Gilliland v. Venepally et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
____________________
DAVID L. GILLILAND, in his capacity as
Trustee of the David L. Gilliland Revocable Trust,
Plaintiff,
v. No. 2:24-cv-00065-MLG-KRS
DR. RAMMOHAN VENEPALLY and
EUGENE SAMUEL,
Defendant.
MEMORANDUM OPINION AND ORDER DENYING
DEFENDANTS’ MOTION TO STAY JUDGMENT
Defendants Dr. Rammohan Venepally and Eugene Samuel seek a stay of judgment against
them. The relief sought is straightforward, but the procedural history is unusual. This matter was
transferred to this Court after Judge James O. Browning left the bench, but not before he held a
hearing on the matter. Doc. 58. There, Judge Browning said he was likely to deny the motion, but
he did not provide reasons for his inclination. Doc. 63. Accordingly, this Court has necessarily.
undertaken an independent review of the parties’ filings and the hearing transcript. Having
completed that process, the outcome remains the same; the motion is denied.
DISCUSSION
The underlying claim in this matter arises from a promissory note issued by Gilliland to
Defendants and a third individual, Robert Wiltshire. Doc. 58 ¶¶ 2-3. Judge Browning issued a
judgment in favor of Gilliland on his breach of contract claim and ordered Defendants to pay the
outstanding balance owed, plus interest and costs. Doc. 55 at 30. Defendants seek a stay of the
judgment pending resolution of (ostensibly) related state litigation, for which they offer a
supersedeas bond. Doc. 58 ¶¶ 2, 16.
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Defendants first cite Federal Rule of Civil Procedure 62(b) in support of their request. Doc.
58 ¶ 6; Doc. 61 at 2. That provision allows a party to obtain a stay, with judicial approval, and after
providing a bond or other security. Fed. R. Civ. P. 62(b). Whether to grant a request for bond is
within the court’s discretion. Fed. R. Civ. P. 62(b) advisory committee’s notes to 2018 amendment.
Four factors are material to that decision:1 “(1) whether the stay applicant has made a strong
showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably
injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties
interested in the proceeding; and (4) where the public interest lies.” Hilton v. Braunskill, 481 U.S.
770, 776 (1987). The movant bears the burden of establishing entitlement to relief. Springer v.
Seventh Jud. Dist. Ct., No. 1:23-CV-00499-MIS-JMR, 2023 WL 7130541 (D.N.M. Oct. 30, 2023)
(internal citations omitted).
Addressing these factors here, the Court finds that Defendants have not satisfied the Hilton
factors or shown their entitlement to a stay.
Defendants first assert that they are likely to succeed on the merits because the “undisputed
evidence” supports their state law contract and fraud claims against Wiltshire, but their optimism
1 The Hilton factors are typically applied when addressing a request for a stay pending appeal, and
some courts have refused to apply them when considering a stay under Rule 62(b). Rajala v.
Gardner, No. 09-2482, 2014 U.S. Dist. LEXIS 126673 *2 (2014) (“The Court finds the test
inapplicable here because the case Defendants rely upon…addresses Fed. R. Civ. P. 62(c), which
details with an injunction pending an appeal.”). Other courts have taken a different view. United
States v. Moyer, No. C 07-00510 SBA, 2012 U.S. Dist. LEXIS 99284 *6 (N.D. Cal. Aug. 12, 2008)
(“Although it appears no court in the Ninth Circuit has ever expressly considered what factors
should be used to determine whether or not a stay would be appropriate under Rule 62(b), this
Court finds it proper to consider the same factors used to determine whether or not to stay an action
under Rule 62(c).”); Associated Elec. & Gas Ins. Servs. v. Rigas, No. 02-7444, 2004 U.S. Dist.
LEXIS 7027 *3 n.1 (2004) (“Regardless of which subsection Plaintiffs are invoking, to obtain a
stay they must show [satisfaction of the factor test].”). The parties rely on the Hilton factors in
their filings, however, and so the Court also addresses them in this opinion. Doc. 60 at 5-6; Doc.
61 at 6-9; supra at 5-6.
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regarding their prospects in the state law proceedings has not yet been borne out. Doc. 61 at 6-7.
A bench trial was held in the state court action earlier this summer, and the findings of fact and
conclusions of law remain contested. Plaintiff’s Proposed Findings of Fact and Conclusions of
Law; Defendants’ Proposed Post-Trial Findings of Fact and Conclusions of Law; Defendants’
Objections to Plaintiff’s Proposed Findings of Fact, Las Cruces PET Imaging, LLC, et al. v. Rio
Grande Hematology & Oncology, LLC, et al. (2026) (No. D-307-CV-2023-02224). Further, no
judgment has been entered in the case. Id. Defendants’ argument is not persuasive, and the first
Hilton factor weighs against them.
Second, Defendants will not suffer irreparable injury. They argue otherwise, averring that
“[a]bsent a stay, Defendants may be forced to satisfy the Judgment in full while their related
indemnification and fraud claims against Mr. Wiltshire remain pending, creating a substantial risk
that Defendants will be unable to recoup amounts that may ultimately be determined to be Mr.
Wiltshire’s responsibility.” Doc. 58 ¶ 9. Judge Browning previously addressed this issue.2 He
found (and this Court agrees) that payment of the judgment is part of Defendants’ contractual
obligations. Doc. 55. See Edmonds v. Companie Generale Transatlantique, 443 U.S. 256, 260, n.
8, 271, n. 30 (1979) (“[A] plaintiff obtaining a judgment against more than one concurrent
tortfeasor may satisfy it against any one of them.”). Fulfillment of a legal obligation is not an
irreparable injury.3 Doc. 63. That Defendants may have to pay Wiltshire’s (alleged) portion of the
2 “The Defendants…admit, however, that [Gilliland] can sue any one of the joint
and severally liable parties and force them to sue each other to sort things
out….Gilliland has decided to sue certain signatories to the Note, presumably
because he has decided that the Defendants here are either: (i) wealthier and more
likely to be able to satisfy a judgment; or (ii) more culpable for the breach of
contract and for the business relationship falling apart.”
Doc. 55 at 25-26.
3 “Injury is generally not irreparable if compensatory relief would be adequate.” Tri-State
Generation & Transmission Ass'n, Inc. v. Shoshone River Power, Inc., 805 F.2d 351, 355 (10th Cir.
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judgment is a risk inherent to joint-and-several-liability and one that was part of the underlying
agreement. Indeed, when Defendants executed the relevant contract with Gilliland, they assumed
the risk of liability for a breach, including the obligation to make the other party whole. Even
assuming that Wiltshire will file for bankruptcy, as Defendants allege, the allocation of
contributions between joint wrongdoers is not properly before this Court. Wiltshire is not a party
to this action, and contribution is an issue to be resolved in a separate proceeding.4 Simply put, the
Court’s imposition of joint-and-several liability for Defendants’ breach of contract is not an
irreparable injury.
Third, Gilliland will suffer substantial injury if the judgment is stayed. Notwithstanding
Defendants’ protestations, a stay will further delay and complicate Gilliland’s ability to recover
what he is owed. Doc. 58 ¶ 15; Doc. 61 at 5. Gilliland obtained judgment in his favor more than
one year ago. Doc. 55. Yet, Defendants ask him to wait indefinitely to receive funds he is lawfully
owed. Doc. 1; Doc. 55; Doc. 58. That delay is both unnecessary and unreasonable; “Every moment
that the judgment is not executed is a moment that Plaintiffs are deprived of the use of their assets.”
Spizizen v. Nat’l City Corp., 2012 U.S. Dist. LEXIS 207116, at *14 (E.D. Mich. Nov. 5, 2012)
(analyzing the substantial injury factor under Rule 62(b)). This factor weighs against staying
execution.
1986); cf. Strong v. Laubach, 443 F.3d 1297, (10th Cir. 2006) (“A judgment debtor who is unable
or is unwilling to post a supersedeas bond retains the right to appeal even if the judgment is
executed….Should the judgment be reversed on appeal, a district court may…order the judgment
creditor to restore the benefits obtained.” (internal citations omitted)). In the event that Defendants
later show that the judgment is erroneous, they will still be entitled to compensatory relief. And
even if payment of a court-ordered judgment is an injury, it is certainly not an irreparable one.
4 See Edmonds, 443 U.S. at 260, n. 8, 271, n. 30 (“If both [wrongdoers] are already before the
court… a separate contribution action is unnecessary…[A] concurrent tortfeasor generally may
seek contribution from another…, but he is not relieved from liability for the entire damages even
when the nondefendant tortfeasor is immune from liability.”)
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Fourth, and finally, public interest does not support staying the judgment. Defendants
invoke notions of “fundamental unfairness” and “judicial efficiency and economy” in support of
their position, but neither argument is persuasive. Doc. 61 at 7-9. As explained above, holding
Defendants to their legal obligations is not fundamentally unfair, and requiring joint wrongdoers
to pursue contribution in a separate action does not create logically inconsistent judgments. See
Doc. 58 ¶ 10; Doc. 61 at 7. As Gilliland notes, a stay secured by a bond disadvantages all parties:
“Defendants will have to part with cash or collateral sufficient to satisfy the judgment in order to
post a bond, Plaintiff will not receive what he is owed, interest will continue to accrue on
Defendants’ obligations, and this case will remain on the Court’s docket indefinitely.” Doc. 60 at
10. Gilliland’s points are well-taken. The Court resolves this factor in his favor and against the
Defendants.
In short, every one of the Hilton considerations falls on Gilliland’s side of the ledger. 481
U.S. at 776. The Court therefore concludes that Defendants have fallen short of demonstrating
entitlement to a stay under Rule 62(b).
Defendants’ other arguments are unavailing. Their references to N.M. Stat. Ann. Section
39-1-13 (2024) are inapposite; that provision applies only in those cases when a defendant
confesses to partial or full liability. Doc. 58 ¶ 7. They claim that “[r]efusing a stay may visit an
irreversible harm on applicants” while “granting it will apparently do no permanent injury to
respondents.” Doc. 58 ¶ 9; Doc. 61 at 3, 9. Defendants cite Philip Morris USA Inc. v. Scott to
support that proposition, but that decision is not on point. 561 U.S. 1301, 1302 (2010). Philip
Morris addresses stays during the pendency of an appeal to the U.S. Supreme Court, which is
plainly not the circumstances presented here. 28 U.S.C § 2101(f) (“In any case in which the final
judgment or decree of any court is subject to review by the Supreme Court on writ of certiorari…”)
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(emphasis added). Defendants further claim that “in a case with multiple defendants, judgment
should not be entered against a defaulting defendant before the case has been decided on the merits
as to the remaining defendants.” Wilcox v. Raintree Inns of Am., Inc., 76 F.3d 394 *2 (10th Cir.
1996) (citing Frow v. De La Vega, 82 U.S. 552, 554 (1872)). This holding, which is colloquially
known as the Frow rule, is inapplicable. No default is at issue here. Mays v. Ct. Servs., Inc., No.
CV 09-662-KG-KBM, 2014 WL 12789019 *2 (D.N.M. Aug. 19, 2014).
CONCLUSION
In conclusion, the Court has discretion to issue a stay under Federal Rule of Civil Procedure
62(b), using the four Hilton factors. All four factors weigh against a stay in this case: Defendants
fail to show a likelihood of success on the merits of their state court litigation; they will not suffer
irreparable injury from paying the judgment in full; Gilliland will suffer substantial injury from
the continued delay in enforcing his contract; and public policy weighs in favor of enforcing the
judgment and finishing this litigation. For the foregoing reasons, the Court denies Defendants’
Motion to Stay Judgment.
It is so ordered.
UNITED STATES DISTRICT JUDGE
MATTHEW L. GARCIA
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