Opinion
CV F 96-5948 AWI DLB, [Document #256]
May 14, 2002
ORDER DENYING MOTION TO STAY AUCTION SALE PENDING APPEAL
BACKGROUND
On April 1, 1998, the court granted summary judgment to the United States. The same day, the court denied Simmons' motion to file an amended counterclaim. On May 5, 1998, the court filed an Order of Judicial Sale, which was amended by Order entered on April 27, 2000, respecting the sale of coins and amended by Order entered on October 24, 2000, respecting the sale of real property. On July 2, 1998, Simmons filed a notice of appeal from the final judgment and the Order of Judicial Sale. The Ninth Circuit affirmed the court's grant of summary judgment and entry of judgment in favor of the United States.
After further amendments to the Order of Judicial Sale and other post judgment motions, on September 14, 2001, Simmons filed a notice of appeal concerning the amendments to the Order of Judicial Sale. This appeal is currently pending.
On April 12, 2002, Simmons filed an ex pade application for a stay of an auction sale pending appeal.
On April 25, 2002, the United States filed an opposition. The United States argues that no stay should be granted unless Simmons posts a supersedeas bond and agrees to other conditions to protect the United States' interests.
DISCUSSION
Simmons has requested that this court stay the auction of real property pending appeal. The real property at issue is subject to an Order of Judicial Sale to satisfy a monetary judgment in favor of the United States. The United States contends that no stay of the judgment should be granted unless Simmons posts a supersedeas bond as required by Rule 62(d) of the Federal Rules of Civil Procedure.
A party appealing a district court's entry of a money judgment is entitled to a stay of the money judgment as a matter of fight if he posts a bond in accordance with Rule 62(d) of the Federal Rules of Civil Procedure. American Mfrs. Mut. Ins. Co. v. American Broadcasting Paramount Theatres. Inc., 87 S.Ct. 1, 3 (1966) (mem.). Rule 62(d) provides that "[w]hen an appeal is taken the appellant by giving a supersedeas bond may obtain a stay," subject to exceptions not relevant in this case. Fed.R.Civ.P. 62(d). The purpose of a supersedeas bond is to protect the appellees from the risk of a later uncollectible judgment and compensate the appellees for any loss resulting from the stay of execution. N.L.R.B. v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988). The district court has discretion to set the amount of a supersedeas bond. Rachel v. Banana Republic. Inc., 831 F.2d 1503, 1505 n. 1 (9th Cir. 1987).
A stay of the judgment will not automatically be issued without a supersedeas bond. See Westphal, 859 F.2d 818, 819 (9th Cir. 1988). The appealing party may provide the supersedeas bond when the notice of appeal is filed or at the time of procuring the order allowing the appeal. Fed.R.Civ.P. 62(d). The stay of the judgment becomes effective when the supersedeas bond is approved by the court. Id.
When equities require it, a court may deviate from the terms of Rule 62 in its discretion, and the court can allow other forms of judgment guarantee. See Intern. Telemeter v. Hamlin Intern. Corn., 754 F.2d 1492, 1495 (9th Cir. 1985). The Ninth Circuit has also followed other circuits in finding that under certain circumstances the bond requirement of Rule 62(d) can be waived. See Townsend v. Holman Consulting Corn., 881 F.2d 788, 796-97 (9th Cir. 1989), vacated on reh'g on other grounds, 929 F .2d 1358 (9th Cir. 1990) (en banc); United States v. $2.490.00 in U.S. Currency, 825 F.2d 1419, 1421 (9th Cir. 1987). The Seventh Circuit has listed several grounds which could justify waiver of the bond requirement: (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. Dillon v. City of Chicago, 866 F.2d 902, 904-05 (7th Cir. 1988). The Fifth Circuit holds that the party moving for waiver bears the burden of objectively demonstrating the reasons to waive the bond. Poplar Grove Planting and Refining Co. v. Bache Halsey Stuart. Inc., 600 F.2d 1189, 1191 (51h Cir. 1979).
The court has entered a monetary judgment against Simmons. The auction that Simmons is requesting the court stay is to satisfy the monetary judgment, and the auction is proceeding under the Order of Judicial Sale. The United States' concerns if the auction is stayed pending appeal over loss of income, the placement of encumbrances on the property, and possible damage to the property are valid. Simmons' concerns over the difficulties that will occur if the property is sold and Simmons wins on appeal are also valid. To solve this very problem of conflicting interests, the Federal Rules of Civil Procedure provide for the payment of a supersedeas bond to stay enforcement of a valid judgment.
Simmons has requested a stay of the auction pending appeal, but Simmons has not provided a supersedeas bond nor indicated a willingness to pay such a bond. The United States has proposed a monetary bond along with other conditions to guarantee the United States' judgment. The general conditions of the bond proposed by the United States appear to be reasonable under the circumstances. Simmons has not agreed to the United States' proposed bond, offered to pay a different bond, or otherwise responded to the United States' proposal. Without some type of a supersedeas bond, this court is not inclined to stay the auction.
The court is mindful that it has the discretion to create alternative requirements to guarantee the judgment. However, Simmons has not expressed a willingness to agree to other conditions. The court is also mindful that it has the discretion to stay the execution of the judgment and stay the auction without payment of any bond. However, Simmons has not argued or asked that the court waive Rule 62(d)'s bond requirement. In his motion, Simmons' arguments for staying the auction address whether the court properly entered the judgment and Order or Judicial Sale rather than addressing whether the bond requirement should be waived. These arguments about the court's lack ofjurisdiction and court's inability to amend the Order of Judicial Sale have already been reviewed and rejected by the court. In light of Simmons' failure to articulate sufficient grounds for waiving such a bond, and in light of the government's asserted interest in executing the judgment, the court will not waive the bond requirement. Thus, execution of the judgment will not be stayed unless Simmons files a supersedeas bond and this bond is approved by the court.
Accordingly, the court ORDERS that Simmons' motion to stay the auction sale is DENIED WITHOUT PREJUDICE.