AOR v. Bustamante (CA1 8/4/16)

The third case in six months or so on calculating a supersedeas bond.

AOR sued to collect on a promissory note. It won damages, costs, and fees. Defendant appealed. It asked that the supersedeas bond be the amount of damages awarded AOR less the amount of a bond it had posted as a provisional remedy and also less the amount of attorney’s fees that had been awarded it against AOR in a separate action. The trial court agreed. AOR took special action, arguing that under the statute and Rule 7 the bond must equal the damages.

The Court of Appeals takes jurisdiction and grants relief. AOR had taken down the provisional-remedy bond and used it, with Defendant’s agreement, to cover some of its attorney’s fees. Because it was used to cover a part of the judgment that the statute and rule don’t include in the supersedeas bond, using it to reduce that bond was wrong. In addition, although Rule 7 allows “other security” to be considered when setting a supersedeas bond the trial court did not do so. The opinion emphasizes this repeatedly as a reason for its ruling – that, apparently, the trial court’s order didn’t specifically say that it considered the first bond to be “other security” under Rule 7. Could it properly have done so? How would the case change if it had? The opinion does not say.

As for the attorney’s fees in the separate case, the statute and rule do not provide that a supersedeas bond can be reduced by elements of a judgment in another action. 

Defendant argued that the trial court was taking into account cash that AOR had received in order to maintain the status quo. Rule 7 allows the court to use an order “in lieu of or in addition to” the supersedeas bond” to “preserve the status quo.” But that’s a separate thing from figuring the amount of the bond and doesn’t change its calculation, which is controlled by other provisions of the Rule.

The opinion is not a model of clarity. Its one of those in which the meaning – once you’ve figured it out – explains the language used rather than the other way around. But we have to give it at least a couple of stars since there are no footnotes.

(Opinion: AOR v. Bustamante)