Friends of Tuhaye, LLC v. Tuhaye Homeowners Association

Filing 139

MEMORANDUM DECISION AND ORDER granting 128 Motion to Stay Execution of Balance Judgment during the pendency of plaintiff's appeal conditional on posting of bond; Plaintiff is ordered to post a supersedeas bond in the amount of $160,000.00 within 5 business days. Signed by Judge David Nuffer on 7/10/18 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
FRIENDS OF TUHAYE, LLC, a Delaware
limited liability company,
Plaintiff,
v.

MEMORANDUM DECISION AND
ORDER GRANTING [128] PLAINTIFF’S
EXPEDITED MOTION FOR STAY OF
EXECUTION OF BALANCE
JUDGMENT

TUHAYE HOMEOWNERS ASSOCIATION, Case No. 2:14-cv-00901
a Utah non-profit organization,
District Judge David Nuffer
Defendant.

Plaintiff Friends of Tuhaye, LLC (“FOT”) has filed a motion to stay execution of the
balance of the monetary judgment entered in favor of Defendant Tuhaye Homeowners
Association (the “HOA”). 1 The HOA filed a response to the motion. 2 FOT replied. 3
On March 29, 2018, the court entered judgment in favor of the HOA and against FOT in
the amount of $59,771.32 plus attorney’s fees in the amount of $78,600.80, for a total of
$138,372.12. 4 FOT subsequently filed a Notice of Appeal. 5 The HOA obtained a Writ of
Execution and Writ of Garnishment to collect the judgment against two properties owned by

1

Plaintiff’s Expedited Motion for Stay of Execution of Balance Judgment (“Motion”), docket no. 128, filed June 26,
2018.
2

Opposition and Objection to Plaintiff’s Expedited Motion for Stay of Execution of Balance (“Opposition and
Objection”), docket no. 129, filed June 27, 2018.

3

Plaintiff’s Reply in Support of Expedited Motion for Stay of Execution of Balance Judgment (“Reply”), docket no.
130, entered June 28, 2018.
4

Judgment, docket no. 116, entered on Mar. 29, 2018. Judgment in the amount of $119,610.92 was also entered in
favor of the HOA and against JRAT Investments, LLC, which has already been satisfied. Id.; see also Satisfaction
of Judgment, docket no. 117, filed Apr. 25, 2018.
5

Notice of Appeal, docket no. 118, filed Apr. 27, 2018.

FOT until about a month after judgment was entered and referred to as Lots 15 and 18. 6 FOT
now seeks to stay execution of the judgment pending its appeal. 7
“A judgment entitles the prevailing party to the stated sum. If the loser does not pay, the
winner can seize and sell its assets. An appeal by the loser does not eliminate the winner's
entitlement to immediate payment, although it does create the opportunity to obtain a stay by
posting a supersedeas bond.” 8
Federal Rule of Civil Procedure 62 provides the mechanism to stay enforcement of a
judgment during an appeal:
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. 9
“With respect to money judgments, Rule 62(d) has been interpreted to mean that an
appellant may obtain a stay of the money judgment during the pendency of the appeal as a matter
of right by posting an adequate supersedeas bond.” 10 FOT has not yet posted a supersedeas
bond, but it has offered to do so in an amount equal to the judgment owed or such other amount
as the court deems just and proper. 11 Accordingly, FOT is entitled to a stay on execution of the
judgment as a matter of right if it posts bond. The question is, then, what is the appropriate
amount of bond that FOT should be required to post.
6

Writ of Garnishment, docket no. 123, entered June 1, 2018; Writ of Execution, docket no. 125, entered June 1,
2018.
7

Motion, docket no. 128.

8

BASF Corp. v. Old World Trading Co., 979 F.2d 615, 616 (7th Cir. 1992).

9

Fed. R. Civ. P. 62.

10
U.S. v. Mansion House Ctr. Redev. Co., 682 F. Supp. 446, 449 (E.D. Mo. 1988)). See also Am. Mfrs Mutual Ins.
Co. v. Am. Broadcasting–Paramount Theatres, Inc., 87 S.Ct. 1, 17 L.Ed.2d 37 (1966); Dutton v. Johnson Cty. Bd. of
Cty. Com’rs, 884 F. Supp. 431, 435 (D. Kan. 1995); Wilmer v. Bd. of Cty. Comm’rs of Leavenworth Cty., Kan., 844
F. Supp. 1414, 1417 (D. Kan. 1993), aff’d, 28 F.3d 114 (10th Cir. July 11, 1994).
11

Motion ¶ 7 at 3.

2

A supersedeas bond serves several purposes:
[F]irst, it permits the appellant to appeal without risking satisfying the judgment
prior to appeal and then being unable to obtain a refund from the appellee after
the judgment is reversed on appeal; second, it protects the appellee against the
risk that the appellant could satisfy the judgment prior to the appeal but is unable
to satisfy the judgment after the appeal; and third, it provides a guarantee that the
appellee can recover from the appellant the damages caused by the delay incident
to the appeal, that is the bond guarantees that the appellee can recover the interest
that accrues on the judgment during the appeal. 12
“The amount of the bond generally includes the principal amount of the judgment, anticipated
interest on the judgment, and costs.” 13 The district court has “inherent discretionary authority in
setting supersedeas bonds.” 14
After considering the principal amount of judgment owed, interest, and anticipated costs
of the appeal, it is reasonable to require FOT to post bond in the amount of $160,000.00. This
amount will secure the HOA from any loss resulting from the stay of execution and FOT has
represented that it has the funds available to do so. 15
Although it does not impact the court’s ruling on whether a stay should be granted, it is
worth noting that the parties are in disagreement as to the validity of the Writ of Execution
issued against Lots 15 and 18. FOT has asserted that the Writ of Execution is void because FOT
transferred title to an entity named Midnight 1, LLC and therefore, FOT no longer owns the
properties. 16 The HOA has alleged that the transfer was improper, with the intent to hinder,

12

U.S. v. Mansion House Ctr. Redev. Co., 682 F. Supp. 446, 450 n.5 (E.D. Mo. 1988)

13

U.S. v. Mansion House Ctr. Redev. Co., 682 F. Supp. at 449 (citing Am. Mfts Mutual Ins. Co., 87 S.Ct. at 3).

14

Miami Int'l Realty Co. v. Paynter, 807 F.2d 871, 873 (10th Cir. 1986).

15

FOT had previously deposited $166,620.00 into an escrow account to cover the full amount of any judgment that
the HOA obtained against it. Reply ¶ 7.
16
Motion at Ex. A, Affidavit of Dale A. Hayes, Jr., Esq. ¶ 5, docket no 128; see also Opposition and Objection 2,
docket no. 129.

3

delay, or defraud the HOA’s ability to execute on the judgment against FOT. 17 The evidence
presented at this time does not support the HOA’s allegations of fraud. The HOA was advised
about the transfer in advance and had the opportunity to file liens against the properties prior to
closing. 18 Moreover, FOT has committed to posting a bond that would secure 100% of the
HOA’s judgment against it. Nonetheless, Mark A. Stuhmer, presumably on behalf of Midnight
1, LLC, has filed a Motion/Request for Hearing, alleging that the Writ of Execution was
improperly issued because he owns Lots 15 and 18. 19 Ownership of the properties and validity
of the Writ of Execution will be addressed as part of that proceeding.
ORDER
IT IS HEREBY ORDERED that Plaintiff’s Expedited Motion for Stay of Execution of
Balance Judgment

20

is GRANTED and that any further efforts at execution upon this court’s

Judgment entered on March 29, 2018 and against FOT, 21 shall be stayed during the pendency of
FOT’s appeal conditional on posting of bond; and
IT IS FURTHER ORDERED that FOT shall post a supersedeas bond in the amount of
ONE HUNDRED AND SIXTY THOUSAND DOLLARS ($160,000.00) within five business
days.
Dated July 10, 2018.
BY THE COURT:
____________________________
David Nuffer
United States District Judge
17

Opposition and Objection 2.

18

Reply ¶¶ 5-6.

19

Docket no. 136, filed July 3, 2018.

20

Docket no. 128.

21

Docket no. 116.

4