Maine Supersedeas Bonds
What is a Maine Supersedeas Bond?
In Maine, the process for staying a judgment during an appeal is significantly different from many other states. Under Maine Rule of Civil Procedure 62(e), the taking of an appeal will generally operate as an automatic stay of execution on the judgment. This means that, for most civil cases, an appellant is not required to file a supersedeas bond or provide other security to pause the enforcement of a money judgment while the appeal is pending.
However, there are important exceptions to this automatic stay where a supersedeas bond may become necessary. Under Rule 62(c), a court may, in its discretion and for cause shown, order an immediate execution of a judgment before an appeal is taken. If the court denies such a motion for immediate execution, it may require the party against whom execution was sought to post a bond.
Maine Revised Civil Procedure Rule 62
(a) Automatic Stay, Exceptions- Injunctions and Receiverships. Except as stated herein, no execution shall issue upon a judgment nor shall proceedings be taken for its enforcement until the expiration of 21 days after its entry or until the time for appeal from the judgment as extended by the rules governing appeals has expired. Unless otherwise ordered by the court, an interlocutory or final judgment in an action for an injunction or in a receivership action or an order relating to the care, custody and support of minor children or to the separate support or personal liberty of a person or for the protection of a person from abuse or harassment shall not be stayed during the period after its entry and until an appeal is taken or during the pendency of an appeal. The provisions of subdivision (d) of this rule govern the suspending, modifying, restoring or granting of an injunction during the pendency of an appeal.
(b) Stay of Execution on Default Judgment. Execution in a personal action shall not issue upon a judgment by default against an absent defendant who has no actual notice thereof until one year after entry of the judgment except as provided by law.
(c) Order for Immediate Execution. In its discretion, the court on motion may, for cause shown and subject to such conditions as it deems proper, order execution to issue at any time after the entry of judgment and before an appeal from the judgment has been taken or a motion made pursuant to Rule 50, 52(b), 59, or 60; but no such order shall issue if a representation, subject to the obligations set forth in Rule 11, is made that a party intends to appeal or to make such motion. When an order for immediate execution under this subdivision is denied, the court may, upon a showing of good cause, at any time prior to appeal or during the pendency of an appeal order the party against whom execution was sought to give bond in an amount fixed by the court conditioned upon satisfaction of the damages for delay, interest, and costs if for any reason the appeal is not taken or is dismissed, or if the judgment is affirmed.
(d) Injunction Pending Appeal. When an appeal is taken from an interlocutory or 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.
(e) Stay Upon Appeal. Except as provided in subdivisions (c) and (d) 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.
(f) Continuance of Attachment. An attachment of real or personal property or an attachment on trustee process or a bond given to vacate any such attachment or to release the defendant from arrest on capias writ shall, unless dissolved by operation of law, continue during the time within which an appeal may be taken from the judgment and during the pendency of any appeal. When a judgment has become final by expiration of the time for appeal, by dismissal of an appeal, or on certificate of decision from the Superior Court or Law Court, any such attachment or bond shall continue for 60 days if the judgment is for the plaintiff but shall be dissolved forthwith if the judgment is for the defendant.
(g) Power of Reviewing Court Not Limited. The provisions in this rule do not limit any power of the Superior Court or Law Court during the pendency of an appeal to suspend, modify, restore, or grant an injunction or to make any order appropriate to preserve the status quo or the effectiveness of the judgment subsequently to be entered.
(h) Stay of Judgment as to Multiple Claims or Multiple Parties. When a court has ordered a final judgment under the conditions stated in Rule 54(b), the court may stay enforcement of that judgment until the entering of a subsequent judgment or judgments and may prescribe such conditions as are necessary to secure the benefit thereof to the party in whose favor the judgment is entered.
*This does not constitute legal advice, please read our disclaimer.
Maine Supersedeas Bonds Underwriting Requirements
Unlike many jurisdictions where appellants are required to post an appeal or supersedeas bond to stay enforcement of a judgment, Maine grants an automatic stay for most money judgments. However, if your client does require a supersedeas bond, here are the 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.
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
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 Maine 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.
FAQs
How Much Does a Supersedeas Bond Cost in Maine?
The cost of a Maine 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 Maine 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 Maine supersedeas bonds.
For more insights, check out our guide: “The Biggest Mistakes Made with Appeal Bonds.“
Why Choose CSBA for Your Clients' Maine 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 Maine 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 Maine Supersedeas Bond?
The time frame to secure a Maine 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 a Free Quote for Your Client's Maine Supersedeas Bond Today
Filing a supersedeas bond comes with strict deadlines, and securing a Maine 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.