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No. 15-10638
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_____________________________
COQUINA INVESTMENTS,
Plaintiff-Appellee,
v.
TD BANK, N.A.,
Defendant-Appellant.
____________________________
On Appeal From The United States District Court
For The Southern District Of Florida
_____________________________
RESPONSE OF PLAINTIFF-APPELLEE COQUINA INVESTMENTS
IN OPPOSITION TO TIME-SENSITIVE MOTION OF
DEFENDANT-APPELLANT TD BANK, N.A., FOR STAY
_____________________________
David S. Mandel
Nina Stillman Mandel
MANDEL & MANDEL LLP
169 East Flagler Street, Suite 1200
Miami, FL 33131
(305) 374-3771

Miguel A. Estrada
Counsel of Record
Jonathan C. Bond
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 955-8500
mestrada@gibsondunn.com

Counsel for Plaintiff-Appellee Coquina Investments

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Coquina Investments v. TD Bank, N.A.

Eleventh Circuit Docket No. 15-10638
CORPORATE DISCLOSURE STATEMENT AND
CERTIFICATE OF INTERESTED PERSONS
Plaintiff-Appellee Coquina Investments has no parent corporation, subsidiaries, or affiliates whose listing is required by Federal Rule of Appellate Procedure
26.1 or this Courts Rule 26.1-1.
Pursuant to this Courts Rule 26.1-1, Coquina submits that the following entity has an interest in the outcome of this appeal but was omitted from the certificate of interested persons contained in the Time-Sensitive Motion of DefendantAppellant TD Bank, N.A. for Stay:
Travelers Casualty and Surety Company of America, a Connecticut corporation (Surety on TD Banks Supersedeas Bond)
Undersigned counsel certifies that, to the best of counsels knowledge, the
certificate of interested persons contained in the Time-Sensitive Motion of Defendant-Appellant TD Bank, N.A. for Stay is otherwise complete.
DATED: February 19, 2015

Respectfully submitted,
/s/ Miguel A. Estrada
Miguel A. Estrada
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 955-8500
Counsel for Plaintiff-Appellee
Coquina Investments
C-1

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TABLE OF CONTENTS
Page
CORPORATE DISCLOSURE STATEMENT AND
CERTIFICATE OF INTERESTED PERSONS.......................................... C-1
TABLE OF CONTENTS ............................................................................................i
TABLE OF AUTHORITIES ................................................................................... iii
INTRODUCTION ..................................................................................................... 1
COUNTER-STATEMENT OF FACTS .................................................................... 3
ARGUMENT ........................................................................................................... 10
I.

TD BANK IS NOT LIKELY TO SUCCEED ON THE MERITS OF ITS APPEAL ....... 10

A.

B.

The District Court Did Not Abuse Its Discretion In Denying

TDs Request To Reduce The Jurys Compensatory-Damages
Award .................................................................................................. 11
1.

This Courts Opinion In TDs Prior Unsuccessful Appeal

Forecloses TDs Claim That The Damages Are
Illusory. .................................................................................. 11

2.

TDs Separate Claim That Reducing The Jurys Award Is

Necessary To Avoid A Double Recovery Is Meritless ............. 13
a.

TD Cannot Seek An Offset For Hypothetical

Future Recoveries That Have Not Yet Occurred ........... 13

b.

TD Is Not Entitled To An Offset For The $9

Million Payment That The Trustee Has Demanded
Back ................................................................................ 15

Any Possible Recovery By Coquina From Third Parties Does

Not Justify Any Reduction In The Jurys Punitive-Damages
Award .................................................................................................. 17

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TABLE OF CONTENTS
(continued)
Page
II.

THE EQUITIES DO NOT SUPPORT A FURTHER STAY OF EXECUTION .............. 19

A.

TD Has Failed To Show Irreparable Harm Absent A Stay................. 19

B.

A Stay Would Substantially Injure Coquina ....................................... 20

C.

A Stay Would Not Serve The Public Interest ..................................... 20

CONCLUSION ........................................................................................................ 20
CERTIFICATE OF SERVICE

ii

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TABLE OF AUTHORITIES
Page(s)
Cases
Allsups Convenience Stores, Inc. v. N. River Ins. Co.,
976 P.2d 1 (N.M. 1998) ...................................................................................18
Amoco Pipeline Co. v. Montgomery,
487 F. Supp. 1268 (D. Okla. 1980) ..................................................................17
Blasland, Bouck & Lee, Inc. v. City of N. Miami,
283 F.3d 1286 (11th Cir. 2002)........................................................................14
BUC Intl Corp. v. Intl Yacht Council Ltd.,
517 F.3d 1271 (11th Cir. 2008)........................................................................14
Burgess v. Porterfield,
469 S.E.2d 114 (W. Va. 1996) .........................................................................17
Canady v. Crestar Mortg. Corp.,
109 F.3d 969 (4th Cir. 1997)............................................................................14
Coquina Invs. v. TD Bank, N.A.,
760 F.3d 1300 (11th Cir. 2014)....................................... 1, 3, 4, 5, 7, 12, 13, 19
EEOC v. Waffle House, Inc.,
534 U.S. 279 (2002) .........................................................................................17
FDIC v. United Pac. Ins. Co.,
152 F.3d 1266 (10th Cir. 1998)........................................................................14
Hayes Sight & Sound, Inc. v. ONEOK, Inc.,
136 P.3d 428 (Kan. 2006) ................................................................................18
Johansen v. Combustion Engg, Inc.,
170 F.3d 1320 (11th Cir. 1999)........................................................................17
Johnson Waste Materials v. Marshall,
611 F.2d 593 (5th Cir. 1980)............................................................................14
iii

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TABLE OF AUTHORITIES
(continued)
Page(s)
Kelley v. Michaels,
59 F.3d 1050 (10th Cir. 1995)..........................................................................18
Kleinfeld v. Iacopi (In re Kleinfeld),
1994 WL 650057 (9th Cir. Nov. 16, 1994)......................................................14
Lugo v. Secy, Fla. Dept of Corr.,
750 F.3d 1198 (11th Cir. 2014)........................................................................10
Marshack v. Hudson (In re Advance Mortgagee Servicing Corp.),
1996 WL 267330 (9th Cir. May 20, 1996) ......................................................14
Myers v. Cent. Fla. Invs., Inc.,
592 F.3d 1201 (11th Cir. 2010)................................................................. 17, 18
Nken v. Holder,
556 U.S. 418 (2009) .................................................................................. 10, 20
Owens-Corning Fiberglas Corp. v. Ballard,
749 So. 2d 483 (Fla. 1999) ...............................................................................17
Raben Builders, Inc. v. First Am. Bank & Trust Co.,
561 So. 2d 1229 (Fla. Dist. Ct. App. 1990) .....................................................14
Rood v. Rosen (In re Rood),
482 B.R. 132 (D. Md. 2012) ............................................................................14
Searcy v. R.J. Reynolds Tobacco Co.,
2013 WL 5421957 (M.D. Fla. Sept. 12, 2013) ................................................18
Skandinaviska-Enskilda Banken v. C.L.C. Marine Servs., Ltd.
(In re SeaEscape Cruises, Ltd.),
172 B.R. 1002 (S.D. Fla. 1994) .......................................................................14
Trust for the Certificate Holders of the Merrill Lynch Mortg. PassThrough Certificates Series v. Love Funding Corp.,
736 F. Supp. 2d 716 (S.D.N.Y. 2010)..............................................................14
iv

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TABLE OF AUTHORITIES
(continued)
Page(s)
TXO Prod. Corp. v. Alliance Res. Corp.,
509 U.S. 443 (1993) .........................................................................................18
Valle v. Singer,
655 F.3d 1223 (11th Cir. 2011)........................................................................10
Wells v. Tallahassee Meml Regl Med. Ctr., Inc.,
659 So. 2d 249 (Fla. 1995) ...............................................................................14
Statutes
11 U.S.C. 547 ......................................................................................................3
Rules
Fed. R. Civ. P. 50 ...................................................................................................5
Fed. R. Civ. P. 59 ...................................................................................................5
Fed. R. Civ. P. 60 ...................................................................................................1
Fed. R. Civ. P. 62 ...................................................................................................5
S.D. Fla. L.R. 62.1 .................................................................................................5
Sup. Ct. R. 13.1 ......................................................................................................8
Sup. Ct. R. 13.3 ......................................................................................................8

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INTRODUCTION
Defendant TD Bank, N.A. seeks to stay enforcement of a judgment that was
entered more than three years ago and that this Court has already affirm[ed] in all
respects. Coquina Invs. v. TD Bank, N.A., 760 F.3d 1300 (11th Cir. 2014), rehg
denied, No. 12-11161 (11th Cir. Oct. 1, 2014). The jury returned its verdict for
plaintiff Coquina Investments in January 2012, finding that TD (along with Scott
Rothstein) intentionally defrauded Coquina out of millions of dollars in a massive
Ponzi scheme, and the jury awarded Coquina compensatory and punitive damages.
This Court upheld the verdict, rejecting TDs claim that some of Coquinas damages were speculative and illusory because (TD said) Coquina would recover part
of its losses from the bankruptcy estate of Rothsteins law firm. Id. at 1318.
Instead of obeying that final judgment, TD seeks to forestall enforcement
further while it pursues another fruitless appeal, in which it challenges the district
courts denial of TDs Federal Rule 60(b) motion to reduce the damages. That request is literally baseless in that TD submitted zero evidence to back up the bald
assertions and self-serving predictions on which its motion and its representations
to this Court rest. TD cannot show any likelihood of success on the merits, because the bulk of the arguments it now presses merely recast the arguments that
this Court expressly rejected in the direct appeal. Indeed, TD rehashes not only its
shopworn claims that Coquinas damages are illusory but also the claim that Co-

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quina is not a true partnership but merely some sort of conduit for investments
by random individuals, which was earlier presented to this Court in the guise of an
Article III problem and was also decisively rejected in the original appeal.
As to the only issue this Court left openTDs claim that an offset is needed
to avoid a double recoveryTD has not shown that the district court abused its
discretion. Indeed, while TD emphasizes that Coquina has already received an interim payment from the Rothstein bankruptcy Trustee, it never acknowledges,
much less refutes, the Trustees view that Coquina is required to return that payment to the estate if it recovers anything from TD. The district courtpresented
with evidence by Coquina, but only bare assertions by TDfound that enforcing
the judgment in full will not result in a double recovery, and that reducing the
judgment could perversely prevent Coquina from recovering its full damages even
once. The court, moreover, ensured that no double recovery will occur, by ordering Coquina, once paid in full by TD, to comply with the Trustees demand and return the interim payment to the Trustee. TDs claim that the punitive award should
be reduced because Coquina supposedly recovered part of its compensatory damages is contrary to settled law and common sense, and has no basis in the record.
TDs claim of irreparable injury absent a stay suffers the same total lack of
evidentiary support. It cites no record evidence corroborating its conjecture that, if
TD is finally forced to pay the judgment, and in the unlikely event it prevails on

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appeal, it will be unable to recover any overpayment. What the record does show
is that Coquina has been waiting three years since the verdictand more than five
since being defrauded by TDto be made whole. Basic principles of fairness and
the public interest in prompt enforcement of final judgments counsel strongly
against further delay. TD has not carried its burden. Its motion should be denied.
COUNTER-STATEMENT OF FACTS
Coquina Investments, a Texas investment partnership, is one of the victims
of a massive, billion-dollar Ponzi scheme orchestrated by TD and Rothstein.
760 F.3d at 1304-05. The TD-Rothstein scheme entailed selling fictitious structured settlements to investors, including Coquina, offering attractive future returns
in exchange for short-term investments. Id. at 1305. TDs status as a trusted bank
was vital to the scheme, as were its personnel: Its regional vice presidentwho
has been indicted since this Court affirmed the jurys verdictdeceived Coquina
by signing lock letters falsely confirming that Coquinas funds were safe. Id.
All told, Coquina invested $37.7 million in the TD-Rothstein scheme. Coquina temporarily recouped part of that sum (approximately $31 million); it never
1

saw the rest. D.E.943:7. In May 2010, however, the bankruptcy Trustee of Rothsteins former law firm demanded even those recouped sums backincluding
$28.1 million that the Trustee was entitled to claw back automatically under
11 U.S.C. 547 as preferential transfers. 760 F.3d at 1305, 1316-17.
1

Citations in the form D.E.X:Y refer to district court docket entry #X, page Y.
3

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After receiving the Trustees demand, Coquina filed this suit in May 2010
against TD and Rothstein seeking to recover for its losses, claiming (as relevant)
that TD defrauded Coquina and aided and abetted Rothsteins fraud. 760 F.3d at
1306; D.E.1:21-23. Coquina noted in its initial filings that the bankruptcy Trustee
ha[d] made a demand upon Coquina for in excess of $30 million. D.E.16:5.
Shortly before trial, Coquina and the Trustee reached a settlement to avoid
costly litigation. Trial Ex. P-896. The settlement had two parts: First, Coquina
agreed to pay $12.5 million up front, regardless of its recovery in this case; second,
Coquina agreed to pay the Trustee a percentage of any recovery Coquina obtains
from TD, until the Trustees total share (including the $12.5 million) reached the
full sum that Coquina received from Rothstein (roughly $31 million). See id. at 13. In exchange, the Trustee granted Coquina a garden-variety release of any claims
the Trustee might have, plus an allowed general unsecured claim for sums Coquina
paid to the bankruptcy estate. See id. Coquina amended its damages calculation in
this case accordingly to include its settlement damages. See D.E.570.
At trial, in addition to extensive evidence of TDs fraud, Coquina presented
evidence of its damages, including those based on the bankruptcy settlement. Coquinas expert explained how the settlement worked and how any award here
would affect what Coquina owed the Trustee. D.E.811:150-54. Wire-transfer records also were presented showing the amounts the bankruptcy estate could reclaim

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as preferential transfers. Trial Ex. P-529; 760 F.3d at 1317. The jury also learned
that Coquina might receive future distributions from the estate. D.E.812:35-39.
The jury found TD liable and awarded Coquina $32 million in compensatory
damagesroughly $7 million representing what Coquina invested but never recovered, and $25 million for what Coquina paid or owed the Trustee under the settlement (the $12.5 million Coquina paid up front, plus $12.5 million under the settlement formula). 760 F.3d at 1306-07 & n.4; D.E.748:3-5. Finding that TD acted
intentionally, the jury also awarded $35 million in punitive damages. D.E.748:3,
5. The district court accordingly entered judgment for $67 million. D.E.754.
TD appealed, challenging among many other things the jurys award of
damages. D.E.767. TD also filed post-judgment motions attacking the verdict and
damages under Federal Rules of Civil Procedure 50 and 59. D.E.759, 760. The
Bank obtained a stay pending appeal by posting a supersedeas bond under Federal
Rule of Civil Procedure 62(d), see D.E.764, 769, 910; see also S.D. Fla. L.R. 62.1,
and the appeal was held in abeyance while the district court considered TDs Rule
50 and 59 motions. While those motions were pending, extensive litigation misconduct by TD and its outside counsel came to light, prompting the district court to
sanction both. D.E.911. The district court then denied all of TDs challenges to
the verdict and damages, D.E.943, and TD also appealed that ruling and the sanctions to this Court. The briefing was completed in August 2013. Also in August

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2013, Coquina received an interim partial distribution of $9,062,500 from the

Rothstein bankruptcy estate on its allowed unsecured claim. D.E.959, Ex. B:20.
In January 2014only weeks before argument in this CourtTD filed in
the district court a Rule 60(b) motion, claiming that Coquinas settlement damages
were speculative and nonexistent, and that Coquina stood to receive a double
recovery. D.E.959:1-3. TD cited the $9,062,500 payment that Coquina received
from the estate, and the possibility that Coquina might receive more in the future,
as purported proof that Coquinas settlement damages were illusory all along.
Id. at 1-2, 8. TD immediately presented its Rule 60(b) motion to this Court, offering it as authority for the banks argument that Coquinas damages were speculative and alternatively urging this Court to reduce the damages awarded by the
jury. TD 28(j) Ltr. 1-2, No. 12-11161 (11th Cir. Jan. 29, 2014) (TD 28(j) Ltr.).
Coquinas response explained that TDs motion misrepresented the terms of
the bankruptcy plan. D.E.960:1-2. In particular, the partial distribution was only
temporary: If Coquina recovers from TD in this case the sum the jury awarded,
Coquina will be required by the bankruptcy plan to repay that distribution back to
the Trustee. See D.E.967:1; see also id., Ex. 2:35-36. Indeed, less than a month
after the Eleventh Circuit argument, the Trustee formally demanded that Coquina
return the $9,062,500 in the event that Coquina recovers from TD. Id., Ex. 1:1-2.
Coquina also emphasized at oral argument in this Court that TDs self-serving mis-

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representations of the bankruptcy plan should not be accepted at face value by this
Court, but should be vetted by the trial court in the first instance. Id., Ex. 2:38-39.
In July 2014, this Court issued its opinion in the appeal affirm[ing] in all
respects. 760 F.3d at 1304. The Court flatly rejected TDs attacks on Coquinas
damages based on the bankruptcy settlement. Id. at 1316-19. In light of Coquinas
potential liability to the Trustee, the Court held, the settlement Coquina reached
with the Trusteefor millions less than the Trustee almost certainly could have
recovered under bankruptcy lawwas patently reasonable. Id. at 1317. The
Court also rejected TDs claim that the conditional nature of the settlement rendered Coquinas damages speculative. Id. at 1318. The Court acknowledged
TDs separate argument that, if Coquina recovers in full from TD, it may obtain a
double recovery if it retains the $9,062,500 it previously received from the Trustee
or receives additional distributions from the bankruptcy estate. Id. This Court left
it to the district court to consider that issue, and TDs related arguments on punitive damages, in the context of TDs pending Rule 60(b) motion. Id. at 1318-19.
TD filed a petition for rehearing en banc. Pet. for Rehg En Banc, No. 1211161 (11th Cir. Aug. 19, 2014). This Court denied the petition, without a single
judge calling for a poll. Order, No. 12-11161 (11th Cir. Oct. 1, 2014). TD did not
seek a stay of this Courts mandate, which issued on October 16, 2014, D.E.963,
terminating the appeal and, with it, the stay pending appeal that TD previously se-

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cured. After the deadline for seeking certiorari passed on December 30, 2014,
Sup. Ct. R. 13.1, 13.3, Coquinas counsel contacted counsel for TD on January 13,
2015, to arrange for payment of the final, operative judgment. See D.E.971, Ex. A.
TD refused to discuss payment, and instead sought an additional stay. D.E.969.
Coquina then moved to enforce TDs bond to satisfy the judgment. D.E.972.
The parties motions were fully briefed, and the court held a hearing on February 11, 2015, to address those motions and TDs Rule 60(b) motion. D.E.983.
Coquina explained that the Trustees demand letteralready in the record
(D.E.967, Ex. 1)showed that, consistent with the terms of the bankruptcy plan,
the $9,062,500 that Coquina had received was not given to it free and clear, but it
had strings attached. D.E.984:32. TD conceded that any future recoveries that
Coquina might receive were prospective, and it could not even say when they
might occur. Id. at 14-15, 24. And when asked whether Coquina, if paid in full by
TD, would still have a claim in the bankruptcy, TDs counsel c[ould]nt answer
that question, explaining that it depended on the bankruptcy plan, and that one
would have to ask the bankruptcy trustee. Id. at 15. TD introduced no evidenceit neither called the Trustee nor presented a letter or affidavit from him
to back up its assertions about what it says might happen in the bankruptcy.
After hearing argument from both sides, the court denied TDs motion and
granted Coquinas motion to enforce. D.E.991. Enforcing the judgment in full,

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the court explained, was most consistent with the jurys verdict, this Courts ruling,
and the state of the proceedings in the bankruptcy case. D.E.984:41. The possibility of hypothetical future distributions to Coquina did not merit an offset because
such distributions were still prospective, id. at 14, and could be adequately addressed in the bankruptcy case, id. at 42, 44. The court found that there were adequate provisions in place to prevent a double recovery by Coquina, and that
TDs speculation that Coquina, if it recovered in full from TD, would still receive
additional sums from the bankruptcy estate was implausible. See id. at 42, 47.
The court also found that an offset was not warranted as to the $9,062,500
that Coquina had received, finding that the Trustees demand letter, already in evidence, showed that there was an actual demand from the trustee that [Coquina]
return that money. D.E.984:42. And, as the district court recognized, if it did offset Coquinas recovery by the $9,062,500, there was a serious risk that the Trustee
would attempt to claw back that sum anyway from other portions of Coquinas
damages. Id. at 42-43. To ensure that the $9,062,500 did not result in a double recovery, the Court ordered Coquina, within three days after receiving payment of
the judgment in full from TD, to pay the $9,062,500 to the Trustee. Id.; D.E.991:2.
The district court also denied TDs request to reduce the punitive-damages
award. D.E.984:42. The court found there was ample evidence in this record for
the judgment on the punitives to stand, which goes to the banks misconduct, the

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disparity between the actual and potential harm suffered by Coquina, and comparable cases like this that have talked about these sort of damages. Id. The district
court, finally, rejected TDs request for an additional stay. Id. at 47-48.
ARGUMENT
As the Supreme Court has made clear, [a] stay is an intrusion into the ordinary processes of administration and judicial review, and accordingly is not a
matter of right. Nken v. Holder, 556 U.S. 418, 427 (2009) (citation omitted).
This Court will not grant that extraordinary remedy unless the movant shows
that: (1) he has a substantial likelihood of success on the merits; (2) he will suffer
irreparable injury unless the injunction issues; (3) the stay would not substantially
harm the other litigant; and (4) if issued, the injunction would not be adverse to the
public interest. Valle v. Singer, 655 F.3d 1223, 1225 (11th Cir. 2011) (per curiam) (citation omitted). TD fails to satisfy any, let alone all, of those elements.
I.

TD BANK IS NOT LIKELY TO SUCCEED ON THE MERITS OF ITS APPEAL.

TD has not established any substantial likelihood (Valle, 655 F.3d at

1225 (citation omitted)) that it will prevail in its appeal of the denial of TDs Rule
60(b) motion. This Court review[s] the denial of a Rule 60(b) motion only for an
abuse of discretion, and thus will affirm unless [it] determine[s] that the district
court applied an incorrect legal standard, failed to follow proper procedures , or
made findings of fact that are clearly erroneous. Lugo v. Secy, Fla. Dept of

10

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Corr., 750 F.3d 1198, 1207 (11th Cir. 2014). TD has not shown any abuse of discretion here. Indeed, this Courts opinion in TDs prior appeal forecloses a central
plank of TDs Rule 60(b) motion, and TD does not come close to showing that the
district courts other findings were clearly erroneous.
A.

The District Court Did Not Abuse Its Discretion In Denying TDs
Request To Reduce The Jurys Compensatory-Damages Award.

The crux of TDs attack on the judgment is its claim that the compensatory
damages should be reduced in light of hypothetical and actual distributions to Coquina from the bankruptcy estate. TD Stay Mot. 11-12; D.E.959:9-13. A key argument in TDs Rule 60(b) motion was eviscerated by this Courts prior ruling,
and its remaining double recovery contentions are factually and legally meritless.
1.

This Courts Opinion In TDs Prior Unsuccessful Appeal

Forecloses TDs Claim That The Damages Are Illusory.

TDs central argument in its Rule 60(b) motion was that Coquinas compensatory damages based on the bankruptcy settlement were speculative, illusory,
and nonexistent from the outset because Coquina might receive some or all of its
payments to the bankruptcy estate back, as distributions on its allowed unsecured
claim. D.E.959:1-2, 8; see id. at 12-13. On appeal, TD again argues that those
damages were illusory and for this reason were never correct to begin with.
Indeed, TD now says that it warned this Court about these things in the prior appeal. TD Stay Mot. 1-2, 13. This Court heard and rejected that very argument.

11

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TD argued in the prior appeal that Coquinas settlement damages were

speculative because Coquina, by dint of its unsecured claim in the bankruptcy
proceeding, might receive future distributions. TD Am. Opening Br. 42-43, No.
12-11161 (11th Cir. Nov. 26, 2012). TD itself equated that argument with the argument in its Rule 60(b) motion that the settlement damages are illusory: Immediately after filing its Rule 60(b) motion in the district court, TD tendered that motion to this Court, arguing that the points in that motion are related to TDs arguments on appeal that the damages related to Coquinas bankruptcy settlement were
speculative and that the settlement was unreasonable. TD 28(j) Ltr. 1.
This Court squarely rejected TDs claim: [N]o court has held that an
amount of loss is speculative just because the loss resulted from the surrender of a
preference and the injured party has an unsecured claim in the bankruptcy case for
the property surrendered. 760 F.3d at 1318. The Court thus c[ould ]not conclude that Coquinas settlement damages awarded by the jury were speculative.
Id. TDs claim in its Rule 60(b) motion that the settlement damages were never
properly part of its damages is an attack on this Courts ruling and on the verdict.
Seeking to circumvent this Courts ruling, TD argued below that this Courts
ruling d[id] not affect the relief TD Bank seeks in its Rule 60(b) motion,
D.E.977:2, and in this Court, TD misleadingly claims that the district court disobeyed this Courts direction by denying TDs Rule 60(b) motion, TD Stay Mot.

12

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3, 10. TD grossly distorts this Courts decision. This Court did not hold that TDs
Rule 60(b) motion has merit; it flatly rejected TDs claim, which that motion repeated, that Coquinas settlement damages were speculative. 760 F.3d at 1318.
All that this Court left open was TDs distinct argument that a reduction of
the damages was warranted to avoid a double recoverywhich TD claimed would
occur because Coquina received $9,062,500 already and might receive more in the
future. 760 F.3d at 1318-19. As Coquina explained, that distinct double recovery argument was meritless, but in any case should not be resolved for the first
time on appeal, on the basis of TDs self-serving but unsubstantiated factual assertions. D.E.967, Ex. 2:35-39. That distinct argumentand only that argument (and
TDs related attack on the punitive damages)was open to the district court to
consider. This Court said nothing about the merit vel non of that argumentand
the district court, after careful consideration of the evidence, found that it has none.
2.

TDs Separate Claim That Reducing The Jurys Award Is

Necessary To Avoid A Double Recovery Is Meritless.

The only compensatory-damages issue left open by this Courts prior ruling
is whether TD is entitled to a setoff to avoid a double recovery. It is not.
a.

TD Cannot Seek An Offset For Hypothetical Future

Recoveries That Have Not Yet Occurred.

TD primarily seeks a reduction in Coquinas compensatory damages based

on the prospect that Coquina might receive certain sums from the bankruptcy estate

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Page: 21 of 29

in the future. TD Stay Mot. 2, 12. But it offers no authority for the proposition
that a defendant may obtain a setoff based on hypothetical recoveries that have not
yet happened. TDs stay motion cites no case law on this issue, and its Rule 60(b)
motion cited no case that granted a setoff solely because the defendant anticipated
that the plaintiff would recover from a third party in the future. Indeed, in all but
three of the cases TD cited, the plaintiffs had already recovered part or all of their
damages from another source (or their damages had been awarded by a court).2
And in the remaining three cases, the courts made clear that the defendants would
be entitled to relief only if the plaintiffs recovered elsewhere.3
The district court therefore properly rejected TDs bid in its Rule 60(b) motion for a setoff based on hypothetical recoveries by Coquina from the estate that
have not occurred. Aside from the $9,062,500 Coquina receivedwhich the Trus2

See BUC Intl Corp. v. Intl Yacht Council Ltd., 517 F.3d 1271, 1276 (11th Cir.
2008); Blasland, Bouck & Lee, Inc. v. City of N. Miami, 283 F.3d 1286, 1293 (11th
Cir. 2002); Canady v. Crestar Mortg. Corp., 109 F.3d 969, 972 (4th Cir. 1997);
Marshack v. Hudson (In re Advance Mortgagee Servicing Corp.), 1996 WL
267330, at *1 (9th Cir. May 20, 1996); Kleinfeld v. Iacopi (In re Kleinfeld),
1994 WL 650057, at *3 (9th Cir. Nov. 16, 1994); Johnson Waste Materials v.
Marshall, 611 F.2d 593, 599-600 (5th Cir. 1980); Skandinaviska-Enskilda Banken
v. C.L.C. Marine Servs., Ltd. (In re SeaEscape Cruises, Ltd.), 172 B.R. 1002, 1007
(S.D. Fla. 1994); Raben Builders, Inc. v. First Am. Bank & Trust Co., 561 So. 2d
1229, 1230 (Fla. Dist. Ct. App. 1990) (per curiam), abrogated on other grounds by
Wells v. Tallahassee Meml Regl Med. Ctr., Inc., 659 So. 2d 249 (Fla. 1995).
3
See FDIC v. United Pac. Ins. Co., 152 F.3d 1266, 1275 (10th Cir. 1998); Rood
v. Rosen (In re Rood), 482 B.R. 132, 154 (D. Md. 2012); Trust for the Certificate
Holders of the Merrill Lynch Mortg. Pass-Through Certificates Series v. Love
Funding Corp., 736 F. Supp. 2d 716, 728 (S.D.N.Y. 2010).
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tee has demanded be returned if Coquina recovers anything from TD, D.E.967, Ex.
1TD does not and cannot claim that Coquina has already recovered from the estate. TD conceded below, and the district court agreed, that such distributions are
purely prospective. D.E.984:14-15. And neither below nor in this Court has TD
offered any actual evidencemerely its own self-serving surmisethat such distributions will in fact occur. E.g., TD Stay Mot. 12. A defendants bare speculation that a plaintiff might recover elsewhere is no basis to upend a verdict.

Moreover, as the district court found, adequate provisions are in place to

prevent the prospect of duplicative recovery: The Trustee is watching very carefully whats going out of the door, and it is difficult to believe that the Trustee
would pay Coquina any further funds if it recovers fully here. D.E.984:42, 47. In
all events, the propriety of any further distributions is to be decided by the bankruptcy court, id. at 43where TD, which admittedly is a participant in the bankruptcy proceedings, id. at 12, can object to distributions it believes improper.
b.

TD Is Not Entitled To An Offset For The $9 Million

Payment That The Trustee Has Demanded Back.

The only genuine issue TDs Rule 60(b) motion raised regarding purported
double recovery is whether TD should receive a setoff for the $9,062,500 distribution. But TDs stay motion utterly fails to show that the district court abused its
4

TD could not even say whether Coquina, if paid in full by TD, would still have
a claim in the bankruptcy case. D.E.984:15. Moreover, as Coquina explained, in
December 2014 the Trustee sought and received court approval for a list of final
distributions for class 3 creditors, which included none for Coquina. D.E.971:7.
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discretion in resolving that highly factbound question. Coquina demonstrated that

it did not receive that payment free and clear. Under the bankruptcy plan, once TD
(or its surety) pays the judgment in full, Coquina cannot keep the $9,062,500 pay5

ment, but must return it to the bankruptcy estate. And, as the district court found,
the Trustee has already formally demanded the return of that sum if Coquina recovers from TD. D.E.984:42 (citing D.E.967, Ex. 1). TD offered no evidence to
refute these facts. And there is no question that Coquina will in fact repay that sum
once TD pays what it owes: The court ordered Coquina to do so within three days
of being paid by TD and to present proof to the Court, id. at 43; see also
D.E.991:2, eliminating any possibility of double recovery.
Moreover, as the district court noted, D.E.984:42-43, granting TD a credit
for the $9,062,500 could perversely deprive Coquina of even one full recovery.
The Trustee expressly demanded that Coquina repay the $9 million from whatever
6

sum Coquina receives here, even if reduced as TD proposes. Indeed, because TD,
as a residual creditor in the bankruptcy, stands to benefit from such recoveries by
the estate, much or all of the offset it seeks here would likely go to its own pocket.
5

D.E.960, Ex. A:41 (Any holder of a Class 3 Claim that receives Distributions
in excess of the amount such holder of a Class 3 Claim was entitled to receive in
Distributions shall repay such amount that it received that was in excess of the Distributions such holder was entitled to receive.); id. at 73-74 (holder of an unsecured claim who receives collateral source recovery must repay to the estate a sum
equal to that recovery, up to the amount of prior distributions to claim holder).
6
D.E.967, Ex. 1:1 (demanding recovery if TD satisfies [the] judgment in whole
or in part (emphasis added)).
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B.

Date Filed: 02/19/2015

Page: 24 of 29

Any Possible Recovery By Coquina From Third Parties Does Not

Justify Any Reduction In The Jurys Punitive-Damages Award.

TDs real motivation for manufacturing an illusion of double recovery and

seeking a setoff of the compensatory damages is no mystery: It hopes by doing so
to escape paying the punitive damages the jury awarded. TD Stay Mot. 10, 12-14.
But even if an offset were needed to avoid double recovery (and it is not), TDs
claim that the punitive award should be reduced is legally and factually baseless.
Punitive damages by definition are not intended to compensate the injured
party, but instead to punish the tortfeasor, and to deter him and others from
7

similar extreme misconduct.

Courts thus routinely refuse to set off punitive-

damages awards in light of a plaintiffs recovery of compensatory damages from

8

an alternative source. TD tries to end-run these principles by claiming that, if the

compensatory award is reduced, the punitive award will then be disproportionate. TD Stay Mot. 13. But courts have correctly rejected this gambit as well.
Unless the compensatory damages were incorrect ab initio, courts have held, the
proper benchmark for assessing punitive damages is still the original compensatory award, not the portion of that award that is still unpaid on some random future

EEOC v. Waffle House, Inc., 534 U.S. 279, 295 (2002) (citation omitted); see
also Myers v. Cent. Fla. Invs., Inc., 592 F.3d 1201, 1216 (11th Cir. 2010); OwensCorning Fiberglas Corp. v. Ballard, 749 So. 2d 483, 486 (Fla. 1999).
8
See, e.g., Johansen v. Combustion Engg, Inc., 170 F.3d 1320, 1340 (11th Cir.
1999); Burgess v. Porterfield, 469 S.E.2d 114, 118-21 (W. Va. 1996); Amoco Pipeline Co. v. Montgomery, 487 F. Supp. 1268, 1273 (D. Okla. 1980).
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date. Only if the compensatory award was wrong when renderedas was true in
TDs only case on this pointis there any basis to alter the punitive award.

10

TDs contrary rule makes no sense. That a plaintiff has recovered for some
of its harm from a third party does not diminish the reprehensibility of the defendants conduct or the extent of the injury that the defendants conduct caused, much
less the magnitude of the potential harm that the defendants conduct could have
11

inflicted.

TDs rule also would perversely enable a defendant to buy its way out

of a punitive-damages awardwriting a check for the compensatory damages and

then contending that the punitive damages, measured against the remaining compensatory damages, are out of whack. That is not the law.
Here, this Courts decision in the prior appeal forecloses any argument that
the original $32 million compensatory-damages award was incorrect. That original
award is therefore the proper benchmark for assessing the punitive award. It is not
Coquina that seeks to pump up the punitive damages, TD Stay Mot. 12, but rather TD that seeks to deflate them by a misleading comparison to the amount of
compensatory damages TD claims is not yet paid. Moreover, as the district court
9

See, e.g., Kelley v. Michaels, 59 F.3d 1050, 1055 (10th Cir. 1995); Hayes Sight
& Sound, Inc. v. ONEOK, Inc., 136 P.3d 428, 447-48 (Kan. 2006); Allsups Convenience Stores, Inc. v. N. River Ins. Co., 976 P.2d 1, 18-19 (N.M. 1998).
10
See TD Stay Mot. 13-14 (citing Searcy v. R.J. Reynolds Tobacco Co., 2013 WL
5421957, at *6-7 (M.D. Fla. Sept. 12, 2013) (concluding compensatory damages
were excessive when rendered and then reducing punitive damages accordingly)).
11
TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 460 (1993) (plurality
opinion) (emphasis added); see also Myers, 592 F.3d at 1221.
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found, there is ample evidence in this record for the judgment on the punitives to
stand, which goes to the banks misconduct, the disparity between the actual and
potential harm suffered by Coquina, and comparable cases like this that have
talked about these sort of damages. D.E.984:42. TD identifies no clear error in
that finding. And its bald assertion that reducing the punitive award honors the
wishes of the jury (TD Stay Mot. 13) is not only baseless, but galling; it is utterly
implausible that the jury, if aware of all the additional evidence of TDs misconduct revealed only after trial, cf. D.E.911:6-28, would award less punitive damages
today merely because (TD says) Coquina partially recovered from another source.
II.

THE EQUITIES DO NOT SUPPORT A FURTHER STAY OF EXECUTION.

TD also fails to demonstrate any of the remaining prerequisites for a stay.
A.

TD Has Failed To Show Irreparable Harm Absent A Stay.

The only irreparable harm TD alleges is that, if it is required to pay the

judgment but prevails on appeal, it will be unable to recoup any overpayment. TD
Stay Mot. 15-17. But all it offers for that assertion is its own self-serving speculation, not evidence, that the proceeds will be dissipated and beyond the courts
reach. This Court has rejected TDs efforts to overturn the judgment by portraying
Coquina as a fictional conduit entity. 760 F.3d at 1309. It should not countenance TDs efforts to evade paying the judgment on the same basis.

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Case: 15-10638

B.

Date Filed: 02/19/2015

Page: 27 of 29

A Stay Would Substantially Injure Coquina.

TD is also incorrect that its supersedeas bond eliminates any injury to Coquina from a stay. Coquina has already been forced to wait more than five years
since it was defrauded, and three since the verdict, to be made whole. TDs first
failed appeal lasted more than two and a half years, from February 2012 to October
2014; a second appeal might take just as long. The paltry federal postjudgment interest rate hardly compensates Coquina for the loss of its money in the interim.
C.

A Stay Would Not Serve The Public Interest.

Allowing TD to evade paying what a federal jury determined (and this Court
confirmed) TD owes while it exhausts a second fruitless appeal hardly serves the
public interest. While [t]he parties and the public are entitled to both careful
review and a meaningful decision, they are also generally entitled to the prompt
execution of orders that the legislature has made final. Nken, 556 U.S. at 427.
TDs claims that a stay would enable the Court to ensure the judgments accuracy and prevent what the bank deems illegitimate recoveries are merely its merits and irreparable-harm arguments repackaged. TD Stay Mot. 18. Nor has TD
shown how a stay could possibly conserve judicial resources, id.; with or without
a stay, this Courts task of deciding TDs baseless appeal will be the same.
CONCLUSION
TDs motion for a stay should be denied.

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Case: 15-10638

Date Filed: 02/19/2015

DATED: February 19, 2015

David S. Mandel
Nina Stillman Mandel
MANDEL & MANDEL LLP
169 East Flagler Street, Suite 1200
Miami, FL 33131
(305) 374-3771

Page: 28 of 29

Respectfully submitted,
/s/ Miguel A. Estrada
Miguel A. Estrada
Counsel of Record
Jonathan C. Bond
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 955-8500
mestrada@gibsondunn.com

Counsel for Plaintiff-Appellee Coquina Investments

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CERTIFICATE OF SERVICE
I hereby certify that on this 19th day of February, 2015, I electronically filed
the foregoing Response in Opposition to Motion of Defendant-Appellant TD Bank,
N.A. for Stay using the Courts ECF system. Service was effected by the ECF system on the following counsel for Defendant-Appellant TD Bank:
Marcos D. Jimnez
MCDERMOTT WILL & EMERY, LLP
333 Avenue of the Americas
Suite 4500
Miami, FL 33131
(305) 358-3500
mjimenez@mwe.com
Peter J. Covington
MCDERMOTT WILL & EMERY, LLP
201 N. Tryon Street
Suite 3000
Charlotte, NC 28202
(704) 343-2000
pcovington@mcguirewoods.com

Lawrence S. Robbins
Mark T. Stancil
Joshua S. Bolian
ROBBINS, RUSSELL, ENGLERT, ORSECK,
UNTEREINER & SAUBER LLP
1801 K Street, N.W., Suite 411-L
Washington, D.C. 20006
(202) 775-4500
lrobbins@robbinsrussell.com
mstancil@robbinsrussell.com
jbolian@robbinsrussell.com

Counsel for Defendant-Appellant TD Bank, N.A

/s/ Miguel A. Estrada

Miguel A. Estrada
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 955-8500
mestrada@gibsondunn.com
Counsel for Plaintiff-Appellee
Coquina Investments