Ortiz v. Wagstaff, et al
Filing
207
DECISION AND ORDER granting 198 motion to stay enforcement of judgment pending appeal and to waive bond requirement. Signed by Hon. Elizabeth A. Wolford on 04/26/2023. (CDH)
Case 1:16-cv-00321-EAW-MJR Document 207 Filed 04/26/23 Page 1 of 6
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
JOSUE ORTIZ,
Plaintiff,
DECISION AND ORDER
v.
1:16-CV-00321 EAW
MARK STAMBACH,
Defendant.
BACKGROUND
Plaintiff Josue Ortiz (“Plaintiff”) sued defendant Mark Stambach (“Defendant”), a
former police detective for the City of Buffalo (the “City”), for violations of his civil rights
related to his arrest, conviction, and incarceration for two murders that he did not commit.
(Dkt. 1). A jury found in Plaintiff’s favor after a five-day trial, and awarded $5 million in
compensatory damages and $1.5 million in punitive damages. (Dkt. 158; Dkt. 160; Dkt.
162). Judgment was entered on May 10, 2022. (Dkt. 164). Following the Court’s
resolution of the parties’ post-trial motions (Dkt. 195), Defendant filed a notice of appeal
(Dkt. 197).
Currently pending before the Court is Defendant’s motion to stay enforcement of
the judgment pending appeal and to waive the requirement that he secure a bond. (Dkt.
198). Plaintiff filed a response to this motion on April 14, 2023 (Dkt. 205), and Defendant
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filed a reply on April 21, 2023 (Dkt. 206). For the reasons that follow, Defendant’s motion
is granted.
DISCUSSION
Prior to 2018, Federal Rule of Civil Procedure 62(d) “provide[d] that an appellant
[was] entitled to a stay pending appeal by posting a supersedeas bond.” In re Nassau Cnty.
Strip Search Cases, 783 F.3d 414, 417 (2d Cir. 2015). However, a district court was
permitted, in its discretion, to “waive the bond requirement if the appellant provide[d] an
acceptable alternative means of securing the judgment.” Id. (quotation omitted). In Nassau
County, the Second Circuit set forth a list of non-exclusive factors for district courts to
consider “in determining whether to waive the supersedeas bond requirement under Rule
62(d).” Id. Those factors are:
(1) the complexity of the collection process; (2) the amount of time required
to obtain a judgment after it is affirmed on appeal; (3) the degree of
confidence that the district court has in the availability of funds to pay the
judgment; (4) whether the defendant’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
defendant is in such a precarious financial situation that the requirement to
post a bond would place other creditors of the defendant in an insecure
position.
Id. at 417-18 (quoting Dillon v. Chicago, 866 F.2d 902, 904-05 (7th Cir. 1988)).
Rule 62 was amended in 2018 and the relevant provision now appears at
subparagraph b, which provides: “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
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security.” Fed. R. Civ. P. 62(b); see also Fed. R. Civ. P. 62, Advisory Committee’s Note
to 2018 Amendments (“Subdivision 62(b) carries forward in modified form the
supersedeas bond provisions of former Rule 62(d).”). The 2018 amendments to Rule 62
“made explicit the opportunity to post security in a form other than a bond.” Petroleos de
Venezuela S.A. v. MUFG Union Bank, N.A., No. 19 CIV. 10023 (KPF), 2020 WL 7711522,
at *2 (S.D.N.Y. Dec. 29, 2020) (quotation omitted). Even following the 2018 amendments,
“courts continue to rely on the Nassau County factors in determining whether to waive the
bond or other security requirements of Rule 62(b).” Id. at *2 n.3.
Here, Defendant contends that he has offered adequate other security because the
City—which has agreed to satisfy the judgment in the event Defendant is unsuccessful on
appeal (see Dkt. 198-2 at ¶ 3)—has transferred $6.5 million to a separate account reserved
specifically for payment of the judgment. The City’s accountant has sworn under penalty
of perjury that this account will be maintained only for the potential satisfaction of the
judgment issued in this case, that the funds therein will not be used or appropriated for any
other purpose, and that funds will be added to the account to address any interest awarded
to Plaintiff. (See Dkt. 206-1 at ¶¶ 6-8).
Considering the circumstances of this case and the Nassau County factors, the Court
concludes that Defendant has identified an acceptable alternative means of securing the
judgment, such that the bond requirement should be waived. As to the first two Nassau
County factors—the complexity of the collection process and the amount of time required
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to obtain the judgment after it is affirmed on appeal—the City’s accountant has stated in a
sworn affidavit that if Defendant’s appeal is unsuccessful and the judgment becomes final
and un-appealable, “the Comptroller’s Office can remit payment from the” account holding
the reserved funds upon request from the City’s corporation counsel, and “it would take
approximately two business days . . . to remit payment from the account to any account
identified by [Plaintiff] or his attorneys.” (Id. at ¶ 9). The entire process of receiving the
request for payment and remitting payment would take only approximately five business
days. (Dkt. 198-2 at ¶¶ 11-14).
The Court further has a high degree of confidence in the availability of funds to pay
the judgment. Not only is the City—which is the second largest city in the state of New
York—projected to have more than $109,000,000 available for cash disbursements at the
end of the fiscal year (id. at ¶¶ 8-9), as noted above, it has specifically set aside the full
amount of the judgment in a separate account that will not be used for any other purpose
(Dkt. 206-1 at ¶¶ 6-8). Similarly, because it is plain that the City, which has agreed to
indemnify Defendant, has the ability to pay the judgment, the cost of a bond—which would
be up to $400,000 (see Dkt. 198-2 at ¶ 16)—would be a waste of money.
As to the final Nassau County factor, it is not applicable under the circumstances of
this case. Accordingly, the factors as a whole weigh in favor of dispensing with the bond
requirement. See Nassau County, 783 F.3d at 418 (waiving bond requirement because
“Nassau County has demonstrated the existence of appropriate funds, available for the
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purpose of paying judgments without substantial delay or other difficulty.” (quotation
omitted)).
The Court is not persuaded by Plaintiff’s arguments to the contrary. The main
objection Plaintiff raises is that Defendant has not offered adequate other security for the
judgment. (See Dkt. 205 at 5-6). In particular, Plaintiff objects to the fact that, at the time
the motion for a stay was originally filed, the City had not specifically allocated or set aside
funds to pay the judgment in this matter. (Id. at 6-7). However, that objection has been
mooted by the City having now specifically set aside funds to pay the judgment, which
funds will not be used or allocated for any other purpose. Cf. Gilead Community Services,
Inc. v. Town of Cromwell, 604 F. Supp. 3d 1, 33 (D. Conn. 2022) (denying motion to waive
bond because town had not set aside assets to pay the judgment, but staying execution of
judgment for 90 days “to allow the Town to provide evidence that funds have been
allocated or unencumbered specifically to ensure that the judgment will be paid within
thirty days of the Second Circuit’s decision, should the Town appeal”); Conte v. County of
Nassau, No. 06-CV-4746-JFB-ARL, 2017 WL 9478355, at *4 (E.D.N.Y. May 4, 2017)
(denying motion to waive bond because county had not “submitted any evidence to
establish that specific funds have been encumbered to cover the current judgment in
plaintiff’s favor,” but granting temporary stay “to allow the County to provide evidence
that funds have been allocated or encumbered specifically to cover the judgment amount
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or to otherwise ensure that the judgment will be paid within thirty days of the Second
Circuit’s decision, should that decision favor plaintiff”).
Plaintiff also argues that the City has a “checkered financial history.” (Dkt. 205 at
8). Whatever the truth of that assertion, the City’s action of setting aside the full amount
of the judgment confirms that its present financial situation is such that it is fully capable
of paying the judgment if Plaintiff prevails on appellate review. On the record before it,
the Court, in its discretion, determines that posting a bond is not necessary to “ensure that
the prevailing party will recover in full, if the decision should be affirmed[.]” Nassau
County, 783 F.3d at 417 (quotation omitted). Accordingly, Defendant’s motion is granted.
CONCLUSION
For the reasons set forth above, the Court grants Defendant’s motion (Dkt. 198) and
stays enforcement of the judgment in this case (Dkt. 164) pending appeal, without requiring
Defendant to post a supersedeas bond.
SO ORDERED.
_________________________________
ELIZABETH A. WOLFORD
Chief Judge
United States District Court
Dated: April 26, 2023
Rochester, New York
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