How to Stop Collection of a Judgment While You Appeal - Appeals Lawyer
How to Stop Collection of a Judgment While You Appeal: Obtaining a Stay Pending Appeal
The filing of an appeal from a civil judgment awarding money does not automatically stop or “stay” enforcement of the judgment. In short, this means that the party that was awarded a money judgment can generally take action to collect on the judgment while the appeal is pending. While this may be understood by a New Jersey appeals lawyer, it is not commonly understood by civil litigants who assume that the mere filing of an appeal stops trial court proceedings. The reality is that a party can pursue an appeal from a money judgment without a stay, but in order to stop the enforcement of a judgment, or trial court proceedings in general, while an appeal is pending, the appealing party must take action and obtain a stay pending appeal from the court.
Rationale for a Stay Pending Appeal
One who wishes to appeal from a money judgment and stay enforcement of that judgment must, with certain exceptions, request a stay from the trial court that entered the judgment. The purpose of the stay is to protect the appealing party, the judgment debtor, who might ultimately obtain a reversal of the judgment. If the appellate court were to grant a reversal of the judgment, the judgment debtor would be harmed if the prevailing party, the judgment creditor, had been permitted to execute on the judgment before the appellate court had an opportunity to review the case.
The Requirement of Security or a Supersedeas Bond
In most cases, in order to obtain and maintain a stay pending appeal from the trial court judge, the party appealing from a money judgment must post a supersedeas bond or other security. R. 2:9-5. The purpose of the bond is to protect the prevailing party from the loss of the use of funds otherwise immediately due under the order or judgment being appealed. See Courvoisier v. Harley Davidson of Trenton, Inc., 162 N.J. 153, 158 (1999). Accordingly, the bond required is normally in the amount of the judgment plus the amount of interest that would accrue on the judgment while the appeal is pending.
Consulting With an Appeals Lawyer to Decide if You Need to Obtain a Stay
Nonetheless, there are situations in which the appealing party may decide that obtaining a stay is not necessary. Posting a supersedeas bond or providing other security necessary to obtain a stay has costs and conceivably makes it easier for the prevailing party to collect on the judgment if it is affirmed on appeal. If the appealing party believes a stay is not needed to prevent enforcement of the judgment, then it is better to avoid the attorney’s fees and costs, not to mention the challenge of posting a bond or other security, that are necessary in order to obtain a stay. For example, parties can agree that the judgment will not be enforced pending appeal. Alternatively, if the party pursuing the appeal has good reason to believe the prevailing party at the trial level lacks the resources or desire to collect on the judgment while the appeal is pending, the appealing party may decide to take a calculated risk and proceed with the appeal without obtaining a stay.
Ultimately, deciding whether or not to pursue a stay pending appeal is a fact specific determination that is best made with the advice of a competent New Jersey appeals lawyer who understands the client’s unique situation. Pursuing an appeal of a civil judgment in the appellate courts of New Jersey is a significant decision. Thorough consultation between a client and their New Jersey appeals lawyer is necessary to determine whether incurring the expense involved in obtaining a stay in connection with prosecution of an appeal is worthwhile.