In previous articles the bond experts at Jurisco explained why collateral is a necessity in the surety bond industry. To quickly summarize: collateral is required on almost all defendant bonds applicants are appealing a money judgement or court action of some kind. Full collateral of the contested amount is required to provide adequate ‘good faith’ that the appeal action is not just a delay tactic by the defense in order to move assets out of jurisdiction and that the full sum of the contested amount will be satisfied if the appeal is denied.
What happens, however, if a defendant is faced with the possibility of two surety bonds on an appeal action. This is a rare circumstance where a defendant needs both a Superseadas/Appeal Bond and a Transfer of Lien Bond. This situation occurs when a defendant wishes to appeal a judgment and also wishes to sell a property that currently has a lien attached. This can often result in confusion, consternation and rancor over the double burden of having to fulfill the collateral requirements of both bonds. Just the bonding process alone (not counting attorney fees) could make the appeal process prohibitively expensive.
There are some surety agencies who feel that requiring an applicant to post collateral for both bonds is unnecessarily burdensome. The surety bond experts at Jurisco, for example, believe that a single posting of collateral is sufficient because it was a single judgement that created the need for the bonds. This saves the client precious time and money; and may even provide the financial leeway necessary to allow them to proceed with an appeal action.
For any question about rates and applications, feel free to contact the industry leaders at Jurisco
Often times surety bonds are used in cases to protect an enjoined party from wrongful civil actions. These generally fall under the category of plaintiff bonds. However there is also a list of surety bonds used as good faith measures so certain legal actions can be delayed. These are called defendants bonds. Over the coming weeks, the surety bond experts at Jurisco will explain the different types defendant bonds and their appropriate uses as it pertains to civil law in California. Today’s post will start with Appeal bonds.
In most instances obtaining a defendant bond is statutorily mandated by courts during an appeal proceeding in a civil court. Called either an appeal bond or supersedeas bond, these legal mechanisms are required by statute for the appeal of a money judgment. These surety bonds guarantee the judgment will be satisfied along with court costs. Surety bond cost varies by state but usually includes a provision for interest.
Appeal Bonds are widely used but not the only available option for a defendant. There are several other defendant bonds offered by Jurisco. Keep checking in to this blog explanations of the defendants bonds listed below:
When you are in need of a bond of if you have any questions, contact the bond experts at Jurisco and they will answer any of your questions.
Court bonds are used either by the defendant or plaintiff in a case. Plaintiff bonds usually involve starting an action and defendant bonds aim to stop the action. Today our blog focuses on types of bonds a defendant may wish to use in Florida.
A supersedeas bond is used after the Florida court has issued a judgment. When a judgment is not in the defendant’s favor he or she may wish to appeal the decision. Taking supersedeas action happens after a judgment but plans for the bond should begin before trial.
Once a judge in Miami issues her ruling it goes into effect immediately. This means a defendant is not going to have the necessary time to apply for a supersedeas bond, take it through the proper channels and stay the judgment. However, if an attorney is prepared, the supersedeas bond will be ready to use, allowing the defendant to stay the judgment while they appeal.
A lis pendens bond is used when a plaintiff is attempting to block the defendant from selling property. As foreclosure rates in Tallahassee, Tampa, Orlando and other Florida cities increases lis pendens bonds is a common court bond in the state.
When the plaintiff has reason to believe the sale of the property will hinder their right to collect a debt owed by the defendant they can legally prevent the sale of property. If the defendant thinks this is in error they can use a lis pendens, which requires a lis pendens bond, to allow them to sell the house or land and still protect the plaintiffs interest. A lis pendens must cover the full amount of the debt being sought along with any interest and court cost.
Transfer of lien
A transfer of lien bond is another common type of court bond in Florida. A transfer of lien bond substitutes the bond for the lien on the property thereby removing the lien restrictions. This type of surety bond covers all types of property but is most commonly used on automobiles or admiralty.
Jurisco makes it easy to fill out a transfer of lien application online. The cost for a transfer of lien bond is based on the bond amount, type of court cost and any interest the courts want the defendant to cover. A Jurisco surety bond expert can assist you in learning more about this type of Florida defendant bond and how much bonds typically cost.
Court bonds are a matter of importance for both the plaintiff and a defendant of a case in Georgia. Depending on the details of the case, more than one court bond may be required by either party. A Jurisco surety bond professional will work with you to make sure the necessary bonds are written and ready when needed. Today we will talk about only a few types of court bonds. We invite you to contact us to discuss each bond further or to ask questions about a bond not listed.
A counter replevin bond is a surety bond required for the defendant who is wishing to regain possession of levied property. The plaintiff in the same case would have used a replevin bond to cover the action of repossession property. As for the replevin bond, the counter replevin bond must full cover the financial worth of the property and any court cost associated with the action. Georgia courts require this measure to protect both parties from a financial loss and wrongful repossession.
An appeal bond (also known as a supersedeas bond) guarantees the judgment will be paid and not delayed by an appeal. The defendant is responsible for obtaining this bond before a judgment is made if he or she wishes to stay a judgment. Otherwise the judgment must be settled immediately despite the time it will take to formerly hear an appeal. Courts require appeal bonds to protect the plaintiff against loss of a judgment or the defendant for dragging out the process simply to delay payment.
When a plaintiff attempts to garnish the defendant’s assets or wages before a judgment is made they are required to have a garnishment bond. This surety bond protects the defendant from any wrongful garnishments or financial losses. The cost of a garnishment bond is determined by the court after calculating the total amount of wages and/or assets to be garnished.
An injunction bond is another type of plaintiff bond. When a plaintiff seeks an injunction against a defendant he or she must prove to the court that they will cover all costs. Georgia courts view this mandate as a way of protecting the defendant from being wrongfully enjoined.
A supersedeas bond covers the cost of a money judgment and court fees, in order to stay a judgment during an appeal process. Without using a surety bond, a defendant is required to immediately settle the judgment with the plaintiff. Clients may be hopeful that they will not need the appeal process, some refuse to prepare for its inevitability, but a supersedeas bond should be a priority.
Applying, being approved, and actually writing the supersedeas bond takes time. Since the judgment is effective as soon as it is issued, a client in Texas needs to plan ahead. Obtaining a supersedeas bond (this may be referred to as an appeal bond in certain Texas cities) should be done before a ruling is made. This way the defendant is able to immediately stay the judgment and move forward with their appeal.
Why are supersedeas bonds required in Texas?
When a judge and/or jury finds in favor of the plaintiff and grants a money judgment against the defendant, the court expects that order to be carried out dutifully. However, the court also understands and respects the defendant’s right to appeal or protest the decision. While this legal right is upheld, it does not overshadow the responsibility the defendant has to the initial court ruling.
A supersedeas bond works like a financial guarantee covering the full amount of the judgment plus all related court cost. Since the bond stays the execution of the judgment the defendant can carry on the appeal without having to worry about paying the full settlement to the judgment holder.
This may seem like a cheaper way out for the defendant. Certainly there have been cases where individuals and businesses have used the appeal process to delay payment. But requiring the bond insures the ruling will be upheld and payment made.
Cost of Surety Bond
The amount of a supersedeas bond in Texas is easy to compute: if the judgment is under $40,000.00 the bond must be double the judgment amount. If the judgment is over $40,000.00 the bond must be 150%. For individuals this amount could be in the thousands of dollars, while major corporations face million dollar payouts. This means the cost is going to fluctuate from case to case, as well as being dependent on local regulations.
To receive a price for a supersedeas bond and to discuss your bonding needs, please contact Jurisco today.
Money judgments are typical across the United States in a variety of circumstances. A plaintiff may seek damages in an automobile accident, loan repayment, or even medical bills. There are also suits where courts award plaintiffs large sums of money, often millions of dollars, for safety hazards, product mishaps, and defamation of character. No matter the reason for the judgment, the defendant is responsible for seeing the money is paid to the plaintiff even if they wish to appeal the decision.
States mandate supersedeas bonds for appellants to qualify for re-trial by a higher court. A supersedeas bond secures and suspends execution of the judgment already awarded. The party seeking an appeal to a money judgment must post collateral or a bond with the court. This surety bond, often referred to as an appeal bond, satisfies this requirement.
Surety Bond Definition
A supersedeas bond guarantees full payment of the judgment should the appealing party lose its appeal. While the defendant has the legal right to appeal any decision by the court, it does not override the duty to protect other parties involved in the case including those awarded a money judgments. The court has a responsibility to ensure the judgment will not be delayed with frivolous appeal attempts. This surety also covers court cost and interest as well.
New Jersey and Delaware are the only two states that do not require a supersedeas bond when a money judgment is appealed. All other states require a surety or full payment of the awarded amount while the appeal process plays out. In some instances, a state court can override the bonding stipulations if both parties come to an agreement preventing the necessity of bonding. Courts may also waive a supersedeas bond in cases involving child support and require payment regardless of appeal.
Every state uses certiorari, a mandate from a superior court calling up for review from an inferior court the certified records of a particular case. Using this process, courts will determine bond requirements such as cost. States like Florida, Georgia, Texas and California will include a percentage of the judgment amount, or statutory interest rate, when determining the bond amount. 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.
Supersedeas Bond Advantages
A supersedeas bond may appear to be a hindrance in the appeal process; however, it actually benefits the appellant. Supersedeas, meaning to “take place of,” suspends the execution of the money judgment. Now the defendant doesn’t have to pay out of pocket and then later try to recover that sum should he/she win the appeal.
The seizure of defendant’s property is also stayed using this bond. Should the judgment call for the transfer of ownership of a house, vehicle, artwork, et cetera, the defendant would be allowed to maintain possession of the property.
Posting collateral is one way to replace a supersedeas bond, but this is not nearly as beneficial as using surety bonding. Here are a few benefits of using a bond rather than depositing collateral/cash with the court registry:
- On average, courts charge a sliding scale to hold the money. This is 2% in most cases. The premium for a collateralized bond is 1%.
- Filing a bond automatically stays the execution of the judgment. Without the bond you must file a separate motion to stay.
- Many states will require a smaller bond than if the money is placed with the court. For instance in CA if a corporate surety bond is used to secure the judgment the bond amount is 150% of the judgment. If collateral is placed with the court’s registry, it must be 200% of the judgment.
- Fortune 500 companies and large insurance companies can qualify for rate credits as well as acquire the bond without collateral.
Using a surety bond may be the best route to take depending on the situation. Discussing the matter with a professional at a surety bond company is a good way to determine if a supersedeas bond applies to your needs.