New Mexico Supersedeas Bonds
What is a New Mexico Supersedeas Bond?
In New Mexico, a supersedeas bond is a legal instrument used to stay the execution of a final judgment or decision of the district court during an appeal. Under NMSA § 39-3-22, there is no stay of execution in civil actions upon the taking of an appeal unless, within sixty days from the entry of the judgment or decision, the appellant executes a bond to the adverse party in double the amount of the judgment.
This bond serves as a financial guarantee that the appellant will satisfy the judgment, along with all costs and damages finally adjudged against them, if the appeal is dismissed or the original decision is affirmed. The stay of proceedings in the civil action officially takes effect only upon the approval and filing of the bond with the appropriate court clerk.
New Mexico Supersedeas Bond Amount Requirements
NMSA § 39-3-22 establishes specific guidelines for determining the sum of a supersedeas bond based on the nature of the judgment. Here are the key requirements to consider:
- Bond Amount: For judgments directing the payment of a fixed amount of money, the bond must be executed in double the amount of the judgment.
- Non-Money Judgments: If the decision is for recovery other than a fixed amount of money, the amount of the bond is then generally fixed by the district court.
- Master Settlement Agreement Cap: Under NMSA § 39-3-22(C), the total supersedeas bond required collectively from all appellants in civil actions involving a signatory, successor, or affiliate to the Master Settlement Agreement is capped at $100,000,000, regardless of the total judgment value.
New Mexico Statutes Annotated § 39-3-22. Supersedeas and Stay in Civil Actions
A. There shall be no supersedeas or stay of execution upon any final judgment or decision of the district court in any civil action in which an appeal has been taken or a writ of error sued out unless the appellant or plaintiff in error, or some responsible person for the appellant or plaintiff in error, within sixty days from the entry of the judgment or decision, executes a bond to the adverse party in double the amount of the judgment complained of, with sufficient sureties, and approved by the clerk of the district court in case of appeals or by the clerk of the supreme court in case of writ of error. The bond shall be conditioned for the payment of the judgment and all costs that may be finally adjudged against the appellant or plaintiff in error if the appeal or writ of error is dismissed or the judgment or decision of the district court is affirmed. The district court, for good cause shown, may grant the appellant not to exceed thirty days’ additional time within which to file the bond, and a like extension of time may be granted by the supreme court in cases of writs of error upon a like showing.
B. If the decision appealed from, or from which a writ of error is sued out, is for a recovery other than a fixed amount of money, the amount of the bond, if any, shall be fixed by the district court if an appeal is taken or, in case of a writ of error, by the chief justice or any justice of the supreme court, conditioned that the appellant or plaintiff in error shall prosecute the appeal or writ of error with diligence and that if the decision of the district court is affirmed or the appeal or writ of error is dismissed, the appellant or plaintiff in error will comply with the judgment of the district court and pay all damages and costs finally adjudged against the appellant or plaintiff in error in the district court and in the supreme court or court of appeals on the appeal or writ of error, including any legal damages caused by taking the appeal, whether the damages are assessed upon motion in the cause or in a civil action on the bond.
C. In any civil action involving a signatory, a successor of a signatory or any affiliate of a signatory to the master settlement agreement, as defined in Subsection E of Section 6-4-12 NMSA 1978, the supersedeas bond required of all appellants collectively in order to stay the execution of a judgment during the entire course of appellate review shall not exceed one hundred million dollars ($100,000,000), regardless of the amount of the judgment.
D. Upon approval of a bond provided for in this section and upon filing the bond, in case of appeal with the clerk of the district court and in case of writ of error with the clerk of the supreme court, there shall be a stay of proceedings in the action until the appeal or writ of error is finally determined.
E. In all cases where an appeal has been taken or a writ of error sued out against any interlocutory judgment, order or decision of the district court, from any final order affecting a substantial right made after entry of a final judgment or from any proceeding or conviction of civil contempt, supersedeas may be granted under the provisions of this section, but the bond shall be filed within thirty days from the entry of such judgment, order, decision or conviction and no extension of time for the filing of the bond shall be granted in excess of ten days.
F. Any supersedeas granted under this section in any matter appealed to the supreme court or court of appeals shall automatically continue in effect pending any action or further review that may be taken in the supreme court or court of appeals.
*This does not constitute legal advice, please read our disclaimer.
Who Needs Supersedeas Bonds in New Mexico State Cases?
In New Mexico courts, supersedeas 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 a supersedeas bond to prevent execution of the judgment during the appeals process.
Here are a few common cases that require supersedeas bonds in New Mexico:
- 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
New Mexico 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, 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.
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 New Mexico supersedeas 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
Collateral Options for Supersedeas Bonds
To secure a supersedeas bond, appellants may provide collateral in various forms, including the following:
Common forms of collateral include:
- 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 New Mexico Supersedeas Bond Cost?
A New Mexico supersedeas bond cost is determined by the premium rate set by a surety company, which is generally between 0.3% to 4% depending on several factors such as:
- The size of the supersedeas bond
- The type of collateral provided, if required
- The financial strength of the appellant relative to the bond amount, if the bond is being considered without collateral
The bond premium is charged yearly until the surety’s liability under the bond is fully released. If the bond is exonerated midterm after the first year’s renewal, the client will receive a prorated return premium from the surety company.
What are the Best Practices for Securing a Supersedeas Bond through an Admitted Surety Insurer?
Securing a New Mexico 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 New Mexico supersedeas bonds.
See our guide, “The Biggest Mistakes Made with Appeal Bonds,” to learn more.
Why Choose CSBA for Your Client's New Mexico Supersedeas Bonds?
If your client needs to stay enforcement of a New Mexico 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 30 surety insurers for clients seeking to secure a New Mexico 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 New Mexico cases.
How Long Does It Take to Secure a New Mexico Supersedeas Bond?
The time frame to secure a New Mexico 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 Company Financial Statement if the client may be a candidate to qualify for an appeal bond without 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 New Mexico 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.