Posted 7/19/2015

County of Los Angeles v. Financial Casualty & Surety, Inc., Case No. B254010 (Cal.App. June 26, 2015) held that the surety that had paid a judgment while an appeal was pending was entitled to interest on the amount paid after the judgment was reversed.  In a decision reported at 157 Cal.Rptr.3d 448 (Cal.App. 2013) the Court reversed the judgment.  While the appeal had been pending, however, the County demanded payment of the judgment and the surety complied.  Pursuant to Cal. Code Civ. Proc. §908 the surety was entitled to restitution, and the trial court directed repayment of the amount the surety had paid but without interest.  The Court of Appeals reversed the denial of interest and directed the trial court to add interest at a reasonable rate from the date the surety paid the judgment to the date the County repaid the surety.  The Court reasoned that the purpose of §908 was “to place the parties in as favorable a position as they could have been in had the judgment not been enforced pending appeal” and that interest was necessary under the circumstances to accomplish this purpose.  [Not published].

In State v. Lodrige, 2015 WL 4002300 (La.App. July 1, 2015) on October 25, 2013, the clerk mailed notice of judgment forfeiting the bond.  On April 23, 2014 (180 days from the mailing of the notice) the defendant was arrested and booked into jail in another parish.  On April 25 the surety filed a motion to set aside the judgment.  The State opposed the motion on the ground that it was not filed within the 180 day statutory time period.  The trial court granted the surety’s motion reasoning that the surety had substantially complied with the statute by promptly filing its motion and that the State’s position would make the appearance period 179 days rather than 180 days.  The State appealed, and the Court of Appeals affirmed.  The Court noted that La.C.Cr.P. Art. 345(I) provides the trial court with discretion to grant an extension of the initial time period to have the judgment of forfeiture set aside if a fortuitous event occurs to prevent the surety from acting within the statutory period.  The trial court in effect granted such an extension, and the Court stated, “we cannot say the district court erred in finding that the surety’s motion to set aside the judgment of bond forfeiture was timely filed under the particular facts of this case.”

The State also argued that the record did not show the surety offered to pay the cost to return the defendant to Bossier Parish as required by Art. 345(D).  The Court noted that the defendant appeared by video conference, so there was presumably no cost, but held that the State failed to preserve the argument because it was not made in the State’s motion for a new trial in the district court.  Therefore, the argument was not properly before the Court of Appeals.

State v. West, Case No. A14-1630 (Minn.App. July 6, 2015) involved primarily the defendant’s appeal of his conviction, but he also appealed forfeiture of a $5,000 cash-only bond.  The Court held that the bond violated the sufficient sureties clause of the Minnesota Constitution.  The trial court imposed the cash-only bond in addition to options for much larger conditional release or unconditional release bonds.  The Court held, “Regardless of appellant’s option to pay conditional- or unconditional-release bail, the imposition of additional cash-only bail violated his constitutional right to provide an alternative form of sufficient surety.”  The Court affirmed the defendant’s conviction but reversed forfeiture of the cash-only bond and directed that the $5,000 be returned.

In AA-Professional Bail Bonding v. Deal, 2015 WL 4098601 (Ga.App. July 8, 2015) the defendant was arrested for shoplifting and released on bond.  She subsequently entered a pretrial diversion program pursuant to a Notice signed by the prosecutor, the defendant and the probations officer and filed with the clerk of court.  After she failed to comply with the requirements of the diversion program, the shoplifting case was placed back on the court’s calendar, and the defendant failed to appear.  The surety appealed from forfeiture of the bond on the ground that OCG §17-6-31(d)(1)(C) released it from liability upon the defendant’s entry into the pretrial diversion program.  The Court held that the statute applied only to a “court ordered” diversion program and “here, Kisudila’s entry into the pretrial diversion program was based upon an agreement with the State’s solicitor rather than as a result of an explicit court order.”  The Court also rejected the surety’s argument that the Legislature’s subsequent authorization of pretrial diversion programs established by prosecutors (OCG §15-18-80) implicitly eliminated the court ordered requirement.  The Court noted that the resolution of any tension between the two statutes was for the General Assembly not the courts.

In Ramos v. International Fidelity Insurance Co., 2014 WL 10044905 (Mass.App. July 9, 2015) several plaintiffs who had paid premiums to and deposited collateral with an agent of the surety sued the surety after the agent died without returning the collateral.  The agent’s estate was insolvent, and the plaintiffs sought to recover from the surety even though the agent had not deposited the collateral in an escrow account as required by his contract with the surety.  With one exception, the bonds had not been forfeited.  For the one exception, the surety had negotiated remission of half the forfeiture, and the plaintiff sought return of his collateral to the extent of the remission (that is, he deposited $50,000 with the agent but the surety ultimately had to pay only $25,000).  The plaintiffs also showed that the agent collected 10% premiums for secured bonds but the maximum premium allowed by law was 5%, and they sought return of the overcharges.  Finally, the plaintiffs alleged the surety should be liable for violations of the Massachusetts unfair business practices statute, G.L. c.93A.  The trial court granted summary judgment to the plaintiffs on their claims seeking return of the premium overcharges and collateral but granted summary judgment to the surety on the c.93A claims.  Both sides appealed.

The Court viewed the premium and collateral claims against the surety as ones for breach of contract with the surety liable for the contract made by its authorized agent rather than ones of vicarious liability for fraud.  The Court found that entry into contracts for bail bonds was within the agent’s authority, and the surety was bound by the contracts.  The Court, therefore, affirmed summary judgments for the plaintiffs with prejudgment interest to run from the dates the collateral should have been returned (usually the date the criminal case concluded without a forfeiture of the bond).  The one exception was the case in which there was a forfeiture.  The Court held that the indemnitor was entitled to return of the remitted 50% with prejudgment interest from the date the court reduced the forfeiture amount.

On the G.L. c.93A claims, the Court agreed that the surety’s letters denying liability themselves caused no damages to the plaintiffs but found that the surety could be vicariously liable under c.93A for the agent’s illegal premium overcharges because “Fiore’s entry into contracts for the sale of bail bonds was well within his actual authority.”  The Court reversed summary judgment for the surety on the c.93A claims stemming from the illegal overcharges and remanded those claims including any determination of damages and attorneys fees.

In State v. Anderson, 2015 WL 4078721 (La. App. May 8, 2015) the trial court reinstated a bond pursuant to La.C.Cr.Proc. art. 334.3 after the defendant voluntarily surrendered and a hearing was held.  An alleged representative of the surety’s agent appeared at the hearing and consented to reinstatement of the bond.  On the State’s appeal, the Court found that there was no evidence that the person “was properly acting for the mandatary [the agent] on behalf of the surety, Roche.  The state has a right to insist upon strict proof of Ms. Gladney’s authority to act for Roche.”  The Court, therefore, reversed the order reinstating the bond.