Woodson et al v. Allstate Insurance Company

Filing 61

ORDER denying 47 Motion to Stay and Waive Supersedeas Bond. Signed by District Judge Terrence W. Boyle on 7/7/2016. (Romine, L.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
NORTHERN DIVISION
NO. 2:13-CV-21-BO

GARY WOODSON and REBECCA
WOODSON,
Plaintiffs,
v.
ALLSTATE INSURANCE COMPANY,
Defendant.

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ORDER

This matter comes before the Court on defendant's motion to stay enforcement of the
judgment and to waive supersedeas bond. [DE 4 7]. The appropriate responses and replies have
been filed, and the matter is ripe for ruling. For the reasons discussed below, defendant's motion
is DENIED.
BACKGROUND
Plaintiffs, Gary and Rebecca Woodson, initially brought suit in Currituck County, North
Carolina, on claims of breach of contract and unfair trade practices under North Carolina law.
Defendant removed the matter to federal court. Plaintiffs' complaint was based on defendant
Allstate's denial of the Woodsons' insurance claim for flood-related damages to their property
following Hurricane Irene. The Woodsons were insured by the Standard Flood Insurance Policy,
issued to them by Allstate.
The matter went to a bench trial on April25, 2016, in Elizabeth City, North Carolina. On
May 4, 2016, the Court issued its Findings of Fact and Conclusions of Law, which found that
defendant did breach the contract, that the actual damages to plaintiffs' property amounted to
$233,398.00, and that defendant's conduct was done in bad faith and constituted unfair and

deceptive trade practices, which entitled plaintiffs to treble damages. Therefore, the Court's
judgment awarded damages to plaintiffs in the amount of$700,194.00.
On May 20, 2016, defendant filed the instant motion. One week later, defendant noticed
an appeal.
DISCUSSION
Federal Rule of Civil Procedure 62(d) states: "If 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). Federal Rule of Civil Procedure 62(e) states: "The
court must not require a bond, obligation, or other security from the appellant when granting a
stay on an appeal by the United States, its officers, or its agencies or on an appeal directed by a
department ofthe federal government." Fed. R. Civ. P. 62(e).
Here, defendant asks the Court to stay enforcement of the judgment entered in this action
pursuant to Fed. R. Civ. P. 62 until disposition of the appeal. Defendant does not make clear
which Rule 62 provision it relies upon, but the Court finds that defendant's only possible course
for the requested relief is Rule 62( d). As a foundational matter, defendant has not explicitly
claimed relief under Rule 62( e), whereas it has explicitly mentioned Rule 62(d). Moreover,
defendant has done nothing to demonstrate that it is an officer or agency of the United States.
Defendant has claimed it acted as the fiscal agent of the United States in its role as a Write-YourOwn carrier of flood insurance but has done nothing to indicate that, as such, it is an agency of
the United States. Additionally, the very nature of defendant's request to waive the supersedeas
bond reveals that defendant rightly believes one is required in order to obtain a stay, which

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necessarily means this matter is not covered by Rule 62(e). Accordingly, the Court's analysis
will focus on Rule 62(d).
Having eliminated the possibility of relief pursuant to Rule 62(e), the Court notes, as
have other courts in the Fourth Circuit, that an appellant may obtain a stay pursuant to Rule 62(d)
by paying a supersedeas bond. Fed. R. Civ. P. 62(d); see also Southeast Booksellers Ass'n v.

McMaster, 233 F.R.D. 456, 457 (D.S.C. 2006); Alexander v. Chesapeake, Potomac & Tidewater
Books, Inc., 190 F.R.D. 190, 192 (E.D. Va. 1999). However, "[w]hen a party seeks a stay
without the filing of a supersedeas bond, the issuance of a stay is a matter within the Court's
discretion." Diamond Falls Estates, LLC v. Nantahala Bank & Trust Co., 2015 U.S. Dist. LEXIS
143799, *2 (W.D.N.C. Oct. 22, 2015). Such is the case in the instant matter.
Here, as defendant requests both a stay and a waiver of the supersedeas bond, the Court
will first consider whether a stay is appropriate, and then, if so, consider whether bond waiver is
appropriate. See Kirby v. Gen. Elec. Co., 210 F.R.D. 180, 195 (W.D.N.C. 2000). The Court is
guided by the traditional stay factors when determining whether a stay is appropriate. See

Diamond Falls Estates, 2015 U.S. Dist. LEXIS 143799 at *2-5. The factors regulating issuance
of a stay are, generally, "(1) whether the stay applicant has made a strong showing that he is
likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a
stay; (3) whether issuance of the stay will substantially injure the other parties interested in the
proceeding; and (4) where the public interest lies." Hilton v. Braunskill, 481 U.S. 770, 776
(1987).
With respect to the first factor, the Court cannot find that the stay applicant-defendanthas made a strong showing that it is likely to succeed on the merits on appeal, as the Court
recently found against defendant on the merits of all claims in its Findings of Fact and

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Conclusions of Law. [DE 45]. The Court does not now reverse course. Accordingly, this factor
weighs against a stay.
As for the second factor, there has been no evidence defendant will be irreparably injured
absent a stay, so this factor, too, weighs against a stay.
As for the third factor, there is some evidence that issuance of a stay will substantially
injure plaintiffs. As plaintiffs note in their response to the instant motion, they have been waiting
for years now for payment on what the Court has already determined was a rightful claim.
Additional delay could certainly injure plaintiffs further. Accordingly, this factor also weighs
against a stay.
As for the fourth and final factor, the Court finds that the public interest lies against
granting a stay. As already discussed in the Findings of Fact and Conclusions of Law,
defendant's actions in this case constituted a flagrant bad faith denial of a rightful claim. The
Court will not now use its discretion to delay payment of that claim further. Accordingly,
consideration of the public interest also weighs against a stay.
As all four factors weigh against a stay, the Court, in its discretion, denies defendant's
motion to stay enforcement of the judgment. Accordingly, the Court need not consider whether
to waive supersedeas bond but notes that, in its discretion, it would not waive the supersedeas
bond. Finally, the Court also notes that defendant may still elect to post a full supersedeas bond
as required by Rule 62(d). Unless and until such bond is posted, however, execution on the
judgment may proceed.

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CONCLUSION
For the reasons discussed above, the Court, in its discretion, DENIES defendant's motion
to stay enforcement of the judgment and to waive supersedeas bond. [DE 47].

SO ORDERED, this --.:1_ day of July, 2016.

RRENCE W. BOYLE
UNITED STATES DISTRICT JUDGE

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