Teleport Mobility, Inc. v. Sywula

Background

On March 18, 2025, the court confirmed a $1,500,000 arbitration award against Krzysztof Sywula and entered judgment two days later. Sywula timely appealed to the Ninth Circuit. The court noted that the appeal may challenge whether it had jurisdiction to confirm the award under the Supreme Court’s decision in Badgerow v. Walters, but it did not decide that issue in this order.

The court had not confirmed the arbitrator’s separate $500,000 attorney-fee award because of an earlier jurisdictional problem. The San Diego County Superior Court later confirmed that portion of the award after a May 16, 2025 hearing.

Sywula asked the court to stay, or pause, enforcement of the judgment during the appeal without requiring a bond. Alternatively, he asked to place some of his non-public Teleport Mobility shares in escrow as security. He argued that requiring a full bond would likely force him into personal bankruptcy and put his creditors in an insecure position.

Sywula submitted information about household income, expenses, debts, and his ownership of 2.4 million Teleport Mobility shares. The plaintiffs challenged the support for his financial claims, relying in part on earlier financial figures and his 2022 deposition testimony. They also disputed the value of the shares, asserting that the company had never generated revenue and that its stock was not publicly traded. The court found that the stock’s future value was uncertain because it depended on the company’s ability to monetize patents through litigation, licensing, or product development and sales.

Legal standard

Federal Rule of Civil Procedure 62 permits a court to require a bond or other security when a party seeks to pause enforcement of a judgment during an appeal. District courts have discretion to set the bond amount or waive the bond requirement. The usual purpose of a bond is to protect the judgment creditor against the risk that the judgment later cannot be collected and to compensate for delay.

The court applied five factors drawn from Dillon v. City of Chicago: the complexity of collection; the time needed to obtain a judgment after an affirmance on appeal; the court’s confidence that funds would be available; whether the defendant’s ability to pay makes a bond unnecessary; and whether requiring a bond would place other creditors in an insecure position.

Court’s analysis

The court focused on the first, second, and fifth factors. It found that the evidence about assets and their location was contested, but that the plaintiffs’ concerns about assets outside the United States were reasonable. Taking Sywula’s claimed financial difficulties as true, the court also found that collection could be difficult.

Even so, the court held that Sywula had not objectively shown why the usual bond requirement should be sharply reduced or waived. The court found that his evidence consisted only of his own declaration, used figures from earlier filings, was questioned by his deposition testimony, lacked financial statements, did not identify specific third-party creditors other than the Internal Revenue Service, and did not state his current employment status.

The court gave some weight to the open jurisdictional issue underlying the appeal but concluded that it did not justify an unbonded stay. It also rejected Teleport shares as alternative security because their value was indeterminate and depended on the company’s future success.

Disposition

The court denied Sywula’s motion to stay enforcement without a bond and ordered him to post a $750,000 bond if he wished to stay enforcement of the $1,500,000 judgment during the appeal. The court denied as moot his separate application for a stay pending the ruling. It also vacated the June 24, 2025 hearing. This order addressed the security required for a stay; it did not decide the merits of the appeal or the jurisdictional issue identified in the order.