Hawaii Supreme Court: Bond on Appeal Should be Based Upon Evidence of Potential Loss Pending Appeal, Not the Value of the Property.

Many thanks again to Attorney Gary Dubin for bringing this to my attention.

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The current hodgepodge of decisions that I have always maintained were merely vehicles to discourage appeals is taken to task in this well-reasoned decision.

In Hawaii the rule is now no bond pending appeal or low bond pending appeal.

The Hawaii Supreme Court has merely applied principales that are already stated in all US jurisdictions and applied it to limit the discretion of the trial court or even an appellate court to set an arbitrary amount to stay the effect of an adverse judgement.

But this does not mean that a stay order will always be granted.

see Kelepolo Hawaii decision 2020-scwc-18-0000138

The reason that judges abuse their discretion in setting bond for appeals is that they have already made a decision and they don’t want it reversed. Reversals look bad on a judge’s record and too many reversals can impede their ambitions to be on higher courts or higher political office.

And up until now the court’s have been reluctant to intrude upon the wide discretion allowed to trial courts and appellate courts (either one can grant a stay and set bond).

Finally an element stated but rarely used as the basis for a decision on whether the lower courts based their discretion has been elevated to where it belongs, to wit: courts may not use high bond to discourage appeals.

Just because the property is worth $1 million does not mean that the bond should be set at $1 million — unless there is clear and convincing evidence that the entire value of the property will be lost pending appeal.

In a rising market it is perfectly acceptable to have no bond, particularly where bond causes undue hardship (like bankruptcy) on the appealing party.

While authoritative in Hawaii this case may be cited as persuasive and linked to the state specific decisions of every state in the U.S. It merely states the results of the doctrines already used in all states.

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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One Response

  1. Good case. Good to point out. But, does not help.

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