A question that is often asked: When are appeal bonds filed and when does the stay go into effect? In various state courts, there are different rules and requirements. In this article, we’re going to talk about New York, New Jersey, and the Federal courts to keep things simple for now.
Other courts have different requirements, but in New York and New Jersey, there’s what’s called “no safe days,” which means that once a judgment is entered, the other side can execute the judgment — unless it’s bonded and there is a notice of appeal filed. A notice of appeal and a bond need to be filed because the bond is pursuant to an area of law, so if only one or the other is filed, there is no stay. In New York state CPLR 5519 grants an automatic stay, which goes into effect once both the bond and notice of appeal are filed.
You have 30 days to file the notice of appeal, but if you need an immediate stay, you should have the notice of appeal drafted and ready to be filed prior to the entry of the judgment. In New York State, once the judgment is entered, you would then file the notice of appeal and appeal bond immediately for the automatic stay to go into effect.
The same thing goes for the bond; you want to have the bond lined up. You probably have an idea when the judgment’s going to be entered (maybe there’s a proposed judgment), and you have a pretty good idea of the amount of the judgment which will allow my office to help with the underwriting. We would then need a client’s financials to underwrite the matter or alternatively they could put up collateral. Skipping the underwriting, for now, the mechanics for a stay under CPLR 5519 are filing the bond and notice of appeal, regardless of whether or not you have 30 days. If you want the stay immediately, you need both on file.
Moving over to New Jersey, it’s my understanding, and I’m not an attorney, that once you file the bond and the notice of appeal, you also need to motion the court for a stay of execution of the judgment pending appeal. In Federal court, it’s a similar process, but the difference is that in Federal court, you have 30 safe days — which means there are 30 days after the entry of the judgment to get both the notice of appeal and the bond on file. You don’t need to wait the full 30 days to file it, but you do have that amount of time. I do suggest that even with the Federal court, work on obtaining the bond immediately so that if your client cannot obtain it, you can make other arrangements to deal with whether or not there’s going to be a stay pending appeal or what your client needs to do to protect themselves.
That said, I always suggest that you reach out to a specialist like me to discuss the ins, outs, and mechanisms of what your client needs in order to have the bond on file quickly and efficiently. You don’t want to be waiting until accounts are restrained or until there are other post-judgment execution efforts that could harm your client. Once accounts are restrained, the filing of a bond and notice of appeal does not automatically lift the restraints. A lot of times you’re going to have to motion the court, and that could be a costly process.
The other question that I’m asked is: Does every appeal need a bond? The answer is no. The bond is only to stay the execution pending appeal. You can appeal any judgment and not bond it, but if you want to stay and perfect the execution of the judgment, you need a bond.
Very few discretionary stays are granted; generally, less than 1%. It’s not a good strategy to hope that you’re going to get the one-in-a-thousand chance of obtaining a discretionary stay. I always suggest having the bond lined up, making sure the client’s protected. You can bond a judgment at any time after it’s entered, but the stay of execution pending appeal is normally needed immediately so it is strongly suggested to have everything ready to go before it is entered.
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