ORCP 82: Security; Bonds and Undertakings; Justification of Sureties

A Security required.

A(1) Restraining orders; preliminary injunctions.

A(1)(a) No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs, damages, and attorney fees as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained.

A(1)(b) No security will be required under this subsection where:

A(1)(b)(i) A restraining order or preliminary injunction is sought to protect a person from violent or threatening behavior; or

A(1)(b)(ii) A restraining order or preliminary injunction is sought to prevent unlawful conduct when the effect of the injunction is to restrict the enjoined party to available judicial remedies.

A(2) Receivers. No receiver shall be appointed except upon the giving of security by the receiver in such sum as the court deems proper for the payment of any costs, damages, and attorney fees as may be sustained or suffered by any party due to the wrongful act of the receiver.

A(3) Attachment or claim and delivery.

A(3)(a) Before any property is attached under Rule 84 or taken by the sheriff under Rule 85, the plaintiff must file with the clerk a surety bond or an irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, in an amount fixed by the court, and to the effect that the plaintiff will pay all costs that may be adjudged to the defendant, and all damages which the defendant may sustain by reason of the attachment or taking, if the same be wrongful or without sufficient cause, not exceeding the sum specified in the bond or letter of credit.

A(3)(b) Upon motion by the defendant and a showing that defendant's potential costs or damages exceed the amount of the bond or letter of credit, the court may require the plaintiff to give additional security.

A(3)(c) No bond or letter of credit shall be required before property is taken by the sheriff under Rule 85 if the court, in the order authorizing issuance of provisional process, finds that the claim for which probable cause exists is that defendant acquired the property contrary to law.

A(4) Other provisional process. No other provisional process shall issue except upon the giving of security by the plaintiff in such sum as the court deems proper, for payment of such costs, damages, and attorney fees as may be incurred or suffered by any party who is wrongfully damaged by such provisional process.

A(5) Form of security or bond. Unless otherwise ordered by the court under subsection (6) of this section, any security or bond provided for by these rules shall be in the form of a security bond issued by a corporate surety qualified by law to issue surety insurance as defined in ORS 731.186, or a letter of credit issued by an insured institution, as defined in ORS 706.008.

A(6) Modification of security requirements by court. The court may waive, reduce, or limit any security or bond provided by these rules, or may authorize a non-corporate surety bond or deposit in lieu of bond, or require other security, upon an ex parte showing of good cause and on such terms as may be just and equitable.

B Security; proceedings against sureties. Whenever these rules or other rule or statute require or permit the giving of security by a party, and security is given in the form of a bond or stipulation or other undertaking with one or more sureties, or in the form of an irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, each surety and each letter of credit issuer submits to the jurisdiction of the court and irrevocably appoints the clerk of the court as such surety's or such issuer's agent upon whom any papers affecting the surety's or issuer's liability on the bond, undertaking or letter of credit may be served. Any surety's or issuer's liability may be enforced on motion without the necessity of an independent action. The motion and such notice of the motion as the court prescribes may be served on the clerk of the court, who shall forthwith mail copies to the sureties or issuers if their addresses are known.

C Approval by clerk. Except where approval by a judge is otherwise required, the clerk is authorized to approve all irrevocable letters of credit, undertakings, bonds, and stipulations of security given in the form and amount prescribed by statute, rule, or order of the court, where the same are executed by a corporate surety under subsection D(2) of this rule, or where the same are issued by an insured institution, as defined in ORS 706.008.

D Qualifications of sureties.

D(1) Individuals. Each individual surety must be a resident of the state. If there is one individual surety, that surety must be worth twice the sum specified in the undertaking, exclusive of property exempt from execution, and over and above all just debts and liabilities; where there is more than one individual surety, each may be worth a lesser amount if the total net worth of all of them is equal to twice the sum specified in the undertaking. No attorney at law, peace officer, clerk of any court, or other officer of any court is qualified to be surety on the undertaking.

D(2) Corporations. A corporate surety must be qualified by law to issue surety insurance as defined in ORS 731.186.

E Affidavits or declarations of sureties.

E(1) Individuals. The bond or undertaking must contain an affidavit or a declaration of each surety which shall state that such surety possesses the qualifications prescribed by section D of this rule.

E(2) Corporations. The bond or undertaking of a corporate surety must contain affidavits or declarations showing the authority of the agent to act for the corporation and stating that the corporation is qualified to issue surety insurance as defined in ORS 731.186.

E(3) Service. When an irrevocable letter of credit, bond or undertaking is given for the benefit of a party, a copy of such letter of credit, bond or undertaking shall be served on that party promptly in the manner prescribed in Rule 9 A. Proof of service thereof shall thereupon be filed promptly in the court in which the letter of credit, bond or undertaking has been filed.

F Objections to sureties. If the party for whose benefit an irrevocable letter of credit, bond or undertaking is given is not satisfied with the sufficiency of the issuers or sureties, that party may, within 10 days after the receipt of a copy of the letter of credit or bond, serve upon the party giving the letter of credit or bond, or the attorney for the party giving the letter of credit or bond, a notice that the party for whose benefit the letter of credit or bond is given objects to the sufficiency of such issuers or sureties. If the party for whose benefit the letter of credit or bond is given fails to do so, that party is deemed to have waived all objection to the issuers or sureties.

G Hearing on objections to sureties.

G(1) Request for hearing. Notice of objections to an issuer or a surety as provided in section F of this rule shall be filed in the form of a motion for hearing on objections to the irrevocable letter of credit or bond. Upon demand of the objecting party, each issuer or surety shall appear at the hearing of such motion and be subject to examination as to such issuer's or surety's pecuniary responsibility or the validity of the execution of the letter of credit or bond. Upon hearing of such motion, the court may approve or reject the letter of credit or bond as filed or require such amended, substitute, or additional letter of credit or bond as the circumstances will warrant.

G(2) Information to be furnished. Sureties on any bond or undertaking and any irrevocable letter of credit issuers shall furnish such information as may be required by the judge approving the same.

G(3) Surety insurers. It shall be sufficient justification for a surety insurer when examined as to its qualifications to exhibit the certificate of authority issued to it by the Director of the Department of Consumer and Business Services or a certified copy thereof.