Mississippi Legislature Changes Supersedeas Bond Amounts . . . Maybe
A party that wins at trial and recovers a money judgment may seek to collect on the judgment immediately, unless the other party posts a supersedeas bond to stay execution of the judgment pending appeal. The Mississippi Legislature recently made significant changes to Mississippi’s supersedeas bond statute, which take effect July 1, 2016. The revisions purport to lower these bond amounts by limiting the bond to the amount of the judgment. The revised statue also provides that bond amounts are capped at 50 percent of the appellant’s net worth, not to exceed $35 million. However, if the court finds an appellant is shedding assets in effort to avoid a judgment, the court may order a supersedeas bond in an amount greater than 50 percent of the appellant’s net worth—possibly even if the amount exceeds $35 million—up to the amount of the judgment.
But cautious appellants should not rely on these changes just yet. The Mississippi Supreme Court, rather than the Legislature, holds the power to set the amounts for supersedeas bonds. Currently, Mississippi Rule of Appellate Procedure 8 sets the supersedeas bond amount at 125 percent of the judgment. The rule also provides that where there are punitive damages, the bond amount must be the lower of (a) 125 percent of the punitive amount, or (b) 10 percent of the party’s net worth; under either calculation, the amount is capped at $100 million.
This conflict between the statute and the procedural rule presents appellants with a decision about what bond amount they should post after July 1, 2016. For now, the safe answer is 125 percent of the judgment, or if applicable, another amount as described in Rule 8. The Mississippi Supreme Court has indicated that it will follow the Legislature’s suggestions—including suggestions it makes through statutory enactments like this one—where they are not “an impediment to justice.” Adopting the bond amounts set out in the revised statute would improve access to the appellate courts, so the Court may adopt this legislation and amend the procedural rules. Until then, appellants would be wise to continue to follow Rule 8 of the Rules of Appellate Procedure.
For those who choose, instead, to follow the statute before any corresponding change to Rule 8, there are a few things to keep in mind. Appellants should first provide notice of their intent to the opposing party and to the trial court. This will ensure there is no confusion as to which authority the appellant is relying on to calculate the bond amount. Appellants also should be aware that this decision comes with significant risk: The circuit clerk or the court may deem the bond insufficient, and may require the appellant to post an additional bond or, worse, refuse to stay the judgment. This will permit the opposing party to execute on the judgment without awaiting the outcome of an appeal.
While the lower bond amounts under the statute are good news for appellants, the Mississippi Supreme Court has not adopted them. Until that occurs, appellants are advised to continue to follow the process set out in Rule 8, rather than using the bond amounts set by the revised statute.