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DeTienne v. Sandrock

Supreme Court of Montana

January 3, 2017

KEVIN DeTIENNE, individually and on Behalf of THE VIBEKE DeTIENNE TRUST, AS TRUSTEE, THE TRAIN STATION, LLC, A Montana Limited Liability Company, and THE MONEY TRAIN, LLC, a Montana Limited Liability Company, Plaintiffs and Appellees,
v.
BRYAN SANDROCK, GG&ME, LLC a Montana Limited Liability Company, and DRAES, INC., a Montana Close Corporation, Defendants and Appellants.

          ORDER

          Defendants/Appellants ("Sandrock") have renewed their motion for a stay of the judgment entered by the District Court pending appeal. We denied this relief without prejudice in our order of November 29, 2016, noting that a final judgment had not yet been entered because an attorney fee issue was still pending before the District Court. Following entry of a final judgment by the District Court, we issued an order on December 13, 2016, which stayed the judgment pending this Court's resolution of Sandrock's renewed motion for a stay pending appeal. Plaintiffs/Appellees ("DeTienne") have filed a response objecting to the stay request.

         The District Court entered a judgment by default against Sandrock, and in favor of DeTienne, on September 28, 2016. A final judgment, including an award of attorney fees and costs to DeTienne, was entered on December 12, 2016. The judgment includes surrender of real property, actual and punitive damages, pre-judgment interest running from 2009, and attorney fees and costs. The parties dispute the precise amount of the judgment, with Sandrock estimating it to be $3.5 to $4 million, and DeTienne estimating it to be $4.9 million.

         Sandrock has been unable to obtain a bond for purposes of posting security on appeal, and DeTienne has not waived that requirement. M. R. Civ. P. 62(f)(2); M. R. App. P. 22(1)(b). Sandrock moved the District Court for a stay of the judgment and for approval of alternative security pursuant to M. R. Civ. P. 62(f)(1), which authorizes a district court, in its discretion, to "allow alternate forms of security other than a bond, when adequate equivalent security is provided and the appealing party can show that the judgment creditor's recovery is not in jeopardy." However, the District Court denied these requests, stating that "[t]he Court finds that the alternative bond proposed, as outlined by [Sandrock], is not equivalent, or close to equivalent, to the judgment entered in this matter." Sandrock has thus sought similar relief from this Court pursuant to M. R. App. P. 22, which, in like language to M. R. Civ. P. 62(f)(1), authorizes this Court to approve "alternative forms of security other than a bond, when adequate equivalent security is provided and the appealing party can show that the judgment creditor's recovery is not in jeopardy." M. R. App. P. 22(5).

         Submitted in support of Sandrock's request is a personal financial statement of Bryan Sandrock and his spouse listing a joint net worth at $6.4 million.[1] Bryan Sandrock's affidavit avers that he will "not dispose of any monies or assets over the course of this appeal other than in the course of ordinary business, " including payment of attorney fees, and that he can provide "a monthly status report of the operations of the enumerated assets."

         The values of the assets listed on the financial statement may well exceed the estimates of the amount of the judgment, but there is no assurance of that. The values of the many listed properties are not verified, with the value of the largest property premised upon an appraisal conducted in 2009. In assessing punitive damages, the District Court estimated Sandrock's net worth to be a lower figure of $5 million. We note that the listed properties are located in several different states, and that the ownership rests with various business entities and individuals, including Bryan Sandrock and his wife. Further, as stated in the affidavit, it is proposed that the assets would continue to be used for business purposes during the appeal, and would therefore be subject to unknown future economic fluctuations and potential business reversals. Considering these circumstances, we conclude that Sandrock's diverse property interests do not constitute an "adequate equivalent security" that provides assurance that "the judgment creditor's recovery is not in jeopardy" in the event Sandrock does not prevail on appeal. M. R. App. P. 22(5).

         We recognize the frustration of Sandrock's position that the large default judgment was entered because of the failures of previous counsel. Indeed, Sandrock has initiated litigation against previous counsel over this claim. However, that does not change the requirements of the rule governing alternative security on appeal, which we conclude has not been satisfied here. Therefore, IT IS ORDERED that the motion for approval of alternate security and for a stay of judgment pending appeal is DENIED. The stay of judgment previously entered herein is VACATED.

         IT IS FURTHER ORDERED that the stay of appeal entered by this Court in its November 29, 2016, order is VACATED. This appeal may continue pursuant to the Rules of Appellate Procedure, except that appellate mediation will be completed within 75 days of the entry of the final judgment (entered on December 12, 2016), as previously provided in our order of November 29, 2016.

         The Clerk of the Supreme Court is directed to send a copy of this Order to counsel of record, Mediator David C. Dalthorp, and Hon. Kathy Seeley, presiding judge, First Judicial District Court.

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Notes:

[1] Sandrock's briefing and affidavit uses a net worth figure of $6.9 million, but the financial statement lists assets of $7.9 million, liabilities of $1.5 million, and a net worth of ...


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