Securing Court Approval of an Appeal Bond in an Amount Less than Full Judgment under Illinois Supreme Court Rule 305(a)

In Illinois, when a jury awards damages to the plaintiff, the trial court enters a judgment in favor of the plaintiff and against the defendant in the amount of the jury’s verdict. That judgment may be enforced during the course of the defendant’s appeal unless the defendant seeks a stay of enforcement supported by the filing of an appeal bond or some other form of security, such as a letter of credit, escrow agreement, or certificate of deposit. The amount of the appeal bond or security necessary to stay enforcement of the judgment is governed by Illinois Supreme CourtRule 305(a), which requires that “[t]he bond or other form of security ordinarily shall be in an amount sufficient to cover the amount of the judgment and costs plus interest reasonably anticipated to accrue during the pendency of the appeal.”

What happens if the defendant is not able to secure a bond or other security in the required amount? In that circumstance, Rule 305(a) states that the trial court “may approve a bond or other form of security in the maximum amount reasonably available to the judgment debtor.” Rule 305(a) states further that the trial court may make this approval only if it “determines that a bond or other form of security in the amount of the judgment plus anticipated interest and costs is not reasonably available to the judgment debtor” after it weighs “all the relevant circumstances, including the amount of the judgment, anticipated interest and costs, the availability and cost of a bond or other form of security, the assets of the judgment debtor and of the judgment debtor’s insurers and indemnitors, if any, and any other factors the court may deem relevant.” Finally, Rule 305(a) requires that when the trial court “approves a bond or other form of security in an amount less than the judgment, the court shall impose additional conditions on the judgment debtor to prevent dissipation or diversion of the judgment debtor’s assets during the appeal.”

Rule 305(a)’s provisions regarding the approval of a bond or other security in an amount less than the judgment were added to the rule on June 15, 2004. The Committee Comments to this amendment provide further insight on the bond amount issue and make clear that the trial court’s authority to approve an appeal bond or other security in an amount less than the full amount of the judgment plus interest and costs is to be exercised rarely:

“This amendment is designed to preserve the right of appeal. The traditional method of securing a judgment is to require an appeal bond in the amount of the judgment plus anticipated interest and costs. In recent years, changes in the insurance market have made appeal bonds costly in many cases and unavailable in some cases. When an alternative type of security (e.g., letters of credit, escrow agreement, certificate of deposit) offers comparable assurance of payment at lower cost, requiring an appeal bond needlessly increases the cost of appeal. When seeking to file a form of security other than an appeal bond, it is the judgment debtor’s burden to demonstrate that the other form of security is an adequate substitute.

“It is anticipated that the amount of the bond or other form of security will normally be in an amount sufficient to cover the judgment, interest, and costs. In some limited instances, however, the appeal bond requirement may be so onerous that it creates an artificial barrier to appeal, forcing a party to settle a case or declare bankruptcy. See, e.g., Price v. Philip Morris, Inc., 341 Ill. App. 3d 941 (2003), vacated by supervisory order No. 96644 (September 16, 2003). Thus, the amended rule gives the court discretion in a money judgment case to approve a bond or other form of security that covers less than the entire amount of the judgment plus anticipated interest and costs. This does not lessen the judgment debtor’s obligation on the judgment, but simply allows the judgment debtor to obtain a stay of execution on the judgment pending appeal. In such a case, the last sentence of the amended rule makes clear that appropriate conditions shall be imposed to prevent the judgment debtor from dissipating assets that would otherwise be available for payment of the judgment if the appeal is unsuccessful. Thus, depending on the circumstances, a business may be precluded from selling or otherwise disposing of any of its assets outside the ordinary course of its business, or an individual might be prohibited from spending any sums other than are required for ordinary living expenses.”
Ill. S. Ct. R. 305, Committee Comments (adopted June 15, 2004).

A Cautionary Tale
The foregoing provisions of Rule 305(a) were recently addressed by the Illinois Appellate Court – First District in Walsh v. Sklar , 2025 IL App (1st) 231830-U. Walsh is a cautionary tale that illustrates the peril of disregarding Rule 305(a)’s requirements when seeking the trial court’s approval of a bond amount less than the judgment.

In Walsh, the plaintiff sued the defendants – a podiatrist and his practice – for medical malpractice. The jury found in plaintiff’s favor and awarded her damages in the amount of $2,865,495.00. After judgment was entered on the jury’s verdict, the defendants filed a post-trial motion seeking a new trial, which was denied. The defendants then filed a motion to stay enforcement of the judgment pending appeal. In this motion, the defendants sought approval of an appeal bond in the amount of $1.85 million – $1 million less than the judgment – which was the amount of insurance coverage available to them under their liability policy. The plaintiff objected to the bond amount as insufficient under Rule 305(a). The trial court overruled this objection and approved the bond amount that the defendants sought. The plaintiff moved to reconsider, and this motion was denied. The defendants then appealed, again seeking a new trial, and plaintiff cross-appealed, seeking reversal of the order approving the bond amount.

After affirming the trial court’s order denying the defendants’ post-trial motion for a new trial, the appellate court reversed the trial court’s order, approving the appeal bond amount. The appellate court reasoned as follows based on the provisions of Rule 305(a) and its Committee Comments discussed above:

  1. The trial court’s order approving an appeal bond amount is to be reviewed for an abuse of discretion:
    1. [T]he language of the rule is clear that the amount of the bond, where it differs from the amount of the judgment, as in the case before us, is discretionary. As such, we review the trial court’s approval of defendants’ $1.85 million bond for an abuse of discretion.
  2. The trial court abused its discretion in approving a bond amount less than the judgment.

Rule 305(a) requires that a defendant seeking approval of a bond amount less than the judgment present evidence supporting the reasons for that request and the trial court is “required to consider the relevant circumstances of defendants that would prevent them from covering the full amount.” Here,

“… defendants did not present any evidence to the court to suggest that they would have to declare bankruptcy in order to purse an appeal if required to provide the full amount of the judgment. Further, defendants did not demonstrate that the insurance policy was an adequate substitute, and the mere existence of their insurance coverage does not determine whether the full amount of the judgment is reasonably available to defendants. It is conceivable that defendants might have assets and funds available, outside of insurance coverage, that would cover the remainder of the full judgment plus costs and interest. As stated, nothing in the record shows that they presented any such evidence to the trial court, and defendants have provided this court with no reason to believe that there is any such evidence. To reiterate, nothing in the record below or on appeal shows that the full amount for an appeal bond would create a barrier to defendants’ ability to appeal the judgment or that they would be required to declare bankruptcy. Because the trial court did not consider any circumstances of defendants that would necessitate the $1.85 million appeal bond, the court failed to comply with the rule and abused its discretion.”

(3) Even if the defendants had submitted the evidence described above, the trial court erred in failing to impose additional conditions on the defendants to prevent them from dissipating their assets during the appeal as required by Rule 305(a):

“Nothing in the record shows that the trial court imposed any conditions on Dr. K. Sklar, as an individual, or Foot First Podiatry, as a business, to prevent the dissipation or diversion of funds. The Committee Comments make clear that, where less than the full amount of the judgment plus costs and interest is offered, appropriate conditions shall be imposed, meaning that the trial court did not have discretion in this aspect.” (emphasis in original)

Finally, the appellate court noted that its review of the bond approval order was not moot in light of its affirmance of the trial court’s judgment on the jury’s verdict because defendants may seek review in the Illinois Supreme Court. The appellate court accordingly ordered that the trial court conduct further proceedings on the bond amount if defendants seek to stay enforcement of the judgment while proceeding in the Supreme Court:

“In the event defendants seek to stay the judgment while proceeding with further review, we reverse the trial court’s approval of defendants’ appeal bond for $1.85 million and remand for the limited purpose of reconsidering the appeal bond in conformity with Illinois Supreme Court Rule 305(a) and this order. The present stay of enforcement shall remain in effect for 60 days following the entry of this order to preserve the status quo while proceedings are conducted in the [trial] court. Should additional time be necessary and reasonable to comply with this order, the [trial] court may, in its inherent authority, grant a temporary stay of the enforcement of the judgment for that purpose. If defendants choose not to seek a stay of enforcement of the judgment for the purpose of seeking further review, the issue of the appeal bond is deemed moot.”

Practice Pointers

  • Although Walsh is an unpublished decision, it is a decision of first impression on the bond amount issue: “[W]e first note that this is an issue of first impression in this court. Our research has not revealed any case involving the sufficiency of an appeal bond under Rule 305(a) since the language allowing for less than the judgment plus interest and costs was added in 2004.” Because Illinois Supreme Court Rule 23(e) allows the citation of unpublished decisions as persuasive authority, Walsh should be considered and followed when seeking approval of an appeal bond or other security in an amount less than the amount of the judgment plus interest and costs.
  • The enforcement of a judgment is not stayed automatically under Illinois law, so the procurement of an appeal bond or other security is an immediate concern for defense counsel upon receipt of the jury’s verdict. When the judgment on the verdict is entered, defense counsel should request an order staying enforcement of the judgment until the filing of the defendant’s posttrial motion. A posttrial motion must be filed within 30 days after the entry of the judgment, and a timely filed posttrial motion temporarily stays enforcement of the judgment until the trial court rules on the motion. See, 735 ILCS 5/2-1202(d). When the posttrial motion is denied, the judgment becomes enforceable again. At this juncture, defense counsel should request an order staying enforcement of the judgment until the defendant files its notice of appeal and appeal bond or other security. Counsel for the parties also may agree to stay enforcement of the judgment during these time periods. Note that the same considerations apply to verdicts reached in bench trials. See, 735 ILCS 5/2-1203.
  • Illinois law provides no concrete guidance on how the full amount of the judgment plus interest and costs is to be determined. The customary amount is equal to 150 percent of the judgment, but counsel for the parties may agree on a different calculation. Post-judgment interest is automatic and accrues from the date of judgment entry to the date of judgment satisfaction at the annual rate of 9%. See, 735 ILCS 5/2-1303(a). Pre-judgment interest, where applicable, accrues at the annual rate of 6% and is capped at five years. See, 735 ILCS 5/2-1303(c).
  • Illinois Supreme Court Rule 305(j) and section 392.1 of the Illinois Insurance Code allow a defendant to post a certified copy of a liability insurance policy in lieu of an appeal bond or other security where there are no policy defenses and the policy covers the amount required by Rule 305(a). See, 215 ILCS 5/392.1. In circumstances where the judgment exceeds the amount of insurance coverage, it is possible to post a certified copy of the policy and a supplemental bond or other security covering the amount in excess of the policy. The insurer or coverage counsel should be consulted when deciding whether to post a policy in lieu of a bond or other security.