People v. Financial Casualty & Surety

Filed 7/14/17 Certified for Publication 8/10/17 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
THE PEOPLE,
Plaintiff and Respondent,
A145568, A146916
v.
FINANCIAL CASUALTY & SURETY, (City & County of San Francisco
INC., Super. Ct. Nos. 14010983,
CPF15514441)
Defendant and Appellant.
In this consolidated appeal, Financial Casualty & Surety, Inc. (FC Surety) appeals
two orders denying it relief from the forfeiture of a $150,000 bail bond. The trial court
denied FC Surety‘s bail agent‘s initial motion to vacate the forfeiture under Penal Code
section 980, subdivision (b).1 The trial court also denied FC Surety‘s motion to set aside
the summary judgment issued when FC Surety failed to exonerate the bond within the
statutory period. FC Surety contends it was entitled to tolling of the appearance period
under section 1305, subdivision (e); vacation of forfeiture due to defendant‘s custody and
good cause under section 1305.6, subdivision (b); and untimeliness of summary judgment
under section 1306, subdivision (c). We agree FC Surety had valid grounds for relief
under section 1305.6, subdivision (b), so we reverse.
1
All further statutory references are to the Penal Code unless otherwise stated.
1
BACKGROUND
FC Surety, through its bail agent, Bail Hotline Bail Bonds, posted $150,000 bail to
secure Carlos Ventura‘s release from custody in San Francisco.
On September 15, 2014, when Ventura failed to appear in court, the San Francisco
Superior Court issued a bench warrant and declared the bond forfeited. Notice of the
forfeiture was mailed on October 7, 2014. The notice stated FC Surety‘s ―contractual
obligation to pay th[e] bond [would] become absolute on [April 10, 2015], the 185th day
following the date of mailing of this NOTICE unless the court shall sooner order the
forfeiture set aside.‖
On March 12, 2015, FC Surety‘s bail agent discovered Ventura was in custody in
Contra Costa County. The bail agent tried to surrender the warrant issued by the San
Francisco Superior Court and have Ventura held and arrested for the San Francisco case.
Twice, the bail agent asked the Contra Costa County Sheriff to run Ventura‘s identity for
active warrants. On both occasions, the Contra Costa County Sheriff found none, in spite
of verification the bail agent received from the San Francisco Sheriff that there was an
active bench warrant issued by the San Francisco court.
On April 3, 2015, the bail agent moved to vacate the forfeiture and exonerate the
bond. The bail agent argued the failure to enter the San Francisco bench warrant into the
National Crime Information Center as required was a data entry error that prevented
Ventura from being arrested for the San Francisco case and required exoneration of
liability on the bond pursuant to section 980, subdivision (b). The bail agent asserted no
alternative statutory basis for relief. But the caption page, beneath the motion title, stated
―P.C. § 980(b), 1305(e)‖ in brackets.
On April 27, 2015, the trial court denied the motion to vacate forfeiture and
exonerate bail because the bench warrant remained outstanding. The bail agent then
orally requested the court to extend the statutory time to secure Ventura‘s appearance
under section 1305.4. Absent a request in writing, the court denied the oral motion.
On May 8, 2015, FC Surety, represented by new counsel, filed a reconsideration
motion. In part, FC Surety asked the court to toll the appearance period pursuant to Penal
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Code section 1305, subdivision (e), which had been referenced in the initial motion. The
trial court heard and denied FC Surety‘s reconsideration motion on June 16, 2015. Two
days later, FC Surety appealed the April 27, 2015 order in appeal number A145568.
On August 19, 2015, in the absence of any order setting aside the forfeiture, the
court issued summary judgment on the bail forfeiture for $150,000, plus fees, pursuant to
section 1306. On August 21, 2015, the court mailed notice of the judgment.
On September 9, 2015, FC Surety e-filed its motion to set aside summary
judgment, discharge forfeiture, and exonerate the $150,000 bail. FC Surety argued
section 1305, subdivision (c)(3) required the court to exonerate bail because Ventura had
been arrested in Contra Costa County and FC Surety first learned on June 19, 2015, that
the San Francisco warrant had actually been served during the appearance period. It also
argued section 1305.6, subdivision (b) allowed it to file its motion within 20 days of the
court‘s notice of entry of summary judgment. In addition, it informed the court that
Ventura was then in custody in San Francisco County.
On October 27, 2015, the trial court heard the motion and denied it the next day.
In its written order, the court stated, ―Even if the court tolled the 180-day period due to
[Ventura‘s incarceration], the court still entered summary judgment within 90 days of
[FC Surety‘s] Motion for Reconsideration. Defendant also untimely filed their instant
motion. Motions under section 1305(c)(3) were meant to be filed within the 180-day
period, unless the period is extended.‖
On November 9, 2015, FC Surety appealed this order in appeal number
A146916. In response to the People‘s unopposed motion, we consolidated appeals
A145568 and A146916 for purposes of briefing, oral argument, and a decision.
DISCUSSION
A. Bail Bond Forfeitures and Relief from Forfeiture
A bail bond ― ‗is a contract between the surety and the government whereby the
surety acts as a guarantor of the defendant's appearance in court under the risk of
forfeiture of the bond.‘ ‖ (People v. American Contractors Indemnity Co. (2004) 33
Cal. 4th 653, 657 (American Contractors).)
3
The statutory scheme governing bail forfeitures provides that: If a criminal
defendant out on bail fails to appear in court when lawfully required to do so, the trial
court must declare the bail forfeited. (§ 1305, subd. (a)(1).) The clerk must mail notice
of forfeiture to the surety for bonds over $400, and then the surety has 180 days, plus an
additional 5 days for mailing, to bring the criminal defendant into court. (§ 1305, subds.
(b)-(c).) These 185 days are known as the appearance period. (People v. The North
River Ins. Co. (2011) 200 Cal. App. 4th 712, 718 (North River).) Under section 1305.4,
the surety may seek an extension of the appearance period of up to another 180 days upon
a showing of good cause. (§ 1305.4.) Under section 1305, subdivision (e)(1), the
appearance period can be tolled in the case of a ―temporary disability.‖ (§ 1305, subd.
(e)(1).) Detention by civilian authorities or incarceration in another jurisdiction is
considered a temporary disability. (People v. Lexington National Insurance Corp. (2010)
181 Cal. App. 4th 1485, 1491 (Lexington).)
During the appearance period, the surety is entitled to move to have the forfeiture
vacated and the bond exonerated on grounds specified in the statute. (§ 1305, subd.
(c)(1); American Contractors, supra, 33 Cal.4th at p. 658.) One such ground is set forth
in section 1305, subdivision (c)(3), which requires the court to vacate forfeiture and
exonerate bail ―[i]f, outside the county where the case is located, the defendant is
surrendered to custody by the bail agent or is arrested in the underlying case within the
180-day period.‖ (§ 1305, subd. (c)(3).)
If, at the end of the appearance period, forfeiture has not been vacated, the trial
court must enter summary judgment against the surety. (§ 1306, subd. (a).) Under
section 1305.6, ―upon a showing of good cause,‖ a surety may file a section 1305,
subdivision (c)(3) motion ―within 20 days from the mailing of the notice of entry of
judgment under Section 1306.‖ (§ 1305.6, subd. (b).)
―The purpose of bail and of its forfeiture . . . is to ensure the accused‘s attendance
and obedience to the criminal court, not to raise revenue or to punish the surety.‖
(People v. Financial Casualty & Surety, Inc. (2016) 2 Cal.5th 35, 42.)
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B. Standard of Review
―[A]s a general rule, the statutes governing bail are strictly construed to avoid
forfeiture.‖ (People v. Accredited Surety Casualty Co. (2014) 230 Cal. App. 4th 548, 556
(Accredited).) ―The law disfavors forfeitures in general and bail forfeitures in particular
. . . . This policy of strict construction to avoid forfeitures protects the surety ‗and more
importantly the individual citizens who pledge to the surety their property on behalf of
persons seeking release from custody.‘ ‖ (Id. at p. 555–556, citation omitted.)
Regarding the particular standard of appellate review in this case, the parties
disagree. FC Surety contends our review here is de novo ―since there are no factual
disputes and the issue is purely legal.‖ The People, however, contend we review for
abuse of discretion. Both parties are correct to a degree.
―Ordinarily, appellate courts review an order denying a motion to vacate the
forfeiture of a bail bond under an abuse of discretion standard. [Citation.] When the
appellate court is deciding only legal issues, however, such as jurisdictional questions and
matters of statutory interpretation, the abuse of discretion standard does not apply.
[Citation.] When the facts are undisputed and only legal issues are involved, appellate
courts conduct an independent review.‖ (People v. International Fidelity Insurance Co.
(2012) 204 Cal. App. 4th 588, 592.)
The parties do not engage in any substantive argument on the controlling standard
in this case. We need not reconcile the differences, since under either the abuse of
discretion standard or de novo review, the result here would be the same.
C. Section 1305.6, subdivision (b)
As one of its grounds for reversal, FC Surety argues the trial court erred by
denying its motion to set aside summary judgment, discharge forfeiture, and exonerate
bail, which sought substantive relief under section 1305, subdivision (c)(3) because
Ventura was in custody in another county. Pursuant to section 1305.6, subdivision (b), it
contends its motion was timely filed and supported by good cause. We agree.
As explained above, following summary judgment on a bond forfeiture, section
1305.6, subdivision (b), authorizes a section 1305, subdivision (c)(3) motion to be filed
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―[u]pon a showing of good cause . . . [and] within 20 days from the mailing of the notice
of entry of judgment under section 1306.‖ (§ 1305.6, subd. (b).)
The trial court ruled FC Surety‘s motion was untimely. On appeal, the People
offer no defense of the court‘s timeliness analysis under section 1305.6, subdivision (b).
Rather, the People posit that even if FC Surety‘s motion was timely, relief under section
1305.6 was still improper because the surety failed to show good cause for not filing its
motion within the appearance period. Not so.
First, FC Surety‘s motion was timely. To be timely under section 1305.6,
subdivision (b), its motion had to be ―filed within 20 days from the mailing of the notice
of entry of judgment under section 1306.‖ (§ 1305.6, subd. (b).) Here, the court mailed
notice of entry of judgment on August 21, 2015. FC Surety had 20 days—until
September 10, 2015—to file its section 1305, subdivision (c)(3) motion. (Ibid.)
Notwithstanding the September 11, 2015 file-stamp on this motion, the record shows FC
Surety electronically submitted its motion on September 9, 2015, at 5:30 p.m. and it was
stamped once FC Surety had addressed an issue regarding payment of court reporter fees
per local rules ―A paper submitted before the close of the clerk‘s office on the day the
paper is due is deemed timely filed.‖ (Cal. Rules of Court, rule 3.1300(e).) Since the
motion was deemed filed on September 10, 2015, the statutory deadline, it was timely.
Further, ―[i]f a document is presented to the clerk‘s office for filing in a form that
complies with the rules of court, the clerk‘s office has a ministerial duty to file it.
[Citation.] Even if the document contains defects, the clerk‘s office should file it and
notify the party that the defect should be corrected.‖ (Voit v. Superior Court (2011) 201
Cal. App. 4th 1285, 1287.) In light of the evidence of a timely electronic submission, the
trial court erred in ruling FC Surety‘s motion untimely.
Second, FC Surety also demonstrated good cause. Accredited, supra, 230
Cal. App. 4th 548 the only published case available on section 1305.6 (enacted in 2012),
analyzed the good cause requirement as a matter of first impression. (See id. at p. 557.)
Both parties cite to its good cause standard, which we apply. Under Accredited, good
cause ―contains an objective component (i.e., reasonableness) and a subjective good faith
6
component. In determining whether a surety acted reasonably and in good faith, courts
must consider the totality of the circumstances and evaluate the reasons given by the
surety for not filing a motion within the 185-day appearance period.‖ (Id. at pp. 551–
552.) Good faith is inferred if ―[t]here are no facts in the record that suggest the bail
agent was acting dishonestly or attempting to mislead anyone when he did not file a
motion to vacate the forfeiture during the appearance period.‖ (Id. at p. 563.)
FC Surety‘s subjective good faith is easily established here. There are no facts in
the record showing FC Surety acted dishonestly or attempted to mislead anyone by not
filing its section 1305, subdivision (c)(3) motion any earlier. Therefore, we conclude FC
Surety‘s bail agent acted in good faith and FC Surety satisfied the subjective component
of the good cause requirement. (See Accredited, supra, 230 Cal.App.4th at p. 563.)
The closer question is whether FC Surety‘s actions were objectively reasonable.
Again, we turn to Accredited. In that case, bail was forfeited when the defendant failed
to appear in the Fresno County Superior Court. (Accredited, supra, 230 Cal.App.4th at p.
552.) The bail agent subsequently learned the defendant had been arrested in Sacramento
County and that a hold had been placed on him in the Fresno case. (Ibid.) The bail
agent, however, did not file a section 1305, subdivision (c)(3) motion because he believed
the defendant would be returned to Fresno prior to the expiration of the 180-day
appearance period once his Sacramento case was completed. (Id. at p. 553.)
Towards the end of the appearance period, the bail agent contacted the Fresno
County court clerk several times to determine if the defendant had been returned to
Fresno. (Accredited, supra, 230 Cal.App.4th at p. 553.) The defendant‘s file could not
be located, but the bail agent received from the clerk a printed minute order showing the
exoneration of a bail bond. (Ibid.) Later the bail agent learned the exoneration related to
a prior bond issued by another surety, so he returned to the court to inquire about the
correct bond but without success due to the lost file. (Ibid.) The day after the trial court
entered summary judgment on the bond, the bail agent discovered the defendant‘s file
had been located and the bond had not been exonerated. (Id. at p. 554.) The surety
moved to set aside the summary judgment based on section 1305, subdivision (c)(3)
7
given the defendant was in custody in another jurisdiction. (Ibid.) The trial court denied
relief. (Ibid.)
The Court of Appeal affirmed. (Accredited, supra, 230 Cal.App.4th at p. 566.) It
concluded there was no good cause for the motion because the bail agent‘s conduct was
not reasonable. (Id. at pp. 563–565.) The bail agent provided no basis for his belief
Sacramento County would return the defendant to Fresno within the appearance period
because he also had outstanding warrants in other counties. (Id. at pp. 563–564.) Nor
could the court evaluate whether the bail agent acted reasonably in relying on the minute
order stating a bond had been exonerated because the minute order was not included in
the record on appeal. (Id. at p. 565.)
Here, in contrast to Accredited, there is enough evidence for us to conclude FC
Surety‘s decision to not file a section 1305, subdivision (c)(3) motion within the
appearance period was objectively reasonable. FC Surety‘s bail agent discovered
Ventura was in custody in Contra Costa County on March 12, 2015. At that point, the
record shows FC Surety‘s bail agent attempted to get the San Francisco warrant served in
order to hold him and have him arrested for the San Francisco case. However, the Contra
Costa County Sheriff twice informed the bail agent it had no warrants for Ventura in its
system. In light of the Sheriff‘s persistent notice that there was no warrant for Ventura in
the system, FC Surety‘s bail agent elected to seek exoneration of the bond under section
980, subdivision (b), which gives the trial court discretion to set aside a bail forfeiture if
the defendant‘s warrant is not entered into the national system and if the court finds that
this failure to enter the warrant prevents the fugitive from being arrested. (People v.
American Contractors Indemnity Co. (1999) 76 Cal. App. 4th 1408, 1417.) Unfortunately,
the court concluded the bail agent failed to make the showing required under section 980
and its motion was denied on April 27, 2015, after the appearance period expired. FC
Surety then replaced counsel, sorted out the discrepancies regarding the warrant, filed a
motion to reconsider, and asserted other available grounds to vacate the forfeiture or toll
the appearance period. Since there was a colorable basis to vacate the forfeiture under
the section 980 motion based on the information originally supplied to the bail agent, and
8
because it had filed this motion within the appearance period, FC Surety proceeded
reasonably.
The People contend FC Surety did not proceed in good faith or reasonably because
it assumed the government made a mistake with the warrant, and based its entire strategy
on that unwarranted assumption. The People also question why FC Surety did not fully
investigate why Contra Costa County did not have a hold on Ventura from San Francisco
or file a motion requesting all forms of relief alternative available. The People argue
such conduct cannot be deemed reasonable.
None of the People‘s points go to good faith. ―Subjective good faith means a state
of mind denoting honesty of purpose and freedom from intention to defraud or mislead.‖
(Accredited, supra, 230 Cal.App.4th at p. 560, fn. 9.) The People‘s criticisms do not
impugn FC Surety‘s honesty or intentions but instead criticize its reliance on a singular
legal theory under which the surety brought its first motion as unreasonable.
Here, the People raise fair points. In hindsight, FC Surety‘s approach to resolve
the matter was easily capable of improvement. Had its bail agent earlier been able to
confirm the fact that Ventura had actually been served the San Francisco warrant in
Contra Costa County in March 2015, the surety could have probably secured the relief it
has now taken three motions and a consolidated appeal to pursue. However, we will not
conclude that FC Surety had to interrogate the Sheriff‘s clerks to pass the threshold of
reasonableness. Based on the information it received from the Contra Costa County
Sheriff, it pursued a viable avenue for relief that it believed would result in relief from
forfeiture and exoneration of bail. We are not convinced FC Surety proceeded
unreasonably in doing so, especially because forfeitures are disfavored.
The People also contend this case involves ―almost the same facts‖ as Accredited
and that FC Surety advances ―a similar argument‖ as the surety in that case, in which the
court denied the surety relief from forfeiture. We disagree. The People disregard the fact
that FC Surety‘s bail agent made attempts to get the San Francisco warrant served on
Ventura in Contra Costa County and twice was given incorrect information on Ventura‘s
status by the Sheriff. In Accredited, the surety‘s conduct reflected a laissez-faire
9
approach with the operating assumption that bail would eventually be exonerated through
the normal course of events. Also, unlike FC Surety, the surety in Accredited never
attempted to file a motion for relief within the appearance period on any basis. The
proactive steps undertaken by FC Surety‘s bail agent are enough to distinguish our case
from Accredited.
Finally, the People contend FC Surety was not entitled to relief under section
1305.6 because it ―did not file a section 1305(c)(3) motion within the 180-day appearance
period.‖ The trial court‘s October 28, 2015 order rejected FC Surety‘s motion to set
aside summary judgment, in part, on similar grounds. The court stated, ― ‗[M]otions
under section 1305(c)(3) were meant to be filed within the 180-day period, unless the
period is extended. The policy disfavoring forfeiture cannot overcome the plainly
intended meaning of the statute . . . failure to bring a timely motion results in a statutory
bar to relief, not a windfall to the county.‘ (People v. Indiana Lumbermans Mut. Ins. Co.
(2010) 49 Cal. 4th 301, 308 [Indiana Lumbermans].)‖ On this point, the People offer no
further legal argument or authority so we are inclined to pass on it without consideration.
(See Sprague v. Equifax, Inc. (1985) 166 Cal. App. 3d 1012, 1050.) However, we disagree
with the trial court‘s comments. Both the People and trial court‘s position controvert the
plain language of section 1305.6, subdivision (b), which expressly authorizes ―[u]pon a
showing of good cause, a motion brought pursuant to paragraph (3) of subdivision (c) of
Section 1305 . . . within 20 days from the mailing of notice of entry of judgment.‖ (§
1305.6, subd. (b).) Indiana Lumbermans, supra, 49 Cal.4th at p. 301, the 2010 case cited
by the trial court, does not even consider section 1305.6, which was enacted in 2012, and
it provides no authority that limits its application. Otherwise, the People cite no
authority, nor have we found any, that supports its apparent position that a surety must
file a section 1305, subdivision (c)(3) motion during the 180-day appearance period in
order to avail itself of section 1305.6, subdivision (b). Accordingly, this argument also
does not bar the surety from filing its section 1305, subdivision (c)(3) motion as
permitted by section 1305.6, subdivision (b) as long as the good cause and timeliness
requirements were satisfied, which they were.
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D. Section 1305, subdivision (c)(3)
Because we conclude that FC Surety‘s motion to set aside summary judgment,
discharge forfeiture, and exonerate bail was timely and supported by good cause, we
must next determine whether the surety should have been granted relief under section
1305, subdivision (c)(3). As noted, this provision provides that a court ―shall vacate the
forfeiture and exonerate the bail‖ ―[i[f, outside the county where the case is located, the
defendant is surrendered to custody by the bail or is arrested in the underlying case.‖
(§1305, subd. (c)(3).) ― ‗[A]rrest‘ includes a hold placed on the defendant in the
underlying case while he or she is in custody on other charges.‖ (§ 1305, subd. (i).) The
record shows that on March 12, 2015, within the 185-day appearance period, upon
Ventura‘s arrest in Contra Costa County, the warrant from the San Francisco case was
served on Ventura and he was held, or arrested, for that matter. Moreover, FC Surety
first learned the warrant was served in June 2015, after the court had declined to
reconsider the motion for exoneration. These facts require that summary judgment be set
aside, the forfeiture discharged, and the bond vacated.
Based on our decision, we need not address the other grounds FC Surety asserts
for reversal.
DISPOSITION
The October 28, 2015 order of the trial court denying FC Surety‘s motion to set
aside summary judgment, discharge forfeiture, and exonerate bail is vacated. On remand,
the trial court is to enter a new and different order vacating the forfeiture and exonerating
all liability on bail bond number FCS250-1294399. The appeal of the April 27, 2015
order of the trial court (A145568) is moot. Each party is to bear its own costs on appeal.
11
_________________________
Siggins, J.
We concur:
_________________________
McGuiness, P.J.
_________________________
Jenkins, J.
People v. Financial Casualty & Surety, A146916, A145568
12
Filed 8/10/17
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
THE PEOPLE,
Plaintiff and Respondent,
A145568, A146916
v.
FINANCIAL CASUALTY & SURETY, (City & County of San Francisco
INC., Super. Ct. Nos. 14010983,
CPF15514441)
Defendant and Appellant.
ORDER CERTIFYING OPINION
FOR PUBLICATION
THE COURT:
The opinion filed in the above-entitled matter on July 14, 2017, was not certified
for publication in the Official Reports. For good cause, the request for publication by
defendant and appellant is granted.
Pursuant to rule 8.1105(b) of the California Rules of Court, the opinion in the
above-entitled matter is ordered certified for publication in the Official Reports.
DATE: _________________________
Siggins, Acting P.J.
Trial Court: San Francisco City and County Superior
Court
Trial Judge: Hon. Bruce E. Chan, Hon. Ernest
Goldsmith
Counsel:
John Mark Rorabaugh, Alan E. Nunez, Robert Tomlin White, Adam Phillip Sostrin, for
Appellant.
Dennis J. Herrera, City Attorney, Cheryl Adams, Chief Trial Deputy, Diana Rosenstein,
Deputy City Attorney, for Respondent.