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House approves appellate-bond requirement for municipalities after heated debate
Summary
The House approved SB 229 to require municipalities to post appellate bonds for judgments above $5 million, rejecting an amendment to make the requirement discretionary; supporters argued it levels the playing field, critics warned it unfairly burdens small cities and referenced the Tooele litigation history.
The Utah House passed first substitute Senate Bill 229 on March 12, 2013, after an extended floor debate over whether municipalities should be required to post appellate bonds for judgments above $5 million. Sponsor Representative Dee said the bill requires a municipality that is appealing a judgment over $5,000,000 to post a surety bond for the amount above $5,000,000 plus accrued interest during the appeal process; the sponsor argued this provides an incentive to negotiate and prevents appeals that drag on for years while claimants go unpaid.
Opponents repeatedly cited a high-profile litigation history in Tooele as an example where the process created hardship for a city, and they argued the bill would be punitive or place disproportionate burdens on smaller municipalities. Representative Sagers proposed an amendment changing 'shall' to 'may' so that trial courts would retain discretion to require an appeal bond in appropriate cases. That amendment generated lengthy floor discussion for and against; proponents of the amendment asked why municipalities should be singled out and urged judicial discretion, while opponents said 'may' would undercut the bill's intent and leave the status quo. The amendment failed on division and the bill passed on the floor; the clerk recorded passage at 59 yes, 12 no.
Supporters said appellate bonds would create a level playing field between public entities and private litigants and would discourage litigants from using prolonged appeals to avoid payment. Critics stressed the practical burden on small jurisdictions and urged the Legislature to consider a more tailored approach or expand the policy to include state entities.
What’s next: The bill will be transmitted to the Senate for signature/enrollment and proponents said they would be open to discussion on how the rule should apply across different classes of governmental entities.
