HomeMy WebLinkAbout2021-cv-2063 - City of Fort Collins v. Open International, et al. - 338 - Dfs' Mot Approval of Security1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.: 21-cv-02063-CNS-SBP
CITY OF FORT COLLINS,
Plaintiff/Counterclaim Defendant,
v.
OPEN INTERNATIONAL, LLC,
Defendant/Counterclaim Plaintiff,
and
OPEN INVESTMENTS, LLC,
Defendant.
______________________________________________________________________________
DEFENDANT’S TIME SENSITIVE MOTION FOR APPROVAL OF SECURITY
______________________________________________________________________________
Pursuant to Fed. R. Civ. P. 62 and Fed. R. App. P. 8(a)(1), Defendant Open Investments,
LLC (“Defendant”) respectfully moves the Court for an order approving, as sufficient security
for a stay of execution pending appeal, an irrevocable letter of credit (“LOC”) in the amount of
$21,880,591.70 on the terms articulated in this motion and the LOC attached as Exhibit A. As
the automatic stay in this matter will expire on April 27, 2024 per Rule 62(a), Defendant requests
that the Court expedite its order (and any briefing it deems necessary to issue it). Should the
Court grant this motion, then Defendant will move to stay execution and append proof of the
executed and effective LOC at that time.
Case No. 1:21-cv-02063-CNS-SBP Document 338 filed 04/10/24 USDC Colorado pg 1 of 5
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BACKGROUND
On March 26, 2024, this Court entered its final judgment in favor of Plaintiff City of Fort
Collins and against Defendants Open International, LLC and Open Investments, LLC. Doc. 329.
Two days later, it amended the judgment to include a calculation of prejudgment interest,
resulting in an aggregate $19,891,447 judgment comprised of $12,245,881 in project costs,
$578,280 in third-party consulting costs, and $7,067,286 in labor costs owed to Plaintiff as
restitution. Doc. 332. The Court also ordered Defendants to pay post-judgment interest and
awarded Plaintiff its costs. Id. By separate order, the Court instructed the parties to submit
briefing on post-judgment motions in April and May of 2024. Doc. 334. Barring relief from this
Court, Defendants intend to appeal the amended judgment to the Tenth Circuit.
Shortly after the judgment issued, Open Investments, LLC applied for an LOC from
Bank of America in the amount of $21,880,591.70—or 10% more than the judgment amount—to
provide security sufficient to satisfy the entirety of the judgment against it, as well as Plaintiff’s
costs and post-trial interest accruing during the post-trial and appellate stages. Defendant
received the draft LOC from the bank on April 10, 2024—the date this motion is being filed. As
the LOC is irrevocable and contains an “evergreen” provision that ensures its automatic
extension, it provides the Plaintiff with the security of a bond at a fraction of the cost.
ARGUMENT
After judgment has been entered, a party may obtain a stay of judgment execution by
“providing a bond or other security.” Fed. R. Civ. P. 62(b). The 2018 amendment to Rule 62
“makes explicit the opportunity to post security in a form other than a bond.’” Deutsche Bank
Nat'l Tr. Co. v. Cornish, 759 F. App’x 503, 509 (7th Cir. 2019) (quoting Fed. R. Civ. P. 62,
Case No. 1:21-cv-02063-CNS-SBP Document 338 filed 04/10/24 USDC Colorado pg 2 of 5
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Advisory Committee Notes—2018 Amendment). One such favored security instrument is a letter
of credit—the mechanics of which are explained within a leading contracts treatise. See Williston
on Contracts § 2:27 (4th ed.) (recognizing that a letter of credit serves “much the same purpose
as other security devices”). District courts in the Tenth Circuit and beyond have accepted LOCs
as sufficient “other security” to secure a post-judgment stay under Rule 62. See, e.g., Bishop v.
Mid-Am. Auto Auction, Inc., 1993 WL 169116, at *1 (D. Kan. Apr. 26, 1993); Richardson v.
Prisoner Transp. Servs. of Am., 2019 WL 1003624, at *2 (M.D. Pa. Feb. 27, 2019); Allegis Grp.,
Inc. v. Jordan, 2019 WL 2106384, at *2 (D. Md. May 14, 2019); Hartford Underwriters Ins. Co.
v. Otto, 2023 WL 3129469, at *1 (E.D. Mich. Apr. 27, 2023); Fin. Info. Techs., LLC v. iControl
Sys., USA, LLC, 2020 WL 11423017, at *1 (M.D. Fla. Nov. 13, 2020); Legacy Data Access, Inc.
v. Cadrillion, LLC, 2018 WL 3277557, at *1 (W.D.N.C. Mar. 21, 2018); Ishman v. Penn Lyon
Homes, Inc., 2007 WL 2332490, at *1 (N.D.W. Va. Aug. 10, 2007) (“This Court is unable to
perceive in what manner the plaintiffs would be prejudiced by the approval of an irrevocable
letter of credit rather than a supersedeas bond.”).
Should the Court approve the LOC on the terms articulated herein, then upon its final
execution, Defendant will petition this Court for a stay of judgment execution, appending the
signed LOC as an exhibit to that motion. Once granted, the stay is automatic and remains in
effect for the time specified in that LOC. Fed. R. Civ. P. 62(b); see also Becker v. United States,
451 U.S. 1306, 1307 (1981) (noting that a stay under former Rule 62(d) is “automatic”).
Case No. 1:21-cv-02063-CNS-SBP Document 338 filed 04/10/24 USDC Colorado pg 3 of 5
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CONCLUSION
Open Investments, LLC respectfully requests that the Court issue an Order approving, as
sufficient security for a stay of execution pending post-trial motions and appeal, an irrevocable
letter of credit in the amount of $21,880,591.70 on the terms articulated herein.
Dated: April 10, 2024 Respectfully submitted,
/s/ Jeffrey Sandman
Laurie.Daniel@webbdaniel.law
Jeff.Sandman@webbdaniel.law
WEBB DANIEL FRIEDLANDER LLP
75 14th Street NE
Suite 2450
Atlanta, Georgia 30309
Attorneys for Open Investments, LLC
Case No. 1:21-cv-02063-CNS-SBP Document 338 filed 04/10/24 USDC Colorado pg 4 of 5
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CERTIFICATE OF CONFERAL
Pursuant to Local Rule 7.1(a), from April 8 to April 10, counsel for Open Investments,
LLC conferred with counsel for Plaintiff regarding the relief requested by this Motion. Plaintiff’s
counsel does not agree to the relief requested herein.
/s/ Jeffrey Sandman
Jeffrey Sandman
Webb Daniel Friedlander LLP
CERTIFICATE OF SERVICE
I hereby certify that on this April 10, 2024, the foregoing was electronically filed with the
Clerk of Court using the Court’s electronic filing system and that a copy of the foregoing was
sent to all counsel of record via same in compliance with the Federal Rules of Civil Procedure
and the Local Rules of this Court.
/s/ Jeffrey Sandman
Jeffrey Sandman
Webb Daniel Friedlander LLP
Case No. 1:21-cv-02063-CNS-SBP Document 338 filed 04/10/24 USDC Colorado pg 5 of 5
BANK OF AMERICA - CONFIDENTIAL PAGE: 1
DATE:
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER:
APPLICANT BENEFICIARY
OPEN INVESTMENTS, LLC CITY OF FORT COLLINS, COLORADO
13019 MAR ST CHIEF FINANCIAL OFFICER
CORAL GABLES, FL 33156 700 WOOD STREET
FORT COLLINS, CO 805222
ISSUING BANK
BANK OF AMERICA, N.A.
ONE FLEET WAY
PA6-580-02-30
SCRANTON, PA 18507-1999
AMOUNT
NOT EXCEEDING USD 21,880,591.70
NOT EXCEEDING TWENTY ONE MILLION EIGHT HUNDRED EIGHTY THOUSAND FIVE
HUNDRED NINETY ONE AND 70/100'S US DOLLARS
EXPIRATION
MAY 1, 2025 AT OUR COUNTERS
WE HEREBY OPEN OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER
XXXXXXXX IN YOUR FAVOR FOR THE AGGREGATE AMOUNT OF $21,880,591.70
USD.
THIS CREDIT IS AVAILABLE WITH BANK OF AMERICA BY PAYMENT AGAINST
PRESENTATION OF BENEFICIARY'S DRAFT(S) AT SIGHT DRAWN ON BANK OF
AMERICA N.A.
DRAFT(S) MUST BE ACCOMPANIED BY:
1. THE ORIGINAL LETTER OF CREDIT AND ALL AMENDMENTS, IF ANY.
2. A DEMAND FOR PAYMENT IN THE FORM OF EXHIBIT A ATTACHED HERETO
3. A COPY, CERTIFIED BY THE CLERK OF THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO, OF AN ORDER ENTERED BY THE DISTRICT
COURT AUTHORIZING THIS DEMAND IN THE AMOUNT DRAWN
PARTIAL DRAWINGS: ARE ALLOWED
IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT IS DEEMED TO BE
AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR PERIOD(S) OF ONE YEAR
EACH FROM THE CURRENT EXPIRY DATE HEREOF, OR ANY FUTURE EXPIRATION
DATE, UNLESS AT LEAST THIRTY (30) DAYS PRIOR TO ANY EXPIRATION DATE,
WE NOTIFY YOU BY REGISTERED MAIL OR OVERNIGHT COURIER AT THE ABOVE
LISTED ADDRESS THAT WE ELECT NOT TO CONSIDER THIS LETTER OF CREDIT
EXTENDED FOR ANY SUCH ADDITIONAL PERIOD.
DRAFT
Case No. 1:21-cv-02063-CNS-SBP Document 338-1 filed 04/10/24 USDC Colorado pg 1
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BANK OF AMERICA - CONFIDENTIAL PAGE: 2
THIS IS AN INTEGRAL PART OF LETTER OF CREDIT NUMBER:
ANY SUCH NOTICE SHALL BE EFFECTIVE WHEN SENT BY US AND UPON SUCH
NOTICE TO YOU, YOU MAY DRAW AT ANY TIME PRIOR TO THE THEN CURRENT
EXPIRATION DATE, UP TO THE FULL AMOUNT THEN AVAILABLE HEREUNDER,
AGAINST YOUR DRAFT(S) DRAWN ON US AT SIGHT AND THE ORIGINAL OF THIS
LETTER OF CREDIT AND ALL AMENDMENTS THERETO, ACCOMPANIED BY YOUR
STATEMENT, SIGNED BY AN AUTHORIZED SIGNATORY, ON YOUR LETTERHEAD
STATING THAT YOU ARE IN RECEIPT OF BANK OF AMERICA, N.A.'S NOTICE OF
NON-EXTENSION UNDER LETTER OF CREDIT NO. XXXXXXXX AND THE APPLICANT'S
OBLIGATION TO YOU REMAINS.
THIS LETTER OF CREDIT MAY BE CANCELLED PRIOR TO THE EXPIRATION DATE
UPON OUR RECEIPT OF WRITTEN CONSENT TO CANCEL FROM THE BENEFICIARY
WHEN ACCOMPANIED BY THE ORIGINAL OF THIS LETTER OF CREDIT AND ANY
AMENDMENTS.
DRAFT(S) MUST STATE "DRAWN UNDER BANK OF AMERICA N.A., STANDBY LETTER
OF CREDIT NUMBER XXXXXXXX DATED APRIL XX, 2024."
DRAFT(S) AND DOCUMENTS SHALL BE PRESENTED AT OUR OFFICES AT BANK OF
AMERICA, ONE FLEET WAY, SCRANTON, PA 18507-1999, ATTN: GLOBAL TRADE
COMMUNICATIONS WITH RESPECT TO THIS LETTER OF CREDIT SHALL BE IN
WRITING AND SHALL BE ADDRESSED TO US AT ONE FLEET WAY, SCRANTON, PA
18507-1999, ATTN: GLOBAL TRADE OPERATIONS, STANDBY UNIT, PHONE:
1-800-370-7519, SPECIFICALLY REFERRING TO THE NUMBER OF THIS LETTER
OF CREDIT.
EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, THIS CREDIT IS ISSUED
SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES (ISP98), INTERNATIONAL
CHAMBER OF COMMERCE PUBLICATION NO. 590.
IF YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS
TRANSACTION, PLEASE CALL 800-370-7519 .
Draft only
--------------------------
AUTHORIZED SIGNATURE
THIS DOCUMENT CONSISTS OF 2 PAGE(S).
DRAFT COPY
FOR DISCUSSION AND REVIEW PURPOSE ONLY
PLEASE SIGNIFY YOUR ACCEPTANCE AND APPROVAL TO ISSUE THIS FORM
_______________________________________________ ____________________________
Applicant's Authorized Signature Date
DRAFT
Case No. 1:21-cv-02063-CNS-SBP Document 338-1 filed 04/10/24 USDC Colorado pg 2
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Exhibit A
Demand for Payment
[On Letterhead of City of Fort Collins]
The undersigned hereby makes demand for payment in the amount of (insert amount in word
form) [$_______], not to exceed twenty one million, eight hundred eighty thousand, five
hundred ninety one dollars and seventy cents ($21,880,591.70), on your letter of credit number
[xx], dated [xx], and in support thereof, certifies to you as follows:
1. The undersigned is a party to, and the current holder of, a judgment entered against Open
Investments, LLC in Civil Action No. 2021-cv-2063 in the United States District Court
for the District of Colorado, which the Applicant has appealed.
2. The judgment entered in the case has become final and nonappealable.
3. The amount of this demand for payment does not exceed the sum of (A) the amount of
the final and nonappealable judgment in the case awarded to the undersigned, and (B)
interest thereon and costs thereof.
4. Payment of this demand should be made by you to the following account:
Account No.:
Name of Account:
Name of Account Holder:
ABA Routing No. of Bank:
Name of Bank:
Attention:
Telephone:
5. Accompanying this demand is a copy, certified by the clerk of the district court, of an
order entered by that court authorizing this demand in the amount drawn.
Dated: _______________________
By: _______________________
Name: _______________________
Title: _______________________
Case No. 1:21-cv-02063-CNS-SBP Document 338-1 filed 04/10/24 USDC Colorado pg 3
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