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August 15, 2017
Divided court won’t hear appeals bond case

By Gary Blankenship
Senior Editor

The Supreme Court declined to accept jurisdiction in a case to resolve a difference in district court of appeal rulings over whether trial courts may allow a reduction in the amount of the bond required by Appellate Court Rule 9.130(b).

The order prompted a sharp dissent from Justice Fred Lewis, joined by Justices Barbara Pariente and Peggy Quince. He noted that the First and Second District Courts of Appeal have produced conflicting opinions from the Third and Fourth DCAs and said the justices should resolve that dispute.

Rule 9.310(a) provides that in an appeal of a final or non-final order, the lower tribunal retains jurisdiction “to grant, modify, or deny” a stay of execution “[e]xcept as provided by general law and in subdivision (b) of this rule.” The stay “may be conditioned on the posting of a good and sufficient bond, other conditions, or both.”

Rule 9.310(b) provides exceptions to (a). The first one is in cases involving money judgments only: “[A] party may obtain an automatic stay of execution pending review, without the necessity of a motion or order, by posting a good and sufficient bond equal to the principal amount of the judgment plus twice the statutory rate of interest on judgments on the total amount on which the party has an obligation to pay interest.”

The comment to (b) said the section “establishes a fixed formula for determining the amount of the bond if there is a judgment solely for money. This formula shall be automatically accepted by the clerk.” It also says if an insurance company is a party by representing an insured, its bond is the policy limits plus 15 percent.

In the case rejected by the court, Silver Beach Investments of Destin v. Silver Beach Towers Property Owners Association, Inc., Case No. SC 17-470, a stay was allowed by the trial court for a bond of $175,000 on a judgment of just over $2.1 million. In approving that action, a panel of the First DCA said as long as the decision was granted under subsection (a), it did not have to comply with the requirements of (b).

In his dissent, Lewis called that a “novel principle of law.”

He noted the First DCA opinion cited two cases from the Second DCA, Platt v. Russek, 921 So. 2d 5, 7-8 (Fla. 2d DCA 2004), and Waller v. DSA Group, Inc., 606 So. 2d 1234, 1235 (Fla. 2d DCA 1992), in reaching its decision. However, the panel noted its conclusion conflicts with the Third DCA in “Mellon United National Bank v. Cochran, 76 So. 2d 964, 964 (Fla. 3d DCA 2000), in which the Third District held that a trial court can only enter a stay of execution of a money judgment upon the movant’s posting of a bond in the full amount of the judgment plus the applicable statutory interest as required by the applicable rule,” Lewis wrote.

He went on to note that the Fourth DCA has routinely issued opinions in line with the Third DCA opinion.

That means, Lewis said, that parties may be treated differently on the same issue in different parts of the state, and, “As a result, we now have a state expressly, directly, and sharply divided on an issue that is very basic and fundamental both to the proper functioning of a judicial hierarchy and to a society that leans on that hierarchy for predictability and stability. This unequal treatment threatens the ability of Floridians to be fully compensated when they seek redress in our courts and secure a judgment through due process.”

He was dissenting “because the conflict presented in this case is one of great importance to all Floridians, rich or poor, incorporate or natural person, which falls squarely within this court’s prerogative to resolve as the state’s supreme court.”

Lewis went on to criticize the outcomes in the First and Second DCA cases.

“The central issue in all of the district court decisions turns on precisely what is required to perfect a stay of execution in connection with a money judgment. For over two centuries, it had been a settled and uncontroversial principle of law that execution of a judgment solely for money could be stayed pending appeal only through a bond for the full amount of the judgment and costs, including applicable interest,” he wrote, citing three cases as examples, one from 1958, one from 1909, and one from 1882.

The Second DCA departed from that tradition in its two decisions, Lewis said, and now has been joined by the First DCA. The result, he said, will be forum-shopping by parties with agents throughout the state, and higher litigation costs for parties in the jurisdiction of the First and Second DCAs because there will be hearings on the proper bond or conditions for securing a stay, which won’t be allowed in the Third and Fourth DCAs.

Lewis also wrote that there will be uncertainty in the trial courts covered by the Fifth DCA until it decides the issue.

Tampa appellate attorney David Caldevilla said most reduced bonds are posted by insurance companies in accordance with the comment to Rule 9.310, but he said it’s always a concern when the bond is less than the judgment.

“It prejudices the plaintiff’s ability to collect on that judgement,” he said. “You’ve got an insufficient security to prevent the plaintiff from executing on that judgment during the one to two years that appeal is going to be in the court. Meanwhile, the defendant could be disbursing assets while you have no way to protect . . . that money from being fraudulently transferred during that appeal.”

Jacksonville appellate attorney Bryan Gowdy said a defendant seeking a lower bond is a rare occurrence and usually rejected by judges. But the underlying issue is significant, he added.

“We’ve always allowed plaintiffs to go execute on their judgment shortly after the opinion, even if there’s an appeal, unless there is a bond,” Gowdy said. “There’s always a risk that during the pendency of the appeal the defendant may have money, and that money may disappear. It’s important for plaintiffs to be able to require the posting of the bond, and, if it’s less than the judgment amount, you’re not assured of getting your full payment.”

He noted there are statutory exceptions for judgments in excess of $50 million and in tobacco-related litigation, but added, “I still think it would be an extraordinary circumstance for a judge to allow a stay of execution without the full bond required by the rule, which is the judgment plus two years of interest. We’ll just have to wait and see what happens. I have not seen defendants try to get away without posting full bond.”

University of Florida Levin School of Law Prof. Jon Mills, who teaches appellate law, said he’s more focused on the jurisdiction issue raised by Lewis — the court’s reluctance to address a dispute between the DCAs. He noted this concern was raised when court procedures were revised more than 35 years ago to reduce the Supreme Court’s workload.

“This goes back to the era when conflict jurisdiction was created and the Supreme Court did away with certiorari and people said, ‘If we’re not careful, there will be different laws in different DCAs,’” Mills said.

“Conflict jurisdiction is important to maintain uniformity. If you accept Justice Lewis’ conclusions, this identifies one of the problems people talked about when they did away with certiorari.”

[Revised: 05-16-2018]