Tricon Energy Ltd v. Vinmar International Ltd

Filing 64

ORDER entered DENYING 61 MOTION to Enforce to Stay Enforcement of Judgment as to 57 Proposed Order. Vinmars motion to stay execution of the final judgment under Rules 62(b) and 62(d) is denied. As stated above, this ruling is without prejudice to Vinmar reurging its Rule 62(d) motion once a notice of appeal is filed. (Signed by Judge Lee H Rosenthal) Parties notified.(leddins, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
TRICON ENERGY, LTD.,
Plaintiff,
v.
VINMAR INTERNATIONAL, LTD.,
Defendant.

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CIVIL ACTION NO. 4:10-05260

ORDER
Vinmar moves to stay the execution of this court’s final judgment under Federal Rule of
Civil Procedure 62(b) pending resolution of Tricon’s Rule 54(d)(2) motion for attorney’s fees. In
the alternative, Vinmar moves for approval of a supersedeas bond to stay enforcement of the
judgment under Rule 62(d) during an appeal to the Fifth Circuit. (Docket Entry No. 61.) For the
following reasons, the motion is denied, but without prejudice to Vinmar reurging the Rule 62(d)
motion once a notice of appeal is filed.
“On appropriate terms for the opposing party’s security,” Rule 62(b) allows a district court
to stay the execution of a judgment pending disposition of any of the following posttrial or
postjudgment motions: (1) a motion for judgment as a matter of law under Rule 50; (2) a motion to
amend the findings or for additional findings under Rule 52(b); (3) a motion for a new trial or to
alter or amend a judgment under Rule 59; or (4) a motion for relief from a judgment or order under
Rule 60. FED. R. CIV. P. 62(b). Tricon’s Rule 54(d)(2) postjudgment motion for attorney’s fees is
not a motion covered by Rule 62(b). No other posttrial or postjudgment motions are pending.
Vinmar’s motion to stay the execution of the final judgment under Rule 62(b) is denied. See

Peacock v. Thomas, 516 U.S. 349, 359 n.8 (1996) (stating that “[t]he district court may only stay
execution of the judgment pending the disposition of certain post-trial motions” (emphasis added)).
“Under Rule 62(d), execution of a money judgment is automatically stayed pending appeal
upon the posting of a supersedeas bond.” Acevedo-Garcia v. Vera-Monroig, 296 F.3d 13, 17 (1st
Cir. 2002). Rule 62(d) states:
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 order allowing the appeal. The stay takes effect when
the court approves the bond.
FED. R. CIV. P. 62(d) (emphasis added). Vinmar “intends to appeal the judgment entered in this
case” to the Fifth Circuit and, if necessary, to the Supreme Court, (Docket Entry No. 61-1, at 2), but
has not filed a notice of appeal. Vinmar must file a notice of appeal before this court can stay the
execution of the judgment under Rule 62(d). See Wedgewood Ltd. P’ship I v. Twp. of Liberty, Ohio,
No. C2-04-1069, 2010 WL 5462472, at *3 (S.D. Ohio Dec. 29, 2010) (holding that “an appeal is a
condition precedent for the issuance of a stay” under Rule 62(d)); United States v. One 1962 Ford
Galaxie Sedan, 41 F.R.D. 156, 157 (S.D.N.Y. 1966) (“The fact that the Rules afford protection for
ten days subsequent to judgment and at a point when notice of appeal is filed, indicates to me that
the Court does not possess such power in the interim.”). Vinmar’s motion to approve its
“supersedeas bond to stay enforcement of the judgment during the appeal,” (Docket Entry No. 61,
at 2), is denied. This ruling, of course, does not preclude Vinmar from reurging its motion once it
has filed a notice of appeal.
Tricon argues that the amount of Vinmar’s proposed supersedeas bond is insufficient because
it does not include: (1) $1,271.60 in costs Tricon incurred to confirm the arbitration award in this
court; (2) $7,565.55 in postjudgment interest for three years; and (3) $100,000 in attorney’s fees that
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Tricon would be entitled to under the final judgment if Vinmar unsuccessfully exhausted its
appellate remedies ($50,000 for appealing to the Fifth Circuit; $15,000 for filing a writ of certiorari;
and $35,000 if the Supreme Court grants the writ). The court will rule on Tricon’s objections if
they are reurged once Vinmar files a notice of appeal and renews its Rule 62(d) motion. The
following comments are offered as guidance in an effort to avoid further litigation of the supersedeas
bond issue:
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Costs taxable under 28 U.S.C. § 1920 are properly included in the supersedeas bond.
See Norton v. Canadian Am. Tank Lines, No. 06–411–C, 2009 WL 3172105, at *1
(W.D. Ky. Sept. 29, 2009) (“Typically, a bond would include costs.”); S.E.C. v.
O’Hagan, 901 F. Supp. 1476, 1480 (D. Minn. 1995) (“Generally, the amount of the
bond should include the principal amount of the judgment, plus costs . . . .”). Unless
Vinmar disputes Tricon’s bill of costs, the supersedeas bond should include the
$1,271.60.

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Because the “purpose of a supersedeas bond is to preserve the status quo while
protecting the non-appealing party’s rights pending appeal,” Poplar Grove Planting
& Refining Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1190–91 (5th Cir.
1979), Vinmar’s supersedeas bond should include a reasonable estimate of the
postjudgment interest that will accrue during the pendency of the appeal. “Of course,
it is impossible to know how long [Vinmar’s] appeal will take. Other courts have
used the average amount of time that it takes to decide an appeal in the circuit for
guidance.” Jack Henry & Assocs., Inc. v. BSC, Inc., 753 F. Supp. 2d 665, 673 (E.D.
Ky. 2010). According to statistics published by the Administrative Office of the U.S.
Courts, the median amount of time between filing a notice of appeal and disposition
in the Fifth Circuit was 10.2 months in 2011. Vinmar’s proposed supersedeas bond,
which includes postjudgment interest for one year, already includes a reasonable
estimate of postjudgment interest for the expected duration of the appeal.

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It is unclear whether a supersedeas bond should include attorney’s fees that will be
incurred on appeal. See Barrett v. Detroit Heading, LLC, No. 05-72341, 2007 WL
2649714, at *2 (E.D. Mich. Sept. 10, 2007) (stating that “[t]he Court found no case
law that expressly states that appellate attorney costs are to be included, or are not
to be included, when setting the amount of a supersedeas bond”). Assuming, without
deciding, that a supersedeas bond properly includes any attorney’s fees that will be
incurred on appeal, Vinmar’s proposed bond should include only the $50,000 related
to the Fifth Circuit appeal. Vinmar’s providing security for the attorney’s fees
Tricon would be entitled to if Vinmar seeks Supreme Court review is properly
addressed by the Fifth Circuit if and when a motion to stay the mandate is filed. See
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FED. R. APP. P. 41(d)(2)(C) (“The court may require a bond or other security as a
condition to granting or continuing a stay of the mandate.”).
Vinmar’s motion to stay execution of the final judgment under Rules 62(b) and 62(d) is
denied. As stated above, this ruling is without prejudice to Vinmar reurging its Rule 62(d) motion
once a notice of appeal is filed.

SIGNED on February 16, 2012, at Houston, Texas.
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Lee H. Rosenthal
United States District Judge

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