Memorandum and Order — No. 8:21-cv-03210 (Dkt. 74, D. Md.)

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A Memorandum and Order, Document 74, filed February 21, 2024 in Cross River Bank v. 3 Bea's Assisted Living LLC, et al., Case No. TJS-21-3210 (Case 8:21-cv-03210-TJS), in the U.S. District Court for the District of Maryland, signed by Chief United States Magistrate Judge Timothy J. Sullivan. The court denies the defendants' Motion for Stay of Enforcement of Judgment Pending Appeal (ECF No. 68), which asked for an unsecured stay instead of a supersedeas bond. It states that the judgment against the defendants totals $2,163,141.51, made up of $1,844,557.96 plus interest, attorney's fees of $317,155.75 and costs of $1,427.80, and that Local Rule 110.1 sets the bond at 120% of the judgment plus $500.

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          Case 8:21-cv-03210-TJS            Document 74     Filed 02/21/24      Page 1 of 4



                           IN THE UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF MARYLAND


 CROSS RIVER BANK,                                  *

           Plaintiff,                               *

                                                    *          Case No. TJS-21-3210
 v.
                                                    *
 3 BEA’S ASSISTED LIVING LLC, et al.,
                                                    *
           Defendants.
                                *       *       *       *      *      *

                                 MEMORANDUM AND ORDER

          Pending before the Court is the Motion for Stay of Enforcement of Judgment Pending

Appeal (“Motion”) filed by Defendants 3 Bea’s Assisted Living, LLC, and Connie Stewart (“Ms.

Stewart”) (ECF No. 68). Having considered the parties’ submissions (ECF Nos. 68 & 72), I find

that a hearing is unnecessary. See Loc. R. 105.6. For the following reasons, the Motion will be

denied.

          The Court previously entered judgment in favor of Plaintiff Cross River Bank, and against

Defendants, in the amount of $1,844,557.96, plus interest. In addition, the Court awarded Plaintiff

attorney’s fees of $317,155.75 and costs in the amount of $1,427.80. The total amount of the

judgment against Defendants is $2,163,141.51.

          Rule 62(b) provides: “[a]t any time after judgment is entered, a party may obtain a stay by

providing a bond or other security.” Fed. R. Civ. P. 62(b). “A full supersedeas bond is normally

required to preserve the status quo during appeal and preserve the ability of the judgment creditor

to execute on the judgment.” TransPacific Tire & Wheel, Inc. v. Orteck Int’l, Inc., No. DKC-06-

0187, 2010 WL 2774445, at *5 (D. Md. July 13, 2010) (citations omitted). Local Rule 110.1
        Case 8:21-cv-03210-TJS          Document 74         Filed 02/21/24      Page 2 of 4



provides: “[u]nless otherwise ordered by the Court, the amount of any supersedeas bond filed to

stay execution of a money judgment pending appeal shall be 120% of the amount of the judgment

plus an additional $500 to cover costs on appeal.”1 Rule 8 of the Federal Rules of Appellate

Procedure provides that a “party must ordinarily move first in the district court” for a stay of

judgment pending appeal.

       “The purpose for requiring an appeal bond is to preserve the status quo while protecting

the non-appealing party’s rights pending appeal.” Gunter v. Alutiiq Advanced Sec. Sols., LLC, No.

JRR-20-3410, 2023 WL 8172714, at *1 (D. Md. May 24, 2023) (internal quotation marks omitted).

The Fourth Circuit has not yet adopted “‘any particular standard to guide a District Court’s

discretion in granting unsecured stays,’ though every circuit that has addressed the issue has found

that district courts have discretion to issue ‘a stay on the basis of some lesser bond, or indeed, no

bond.’” Carrera v. E.M.D. Sales, Inc., No. JKB-17-3066, 2021 WL 6077120, at *2 (D. Md. Dec.

23, 2021) (quoting Transpacific Tire, 2010 WL 2774445, at *5). The party seeking a waiver of the

bond requirement “bears the burden of justifying the waiver.” Transpacific Tire, 2010 WL

2774445, at *5 (citing Poplar Grove Planting & Ref. Co. v. Bache Halsey Stuart, Inc., 600 F.2d

1189, 1191 (5th Cir. 1979)).

       Defendants move for an unsecured stay pending appeal. ECF No. 68. They argue that

permitting enforcement of the judgment will “cause irreparable harm to Ms. Stewart and would

effectively moot the appeal in this case.” Id. at 1. Defendants state that they “cannot possibl[y]

post a bond in the amount of judgment,” and that “if defendants had $2,000,000.00 on hand, this

case would have been resolved long ago.” Id. at 2. Defendants explain that the only “realistic” way



       1
         The parties disagree about whether Rule 62(f) applies, but the disagreement is not material
to the Court’s analysis. There is no dispute that the Court has discretion in deciding the terms under
which a stay may issue.

                                                  2
        Case 8:21-cv-03210-TJS           Document 74        Filed 02/21/24       Page 3 of 4



for Plaintiff to recover its judgment “would be the forced sale and eviction of the Brandywine

property,” where Ms. Stewart lives. Id. at 2-3. Defendants state that “in lieu of a bond,” they will

“agree to maintain ownership in good standing of the Brandywine property during the pendency

of this appeal,” and “will continue to pay the mortgage and insurance and will otherwise maintain

the property in good, saleable condition.” Id. at 2. Plaintiff objects to Defendants’ requested relief.

ECF No. 72.

       The Court declines to exercise its discretion to issue an unsecured stay to Defendants under

their requested terms. To begin, Defendants have failed to carry their burden that such a stay is

warranted. Although they state that they cannot afford to post a supersedeas bond in the amount

of 120% of the judgment, they provide no proof to this effect. Instead, they rely on the assertions

of their attorney in the Motion. This is insufficient. See TransPacific Tire, 2010 WL 2774445, at

*6 (finding that “providing unsigned and unverified copies of tax returns, and asserting through

counsel that it cannot afford to pay for a bond” was not enough for a party seeking an unsecured

stay pending appeal to shoulder its burden). It is not Plaintiff’s burden to disprove Defendants’

claims of insolvency. Id.

       But even if Defendants had shown that they cannot post a supersedeas bond in the amount

of 120% of the judgment plus $500 for appellate costs, the Court would still decline to exercise its

discretion to enter an unsecured stay. In the Court’s view, Defendants did not raise meritorious

defenses against Plaintiff’s claims. Defendants obtained a loan from Plaintiff and never paid it

back. Some of the proceeds of the loan were used to purchase the Brandywine property. Plaintiff

obtained a judgment against Defendants and has a right to collect on the judgment without further

delay. Finally, Plaintiff notes that Defendants’ financial situation is not as dire as they make it

seem. ECF No. 72 at 12 (explaining that Ms. Stewart and her husband “currently own another




                                                  3
        Case 8:21-cv-03210-TJS            Document 74   Filed 02/21/24    Page 4 of 4



home in Saint Leonard, Maryland, where they resided . . . until 2020, when Connie Stewart

purchased the Brandywine property with some of the proceeds of the PPP loan.”). Defendants did

not file a reply to contest this point.

        For these reasons, Defendants’ Motion (ECF No. 68) is DENIED.


Date: February 21, 2024                                          /s/
                                                          Timothy J. Sullivan
                                                          Chief United States Magistrate Judge




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