Louisiana Appeal Bonds
What is a Louisiana Appeal Bond?
In Louisiana courts, a party generally has two options for appealing a judgment: a suspensive appeal or a devolutive appeal.
The suspensive appeal pauses the enforcement of the judgment until the appeal is over. However, this form of appeal requires the judgment debtor to post security such as an appeal bond, or often referred to as a suspensive appeal bond to stay execution of a judgment.
Surety companies underwrite Louisiana suspensive appeal bonds, and the process is commonly executed through appointed surety agents working directly with the appellants and their attorneys.
Louisiana Appeal Bond Amount Requirements
The requirements for Louisiana appeal bonds are governed by Louisiana Code of Civil Procedure (LA CCP) art. 2124, which outlines that the security to be furnished for a suspensive appeal on money judgments shall be equal to the amount of the judgment, including the interest allowed by the judgment to the date the security is furnished, exclusive of the costs. However, the trial judge for good cause shown may fix the amount of the surety bond at an amount not to exceed one hundred fifty percent of the amount of the judgment, including the interest allowed by the judgment to the date the security is furnished, exclusive of the costs.
LA Code of Civil Procedure Art. 2124 - Security to be furnished for an Appeal
Art. 2124. Security to be furnished for an appeal
A. No security is required for a devolutive appeal.
B. The security to be furnished for a suspensive appeal is determined in accordance with the following rules:
(1) When the judgment is for a sum of money, the amount of the security shall be equal to the amount of the judgment, including the interest allowed by the judgment to the date the security is furnished, exclusive of the costs.
(a) However, in all cases, except litigation related to the Tobacco Master Settlement Agreement, or any litigation where the state is a judgment creditor, where the amount of the judgment exceeds one hundred fifty million dollars, the trial court, upon motion and after a hearing, may, in the exercise of its broad discretion, fix the security in an amount sufficient to protect the rights of the judgment creditor while at the same time preserving the favored status of appeals in Louisiana.
(b) The time for taking the suspensive appeal under Article 2123 shall be interrupted for judgments pursuant to Article 2124(B)(1)(a) until the trial court fixes the amount of the security and commences anew on the date the security is fixed.
(2) When the judgment distributes a fund in custodia legis, only security sufficient to secure the payment of costs is required.
(3) In all other cases, the security shall be fixed by the trial court at an amount sufficient to assure the satisfaction of the judgment, together with damages for the delay resulting from the suspension of the execution.
C. Where the party seeking to appeal from a judgment for a sum of money is aggrieved by the amount of the security fixed by the trial court, the party so aggrieved may seek supervisory writs to review the appropriateness of the determination of the trial court in fixing the security. The application for supervisory writ shall be heard by the court of appeal on a priority basis. The time for taking a suspensive appeal under Article 2123 shall be interrupted until the appellate court acts on the supervisory writs to review the determination of the trial court in fixing the security and commences anew on the date the action is taken.
D. For good cause shown, the trial judge in the case of the appeal of a money judgment to be secured by a surety bond may fix the amount of the security at an amount not to exceed one hundred fifty percent of the amount of the judgment, including the interest allowed by the judgment to the date the security is furnished, exclusive of the costs.
E. A suspensive appeal bond shall provide, in substance, that it is furnished as security that the appellant will prosecute his appeal, that any judgment against him will be paid or satisfied from the proceeds of the sale of his property, or that otherwise the surety is liable for the amount of the judgment.
Amended by Acts 1977, No. 176, §1, eff. Jan. 1, 1978; Acts 1988, No. 444, §1, eff. Jan. 1, 1989; Acts 1989, No. 307, §2; Acts 2001, No. 450, §1, eff. June 19, 2001.
{{NOTE: SEE ACTS 1988, NO. 444, §2.}}
*This does not constitute legal advice, please read our disclaimer.
Who Needs Appeal Bonds in Louisiana State Cases?
In Louisiana courts, appeal bonds are typically required to stay the enforcement of a money judgment while an appellant seeks to overturn a judgment or order. Except for judgments against most public entities, most monetary judgments require an appeal bond to prevent execution of the judgment during the appeals process.
Here are a few common cases that require appeal bonds in Louisiana:
- 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)
Louisiana Appeal Bonds Underwriting Requirements
Appeal 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.
Appeal 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 appeal 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 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 Louisiana, 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 an appeal bond without having to liquidate assets.
FAQs
How Much Does an Appeal Bond Cost in Louisiana?
The cost of a Louisiana appeal 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 appeal 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 an Appeal Bond through an Admitted Surety Insurer?
Securing a Louisiana appeal 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 appeal 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 Louisiana appeal bonds.
For more insights, check out our guide: “The Biggest Mistakes Made with Appeal Bonds.“
Why Choose CSBA for Your Client's Louisiana Appeal Bonds?
If your client needs to stay enforcement of a Louisiana 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 InsurerAccess & Creative Solutions
At CSBA, we leverage our extensive network of over 35 surety insurers for clients seeking to secure a Louisiana appeal 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 appeal bond for a private individual or a $1 billion appeal 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 appeal bond process.
Our specialized expertise and direct surety relationships set us apart, making CSBA the trusted choice to attorneys and their clients for appeal bonds in Louisiana cases.
How Long Does It Take to Secure a Louisiana Appeal Bond?
The time frame to secure a Louisiana appeal 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 an appeal 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 an Appeal Bond
1. Contact an appeal bond specialist to review your client’s bond requirement and start the process.
2. The bond agent will discuss the various options with you and your client, and address any underwriting questions you or the client may have.
3. 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.
4. The surety agent will outline the appeal bond approval, and work closely with you and your client to efficiently finalize the bond.
Get a Free Quote for Your Client's Louisiana Appeal Bond Today
Filing an appeal bond comes with strict deadlines, and securing an Louisiana appeal 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.