Monday, March 20, 2023

Partial appeal bonds have 'Merritt'

Today's DJ has David Axelrad's enlightening piece titled When is a partial appeal bond sufficient? -- What happens if an insurance carrier is required to post an appeal bond as part of its contractual obligation to an insured seeking to appeal a judgment or order, but the required amount of the bond exceeds the policy limit or is otherwise more than the insurer is prepared to give?

  • On its face, the statutory scheme seems to say “no” by prescribing the amount of the bond and by enabling the respondent on appeal to object to the undertaking as insufficient in amount. (Code Civ. Proc., §§ 922, 995.920, subd. (b).) But in Merritt v. J. A. Stafford Co., 68 Cal.2d 619, 625 (1968), the California Supreme Court made an exception.
  • Although some recent cases have made blanket statements about the insufficiency of bonds in amounts less than that provided by statute (see, e.g., Patel v. Chavez, 85 Cal.App.5th 712, 719–720 (2022)), neither the Supreme Court nor the Legislature has seen fit to overrule Merritt, and partial bonds issued by insurers therefore continue to be effective to stay the portion of the judgment covered by the partial bond. Respondents may still “seek execution” as to the “excess part of the judgment,” or “enter into an agreement to stay execution with the insured.” (Merritt, supra, 68 Cal.2d at p. 626.) But “as to the part of the judgment within the policy limits [the respondent] will be protected by the [insurer’s partial] bond.” (Ibid.)

Today's DJ also has Myron Moskovitz's Judging Bad Guys. Part III: The Effect On "The Law"