Pennsylvania Supersedeas Bonds
What is a Pennsylvania Supersedeas Bond?
In Pennsylvania, a supersedeas bond is a type of security instrument used to stay the enforcement of a civil judgment while an appeal is pending. Under Pennsylvania Title 210, Rules of Appellate Procedure, Code Rule 1731(a), an appeal from an order involving solely the payment of money operates as an automatic supersedeas, provided that the appellant files appropriate security with the clerk of the lower court. This stay ensures that the judgment creditor (appellee) is protected against the risk of non-payment if the appeal is dismissed or the judgment is affirmed.
The stay remains in effect for the duration of the appellate review, preserving the status quo while the case is being considered.
Pennsylvania Supersedeas Bond Amount Requirements
Code Rule 1731 and 35 P.S. § 5701.309 establish the specific requirements for determining the sum of a supersedeas bond. Here are the key highlights for attorneys:
- For most money judgments, the security must be in the amount of 120% of the amount found due by the trial court and remaining unpaid.
- If the judgment is payable over a period of time, the amount considered “due” for the purpose of the 120% calculation is the aggregate amount payable within 18 months after the entry of the order.
- Under 35 P.S. § 5701.309, the total supersedeas bond required for all appellants collectively in litigation involving a tobacco Master Settlement Agreement signatory is capped at $100,000,000, regardless of the total judgment value.
- Per § 5701.309(b), the $100 million cap can be rescinded if the appellee proves by a preponderance of the evidence that the appellant is dissipating assets outside the ordinary course of business. In such cases, the court may require a bond up to the full amount of the judgment.
- For orders involving child or spousal support, alimony, or equitable distribution, the trial court has discretion to determine the “amount and terms” of the security.
If you are an attorney handling a client’s case in Pennsylvania, you should note that under 210 Pa. Code Rule 1734. Appropriate Security, the court could also accept alternative forms of security in lieu of a bond, such as:
- Irrevocable letters of credit
- US Treasury Bills
- Certificates of Deposit
Pennsylvania Code Rule 1731 - Automatic Supersedeas of Orders For the Payment of Money
(a) General Rule.—Except as provided by subdivision (b), an appeal from an order involving solely the payment of money shall, unless otherwise ordered pursuant to this chapter, operate as a supersedeas upon filing with the clerk of the lower court of appropriate security in the amount of 120% of the amount found due by the lower court and remaining unpaid. Where the amount is payable over a period of time, the amount found due for the purposes of this rule shall be the aggregate amount payable within 18 months after entry of the order.
(b) Domestic Relations Matters.—An appeal from an order of child support, spousal support, alimony, alimony pendente lite, equitable distribution or counsel fees and costs shall operate as a supersedeas only upon application to and order of the trial court and the filing of security as required by subdivision (a). The amount and terms of security shall be within the discretion of the trial court.
*This does not constitute legal advice, please read our disclaimer.
Pennsylvania Title 35 P.S. Health and Safety § 5701.309 - Limits on supersedeas bond requirements
(a) General rule.–Except as otherwise provided in subsection (b), in civil litigation under any legal theory involving a signatory, a successor of a signatory or an affiliate of a signatory to the Master Settlement Agreement, the supersedeas bond to be furnished during the pendency of all appeals or discretionary reviews of any judgment granting legal, equitable or any other form of relief in order to stay the execution thereon during the entire course of any appellate reviews shall be set in accordance with applicable laws or court rules, provided that the total supersedeas bond that is required of all appellants collectively shall not exceed $100,000,000, regardless of the value of the judgment.
(b) Exception.–Notwithstanding subsection (a), if an appellee proves by a preponderance of the evidence that an appellant is dissipating assets outside the ordinary course of business to avoid payment of a judgment, the court may enter an order that:
(1) Is necessary to protect the appellee.
(2) Requires the appellant to post a supersedeas 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 Pennsylvania 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 Pennsylvania 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
Pennsylvania 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 a significant net worth and liquid assets relative to the bond amount. See our article, “Qualifying for a Supersedeas 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 Nebraska, 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 a supersedeas bond without having to liquidate assets.
FAQs
How Much Does a Pennsylvania Supersedeas Bond Cost?
A Pennsylvania 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.
Best Practices for Posting a Supersedeas Bond Through a Surety Bond Provider
Securing a supersedeas bond in Pennsylvania 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 Pennsylvania supersedeas bonds.
Read our guide, “The Biggest Mistakes Made with Appeal Bonds,” to learn more.
Why Choose CSBA for Your Client's Pennsylvania Supersedeas Bonds?
If your client needs to stay enforcement of a Pennsylvania 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 Pennsylvania 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 Pennsylvania cases.
How Long Does It Take to Secure a Pennsylvania Supersedeas Bond?
The time frame to secure a Pennsylvania supersedeas bond will depend on whether or not collateral is required.
If collateral isn’t required, the bond can be approved and issued within 24 hours in the most straightforward cases.
If the surety does require collateral, the type of collateral can affect the duration of securing a supersedeas bond. Cash collateral can be secured in a few days, while real estate collateral can generally take 30-60 days, depending on the property 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 requirement and start the process.
- The bond agent will discuss the various options with you and your client, and address any underwriting questions you or the client may have.
- 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.
- The surety agent will outline the supersedeas bond approval, and work closely with you and your client to efficiently finalize the bond.
Get Your Client’s Pennsylvania 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.