Appeals court denies Bangstad bid to delay paying debt

A state court of appeals has denied a bid by Kirk Bangstad and Minocqua Brewing Company to delay payment of two money judgments against them for defamation — a judgment of $759,428 against Bangstad and a joint and severable judgment against Minocqua Brewing Company for $329,428.

Bangstad and Minocqua Brewing Company (MBC) owed the money judgments after an Oneida County jury found that they committed multiple counts of defamation against Lakeland Times publisher Gregg Walker, awarding Walker what is believed to be the largest defamation judgment in state history.

The verdict was decided unanimously by 13 jurors. 

Bangstad has appealed the verdict and earlier sought to stay execution of the money judgments pending the outcome of the appeal. 

The circuit court denied the motion to stay the payments pending appeal, and on Sept. 6 the court of appeals upheld the circuit court’s order.

The decision lifts a temporary stay put in place by the appeals court to allow each party to submit additional materials, including a transcript of the circuit court’s decision. 

 The court’s action means Bangstad must pay the judgments forthwith, though he is expected to appeal the latest ruling to the progressive-majority state Supreme Court.

In announcing the denial, district III appeals court presiding judge Lisa Stark said the court was satisfied that the circuit court properly exercised its discretion in denying the stay by reasonably applying the correct standard of law to the relevant facts.

In analyzing the circuit court’s decision, Stark pointed to, among other things, the circuit court’s finding that Bangstad had relied on a “ludicrous” reading of case law to support his contention that the circuit court had made significant errors in the case, as well as the court’s concern that delaying collection would give Bangstad time “to hide assets.”                       

The analysis

Bangstad contested paying the judgments’ total of $759,428, arguing that he was likely to succeed in overturning the verdict on appeal and that the circuit court failed to give proper consideration to his assertion that he will raise new First Amendment claims on appeal that must be reviewed de novo, that is, from the start, without reference to any legal conclusion or assumption made by the circuit court.

The appeals court rejected Bangstad’s arguments.      

In doing so, Stark observed that the court has the power to stay a judgment, grant an injunction, or enter other orders to preserve the existing state of affairs or the effectiveness of the judgment subsequently to be entered, though a party must first either seek relief in the circuit court or demonstrate that it would be impractical to do so. The appeals court then reviews circuit court determinations regarding relief pending appeal under a standard known as “erroneous exercise of discretion” — which was the central claim being considered by the appeals court, that is, whether the court had abused its discretion in denying Bangstad’s motion to stay.

In conducting such an analysis, Stark wrote, the court must consider specific criteria for staying execution of a money judgment, which include the likelihood that the appellant will succeed on appeal; the collectability of the judgment in the event that the appellant does not succeed on appeal, taking into account the appellant’s ability to provide an undertaking or other security; the recoverability of money paid in execution of the judgment in the event the appellant does succeed on appeal; any special harm which may occur to one of the parties if the judgment is or is not paid until completion of the appeal; and, if relevant, the interest of the public.

In this case, Stark concluded, the record showed that the circuit court explicitly considered each of the relevant criteria.

“As to the likelihood of success on appeal, the court observed that Bangstad was relying upon a ‘ludicrous’ reading of Polzin v. Helbrecht to support its position that the court had erred in refusing to apply the actual malice standard in this case, and that he was proposing to raise new arguments on appeal that he had forfeited by not asserting during summary judgment or other points in the proceedings,” Stark wrote. “Based on the facts and positions Bangstad had actually presented during the litigation, the court found there was not more than a mere possibility that Bangstad would prevail on appeal.”

To be sure, Stark continued, Bangstad contended that the circuit court failed to give proper consideration to his assertion that some or all of the issues he intends to raise on appeal will be subject to de novo review because they involve First Amendment claims. But, Stark, wrote, just because those claims will be considered de novo does not necessarily mean that they are any more likely to be sufficient to justify granting his motion to delay payments.

“While it is true that the standard of review for an issue is an aspect of the evaluation as to the likelihood of its success on appeal, it does not follow that every issue subject to de novo review automatically has a sufficient likelihood of success on appeal to warrant a stay,” she wrote. “Here, the circuit court considered both the actual merits of the issues Bangstad said he planned to raise, and whether they had been properly preserved for appellate review.”

The circuit court was also concerned that Bangstad’s conduct during the judicial process suggested he would attempt to avoid payments, Stark wrote.

“As to the collectability of the judgment and accumulated interest, the court found that Bangstad’s pattern throughout the litigation of refusing to comply with court orders requiring his disclosure of financial information, his failure to appear for a supplemental examination, and his failure to provide any type of security for payment of the judgment suggested that Bangstad would try to frustrate collection,” she wrote. “The court further considered other options to secure payment of the judgment, including insurance coverage, but did not consider those options viable at this time.”

All in all, Stark wrote, the court reasoned that staying collection pending appeal would jeopardize collectability by giving Bangstad time “to hide assets.”

“Conversely, the court found that it would be ‘a lot easier’ for Bangstad to recover any payments made to Walker, whom Bangstad himself alleged to be a multi-millionaire,” she wrote. 

Stark observed that the court acknowledged the possibility of MBC going under financially.

“The court considered as a potential special harm the possibility that the Minocqua Brewing Company might go out of business or need to be sold in the absence of a stay,” she wrote. “However, the court noted that it could take other steps to reduce that possibility, such as placing the business in receivership.”

In sum, Stark concluded, the court was satisfied that the circuit court properly exercised its discretion in denying a stay in the case by reasonably applying the correct standard of law to the relevant facts.

In a separate order, Stark denied Walker’s motion to supplement the record with additional materials related to ongoing contempt proceedings against Bangstad. 

“The additional materials are not appropriately part of the record on appeal, however, which is limited to what was before the circuit court at the time it entered the judgment that is the subject of this appeal,” she wrote. “Rather, post-judgment materials in support of or in opposition to a stay may be included or attached to the parties’ filings without being a part of the record on appeal.”

The court did grant Walker’s motion to temporarily seal the transcript of a June 26, 2024, supplemental examination, which Bangstad designated as confidential and which Walker is currently challenging.

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.