Staying enforcement of a money judgment pending appeal: an overview.

• Jurisdiction: United States
• Date: 01 January 2009
• Author: Axelrad, David M.

This article originally appeared in the August 2008 IADC Appellate Practice Committee Newsletter.

This article addresses one pressing issue that clients and defense counsel must confront after receiving an adverse verdict--can you avoid paying a money judgment while pursuing post-trial and appellate remedies?

1. A JUDGMENT CAN USUALLY BE ENFORCED SOON AFTER IT IS ENTERED. IN RARE SITUATIONS, ENFORCEMENT IS AUTOMATICALLY STAYED BY OPERATION OF LAW.

   The entry of a judgment is the triggering event for the issues we discuss. In some jurisdictions, a prevailing party may begin taking steps to enforce the judgment as soon as it is entered. (16) In many other jurisdictions, the enforcement of a judgment is stayed for a brief period after the judgment is entered. (17)

   Although rare, there are some situations in which the law provides for an automatic stay of enforcement during an appeal. In Massachusetts, for example, "[n]o execution shall issue upon a judgment until the exhaustion of all possible appellate review thereof, and the receipt by the clerk of the trial court of the appropriate rescript or order." (18) In several states, government agencies and officers are entitled to a stay of enforcement pending their appeal from a judgment. (19) And in federal court, a judgment is automatically stayed if it would operate as "a lien on the judgment debtor's property under the law of the state where the court is located." (20) This is not an exhaustive list of situations in which an automatic stay is created; you will want to check the rules and statutes in operation in your jurisdiction.

   In the vast majority of situations, however, filing a notice of appeal will not automatically prevent the verdict winner from enforcing the judgment. Instead, the verdict loser will need to obtain a stay of enforcement using one of the procedures discussed below.

2. ENFORCEMENT OF A JUDGMENT CAN BE STAYED DURING THE TIME FOR POST-TRIAL MOTION PRACTICE IN THE TRIAL COURT.

   In many cases where a jury returns an adverse verdict, it will be advisable to file one or more post-trial motions, such as a motion for new trial or a motion for judgment as a matter of law. Sometimes it is mandatory to raise certain issues in post-trial motions to preserve them for appeal. Along with the desire to file post-trial motions comes the need to stay enforcement of the judgment while the trial court considers those motions.

   In a very few jurisdictions, the timely filing of post-trial motions alone stays enforcement of the judgment. (21) In other jurisdictions, a trial judge has discretion, without requiring security, to stay enforcement of a judgment during the time when post-trial motions may be filed and decided. (22) But in most courts, including the federal courts, defendants must request a stay of enforcement during post-trial motion practice, and trial judges have discretion to require some measure of security. (23) When a trial court demands security for the stay, a defendant generally may use the same types of security that we discuss below in the context of stays pending appeal.

3. THE ENFORCEMENT OF A JUDGMENT CAN BE STAYED DURING AN APPEAL.

   1. Defendants should first ask prevailing plaintiffs to agree voluntarily not to enforce the judgment during the appeal.

      In most jurisdictions, the parties may agree to stay enforcement of a judgment pending appeal. (24) It is prudent to contact the opposing party to see if he will agree to a voluntary stay, which can be quickly memorialized in a stipulation or letter signed by counsel on both sides. Few plaintiffs ultimately agree to waive the requirement of security altogether, but by making such a request, defendants can establish that the plaintiff has forced them to post a bond or provide other security. In many jurisdictions, that allows the defendant to recover the cost of obtaining security (usually bond premiums) if the defendant eventually prevails on appeal. (25)

   2. A defendant commonly obtains a stay of enforcement of...