Delaware Supersedeas Bonds
What is a Delaware Supersedeas Bond?
Supersedeas bonds are surety bonds required by courts to stay the enforcement of a judgment while it’s on appeal. In Delaware, there is typically a 10-day automatic stay before the judgment creditor can begin collection efforts to enforce the judgment.
If the judgment debtor appeals, they can request a stay of enforcement while the appeal is pending. As a condition of the stay, the court may require the appellant to post a supersedeas bond to protect the judgment creditor and ensure they will be paid should the judgment be affirmed on appeal.
Delaware Supersedeas Bond Amount Requirements
According to the Delaware Rules of Civil Procedure for the Superior Court, Rule 62(c), the bond required for appeal cases from a lower court to the Superior Court must be sufficient to cover the judgment amount, court costs, and interest.
For supersedeas bonds related to appeals from the Superior Court to the Delaware Supreme Court, Rule 62(d) states that the process is governed by Article IV, Section 24 of the Delaware Constitution and by Delaware Supreme Court Rule 32. This rule provides several key details:
- Standard Amount: For a money judgment, the security “shall ordinarily equal” the sum of the money judgment plus all costs and damages, including damages for delay (Rule 32(c)(ii)).
- Court Discretion: The trial court (where the motion must be filed first) has the discretion to set the security at a lesser amount.
- Burden of Proof: The party seeking the stay has the burden to demonstrate to the trial court that a lesser amount is sufficient in the circumstances.
Rule 62. Stays by Trial Court and on Appeal
(a) Automatic stay. — Except as stated herein, no execution shall issue upon a judgment nor shall proceedings be
taken for its enforcement until the expiration of 10 days after its entry.
(b) Stay on motion for new trial or for judgment. — In its discretion and on such conditions for the security of the
adverse party as are proper, the Court may stay the execution of or any proceedings to enforce a judgment pending
the disposition of a motion for a new trial or to alter or amend a judgment made pursuant to Rule 59 or of a motion
for relief from a judgment or order made pursuant to Rule 60, or of a motion for judgment in accordance with a
motion for a directed verdict made pursuant to Rule 50.
(c) Stay and supersedeas on appeal from lower court. — In any civil action in which an appeal is taken from a
lower court to the Superior Court the Superior Court may, upon motion of the appellant, stay execution on the
judgment appealed from and may as a condition of such stay require the appellant to post a supersedeas bond with
surety or a cash deposit. The amount of such supersedeas bond or cash deposit shall be sufficient to pay the amount
of the judgment appealed from plus interest and court costs.
(d) Supersedeas or stay pending appeal. — Supersedeas, and stay pending appeal, and supersedeas, stay and cost
bonds shall be governed by Article IV, Section 24 of the Constitution of the State of Delaware and by Supreme
Court Rule 32.
(e) Omitted.
(f) Stay according to statute. — A judgment debtor is entitled to a stay of execution where such stay is accorded
by statute.
(g) Omitted.
(h) Stay of judgment as to multiple claims or multiple parties. — When a Court has ordered a final judgment
under the conditions stated in Rule 54(b), the Court may stay enforcement of that judgment until the entering of a
subsequent judgment or judgments and may prescribe such conditions as are necessary to secure the benefit thereof
to the party in whose favor the judgment is entered.
*This does not constitute legal advice, please read our disclaimer.
Article IV, Section 24 of the Delaware Constitution
Section 24. Whenever a person, not being an executor or administrator, appeals or applies to the Supreme Court for a writ of error, such appeal or writ shall be no stay of proceedings in the court below unless the appellant or plaintiff in error shall give sufficient security to be approved by the court below or by a judge of the Supreme Court that the appellant or plaintiff in error shall prosecute respectively his or her appeal or writ to effect, and pay the condemnation money and all costs, or otherwise abide the decree in appeal or the judgment in error, if he or she fail to make his or her plea good.
*This does not constitute legal advice, please read our disclaimer.
Delaware Supreme Court Rule 32
(a) Stay or injunction pending appeal. —Except in a challenge to a final award under the Delaware Rapid Arbitration Act, a motion for stay must be filed in the trial court in the first instance. The trial court retains jurisdiction over the initial motion and must rule on the initial motion regardless of whether the case is on appeal to this Court. A stay or an injunction pending appeal may be granted or denied in the discretion of the trial court, whose decision shall be reviewable by this Court. The trial court or this Court, as a condition of granting or continuing a stay or an injunction pending appeal, may impose such terms and conditions, in addition to the requirement of indemnity, as may appear appropriate in the circumstances.
(b) Stay in criminal proceedings. —The right to a stay of execution and bail on appeal in criminal cases shall be as provided by statute and by these Rules. On application for a stay of execution and bail, the provisions of any applicable statute must be met. Such an application may be heard by this Court. The party seeking a stay must file with the Court a stipulation of facts or such portion of the record as is necessary to sustain the application. The State may submit such portions of the record as it deems relevant.
(c) Supersedeas bond or other security. —A stay or injunction pending appeal shall be granted upon filing and approval of sufficient security. Such security shall be presented to and approved or disapproved in the first instance by the trial court. The type, amount, and form of the security shall be determined in the first instance by the trial court, whose actions shall be reviewable by this Court. The security shall be filed with the clerk of the trial court who shall forthwith give notice thereof to the attorney for the appellee. The security shall not beapproved until notice of appeal has been served on the appellee and filed in the manner provided under these Rules. In a challenge to a final award under the Delaware Rapid Arbitration Act, this Court may make all determination regarding the security.
(i) Type of security. —Security for a stay or injunction pending appeal shall be a supersedeas bond or other security. The trial court shall have the discretion to set a type of security other than a supersedeas bond, with the party seeking such other type of security having the burden to demonstrate the sufficiency of such other type of security.
(ii) Amount of security. —With regard to a judgment or a portion of a judgment for a sum of money, the security shall ordinarily equal such sum of money and all costs and damages, including damages for delay. The trial court shall have the discretion to set the security at a lesser amount, with a party seeking the stay or injunction pending appeal having the burden to show that a lesser amount is sufficient in the circumstances.
(iii) Form of security. —In a civil case the security shall remain in full force and effect unless the principal obligor prosecutes the appeal to effect, according to law and the Rules of this Court, and pays any judgment for a sum of money and all costs and damages, including damages for delay, and otherwise abides the decree if the principal obligor fails to make the principal obligor’s plea good. A supersedeas bond shall be substantially in the form prescribed in Official Form J.
(d) Bond in a criminal case. —In a criminal case, if this Court issues the certificate under 11 Del. C. Sec. 4502 in the first instance, the Court, in its discretion, may either determine the terms and conditions of release or remand the matter to the trial court for such determination. If the trial court issues the certificate under 11 Del. C. Sec. 4502, the amount of the bond and the surety, when fixed and approved by the trial court, shall be deemed to have been so fixed and approved by this Court. If either the defendant or the State seeks a change in the terms or conditions of release previously ordered by the trial court, the Court may, in its discretion, review and, if appropriate, modify the terms or conditions of release or, if additional evidence is required, remand, subject to review by this Court, the case to the trial court for the limited purpose of conducting such review and making such changes as may be appropriate. Pursuant to Rule 19(c), the trial court shall make and report its determination within 30 days of the remand, unless some other time is ordered by the Court.
The principal obligor shall be bound to appear when directed by this Court or the trial court, to prosecute the appeal to effect according to law and the Rules of this Court, to pay all costs and otherwise to abide the judgment on appeal and the final judgment in the trial court.
(i) Justification by surety. —Every surety shall justify by affidavit the property offered to secure the principal obligor’s surety.
(ii) Forfeiture. —If there is a breach of condition of a bond, this Court or the trial court may declare a forfeiture of the bail.
(iii) Setting aside. —This Court or the trial court may direct that a forfeiture be set aside, upon such conditions as the Court may impose, if it appears that justice does not require enforcement of the forfeiture.
(iv) Enforcement. —When a forfeiture has not been set aside, the trial court shall on motion enter a judgment of default and execution may issue thereon. By entering into a bond, the obligors submit to the jurisdiction of the trial court and irrevocably appoint the clerk of that court as their agent upon whom any papers affecting their liability may be served. The liability may be enforced on motion without the necessity of an independent action. The motion and such notice of the motion as the court prescribes may be served on the clerk of the court, who shall forthwith mail a copy to each obligor at the obligor’s last known address.
(v) Remission. —After entry of such judgment, the court may remit it in whole or in part under the conditions applying to the setting aside of forfeiture in subparagraph (iii) of this paragraph.
(vi) Exoneration. —When the condition of the bond has been satisfied or the forfeiture thereof has been set aside or remitted, the court shall exonerate the obligors and release any bail. A surety may be exonerated by a deposit of cash in the amount of the bond or by a timely surrender of defendant into custody.
*This does not constitute legal advice, please read our disclaimer.
Who Needs Supersedeas Bonds in Delaware State Cases?
Aside from judgments against most public entities, all judgment debtors are required to post a supersedeas bond or other security to prevent judgment execution during the appeal.
Here are some of the cases that may require supersedeas bonds in Delaware courts:
- Contract Disputes
- Class Action Lawsuits
- Personal Injury Lawsuits
- Property Disagreements
- Business Litigation
- Employment Law Disputes
- Product Liability Claims
- Intellectual Property Conflicts with Monetary Awards
- Toxic Tort Litigation
- Domestic Relations Cases involving property division, alimony, or child support
Delaware Supersedeas Bonds Underwriting Requirements
Supersedeas bonds are technically an insurance product issued primarily by corporate surety companies. However, these bonds are more like an extension of credit and are therefore underwritten similar to bank loans.
Supersedeas bonds function more like financial guarantees, where the surety company guarantees to pay the judgment to the appellee up to the bond amount if the appellant doesn’t satisfy the judgment should it be affirmed on appeal.
Unlike insurance products, the appellant has to repay the surety company if the surety ends up satisfying the judgment. Because most civil appeals result in the judgment being affirmed, there is a high probability that the surety company backing the supersedeas bond will receive a claim. Given the likelihood of a claim, surety companies will often require collateral for the full bond amount.
There are exceptions to the collateral requirement, and those are generally when the appellants are publicly traded companies, banks, insurers, large private firms, municipalities, or high-net-worth individuals who meet particular criteria, such as if the appellant has significant net worth and liquid assets relative to the bond amount. See our article, “Qualifying for an Appeal Bond Without Collateral,” for additional content.
Common forms of collateral include:
- Cash: This is generally the most streamlined collateral option for clients when dealing with a tight deadline.
- Bank Letters of Credit: A formal guarantee from a bank to a surety ensuring the availability of funds up to a certain dollar amount upon demand.
- Real Estate: Acceptable collateral may include residential properties (single-family or multi-family) and commercial properties (office, industrial, or retail). However, due to the homestead laws in Delaware, the property cannot be the client’s primary residence.
- Marketable Securities: Non-retirement brokerage accounts holding stocks and bonds can be pledged as collateral, offering a creative option for securing an supersedeas bond without having to liquidate assets.
FAQs
How Much Does a Delaware Supersedeas Bond Cost?
A Delaware supersedeas bond cost is determined by the premium rate set by a surety company, which is generally between 0.3% to 4% depending on several factors such as:
- The size of the supersedeas bond
- The type of collateral provided, if required
- The financial strength of the appellant relative to the bond amount, if the bond is being considered without collateral
The bond premium is charged yearly until the surety’s liability under the bond is fully released. If the bond is exonerated midterm after the first year’s renewal, the client will receive a prorated return premium from the surety company.
What are the Best Practices for Securing a Supersedeas Bond through an Admitted Surety Insurer?
Securing a Delaware supersedeas bond can be complex. However, following best practices can help ensure a smooth experience. Here’s what we recommend:
- Contact a surety bond agent early. This advantage helps the client explore all options and ensure the supersedeas bond can be filed without delay.
- Ensure attorney involvement. Attorneys are critical in confirming the bond amount based on the jurisdiction’s requirements and parts of the judgment being bonded, updating the surety company on the deadline to file the bond, and reviewing the bond form to ensure it conforms with local rules.
- You can choose the right surety bond agent by interviewing multiple professionals and choosing one with a strong track record of experience and who specializes in Delaware supersedeas bonds.
For more insights, check out our guide: “The Biggest Mistakes Made with Appeal Bonds.“
Why Choose CSBA for Your Clients' Delaware Supersedeas Bond?
When your client needs to stay enforcement of a judgment, they need a professional surety agent who can guide them through this difficult process.
A Legacy of Expertise & Trust
Since 1984, CSBA has helped appellants from all different industries involved in almost every type of case imaginable secure supersedeas bonds to stay enforcement of Delaware judgments. Whether your client is an individual appealing a $1 million judgment, or a publicly traded international company needing a $1 billion supersedeas bond, our team is able to leverage our 110 years of combined experience to assist in securing a supersedeas bond for your client with competitive terms.
Exclusive Surety Insurer Access & Creative Solutions
CSBA has exclusive and semi-exclusive access to top admitted surety insurers, allowing us to handle any size supersedeas bond with creative collateral solutions tailored to your client’s specific financial situation. Whether the bond amount is small or large, we ensure that appellants and their attorneys receive first-class service and the best possible terms for their supersedeas bonds.
How Long Does It Take to Get a Supersedeas Bond?
The time it takes to put a Delaware supersedeas bond in place depends on various factors. For example, when collateral is not required, a bond can be approved and issued in as little as 24 hours in the most straightforward cases. However, the process can vary significantly when collateral is involved, and the time then depends on the type of collateral that is being used. For instance, cash collateral can be posted in just a few days, while securing real estate collateral can take 30 to 60 days, depending on the type and number of properties being posted.
Steps to Apply for a Supersedeas Bond
- Contact a supersedeas bond specialist to review your client’s bond requirements and start the process.
- CSBA will discuss the various options available with you and your client.
- Submit the following documents:
- Application
- Court complaint
- Judgment
- Notice of appeal
- CPA Audited Year-end Company Financial Statement if the client may be a candidate to qualify for an appeal bond without collateral.
- CSBA will work on obtaining competitive terms for your client with the admitted surety insurers we work with. CSBA will outline the supersedeas bond approval for your client and facilitate securing the collateral.
While the process can typically take a few weeks, CSBA’s expertise allows us to expedite the process and minimize any delays in finalizing the issuance of the supersedeas bond.
Get Your Client’s Delaware Supersedeas Bond Quote Today
Deadlines for filing a supersedeas bond are normally very tight. Appellants and their attorneys will need a responsive and knowledgeable surety agent to navigate the process.
At CSBA, we make the supersedeas bond process smooth so you can focus on your case. Contact our supersedeas bond experts today to take the next step toward securing your client’s supersedeas bond.