New York Appeal Bonds
What is a New York Appeal Bond?
Under New York law, an appeal or supersedeas bond—commonly referred to as an undertaking—may be filed by an appellant to stay execution of a judgment during the pendency of an appeal. These bonds are underwritten by surety companies and are usually arranged through licensed surety agents working closely with the appellant and their attorneys.
An undertaking issued by a surety company serves to assure both the court and the respondent that, if the judgment is affirmed on appeal, the appellant will satisfy the judgment, including costs and interest, should the appellate court affirm the lower court’s decision.
New York Appeal Bond Amount and Court Requirements
Under New York Civil Practice Law & Rules (CPLR 5519), an appeal bond amount must cover the judgment amount, post-judgment interest and costs.
New York Civil Practice Law and Rules - Section 5519
§ 5519. Stay of enforcement. (a) Stay without court order. Service
upon the adverse party of a notice of appeal or an affidavit of
intention to move for permission to appeal stays all proceedings to
enforce the judgment or order appealed from pending the appeal or
determination on the motion for permission to appeal where:
1. the appellant or moving party is the state or any political
subdivision of the state or any officer or agency of the state or of any
political subdivision of the state; provided that where a court, after
considering an issue specified in question four of section seventy-eight
hundred three of this chapter, issues a judgment or order directing
reinstatement of a license held by a corporation with no more than five
stockholders and which employs no more than ten employees, a partnership
with no more than five partners and which employs no more than ten
employees, a proprietorship or a natural person, the stay provided for
by this paragraph shall be for a period of fifteen days; or
2. the judgment or order directs the payment of a sum of money, and an
undertaking in that sum is given that if the judgment or order appealed
from, or any part of it, is affirmed, or the appeal is dismissed, the
appellant or moving party shall pay the amount directed to be paid by
the judgment or order, or the part of it as to which the judgment or
order is affirmed; or
3. the judgment or order directs the payment of a sum of money, to be
paid in fixed installments, and an undertaking in a sum fixed by the
court of original instance is given that the appellant or moving party
shall pay each installment which becomes due pending the appeal and that
if the judgment or order appealed from, or any part of it, is affirmed,
or the appeal is dismissed, the appellant or moving party shall pay any
installments or part of installments then due or the part of them as to
which the judgment or order is affirmed; or
4. the judgment or order directs the assignment or delivery of
personal property, and the property is placed in the custody of an
officer designated by the court of original instance to abide the
direction of the court to which the appeal is taken, or an undertaking
in a sum fixed by the court of original instance is given that the
appellant or moving party will obey the direction of the court to which
the appeal is taken; or
5. the judgment or order directs the execution of any instrument, and
the instrument is executed and deposited in the office where the
original judgment or order is entered to abide the direction of the
court to which the appeal is taken; or
6. the appellant or moving party is in possession or control of real
property which the judgment or order directs be conveyed or delivered,
and an undertaking in a sum fixed by the court of original instance is
given that the appellant or moving party will not commit or suffer to be
committed any waste and that if the judgment or order appealed from, or
any part of it, is affirmed, or the appeal is dismissed, the appellant
or moving party shall pay the value of the use and occupancy of such
property, or the part of it as to which the judgment or order is
affirmed, from the taking of the appeal until the delivery of possession
of the property; if the judgment or order directs the sale of mortgaged
property and the payment of any deficiency, the undertaking shall also
provide that the appellant or moving party shall pay any such
deficiency; or
7. the judgment or order directs the performance of two or more of the
acts specified in subparagraphs two through six and the appellant or
moving party complies with each applicable subparagraph.
(b) Stay in action defended by insurer. If an appeal is taken from a
judgment or order entered against an insured in an action which is
defended by an insurance corporation, or other insurer, on behalf of the
insured under a policy of insurance the limit of liability of which is
less than the amount of said judgment or order, all proceedings to
enforce the judgment or order to the extent of the policy coverage shall
be stayed pending the appeal, and no action shall be commenced or
maintained against the insurer for payment under the policy pending the
appeal, where the insurer:
1. files with the clerk of the court in which the judgment or order
was entered a sworn statement of one of its officers, describing the
nature of the policy and the amount of coverage together with a written
undertaking that if the judgment or order appealed from, or any part of
it, is affirmed, or the appeal is dismissed, the insurer shall pay the
amount directed to be paid by the judgment or order, or the part of it
as to which the judgment or order is affirmed, to the extent of the
limit of liability in the policy, plus interest and costs;
2. serves a copy of such sworn statement and undertaking upon the
judgment creditor or his attorney; and
3. delivers or mails to the insured at the latest address of the
insured appearing upon the records of the insurer, written notice that
the enforcement of such judgment or order, to the extent that the amount
it directs to be paid exceeds the limit of liability in the policy, is
not stated in respect to the insured. A stay of enforcement of the
balance of the amount of the judgment or order may be imposed by giving
an undertaking, as provided in paragraph two of subdivision (a), in an
amount equal to that balance.
(c) Stay and limitation of stay by court order. The court from or to
which an appeal is taken or the court of original instance may stay all
proceedings to enforce the judgment or order appealed from pending an
appeal or determination on a motion for permission to appeal in a case
not provided for in subdivision (a) or subdivision (b), or may grant a
limited stay or may vacate, limit or modify any stay imposed by
subdivision (a), subdivision (b) or this subdivision, except that only
the court to which an appeal is taken may vacate, limit or modify a stay
imposed by paragraph one of subdivision (a).
(d) Undertaking. On an appeal from an order affirming a judgment or
order, the undertaking shall secure both the order and the judgment or
order which is affirmed.
(e) Continuation of stay. If the judgment or order appealed from is
affirmed or modified, the stay shall continue for five days after
service upon the appellant of the order of affirmance or modification
with notice of its entry in the court to which the appeal was taken. If
an appeal is taken, or a motion is made for permission to appeal, from
such an order before the expiration of the five days, the stay shall
continue until five days after service of notice of the entry of the
order determining such appeal or motion. When a motion for permission to
appeal is involved, the stay, or any other stay granted pending
determination of the motion for permission to appeal, shall:
(i) if the motion is granted, continue until five days after the
appeal is determined; or
(ii) if the motion is denied, continue until five days after the
movant is served with the order of denial with notice of its entry.
(f) Proceedings after stay. A stay of enforcement shall not prevent
the court of original instance from proceeding in any matter not
affected by the judgment or order appealed from or from directing the
sale of perishable property.
(g) Appeals in medical, dental or podiatric malpractice judgments. In
an action for medical, dental or podiatric malpractice, if an appeal is
taken from a judgment in excess of one million dollars and an
undertaking in the amount of one million dollars or the limit of
insurance coverage available to the appellant for the occurrence,
whichever is greater, is given together with a joint undertaking by the
appellant and any insurer of the appellant’s professional liability
that, during the period of such stay, the appellant will make no
voidable transaction as described in article ten of the debtor and
creditor law, the court to which such an appeal is taken shall stay all
proceedings to enforce the judgment pending such appeal if it finds that
there is a reasonable probability that the judgment may be reversed or
determined excessive. In making a determination under this subdivision,
the court shall not consider the availability of a stay pursuant to
subdivision (a) or (b) of this section. Liability under such joint
undertaking shall be limited to voidable transactions made by the
appellant subsequent to the execution of such undertaking and during the
period of such stay, but nothing herein shall limit the liability of the
appellant for voidable transactions pursuant to article ten of the
debtor and creditor law or any other law. An insurer that pays money to
a beneficiary of such a joint undertaking shall thereupon be subrogated,
to the extent of the amount to be paid, to the rights and interests of
such beneficiary, as a judgment creditor, against the appellant on whose
behalf the joint undertaking was executed.
*This does not constitute legal advice, please read our disclaimer.
As outlined in CPLR 2502
§ 2502. Surety; form of affidavit; two or more undertakings;
condition; acknowledgment. (a) Surety; form of affidavit. Unless the
court orders otherwise, surety shall be:
1. an insurance company authorized to execute the undertaking within
the state, or
2. a natural person, except an attorney, who shall execute with the
undertaking his affidavit setting forth his full name and address and
that he is domiciled within the state and worth at least the amount
specified in the undertaking exclusive of liabilities and of property
exempt from application to the satisfaction of a judgment.
(b) Two or more undertakings. Where two or more undertakings are
authorized or required to be given, they may be contained in the same
instrument.
(c) Condition. Where no condition is specified in an undertaking in an
action or proceeding, the condition shall be that the principal shall
faithfully and fairly discharge the duties and fulfill the obligations
imposed by law, or court order. Where the condition specifies that the
undertaking is to be void upon payment of an amount or performance of an
act, the undertaking shall be construed in accordance with the
provisions of section 7-301 of the general obligations law.
(d) Acknowledgment. The undertaking shall be acknowledged in the form
required to entitle a deed to be recorded.
*This does not constitute legal advice, please read our disclaimer.
Who Needs an Appeal Bond in New York Courts?
Aside from judgments against most public entities, all judgment debtors are required to post an appeal bond or other security to prevent judgment execution during the appeal.
Here are some of the cases that may require appeal bonds in New York courts.
- 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)
New York 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 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 New York, 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 are the Premium Rates for New York Appeal Bonds?
The cost of a New York appeal bond is determined by the premium rate, which typically ranges from 0.30% to 4% of the total bond amount. The exact premium rate will depend on several factors, such as:
- The size of the bond requirement
- 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
For example, if the appeal bond is required for $8,000,000 and the premium rate is set at 0.75%, the bond premium would be $60,000. It’s important to know that surety companies charge premiums for appeal bonds annually until their liability under the bond has been released. The premium for the first year is considered fully earned once the bond is issued, and any renewal premiums for subsequent years are prorated if the bond is exonerated midterm.
What are the Best Practices for Securing an Appeal Bond through an Admitted Surety Insurer?
Securing a New York 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 New York appeal bonds.
For more insights, check out our guide: “The Biggest Mistakes Made with Appeal Bonds.”
Why Choose CSBA for Your Client's Supersedeas Bonds in New York?
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 New York Appeal Bond in New York?
If collateral isn’t required to secure a New York appeal bond, a New York appeal bond can be approved and issued in as little as 24 hours in the most straightforward cases.
If collateral is required, the process can vary significantly and mainly depends on the type of collateral being used. For example, cash collateral can be posted within a few days, while real estate can take 30-60 days, depending on the type and number of properties being posted.
Steps to Apply for a New York Appeal Bond
1. Contact an Appeal Bond Specialist
Consult with a surety expert to review your client’s bond amount, financial qualifications, and go over available collateral options. We recommend that the client contact CSBA early so that we can prevent setbacks, and ensure that all necessary steps are completed on time.
2. Explore All Available Options
The surety agent will discuss customized solutions based on your client’s financial situation. If your client may qualify for a New York appeal bond without full collateral, we will go over the underwriting requirements and answer any questions.
3. Submit Required Documentation
To begin the underwriting process, the following documents are required:
- Appeal bond 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)
4. Secure Approval & Finalize the Bond
Once the underwriting documents have been received, your surety agent will review them internally and:
- Work to obtain competitive terms from a surety insurer.
- Outline the appeal bond approval for your client.
- Guide the client in the posting of the collateral, if required.
Get Your Client’s New York
Appeal Bond Quote Today
Deadlines for filing an appeal 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 appeal bond process smooth so you can focus on your case. Contact our appeal bond experts today to take the next step toward securing your client’s appeal bond.