UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Karen L. Bartlett

v. Civil No. 08-cv-00358-JL

Mutual Pharmaceutical

Company, Inc.

SUMMARY ORDER

Defendant Mutual Pharmaceutical Company has moved to stay

the execution of this court’s judgment and any proceedings to

enforce it pending the disposition of Mutual’s post-trial

motions, see Fed. R. Civ. P. 62(b), and any subsequent appeal,

see Fed. R. Civ. P. 62(d). Shortly after that motion was filed,

this court granted a temporary stay and ordered Mutual to

“demonstrate that it has taken appropriate steps to provide for

[plaintiff Karen] Bartlett’s security, including the posting of a

supersedeas bond or other step(s) that provide security

equivalent to that of a supersedeas bond.” Document no. 393

(citing Peacock v. Thomas, 516 U.S. 349, 359 n.8 (1996)). Mutual

responded by submitting evidence that it has more than $27

million in insurance coverage available to satisfy the judgment

(which was for $21.06 million plus interest, currently estimated

by Bartlett at an additional $2.29 million or so) and requesting

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that this court approve that “alternative security” in lieu of

requiring Mutual to post a supersedeas bond.

Specifically, Mutual submitted sworn declarations from its

primary insurer, Noetic Specialty Insurance Company, and its

excess insurers, Lexington Insurance Company and Chubb & Son (a

division of Federal Insurance Company), confirming that each

insurer had issued a $10 million insurance policy to Mutual, that

a claim for this lawsuit had been made against each policy, and

that the insurers had made no reservation of rights on that

claim, such that if the judgment in Bartlett’s favor is upheld by

this court and affirmed on appeal, the insurers will pay the

policy proceeds to Bartlett in satisfaction of that judgment. 

The primary insurer, Noetic, explained that the coverage

available under its policy had eroded from $10 million to about

$7 million so far (due to attorneys’ fees for defending this

action), but stated that in the event of further erosion, it

would secure a bond to ensure that the total security for the

judgment would not drop below $26 million.

After Mutual’s submission, this court held a conference call

with the parties to discuss the supersedeas bond issue. 

Bartlett, while conceding that this court has discretion to waive

the bond requirement if Mutual can show equivalent security, see,

e.g., Dillon v. City of Chicago, 866 F.2d 902, 904-05 (7th Cir.

1988), argued that Mutual had not made such a showing. In

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particular, Bartlett expressed concerns about whether (1) the

insurer’s declarations were signed by officials with authority to

bind each insurer, (2) the insurers were strong enough

financially, and (3) the insurers might refuse to pay the

judgment after appeal or unreasonably delay in doing so

(notwithstanding their declarations). She reiterated those

concerns in her subsequently filed objection.

Mutual responded to Bartlett’s concerns by submitting

amended declarations from each insurer, in which the signatories

(1) confirmed their authority to bind their respective companies,

(2) confirmed their companies’ financial strength and long-term

viability, and (3) described the straightforward process for 1

making payment in the event that the judgment in this case is

upheld by this court and affirmed on appeal. According to each

of the declarations, payment is “routinely accomplished within 30

days . . . and that will be the case here.”

In light of those amended declarations, this court concludes

that Mutual’s insurance coverage provides appropriate security

for Bartlett, equivalent to that of a supersedeas bond (both in

terms of ensuring “the availability of funds to pay the judgment”

According to the declarations, Noetic has an A- credit 1

rating from an independent rating agency, Lexington has an A

credit rating, Chubb has an A++ rating, and all three companies

have sufficient cash reserves to satisfy the policy limits in

this case.

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and ensuring a simple and prompt procedure for collecting those

funds, Dillon, 866 F.2d at 904). Requiring Mutual to post a

supersedeas bond under these circumstances, and thereby adding

another layer of protection beyond Mutual’s three insurance

policies, would be superfluous and “a waste of money.” Id. at 2

904; see also Acevedo-Garcia v. Vera-Monroig, 296 F.3d 13, 17

(1st Cir. 2002). This court therefore exercises its discretion

to waive the requirement that Mutual post a supersedeas bond in

order to obtain a stay under Fed. R. Civ. P. 62(b) and 62(d).

For the reasons set forth above, Mutual’s emergency motion

to stay any proceedings to enforce the judgment pending posttrial motions and appeal (document no. 391) and its emergency

motion for approval of alternative security in lieu of a

supersedeas bond (document no. 399) are both GRANTED. The

execution of this court’s judgment and any proceedings to enforce

it are STAYED pending the disposition of Mutual’s post-trial

motions and any subsequent appeal. Mutual shall notify this

court and Bartlett immediately if any of the representations upon

which the stay is based (including but not limited to any

representations about the financial strength of Mutual’s

insurers) becomes incorrect or incomplete.

According to Mutual, the cost of such a bond would be 2

between $200,000 and $500,000.

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SO ORDERED.

____________________________

Joseph N. Laplante

United States District Judge

Dated: October 22, 2010

cc: Bryan Ballew, Esq.

Keith M. Jensen, Esq.

Patrick J. O’Neal, Esq.

Eric Roberson, Esq.

Christine M. Craig, Esq.

Timothy P. Beaupre, Esq.

Jeffrey D. Geoppinger, Esq.

Joseph P. Thomas, Esq.

Paul J. Cosgrove, Esq.

Linda E. Maichl, Esq.

Stephen J. Judge, Esq.

Pierre A. Chabot, Esq.

 

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