New Jersey Supersedeas Bonds
What is a New Jersey Supersedeas Bond?
In New Jersey, a supersedeas bond enables the party appealing a civil money judgment to temporarily suspend enforcement of the judgment while the appeal is pending. A judgment debtor may file an appeal without a supersedeas bond, but the posting of the bond is necessary to stay enforcement during the appellate process. Without a bond approved by the court or other approved security, the judgment creditor may proceed with collection efforts while the appeal is pending.
A supersedeas bond in New Jersey functions as a financial assurance that, if the trial court’s judgment is upheld on appeal, the appellee/respondent will be paid. The bond must be issued by a surety company authorized to conduct business in New Jersey, and is typically arranged through a licensed surety agent working in coordination with the appellant and their attorney.
New Jersey Supersedeas Bond Amount Requirements
According to the New Jersey Rules of Court, Rule 2:9-6, the supersedeas bond amount must cover the full judgment amount, interest and trial costs. The bond must be filed with the trial court that entered the judgment for approval.
Rule 2:9-6. Supersedeas Bond; Exceptions
(a) Supersedeas Bond; Other Form of Security.
(1)Except as otherwise provided in paragraph (c), the supersedeas bond or the form of security other than a supersedeas bond shall be presented for approval to the court or agency from which the appeal is taken, or to the court to which certification is sought, and shall have such surety or sureties as the court requires. Unless the court otherwise orders after notice on good cause shown, the bond or other form of security shall be conditioned for the satisfaction of the judgment in full, together with interest and trial costs, and to satisfy fully such modification of judgment, additional interest and costs and damages as the appellate court may adjudge.
(2)In determining whether good cause exists to approve a supersedeas bond in an amount less than the full judgment together with interest and trial costs or to approve a form of security other than a supersedeas bond either in the amount of the full judgment or an amount less than the full judgment together with interest and trial costs, the court shall consider all relevant factors, including, but not limited to, the amount and nature of the judgment, anticipated interest and costs, the availability and cost of a supersedeas bond or other form of security, the assets of the judgment debtor and of the judgment debtor’s insurers, sureties and indemnitors, if any, the judgment debtor’s ability to dissipate assets, and the risk of harm to the parties on the appeal. The burden shall be on the party seeking approval of a supersedeas bond in an amount less than the full judgment together with interest and trial costs or a form of security other than a supersedeas bond either in the full judgment amount or an amount less than the full judgment together with interest and trial costs to show that the posting of a supersedeas bond in the full judgment amount would cause undue economic hardship and that in the circumstances such lesser amount or other form of security is adequate and just. In the event the court approves a form of security other than a supersedeas bond or a supersedeas bond in an amount less than the amount of the judgment plus anticipated interest and costs, the court shall impose additional conditions on the judgment debtor to prevent the dissipation, the diminution in the aggregate value, or the diversion of the judgment debtor’s assets during the appeal.
(3) When the judgment determines the disposition of the property in controversy or when such property is in the custody of the sheriff or when the proceeds of such property or a bond for its value is in the custody or control of the court below, the amount of the supersedeas bond shall be fixed at such sum only as will secure the damages recovered for the use and detention of the property, trial and appellate costs, and interest.
- (4) In all other cases not specifically provided for herein the amount of the supersedeas bond shall be fixed by the court.
(b) Appellants Excepted. When an appeal is taken or certification sought by the State or any political subdivision thereof or any of their respective officers or agencies or by direction of any of the principal departments of the State and the operation or enforcement of a judgment or order is stayed, no bond, obligation or other security shall be required from the appellant.
(c) Bail Forfeiture Appeals. Simultaneous with the filing of notice of appeal in respect of a bail forfeiture judgment by or on behalf of an insurer, the appellant shall deposit the full amount of the judgment with the Clerk of the Superior Court in cash or by certified, cashiers or bank check. The court for good cause shown may allow the posting of a supersedeas bond or other form of security in lieu of the cash deposit. Good cause, however, shall not be satisfied by an application to extend the time to locate the defendant or to stay payment of a forfeited bond, entry of a judgment, or preclusion from the bail registry maintained by the Superior Court. The notice of appeal in a bail forfeiture appeal shall be accompanied by proof of compliance with this rule. Such proof shall be provided by affidavit, unless the court otherwise orders.
This does not constitute legal advice, please read our disclaimer.
Who Needs Supersedeas Bonds in New Jersey State Cases?
Supersedeas bonds are typically a requirement in New Jersey courts to supersede a judgment while the appellant seeks to overturn a verdict on appeal.
Here are a few common cases that require appeal bonds:
- 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 (click here to read our article on Appeal Bonds in Family Law Cases)
New Jersey Supersedeas Bonds Underwriting Requirements
A supersedeas bond functions similarly to an extension of credit. It ensures that the judgment debtor will pay the judgment to the judgment creditor if the appeal is wholly or partially unsuccessful. Unlike traditional insurance, which absorbs financial losses, a supersedeas bond requires the appellant to reimburse the surety company if the appeals court affirms the trial court’s decision and the surety ends up paying a claim on the bond.
Since most judgments are not reversed on appeal, there is a high likelihood that the surety will receive a claim on the supersedeas bond. Given this high probability of a claim, surety companies will often require collateral equal to the full bond amount before issuing a New Jersey supersedeas bond.
Collateral Options for Supersedeas Bonds
To secure a supersedeas bond, appellants may provide collateral in various forms, including the following:
- Cash: This is the fastest and most straightforward method for securing a supersedeas 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.
Exceptions to Collateral Requirements
Certain high-net-worth appellants with substantial liquidity relative to the bond amount may qualify for an appeal bond without full collateral. This may include:
- Publicly traded companies
- Banks and financial institutions
- Insurers
- Large private firms
- Individuals with significant liquid assets
FAQs
How Much are the Premium Rates for New Jersey Supersedeas Bonds?
The cost of a New Jersey 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 Supersedeas Bond Through a Surety Bond Provider
Securing a supersedeas bond in New Jersey can be a complex process. Following best practices and having an experienced appellate bond specialist working with your client can help simplify this process and ensure a smooth and efficient experience:
- Contact a surety bond agent early. This advantage helps the client explore all options and ensure they can file the supersedeas bond 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 State or local rules.
- Choose the right surety bond agent. You and your client 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 New Jersey supersedeas bonds.
Read our guide, “The Biggest Mistakes Made with Appeal Bonds,” to learn more.
Why Choose CSBA for Your Clients' New Jersey 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 New Jersey 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 Secure a Supersedeas Bond in New Jersey?
If collateral isn’t required to secure a supersedeas bond, a New Jersey supersedeas bond can be approved and issued in as little as 24 hours in the most straightforward cases.
If collateral is required, the process can vary significantly and mainly depends on the type of collateral being used. For example, cash collateral can be posted within a few days, while real estate can take 30-60 days, depending on the type and number of properties being posted.
Steps to Apply for a Supersedeas Bond
1. Contact a Supersedeas Bond Specialist
Consult with a surety expert to review your client’s bond amount, financial qualifications, and go over available collateral options. We recommend that the client contact CSBA early so that we can prevent setbacks, and ensure that all necessary steps are completed on time.
2. Explore All Available Options
The surety agent will discuss customized solutions based on your client’s financial situation. If your client may qualify for a supersedeas bond without full collateral, we will go over the underwriting requirements and answer any questions.
3. Submit Required Documentation
To begin the underwriting process, the following documents are required:
- Supersedeas bond application
- Court complaint
- Judgment
- Notice of appeal
- CPA-audited year-end financial statement (if the client is a candidate for an appeal bond without full collateral)
4. Secure Approval & Finalize the Bond
Once the underwriting documents have been received, your surety agent will review them internally and:
- Work to obtain competitive terms from a surety insurer.
- Outline the supersedeas bond approval for your client.
- Guide the client in the posting of the collateral, if required.
Get Your Client’s New Jersey 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.