing 229

MEMORANDUM-DECISION and ORDER - That plaintiffs' motion (Dkt. No. 217) is GRANTED in part and DENIED in part as follows: 1. GRANTED to the extent that they seek a stay of execution of the money judgment entered against them, but only if they po st a supersedeas bond, in accordance with the Federal and Local Rules of Practice, in the amount of $137,768.30, plus eleven percent to cover interest and any damage for delay as may be awarded, plus $250 to cover costs. 2. DENIED to the e xtent that they seek a waiver or reduction of the supersedeas bond under Federal Rules of Civil Procedure 62(d). That DeRaven's motion (Dkt. No. 218) is GRANTED to the extent that it seeks a $5,000.00 bond to cover costs on appeal. That plaintiffs shall post a $5,000.00 bond under Federal Rule of Appellate Procedure 7 to cover DeRaven's costs on appeal. That T.P.'s motion (Dkt. No. 224) is GRANTED to the extent that is seeks a $5,000.00 bond to cover costs on appeal. That plaintiffs shall post a $5,000 bond under Federal Rules of Appellate Procedure 7 to cover T.P.'s costs on appeal. Signed by Chief Judge Gary L. Sharpe on 12/21/2012. (jel, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________
JAMES E. ZALEWSKI et al.,
Plaintiffs,

1:10-cv-876
(GLS/RFT)

v.
T.P. BUILDERS, INC. et al.,
Defendants.
________________________________
APPEARANCES:
OF COUNSEL:
FOR THE PLAINTIFFS:
Lee Palmateer Law Office LLC
90 State Street, Suite 700
Albany, NY 12207
FOR THE DEFENDANTS:
T.P. Builders and Thomas Paonessa
Schmeiser, Olsen Law Firm
22 Century Hill Drive
Suite 302
Latham, NY 12110
Roxanne K. Heller
and DeRaven Design & Drafting
Heslin, Rothenberg Law Firm
5 Columbia Circle
Albany, NY 12203

LEE PALMATEER, ESQ.

ARLEN L. OLSEN, ESQ.

ANNETTE I. KAHLER, ESQ.
CAROLINE B. AHN, ESQ.
SUSAN E. FARLEY, ESQ.

Gary L. Sharpe
Chief Judge

MEMORANDUM-DECISION AND ORDER

I. Introduction
Plaintiffs James E. Zalewski and Draftics, Ltd. commenced this action
for copyright infringement under the Copyright Act of 1976, as amended,1
against multiple defendants, including T.P. Builders, Inc. and Thomas
Paonessa (collectively “T.P.”), and Roxanne K. Heller and DeRaven
Design & Drafting (collectively “DeRaven”). (See 3d Am. Compl., Dkt. No.
138.) Following the dismissal of plaintiffs’ claims, (see Dkt. No. 194), the
court granted T.P. and DeRaven’s motions for attorneys’ fees and costs,
and entered judgment against plaintiffs in the aggregate amount of
$137,768.30. (See Dkt. Nos. 214, 215.) Pending is plaintiffs’ motion for a
stay of execution and enforcement of that judgment, and T.P. and
DeRaven’s motions for cost bonds. (See Dkt. Nos. 217, 218, 224.) For the
reasons that follow, plaintiffs’ motion is granted in part and denied in part,
and T.P. and DeRaven’s motions are granted to the extent that they seek
bonds to cover costs on appeal.
II. Background
The court presumes the parties’ familiarity with the underlying facts

1

17 U.S.C. §§ 101-1332.

2

and procedural history as discussed in its previous Memorandum-Decision
and Order. (See Dkt. No. 194 at 3-7.)
III. Legal Standards
An appellant may obtain an automatic stay by posting a supersedeas
bond. See Fed. R. Civ. P. 62(d). “Although the rule provides that the stay
takes effect upon the district court’s approval of the bond, the party posting
the bond is entitled to a stay as of right; the court has no discretion to deny
the stay itself, but only to fix the amount of (or to waive) the bond.”
Frommert v. Conkright, 639 F. Supp. 2d 305, 308 (W.D.N.Y. 2009).
Generally, the supersedeas bond is for the full amount of the judgment.
Am. Underground Eng’g, Inc. v. City of Syracuse, No. 5:00-CV-278, 2012
WL 3202853, at *1 (N.D.N.Y. Aug. 2, 2012). But “a reduced bond, or no
bond at all,” may be appropriate where the prevailing party’s “ability to
collect on the judgment is reasonably secure.” Id.
Besides a supersedeas bond, which is retrospective, see Adsani v.
Miller, 139 F.3d 67, 70 n.2 (2d Cir. 1998), the court may also require an
appellant in a civil case “to file a bond or provide other security in any form
and amount necessary to ensure payment of costs on appeal,” Fed. R.
App. P. 7. In determining whether such a bond is warranted, courts
3

typically consider the following: “(1) the appellant’s financial ability to post a
bond, (2) the risk that the appellant would not pay appellee’s costs if the
appeal loses, (3) the merits of the appeal, and (4) whether the appellant
has shown any bad faith or vexatious conduct.” Baker v. Urban Outfitters,
Inc., No. 01 CV 5440 LAP, 2006 WL 3635392, at *1 (S.D.N.Y. Dec. 12,
2006). A showing of “bad faith” or “vexatious conduct,” however, is not a
prerequisite for a bond under Federal Rule of Appellate Procedure 7.
Stillman v. Inservice Am., Inc., 838 F. Supp. 2d 138, 140 (S.D.N.Y. 2011).
IV. Discussion
Though styled as a motion for a stay, plaintiffs actually seek a waiver
of the supersedeas bond. (See Dkt. No. 217, Attach. 1 at 5-9.) DeRaven
and T.P. not only oppose the waiver, but each also seek an order under
Federal Rule of Appellate Procedure 7, requiring plaintiffs to post a bond to
cover costs on appeal. (See Dkt. Nos. 218, 222, 223, 224.) Because the
bonds are distinct, the court will address them separately.
With respect to a waiver of a supersedeas bond, plaintiffs argue “that
the unique circumstances of this case warrant a stay.” (Dkt. No. 217,
Attach. 1 at 5.) They further aver that both the enforcement of judgment
and/or the posting of a bond, which apparently requires one hundred
4

percent collateralization, “would cause severe, irreparable hardship”
because it would require Zalewski to liquidate his personal assets. (Id. at
8.) In short, the court is unpersuaded that a waiver or reduction is
warranted. The mere fact that Zaleweski will need to leverage personal
assets in order to obtain a bond is not a sufficiently unique circumstance,
especially since he was a plaintiff in this case.2 But see Centauri Shipping
Ltd. v. W. Bulk Carriers KS, 528 F. Supp. 2d 186, 194 (S.D.N.Y. 2007)
(stating that a showing of insolvency or imminent bankruptcy “may suffice
to establish irreparable harm”). Plaintiffs are nevertheless entitled to a
stay, but only if they post a supersedeas bond in the amount of
$137,768.30, the full amount of the judgment, plus the additional amounts
provided for in Local Rule 67.1(d) of the Northern District of New
York—i.e., eleven percent “to cover interest and any damage for delay as
may be awarded, [and] $250 to cover costs.” N.D.N.Y. L.R. 67.1(d).
Moreover, plaintiffs’ representations regarding their financial
inabilities are also instructive in considering the appropriateness of a bond
under Federal Rule of Appellate Procedure 7. Here, the three salient

2

Nothing in plaintiffs’ December 20, 2012 submissions demonstrates that they will be
irreparably harmed by having to post a bond.

5

factors weigh in favor of ordering a bond. See Baker, 2006 WL 3635392,
at *1. First, plaintiffs have offered no proof that they are unable to post a
bond. See Stillman, 838 F. Supp. 2d at 140. Second, plaintiffs’
representations on their net annual incomes and the hardship that a
supersedeas bond would cause raise doubts about their ability to pay the
appellees’ costs if their appeal is unsuccessful. (See Dkt. No. 217, Attach.
5 ¶ 2); Baker, 2006 WL 3635392, at *1. And third, the court is
unpersuaded that there has been any intervening change in law, including
the decisions of the Second and Fourth Circuits that plaintiffs cite, which
improves their chances on appeal. (See Dkt. No. 217, Attach. 1 at 7-8;
Dkt. No. 218 at 6-7.) Setting aside the issue of bad faith, these factors all
weigh in favor of ordering plaintiffs to post an appellate bond.
Although a bond is appropriate here, T.P. and DeRaven’s requests
are excessive insofar as they seek bonds to cover additional attorneys’
fees on appeal. (See Dkt. No. 218 at 1; Dkt. No. 224 at 5-12.) Put simply,
the court is unconvinced that there is sufficient justification for T.P. and
DeRaven’s requests for $30,000 bonds to cover attorneys’ fees.3 (See id.)
3

Notably absent from the submissions is an explanation of the standard for awarding
attorneys’ fees on appeal under the Copyright Act, and any supporting documentation that
articulates the hourly rate or the number of hours T.P. or DeRaven’s counsel anticipates
expending to defend against plaintiffs’ appeal. (See generally Dkt. Nos. 218, 224.)

6

Conversely, $5,000 is a reasonable estimation of the costs on appeal.
(See Dkt. No. 218 at 8; Dkt. No. 224 at 5-12); see, e.g., RBFC One, LLC v.
Zeeks, Inc., No. 02 Civ. 3231, 2005 WL 2140994, at *2-3 (S.D.N.Y. Sept. 2,
2005). It follows that T.P. and DeRaven’s motions are granted to the
extent that they seek $5,000 bonds under Federal Rule of Appellate
Procedure 7 to cover each of their costs on appeal.
V. Conclusion
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that plaintiffs’ motion (Dkt. No. 217) is GRANTED in part
and DENIED in part as follows:
1.

GRANTED to the extent that they seek a stay of execution of
the money judgment entered against them, but only if they post
a supersedeas bond, in accordance with the Federal and Local
Rules of practice, in the amount of $137,768.30, plus eleven
percent to cover interest and any damage for delay as may be
awarded, plus $250 to cover costs; and

2.

DENIED to the extent that they seek a waiver or reduction of
the supersedeas bond under Federal Rule of Civil Procedure
62(d); and it is further
7

ORDERED that DeRaven’s motion (Dkt. No. 218) is GRANTED to
the extent that it seeks a $5,000 bond to cover costs on appeal; and it is
further
ORDERED that plaintiffs shall post a $5,000 bond under Federal
Rule of Appellate Procedure 7 to cover DeRaven’s costs on appeal; and it
is further
ORDERED that T.P.’s motion (Dkt. No. 224) is GRANTED to the
extent that it seeks a $5,000 bond to cover costs on appeal; and it is further
ORDERED that plaintiffs shall post a $5,000 bond under Federal
Rule of Appellate Procedure 7 to cover T.P.’s costs on appeal; and it is
further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
December 21, 2012
Albany, New York

8