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Fox v. Pittsburg State University

United States District Court, D. Kansas

April 20, 2017

MARTHA FOX, Plaintiff,
v.
PITTSBURG STATE UNIVERSITY, Defendant.

          MEMORANDUM AND ORDER

          JULIE A. ROBINSON, UNITED STATES DISTRICT JUDGE

         On October 18, 2016, judgment was entered against Defendant Pittsburg State University following a jury trial and verdict in the amount of $230, 000.[1] This matter is before the Court on Defendant's Motion for Stay of Execution Pending Resolution of Post-Trial Motions and Appeals and For Waiver of Supersedeas Bond (Doc. 205). Plaintiff does not oppose Defendant's request under Fed.R.Civ.P. 62(b) for a stay of execution of the judgment until resolution of the post-trial motions in this matter if supersedeas bond is posted. The parties also addressed the issue of stay of execution of the judgment until resolution of an appeal under Fed.R.Civ.P. 62(d), but the Court will not address this as it is not ripe for consideration. Thus, the issue of whether Defendant should post a supersedeas bond during consideration of the post-trial motions is the only matter remaining for this Court to decide. The motion is fully briefed, and the Court is prepared to rule. For the reasoning explained more fully below, the Court grants the stay of execution of the judgment and the request to deny posting a supersedeas bond until resolution of the post-trial motions. The Court denies without prejudice the motion for stay of execution of the judgment on appeal, and Defendant may re-file the motion when and if an appeal is taken.

         I. Legal Standard

         Stay of execution during resolution of post-trial motions is governed by Federal Rule of Civil Procedure 62(b), which provides in relevant part that:

On appropriate terms for the opposing party's security, the court may stay the execution of a judgment . . . pending disposition of any of the following motions . . . (3) under Rule 59 for a new trial or to alter or amend a judgment; or (4) under Rule 60, for relief from a judgment or order.

         Under Rule 62(b), the conditional “may” applies to the Court's discretion of issuing the stay, not to the requirement of security.[2] While the Court must consider “appropriate terms” for Plaintiff's security in granting the stay, this Court has found that the appropriate terms need not include a supersedeas bond.[3] If the Court determines a bond is required, D. Kan. Rule 62.2 provides that “[a] supersedeas bond staying execution of a money judgment must, unless the court otherwise directs, be in the amount of the judgment, plus 25% of that amount to cover interest and any award of damages for delay.” Here, if supersedeas bond was warranted, the amount would be $287, 500.

         A supersedeas bond secures the creditor from loss resulting from the stay of execution.[4] It is used to protect the prevailing party from the risk of a later uncollectible judgment and compensates him for the delay.[5] The district court has discretion to stay the proceedings without a full supersedeas bond “when the judgment creditor's interest would not be unduly endangered.”[6] The burden is on the debtor to objectively demonstrate good cause for not requiring supersedeas bond.[7] In considering supersedeas bond during pending post-trial motions and on appeal, this Court has previously considered the following factors:

(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 court has in the availability of funds to pay the judgment; (4) whether defendants' ability to pay the judgment is so plain that the cost of a bond would be a waste of money; and (5) whether defendants are in such a precarious financial situation that the requirement to post a bond would place other creditors of the defendant in an insecure position.[8]

         II. Discussion

         Plaintiff does not oppose a stay of execution during the pendency of post-trial motions, so the Court will grant the stay of execution of the judgment during post-trial motions as unopposed.[9] Therefore, the only remaining issue is whether supersedeas bond, or other appropriate terms, are necessary to protect Plaintiff's interests. Defendant argues that the $287, 500 supersedeas bond is unnecessary because it is an entity of the state of Kansas with sufficient funds to cover the judgment upon conclusion of the post-trial motions or appeal. Defendant submitted the affidavit of Jeffrey A. Chanay, the chief deputy of the Kansas Attorney General's office, laying out the administration of the Kansas Tort Claims Fund (“KTCF”), which is the fund from which this judgment would be satisfied.[10]

         The KTCF is established by Kansas statute for judgments against the state of Kansas.[11] It provides in pertinent part:

(a) There is hereby established in the state treasury the tort claims fund which shall be administered by the attorney general. All expenditures from such fund shall be made upon warrants of the director of accounts and reports pursuant to vouchers approved by the attorney general or by a designee of the attorney general.
(b) Moneys in the tort claims fund shall be used only for the purpose of paying (1) compromises, settlements and final judgments arising from claims against the state or an employee of the state under the Kansas tort claims act or under the civil rights laws of the United States or of the state of Kansas and (2) costs of defending the state or an employee of the state in any actions or proceedings on those claims. . . . Payment of a final judgment shall be made from the fund if there has been a determination of any appeal taken from the judgment or, if no appeal is taken, if the time for appeal has expired.
(c) Upon certification by the attorney general to the director of accounts and reports that the unencumbered balance in the tort claims fund is insufficient to pay an amount for which the fund is liable, the director of accounts and reports shall transfer an amount equal to the ...

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