Opinion
99 Civ. 2447 (JSM)
April 12, 2002
Nelson M. Stern, New York, NY. Attorney for Plaintiffs.
Mel B. Ginsburg, Vernon Ginsburg, LLP, New York, NY. Attorney for Defendants.
MEMORANDUM OPINION ORDER
Plaintiffs have obtained partial summary judgement against Defendant Helix North American, Inc. in the amount of $111,457.09 plus interest, but have been unable to collect any of this amount. They now seek an order requiring Defendants to post security for costs as a condition of proceeding with their counterclaims. Defendants concede that Helix is without assets and has ceased doing business, but contend that there has been no showing that other Defendants lack sufficient assets to pay costs should Plaintiffs prevail on the counterclaims.
The standard to be applied in deciding whether to require security for costs was set forth in Zen Music, Inc. v. CVS Corp., No. 98 Civ. 4246, 1999 WL 225530, at *1 (S.D.N.Y. April 19, 1999):
Courts generally consider (1) the financial condition and ability to pay of the party who would post the bond; (2) whether that party is a non-resident or foreign corporation; (3) the merits of the underlying claims; (4) the extent and scope of discovery; (5) the legal costs expected to be incurred; and (6) compliance with past court orders. See Seletti v. Carey, 173 F.R.D. 96, 100-101 (S.D.N.Y. 1997); Bressler v. Liebman, No. 96 Civ. 9310, 1997 WL 466553, at *3 (August 14, 1997). See also Livnat v. Lavi, No. 96 Civ. 4967, 1997 WL 563799, at *3 (S.D.N.Y. Sept. 9, 1997) (considering financial stability, resident and alien status, and the merits of the lawsuit).See also Atlanta Shipping Corp., Inc. v. Chemical Bank, 818 F.2d 240 (1987); Leighton v. One William Street Fund, Inc., 343 F.2d 565, 567 (2d Cir. 1965); Leighton v. Paramount Pictures Corp., 340 F.2d 859, 861 (2d Cir. 1965); Miller v. Town of Suffield, 249 F.2d 16 (2d Cir. 1957).
There seems little question that, if the sole issue was the ability of Helix to pay a judgment for costs, an order to post security would be appropriate. While the Court at this stage can not make a judgment as to the merits of the counterclaims, it is clear that if those claims fail Defendant Helix will not be able to pay the costs. It is also true that given the nature of the case, which will require depositions from foreign witnesses, the cost may be substantial.
Although the defendants other than Helix contend that they have assets, it appears from a reading of the Answer that the only party with standing to assert the counterclaims is Helix. Therefore, the court will require Helix to post security for costs.
Plaintiffs have provided little evidence that the costs in this case will reach $50,000, the amount of security it seeks. The only specific cost that Plaintiffs document is $2,500 for the transcript of a deposition. Therefore, at this time, the Court will require the posting of security in the amount of $7,500, without prejudice to the right of Plaintiffs to seek an increase in the security on a showing that costs in excess of that amount have been incurred.
SO ORDERED.