The opinion of the court was delivered by: ALAN KAY, Senior District Judge
Currently before the Court are Plaintiff,
Counterclaim-Defendant Steven R. Perles, P.C. and Third-Party
Defendant Steven R. Perles' (collectively "Perles") motion to
waive posting of a supersedeas bond ("Pl. Mot."),
Defendant and Counter-Plaintiff Anne-Marie Kagy's (hereinafter
"Kagy") opposition and motion for relief from judgment under Rule
60(b) and motion for sanctions in the form of attorney's fees
("Def. Opp'n.") /*fn1 and Thomas Fortune Fay's motion and accompanying brief to intervene to
oppose Perles' motion seeking waiver of the supersedeas bond
("Fay Mot." & "Fay Br.") .
The issues currently before this Court arise out of two
separate but related contract disputes over fees awarded to
Perles based on his work in two wrongful death and
state-sponsored terrorism lawsuits, Flatow v. Islamic Republic
of Iran, No. 97-0396 (D.D.C.) and Eisenfeld and Duker v.
Islamic Republic of Iran, No. 98-1945 (D.D.C.). Anne Marie Kagy,
a recent law graduate at the time, worked for Perles on these
cases with the understanding that Perles would pay her a
percentage of the fees, should any award be forthcoming. The bulk
of Kagy's work on the state-sponsored terrorism cases involved
Flatow, with some work on the Eisenfeld and Duker cases as
Although Judge Royce Lamberth entered judgment for the
plaintiff in Flatow against the Iranian defendants in excess of
$250 million (approximately $23 million of which was
compensatory), the possibility of actually collecting on the
judgment was remote. On January 4, 2001, however, Congress
appropriated money to pay the judgments in the Flatow and
Eisenfeld and Duker cases, among others.
With the subsequent availability of funds to pay the judgment
and attorney's fees, a dispute arose between Kagy and Perles
regarding the compensation to which she was entitled for her work
on the Flatow and Eisenfeld and Duker cases. Unable to
agree on payment for legal services, Kagy asserted an "attorney's
lien" of $2,000,000 on the net proceeds of the judgment payments.
(Fay Br. at 2.) On Jan. 18, 2001, Fay and Perles jointly
transferred $2,000,000 from the escrow account holding the proceeds of the two cases to a
separate trust account,*fn2 (hereinafter "the Greenberg
Traurig trust account"), established specifically in response to
Kagy's equitable lien. Id.; see also Perles v. Kagy,
339 F.Supp.2d 47, 52 (D.D.C. 2004) (hereinafter "Flatow Order")
(explaining that Kagy's lien for attorney's fees caused Perles to
place funds subject to the lien in a separate trust account
pending a determination of the validity of the lien).
On Jan. 19, 2001, Perles filed suit against Kagy, seeking a
declaratory judgment that Kagy was only entitled to hourly
compensation rather than a percentage share of the net fees
received by Perles. Kagy counter-claimed for a one-third
percentage of the fees, or in the alternative, for a judgment in
quantum meruit for the value of her work.
Following a bench trial in January 2003, Judge Thomas Penfield
Jackson (now retired) found the existence of an oral contract
between Kagy and Perles and found that Kagy was entitled to one
third of any net fees paid to Perles in the Flatow case.
Perles v. Kagy, Civ. No. 01-105, (D.D.C. April 10, 2003)
(Docket #60) (hereinafter "Jackson Order"). Judge Jackson
subsequently referred the case to the undersigned for a
determination of the net fees paid to Perles.*fn3 Beginning December 16, 2003, the undersigned held a combined
evidentiary hearing to determine of the "net fees" received by
Perles in the Flatow case,*fn4 and to decide Kagy's
quantum meruit claim regarding her work on Eisenfeld and
Duker. On April 20, 2005, this Court entered an amended final
order and judgment, nunc pro tunc,  awarding Kagy
$1,339,675.35 plus actual accrued interest in the Flatow case
and $47,326.09, plus actual accrued interest for the value of her
legal services provided in the Eisenfeld and Duker case.
On May 20, 2005, Perles filed a notice of appeal . Kagy
cross-appealed  on May 27, 2005. On June 17, 2005, Perles
moved for a stay pending appeal and waiver of the supersedeas
bond . On June 20, 2005, Mr. Thomas Fortune Fay, Perles'
co-counsel in the state-sponsored terrorism litigation, filed a
motion to intervene . Fay has asserted an interest in the
Greenberg Traurig trust account in the amount of $1 million and
opposes the use of the trust fund as an alternative to a
supersedeas bond. Plaintiff's motion to waive the supersedeas
bond, Fay's motion to intervene and Defendant's motion for relief
from judgment are discussed in turn.
1. Perles' Motion to Waive the Supersedeas Bond
The district court has broad discretionary power to stay a
judgment pending appeal without the requirement of a
supersedeas bond in appropriate cases. See FED. R. CIV. PROC.
62(d) & (g); FED. R. APP. PROC. 8(a) (requiring appellant to seek
suspension or modification of the bond requirement in the
district court before seeking such relief in the court of
appeals); see also Federal Prescription Service, Inc. v.
American Pharmaceutical Assoc., 636 F.2d 755, 756-60 (D.C. Cir. 1980) (upholding district court's authority to grant
stay pending appeal without posting of a bond based on
defendant's "continuing ability to satisfy the judgment").
Appropriate circumstances for waiver include cases in which the
net worth of the judgment creditor far exceeds the amount of the
judgment, Federal Prescription, 636 F.2d at 761, where
available alternative security arrangements exist, id. at
758-59, and situations in which posting a bond would place
defendant's other creditors in jeopardy, Olympia Equipment
Leasing Co. v. Western Union Telegraph Co., 786 F.2d 794, 798-99
(7th Cir. 1986).
The purpose of the bond is to protect the prevailing party from
losses that could result if execution of the judgment is delayed.
Federal Prescription, 636 F.2d at 760. A supersedeas bond
should be required therefore, when there is "some reasonable
likelihood of the judgment debtor's inability or unwillingness to
satisfy the judgment in full upon ultimate disposition of the
case." Id. at 760; see also FDIC v. Ann-High Associates,
129 F.3d 113, 1997 U.S. App. LEXIS 35547 at *3 (D.C. Cir. Dec. 2,
1997) (noting burden on the appellant to provide "an acceptable
alternative means of securing the judgment"). Ordinarily, the
existence of a trust account established in response to ...