Rhode Island Supersedeas Bonds
What Are Rhode Island Supersedeas Bonds?
While a client can file an appeal without a supersedeas bond, the bond is the legal instrument used to stay the enforcement of a judgment while the case is on appeal. In Rhode Island, Rule 62(a) provides an automatic stay of execution until 20 days after the entry of judgment or until the time for appeal has expired. However, to maintain that stay throughout the appellate process, a supersedeas bond is generally required.
A Rhode Island supersedeas bond guarantees that the appellant will satisfy the judgment in full should it be affirmed on appeal, or if the appeal is dismissed. To stay is effective once the supersedeas bond is approved by the trial court. In Rhode Island, the bond must be issued by a surety company authorized to do business in the state to be deemed sufficient.
If you’re an attorney handling your client’s case in Rhode Island, here are the requirements and statutory caps for securing a supersedeas bond.
Rhode Island Supersedeas Bond Amount Requirements
Superior Court Rules of Civil Procedure, Rule 62 and R.I. Gen. Laws § 42-133-11.1 outline the requirements for the bond amount. Here are several highlights to be aware of:
- Bond Cap: Under R.I. Gen. Laws § 42-133-11.1, the total supersedeas bond amount required for all appellants collectively is capped at $50 million in civil litigation involving a signatory, successor, or affiliate of the tobacco Master Settlement Agreement (MSA).
- Exception for Asset Dissipation: Per § 42-133-11.1(b), the $50 million cap does not apply if the appellee proves by a preponderance of the evidence that the appellant is dissipating assets outside the ordinary course of business to avoid payment. In such cases, the court may require a bond up to the full amount of the judgment.
- State Exemption: Under Rule 62(d), the requirement of a supersedeas bond does not apply to the State of Rhode Island when it is the appellant.
Rhode Island Superior Court Rules of Civil Procedure - Rule 62(d)
“(d) Stay Upon Appeal. When an appeal is taken the appellant by giving a supersedeas bond may obtain a stay subject to the exceptions contained in subdivision (a) of this rule. The bond may be given at or after the time of filing the notice of appeal or of procuring the order allowing the appeal, as the case may be. The stay is effective when the supersedeas bond is approved by the court. The requirement of a supersedeas bond shall not apply to the State of Rhode Island in cases in which it is the appellant.”
*This does not constitute legal advice, please read our disclaimer.
R.I. Gen. Laws 42-133-11.1
“(a) In order to secure and protect the monies to be received as a result of the Master Settlement Agreement, as defined in § 42-133-3 of this chapter, in civil litigation under any legal theory involving a signatory, a successor of a signatory, or an affiliate of a signatory to the Master Settlement Agreement, the supersedeas bond to be furnished in order to stay the execution of the judgment during the entire course of appellate review shall be set in accordance with applicable laws or court rules, except that the total supersedeas bond in any one case that is required of all appellants collectively shall not exceed fifty million dollars ($50,000,000) regardless of the value of the judgment. The limitation on the amount of the bond set out in this section does not apply to awards resulting from actions enforcing payments under the Master Settlement Agreement, as defined in § 42-133-3 of this chapter.
(b) Notwithstanding subsection (a), if an appellee proves by a preponderance of the evidence that an appellant is dissipating assets outside the ordinary course of business to avoid payment of a judgment, a court may require the appellant to post a supersedeas bond in an amount up to the total amount of the judgment.”
*This does not constitute legal advice, please read our disclaimer.
Who Needs Supersedeas Bonds in Rhode Island State Cases?
In Rhode Island 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 Rhode Island:
- 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
Rhode Island Supersedeas Bonds Underwriting Requirements
While supersedeas bonds are technically insurance products issued by surety companies, they function more like a financial guarantee whereby the surety is guaranteeing to pay the judgment to the appellee up to the bond amount if the judgment is not satisfied by the appellant. Unlike insurance, however, the appellant has to indemnify or repay the surety if the surety pays the judgment. Consequently, [appeal/supersedeas] bonds are generally considered an extension of credit and underwritten more like bank loans.
Considering that most appeals do not result in a reversal of the judgment or order, there is a strong likelihood that the surety providing the [appeal/supersedeas] bond will receive a claim. As a result of this high probability, surety companies generally require collateral for the full bond amount.
However, there are exceptions to the collateral requirement, such as if an appellant has a significant net worth and liquid assets relative to the bond amount. Publicly traded companies, banks, insurers, large private firms, and high-net-worth individuals may meet these requirements, and not need to post collateral. (Find out if your client may qualify for an appeal bond without collateral, here.)
Common forms of collateral include:
- Cash: This is the quickest and simplest way to secure an appeal bond.
- Bank Letters of Credit: These are a written guarantee from a bank to the surety that promises payment of the required amount upon demand by the surety.
- Real Estate: This could include both residential properties (single-family and multi-family) and commercial properties (office, industrial, or retail).
- Marketable Securities: Non-retirement brokerage accounts holding stocks and bonds that are pledged to a surety company.
FAQs
How Much Does A Supersedeas Bond Cost in Rhode Island?
The cost of a Rhode Island 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.
Best Practices for Posting a Rhode Island Supersedeas Bond Through a Corporate Surety Company
Supersedeas bonds can take anywhere from a couple of days to several weeks to put in place, depending on the client’s circumstances. Here are the best practices to help ensure a smooth process in securing a supersedeas bond for your client:
- Engage a Supersedeas Bond Expert Early
It is never too early to start discussions with a surety agent. When possible, reach out before the judgment has been entered because when it comes to [appeal/supersedeas] bonds, “more time” equals “more options” to allow the surety agent to find the best solution for the client’s unique circumstances. - Ensure Attorney Collaboration
It is best when the attorney is able to confirm the bond amount based on jurisdictional requirements, outline which parts of the judgment need to be bonded, keep the surety company informed of filing deadlines, and review the bond form for compliance with State or local court rules. - Choose a Surety Partner with Proven Expertise
Not all surety agencies are the same. Selecting a provider with a proven strong track record in issuing Rhode Island supersedeas bonds ensures your client receives specialized guidance and a smooth approval process. At CSBA, we bring decades of experience exclusively handling civil litigation bonds nationwide.
See our guide, “The Biggest Mistakes Made with Appeal Bonds,” to learn more.
Why Choose CSBA for Your Clients' Rhode Island 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 Rhode Island 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 Rhode Island Supersedeas Bond?
The time frame to secure a Rhode Island 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 Rhode Island 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.