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  4. July / August 2023 Vol. 27 No.7
Documentary Credit World (DCW) - July / August 2023 Vol. 27 No.7 section - Litigation Digest

Glacier Bear Retreat, LLC v. Dusek - No. CV 22-19-M-KLD, slip op. (D. Mont. Feb. 17, 2023) [USA]

Topics: Standby LC; Stay of Judgment Execution; Supersedeas Bond

Note: Following defeat at trial whereby the court ordered specific performance by Matt and Rachel Dusek (Judgment Debtors) regarding a buy-sell agreement for real property located in Glacier National Park, Judgment Debtors appealed. While the action was pending on the docket of the U.S. Court of Appeals for the Ninth Circuit, Judgment Debtors filed a motion to extend the temporary stay of execution of the judgment. Glacier Bear Retreat, LLC (Judgment Creditor) also filed post-judgment motions for an award of attorney fees as well as to amend the judgment to allow for pre- and post-judgment interest. The Judgment Creditor motions were resolved in a separate order. The U.S. District Court for the District of Montana, DeSoto, MJ., granted the motion to extend the temporary stay.

As a general matter, temporary stays are granted following review and approval of proposed security posted by judgment debtors. In this action, a temporary stay had already been granted. Judgment Debtors argued for a stay extension in order to “give them additional time to finalize the security necessary for a permanent stay under [U.S. Federal Civil Procedure] Rule 62(b) pending their appeal”. Judgment Debtors had “diligently” worked to obtain security and “concluded after consulting with their investment advisor that a standby letter of credit w[ould] be the quickest and most efficient option for doing so.” Two items remained outstanding before the LC could be issued: (1) the precise amount of the credit, and (2) the “’draw triggering’ language specifying the conditions upon which the beneficiary may draw upon the letter of credit.” Judgment Debtors were awaiting comments from Judgment Creditor regarding the demand text. While Judgment Creditor opposed the motion, the Judge deemed the requested extension warranted under the circumstances as Judgment Debtors “submitted evidence that they are likely to the obtain the security necessary for a Rule 62(b) stay within 30 days of a ruling on [Judgment Creditor]’s motion to amend the judgment.”