Failure to Issue Summary Judgment Within 90 Days Exonerates Surety Bond

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Trial Court’s Lack of Action Made Moot the Issues Raised on Appeal

Bankers Insurance Company (the Surety) appealed from trial court orders denying its motion to vacate forfeiture and exonerate bail and denying its subsequent motion to toll time. Because the trial court failed to timely enter summary judgment and now lacks jurisdiction to enforce the forfeiture under Penal Code section 1306, subdivision (c), in any event, the court refused to reach the merits. In The People v. Bankers Insurance Co., A157633, Court Of Appeal Of The State Of California (June 10, 2021) was asked to deal with the refusal of the state to exonerate a bond when faced with evidence from the surety that the defendant was in custody and could not appear.

FACTUAL BACKGROUND

On August 9, 2018, the Surety, through its bail agent Bail Hotline Bail Bonds, posted a bond of $100,000 for the release of Jammie Lee (Lee or defendant) from the San Mateo County Jail. On September 13, 2018, Lee failed to appear at a scheduled preliminary hearing. The court issued a bench warrant for Lee and ordered the bail forfeited.

On September 21, 2018, the clerk of the court mailed a “Notice of Order Forfeiting Bail” to the Surety. The notice provided, “You may seek relief from this forfeiture in accordance with California Penal Code sections 1305 through 1306. You have 180 days from the date of this notice to seek such relief, plus 5 more days if this notice was mailed to you.”

The Surety filed a motion to vacate the forfeiture and exonerate the bail. Supporting exhibits indicated that Lee was currently in custody in the Alameda County Jail on federal charges and that the San Mateo County District Attorney’s Office had been notified of defendant’s detention in federal custody. In a supporting declaration, Roman Clark, a fugitive recovery agent, stated, first, that Alameda County was informed of Lee’s San Mateo County warrant, but a jail employee would not sign a form accepting or declining surrender and, second, that a law enforcement employee in San Mateo County reported she was unable to place a hold on Lee.

In support of its first argument, the Surety relied on the principle “where the government interferes with the performance of the bail contract or makes performance impossible the bond is exonerated.” It argued Clark diligently tried to have defendant surrendered on the warrant, but “Despite proper surrender documentation given by the bail agent to the jailer on January 4, 2019, . . . the Alameda County Sheriff’s Department refused to accept the surrender of the defendant on the out of county warrant.”

A hearing on the motion was held on April 15, 2019. The trial court indicated it would deny the motion because section 1305(f) did not apply (since the District Attorney was electing to extradite Lee) and because the alternative request for tolling was not properly referenced in the notice of motion. The court did not mention the Surety’s primary argument that it was entitled to exoneration of the bond because the defendant was surrendered to custody.

DISCUSSION

While the Surety does argue it was entitled to exoneration or tolling at the time the trial court denied its motion to vacate forfeiture and exonerate bond, its primary contention on appeal is that it is entitled to appellate relief because the trial court has now lost jurisdiction to enforce the forfeiture. The Surety asserts that, after the denial of its motion, the trial court failed to enter summary judgment against the Surety within the statutory period for doing so and therefore, pursuant to section 1306, subdivision (c) (§ 1306(c)), “the bail is exonerated.”

The appeal presented that rare case where it was appropriate for the court to consider events that occurred after entry of the appealed order. It is undisputed that no summary judgment has been entered in this case. A prompt determination that the bond has been exonerated avoids repetitive litigation. And the court record showing the absence of a summary judgment would properly be the subject of judicial notice.

When a person for whom a bail bond has been posted fails without sufficient excuse to appear as required, the trial court must declare a forfeiture of the bond. Here, defendant failed to appear on September 13, 2018, and the clerk mailed a notice of forfeiture on September 21, 2018, starting the 185-day appearance period.

After the appearance period has elapsed without the forfeiture having been set aside, a statute requires the court which has declared the forfeiture shall enter a summary judgment against each bondsman named in the bond in the amount for which the bondsman is bound.

The trial court’s authority to enter summary judgment is time limited. If, because of the failure of any court to promptly perform the duties enjoined upon it pursuant to this section, summary judgment is not entered within 90 days after the date upon which it may first be entered, the right to do so expires and the bail is exonerated. This time limit is jurisdictional.

Generally, the 90-day period during which the trial court has authority to enter summary judgment begins after the 185-day appearance period. However, in cases where a motion to vacate forfeiture is timely filed prior to the expiration of the [appearance] period, but not decided until after that period, the 90-day period to enter summary judgment begins to run when the motion is denied.

The Surety filed a timely motion to vacate forfeiture and exonerate bond on the 185th day of the appearance period, March 25, 2019. Therefore, the trial court’s 90-day period to enter summary judgment began after the court denied the Surety’s motion on April 15, 2019. That period expired July 15, 2019.  It was not disputed that summary judgment was not entered by July 15, 2019, the trial court’s right to enter summary judgment expired and the bail was automatically exonerated.

Under these circumstances, there is no purpose in the Court of Appeal determining whether the trial court erred in denying either the Surety’s motion to vacate forfeiture and exonerate bond or its subsequent motion to toll because, in any event, the People cannot enforce the forfeiture of the bond. The appeal of the trial court’s rulings has been, in effect, mooted by subsequent events.

The general rule of appellate procedure is that, when reviewing the correctness of a trial court’s order, an appellate court will consider only matters which were part of the record at the time the order was entered. The rule preserves an orderly system of appellate procedure and prevents litigants from circumventing the normal sequence of litigation. But in this unusual case, in the interests of judicial efficiency, the Court of Appeal directed the trial court to enter an order exonerating the bond.

ZALMA OPINION

The Court of Appeal cut through the chaff and found that since the trial court failed to comply with the statute by entering a summary judgment against the surety within 90 days it had no right to do so nor could it collect the bond. The Surety did what it could to exonerate the forfeiture only to have the trial court refuse and then slothfully failed to enter summary judgment within 90 days requiring the exoneration of the forfeiture. Statutes are written to be followed and failure to enter summary judgment defeated the state’s action and saved the surety $100,0o00.


© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4

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