Surety Must Pay Bond to State When Defendant Fails to Appear

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Incarceration in Different State no Excuse for Failure to Appear

Bail bonds are a form of surety insurance. The insurer promises that the person for whom they issued a bail bond will appear as required by the court or will provide a reasonable excuse – promptly – for the failure to appear. If the defendant fails to appear and his surety fails to produce him to the court or a peace officer in the state, the bond will be forefeited and must be paid to the state.

In State Of Montana v. Chalon Michael Kinholt v. ASAP Bail Bonds, 2019 MT 64N, DA 17-0749, Supreme Court Of The State Of Montana (March 19, 2019) ASAP Bail Bonds (ASAP) appealed to the Supreme Court from an order denying its request to discharge a judgment of forfeiture.

FACTS

On July 15, 2016, the District Court issued an arrest warrant for Chalon Kinholt (Kinholt) for violation of his bail conditions and set bail at $15,000. On August 8, 2016, Kinholt failed to appear at a final pretrial hearing, which the Court had ordered him to personally attend. Consequently, the District Court issued an additional arrest warrant for failure to appear at the hearing and for failing to maintain contact with his attorney. Bail was set at $25,000 to ensure Kinholt’s appearance and compliance with the Court’s conditions of release on bail. On December 22, 2016, Kinholt posted a surety bond in the amount of $40,000 and was released from custody. The bond was issued by ASAP and underwritten by United States Fire Insurance Company (USFIC).

Despite an order requiring Kinholt to personally attend, Kinholt failed to appear. The State filed a petition requesting the District Court forfeit the $40,000 surety bond. That same day, the District Court entered its Order and Notice of Forfeiture declaring the $40,000 bond posted by Kinholt and his sureties forfeited for Kinholt’s failure to appear at the April 24, 2017 final pretrial hearing.

Ninety-two days after the petition to forfeit was filed and after the District Court received no response from either ASAP or USFIC, the State moved for a default judgment and mailed the motion to ASAP and USFIC. Neither ASAP nor USFIC responded to the State’s motion.  The District Court entered a Judgment of Forfeiture in favor of the State and against ASAP and USFIC for $40,000, noting that “no basis for discharge has been provided by the defendant, his bondsman, or his surety.”

ASAP filed an objection to the entry of judgment and forfeiture and requested a hearing after the period to respond had run. The District Court denied ASAP’s objection and request for a hearing.

ANALYSIS

Sections 46-9-501 to -512, MCA, set forth specific substantive and procedural requirements for bail forfeiture. If a defendant fails to appear before a court as required and bail has been posted, the judge may declare the bail forfeited.  If at any time within ninety days after the forfeiture the defendant’s sureties surrender the defendant, or appear and satisfactorily excuse the defendant’s failure to appear, the forfeiture will be discharged without penalty.

According to ASAP, because Kinholt was incarcerated in Colorado on September 9, 2017, ASAP would have been able to excuse Kinholt’s absence within those three additional days.

Because this action is criminal, ASAP’s argument it is entitled to an extra three days to respond was unpersuasive. Furthermore, not only was Kinholt’s September 9 incarceration outside the statutory ninety-day window, it was also outside the ninety-three days to which ASAP asserts it was entitled. Kinholt’s incarceration occurred ninety-four days after the forfeiture was entered.

The defendant or surety has the burden of demonstrating a satisfactory excuse before any discharge may be ordered. Because ASAP failed to present a satisfactory excuse and it did not appear within the ninety-day window, the bond was forfeited.

The statute explicitly provides “any peace officer” of this state. The fact that he was incarcerated in Colorado had no effect on the bond. Incarceration by a foreign sovereign is not a per se satisfactory excuse for failure to appear and a defendant cannot avail himself of his own wrong to escape accounting with the State. In addition the surety may not avail itself of an excuse not available to the defendant.

ASAP cited no authority entitling it to notice of such a hearing. ASAP was notified of the order and notice of forfeiture and the motion for default judgment. ASAP failed to respond to either. The statute imposes two conditions on a surety to discharge a forfeiture: (1) appear within ninety days of the forfeiture; and (2) satisfactorily excuse the bail-jumper’s failure to appear as ordered by the court. Here, ASAP failed to meet either requirement.

ZALMA OPINION

Bail bonds, a type of insurance, require claims people to protect the insurer from the failure of the defendant to appear as required by the order allowing him to leave jail with the bond as a surety for his appearance. When he failed to appear the surety was required, to protect itself, to either find the defendant and present him to the court or a peace officer, find a reasonable excuse for his failure to appear within 90 days or pay the $40,000 to the court. In this case the surety did nothing to protect its funds until 94 days after the failure to appear. Poor claims handling cost the surety the $40,000 plus the cost of fees to counsel to bring this unsuccessful appeal to the Supreme Court.


© 2020 – 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.

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