Minnesota Supersedeas Bonds
What Are Minnesota Supersedeas Bonds?
While a client can file an appeal without a supersedeas bond, the bond is the primary legal mechanism used to stay the enforcement of a judgment while the case is on appeal. In Minnesota, the act of filing an appeal does not automatically stay enforcement. Under Rule 108.01, a party seeking to pause collection must move for a stay in the trial court and provide approved security.
A Minnesota supersedeas bond serves as a financial guarantee that the judgment creditor will be protected from loss during the appellate process. It ensures payment of the judgment, interest, and costs if the appeal is unsuccessful. To be acceptable, the bond must be issued by a surety company that holds the certificate of the commissioner of commerce.
If you’re an attorney handling your client’s case in Minnesota, here are the requirements and statutory caps for securing a supersedeas bond.
Minnesota Supersedeas Bond Amount Requirements
Minnesota provides two distinct paths for securing a stay: Rule 108.02 of the Rules of Civil Appellate Procedure and Minnesota Statute § 550.36. Here are the key highlights of the bond requirements:
- Bond Amount: Per Rule 108.02,when a judgment is for the payment of money not otherwise secured, the bond amount is typically set to cover:
- The unpaid amount of the judgment.
- Costs on appeal.
- Interest anticipated to accrue during the pendency of the appeal.
- Any other damages caused by the delay in enforcement.
- Alternative Bond Amount on Money Judgments: Under Minn. Stat. § 550.36, a judgment debtor may obtain a stay by filing a bond within 10 days of the entry of judgment. The bond must generally be in the amount of the judgment, or a lesser amount approved by the court and conditioned on the payment of the judgment plus interest.
- $150 Million Bond Cap: For any money judgments, the total supersedeas bond required of all appellants collectively shall not exceed $150 million, regardless of the total value of the judgment.
- Exception for Asset Dissipation: If the judgment creditor proves by a preponderance of the evidence that the appellant is dissipating assets to avoid payment, the court may enter orders to protect the creditor, including requiring a bond for the full amount of the judgment without regard to the cap.
If you are an attorney handling a client’s case in Minnesota, you should note that the court also accepts alternative forms of security in lieu of a bond, such as:
- Letters of Credit
- Certificates of Deposit (CDs)
- Escrow Agreements
Rule 108.02 Motion for Stay or Injunction in Trial Court; Security
Subdivision 1.Motion in Trial Court.
A party seeking any of the following relief must move first in the trial court:
(a) a stay of enforcement of the judgment or order of a trial court pending appeal;
(b) approval of the form and amount of security, if any, to be provided in connection with such a stay; or
(c) an order suspending, modifying, restoring, or granting an injunction while an appeal is pending pursuant to Minn. R. Civ. P. 62.02.
Subd. 2.Security Required.
Except as to cases in which a governmental body is the appellant or as otherwise provided by rule or statute, a trial court may grant the relief described in subdivision 1 of this rule if the appellant provides security in a form and amount that the trial court approves. The security provided for in this rule may be in one instrument or several. The appellant must serve proof of the security in accordance with Rule 125.02.
Subd. 3.Form of Security.
The form of the security may be a supersedeas bond, a letter of credit, a deposit of cash or property with the trial court administrator, or any other form of security that the trial court approves as adequate under the circumstances. The appellant bears the burden of demonstrating the adequacy of any security to be given. Unless the trial court orders otherwise, a stay of an order or judgment does not take effect until any security ordered is filed and notice of filing is provided to all parties.
Subd. 4.Amount of Security.
(a) In all cases, the amount of the security, if any, must be fixed at such amount as the trial court determines will preserve the value of the judgment or order to the respondent during the pendency of appeal.
(b) When the judgment or order is for the payment of money not otherwise secured, the amount of the security normally must be fixed at such sum as will cover the unpaid amount of the judgment or order, costs on appeal (to the extent security for costs has not already been given under Rule 107), interest during the pendency of the appeal, and any other damages that may be caused by depriving the respondent of the right to enforce the judgment or order during the pendency of the appeal.
(c) When the judgment or order determines the possession, ownership, or use of real or personal property (such as in actions for replevin, foreclosure, or conveyance of real property), the amount of the security normally must be fixed at such sum as will compensate the respondent for the loss of use of the property during the pendency of the appeal, costs on appeal (to the extent security for costs has not already been given under Rule 107), interest during the pendency of the appeal, and any other damages (including waste) that may be caused by depriving the respondent of the right to enforcement of the judgment or order during the pendency of the appeal.
(d) If a party seeks to stay enforcement of only part of the judgment or order on appeal, the security must be fixed at such sum as the trial court determines is sufficient to secure that portion of the judgment or order on appeal.
Subd. 5.Providers Submit to Jurisdiction of District Court.
If security is provided in the form of a bond, letter of credit, or undertaking with one or more sureties, each provider (whether surety, issuer, or other person liable for the security) submits to the jurisdiction of the district court. A provider’s liability may be enforced on motion in the district court, served on the provider or providers in accordance with the Minnesota Rules of Civil Procedure as if the provider or providers were a party or parties to the action, without the necessity of an independent action.
Subd. 6.Review by Court of Appeals.
On a motion under Rule 127, the Court of Appeals may review the trial court’s determinations as to whether a stay is appropriate, the terms of any stay, and the form and amount of security pending appeal. The motion for review must:
(a) set forth the reasons for granting the relief requested and the facts relied on;
(b) include originals or copies of affidavits or other sworn statements supporting the facts that are subject to dispute; and
(c) include a copy of any submissions to the trial court, any order entered by the trial court relating to security pending appeal, and any other relevant parts of the record in the trial court.
If the Court of Appeals grants the motion, it may give relief on the same terms that a trial court may give relief under Rule 108.02, subds. 2, 3, and 4, and may require that any security that the appellant must provide be posted in the trial court.
*This does not constitute legal advice, please read our disclaimer.
Minnesota Statute § 550.36 Stay of Execution on Money Judgment
(a) This section is an alternative to the Minnesota Rule of Civil Appellate Procedure, Rule 108.02, subdivision 3. Execution of a judgment for the payment of money only shall be stayed during the course of all appeals or discretionary appellate reviews of a judgment if, within ten days after the entry thereof, the judgment debtor shall file with the court administrator a bond, running to the judgment creditor, the creditor’s personal representatives, and assigns. The amount of the bond must be in the amount of the judgment, or a lesser amount approved by the court in the interests of justice. The total appeal bond that is required of all appellants must not exceed $150,000,000, regardless of the value of the judgment. The bond must be conditioned for the payment of the judgment, with interest during the time for which the stay is granted. Interest shall be computed in the same manner and at the same rate provided for interest on verdicts in section 549.09. Within two days thereafter notice that such bond has been filed, with a copy of the same, shall be served on the judgment creditor, if the creditor be a resident of the county, or upon the creditor’s agent or attorney, if the creditor has one, and the judgment creditor may except to the sufficiency of the bond; and, upon the creditor’s application upon notice or order to show cause, the court, if it find the bond insufficient, may order execution to issue notwithstanding the same, unless the judgment debtor give such further bond as it shall deem sufficient. If the condition of any such bond be not performed, the execution shall issue for the amount of the judgment, with interest and costs, against the judgment debtor and the sureties. When an execution issues against sureties the officer shall certify in the return what amount, if any, was collected from them and the date thereof. If a stay be granted after execution issued, any levy made thereon shall be released and the execution shall be returned and the reason noted by the officer.
(b) Notwithstanding paragraph (a), if a judgment creditor provides evidence that a judgment debtor may be dissipating assets to avoid payment of a judgment, a court may enter orders that:
(1) are necessary to protect the judgment creditor; and
(2) require the judgment debtor to post a bond in an amount up to the total amount of the judgment.
*This does not constitute legal advice, please read our disclaimer.
Who Needs Supersedeas Bonds in Minnesota State Cases?
Aside from judgments against most public entities, 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 Minnesota 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
Minnesota Supersedeas Bonds Underwriting Requirements
While supersedeas bonds are technically insurance products issued by surety companies, they function more like a financial guarantee whereby the surety is guaranteeing to pay the judgment to the appellee up to the bond amount if the judgment is not satisfied by the appellant. Unlike insurance, however, the appellant has to indemnify or repay the surety if the surety pays the judgment. Consequently, supersedeas bonds are generally considered an extension of credit and underwritten more like bank loans.
Considering that most appeals do not result in a reversal of the judgment or order, there is a strong likelihood that the surety providing the supersedeas bond will receive a claim. As a result of this high probability, surety companies generally require collateral for the full bond amount.
However, there are exceptions to the collateral requirement, such as if an appellant has a significant net worth and liquid assets relative to the bond amount. Publicly traded companies, banks, insurers, large private firms, and high-net-worth individuals may meet these requirements and not need to post collateral. (Find out if your client may qualify for an appeal bond without collateral, here.)
Common forms of collateral include:
- Cash: This is the fastest and most straightforward method for securing an appeal bond. Appellants can also potentially earn interest on their cash during the appeal.
- Bank Letters of Credit: These are a financial guarantee issued by a bank to a surety, which confirms availability of funds upon demand up to a stated amount.
- Real Estate: Residential and commercial properties, including single-family homes, multi-family units, office spaces, industrial facilities, and retail properties.
- Marketable Securities: These include non-retirement brokerage accounts holding publicly traded stocks and bonds pledged to a surety as collateral.
FAQs
How Much are the Premium Rates for Minnesota Supersedeas Bonds?
The cost of a Minnesota supersedeas bond is determined by the premium rate, which typically ranges from 0.30% to 4% of the total bond amount. The exact premium rate will depend on several factors, such as:
- The size of the bond requirement
- 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
For example, if the supersedeas bond is required for $8,000,000 and the premium rate is set at 0.75%, the bond premium would be $60,000. It’s important to know that surety companies charge premiums for supersedeas bonds annually until their liability under the bond has been released. The premium for the first year is considered fully earned once the bond is issued, and any renewal premiums for subsequent years are prorated if the bond is exonerated midterm.
Best Practices for Posting a Minnesota Supersedeas Bond Through a Corporate Surety Company
Supersedeas bonds can take anywhere from a couple of days to several weeks to put in place, depending on the client’s circumstances. Here are the best practices to help ensure a smooth process in securing a supersedeas bond for your client:
- Engage an Appeal Bond Expert Early – It is never too early to start discussions with a surety agent. When possible, reach out before the judgment has been entered because when it comes to supersedeas bonds, “more time” equals “more options” to allow the surety agent to find the best solution for the client’s unique circumstances.
- Ensure Attorney Collaboration – It is best when the attorney is able to confirm the bond amount based on jurisdictional requirements, outline which parts of the judgment need to be bonded, keep the surety company informed of filing deadlines, and review the bond form for compliance with State or local court rules.
- Choose a Surety Partner with Proven Expert – Not all surety agencies are the same. Selecting a provider with a proven strong track record in issuing Minnesota supersedeas bonds ensures your client receives specialized guidance and a smooth approval process. At CSBA, we bring decades of experience exclusively handling civil litigation bonds nationwide.
See our guide, “The Biggest Mistakes Made with Appeal Bonds,” to learn more.
Why Choose CSBA for Your Client's Minnesota Supersedeas Bonds?
If your client needs to stay enforcement of a Minnesota judgment, they need a professional surety agent who can use a wide variety of collateral options and who has access to the right surety companies.
A Legacy of Expertise & Trust
Since 1984, CSBA has provided first-class service through our expertise in the appellate process, underwriting requirements, and the time frames required to secure a bond before the filing deadline. With our combined experience of 110 years, our surety bond professionals anticipate potential setbacks and take proactive steps to tailor options unique to your client’s financial situation.
Exclusive Surety Insurer Access & Creative Solutions
At CSBA, we leverage our extensive network of over 30 surety insurers for clients seeking to secure a Minnesota supersedeas bond. Our long-standing relationships with top-tier surety companies allow us to handle bond amounts of all sizes, whether it’s a $1 million supersedeas bond for a private individual or a $1 billion supersedeas bond for a publicly traded corporation.
With access to exclusive and semi-exclusive sureties, we offer:
- Creative collateral solutions tailored to each client’s financial profile.
- Expedited underwriting to ensure a streamlined bonding process.
- Comprehensive support and guidance to attorneys and their clients throughout the supersedeas bond process.
Our specialized expertise and direct surety relationships set us apart, making CSBA the trusted choice to attorneys and their clients for supersedeas bonds in Minnesota cases.
How Long Does It Take to Get a Supersedeas Bond?
The time it takes to put a Minnesota 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 Minnesota 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.