Maryland Supersedeas Bonds

What is a Maryland Supersedeas Bond?

In Maryland, a supersedeas bond allows the losing party in a civil case to delay payment or enforcement of a monetary judgment while pursuing an appeal. This type of bond is also commonly referred to as an appeal bond, and they are generally underwritten by surety companies through appointed surety agents working directly with appellants and their attorneys.

A supersedeas bond functions as a financial guarantee to the prevailing party. It ensures that if the appellate court affirms the judgment, the amount owed will be paid by the surety company if the appellant fails to satisfy the judgment following all appeals.

Maryland Supersedeas Bond Amount Requirements

According to Maryland Rule 8-423, a supersedeas bond is generally required to cover the full monetary judgment that remains unsatisfied, plus interest and costs.

Per Maryland Courts and Judicial Proceedings Code § 12-301.1, the maximum amount required for a supersedeas bond to stay enforcement of a judgment in a civil action is the lesser of $100 million or the actual judgment amount per appellant.

Rule 8-423 Supersedeas Bond

(a) Condition of Bond. Subject to section (b) of this Rule, a supersedeas bond shall be conditioned upon the satisfaction in full of (1) the judgment from which the appeal is taken, together with costs, interest, and damages for delay, if for any reason the appeal is dismissed or if the judgment is affirmed, or (2) any modified judgment and costs, interest, and damages entered or awarded on appeal.

(b) Amount of Bond. Unless the parties otherwise agree, the amount of the bond shall be as follows:

(1) Money Judgment Not Otherwise Secured. Subject to Code, Courts Article, § 12-301.1, when the judgment is for the recovery of money not otherwise secured, the amount of the bond shall be the sum that will cover the whole amount of the judgment remaining unsatisfied plus interest and costs, except that the court, after taking into consideration all relevant factors, may reduce the amount of the bond after making specific findings justifying the amount.

Cross reference: Rule 1-402(d); O’Donnell v. McGann, 310 Md. 342 (1987).

(2) Disposition of Property. When the judgment determines the disposition of the property in controversy (as in real actions, replevin, and actions to foreclose mortgages), or when the property, or the proceeds of its sale, is in the custody of the lower court or the sheriff, the amount of the bond shall be the sum that will secure the amount recovered for the use and detention of the property, interest, costs, and damages for delay.

(3) Other Cases. In any other case, the amount of the bond shall be fixed by the lower court.

Source: This Rule is derived as follows:

Section (a) is derived from former Rule 1018 a.

Section (b) is derived from former Rule 1018 b and 1020 a.

Source

This does not constitute legal advice, please read our disclaimer.

MD Cts & Jud Pro Code 12-301.1

(a)(1) This section does not apply to a judgment in an action for damages under § 3-2102 of this article.

(2) Except as provided in subsection (d) of this section and notwithstanding any other law or court rule, in a civil action the amount of the supersedeas bond necessary to obtain a stay of enforcement of a judgment granting any type of relief during the entire course of all appeals or discretionary reviews may not exceed the lesser of $100,000,000 or the amount of the judgment for each appellant, regardless of the amount of the judgment appealed.

(b)(1) In a civil action a party seeking a stay of execution of a judgment of any amount pending review may file a motion to reduce the amount of a supersedeas bond required to obtain the stay.

(2) A court, on a motion under paragraph (1) of this subsection or on its own motion, may reduce the amount of a supersedeas bond or may set other conditions to obtain the stay, with or without a bond, in the interest of justice and for good cause shown.

(c)(1) If an appellant posts a supersedeas bond in accordance with this section for an amount less than would be required under Rule 8-423(b) of the Maryland Rules, the appellee may engage in discovery for the limited purpose of determining whether the appellant dissipated or diverted assets outside the course of its ordinary business or is in the process of doing so.

(2) The circuit court shall retain jurisdiction over the action for the limited purpose of ruling on any motions relating to discovery under paragraph (1) of this subsection to determine whether the defendant dissipated or diverted assets outside the course of its ordinary business or is in the process of doing so.

(d) If a court determines that an appellant dissipated or diverted assets outside the course of its ordinary business or is in the process of doing so, the court may:

(1) Enter orders necessary to protect the appellee;

(2) Require the appellant to post a supersedeas bond in an amount not exceeding the amount that would be required under Rule 8-423(b) of the Maryland Rules; and

(3) Impose other remedies and sanctions that the court considers appropriate.

Source

This does not constitute legal advice, please read our disclaimer.

Who Needs Supersedeas Bonds in Maryland State Cases?

Aside from judgments against most public entities, all judgment debtors are required to post an supersedeas bond or other security to prevent judgment execution during the appeal.

Here are a few common cases that require appeal bonds:

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)

"I have known Dan Huckabay for many years. He is one of the most knowledgeable appeal bond brokers in the business. His understanding of the requirements for appeal bonds, knowledge of the surety insurer market and his experience working with individual surety insurers make him an excellent choice when you need to bond an appeal."

David AxelradHorvitz & Levy LLP

"Dan and Arturo have been very helpful to me and my clients on more than one occasion. They have been so easy to work with. They can explain to the client about what kind of security is needed, what type of information the client needs to supply and how the process works. They try to get everything in place with a minimum of hassle, and they always follow up. I would not call anyone else for a supersedeas bond."

Julia F. PenderyCowles & Thompson

"Court Surety Bond Agency is my one-stop shop for appellate bonds. There is much more to the appellate bonding process than you might think, and the professionals at CSBA are experts in this area. If you need a supersedeas bond, CSBA will walk you and your client through the process, and help you find the best option for any particular situation. Highly recommended!"

Duane A. DaikerShumaker

"We refer our clients to CSBA with confidence and without hesitation. Whether the client is a sophisticated entity or an individual involved in litigation for the first time, the CSBA team is ready, willing, and able to pursue all available options to secure a bond and ensure that the bond is in place when needed, all while explaining the options and requirements in an understandable way."

Jason AndersonCarney Badley Spellman

David AxelradHorvitz & Levy LLP

Julia F. PenderyCowles & Thompson

Duane A. DaikerShumaker

Jason AndersonCarney Badley Spellman

Maryland Supersedeas Bonds 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, an 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.

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 Maryland 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.

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

FAQs

How Much Does a Supersedeas Bond Cost in Maryland?

The cost of a Maryland 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 Maryland 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 Maryland supersedeas bonds.

For more insights, check out our guide: “The Biggest Mistakes Made with Appeal Bonds.”

Why Choose CSBA for Your Client's Maryland Supersedeas Bonds?

If your client needs to stay enforcement of a Maryland 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 35 surety insurers for clients seeking to secure a Maryland 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 Maryland cases.

How Long Does It Take to Get a Supersedeas Bond?

The time it takes to put a Maryland supersedeas bond in place depends on various factors. For example, when collateral is not required, a bond can be approved and issued in as little as 24 hours in the most straightforward cases. However, the process can vary significantly when collateral is involved, and the time then depends on the type of collateral that is being used. For instance, cash collateral can be posted in just a few days, while securing real estate collateral can take 30 to 60 days, depending on the 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 requirements and start the process.
CSBA will discuss the various options available with you and your client.
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.
CSBA will work on obtaining competitive terms for your client with the admitted surety insurers we work with. CSBA will outline the supersedeas bond approval for your client and facilitate securing the collateral.

While the process can typically take a few weeks, CSBA’s expertise allows us to expedite the process and minimize any delays in finalizing the issuance of the supersedeas bond.

Get a Free Quote for Your Client's Supersedeas Bond in Maryland Today

Filing deadlines for supersedeas bonds are often strict and time-sensitive. At CSBA, we specialize in simplifying the underwriting process, ensuring a smooth experience so you and your client can focus on the case at hand. Our team of dedicated surety experts is ready to assist you—contact us today to take the next step in securing your client’s supersedeas bond in Maryland.