EVERGREEN COMMUNITY POWER LLC v. RIGGS DISTLER & COMPANY, INC.

Filing 104

MEMORANDUM. ( SIGNED BY HONORABLE HARVEY BARTLE, III ON 7/19/12. ) 7/20/12 ENTERED AND COPIES E-MAILED.(gn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
EVERGREEN COMMUNITY POWER LLC
v.
RIGGS DISTLER & CO., INC.

:
:
:
:
:

CIVIL ACTION

NO. 10-728

MEMORANDUM
Bartle, J.

July 19, 2012
After a non-jury trial, Evergreen Community Power LLC

("Evergreen") obtained a judgment in the amount of $962,444.98
against Riggs Distler & Co., Inc. ("Riggs"), a pipe installation
contractor, for breaching the parties' contract in connection
with the construction of a power plant for Evergreen in Reading,
Pennsylvania.1

Before the court is the motion of Riggs to stay

execution of judgment pending appeal without a supersedeas bond
in accordance with Rule 62(d) of the Federal Rules of Civil
Procedure.
Rule 62(d) provides:
If an appeal is taken, the appellant may
obtain a stay by supersedeas bond, except in
an action described in Rule 62(a)(1) or (2).
The bond may be given upon or after filing
the notice of appeal or after obtaining the

1. The court first entered a judgment in favor of Evergreen and
against Riggs in the amount of $422,923.83 and later amended the
judgment to include $539,521.15 in attorneys' fees, costs, and
expenses in favor of Evergreen and against Riggs.

order allowing the appeal. The stay takes
effect when the court approves the bond.2
Riggs asks the court to waive the requirement of Rule
62(d) for a supersedeas bond.

It argues that its assets and its

parent company's assets are sufficient to satisfy the judgment,
that the cost required to obtain a supersedeas bond is
unnecessary, and that obtaining such a bond would reduce its
future bonding capacity and thus limit the amount of work it
could undertake.
The purpose of the supersedeas bond under Rule 62(d) is
to preserve the status quo during the pendency of an appeal and
protect the winning party from the possibility of loss resulting
from the delay in execution.

Schreiber v. Kellogg, 839 F. Supp.

1157, 1159 (E.D. Pa. 1993); see also AMG Nat'l Trust Bank v.
Ries, No. 06-4337, 2008 U.S. Dist. LEXIS 44014, at *4 (E.D. Pa.
June 4, 2008).

Accordingly, the bond should generally be

sufficient in amount to satisfy the judgment, plus interest and
costs.

Id.
Our Court of Appeals has not addressed whether courts

may require a bond less than the amount of the full judgment or
waive the requirement entirely.

See Galvan Montalvo v. Larchmont

Farms, Inc., No. 06-2704, 2011 U.S. Dist. LEXIS 132049, at *3-4
(D.N.J. Nov. 16, 2011).

However, district courts in this circuit

have joined Courts of Appeals of other circuits in determining
that district courts may exercise their discretion under Rule

2.

Rules 62(a)(1) and (2) are not applicable here.
-2-

62(d) to waive the supersedeas bond requirement in certain cases.
See, e.g., Dillon v. City of Chicago, 866 F.2d 902, 904 (7th Cir.
1988); Poplar Grove Planting & Refining Co. v. Bache Halsey
Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir. 1979); Tomasko v. Ira
H. Weinstock, P.C., No. 3:98-cv-1978, 2009 U.S. Dist. LEXIS
17334, at *2 (M.D. Pa. Mar. 6, 2009).

These courts have required

that there be "exceptional circumstances and ... an alternative
means of securing the judgment creditor's interest."

See, e.g.,

Tomasko, 2009 U.S. Dist. LEXIS 17334, at *2.
To determine whether exceptional circumstances exist,
district courts within this Circuit have relied on the five
factors described by the Seventh Circuit in Dillon, 866 F.2d at
904-05:

(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.

Galvan Montalvo, 2011 U.S.

Dist. LEXIS 132049, at *3-4 (citing Church & Dwight, 2009 U.S.
Dist. LEXIS 64459, at *14).
Riggs argues based on Munoz v. City of Philadelphia,
537 F. Supp. 2d 749 (E.D. Pa. 2008) that it has sufficient
resources to make a supersedeas bond an unnecessary waste of
-3-

money.

However, the circumstances in that case were quite

different from those here.

In Munoz, the plaintiff had won a

judgment of $429,230 against the City of Philadelphia.

In the

court's view, a bond would have caused an unnecessary waste of
taxpayers' money.

There was no question about the ability of

Philadelphia, which has taxing power, to pay the judgment.
In contrast, Riggs is not a government entity, and its
financial condition is not certain.

It has supplied the court

with some evidence of its financials and those of its parent
company, CVT Group, Inc. ("CVT"), to show Riggs' ability to pay
the judgments, but this evidence consists of unaudited balance
sheets and press releases.
questionable.

The reliability of this evidence is

Furthermore, even if this evidence proved Riggs'

ability to pay the judgment, there is no guaranty what the state
of its finances will be after the appeal process concludes or
whether CVT, the parent, will be willing to pay the judgment on
its behalf.
Accordingly, applying the Dillon factors leads us to
deny Riggs' motion because we are not entirely confident in "the
availability of funds to pay the judgment," nor is "the
defendant's ability to pay the judgment ... so plain that the
cost of a bond would be a waste of money."
904-05.

Dillon, 866 F.2d at

Furthermore, Riggs admits in its brief in support of its

motion that the cost of a supersedeas bond is not oppressive.
Finally, Riggs has not provided "an alternative means of securing
the judgment creditor's interest," as generally required in this
-4-

discretionary analysis.

See, e.g., Tomasko, 2009 U.S. Dist.

LEXIS 17334, at *2.
For these reasons, we will deny Riggs' motion for a
stay of execution of judgments without a supersedeas bond pending
appeal.

Riggs will have fifteen days from the date of the

accompanying Order to file the appropriate bond.

-5-