Vermont Supersedeas Bonds
What is a Vermont Supersedeas Bond?
Vermont is distinct from most other jurisdictions because it provides a broad automatic stay of execution. Under Vermont Rule of Civil Procedure 62(d), “no supersedeas bond or other security shall be required as a condition of such stay”.
However, a supersedeas bond may still be necessary in specific scenarios such as if a court denies a motion for immediate enforcement under Rule 62(c), it may require the party against whom enforcement was sought to provide a bond.
Rule 62. Stay of Proceedings to Enforce a Judgment
(B) A writ of possession shall issue on the date on which a final judgment for possession of real estate is entered, provided that on motion made within 14 days after entry of judgment the court may stay any such writ for a period of 21 days or until the time for appeal from the judgment as extended by Rule 80.1(m) or Appellate Rule 4 has expired.
(C) Any stay shall be granted upon such terms as the court considers necessary to protect the interests of any party. A timely motion for a stay acts as a further stay until the motion can be heard and determined, which shall be at the earliest possible time.
(1) Automatic Stay. In any action in which an automatic stay prior to appeal is in effect pursuant to paragraph (1) of subdivision (a) of this rule, the taking of an appeal from a judgment shall operate as a stay of execution upon the judgment during the pendency of the appeal, and no supersedeas bond or other security shall be required as a condition of such stay.
(2) Interlocutory Appeals; Injunctions. When an appeal is permitted from an interlocutory order under Rule 5 or 5.1 of the Vermont Rules of Appellate Procedure, the order permitting the appeal shall order whether or not the proceedings shall be stayed, and upon what conditions. When an appeal is taken from final judgment granting, dissolving, or denying an injunction, the court in its discretion may suspend, modify, restore or grant an injunction during the pendency of the appeal upon such terms as to bond or otherwise as it considers proper for the security of the rights of the adverse party. The court shall certify forthwith to the Supreme Court any order entered under this subdivision.
(3) Orders for Possession. When an appeal is taken from a final judgment granting possession of real estate or a chattel, if an order for possession has not been executed, the court in its discretion may stay issuance or execution of any such order during the pendency of the appeal upon such terms as it considers necessary to protect the interests of any party.
*This does not constitute legal advice, please read our disclaimer.
Vermont Supersedeas Bonds Underwriting Requirements
Unlike many jurisdictions where appellants are required to post an appeal or supersedeas bond to stay enforcement of a judgment, Vermont grants an automatic stay for most money judgments. However, if your client is required to post a supersedeas bond, here are the 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 Vermont, 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 Vermont?
The cost of a Vermont 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.
Best Practices for Posting a Vermont 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 a Supersedeas 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 Expertise. Not all surety agencies are the same. Selecting a provider with a proven strong track record in issuing Vermont 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.
Read our guide, “The Biggest Mistakes Made with Appeal Bonds,” to learn more.
Why Choose CSBA for Your Client's Supersedeas Bonds in Vermont?
When the stakes are high, your clients need a professional surety agent they can count on to stay enforcers of judgment. At CSBA, we have decades of experience in supersedeas bonds, and we can guide your clients through the complex process.
A Legacy of Expertise & Trust
CSBA has helped appellants secure supersedeas bonds from various industries involving almost every type of case since 1984. So whether your client is an individual needing a $1 million bond or a publicly traded company with a billion dollar judgment, we have the experience and resources to help.
Exclusive Surety Insurer Access & Creative Solutions
At CSBA, we have access to over 30 top-rated surety insurers. Several of these are exclusive or semi-exclusive insurers that most agents don’t have. This unique access and programs allow us to find creative solutions tailored to each client’s circumstances.
How Long Does It Take to Secure a Vermont Supersedeas Bond?
The time frame to secure a Vermont 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 financial statement (if the client is a candidate for an appeal bond without full 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 Vermont 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.