Supersedeas bond

A supersedeas bond, also known as a defendant's appeal bond, is a type of surety bond that a court requires from an appellant who wants to delay payment of a judgment until the appeal is over.

An appellant's bond to stay execution on a judgment during the pendency of the appeal. Fed. R. Civ. P. 62(d); Fed. R. App. P. 8(b). -- Often shortened to supersedeas.

This is a feature of common law, and in particular the American legal system. In most European countries an appeal leads to an automatic stay of execution, unless the judge expressly ordered immediate execution.

Supersedeas bond rules in the United States

The amount and availability of a supersedeas bond depends on state regulations and case specifics.

In New Jersey, the posting of a bond is not required to appeal a decision. However, if the party wishes to stay a judgment during the appeal, a motion must be made with the Superior Court, and the Court can require the posting of a bond or cash deposit under R.2:9-5. The same rule applies in Delaware under the State Constitution^[1] as well as the court rules.^[2][3]

Arizona Rules of Civil Appellate Procedure, Rule 7, provides that "except in cases involving custody of children," an appellant may obtain a stay on a lower court judgment and all other further proceedings by filing a supersedeas bond in the Superior Court. ARCAP 7(a)(1).

In California, for instance, the supersedeas bond amount must be 150% of the judgment amount, whereas in Florida, the amount may include two years of statutory interest for those fees.^[4]

In Florida, the amount of a supersedeas bond is limited to no more than $50 million per appellant.^[5]

In Texas, the amount of a supersedeas bond (referred to as "security for judgments pending appeal" in the Texas Civil Practice and Remedies Code) is determined as follows:^[6]

• Under subsection (a), the amount of the bond must equal 1) the amount of compensatory damages awarded in the judgment, 2) interest for the estimated duration of the appeal, and 3) costs awarded in the judgment.
• Under subsection (b), notwithstanding the requirements of subsection (a), the security cannot equal the lesser of 1) 50 percent of the judgment debtor's net worth or 2) USD$25 million.
• Under subsection (c), if the judgment debtor shows that the amount of the security would cause "substantial economic harm", the trial court is required to lower it to an amount that would not cause such harm.
• Subsection (d) allows an appellate court to review and modify the amount of security, but not to exceed the limitations above.
• Subsection (e) permits a trial court to enter orders preventing dissipation or transfer of assets to avoid satisfaction of the judgment, but not so as to prohibit use, transfer, conveyance, or dissipation of assets in the normal course of business.

Bond Advantages

Obtaining a supersedeas bond may appear to be judicial red tape; however, it serves the best interest of the defendant and plaintiff. The appellant uses a supersedeas bond to stay the execution of the judgment, meaning appellant does not have to pay the full amount of the judgment until the appellate court makes a ruling and then only if the ruling is to affirm the judgment. A surety bond also replaces the need for collateral. The plaintiff, or party whom the money judgment is awarded, is fully protected by the bond and ensured payment.^[7]

References