Suspension of Execution of Judgment in Virginia: So Often Misunderstood
In general, if an appealing party wishes to have a circuit court suspend (or “stay”) execution of judgment pending the outcome of an appeal, that party must post a bond or irrevocable letter of credit. Attorneys and jurists typically refer to such bonds or letters of credit as a “suspension of execution bond.” If the appealing party fails to post a suspension of execution bond, the opposing party may proceed to collect a money judgment or exercise injunctive or declaratory rights or other award against the appealing party.
Rule 1:1B(a)(3) provides a circuit court with “limited concurrent jurisdiction during the pendency of an appeal,” despite the expiration of twenty-one days following a final order’s entry, to consider and decide post-judgment “motions to stay the judgment pending appeal.”
Va. Code §8.01-676.1(C) provides for suspension of execution for an “appellant who wishes execution of the judgment or award from which appeal is sought to be suspended during the appeal[.]” The bond or irrevocable letter of credit will be “conditioned upon the performance or satisfaction of the judgment and payment of all damages in consequence of such suspension, and except as provided in subsection D, execution shall be suspended upon the filing of such security and the timely prosecution of such appeal.” The security “shall be continuing and additional security shall not necessary except as to any additional amount which may be added or to any additional requirement which may be imposed by the courts.” Subsection (D) provides that a circuit court from which an appeal is taken “may refuse to suspend the execution of decrees for support and custody, and may also refuse suspension when a judgment refuses, grants, modifies or dissolves an injunction.”
The bond or letter of credit amount will vary depending on the amount of the judgment or subject matter of the case. For example, in the event of a money judgment, Code §§8.01-676.1(C) and (J) and 8.01-682 combine to provide that the bond’s amount should equal the judgment amount and one year of anticipated post-judgment interest. If the appealing party posts a surety bond or irrevocable letter of credit in the amount of a money judgment and the “equivalent of one year’s interest calculated from the date of the notice of appeal,” then no circuit court hearing is needed to set a bond amount. Upon the filing of the bond or letter of credit, “execution shall be suspended” pending “the timely prosecution” of the appeal. See Code §8.01-676.1(C). When called upon to set a bond amount, however, a circuit court may not set a bond amount in excess of $25 million. See Code §8.01-676.1(J).
In the absence of a money judgment, Code §8.01-682 serves to limit the suspension of execution bond amount by providing that “[w]hen the judgment is not for the payment of any money,” the amount of “damages” the appellate court may award upon an affirmance of the judgment below “shall be such specific sum as the appellate court may deem reasonable, not being more than $2,500 nor less than $150.” In a non-money judgment case that does not involve injunctive relief, the circuit court therefore should not set a bond amount in excess of $2,500, with or without surety required.
When a circuit court grants, dissolves or denies injunctive relief, Code §8.01-676.1(R) requires the court to set the suspension of execution bond in accordance with Code §8.01-831. The latter statute provides that the circuit court “in its discretion may suspend, modify, restore or grant an injunction during the pendency of the appeal upon such terms as to bond or otherwise as it considers proper for the security of the rights of the adverse party.”
Parts Five (Supreme Court) and Five A (Court of Appeals) of the Rules each contain an Appendix of Forms approved for the required bond or irrevocable letter of credit. Rules 5:24(a) and 5A:17(a) require compliance with the approved Appendix of Forms. The appealing party must file the suspension of execution bond with the clerk of the circuit court. In lieu of a bond or irrevocable letter of credit, the appealing party may file with the clerk “cash in the full amount required.” See Code §8.01-676.1(S). Otherwise, the statute's subsection (F) requires that the appealing party, (or someone on that party’s behalf), execute a bond guaranteed by a “surety approved by the clerk.” As to letters of credit, subsection (F) requires that it “shall be from a bank incorporated or authorized to conduct banking business” in Virginia, or “a federally insured savings institution located in this Commonwealth.”
Code §8.01-676.1(E) provides that the bond amount may be increased or modified by the trial court or appellate courts for a myriad of reasons. Subsection (K) sets forth procedures to deal with an appellant’s potential “dissipation of assets.” Per subsection (Q), a single justice or judge may consider bond-related matters addressed to the Supreme Court or the Court of Appeals.
Finally, Virginia law exempts certain litigants from posting security for a suspension of execution bond, including indigents or “to protect the estate of a decedent or person under disability, or to protect the interest of the Commonwealth or any county, city or town[.]” See Code §8.01-676.1(M) and (N).
Norman A. Thomas
NORMAN A. THOMAS, PLLC