In Re: Cumberland Bail Bonding Company ( 2013 )

IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT KNOXVILLE
May 21, 2013 Session
IN RE CUMBERLAND BAIL BONDING COMPANY
Appeal from the Criminal Court for Roane County
No. 73CC1-2007-CR-4218 E. Eugene Eblen, Judge
No. E2012-02556-CCA-R3-CO - Filed September 3, 3013
The Appellant, Cumberland Bail Bonding Company, appeals the Roane County Criminal
Court’s denial of its petitions to write bonds in the Criminal Courts of the Ninth Judicial
District. On appeal, the Appellant argues that because it met all the necessary qualifications
for bonding companies, the trial court’s order withholding approval for it to write bonds
should be reversed, and the case should be remanded with instructions to approve it to write
bonds as requested or with instructions to implement the procedures outlined in Tennessee
Code Annotated section 40-11-125 in an expedited fashion. Upon review, we reverse the
judgment of the trial court and remand the case for entry of an order approving the Appellant
to write bonds in the Ninth Judicial District.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Criminal Court Reversed
and Remanded
C AMILLE R. M CM ULLEN, J., delivered the opinion of the court, in which JOSEPH M. T IPTON,
P.J., and J AMES C URWOOD W ITT, J R., J., joined.
Donald A. Bosch and Ann C. Short, Knoxville, Tennessee (on appeal), and Stephen T. Greer,
Dunlap, Tennessee, and Andrew L. Berke, Chattanooga, Tennessee (at trial), for the
Appellant, Cumberland Bail Bonding Company.
Robert E. Cooper, Jr., Attorney General and Reporter; John H. Bledsoe, Assistant Attorney
General; Russell Johnson, District Attorney General; and William (Bill) Reedy, Assistant
District Attorney General, for the Appellee, State of Tennessee.
OPINION
FACTS
On April 4, 2007, the Appellant, through its owner Thomas A. Baggenstoss, filed in
the Roane County Criminal Court a petition for approval to write bonds in Roane and Meigs
Counties, which are located in the Ninth Judicial District. At the time, the Appellant had
been approved to write bail bonds in the Twelfth Judicial District and had been doing
business in that judicial district for over two years.
On May 25, 2007, following an appearance by the Appellant and Appellant’s counsel
in open court, the trial court entered an order stating that the Appellant had “met the
qualifications required by law to be authorized to write bail bonds in and for Roane and
Meigs Counties” and that the Appellant was “ready, willing and able to deposit with the
Clerk of the Court the required deposit for each county in which to write bail bonds[.]” In
the order, the court stated that it was taking the petition under advisement.
On March 29, 2012, the Appellant filed an amended petition in the Roane County
Criminal Court for approval to write bonds in Roane, Meigs, Morgan, and Loudon Counties,
all four of the counties in the Ninth Judicial District. On the same day, the Appellant filed
a “Motion for Instructions” asking for guidance in reaching “a final determination” in its
2007 petition for authority to write bonds in and for Roane and Meigs Counties, given that
it had “met all of the qualifications required by law and all of the requirements of this Court
to write bail bonds in each county.”
On September 14, 2012, the Appellant filed a Notice of Filing, which included letters
of recommendation from Eric Watson, the state representative for District 22; Casey Stokes,
an attorney; Ronnie “Bo” Burnett, the Marion County Sheriff; and Jim Ruth, the Bradley
County Sheriff. In addition, on September 25, 2012, the Appellant filed a letter from Sarah
Watkins Bledsoe, a past Loudon County Republican Party Chairperson, to the District
Attorney General of the Ninth Judicial District recommending the Appellant.
Also on September 25, 2012, the District Attorney General for the Ninth Judicial
District filed a response to the petitions in this case:
The District Attorney General feels that the Ninth Judicial District,
including Loudon, Meigs, Morgan and Roane Counties[,] are adequately
served by a sufficient number of bail bonding companies at this point. As both
a three[-]term state legislator and as a District Attorney General for over six
years, I am familiar with the competition among bail bonding companies and
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agents for business in the counties and districts throughout the State of
Tennessee. As such, I have seen a number of problems and issues with too
many companies competing for business in one county. Since the bail bonding
business in Tennessee is not based on a free market economy in that bail
bonding companies and their agents do not negotiate the ten percent (10%) fee
that is required for writing a bond, there is no economic incentive provided by
a multitude of companies working in one area. In fact, too many bonding
companies end up splitting the proverbial economic pie such that unethical
tactics tend to proliferate and the regulation of such requires an increasing
amount of attention from the courts and the district attorney general’s offices.
This is not to say that Cumberland Bail Bonding Company has such a
reputation.
However, with the foregoing being stated, the District Attorney’s Office
submits that it is entirely within the discretion of the Court as to how many bail
bonding companies and which bail bonding companies are granted permission
or otherwise approved for writing bonds in their respective districts. The
District Attorney General, therefore, leaves it to the wisdom and discretion of
the Court as to what decision is made on the within petition.
On October 15, 2012, the trial court conducted a brief hearing on the petitions. The
court stated that it had reviewed the petitions and the recommendation from the District
Attorney General and asked the Appellant if it had filed its financial documentation.
Appellant’s counsel responded that the Appellant had filed its financial documentation in
every district but had not filed it with the petitions and would be happy to file it for the court.
Then the following exchange occurred between the trial court and Appellant’s counsel:
[Appellant’s counsel]: . . . This is Mr. Baggenstoss as you may see from
the petition he’s filed–he’s certified in a number
of other counties.
The Court: Yeah. Right now we [are] real adequate on our
bonding part but I’ll keep you in line.
[Appellant’s counsel]: Well, Your Honor–
The Court: One [other company] has withdrawn their petition
so that’d move you up if I put anybody in, why
you’ll be first now.
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[Appellant’s counsel]: Your Honor, if I may–if I may approach?
The Court: Certainly.
[Appellant’s counsel]: I’ll give this to you and the General as well.
The Court: Yes.
[Appellant’s Counsel]: As you may know the regulation of bonding
companies is governed by [Code section] 40-11-
125 and this has the reasons in it for . . . refusal to
. . . authorize a bonding company. It basically
says the Court can . . . do that for four reasons.
One is any kind of violation of . . . Chapter
Three . . . he can be denied and his bonding
license can be withdrawn or suspended. And that
says in [subpart] “a” that if he’s been guilty of
[violating] any of the laws of the State relating to
bail bonds, if he’s had a final judgment of
forfeiture [entered] against him or is guilty of
professional misconduct [as described in Code
section 40-11-126], those are the reasons to deny
it.
The Court: Yes.
[Appellant’s counsel]: I would submit to this Court that there has been
none of those things and that under [Code section]
40-11-125 . . . he should be authorized by this
Court [to write bonds].
The Court: Yes, I had already checked all those things out.
He meets the qualifications[,] and if I add
anybody in, why, Cumberland Bonding will be
first now.
[Appellant’s counsel]: Okay, so are you denying it at this time.
The Court: I’m just not going to add it at this time.
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[Appellant’s counsel]: Okay. Well, I understand that Your Honor. If
you are denying it[,] then I think that he is entitled
to an appeal de novo to the [Court of Criminal
Appeals] is why I’m asking.
The Court: Well, if you want to do an appeal[,] then just put
it down as a denial at this time so you can do an
appeal.
[Appellant’s counsel]: Okay. All right.
The Court: That’d be fine.
On October 18, 2012, the trial court entered an order denying the Appellant’s
petitions. Specifically, it found, after reviewing the petition, amended petition, motion for
instructions, district attorney’s response, and entire record, that the Appellant was “qualified
to write bonds under the Release from Custody and Bail Reform Act of 1978” and that it
would “be the next bonding company approved to write bail bonds in the area, if the Court
allow[ed] additional bondsmen.”
On November 15, 2012, the Appellant filed a Statement of Financial Condition
detailing its assets, liabilities, and net worth. On November 16, 2012, the Appellant filed a
timely notice of appeal.
ANALYSIS
The Appellant argues that because it met all the necessary qualifications to write
bonds, the trial court’s order withholding approval should be reversed, and the case should
be remanded to the trial court with instructions to approve it to write bonds in the Ninth
Judicial District. Alternatively, the Appellant argues that the trial court’s order should be
reversed and remanded with instructions that within thirty days, the trial court will conduct
a hearing and either affirm that it meets all the qualifications and is approved to write bonds
in the Ninth Judicial District or withhold approval and follow the directives in Code section
40-11-125(b).
Specifically, the Appellant argues that the governing statutes do not give the trial court
the authority to create “an arbitrary ‘waiting list’ for bonding companies that meet all the
qualifications to write bonds.” It asserts that by creating such a list, “[t]he trial court is, in
effect, judicially maintaining a type of oligopoly to which only a select group of bonding
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companies belong.” The Appellant also argues that “[w]hatever may be said of a trial court’s
inherent power regarding the making of bonds, surely that power does not extend to
manipulating the economic market for bonding companies.”
In response, the State concedes that the Appellant meets the minimum requirements
to write bonds in criminal cases in the Ninth Judicial District but argues that the Appellant
has failed to show the trial court abused its discretion in denying its petitions. It asserts,
citing Taylor v. Waddey, 334 S.W.2d 733 (Tenn. 1960), that “the trial court reasonably
concluded that the judicial district needs no additional bonding agents at this time to secure
the court appearances of criminal defendants, and the appellant cannot show that the trial
court acted abitrar[il]y and capriciously in its decision.” Upon review, we reverse and
remand the case for entry of an order approving the Appellant to write bonds in the Ninth
Judicial District.
Contrary to the State’s claim that an abuse of discretion standard applies to this case,
this court must review a trial court’s denial of a bondsman’s application under a de novo
standard of review. T.C.A. § 40-11-125(d). The trial court has full authority to determine
who shall qualify as a bondsman in its court. Gilbreath v. Ferguson, 260 S.W.2d 276, 278
(Tenn. 1953). Specifically, the court has the power to inquire as to the solvency of any
bondsman and to investigate the value of a bondsman’s assets and liabilities. T.C.A. § 40-
11-305. In addition, the court has the power to prohibit a bondsman from executing bonds
until the court becomes satisfied that the bondsman has become financially solvent, and the
court can impose reasonable limitations on the total liability of the bondsman’s undertakings
in its court. Id. § 40-11-306. Also, a trial court may prohibit a bondsman from executing
bonds if that bondsman “has individually or as a corporation owner been discharged in a
bankruptcy proceeding leaving unsatisfied outstanding forfeitures with any court[.]” Id. §
40-11-317(c).
We note that “a trial court has the inherent power to administer its affairs, including
the right to impose reasonable regulations regarding the making of bonds.” Hull v. State, 543
S.W.2d 611, 612 (Tenn. Crim. App. 1976) (citing Taylor, 334 S.W.2d at 736). “So long as
these regulations [governing bondsmen] are not capricious, arbitrary or solely without basis
of right, then these acts may be properly supervised by the court in its ministerial capacity[.]”
Taylor, 334 S.W.2d at 736. Moreover, the statutory requirements for bondsmen “do[] not
by any stretch of the imagination attempt to cover the whole field of what is necessary for
a bondsman before he is allowed to make bonds in the various courts.” Id. However, “[s]o
long as the bondsman complies with the statutes above referred to and meets a fair and
reasonable standard in the conduct of his business before these courts then there is no one
going to prevent him from practicing his profession therein.” Id. at 737.
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Tennessee Code Annotated section 40-11-125(a) outlines the ways in which a
professional bondsman’s approval may be withheld, withdrawn, or suspended by the trial
court:
In addition to the requirements of part 3 of this chapter regulating professional
bondsmen, approval of a professional bondsman or other surety may be
withheld, withdrawn or suspended by any court if, after investigation, it
appears that a bondsman:
(1) Has been guilty of violating any of the laws of this state relating to bail
bonds;
(2) Has a final judgment of forfeiture entered against the bondsman which
remains unsatisfied; or
(3) Is guilty of professional misconduct as described in § 40-11-146.
T.C.A. § 40-11-125(a) (amended April 16, 2013). A court may not withhold approval of a
bondsman without notifying the bondsman in writing of the action taken and of the charges
resulting in the action and without providing the bondsman with the opportunity to file an
answer denying the charges and to present proof at an evidentiary hearing:
Any court withholding, withdrawing or suspending a bondsman or other surety
under this section shall notify the bondsman in writing of the action taken,
accompanied by a copy of the charges resulting in the court’s action. If, within
twenty (20) days after notice, the bail bondsman or surety files a written
answer denying the charges or setting forth extenuating circumstances, the
court shall call a hearing within a reasonable time for the purpose of taking
testimony and evidence on any issues of fact made by the charges and answer.
The court shall give notice to the bail bondsman, or to the insurer represented
by the bondsman, of the time and place of the hearing. The parties shall have
the right to produce witnesses, and to appear personally with or without
representation by counsel. If, upon a hearing, the court determines that the bail
bondsman is guilty as alleged in the charges, the court shall thereupon
withhold, withdraw or suspend the bondsman from the approved list, or
suspend the bondsman for a definite period of time to be fixed in the order of
suspension.
Id. § 40-11-125(b).
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Here, the trial court acknowledged that the Appellant was qualified to write bonds
under the Bail Reform Act of 1978 but denied the Appellant’s petitions because it was not
approving new bondsmen in the judicial district. We begin by noting that an October 4, 1989
Attorney General Opinion, which squarely addresses this issue, states that “[t]he Legislature
has vested the Circuit and Criminal courts with jurisdiction and powers conferred by
[Tennessee Code Annotated section] 40-11-101, et seq., none of which authorize the
limitation of the number of bail bondsmen within the courts’ judicial districts.” Tenn. Op.
Atty. Gen., No. 89-132, 1989 WL 434624 (Oct. 4, 1989), at *2. The opinion concludes that
in the absence of a specific legislative grant of authority, a trial court has no power to limit
the number of bail bondsmen within its jurisdiction:
Although [Code sections 40-11-124(a), -125(a), and -303(a)] grant
circuit courts exercising criminal jurisdiction limited supervisory authority
over bail bondsmen, they do not provide any authority for courts to limit the
number of bondsmen in the jurisdiction. Thus, it appears a circuit court judge
has no power to limit the number of bail bondsmen within its jurisdiction
absent an express legislative grant of such authority.
Id. (emphasis added).
We acknowledge that “[a]lthough opinions of the Attorney General are useful in
advising parties as to a recommended course of action and to avoid litigation, they are not
binding authority for legal conclusions, and courts are not required or obliged to follow
them.” Washington Cnty. Bd. of Educ. v. MarketAmerica, Inc., 693 S.W.2d 344, 348 (Tenn.
1985); State v. Blanchard, 100 S.W.3d 226, 230 (Tenn. Crim. App. 2002) (“[O]pinions of
the state attorney general are merely advisory and do not constitute legal authority binding
on this Court.”). However, the Tennessee Supreme Court has held that although Attorney
General Opinions are not binding, they are “entitled to considerable deference.” State v.
Black, 897 S.W.2d 680, 683 (Tenn. 1995). Because Tennessee law does not provide
sufficient guidance on this issue, we find the October 4, 1989 Attorney General Opinion
helpful in determining whether the Appellant is entitled to relief in this case.
Moreover, the relevant statutes, though failing to directly address the issue on appeal,
lend support to the conclusion that a trial court does not have the power to limit the number
of bail bondsmen within its jurisdiction absent a legislative grant of authority. Notably, all
the statutes giving the trial court the power to withhold approval to write bonds focus on the
bondsman’s insolvency, unprofessional conduct, violation of laws related to bail bonds, or
violation of the requirements regulating professional bondsmen in part 3 of this chapter, none
of which are applicable in this case. See T.C.A. §§ 40-11-125 (withholding, withdrawing,
or suspending approval of bondsmen for insolvency, unprofessional conduct, violation of
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laws related to bail bonds, or violation of the requirements regulating professional bondsmen
in part 3 of this chapter), 40-11-126 (defining unprofessional conduct for bondsmen); 40-11-
127 (allowing a district attorney general to file a motion to have a bondsman stricken from
the approved list pursuant to Code section 40-11-125); 40-11-128 (disqualifying convicted
felons as bondsmen); 40-11-303 (requiring bondsmen to file semiannual report of assets and
liabilities); 40-11-305 (empowering the trial court to investigate a bondsmen’s solvency); 40-
11-306 (authorizing the trial court to prohibit bondsmen from executing bonds if the
bondsmen is insolvent or failed to file semiannual reports of assets and liabilities or filed
false reports); 40-11-317 (authorizing the trial court to prohibit bondsmen from executing
bonds if the bondsman has been discharged in bankruptcy leaving unsatisfied outstanding
forfeitures).
Furthermore, the single case in which this court affirmed the trial court’s withholding
of approval to write bonds for reasons other than insolvency, unprofessional conduct,
violation of laws related to bail bonds, or violation of the requirements in part 3, centered on
the trial court’s determination that the bondsman was untrustworthy. See Kimyata
Izevbizuaiyamu v. State, No. W2012-00017-CCA-R3-CD, 2012 WL 6115092, at *5-6 (Tenn.
Crim. App. Dec. 10, 2012) (affirming the trial court’s denial of Appellant’s application to
write bail bonds on the grounds that the Appellant “was unsuitable to be entrusted yet again
with the privilege of writing bonds in Shelby County[,]” because the Appellant had “betrayed
the trust of the court,” and because the Appellant had “showed an inability to be trusted with
court documents”). This scenario is also not applicable in this case. Consequently, we agree
with the message in Taylor: “So long as the bondsman complies with the [relevant] statutes
. . . and meets a fair and reasonable standard in the conduct of his business before these
courts then there is no one going to prevent him from practicing his profession therein.”
Taylor, 334 S.W.2d at 737. The trial court’s judgment is reversed and remanded for entry
of an order approving the Appellant to write bonds in the Ninth Judicial District.
CONCLUSION
Upon review, we reverse the judgment of the trial court and remand the case for entry
of an order approving the Appellant to write bonds in the Ninth Judicial District.
______________________________
CAMILLE R. McMULLEN, JUDGE
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