Certworthy | Vol. 22 Issue 2

Preserving the (Virtual) Record

Tips for Trial and Appellate Practitioners

By Shayna M. Rogers and Hillary A. Taylor

As the COVID-19 pandemic drags on, a majority of federal and state courts have implemented virtual proceedings in some form. However, even as attorneys grow more comfortable with remote appearances, many of us remain wary of fully virtual trials. And with good reason—virtual trials bring a panoply of challenges, including the diminished impact of demonstrative exhibits, the “digital divide” among court participants, and probable distractions to jurors appearing from home. Of particular concern to appellate lawyers, however, is the impact the virtual environment may have on preservation of the record for appeal. Careful attention to preservation is perhaps even more important in a virtual trial setting than in a live proceeding.

At the trial level, it is advisable to engage the services of a technology consultant; in the virtual era, this has become imperative. One of the most common complaints from early virtual trials is that tracking and displaying electronic exhibits for the jury is far more cumbersome than in the usual courtroom setting. A cumbersome process necessarily creates room for error. With the court’s permission, a technology consultant can help develop a shared database of electronic exhibits that all parties can access, as well as physically display those exhibits for the jury. This not only makes for a smoother trial, but it also ensures that the official exhibit list is accurate in the event of an appeal.

Even the most novice trial lawyer knows that only objected-to errors are subject to appellate review. In a brick-and-mortar courtroom, it is simple to stand up and raise an objection and to distinguish between on- and off-the-record exchanges outside the presence of the jury. In a virtual environment, by contrast, both the use of the mute function and the inability of some platforms to record audio from two speakers at once can make it difficult to confirm whether a particular objection was captured on the record. Moreover, depending on the platform, it may not always be apparent whether a sidebar conversation is in fact “on the record” or “off the record.” To guarantee a complete record for appeal, trial lawyers should ask for permission to raise their hands (either physically or through an agreed-upon electronic icon) when verbally objecting. That way, a glitch in the audio will not prevent an objection from being recognized by the trial court and therefore ensuring it appears in the record. In addition, it would be prudent to begin sidebars by verifying whether the conversation is taking place on or off the record.

A virtual trial is predisposed to certain types of error that trial lawyers should be mindful of. For example, with jurors participating from their homes rather than the jury box, there are far more opportunities for (literal) disconnection and distraction. The trial lawyer should be on the lookout for any technological or personal challenges that jurors may be experiencing, as this could prevent them from hearing a crucial portion of the case. If a juror appears to have lost Internet connection, left the computer, or begun speaking to someone off camera, this must be called to the court’s attention immediately. Similarly, virtual trials provide an unparalleled opportunity for witness coaching. If it appears that a witness is not alone in the room, or that someone else is communicating with them by any means, objections must be made immediately. The appellate lawyer should watch for these specific types of errors whenever they are reviewing the record in a virtual trial.

This also then raises the question: What does constitute the “record” in a virtual trial? If a virtual trial results in an appeal, the appellate lawyer must first determine what constitutes the trial “record” in their jurisdiction. While trial courts have been developing policies related to virtual proceedings for over a year, the inherent lag time between trial and appeal means that appellate courts may not have clear guidelines regarding what constitutes the “record” in the virtual era. While trial presentation may have changed, the rules governing the record have not. Specifically, lawyers should not assume that a video recording of a virtual proceeding is part of the record or that an appellate court could or would review it. Unless someone verbalizes what is happening “in the courtroom” for the written record, these details will ordinarily not come before the appellate court. The focus should remain, as always, on ensuring that the written transcript of the proceedings is as clear and accurate as possible.

To that end, when reviewing a virtual trial transcript, it is important to remember that many remote trial platforms have a “chat” or “message” function. Courts may use these functions to communicate on the record with litigants in the event of an audio or video failure. Such communications can easily be omitted from a transcript that relies entirely on an audio recording of the proceeding. The appellate lawyer should obtain a copy of all chat communications and ensure that those made on the record are reflected in the transcript.

Appeals from virtual proceedings are still in their infancy. Important questions remain regarding the scope of the record, the impact of a recorded trial on credibility determinations and the standard of review, and the unique procedural and constitutional questions that are raised by a virtual environment. As courts sort through these issues in the coming wave of appeals, trial and appellate practitioners alike should watch the process closely and keep the above guidance in mind.

Shayna Rogers is an of counsel attorney at Cosgrave Vergeer Kester LLP in Portland, Oregon. She is an appellate lawyer who also specializes in advising trial attorneys on litigation strategy and in drafting and arguing complex motions. Ms. Rogers obtained her B.S from the Oregon State University Honors College and her J.D. from Lewis & Clark Law School. While attending law school, Ms. Rogers was the editor-in-chief of the Animal Law Review.

Hillary A. Taylor is a Shareholder with Keating Jones Hughes, P.C. in Portland, Oregon, where her practice focuses on professional liability defense, at trial and on appeal in Oregon and Washington. She obtained her B.A. from Lewis & Clark College and her J.D. from Willamette University College of Law. Ms. Taylor has authored many amicus briefs on issues of importance in cases before the Oregon Supreme Court. She enjoys spending her free time with her husband, who owns Portland Baseball Club. Ms. Taylor is a member of DRI.

Fast Facts

How Much Does an Appeal Bond Cost?

By Dan Huckabay

One of the most common questions people naturally have about appeal bonds is what they cost. Like so many questions, the answer is “It depends.” There are a variety of factors that go into it, but generally speaking, the cost for an appeal bond can range from 0.30 percent to 4 percent. In this article, we will examine those specific factors and provide more narrow rate ranges that can apply based on the circumstances.

Before doing so, it’s worth revisiting what exactly appeal bonds guarantee. Put simply, the purpose of an appeal bond is to maintain the status quo during appeal whereby the surety insurer issues a guarantee on behalf of the appellant to the appellee that if the judgment is affirmed, the surety will pay the appellee if the appellant is unable to. In most jurisdictions, the bond not only covers the underlying judgment but costs and interest during the appeal up to some cap typically between 1.2 and 1.5 times the judgment amount.

When you consider that most appeals do not result in a reversal of the lower court’s judgment, this means a high likelihood that the surety providing the appeal bond will receive a claim. Due to the high risk and probability of a claim, collateral in the full amount of the bond is typically required, but there are exceptions to this general rule when the appellant has a substantial net worth and liquid assets relative to the bond amount. Many publicly traded companies and insurers meet this high bar along with some large private companies and very high net worth individuals.

Uncollateralized Appeal Bond Rates

The first factor in determining the premium for appeal bonds is, therefore, whether collateral is required. In those instances when collateral is not required, the premium rates will generally range from 0.30 percent to 2 percent of the bond amount per year. The financial strength of the client relative to the bond amount will be one of the main factors in determining where the premium rate falls in the range.

The other primary factor is the size of the bond. Premium rates are generally higher for smaller bonds and decrease for larger bonds.

Collateralized Appeal Bond Rates

When an appeal bond is collateralized, the primary determinant of rate is the type of collateral. There are four types of collateral sureties will consider: cash, letters of credit from a bank, real estate, and marketable securities.

Cash

The premium rate for using cash collateral will range between 0.30 percent to 2 percent of the bond amount per year. The size of the bond usually determines the ultimate rate in this range with larger bonds being on the lower end. One other factor that is important to consider for clients using cash is some sureties pay interest on the cash deposit. Depending on the premium rate and interest environment at the time, the interest may be enough to partially or entirely offset the cost of the premium.

Letters of Credit

Letters of credit are issued by banks, and they provide a guarantee to the surety to make available a certain amount of funds (generally equal to the bond amount). The premium rate when using a letter of credit as collateral is similar to cash with a range of 0.30 percent to 2 percent per year of the bond amount. It’s important to note that banks may charge their own fee for the letter of credit, which is in addition to the surety’s premium for the appeal bond.

Banks sometimes require the client to secure the letter of credit with cash. In those instances, the client may consider it more advantageous to put the cash directly with the surety as collateral rather than obtain a letter of credit, because it will save the client the letter of credit fee.

Real Estate

Real estate is the most expensive collateral option typically costing 4 percent of the appeal bond amount per year. Sureties usually require appraisals of the property and title insurance, which the client is responsible for paying in addition to the premium. While it is the mostly costly option, real estate is often an important tool used in securing appeal bonds particularly for companies or individuals with much of their net worth invested in real estate.

Marketable Securities

Marketable securities is a term used to refer to nonretirement brokerage account holding stocks and/or bond investments. These accounts can be pledged to certain sureties directly to avoid liquidating the holdings possibly triggering a tax event or losing out on future investment returns.

The premium rate for using these accounts primarily depends on the type of assets held and generally ranges between 0.75 percent to 4 percent of the bond amount per year. For example, sureties usually charge a lower premium rate for lower risk assets such as treasury or highly rated municipal bonds whereas they will charge a higher rate for stock mutual fund indexes or individual stocks that may fluctuate greater in value. The size of the bond can also influence the premium rate with this collateral type as well.

Other Things to Note

There are times when a client may provide multiple types of assets to a surety to collateralize a bond, and in those situations, a surety may be able to apply different premium rates for the different types of collateral. For example, if a client uses a combination of real estate and cash to secure an appeal bond, the surety may charge 4 percent on the real estate portion and 1 percent on the cash portion.

As mentioned throughout the article, premiums for appeal bonds are charged annually. The first year is fully earned once the bond is issued even if the case is settled or decided mid-term. Renewal premiums are collected upon the renewal date. However, the client will receive a prorated return premium for in the event the bond is exonerated mid-term during the renewal. It’s also important to understand that appeal bonds cannot be cancelled; and, therefore, the premium continues to be charged until the appeal bond is exonerated.

Conclusion

While less expensive is usually better in life, when it comes to appeal bonds there are many factors involved that clients will need to consider including what assets the client has available and timing of when the bond needs to be filed. An experienced surety agent will guide the client through all of those options to arrive at the best decision for the particular situation.

Dan Huckabay is President of Court Surety Bond Agency (CSBA). CSBA is a leading surety broker specializing in appeal bonds nationwide and is a member of DRI’s Appellate Advocacy Committee. Dan is a frequent presenter and author on the topic of appeal bonds, and he has also served as an expert for various cases involving appeal bonds. He can be reached at (877) 810-5525 or Dan@courtsurety.com.

Appellate Advocacy Committee

Note From the Vice Chair

By Adam W. Hofmann

As we turn the corner on a new year, I find myself thinking back to the 2021 Appellate Advocacy Seminar and the wonderful conversation I had with colleagues on this committee about what it means—and what it takes—to be an appellate practitioner. One thing that was clear is that the guidance, mentorship, sponsorship, and friendship of other lawyers has been essential.

And so, approaching a year in which we will (hopefully) see more of each other than we have been recently able to, I plan to make a little extra time to keep up—and maybe even revitalize—the relationships that have brought me to this place in my life. But I also plan to redouble my efforts to pay those advantages forward, offering younger attorneys the benefit of whatever guidance I can, especially those younger colleagues who may not traditionally have received the kind of mentorship and sponsorship that I have received.

On to business. In this second and final edition of Certworthy for 2021, Shayna Rogers and Hillary Taylor offer their very timely wisdom on the complexities of record preservation in remote court proceedings. And Dan Huckabay helps you answer the perennial question for appellants, how much will it cost to bond this appeal?

Looking down the road, we are also excited to be planning for the 2022 Appellate Advocacy Seminar in San Diego next November. If you’re interested in getting involved, we would welcome your help. Please reach out to program chair, Matt Nelson.

Adam W. Hofmann is a Partner with Hanson Bridgett. He is an Appellate Specialist, certified by the California Board of Legal Specialization, and serves as the Co-Chair of Hanson Bridgett’s Appellate Practice. He represents both public and private clients in civil writs, appeals, and mandate proceedings. He has briefed and argued cases in the Ninth Circuit Court of Appeals and every District Court of Appeal in California and has filed merits briefs in two U.S. Supreme Court cases.