United States District Court, D. Montana, Missoula Division
W. Molloy, District Judge United States District Court
United States sued Malcolm Wayne Birdsong to reduce federal
income tax assessments to judgment, to determine that
Birdsong is the true owner of two properties in Lolo,
Montana, and to foreclose federal tax liens on those
properties. The Court granted summary judgment for the United
States, (Doc. 48), and entered judgment in favor of the
United States for $438, 146.94 plus interest, (Doc. 50). The
Court also entered a Decree of Foreclosure and Order of
Judicial Sale of the Lolo properties. (Doc. 51.) Birdsong has
appealed. (Doc. 52.) He now moves to stay enforcement of the
Decree of Foreclosure and Order of Judicial Sale pending the
appeal. (Doc. 53.) He also requests a waiver of the
requirement to post a bond or other security. (Id.)
Rule of Civil Procedure 62(b) provides that "[a]t any
time after judgment is entered, a party may obtain a stay by
providing a bond or other security." Under the rule, a
party is entitled to a stay of the judgment as a matter of
right upon posting a bond or security. Am. Mfrs. Mut.
Ins. Co. v. Am. Broad-Paramount Theatres, Inc., 87 S.Ct.
1, 3 (1966). The bond or security protects the prevailing
party "from the risk of a later uncollectible judgment
and compensates him for delay in the entry of the final
judgment." NLRB v. Westphal, 859 F.2d 818, 819
(9th Cir. 1988). A district court has discretion to modify or
waive the bond requirement. Int'l Telemeter v. Hamlin
Int'l Corp., 754 F.2d 1492, 1495 (9th Cir. 1985);
Dillon v. City of Chicago, 866 F.2d 902, 904 (7th
Cir. 1988). Stays under Rule 62(b) apply only to money
judgments. Westphal, 859 F.2d at 819.
62(d) allows a district court to "suspend, modify,
restore, or grant an injunction" pending an appeal from
a judgment that grants or denies injunctive
relief. Fed.R.Civ.P. 62(d). A motion for an
injunction pending appeal is considered under the same
standard as a motion for a preliminary injunction. See
Tribal Vill. o/Akutan v. Hodel, 859 F.2d 662, 663 (9th
Cir. 1988). A party seeking an injunction pending appeal must
show (1) a likelihood of success on the merits, (2) it is
likely to suffer irreparable harm, (3) an injunction will not
substantially injure the other parties, and (4) an injunction
is in the public interest. Hilton v. Braunskill, 481
U.S. 770, 776 (1987).
is imprecise about the relief he seeks. He variously requests
a "stay" pending appeal and an
"injunction" pending appeal. In opposing
Birdsong's motion, the United States argues Rule
62(d)'s standard for an injunction pending appeal
governs. Foreclosure decrees and orders of judicial sale have
injunctive elements in that they direct parties to take
specific actions with respect to the property. See
Deutsche Bank Nat'l Trust Co. v. Cornish, ___ F.
App'x, ___ 2019 WL 462484, at *4 (7th Cir. 2019). But, in
this case, foreclosure is merely a mechanism to enforce the
money judgment. (See Doc. 48 at 18-19.) Accordingly,
Birdsong's motion is properly construed as a motion to
stay the judgment under Rule 62(b). See Deutsche Bank
Nat'l Trust Co., 2019 WL 462484, at *7 (considering
a motion to stay a foreclosure under Rule 62(b)).
question, then, is whether Rule 62(b)'s requirement to
post a bond or other security should be waived. The Ninth
Circuit has not established a test for waiving the bond or
security. Courts have considered the following factors when
deciding whether to do so:
(1) the complexity of the collection process; (2) the amount
of time required to obtain a judgment after it is affirmed on
appeal; (3) the degree of confidence that the district court
has in the availability of funds to pay the judgment; (4)
whether the defendant's ability to pay the judgment is so
plain that the cost of a bond would be a waste of money; and
(5) whether the defendant is in such a precarious financial
situation that the requirement to post a bond would place
other creditors of the defendant in an insecure position.
Dillon, 866 F.2d at 904-05 (citations and internal
quotation marks omitted); see also Educ.
Logistics, Inc. v. Laidlaw Transit, Inc., No.
CV-07-06-M-DWM, 2013 WL 12134035 (D. Mont. May 13, 2013)
(applying the Dillon factors).
does not explicitly address these factors. He filed a
declaration that he has no income, assets, or other source of
funds to obtain a bond and that he believes the value of the
properties subject to the foreclosure decree is sufficient to
secure the judgment. (Doc. 54-1.) He did not produce any
financial records or valuation of the properties.
new amendments to Rule 62 mean the Court need not wade into
the Dillon factors at all. New Rule 62(b) permits
flexibility in the type of security required to obtain a
stay, which allows the Court to treat the properties as
sufficient security. Fed.R.Civ.P. 62 advisory committee's
note to 2018 amendments; Deutsche Bank Nat'l Trust
Co., 2019 WL 462484, at *7. The purpose of Rule
62(b)'s bond requirement is to secure the prevailing
party against the risk of being unable to collect the
judgment. Westphal, 859 F.2d at 819. The properties
offer that security here. Given Birdsong's financial
situation, the proceeds from the sale of the properties are
the United States' only hope for collecting on the
judgment. Treating the properties as security for the
judgment, then, merely maintains the status quo. Further, the
Court's Decree of Foreclosure and Order of Judicial Sale
requires Birdsong to preserve the properties, including by
maintaining insurance, paying property taxes, and avoiding
any action that would decrease their value. (Doc. 51 at
¶ 16.) This maintenance order protects the United States
against a risk of loss pending the appeal. Finally, if the
properties are sold in a judicial sale, Birdsong's appeal
will be effectively rendered moot. These equitable concerns
further counsel treating the properties here as security for
the judgment pending appeal. Accordingly,
ORDERED that Birdsong's motion for a stay pending appeal
(Doc. 53) is GRANTED and the requirement to post a bond or
security is WAIVED. Enforcement of the Judgment (Doc. 50) and
the Decree of Foreclosure and Order of Judicial Sale (Doc.
51) is STAYED pending resolution of BirdSong's appeal.
 The 2018 amendments to Rule 62
reorganized and revised the provisions for staying a
judgment. Rule 62(b) "carries forward in modified form
the supersedeas bond provisions of former Rule 62(d)."
Fed.R.Civ.P. 62 advisory committee's note to 2018
amendments. Further, "[t]he new rule's text makes
explicit the ...