United States District Court, D. Colorado
ORDER DENYING A STAY OF EXECUTION ON
JUDGMENT
CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE
This
matter is before the Court on Defendant Integrity Solutions
Group, Inc.'s Renewed Motion to Stay Execution of
Judgment. (Doc. # 244.) The Court denies Defendant's
Motion for the reasons detailed below.
I.
BACKGROUND INFORMATION
United
States Magistrate Judge Scott T. Varholak detailed the
factual background of this matter in his Recommendation on
the Motion to Dismiss, issued March 14, 2017. (Doc. # 61.)
The Recommendation in incorporated herein by reference.
See 28 U.S.C. § 636(b)(1)(A); Federal Rule of
Civil Procedure 72(a). The Court will detail only the
subsequent procedural history relevant to the Motion now
before it.
On
October 5, 2018, after a four-day jury trial on
Plaintiff's claim for copyright infringement, the jury
returned a verdict for Plaintiff and determined that
Plaintiff's actual damages from Defendant's
infringement were $262, 197.00. See (Doc. # 216.)
The Clerk of the Court entered judgment in favor of Plaintiff
and against Defendant in that amount, with post-judgment
interest accruing at the legal rate of 2.59% (“the
Judgment”). (Doc. # 217.)
On
October 22, 2018, Plaintiff began executing the Judgment. It
filed several Applications for Writs of Garnishment directed
to Defendant's vendors or customers (Doc. ## 228-33),
which the Clerk of the Court issued on the same day (Doc. ##
234- 39).
The
following day, October 23, 2018, Defendant filed the Motion
to Stay Execution of Judgment presently before the Court.
(Doc. # 244.) Defendant asserts that it intends to file
post-trial motions “that may result in the judgment
being vacated or reduced” by the deadline for it to do
so under Federal Rules of Civil Procedure 50 and 59, November
2, 2018. (Id. at 1-2.) It argues that “before
this Court has a chance to rule on [its] post-trial motions,
” the Writs of Garnishment will permanently
“disrupt Integrity's business.” (Id.
at 2.) Defendant's owner, Mr. Michael Kirschbaum, avers
in an accompanying declaration that Defendant's
“business is highly based on personal relationships and
trust, ” and that these relationships are
“permanently damaged” by Plaintiff's attempts
to execute the Judgment. (Doc. # 244-1 at 1.) Mr. Kirschbaum
also states that Defendant's customers can “easily
find a service provider to replace [Defendant].”
(Id.) Defendant therefore requests that pursuant to
Federal Rule of Civil Procedure 62(b), the Court stay the
execution of the Judgment “while it considers post-
trial motions.” (Doc. # 244 at 4.) As to bond,
Defendant cursorily states that it “does not have the
resources to post a bond.” (Id. at 5.)
Plaintiff
responded in opposition to Defendant's Motion to Stay
Execution of Judgment one day later.[1] (Doc. # 249.) Plaintiff
argues that Defendant has made “no showing of unusual
circumstances sufficient to justify a stay without
bond.” (Id. at 2.) It states that “the
evidence at trial suggested Defendant has sufficient revenue
. . . to cover the expense of a bond.” (Id. at
4.) Plaintiff also raises its concern that “Defendant
is attempting to fraudulently transfer and/or dissipate its
assets to avoid collection, ” presenting evidence that
“Defendant's principal has moved to Branson,
Missouri;” that his wife is listed as the registered
agent for a new, Missouri-based entity, Ecxpro, LLC, with a
similar purpose to that of Defendant; and that
Defendant's website was, at various points after the
trial, forwarding visitors to the website for Ecxpro, LLC.
(Id. at 2-3.)
Defendant
filed a Reply in support of its request on October 29, 2018.
(Doc. # 255.) It first denies attempting to fraudulently
transfer or dissipate its asserts to avoid collection of the
Judgment, faulting Plaintiff's Response for being
“rife with speculation and false assertions.”
(Id. at 1.) As to Plaintiff's argument regarding
Defendant's ability to cover the expense of a bond,
Defendant provides a second declaration from Mr. Kirschbaum,
in which he states that Defendant “has no assets to
post a bond because it has been forced to incur legal fees
and expenses these past two years to defend this case and
these costs and expenses have dissipated [its] assets.”
(Doc. # 255-1 at 2.) Mr. Kirschbaum claims that Defendant has
incurred more than $100, 000.00 to defend against
Plaintiff's action. (Id.)
II.
APPLICABLE LEGAL PRINCIPLES
Federal
Rule of Civil Procedure 62 provides for stays pending the
disposition of certain post-trial motions:
On appropriate terms for the opposing party's security,
the court may stay the execution of a judgment-or any
proceedings to enforce it-pending disposition of any of the
following motions:
(1) under Rule 50, for judgment as a matter of law;
(2) under Rule 52(b), to amend the findings or for additional
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