South Carolina Supersedeas Bonds
What Are South Carolina Supersedeas Bonds?
While a client can file an appeal without a supersedeas bond, the bond is the legal instrument used to stay the enforcement of a judgment while the case is on appeal. In South Carolina, a judgment is generally automatically stayed for 10 days after it’s entered. Then the filing of f a notice of appeal provides an automatic stay for many civil matters; however, money judgments are an exception. A notice of appeal from a judgment directing the payment of money does not stay execution unless the presiding judge grants a stay of execution, and in most instances will require a supersedeas bond to be posted.
A South Carolina supersedeas bond serves as a financial guarantee that the judgment creditor will be paid if the appeal is unsuccessful. For the bond to be deemed “good and sufficient,” it must be issued by a surety company authorized to do business in the State of South Carolina.
If you’re an attorney handling your client’s case in South Carolina, here are the bond amount requirements and statutory caps for your client to secure a supersedeas bond.
South Carolina Supersedeas Bond Amount Requirements
The requirements for a supersedeas bond in South Carolina are governed by S.C. Code § 18-9-130 and Rule 62(d) of the South Carolina Rules of Civil Procedure. Here are the key highlights to be aware of:
- If a stay of execution is granted by the presiding judge and a bond or other surety is required to guarantee payment of the judgment while an appeal is pending, the bond shall not exceed the amount of the judgment or:
- (a) twenty-five million dollars, whichever is less, for a business entity that employs more than fifty persons and has gross revenues exceeding five million dollars for the previous tax year; or
- (b) one million dollars, whichever is less, for all other entities or individuals.
Rule 62(d)
(d) Stay Upon Appeal. When an appeal is taken, a party, by giving a supersedeas bond, may obtain a stay subject to the exceptions contained in subdivision (a) of this rule and the South Carolina Appellate Court Rules. The bond may be given at or after the time of filing the notice of appeal or of procuring the order allowing the supersedeas as the case may be. The stay is effective when the supersedeas bond is approved by the court.
*This does not constitute legal advice, please read our disclaimer.
S.C. Code § 18-9-130
Effect of notice of appeal on execution of judgment; sale of defendant’s property; appeal in civil action involving signatory of Master Settlement Agreement.
(A)(1) A notice of appeal from a judgment directing the payment of money does not stay the execution of the judgment unless the presiding judge before whom the judgment was obtained grants a stay of execution. If the presiding judge grants a stay of execution and requires a bond or other surety to guarantee the payment of the judgment pending the appeal, the amount of the bond or other surety may not exceed the amount of the judgment or:
(a) twenty-five million dollars, whichever is less, for a business entity that employs more than fifty persons and has gross revenues exceeding five million dollars for the previous tax year; or
(b) one million dollars, whichever is less, for all other entities or individuals.
(2) A plaintiff may not enforce a sale of property after a notice of appeal is filed without giving an undertaking or bond to the defendant, with two good sureties, in double the appraised value of the property or double the amount of the judgment, conditioned to pay all damages the defendant may sustain by reason of the sale in case the judgment is reversed. The plaintiff in such a case may not proceed with a sale of defendant’s property if the defendant enters into an undertaking, with good sureties, in double the appraised value of the property or the amount of the judgment, to pay the judgment with legal interest and all costs and damages the plaintiff may sustain by reason of the appeal or to produce the property levied on and submit to the sale if the judgment is confirmed.
(B)(1) The appeal of a judgment awarding relief in a civil action, under any legal theory, involving a signatory of the Master Settlement Agreement, as defined in Section 11-47-20(e), or a successor to or affiliate of a signatory to the agreement, automatically stays the execution of that judgment.
(2) The stay described in this subsection is effective upon the filing of the notice of appeal and during the entire course of appellate review of the judgment.
*This does not constitute legal advice, please read our disclaimer.
Who Needs Supersedeas Bonds in South Carolina State Cases?
Aside from judgments against most public entities, judgment debtors are required to post an supersedeas bond or other security to prevent judgment execution during the appeal.
Here are some of the cases that may require supersedeas bonds in South Carolina 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
South Carolina 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 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 South Carolina, 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 Supersedeas Bond Cost in South Carolina?
The cost of a South Carolina supersedeas bond is determined by the premium rate set by surety companies, which are commonly in the 0.30% to 4% range based on the total bond amount and are dependent on the following factors:
- Bond amount requirement
- Type of collateral provided (if required)
- Financial stability of the appellant relative to the bond amount (if the bond is being considered without collateral)
Thus, if a surety is charging a 1% premium rate on a $2 million bond, the annual premium would equal $20,000.
Surety companies charge premiums for supersedeas bonds yearly until their liability under the bond is released. The first year’s premium is considered fully earned upon bond issuance, and the bond automatically renews on an annual basis. After the first year, if the appeal is concluded midterm, and the surety is then exonerated from liability, they will prorate the renewal premium and issue a refund back to the client.
What are the Best Practices for Securing a Supersedeas Bond through an Admitted Surety Insurer?
Securing a South Carolina 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 South Carolina supersedeas bonds.For
more insights, check out our guide: “The Biggest Mistakes Made with Appeal Bonds.”
Why Choose CSBA for Your Clients' South Carolina 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 South Carolina 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 South Carolina?
If collateral isn’t required to secure a supersedeas bond, a South Carolina 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 a Free Quote for Your Client's South Carolina Supersedeas Bond Today
Filing a supersedeas bond comes with strict deadlines, and securing a South Carolina supersedeas bond requires a knowledgeable and responsive surety agent who understands the complexities of the court requirements. At CSBA, we specialize exclusively in appeal and civil litigation bonds, ensuring a fast approval process so you can focus on your case.