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IVOR B. CLARK CO. v. HOGAN

January 23, 1969

IVOR B. CLARK CO., Inc., Plaintiff,
v.
Moreland H. HOGAN, International Office Park, Inc., and International Park Corporation, Defendants. IVOR B. CLARK CO., Inc., Petitioner, v. Moreland H. HOGAN, International Park Corporation and James Talcott, Inc., Respondents



The opinion of the court was delivered by: TENNEY

MEMORANDUM

 TENNEY, District Judge.

 This is a motion, by way of order to show cause, brought on by the third party in interest herein, James Talcott, Inc. (hereinafter referred to as "Talcott"), pursuant to Fed.R.Civ.P. 62(a), 62(d), 59(e), 69(a), CPLR 411 and Rule 33 of the General Rules of this court, seeking: (1) to amend or modify an order of this Court entered October 23, 1968, which required Talcott in its capacity as mortgagee of certain property located in Georgia to turn over all rental monies which came into its possession after receipt by Talcott on March 6, 1968, of a Notification of Issuance and Service of Restraining Notice, issued by the judgment-creditor herein, Ivor B. Clark Co., Inc. (hereinafter referred to as "Clark"), in an effort to satisfy a judgment which Clark obtained against the International Park Corporation (hereinafter referred to as "International"), the mortgagor of the aforementioned property, and Moreland H. Hogan (hereinafter referred to as "Hogan"), the President of International, jointly and severally, in the sum of $85,537.76, and against Hogan, individually, in the sum of $98,276.20; (2) to stay the judgment pending the outcome of the appeal which is presently before the Court of Appeals for the Second Circuit upon Talcott's posting of a supersedeas bond; and (3) any further relief which this Court deems appropriate.

 Inasmuch as the facts underlying the present dispute were sufficiently set forth in my order of October 23, 1968, and somewhat amplified by my subsequent opinion of November 14, 1968, in which, while adhering to my prior decision, I granted Talcott's motion for reargument, this Court sees no purpose in reciting them at this time.

 Talcott seeks to amend the original opinion of this Court in two respects: (1) Talcott contends that it should be required to turn over only those rental monies representing Clark's judgment against International ($85,537.76) since it was solely with International that Talcott shared a debtor-creditor relationship. This would allow all rental monies in excess of that judgment to first be applied to the outstanding debt on the mortgage held by Talcott before being used to satisfy Clark's judgment against Hogan ($98,276.20); and (2) that the amount of the rents required to be paid over to Clark be further limited to that sum which remains in the hands of Talcott after a deduction of the expenses accrued in the course of operating the Georgia property.

 The original opinion of this Court clearly shows that although this Court issued a general order to the effect that

 
"* * * all rental monies which came into the possession of Talcott subsequent to Talcott's receipt of the March 6, 1968 Notification of Issuance and Service of Restraining Notice as well as all rental monies to become due in the future shall be paid over to the judgment creditor pursuant to CPLR § 5225(b) * * *."

 this is no way represented, nor could it be reasonably interpreted to represent, a specific finding as to the extent of Talcott's obligation to Clark. The Court was called upon at that time to determine the nature of the funds in Talcott's possession, which determination could only be made after a studied analysis of Talcott's status in relation to the other parties herein. Having then concluded that Talcott, under Georgia law, had not acquired the necessary degree of control so as to make it a mortgagee in possession with a concurrent legal right to the rents and profits from the estate, this Court simply held that Talcott was to pay over to Clark all rental monies received after March 6, 1968 and those to subsequently become due, with the obvious implication therein that the payments by Talcott would continue only until such time as Talcott's obligation to Clark, under law, became satisfied. Inasmuch as the extent of that obligation did not then appear to be in issue, this Court failed to make a determination with respect thereto. *fn1"

 It appears beyond question that a district court has the power to grant a stay of its own order pending the determination of an appeal therefrom. Hovey v. McDonald, 109 U.S. 150, 161, 3 S. Ct. 136, 27 L. Ed. 888 (1883); Sirloin Room, Inc. v. American Employers Ins. Co., 360 F.2d 160, 161 (5th Cir. 1966); In re Federal Facilities Realty Trust, 227 F.2d 651, 654 (7th Cir. 1955); 7 Moore, Federal Practice, P62.06 at 1371 (2d ed. 1966); 3 Barron & Holtzoff, Federal Practice & Procedure, § 1374 at 467; see Beaver Cloth Cutting Machines, Inc. v. H. Maimin Co., 37 F.R.D. 47 (S.D.N.Y.1964). Additionally, it is established that a party taking an appeal from an order of a district court involving a money judgment, as is the case herein, is entitled to a stay of that judgment as a matter of right upon the posting of a supersedeas bond, American Manuf. Mut. Ins. Co. v. American Broadcasting-Paramount Theatres, Inc., 87 S. Ct. 1, 3, 17 L. Ed. 2d 37, 39 (1966), which bond shall cover the whole amount of the judgment remaining unsatisfied together with the costs of appeal, interest and damages for delay "unless the court after notice and hearing and for good cause shown fixes a different amount or orders security other than the bond." Fed.R.Civ.P. 73(d).

 In determining the "whole amount of the judgment remaining unsatisfied" for the purpose of setting a value to the supersedeas bond which Talcott is required to furnish, this Court must, of necessity, face the issue as to whether Talcott's obligation extends, as it contends, only to the judgment recovered against International and Hogan, jointly and severally, or whether, as Clark contends, it similarly includes the judgment recovered against Hogan in his individual capacity. *fn2"

 Although Clark urges that if this Court were to require any sum less than all the rental monies which came into Talcott's possession subsequent to March 6, 1968, as security for a stay, it would in substance be effecting an untimely and therefore impermissible Rule 59 amendment, it is the opinion of this Court that when it omitted a specific finding in that regard in its original order, it committed inadvertent judicial error which under Fed.R.Civ.P. 60(b)(1), it is permitted to correct within one (1) year following the entry thereof. See Schildhaus v. Moe, 335 F.2d 529, 530-531 (2d Cir. 1964); O'Tell v. New York, New Haven and Hartford R.R. Co., 236 F.2d 472, 475 (2d Cir. 1956); In re Merry Queen Transfer Corp., 266 F. Supp. 605, 607 (E.D.N.Y.1967); Caraway v. Sain, 23 F.R.D. 657, 660 (N.D.Fla.1959); 7 Moore, Federal Practice, P60.22[3] at 236-38 (2d ed. 1966). It is critical to note that this Court is not attempting to accomplish by way of Rule 60(b) something for which an appeal would be a more appropriate remedy, Hines v. Seaboard Airline R.R. Co., 341 F.2d 229, 231 (2d Cir. 1965); Wagner v. United States, 316 F.2d 871, 872 (2d Cir. 1963), nor is it permitting a relitigation of matter adjudged by the original judgment. Schildhaus v. Moe, supra, 335 F.2d at 530. This Court, facing the problem of having to fix the value of the supersedeas bond, is merely enlarging its original opinion to include a finding with respect to an issue which, although not apparently in dispute at the time of my initial consideration of this case, should have been decided at that time.

 Parenthetically, although notice of appeal has been filed herein, the appeal has not yet been docketed (this Court has extended the time to docket such appeal to and including February 18, 1969), thereby permitting the necessary clarification. Ryan v. United States Lines Co., 303 F.2d 430, 434 (2d Cir. 1962); Indussa Corp. v. S.S. Ranborg, 260 F. Supp. 660, 664 (S.D.N.Y.1966). Inamuch as the present consideration by this Court can in no way affect the process of the pending appeal, it appears unnecessary to seek a remand of the case from the Court of Appeals pursuant to the procedure enunciated in Smith v. Pollin, 90 U.S.App.D.C. 178, 194 F.2d 349 (1952) and adopted by the Second Circuit in Ryan v. United States Lines Co., supra.

 Turning to the essence of the present motion, Talcott contends that it should not be required to turn over rental monies in excess of the judgment which Clark obtained against International in that it was only with International that Talcott maintained a debtor-creditor relationship and that the corporate monies of International cannot properly be used to satisfy the personal debt of an individual.

 It is significant to note at this point that an uncontested affidavit, submitted by counsel for the judgment creditor herein, indicates that as of March 6, 1968, two days following the service of the restraining notice on International, International owed approximately $90,000.00 to its ...


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