Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-01852/USCOURTS-casd-3_15-cv-01852-5/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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15cv1852-LAB (BGS)

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

LEADING MANUFACTURING 

SOLUTIONS, LP, 

Plaintiff,

v. 

HITCO, LTD., et al., 

Defendants.

Case No.: 15cv1852-LAB (BGS) 

ORDER REQUIRING 

DEFENDANTS TO OBTAIN AND 

POST BOND 

 After Plaintiff prevailed at trial, Defendants filed a motion under Fed. R. Civ. 

P. 60, and also asked the Court to stay judgment. They offered to post a 

supersedeas bond for the entire amount of the judgment. The purpose of the bond 

was to ensure that even if final judgment were delayed, Plaintiff would be able to 

recover what he had been awarded. Court cautioned that if Defendants did not 

fulfill their part in this, the Court would lift the temporary stay. (See Docket no. 188 

at 2:13–14.) 

After the Court extended the time for Defendants to post a bond, they 

obtained a bond issued by Atlantic Specialty Insurance Company. Plaintiff timely 

objected to the bond, however, as failing to cover the entire amount of the 

judgment, and asked the Court to either require the posting of a new bond, or to 

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15cv1852-LAB (BGS)

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construe the bond so that Plaintiff would receive the full amount of any ultimate 

award. (Docket no. 193.) Defendants filed no opposition, thereby consenting to 

the request’s being granted.1 The Court granted the alternate request and 

construed the bond so as to provide that Plaintiff would be paid the full amount of 

any judgment that survived following appeal. Even if the award were reduced, or 

one or two of the Defendants were held not fully liable, Plaintiff would still be paid 

what he was entitled to. This construction, in the Court’s view, was the most 

generous interpretation of Defendants’ and Atlantic Specialty’s actions, and would 

save money and effort. 

The Court required that Atlantic Specialty be notified, and gave both it and 

any other party the opportunity to file an objection to the Court’s construction of the 

bond. The order the Court issued construing the bond was Atlantic Specialty’s and 

Defendants’ first notice of the Court’s understanding of the bond’s coverage, and 

their opportunity to correct any misapprehension. Because Atlantic Specialty was 

not a party to this action and was affected by the Court’s order, this was its first 

opportunity to explain what it thought the bond covered. 

 Atlantic Specialty filed a more limited objection making clear it did not agree 

with the Court’s construction. Defendants, however, filed a lengthy brief that 

amounts to an unauthorized and unnecessary motion for reconsideration. See 

Standing Order in Civil Cases, ¶ 3(e). The motion sidesteps the Court’s award of 

damages jointly and severally, see Docket no. 177 at 17:23–26, and makes several 

other misplaced arguments. The only portion of their brief that complies with the 

Court’s order are the arguments that duplicate Atlantic Specialty’s. 

                                               

1 See Civil Local Rule 7.1(f)(3)(a) (requiring a party who opposes any request for 

ruling by the Court to file a written opposition). See also Standing Order in Civil 

Cases, ¶ 5 (providing that ex parte applications and administrative requests to 

which no timely opposition is filed may be granted as unopposed). 

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15cv1852-LAB (BGS)

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 Atlantic Specialty’s response makes clear that, as Atlantic Specialty 

understands it, the bond Defendants obtained and posted would only cover the full 

amount of the judgment if Plaintiff prevails in full on appeal. If an appeal is even 

partially successful for any reason, the bond covers nothing. For example, if Hitco, 

Inc. were found not liable for Hitco, Ltd.’s actions, the bond would be worthless 

and would not cover any award against Theodore Smith, even if the judgment 

against him is affirmed entirely. 

 The Court accepts Atlantic Specialty’s and Defendants’ concession that the 

bond provides only narrow coverage, and construes it as urged by Atlantic 

Specialty. The bond therefore does not comply with the Court’s order requiring the 

posting of a bond covering the entire judgment and guaranteeing that Plaintiff will 

recover whatever he is awarded. A bond that would leave Plaintiff potentially 

unable to collect is unacceptable. Defendants’ motion for reconsideration is 

DENIED as moot. 

Within 14 calendar days of the date this order is issued, Defendants must 

post an acceptable bond covering the entire award, as previously ordered, and 

must file a notice stating that they have filed one. If Defendants need more time, 

they should first attempt to resolve the matter with Plaintiff before seeking an 

extension. 

 Defendants were previously cautioned that the onus is on them to justify a 

continued stay. If they do not obey the Court’s order, the stay will be lifted without 

further notice to them. 

IT IS SO ORDERED. 

Dated: June 24, 2019 

Hon. Larry Alan Burns 

Chief United States District Judge

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