Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-01020/USCOURTS-caed-2_02-cv-01020-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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1

 UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

GENERAL INSURANCE COMPANY OF

AMERICA, a Washington

corporation, FIRST NATIONAL

INSURANCE COMPANY OF AMERICA,

a Washington corporation; and

SAFECO INSURANCE COMPANY OF

AMERICA, a Washington

corporation,

NO. CIV. S-02-1020 WBS PAN

Plaintiffs,

v. MEMORANDUM AND ORDER

RE: REQUEST FOR STAY OF

EXECUTION OF JUDGMENT

CORPORATE CONTROL, INC., a

California corporation; HIVOLTAGE WIRE WORKS dba POWER

PROVIDERS, a California

corporation; UNITED UTILITIES,

INC., a California

corporation; SUPPLY SOURCE,

INC., a dba EXTRA EQUIPMENT, a

California corporation; TRADE

TECH. INC., a California

corporation; STEVE K. ZINNEL,

an individual; MICHELLE

ZINNEL, an individual; ZINNEL

FAMILY TRUST DATED DECEMBER

14, 1998 through its trustee,

STEVE K. ZINNEL; and DOES 1

through 100, inclusive,

Defendants.

----oo0oo---- 

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1 Plaintiffs note that, on October 25, 2004, the court

held a hearing on their motion for dismissal. At that hearing,

the court granted plaintiffs’ motion and took the final drafting

of the order under submission. Toward the end of the hearing,

Mr. Zinnel asked the court to set a date to hear a motion to stay

the judgment. The court set that hearing for December 6, 2004. 

Mr. Zinnel moved to stay the portion of the judgment in Michelle

Zinnel’s favor but did not move to stay any portion of the

judgment in plaintiffs’ favor. (Chee Decl. ¶ 9). Plaintiffs now

contend that Mr. Zinnel’s motion to stay the portion of the

judgment in their favor is untimely. However, plaintiffs cite no

authority for this proposition. Therefore, this argument is

rejected. 

2

Defendant Steve K. Zinnel moves for a stay of execution

of the judgment that resulted from litigation over his

obligations under an indemnity agreement he and his codefendants

made with plaintiffs. 

I. Factual and Procedural Background

On October 26, 2004, this court entered a final

judgment against, among others, Mr. Zinnel in the amount of

$1,192,509.28. Mr. Zinnel and his codefendants were also ordered

to “deposit $250,000 in cash or negotiable securities as

collateral with plaintiffs against future losses on [a given

construction project] in accordance with the [court’s] Reissued

Memorandum and Order (re: Plaintiff’s Motion for Summary

Judgment) dated June 23, 2004.” (See Judgment at 2). Pursuant

to Federal Rule of Civil Procedure 62, Mr. Zinnel now moves the

court to stay the execution of the judgment against him without

requiring him to post a supersedeas bond. If that request is

denied, Mr. Zinnel moves the court to stay the execution of the

judgment for 120 days to allow the United States Court of Appeals

for the Ninth Circuit to rule on a subsequent motion for a stay

of execution Mr. Zinnel intends to file with that court.1

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2 The court notes that Mr. Zinnel has objected to

plaintiffs’ oppositions and certificates of service on the ground

that they were not properly served. (See Steve K. Zinnel’s

Objection to Pls.’ Certificates of Service & Opp’ns at 1,4). He

contends that, contrary to the statements in plaintiffs’

certificates of service, he was never personally served with the

relevant documents on June 13, 2005, but rather that he found

them on the front porch of his personal residence on June 14,

2005. (Zinnel Decl. in Supp. of Objections ¶¶ 5,7). 

Mr. Zinnel’s objection is unavailing. Local Rule 5-135

allows pros se litigants, like Mr. Zinnel to be “conventionally

served.” “Conventional service” is defined as service

“accomplished by traditional means (either personal or mailing)

pursuant to Fed. R. Civ. P. 5(b)(2)(A)-(C). . . .” Local Rule 1-

101. Federal Rule of Civil Procedure 5(b)(2)(B) allows for

service by mail and states that such service is complete on

mailing. Mailing can be accomplished by messenger service. See

In re: William B. Kessler, Inc., 29 B.R. 358 (S.D.N.Y. Bankr.

1983)(finding delivery by messenger service to be proper). 

Mr. Zinnel does not challenge the sworn statements in both

of plaintiffs’ certificates of service to the effect that the

documents were placed in a properly addressed envelope and served

on him by messenger service on June 13, 2005. (See Pls.’ June

13, 2005 Certificate of Service at 2-3; Pls.’ June 14, 2005 Am.

Certificate of Service at 2-3). Nor does he deny that he

received the relevant documents. Instead, he freely admits he

found them on his porch on June 14, 2005. (Zinnel Decl. in Supp.

of Objections ¶ 5). Therefore, Mr. Zinnel’s objections to

service are overruled.

3

II. Discussion2

Before the court can reach the merits of this motion,

it must first determine the proper legal standard to apply in

deciding the motion. See Hagans v. Andrus, 651 F.2d 622, 624

(9th Cir. 1981)(applying improper legal standard grounds for

reversal). There is some confusion among the parties as to what

the proper legal standard is. Mr. Zinnel cites several cases for

the proposition that the court should apply a standard comparable

to that used by a district court in evaluating motions for

preliminary injunction. (See Def.’s Mot. for Stay of Execution

of J. at 3-4). Plaintiffs, in part, agree with Mr. Zinnel, but

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3 See Hilton v. Braunskill, 481 U.S. 770 (1987)(vacating

judgment denying application for stay of order directing release

of habeas petitioner); Hawaii Housing Auth. v. Midkiff, 463 U.S.

1323 (1983)(addressing stay of injunction); Wildmon v. Berwick

Universal Pictures, 983 F.2d 21 (5th Cir. 1992)(same); Gilder v.

PGA Tour, Inc., 936 F.2d 417 (9th Cir. 1991)(affirming

preliminary injunction); Lopez v. Heckler, 713 F.2d 1432 (9th

Cir. 1991)(affirming preliminary injunctions); Los Angeles

Memorial Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197

(9th Cir. 1980)(reversing preliminary injunction); Klaus v. HiShear Corp., 528 F.2d 225 (9th Cir. 1975)(addressing Rule 62(c)

motion for stay of injunctive order); Connecticut Hosp. Assoc. v.

O’Neill, 863 F.Supp. 59 (D. Conn. 1994)(same); North Cent. Truck

Lines, Inc. v. United States, 384 F.Supp. 1188 (W.D. Miss.

1974)(same). 

4

contend that he faces an additional hurdle of demonstrating good

cause for the court to deviate from the general rule of requiring

the moving party to post a full supersedeas bond before staying

the judgment pending appeal. (See Pls.’ Opp’n to Mot. For Stay

of Execution of J. (“Pls.’ Opp’n”) at 7). 

Plaintiffs are partially right. All of the cases cited

by the parties for the proposition that the court should apply a

standard comparable to that used in deciding a motion for

preliminary injunction involve either requests for stays of

orders for injunctive relief or motions challenging preliminary

injunctions.3 That such cases can be found is not surprising

considering that Federal Rule of Civil Procedure 62(c) authorizes

a party to seek a stay of an injunction pending appeal. Fed. R.

Civ. P. 62(c); Pajaro Dunes Rental Agency, Inc. v. Pajaro Dunes

Ass’n, 2002 U.S. Dist. LEXIS 2593 *18-19 (N.D. Cal. Feb. 6,

2002); FTC v. Publ’g Clearing House, Inc., 1995 U.S. Dist. LEXIS

21150 *4 (D. Nev. July 12, 1995). However, where a party seeks a

stay of execution of a monetary judgment, courts analyze the

request under Federal Rule of Civil Procedure 62(d). Pajaro

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Dunes Rental Agency, Inc., 2002 U.S. Dist. LEXIS 2593 at *15-23

(applying Rule 62(d) to monetary portion of judgment and Rule

62(c) to nonmonetary portion of judgment); Publ’g Clearing House,

Inc., 1995 U.S. Dist. LEXIS 21150 at *2-8(same). 

The judgment for which Mr. Zinnel seeks a stay of

execution is a monetary judgment. It involves an award of

$1,192,509.28 and a collateral deposit of $250,000 (See Judgment

at 2). Mr. Zinnel might protest that the court’s order requiring

him to make the $250,000 collateral deposit was injunctive in

nature and not monetary. However, where a judgment has both

monetary and nonmonetary aspects, courts treat that judgment as

the type of judgment to which it is most comparable. In re:

Capital West Investors, 180 B.R. 240 243 (N.D. Cal. 1995)(citing

Hebert v. Exxon Corp., 953 F.2d 936, 938 (5th Cir. 1992)(finding

no meaningful distinction between money judgment in form of 

declaratory judgment and traditional money judgment for purposes

of Rule 62(d)); see also Arnold v. Garlock, Inc., 278 F.3d 426,

437 (5th Cir. 2001)(noting that diverse forms of judgment

pertaining to monetary responsibility may fall under Rule 62(d));

United States v. Mansion House Ctr. Redevelopment Co., 682

F.Supp. 446 (E.D. Mo. 1988)(treating mortgage foreclosure

judgment like money judgment for purposes of Rule 62(d)).

Because both portions of the judgment at issue in this motion are

best characterized as monetary in nature, the court applies Rule

62(d)’s legal standard to the entire judgment. 

Rule 62(d) demands the application of a legal standard

sharply distinct from that demanded by Rule 62(c). A party

seeking a stay of a monetary judgment under Rule 62(d) must

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generally post a supersedeas bond. Townsend v. Holman Consulting

Corp., 881 F.2d 788, 796 (9th Cir. 1989) vacated on reh’g on

other grounds, 929 F.2d 1358 (9th Cir. 1990)(en banc). The bond

is meant to “protect[] the prevailing [party] from the risk of a

later uncollectible judgment and compensate[] him for delay in

the entry of the final judgment.” NLRB v. Westphal, 859 F.2d

818, 819 (9th Cir. 1988)(per curiam). However, a district court

has discretion to allow other forms of judgment guarantee or to

waive Rule 62(d)’s bond requirement entirely. Int’l Telemeter

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

In re Combined Metals Reduction Co., 557 F.2d 179, 193 (9th Cir.

1977).

When considering whether to waive the bond requirement,

district courts in this circuit generally apply a five-factor

test that was first articulated by the Seventh Circuit in Dillon

v. City of Chicago, 866 F.2d 902, 905-05 (7th Cir. 1988). See

United States v. Simmons, 2002 U.S. Dist. LEXIS 11530 *5 (E.D.

Cal. May 14, 2002)(listing Dillon factors but not applying them

because plaintiff failed to request waiver of bond); United

States v. Boyce, 148 F. Supp.2d 1069 (S.D. Cal. 2001)(citing

Dillon factors); United States v. Buff, 1998 U.S. Dist. LEXIS

21262 *8 (S.D. Cal. Sept. 21, 1998)(applying Dillon factors);

Publishing Clearing House, Inc., 1995 U.S. Dist. LEXIS 21150 at

*5-8(applying Dillon factors). The five factors to consider are

(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 the district court has in

the defendant’s ability to pay the judgment; (4) whether the

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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, 866 F.2d at 904-05. 

However, where “a court chooses to depart from the

usual requirements of a full security supersedeas bond . . . , it

should place the burden on the moving party to objectively

demonstrate the reasons for such a departure.” Poplar Grove

Planting & Ref. Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189,

1191 (5th Cir. 1979). Courts cognizant of this burden of proof

have denied requests for waiver where those requests were based

on conclusory statements in affidavits, Publ’g Clearing House,

Inc., 1995 U.S. Dist. LEXIS 21150, at *8, based on arguments

relating to insufficient funds, Boyce, 148 F. Supp.2d at 1069, or

unsupported by evidence, Mitchell v. Burt & Gordon, P.C., 1994

U.S. Dist. LEXIS 3314 (D. Or. Mar. 16, 1994).

Because Mr. Zinnel is the moving party, he bears the

burden of objectively demonstrating a reason to waive Rule

62(d)’s bond requirement. Poplar Grove, 600 F.2d at 1191. Mr.

Zinnel devoted the bulk of his briefs to arguments regarding his

likelihood of success on the merits, the balance of hardships

between the parties, and other factors not relevant to this

motion. However, Mr. Zinnel does contend that it would be

impossible for him to obtain a supersedeas bond based on his lack

of assets and poor credit. (See Mem. & Points & Authorities in

Supp. of Def. Steve K. Zinnel’s Mot. for Stay of Execution of J.

at 16). To support this contention, Mr. Zinnel states in his

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declaration that “[b]ased on information and belief, I believe I

have no non-exempt assets that would satisfy any judgment,” and

that “[b]ased on information and belief, I believe that I have no

assets that would allow me to post a bond in accordance with

Federal Rule of Civil Procedure 62(d).” (Zinnel Decl. ¶¶ 5-

6)(emphasis added; italics omitted). He also states that he

served on plaintiffs’ counsel a claim of exemption listing his

assets and the law providing for each exemption. (Id. ¶ 4; Index

of Attach. Exs. in Supp. of Steve K. Zinnel’s Mot. for Stay of

Execution (“Index”), Ex. 5(Claim of Exemption)). 

This evidence is deliberately evasive at worst and

problematic at best. Mr. Zinnel’s statements regarding his

assets were made only on information and belief. As such, they

are insufficient to meet his burden of proof on this motion. See

Publ’g Clearing House, Inc., 1995 U.S. Dist. LEXIS 21150, at

*8(denying request for waiver of supersedeas bond based on

conclusory statements in defendant’s affidavits regarding

defendant’s alleged inability to obtain a bond). The claim of

exemption Mr. Zinnel references is equally unhelpful to his

cause. As plaintiffs correctly point out, the claim of exemption

lists only Mr. Zinnel’s allegedly exempt assets. It does not

purport to be an exhaustive list of all his assets. Even if it

did, the fact that an asset may be exempt from judgment does not

mean that it may not be used to obtain a bond. Therefore, the

claim of exemption does not establish that Mr. Zinnel is unable

to post the requisite supersedeas bond. Mr.

Zinnel also declares that another creditor named First Bank &

Trust already has a lien on his assets that was obtained in May

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of 2002. (Id. ¶ 9). To establish this, he points to a letter

dated December 30, 2002 that was sent to plaintiffs’ counsel by

Mr. Zinnel’s former attorney. (See id. ¶ 10). The letter

states, in part, that “[a]ll of the attachable assets of [Mr.

Zinnel] are subject to a prior attachment lien in favor of First

Bank & Trust, successor in interest to First Bank of California. 

You may check the court files in Sacramento County Superior

Court. . . .” (Index, Ex. 8(letter from Richard A. Bunn, Esq.)). 

This evidence arguably goes to the fifth Dillon factor

regarding 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, 866

F.2d at 904-05. However, Mr. Zinnel provides no evidence that

such a lien is currently in place. Moreover, plaintiffs’

counsel, Lyndon Y. Chee, declares that on June 8, 2005, he

conducted an internet search of the Sacramento County ClerkRecorder’s on-line records for liens against Steven Zinnel. 

(Chee Decl. ¶ 7). He states that his search revealed no liens

against Mr. Zinnel in favor of First Bank & Trust on record. 

(Id.). The copies of the printouts attached to Mr. Chee’s

declaration support Mr. Chee’s statements. 

The evidence Mr. Zinnel presents to support his request

to waive the supersedeas bond is weak at best. Any inference

that First Bank & Trust still has a lien on Mr. Zinnel’s property

is undermined by Mr. Chee’s declaration and the evidence attached

to it. Moreover, it is Mr. Zinnel who bears the burden of proof

on this motion, and not plaintiffs. 

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It is thus of consequence that Mr. Zinnel’s arguments

barely speak to the five Dillon factors the court must apply in

this motion. Mr. Zinnel has not shown that the collection

process will lack complexity. He has not shown that plaintiffs

will be able to collect their judgment against him quickly should

they prevail on his appeal. He has not shown that he has assets

to pay the judgment. In fact, he has argued just the opposite,

claiming that he believes he cannot satisfy it. This leads the

district court to doubt Mr. Zinnel’s ability to pay the judgment. 

This doubt cuts against Mr. Zinnel, because the point of the bond

is to ensure that a prevailing party can collect its judgment. 

See Westphal, 859 F.2d at 819. This is not a situation where the

defendant’s ability to pay is so plain that the cost of a bond

would be a waste of money. Nor has Mr. Zinnel established that

First Bank & Trust still has a lien on his property, much less

that requiring him to post a bond would place First Bank & Trust

in an insecure position as a nonparty creditor. 

Because Mr. Zinnel has failed to demonstrate that the

court should waive the supersedeas bond, his request for a stay

of execution of the judgment must be denied.

Nor will the court grant Mr. Zinnel’s alternative

request to stay the execution of the judgment for 120 days to

allow the United States Court of Appeals for the Ninth Circuit to

rule on a subsequent motion for a stay of execution Mr. Zinnel

intends to file with that court. As Mr. Zinnel notes in his

motion, Rule 8 of the Federal Rules of Appellate Procedure

authorizes him to appeal to the Ninth Circuit for a stay of

execution of judgment pending appeal. Fed. R. App. P. 8. This

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court’s denial of his request for a stay will trigger the Ninth

Circuit’s authority to hear that motion under Fed. R. App. P.

8(a). Therefore, Mr. Zinnel may make a motion to the appellate

court. 

IT IS THEREFORE ORDERED that defendant Steve K.

Zinnel’s motion for stay of execution of judgment be, and the

same hereby is, DENIED. 

DATED: June 27, 2005

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