Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-03518/USCOURTS-cand-4_04-cv-03518-12/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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1 In its motion, Travelers states that judgment was entered against it in the amount of

$1,540,000.07. While Travelers bases the calculations in its motion on this figure, this

discrepancy does not affect the analysis given the breadth of Travelers’ assets. 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

AMERICAN COLOR GRAPHICS, INC.,

Plaintiff,

 v.

TRAVELERS PROPERTY CAS. INS. CO.,

Defendant. 

No. C 04-3518 SBA

ORDER

[Docket Nos. 453, 463]

Before the Court is defendant Travelers Property Casualty Insurance Company’s (Travelers)

motion to stay the enforcement of the judgment against it pending appeal [Docket Nos. 453, 463].

Plaintiff American Color Graphics (ACG) is unopposed to the motion. See Docket No. 467. 

After reading and considering the arguments presented by the parties, the Court finds this matter

appropriate for resolution without a hearing. See FED. R. CIV. P. 78. For the reasons that follow, the

Court GRANTS the motion. 

BACKGROUND

On October 24, 2006, judgment was entered against Travelers in the amount of $.07 for Breach

of Contract; $140,000 for Breach of the Implied Obligation of Good Faith and Fair Dealing; and

$4,000,000 in punitive damages.1 See Docket No. 352; see also Docket No. 334 (Minute Entry); Docket

No. 335 (Jury Verdict). On February 21, 2007, Travelers filed a notice of appeal of the judgment. See

Docket No. 443. 

LEGAL STANDARDS

Enforcement of a final judgment is not generally stayed during the pendency of an appeal.

Federal Rule of Civil Procedure 62(d), however, allows for a stay of the execution of the judgment

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pending appeal when the moving party posts a supersedeas bond. Under Rule 62(d)

When an appeal is taken the appellant by giving a supersedeas bond may obtain a stay

subject to the exceptions contained in subdivision (a) of this rule. The bond may be

given at or after the time of filing the notice of appeal or of procuring the order allowing

the appeal, as the case may be. The stay is effective when the supersedeas bond is

approved by the court. 

A supersedeas bond ensures that the appellee will be able to collect the judgment plus interest should

the court of appeals affirm the judgment. See Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505

n.1 (9th Cir. 1987). Filing the bond allows the stay as a matter of right. See FED. R. CIV. P. 62(d). 

In lieu of a supersedeas bond, a court may allow for the posting of alternate forms of security.

See Townsend v. Holman Consulting Corp., 929 F.2d 1358, 1367 (9th Cir. 1990) (en banc);

International Telemeter, Corp. v. Hamlin Int’l Corp., 754 F.2d 1492, 1495 (9th Cir. 1985) (allowing

appellant to place money in escrow account as an alternative form of judgment guarantee). A court also

has discretion to stay execution of judgment pending appeal without requiring a bond. See Lightfoot

v. Walker, 797 F.2d 505, 506 (7th Cir. 1986); Federal Prescription Serv., Inc. v. Am. Pharm. Ass’n, 636

F.2d 755, 759-61 (D.C. Cir. 1980) (Rule 62 “in no way necessarily implies that filing a bond is the only

way to obtain a stay”); Frommert v. Conkright, 472 F. Supp. 2d 452, 468 (W.D.N.Y. 2007) (whether

to require the posting of a bond lies within the district court’s discretion); DeKalb County Sch. Dist. v.

J.W.M., 445 F. Supp. 2d 1371, 1376 (N.D. Ga. 2006) (“Although the language of Rule 62(d) suggests

that the appellant must always post a supersedeas bond in order to obtain a stay on appeal, case law

establishes that the district court has discretion as to the amount of the bond, and in some instances,

whether to order the posting at all”); New Access Commc’ns. LLC v. Qwest Corp., 378 F. Supp. 2d 1135,

1138 (D. Minn. 2005) (the court is authorized to waive the bond requirement and stay the enforcement

of the judgment pending appeal without a bond).

ANALYSIS

Travelers maintains that it has net assets of $256,735,805.00, a policyholders’ surplus of

$89,682,927.00, and total direct premium written for $4,173,646,091.00. See Docket No. 455 (Doody

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Decl. at ¶ 3). Given the magnitude of its assets, Travelers contends that the judgment against it will not

materially affect its financial condition. The purchasing of a supersedeas bond will simply increase the

costs for the parties, including ACG, should Travelers prevail on appeal. In order to ensure its solvency

during appeal, Travelers has represented that it “will submit copies of its quarterly and annual financial

statements to ACG and the Court while the appeal is pending.” Docket No. 453, at 5. 

Plaintiff ACG does not oppose the motion to stay the enforcement of judgment. See Docket No.

467. It also states that it “waives the requirement that Travelers post a supersedeas bond in accordance

with F.R.C.P. 62(d).” Id. 

Because it appears there is no dispute that Travelers will be able to pay the judgment, and

because the purpose of a supersedeas bond is to protect the appellee’s ability to collect the judgment and

in this case the appellee is unopposed to the granting of a stay without a supersedeas or other bond,

Travelers’ motion is granted. 

CONCLUSION

Accordingly, the Court GRANTS defendant Travelers Property Casualty Insurance Company’s

unopposed motion to stay the enforcement of the judgment against it pending appeal [Docket Nos. 453,

463]. The Court further ORDERS that:

1. Enforcement of the October 24, 2006 judgment is stayed pending appeal;

2. In lieu of a supersedeas bond, Travelers shall submit its quarterly and annual

financial statements filed with the California Department of Insurance to the

Court and plaintiff ACG pending appeal to demonstrate Travelers’ continued

solvency and ability to satisfy the judgment; and

3. In the event there is a material change in Travelers’ financial condition, Travelers

shall, upon showing by ACG that Travelers does not have the present ability to

satisfy the judgment, post a supersedeas bond in the amount of 125% of the

judgment in order to maintain the stay of enforcement of the judgment pending

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appeal. 

IT IS SO ORDERED.

May 22, 2007 _________________________________

Saundra Brown Armstrong 

United States District Judge

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