42 // California Litigation Vol. 34 • No. 1 • 2021 // e Journal of the Litigation Section of the California Lawyers Association
Unless enforcement is stayed, a judgment
creditor can enforce a money judgment as soon
as it is entered — unless the judgment debtor is a
public entity. (Code Civ. Proc., §§917.1, subd.
(a), 995.220.) Money judgments are usually en-
forced by levying against the judgment debtor’s
property under a writ of execution. (See Ahart,
Cal. Practice Guide: Enforcing Judgments and
Debts (e Rutter Group 2019) ¶ 6:300, p.
6D-1.) e court clerk has a ministerial duty
to issue a writ of execution, which means that
the clerk issues the writ in the ordinary course
of business without any notice to the judgment
debtor or any ruling or approval by the judge.
(See Code Civ. Proc., §§ 699.510, 712.010; see
also Judicial Council Forms, form EJ-130.)
Under a writ of execution, the judgment
debtor’s unprotected assets can be seized and
its bank accounts frozen. (See Code Civ. Proc.,
§§ 695.010 et seq., 699.010 et seq., 699.520 et
seq.) However, there are several ways to secure
a stay of enforcement. Judgment debtors and
their counsel should understand all of these
available options.
I. The Voluntary Stay
e governing authority. Code of
Civil Procedure section 995.230 states that
“[t]he beneciary of a bond given in an ac-
tion or proceeding may in writing consent to
the bond in an amount less than the amount
required by statute or may waive the bond.”
Under section 995.230, judgment creditors can
stipulate in writing not to execute on all or part
of a judgment, for a specic period of time or
until all appellate proceedings have concluded.
ere are several reasons why a judgment
creditor may decide to waive the appeal bond
requirement or agree to a reduced bond or other
security.
1. Waiving the bond avoids potential
liability for appeal bond costs. e costs of
obtaining an appeal bond, “including the pre-
mium, the cost to obtain a letter of credit as
collateral, and the fees and net interest expenses
incurred to borrow funds to provide security for
the bond or to obtain a letter of credit” are re-
coverable by a successful appellant. (Cal. Rules
of Court, rule 8.278(d)(1)(F).) ese annual
costs can total 5-10 percent of the judgment
amount over the course of an appeal. If the
judgment debtor is nancially secure, a prudent
judgment creditor may oer to waive the appeal
bond in order to eliminate possible liability
Staying
Enforcement of a
Money Judgment
on Appeal
By H. omas Watson
H. omas Watson, a Certied
Appellate Specialist, is a partner
at the appellate rm Horvitz &
Levy LLP. Tom has published
and presented extensively on
numerous legal topics, including
appellate procedure, medical
expense damages, health law, and
insurance law.
e Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 34 • No. 1 • 2021 // 43
for such costs. Similarly, a prudent judgment
debtor should always ask the judgment creditor
to waive the appeal bond, since their refusal to
do so proves that the bond was necessary and
thereby perfects the right to recover the appeal
bond costs. (See ibid. [costs of an appeal bond
are not recoverable if “the trial court determines
the bond was unnecessary”].)
2. Parties can negotiate an appeal bond
waiver agreement on any terms. Second, the
parties can negotiate any deal they want. For
example, if a judgment debtor would otherwise
incur tens of thousands of dollars in annual
appeal bond costs, the judgment creditor might
oer to waive the appeal bond in exchange for
a nonrecourse lump sum payment (or annual
payments) of an amount less than the cost of
the bond. If priced right, both parties may
benet from such an arrangement.
3. Agreeing to a temporary stay may
avoid needless litigation costs. Finally, even
if the judgment creditor is unwilling to waive
the appeal bond entirely, the judgment creditor
might nonetheless agree to a temporary stay
under Code of Civil Procedure section 918
(discussed below).
II. The Temporary Stay Order
If the judgment creditor declines to tempo-
rarily or permanently waive the appeal bond (or
indeed has begun to execute on the judgment),
the judgment debtor may apply to the court
for a temporary stay of enforcement lasting up
to 10 days after the last day on which a timely
notice of appeal could be led. (See Code Civ.
Proc., § 918.) Such a temporary stay can be
sought ex parte at any time, even before entry
of judgment. Most judges understand that
granting a temporary stay of enforcement is
appropriate because it gives the judgment debt-
or time to secure an appeal bond — especially
when the amount of the required bond may
change as a result of posttrial motions, an award
of costs and/or attorney fees, or setos due to
prior settlements. However, this type of stay is
entirely within the discretion of the trial court,
and the granting of a temporary stay is therefore
subject to any concerns the trial court may have
regarding the security of the judgment (e.g.,
whether the defendant is likely to hide assets
from collection).
III. The Admitted Surety Appeal Bond
Admitted surety bonds are often used
because they must be accepted. Most judg-
ment debtors secure an appeal bond from an
admitted surety to stay enforcement of a money
judgment during the pendency of an appeal.
Admitted sureties are insurance companies that
have been admitted by the California Depart-
ment of Insurance to underwrite surety bonds.
(Civ. Code, § 8002; Code Civ. Proc., § 995.120;
Ins. Code, § 105.) One advantage of using an
admitted surety bond is that minimum attorney
time is generally required. is is because the
court must accept bonds from admitted sureties
if they are in proper form. (Code Civ. Proc., §
995.630.)
Considerations regarding the form of the
surety bond. Counsel should conrm that an
appeal bond is in proper form before ling it.
Under the Bond and Undertaking Law, Code of
Civil Procedure section 995.330 prescribes lan-
guage that may be used in the bond. Although
the statutory language is not mandatory, its
suggested terms provide good benchmarks for
determining the technical suciency of a pro-
posed bond.
Statutory requirements governing the
bond form. An appeal bond must be in writing
and signed by the surety under oath. (Code
Civ. Proc., § 995.320, subd. (a).) It must list
addresses for service on the surety and on the
principal. (Id., subd. (a)(2).) It also must be
“executed in the name of the surety insurer un-
der penalty of perjury” or the fact of execution
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must be “duly acknowledged before an ocer
authorized to take and certify acknowledg-
ments.” (§ 995.630.) In addition, either one of
the following two conditions must be satised:
(1) a certied power of attorney for the attor-
ney-in-fact executing the bond must be “led in
the oce of the clerk of the county in which the
court is located”; or (2) a “copy of a power of
attorney [must be] attached to the bond.” (Id.,
subds. (a) & (b).) In practice, it is best to have
the bond executed by the attorney-in-fact under
penalty of perjury with the signature notarized
and to always attach the power of attorney to
the appeal bond — don’t assume that the power
of attorney is on le in the clerk’s oce.
Bond language can be simple, and multi-
ple sureties can be used. e surety must state
it obligates itself under the statute providing
for the bond to pay the amount of the judg-
ment. (Code Civ. Proc., §§ 995.320, subd. (a)
(1), 995.330.) Typically, this is done simply by
referencing section 917.1 (or another applicable
appeal bond statute) in the bond text. More
than one surety can execute appeal bonds,
and the amount of their individual bonds can
be aggregated together to meet the required
amount. (§ 995.620.) If there are sureties, they
must state they are jointly and severally liable
to the extent of the liability they are assuming.
(§§995.320, subd. (a)(1), 995.620.)
Archaic and redundant language should
be avoided. Some sureties use unnecessary lan-
guage in their appeal bonds that can be revised
for clarity or omitted entirely. Other sureties
attempt to track all of the applicable statutory
language (such as the bond conditions listed in
Code Civ. Proc., § 917.1, subd. (b)), but they
sometimes do so imperfectly and thereby make
the bond vulnerable to objections. It is better
for the bond to simply cross-reference the ap-
plicable statute. (E.g., §917.1.)
Bonds must accurately and completely
identify the correct parties. It is critically
important for an appeal bond to accurately and
completely list all judgment creditors (i.e., every
person or entity to whom the judgment directs
the judgment debtor to pay money) — if it
fails to do so, then any judgment creditor who
is omitted from the bond can execute on the
judgment. (See Code Civ. Proc., § 917.1.) It
is equally important that the bond accurately
specify which judgment debtor(s) it protects.
A bond that inadvertently lists a codefendant
may be used to satisfy the judgment against that
codefendant. (See § 996.410 et seq.)
e power of attorney should be in
correct form. Counsel also should carefully
review the power of attorney form to ensure
it is in proper form. e power of attorney
generally has three sections: (1) the appoint-
ment section — which must name the exact
attorney-in-fact who signs the bond, species
what limits (duration and amount) attaches
to that appointment, and states who made
the appointment — counsel must make sure
the bond meets any such limitations; (2) the
authority section — which generally quotes the
corporate bylaws that specify who can appoint
attorneys-in-fact for the surety — counsel must
make sure that an authorized person made the
appointment at issue; and (3) the certication
section — which conrms that everything
stated in the rst two sections is accurate as of
the date the bond was executed (so the dates of
execution of this section and the bond must be
the same). Counsel also should make sure that
the bond and power of attorney forms comply
with Code of Civil Procedure section 2015.5,
which governs certications and declarations
under penalty of perjury.
e amount of the appeal bond — entire
judgment appealed. Unless the judgment
creditors (i.e., the bond beneciaries) agree
e Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 34 • No. 1 • 2021 // 45
otherwise (see Code Civ. Proc., § 995.230),
an appeal bond must be 1.5 times the amount
awarded in a money judgment (§917.1, subd.
(b)). If the judgment awards costs under section
1021 et seq., the bond amount should be 1.5
times the sum of the judgment and the cost
award. (§917.1, subd. (d).) If the cost award
amount is unknown when the bond is led, a
separate bond covering those costs should be
led when the amount becomes known. No
undertaking is required if the judgment awards
only costs under Code of Civil Procedure, chap-
ter 6, title 14. (Ibid.)
e amount of appeal bond — severable
portion of judgment appealed. If a severable
portion of the judgment will not be challenged
on appeal, the judgment debtor may satisfy that
portion of the judgment while preserving the
right to appeal other portions of the judgment,
rather than allow the unchallenged award to
accrue postjudgment interest during the appeal.
(See Code Civ. Proc., § 695.215.) e judg-
ment debtor can then bond only 1.5 times the
unsatised portion of the judgment. (See ibid.)
Postjudgment interest considerations.
Postjudgment interest generally accrues at
the rate of 10 percent per annum from the
date judgment is entered. (Code Civ. Proc.,
§§685.010, 685.020.) us, the requirement
that appeal bonds equal 1.5 times the amount
of the judgment essentially reects a legislative
determination that the bond be adequate to
cover the amount of the judgment plus ve
years of accrued interest. However, if interest on
a particular judgment started to accrue earlier
than when the judgment was entered, such as
when a declined statutory settlement oer was
made (see Civ. Code, §3291; Code Civ. Proc.,
§ 998), then the judgment creditor may assert
that the bond amount is insucient and the
trial court may require a larger bond (see Code
Civ. Proc., §§ 995.920, 996.010 et seq.).
e cost of an appeal bond. e cost of an
appeal bond varies, depending in part on how
nancially sound the surety perceives the judg-
ment debtor to be. e COVID-19 pandemic
is prompting many surety insurers to demand
that appeal bonds be fully collateralized, usually
by a bank letter of credit — even for judgment
debtors who have a long history of nancial
security. Bond brokers are often used to shop
for the best appeal bond terms among admitted
sureties.
Filing and serving the appeal bond. e
bond must be led with the superior court
clerk, together with a proof of service showing
service on counsel for the beneciary plain-
ti(s). (Code Civ. Proc., § 995.340, 995.370;
see § 995.030.) Generally, the original appeal
bond and certied power of attorney are led
with the superior court where the judgment
was entered. Some courts, however, accept or
even require electronic ling (and many clerk’s
oces are closed during the COVID-19 quar-
antine). In such circumstances, electronic ling
and service of the appeal bond and power of
attorney should be made, with counsel keeping
the original on le.
IV. The Deposit in Lieu of Appeal Bond
e governing authority. Judgment debt-
ors have the statutory right to make a deposit
into the court of certain approved nancial
instruments in lieu of ling an appeal bond.
(Code Civ. Proc., § 995.710 et seq.) “A deposit
given instead of a bond has the same force and
eect, is treated the same, and is subject to the
same conditions, liability, and statutory pro-
visions, including provisions for increase and
decrease of amount, as the bond.” (§ 995.730.)
e advantage of a deposit in lieu of
appeal bond. e major advantage of mak-
ing a deposit in lieu of an appeal bond is that
the judgment debtor avoids all of the costs
associated with procuring an appeal bond and
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instead receives payment of interest earned by
the deposit. (Code Civ. Proc., § 995.740; see
§ 995.170.)
e disadvantage of a deposit in lieu of
appeal bond. e major disadvantage of mak-
ing a deposit in lieu of appeal bond is that it
ties up the funds or securities that are deposited
and may impact the judgment debtor’s reserve
requirements or other obligations. (However,
that same disadvantage exists when an admitted
surety requires full collateral for an appeal bond.
If the same funds will be tied up either as bond
collateral or as a deposit in lieu of bond, the lat-
ter may be the preferred option since it avoids
bond costs.) Another possible disadvantage
is the attorney time needed to secure a court
order valuing the deposit of certain securities, as
described below.
e specic nancial instruments that
may be deposited. e approved deposits
in lieu of an appeal bond include: (1) U.S.
currency or a cashier’s check from a bank,
savings association, or credit union authorized
to do business in California; (2) bonds or
notes issued by the United States or the State
of California; (3) certicates of deposit not
exceeding the federally insured amount, issued
by banks or savings associations authorized to
do business in California and insured by the
FDIC; (4) savings accounts not exceeding the
federally insured amount with banks authorized
to do business in California and insured by the
FDIC; (5) investment certicates or share
accounts not exceeding the federally insured
amount, issued by savings associations autho-
rized to do business in California and insured
by the FDIC; and (6) share certicates not
exceeding the guaranteed or insured amount,
issued by a credit union, as dened in section
14002 of the Financial Code, whose share
accounts are insured by the National Credit
Union Administration or guaranteed or insured
by any other agency that the Commissioner of
Business Oversight has not deemed to be un-
satisfactory. (Code Civ. Proc., § 995.710, subd.
(a).)
e amount of the deposit. e amount of
the required deposit is the same as the amount
of an admitted surety appeal bond. (Code Civ.
Proc., § 995.710, subd. (b).)
Assignment agreements and instructions
that must accompany deposits. A deposit in
lieu of an appeal bond must be held in trust
in interest-bearing deposit or share accounts.
(Code Civ. Proc., § 995.710, subd. (a)(1).)
When cash is deposited, the court clerk will
deposit the money in an interest bearing ac-
count. When bonds or notes are deposited, the
title holder must le and serve all parties, the
court clerk, and the appropriate bank ocer
possessing the bond or note, instructions “that
the treasurer of the county where the judgment
was entered is the custodian of that account”
to whom the title holder assigns “the right to
collect, sell, or otherwise apply the bond or note
to enforce the judgment debtor’s liability pursu-
ant to Section 995.760.” (Id., subd. (a)(2).) e
deposit also must be “accompanied by an agree-
ment executed by the principal authorizing the
ocer to collect, sell, or otherwise apply the
deposit to enforce the liability of the principal
on the deposit.” (Id., subd. (c); see § 995.160
[the term “ ‘ocer’ ” includes the court clerk].)
Valuing securities used for a deposit in
lieu of bond. e market value of bonds or
notes used for a deposit “shall be agreed upon by
stipulation of the principal and beneciary” or,
if they are unable to agree, then by court order
upon application by the judgment debtor mak-
ing the deposit. (Code Civ. Proc., § 995.720,
subds. (a) & (b).) An application for the court’s
valuation of market value must be heard “not
less than ve days or more than 10 days after
service of the application.” (Id., subd. (c).)
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V. The Personal Surety Appeal Bond
e advantages and disadvantages of per-
sonal surety bonds. e nal option for staying
enforcement of a money judgment on appeal is
personal sureties. (Code Civ. Proc., § 995.510
et seq.) e advantages of using personal surety
bonds include avoiding the cost of an admitted
surety bond and avoiding tying up funds used
either for bond collateral or a deposit in lieu
of a bond. e disadvantages include nding
qualied personal sureties, and the prospect of
the personal surety losing whatever assets they
pledge to demonstrate their ability to act as a
personal surety (e.g., their home) in the event
the judgment is armed and the judgment
debtor does not (or cannot) satisfy it.
e bond form. e form of the personal
surety bond is governed by many of the same
statutes cited above regarding admitted surety
bonds. (See Code Civ. Proc., §§ 995.320,
995.330.) In addition, if the bond is based on
the value of property, the personal surety bond
must describe the property in sucient detail
and estimate its value. (§ 995.320, subd. (a)
(3).)
Personal surety requirements. A single
personal surety cannot bond a judgment on ap-
peal. (Code Civ. Proc., § 995.310.) Instead, at
least two personal sureties, or one personal sure-
ty and one admitted surety, are required. (Ibid.)
A personal surety cannot be a lawyer or judge
and must be “a resident, and either an owner of
real property or householder, within the state.”
(§ 995.510, subd. (a)(1), (2).) And while the
judgment debtor cannot act as his or her own
personal surety (§§ 995.185, 995.510, subd. (a)
(1); Buzgheia v. Leasco Sierra Grove (1994) 30
Cal.App.4th 766, 770; see Civ. Code, § 2787),
a closely related person or entity who is not a
named judgment debtor can act as a personal
surety.
e amount of the bonds and net worth
of the sureties. Personal surety bond(s) must
total twice the amount of the judgment (plus
costs). (Code Civ. Proc., § 917.1, subd. (b).) All
personal sureties must be worth the amount of
the bond they are executing if the bond amount
is $10,000 or less. (§ 995.510, subd. (a)(3); see
id., subd. (b).) If the total bond amount exceeds
$10,000, a personal surety may be worth less
than the amount of the bond, so long as the
aggregate worth of all sureties executing the
bond is at least twice the total bonded amount
(i.e., four times the amount of the judgment
plus costs). (Id., subd. (b).)
e personal surety adavit. Each
personal surety must execute an adavit
providing: (i) the surety’s name, occupation,
residence address, and business address (if any);
(ii) a statement of residence in California and
either ownership of real property or status as a
householder within the state; and (iii) a state-
ment that the surety has sucient worth in
real or personal property to support the bond
being executed. (Code Civ. Proc., § 995.520,
subds. (a) & (b).) If the bond exceeds $5,000,
the adavit must also include: (i) a description
of the surety’s property and the nature of the
surety’s interest in that property, (ii) the surety’s
best estimate of the property’s fair market value,
(iii) a statement of any charges or liens against
the property, and (iv) a disclosure of any clouds
or impediments on the personal surety’s use of
the property. (Id., subd. (c).)
Requirements based on bond amount.
If the bond exceeds $10,000 and there are
more than two personal sureties, each surety
may list assets in an amount less than the total
bond amount and each surety’s liability may be
limited “to the worth of the surety stated in the
adavit, so long as the aggregate worth of all
sureties executing the bond is twice the amount
of the bond.” (Code Civ, Proc., §§ 995.510,
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subd. (b), 995.520, subd. (d); see § 996.470,
subd. (c)(1) [liability of surety is limited to the
amount stipulated pursuant to § 995.520].)
Service and ling of the bond. As with
admitted surety bonds, personal surety bonds
must be led with the superior court clerk,
together with a proof of service showing service
on counsel for the beneciary plainti(s). (Code
Civ. Proc., §§ 995.030, 995.340, 995.370.)
VI. Objection and Examination
Proceedings
Grounds for objecting to bonds and de-
posits. e judgment creditor/bond beneciary
may object to any bond or deposit by noticed
motion specifying one or more of the following
grounds: (1) the sureties are insucient; (2)
the amount of the bond is insucient; and (3)
the bond, from any other cause, is insucient.
(Code Civ. Proc., §§ 995.920, 995.930.) Objec-
tions to the bond must be made within 10 days
after service of the bond, or those objections
are waived — except upon a showing of good
cause for the delay or change of circumstances.
(§ 995.930, subds. (b) & (c).) Objections re-
garding the value of the property supporting the
bond are sometimes directed towards personal
surety bonds. Admitted sureties, on the other
hand, are deemed to provide sucient security
for the bonds they write, but that presumption
can be challenged. (§ 995.630.)
Hearing and Resolving Objections.
Although personal sureties need not encumber
any of their assets (they need only list them),
their nances are subject to examination in a
trial-like objection proceeding when the bond
is led and upon a claim of changed circum-
stance. (Code Civ. Proc., §§ 995.940, 995.950.)
e beneciary also might claim that a bond
amount has become insucient, possibly due
to the accrual of postjudgment interest during
the pendency of the appeal or other new cir-
cumstances. Unless the parties agree otherwise,
the court must hear bond objections within
two to ve days after service of the benecia-
ry’s notice of motion. (§§ 995.950, subd. (a),
996.010, subd. (b).) If the court determines
that the bond is insucient, it must specify the
insuciency and give the judgment debtor at
least ve days to cure the defect. (§§ 995.960,
subd. (b)(1), 996.010, subd. (c).) If the judg-
ment debtor fails to cure the defect within the
specied time, the stay of enforcement created
by the bond is lifted. (§§ 995.960, subd. (b)(1),
996.010, subd. (d).)
