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Courvoisier v. Harley Davidson of Trenton

December 21, 1999

FRANK COURVOISIER AND LINDA COURVOISIER, HUSBAND AND WIFE, PLAINTIFFS-RESPONDENTS,
v.
HARLEY DAVIDSON OF TRENTON, INC., DEFENDANT-RESPONDENT, AND HARLEY DAVIDSON, INC.; JOHN DOE(S), I-IV FICTITIOUS DEFENDANTS, ABC COMPONENT PART CORPORATION, A FICTITIOUS DEFENDANT, DEF MANUFACTURING COMPANY A FICTITIOUS DEFENDANT, DEFENDANTS, AND AMERICAN HARDWARE MUTUAL INSURANCE COMPANY, INTERVENOR-APPELLANT.



The opinion of the court was delivered by: Long, J.

Argued September 28, 1999

On appeal from the Superior Court, Appellate Division.

In 1993, plaintiff Frank Courvoisier was seriously injured in a single motorcycle accident. His motorcycle was purchased from, and serviced by, defendant Harley Davidson of Trenton, Inc. (Harley Davidson). Courvoisier sued Harley Davidson for negligent maintenance of the motorcycle that, he claimed, proximately caused the accident. A jury returned a verdict of $1.1 million in his favor. *fn1 The trial court entered judgment on the verdict against Harley Davidson in the amount of $1,441,357.8l, which included pre-judgment interest.

At the time of the accident, Harley Davidson carried a garage liability insurance policy with a limit of $500,000 per occurrence issued by American Hardware Mutual Insurance Company (American Hardware). American Hardware provided representation to Harley Davidson in connection with Courvoisier's lawsuit. When Harley Davidson appealed, American Hardware filed a motion, opposed by Courvoisier, for a "partial stay" of the judgment upon the posting of a supersedeas bond in the amount of its policy limit. Harley Davidson filed a cross-motion to compel American Hardware to post a bond in the full amount of the judgment on the ground that American Hardware had failed to attempt, in good faith, to negotiate a settlement within the policy limits. By this time, Harley Davidson had retained a private attorney to represent its interests with respect to the excess judgment.

The trial court denied American Hardware's motion and ordered it to post a bond in the full amount of the judgment to secure a stay. In so doing, it reasoned that American Hardware could be found liable for the entire judgment if it breached its duty of good faith to settle the claim within the policy limits. The court observed that on the basis of the trial testimony, including the severity of Courvoisier's injuries and the admission of a Harley Davidson employee that Courvoisier's motorcycle had been negligently repaired, American Hardware's sole offer of $100,000 could subject it to liability for the entire judgment on a breach of fiduciary duty theory. At least, according to the court, Harley Davidson had made a "preliminary showing" to that effect.

The Appellate Division denied American Hardware's motion for a stay. *fn2 Thereafter, American Hardware moved for reconsideration of the trial court's prior decision. American Hardware presented certifications indicating that it had handled the claim against Harley Davidson in good faith. Harley Davidson and Courvoisier countered with certifications of their own to the contrary.

The trial court denied the motion. Among other things, the court ordered:

that, if American Hardware chooses to pursue an appeal of the verdict on behalf of Harley Davidson of Trenton, Inc., then in order to obtain a stay of execution of the judgment, American Hardware must post a bond in the amount of $1.5 million; and

IT IS FURTHER ORDERED that, if American Hardware does elect to pursue an appeal and post a $1.5 million bond, then Harley Davidson of Trenton, Inc. will be enjoined from dissipating its assets except as in the ordinary course of business; and

IT IS FURTHER ORDERED that, should American Hardware elect not to pursue an appeal of the verdict, then it may tender its policy limits with supplementary payments and, in that event, shall not be obligated to post any bond on behalf of Harley Davidson of Trenton, Inc.

Thereafter, the Appellate Division denied American Hardware's motion for leave to appeal and for a stay.

We granted American Hardware's motion for leave to appeal from that portion of the trial court's order that conditioned a stay on American Hardware's posting of a supersedeas bond in the full amount of $1.5 million. We ordered Harley Davidson's appeal on the merits to proceed in the Appellate Division and, pending disposition of the appeal, stayed execution on the judgment on the posting by intervenor of a supersedeas bond in the amount of the limits of its garage liability insurance policy issued to Harley Davidson, together with costs and interest to be determined by the trial court as likely to accrue during the pendency of the appeals.

The trial court's non-dissipation order remained in effect. *fn3

I.

A supersedeas bond is a "device to protect a party who has been successful at trial but has been forestalled from proceeding during an appeal." Hudson City Sav. Bank v. Hampton Gardens Ltd., 88 N.J. 16, 20 (1981). Its terms and conditions are governed by Rules 2:9-5 and 6. Rule 2:9-5(a) states in part:

A judgment or order in a civil action adjudicating liability for a sum of money or the rights or liabilities of parties in respect of property which is the subject of an appeal or certification proceedings shall be stayed only upon the posting of a bond pursuant to R. 2:9-6 or a cash deposit pursuant to R. 1:13-3(c) unless the court otherwise orders on good cause shown. Such posting or deposit may ...


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