What is a Supersedeas Bond?

A Supersedeas Bond is a surety bond purchased by the appellant (aka petitioner) in an appealed civil lawsuit.  A supersedeas bond is usually required by the court if a losing party in a civil suit wants to appeal the judgment against them.

The supersedeas bond ensures that the judgment will be paid to the appellee (aka respondent) if the appeal in not successful. It also serves to discourage potential appellants from filing a frivolous appeal only to stall payment of the judgment. Requiring a supersedeas bond makes it more difficult for the appellate system to be abused.

A supersedeas bond is extremely risky for the surety bond company because the appellant loses a significant percentage of appealed cases. Consequently, the surety bond company needs to be fully collateralized on these bonds.

According to the Federal Rule of Civil Procedure 62, it notes the rule for supersedeas bonds in the federal courts. Under that law, the appellant cannot execute on judgment until ten days after the ruling has been inscribed. To secure a stay of the execution of judgment, the appellee must post a Supersedeas Bond upon or after filing an appeal notice.

 

What does "Supersedeas" mean?

Supersedeas, which means "you must desist" in Latin, is a writ of court secured by posting a surety bond to obtain a staying execution of a trial court judgment that is pending an appeal.

A Supersedeas Bond is often incorrectly confused with the defendant's appeal bond

 

Why do you need a Supersedeas Bond?

A supersedeas bond is beneficial for both the appellant and the appellee. For the appellee, it is assurance that they will be paid the amount of the judgment if the appellate court affirms the judgment. On the other hand, the appellant benefits, and has a stay of judgment, and does not have to pay the judgment amount until after the final ruling.

Additionally, it provides security to both parties as it serves a legal middle ground between an appellant’s right to appeal and an appellee’s right to recover.

 

How much does the Supersedeas Bond cost?

The bond amount of a Supersedeas Bond is based on state laws and regulations and case situations, which equals the amount of judgment, plus other fees and interest. For instance, in California, the bond amount is 150% of the judgment amount.

Take note that a surety may require less than 100% collateral, whereas the court often mandates 100%. However, in some cases, courts can consider to reduce or entirely forgo the full bond requirement. It is because a Supersedeas Bond is often paid in its entirety. If an appellant can demonstrate that it has financial incapacity to pay the judgment (but has made good faith) and failed to post a bond, the court may consider a reduced bond amount as more preferable to having not secured a bond at all.

Additionally, Supersedeas Surety Bonds require full collateral. The collateral may come in the manner of real estate (must have a substantial equity relative to the bond amount), liquid assets (such as cash or liquid investments) or irrevocable letters of credit.

 

How do I get to obtain a Supersedeas Bond?

Contact a reliable surety bond company that is authorized to conduct surety bonds and surety bonds consulting services in your state. Here, we provide you the necessary steps on how to secure a Supersedeas Bond:

First, fill out and submit an application form. Or you can request a free quote.

During the process, the surety bond company will likely want to know more about the case. Work product issues, financial capacity, and strengths and weaknesses of the appellant's case will need to be considered since sureties will also need to learn about attorneys' evaluation of the case.

Submit these requirements:

  • Completed application
  • Bond form obtained from the court
  • Any applicable financial statements
  • Notice of Appeal
  • Judgment (official order or decision by the court)
  • Proposed collateral

If you are qualified for the bond, the surety company will call or email you with a quote. You will receive an indemnity agreement to sign.

Once done, the surety company will immediately issue the bond!

Are you looking to appeal against a judgment? We will guide you throughout the process. Please do not hesitate to contact us today!

Learn more about Supersedeas Bonds by watching the video below.

Check out this Infographic!

Have a better view of Supersedeas Bonds through this infographic.

Supersedeas Bond Infographic
Sharing is Caring.