Ema Financial, LLC v. Joey New York, Inc.
- Vernon Broderick
- 1:17-cv-09706
- U.S. District Court · Southern District of New York
- 6
In Ema Financial v. Joey New York, Judge Broderick denied Joey Chancis and Richard Roer’s motions to quash subpoenas and stay the action pending appeal.
Joey Chancis and Richard Roer remain subject to Ema Financial’s subpoenas and restraining notices used to collect the judgment, and the judgment was not stayed by this order.
What happened
In Ema Financial, LLC v. Joey New York, Inc., Joey Chancis and Richard Roer asked the court to cancel subpoenas seeking their personal financial records and placing restrictions on their accounts to collect a judgment. They also asked to pause the case while they appealed.
The court explained that pausing enforcement of a money judgment generally requires a bond or other security. Chancis and Roer said they could not pay the judgment, but they did not offer assurance that the judgment would be secured if Ema Financial won on appeal. The court also found that their arguments focused on the wrong legal test.
The court denied both the motion to quash the subpoenas and the motion to stay the action pending appeal. Judge Vernon S. Broderick ruled that the bond requirement should not be waived because Chancis and Roer had not shown that the judgment would be protected.
The detailed version
- Ema Financial, LLC v. Joey New York, Inc. · No. 1:17-cv-09706
- Vernon Broderick
- July 1, 2022
Background
Ema Financial, LLC obtained a February 2, 2022 judgment. In an earlier opinion and order, the court held Joey Chancis and Richard Roer individually liable for damages arising from breach of contract, breach of guaranty, and constructive fraudulent conveyance.
Ema Financial then issued subpoenas seeking personal financial records and served restraining notices on Chancis’s and Roer’s accounts to collect the judgment. Chancis and Roer filed an emergency motion to quash, meaning to cancel, the subpoenas. They also filed a supplemental letter-motion asking the court to stay, or pause, the action pending their appeal.
Legal standard
Under Federal Rule of Civil Procedure 62(b), a party seeking a stay of a judgment may obtain one by providing a bond or other security. For a money judgment, the court applied a five-factor test concerning whether to waive that security requirement. The factors include the complexity of collection, the time needed to obtain payment after an appeal, the court’s confidence that funds will be available, whether the defendant plainly can pay without a bond, and whether a bond would harm other creditors.
The court explained that a defendant’s assertion that they cannot pay the judgment weighs strongly against waiving the bond requirement. The purpose of the requirement is to protect the prevailing party if the judgment is affirmed while allowing the appellant to recover payment if the judgment is reversed.
Court’s analysis
Chancis and Roer primarily argued that they would prevail on appeal. The court found that argument inapplicable to their request because the traditional four-factor stay test applies to injunctions or equitable relief, not to enforcement of a money judgment. They did not adequately address the five factors governing waiver of security.
Chancis and Roer repeatedly stated that their personal financial situations prevented them from paying the judgment. The court found that this showing weighed against, rather than in favor of, waiving the bond requirement. They also did not provide persuasive assurance that a third party, including Richard Chancis, could satisfy the judgment.
Disposition
The court denied Joey Chancis’s and Richard Roer’s motion to quash the subpoenas and denied any motion to stay the matter pending appeal. The opinion did not waive the bond or other security requirement.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.