Blue Cross Blue Shield of North Carolina v. Jemsek Clinic, P.A. et al

Filing 39

ORDER granting 30 Motion to Stay Enforcement of Judgment and to Fix Amount of Supersedeas Bond; enforcement of the Judgment shall be Stayed pending the current appeal.. Signed by District Judge Robert J. Conrad, Jr on 3/21/16. (ssh)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:14-cv-417-RJC
In re:

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JEMSEK CLINIC, P.A.
)
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Debtor.
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__________________________________________ )
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In re:
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JOSEPH G. JEMSEK, M.D.
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Debtor.
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__________________________________________ )
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BLUE CROSS AND BLUE SHIELD OF
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NORTH CAROLINA,
)
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Plaintiff, Counterclaim
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Defendant, and Counterclaim
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Plaintiff,
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v.
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JEMSEK CLINIC, P.A., and
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JOSEPH G. JEMSEK, M.D., an individual
)
)
Defendants, Counterclaim Plaintiffs, )
and Counterclaim Defendants.
)

ORDER

THIS MATTER is before the Court on Plaintiff Blue Cross and Blue Shield of North
Carolina’s (“BCBSNC”) Motion to Stay Enforcement of Judgment and to Fix Amount of
Supersedeas Bond (“Motion to Stay”). (Doc. No. 30).
On December 8, 2015, this Court entered an Order and Judgment (the “Judgment”),
(Doc. Nos. 23, 24), against BCBSNC and in favor of Defendants Jemsek Clinic, P.A., and
Joseph G. Jemsek (collectively, “Defendants”). On January 5, 2016, BCBSNC filed an appeal of

the Judgment to the United States Court of Appeals for the Fourth Circuit. (Doc. No. 26). On
January 12, 2016, in conjunction with the appeal, BCBSNC filed its Motion to Stay along with a
bond in the amount of $1,305,362.88. (Doc. Nos. 30, 30-2). The original bond named
Defendants, as the parties to the Judgment, as Obligees, (Doc. No. 30-2); however after
consultation, the parties have obtained an amendment to the bond to make Defendants’ counsel
(Langdon Cooper) the Obligee of the bond, (Doc. No. 36-1). Defendants’ counsel will hold any
and all payments made under this bond in trust for the benefit of Defendants’ bankruptcy estate.1
Rule 62(d) of the Federal Rules of Civil Procedure provides, in pertinent part, that where
an appeal is taken, the appealing party “may obtain a stay by supersedeas bond.” Fed. R. Civ. P.
62(d). It is well-settled that, when a supersedeas bond is posted, the appellant is entitled to the
stay “as a matter of right.” Am. Mfrs. Mut. Ins. Co. v. Am. Broad.-Paramount Theatres, Inc., 87
S. Ct. 1, 3 (1966). “The stay takes effect when the court approves the bond.” Fed. R. Civ. P.
62(d). The Court uses its discretion to set the amount of the bond. See Van Pelt v. UBS Fin.
Servs., No. 3:05-cv-477-C, 2007 WL 3224747, at *1 (W.D.N.C. Oct. 29, 2007). The amount of
the bond “is usually set in an amount that will permit full satisfaction of the judgment together
with costs and interest.” Id.
Here, BCBSNC filed a Notice of Appeal with this Court. (Doc. No. 26). BCBSNC then
filed its Motion to Stay along with a bond in the amount of $1,305,362.88 pursuant to Federal
Rule of Civil Procedure 62(d). (Doc. Nos. 30, 30-2). The bond has been executed by BCBSNC,
as Principal, and Atlantic Specialty Insurance Company, as Surety (the “Surety”). (Doc. No. 302). The Surety has an A.M. Best Financial Strength Rating of “A” (Excellent). Pursuant to Fed.

1

Defendants’ chapter 11 bankruptcy cases, Case Nos. 06-31766 and 06-31986, are
currently pending in the United States Bankruptcy Court for the Western District of North
Carolina.

R. App. P. 8(b), the Surety has agreed to submit itself to the jurisdiction of the District Court and
has irrevocably appointed the clerk of the District Court as its agent upon whom any papers
effecting its liability on the bond may be served. (Id. at 3). Consequently, BCBSNC is entitled
to a stay as a matter of right.
All parties have agreed to the proposed language for the supersedeas bond as well as the
amount of the bond. (Doc. Nos. 35, 36). The Court finds that a bond in the amount of
$1,305,362.88 is sufficient to permit full satisfaction of the judgment together with costs and
interest. Accordingly, the Court will grant BCBSNC’s Motion to Stay. Specifically, the Court
approves the supersedeas bond, sets the amount of the bond at no more than $1,305,362.88, and
stays enforcement of the Judgment against BCBSNC.
IT IS, THEREFORE, ORDERED that:
1. The Judgment is property of the bankruptcy estate.
2. BCBSNC’s Motion to Stay Enforcement of Judgment and to Fix Amount of Supersedeas
Bond, (Doc. No. 30), is GRANTED.
3. The Court accepts and receives the bond, in the amount of $1,305,362.88.
4. BCBSNC shall post a supersedeas bond of $1,305,362.88 with the Clerk of the Court
pending appeal of this action. BCBSNC shall also file a rider to the existing supersedeas
bond in the form of Attachment 1 to Doc. No. 36, (Doc. No. 36-1), which shall amend the
supersedeas bond attached to the Motion to Stay, (Doc. 30-2).
5. The Obligee on the bond shall be: “Langdon Cooper (to hold any and all payments made
under this bond in trust in either a client trust account or an interest bearing account
approved by the Court, with all such payments being held in trust by Mr. Cooper until
ordered by the federal district court to distribute and release such funds) for the benefit of

the bankruptcy estate of Jemsek Clinic, P.S. and Joseph G. Jemsek, M.D., to be held in
trust for the benefit of the creditors.”
6. Defendants are not entitled to any payment under the bond, should the need arise for the
bond to be called.
7. BCBSNC shall not be liable to the Defendants separately but shall be deemed to have
discharged its obligation on the Judgment by payment of the bond to counsel for
Defendants (i.e., Langdon Cooper or any successor Obligee on the bond approved by the
Court) should the need arise for the bond to be called. In the event of such payment
under the bond, Langdon Cooper (or any successor Obligee on the bond approved by the
Court) is directed to hold any payment in trust pending further order of this Court.
However, payment by BCBSNC on the underlying Judgment, or payment on the bond
during or after the appeal, shall not be deemed to discharge an obligation of BCBSNC, if
any, to pay: (1) attorney fees and costs related to the appeal of the Judgment; and/or (2)
any further interest in excess of the two years of interest included in the supersedeas
appeal bond. Neither this language nor the requests set out in BCBSNC’s Motion to Stay
shall be construed as an admission or concession by BCBSNC that Defendants have a
valid basis to claim attorneys’ fees or costs in connection with this appeal or that
Defendants are entitled to recover anything from BCBSNC, including damages, interest
or attorneys’ fees.
8. Upon the filing of a rider to the supersedeas bond by BCBSNC as directed above, the
enforcement of the Judgment in this action shall be STAYED pending the current appeal.

Signed: March 21, 2016