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Sundown Energy, L.P. v. Haller

United States District Court, E.D. Louisiana

June 18, 2015



STANWOOD R. DUVAL, Jr., District Judge.

Before the Court is a Motion for Stay Pending Appeal (R. Doc. 300) filed by Plaintiff Sundown Energy LP ("Sundown"). Having reviewed the motion, memoranda, record, and relevant law, the Court GRANTS the motion for the reasons herein.


The Court will not reiterate the background of this case, as the background is set forth in previous decisions of this Court in more detail and, more recently, the decision of the United States Court of Appeals for the Fifth Circuit in these proceedings. See Sundown Energy, L.P. v. Haller, 773 F.3d 606 (2014). The parties reached a settlement as to this case as well as matters not before this Court and read the terms of their settlement into the record on March 5, 2012. Thereafter, this Court attempted to resolve certain issues not addressed explicitly by the parties' settlement in the enforcement of the settlement. After this Court enforced the settlement agreement, part of which included an auction held on August 21, 2012, Sundown appealed.

On appeal, the Fifth Circuit held that the district court erred "when it interpreted the settlement agreement to include those items not mentioned during the parties' oral recitation of the settlement agreement, " and, therefore, the "district court thus enforced a settlement agreement which differed from the actual agreement read into the record by the parties." See id. at 613-614. The Fifth Circuit thus held "that the district court abused its discretion when it enforced the settlement agreement." Id. at 614. Although the Fifth Circuit acknowledged that "[w]hen limited to the terms recited to the district court, it is apparent that the settlement agreement does not resolve every dispute which could potentially arise, " that "the parties had not agreed on all of the details of the auction, " and that "the parties gave the district court the authority to enforce and interpret the settlement agreement, " the Fifth Circuit gave no instruction as to how the settlement agreement, including the auction, should be enforced.[1] See id. at 613-614. Instead, the Fifth Circuit simply stated that "[t]he district court should have found the settlement agreement to encompass only those matters expressly stated by the parties." Id. at 614.

The parties submitted cross-motions to this Court requesting that this Court enforce the settlement agreement pursuant to the Fifth Circuit's opinion. See R. Docs. 284 & 287. In those motions, the parties presented an issue based on their interpretation of the Fifth Circuit's opinion. Although Sundown previously argued to the Fifth Circuit that the auction should be reversed, [2] in its motion before this Court Sundown argued that it should receive the amount of the highest bid and enforce the August 21, 2012 auction. See R. Doc. 284. Defendants, to the contrary, argued that the auction had been reversed and that a new auction should be held. R. Doc. 287.

On May 13, 2015, this Court issued its Order and Reasons denying Sundown's "Motion to Enforce Settlement Agreement Pursuant to Fifth Circuit Decision" (R. Doc. 284) and granting Defendants' "Cross-Motion to Enforce Settlement Pursuant to Fifth Circuit Decision, " (R. Doc. 287). See R. Doc. 298. In that Order, this Court held that the Fifth Circuit's decision did not, as Sundown argued in its motion, enforce the auction that occurred on August 21, 2012, nor did it state that Defendant Haller was required to pay the high bid of $1.5 million dollars to Sundown. This Court's opinion remains that the Fifth Circuit, inferentially, although not explicitly, held that the auction was void. As Defendants argued, this Court found that the Fifth Circuit's opinion necessarily reversed the auction when it reversed the district court's "enforce[ment] of the settlement agreement." Thus, based on the express ruling of the Fifth Circuit, this Court denied Sundown's request and granted the Defendants' Motion to Enforce. This Court ordered that "there be another auction held in strict accordance with the parties' wishes, that is, the high bidder pay the low bidder the entire amount of the bid." In accordance with this order, this Court also ordered Sundown return the amount of $635, 000.00 within five days of that order. Sundown has since appealed this decision.

In the instant Motion, Sundown requests a stay of execution of the Court's most recent Order entered on May 13, 2015, as a matter of right, pursuant to Federal Rule of Civil Procedure Rule 62. Alternatively, Sundown seeks a discretionary stay. In support, Sundown argues that, in ordering Sundown to return the amount it received pursuant to the distribution of funds after the auction, the Court entered a money judgment and under Rule 62(d) Sundown is entitled to a stay of judgment as a matter of right. Further, Sundown argues that a supersedeas bond is not required in this instance or, alternatively, is waivable, because Mr. Haller is in possession of the property and serves as collateral during the pendency of appeal, obviating the need for the bond's security during the pendency of appeal. Sundown asserts that the supersedeas bond requirement may be waived as Sundown is capable of returning the funds to Mr. Haller pending the resolution of appeal. Alternatively, Sundown argues that it is entitled to a discretionary stay for the following reasons: (1) Sundown has a substantial case that the binding settlement should be enforced as "expressly stated" with the "high bidder paying its bid price" and its argument on appeal that this Court erred in ordering a new auction be conducted is likely to succeed; (2) Sundown will suffer irreparable injury as the parties' circumstances and needs relative to the use of the property "have significantly changed" and Sundown "has no property to be auctioned "again"; (3) Mr. Haller will not be significantly harmed by the stay as he is the owner of the property and will enjoy all rights to the property; and (4) no adverse public interest will be implicated by the stay as "the granting of the stay would serve the public interest by preventing the potential change in ownership of the property (to Sundown) and subsequent back (to Haller) if the Court's Order is reversed on appeal."

In opposition, Defendants argue that the Order is not a money judgment as it is not solely monetary: it includes an order to conduct a new auction-the order in its entirety is an order "to do" rather than an order "to pay" a sum. Thus, Defendants argue Sundown is not entitled to a stay as a matter of right. Alternatively, if the Court finds that Sundown is entitled to such a stay, the Defendants argue that Sundown must post a supersedeas bond in light of the uncertainty surrounding the parties' respective rights and obligations regarding the property. Defendants argue that the court may fix the "whole amount of the judgment remaining unsatisfied" or up to 1.25 to 1.5 times the amount of the judgment; thus Sundown should be required to post a supersedeas bond of 1.25 to 1.5 times the $635, 000.00 judgment. Finally, Defendants argue that Sundown is not entitled to a discretionary stay.


"Rule 62(d) has been interpreted as entitling a party appealing a money judgment to an automatic stay upon posting a supersedeas bond." Bridgefield Cas. Ins. Co. v. River Oaks Mgmt., Inc., No. Civ. A 12-2336, 2013 WL 5934434, at *1 (E.D.La. Nov. 4, 2013) (citing Sundown Energy, L.P. v. Haller, No. 10-4354, 2013 WL 319968 (E.D.La. June 21, 2013)). Federal Rule of Civil Procedure Rule 62(d) provides:

If an appeal is taken, the appellant may obtain a stay by supersedeas bond, except in an action described in Rule 62(a)(1) or (2). The bond may be given upon or after filing the notice of appeal or after obtaining the order allowing the appeal. The stay takes effect when the court approves the bond.

Fed. R. Civ. P. 62(d). "Courts have restricted the application of Rule 62(d)'s automatic stay to judgments for money because a bond may not adequately compensate a non-appealing party for loss incurred as a result of the stay of a non-money judgment." Hebert v. Exxon Corp., 953 F.2d 936, 938 (5th Cir. 1992)(citations omitted). "The applicability of Rule 62(d) turns... on whether the judgment involved is monetary or nonmonetary." Id. That the stay provisions of Rule 62(d) pertain to judgments for money "does not preclude diverse forms of judgment pertaining to monetary responsibility from a stay under Rule 62(d) pending appeal." Arnold v. Garlock, Inc., 278 F.3d 426, 437 (5th Cir. 2001).

Where a Rule 62(d) stay is applicable, the Fifth Circuit has stated the following as to the ...

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