Magers v. Bonds (In Re Bonds Distributing Co.)

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
In Re: BONDS DISTRIBUTING 
COMPANY, INCORPORATED,
Debtor.
BRUCE MAGERS, Trustee in
Bankruptcy for Bonds Distributing
Company, Inc.,
Plaintiff-Appellee,
v.  No. 03-1292
DONALD R. BONDS; BONDS,
INCORPORATED,
Defendants-Appellants,
and
WILLIAM L. MILLS, III, d/b/a The
Mills Law Firm, Attorney at Law,
Third Party Defendant.

Appeal from the United States District Court
for the Middle District of North Carolina, at Durham.
Frank W. Bullock, Jr., District Judge.
(CA-01-80-1, BK-97-52130-C)
Submitted: July 24, 2003
Decided: August 26, 2003
Before WIDENER, MICHAEL, and MOTZ, Circuit Judges.
Vacated and remanded by unpublished per curiam opinion.
2 IN RE: BONDS DISTRIBUTING
COUNSEL
Richard S. Gordon, Charlotte, North Carolina, for Appellants.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Donald R. Bonds and Bonds, Inc., appeal from the district court’s
order denying Bonds’ motion for costs, Fed. R. Civ. P. 54(d), and fail-
ing to rule on his motion for an order discharging the supersedeas
bond with respect to Bonds’ prior appeal. We vacate and remand for
further proceedings.
In 1995, Bonds sold Bonds Distributing, Inc. ("BDI"), financing
part of the sale. When the purchaser defaulted in 1997, Bonds fore-
closed pursuant to the sale agreement. Two months later, an involun-
tary petition under Chapter 7 was filed against BDI.
The Trustee filed an action against Bonds and BDI, claiming that
the foreclosure was invalid because a financing statement filed by
Bonds used an incorrect address, thereby preventing the perfection of
his security interest. The bankruptcy court entered an order granting
partial summary judgment in favor of the Trustee on his defective
security interest claim, finding as a matter of law that Bonds’ security
interest was invalid as a result of the omitted address. The district
court affirmed. The bankruptcy court also determined that Bonds had
a right to a jury trial on remaining issues; the jury awarded
$1,400,000 in damages to the Trustee.
Bonds appealed and this court reversed, finding that Bonds sub-
stantially complied with North Carolina law, and, therefore, his secur-
ity interest was perfected. Magers v. Bonds (In re Bonds Distrib.
IN RE: BONDS DISTRIBUTING 3
Inc.), No. 01-2503 (4th Cir. July 15, 2002) (unpublished). On Decem-
ber 16, 2002, Bonds filed in the district court a motion for an order
awarding costs and a motion seeking discharge of the supersedeas
bond. Bonds also filed in this court a motion for costs, which was
granted.
On February 13, 2003, the district court entered an Amended Judg-
ment consistent with this court’s opinion. The order provided that
"[e]ach party shall bear its own costs." Bonds and Bonds, Inc., appeal,
contending that the district court abused its discretion both by denying
Bonds’ motion for costs and by failing to rule on his motion for dis-
charge of the supersedeas bond.
Prevailing parties are entitled to move for an award of costs pursu-
ant to Fed. R. Civ. P. 54(d)(1), which provides that: "Except when
express provision therefor is made either in a statute of the United
States or in these rules, costs . . . shall be allowed as of course to the
prevailing party unless the court otherwise directs." While an award
of costs is always a matter of discretion residing with the court, we
have stated that the trial court "[m]ay not depart from the ‘normal
practice’ of awarding fees to the prevailing party [who has requested
costs] without first articulating some good reason for doing so." Oak
Hall Cap & Gown Co. v. Old Dominion Freight Line, Inc., 899 F.2d
291, 296 (4th Cir. 1990) (citing Constantino v. American S/T Archil-
les, 580 F.2d 121, 123 (4th Cir. 1978)).
Here, Bonds’ motion sought costs specifically allowed under 28
U.S.C. § 1920 (2000). Also included in Bonds’ motion was the cost
of obtaining a letter of credit in lieu of a supersedeas bond, pursuant
to Fed. R. App. P. 39(e) (providing that costs on appeal includes "pre-
miums paid for a supersedeas bond or other bond to preserve rights
pending appeal"). The district court’s order effectively denying
Bonds’ motion for costs failed to cite any reasons for its decision. We
find that this failure constituted an abuse of the court’s discretion.
Accordingly, we vacate the district court’s amended judgment and
remand the case to allow the district court to re-evaluate its decision
under the standards outlined above and to articulate a basis for its
decision. The court is also directed to rule on Bonds’ motion for an
order discharging the supersedeas bond. We express no opinion on
4 IN RE: BONDS DISTRIBUTING
the disposition of the case on remand. We dispense with oral argu-
ment because the facts and legal contentions are adequately presented
in the materials before the court and argument would not aid the deci-
sional process.
VACATED AND REMANDED