Opinion
B299187
04-27-2021
THE PEOPLE, Plaintiff and Respondent, v. AMERICAN SURETY COMPANY, Defendant and Appellant.
Law Office of John Rorabaugh, John Mark Rorabaugh, and Crystal L. Rorabaugh for Defendant and Appellant. Rodrigo A. Castro-Silva, Acting County Counsel, William D. Thetford, Principal Deputy County Counsel for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BA465922) APPEAL from an order of the Superior Court of Los Angeles County, Victoria B. Wilson, Judge. Affirmed. Law Office of John Rorabaugh, John Mark Rorabaugh, and Crystal L. Rorabaugh for Defendant and Appellant. Rodrigo A. Castro-Silva, Acting County Counsel, William D. Thetford, Principal Deputy County Counsel for Plaintiff and Respondent.
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American Surety Company, an Indiana corporation (American Surety), appeals from a summary judgment entered after the forfeiture of its bail bond. (Pen. Code, § 1306, subd. (a).) American Surety argues that the court erred by denying its motion to vacate the forfeiture of the bond. Its motion was based on the ground that the bail setting hearing was constitutionally infirm because it did not comply with the procedural requirements announced in In re Humphrey (2018) 19 Cal.App.5th 1006 (Humphrey), affirmed (2021) 11 Cal.5th 135. In addition to reasserting this ground on appeal, American Surety contends that enforcement of the bond is unconscionable. We conclude that any failure by the trial court to comply with Humphrey does not affect the enforceability of the bond and American Surety has forfeited its unconscionability argument. We therefore affirm the judgment.
Subsequent unspecified statutory references are to the Penal Code.
FACTUAL SUMMARY
On March 1, 2018, the Los Angeles County District Attorney's Office filed a criminal complaint against H.M., charging him with an unlawful lewd and lascivious act upon a child (§ 288, subd. (c)(1)) and oral copulation with a child (former § 288a, subd. (b)(2)). H.M. was approximately 37 years old at the time of the alleged crimes; the victim was his son's 15-year-old girlfriend. The crimes allegedly took place in H.M.'s home. The court initially set bail at $95,000 pursuant to the superior court's bail schedule.
On March 6, 2018, defense counsel requested the court release H.M. on his own recognizance with "an ankle monitor" or, alternatively, that bail be reduced to $10,000 or $20,000. Counsel argued that H.M., who was employed as a welder, could not afford $95,000 bail and had no prior criminal record. Counsel further stated that H.M. has three children—then ages 14, 17, and 19 years—and H.M.'s wife, who was in the courtroom, had said he is "free to come home." The court had previously issued a restraining order preventing H.M. from contact with the victim and, according to his counsel, H.M. does not know where she lives and has no desire to contact her. H.M., counsel added, has lived in the same residence "for some time" and "plans to continue living there."
The prosecutor opposed the request and argued that bail should be set at the "bail schedule amount." When the prosecutor began to discuss the facts of the charged crimes, defense counsel objected to having the facts described in open court. The court then held a sidebar conference with counsel, which the court reporter did not transcribe.
After the sidebar conference concluded, the court denied H.M.'s request and set bail "in the bail schedule amount of $95,000." The court explained that its primary consideration is "the protection of the public." The charged offenses, the court noted, "are serious offenses" based upon the nature of the charges and the young age of the victim. The court considered and rejected electronic monitoring because the alleged crimes took place in H.M.'s home and monitoring would not prevent him from reoffending. Although the court "accept[ed] the representation [that H.M.] does not have the ability to post bond in the current amount of $95,000" and noted his lack of a criminal record, the court concluded that, "[b]ased on the circumstances presented during the hearing," a bail amount less than $95,000 "would not be sufficient to protect the public."
H.M. was arraigned on March 15, 2018, and pleaded not guilty.
On April 19, 2018, Montana Bail Bonds, as an agent of American Surety, posted a bond in the amount of $95,000 for H.M.'s release. The bond conforms to statutory requirements (see § 1459) and provides that, if H.M. fails to appear in court on April 26, 2018, or thereafter fails to hold himself amenable to the orders and process of the court, American Surety "will pay to the [P]eople of the State of California, the sum of . . . $95,000." The bond further provides: "If the forfeiture of this bond be ordered by the [c]ourt, judgment may be summarily made and entered forthwith against American Surety . . . for the amount of its undertakings herein, as provided by [s]ections 1305 and 1306 of the California Penal Code."
On April 26, 2018, H.M. failed to appear in court without sufficient excuse. The court ordered bail forfeited and issued a bench warrant for H.M.'s arrest. The court mailed notice of the forfeiture to American Surety on April 27, 2018.
On May 15, 2019, American Surety filed a motion to vacate forfeiture and exonerate bail. American Surety argued that the order setting H.M.'s bail amount was unconstitutional because the court, in setting the amount of H.M.'s bail, "improperly relied on the bail schedule." Because "the order setting bail is unlawful," American Surety contended, "the bond is void" and "the court was without jurisdiction to forfeit bail or enter summary judgment."
The deadline for filing a motion to vacate forfeiture and exonerate bail is ordinarily 180 days after the court mails the notice of forfeiture (plus five days for mailing). (§ 1305, subds. (b)(1) & (j); People v. Indiana Lumbermens Mutual Ins. Co. (2010) 49 Cal.4th 301, 305, fn. 2.) Upon a showing of good cause, however, the court may grant an extension of time (§ 1305.4), which the court did in this case, allowing American Surety until May 15, 2019, to file its motion.
The People did not file a written opposition.
At the hearing on American Surety's motion on June 6, 2019, American Surety submitted on its moving papers without further argument. The court denied the motion and thereafter entered judgment on the forfeited bond.
American Surety timely appealed.
DISCUSSION
A. Background: The Humphrey Decision
Prior to the January 2018 decision in Humphrey, a criminal defendant's detention prior to trial often depended on whether the accused posted bail in the amount set by the county's bail schedule, without regard to his or her ability to pay the scheduled bail amount or the availability of nonfinancial alternatives to bail. (In re Humphrey, supra, 11 Cal.5th at pp. 142-143; Humphrey, supra, 19 Cal.App.5th at pp. 1036-1037, 1044.) In Humphrey, the Court of Appeal stated that trial courts' "unquestioning reliance upon the bail schedule without consideration of a defendant's ability to pay, as well as other individualized factors bearing upon his or her dangerousness and/or risk of flight, runs afoul of the requirements of due process . . . . Once the trial court determines public and victim safety do not require pretrial detention and a defendant should be admitted to bail, the important financial inquiry is not the amount prescribed by the bail schedule but the amount necessary to secure the defendant's appearance at trial or a court ordered hearing." (Humphrey, supra, 19 Cal.App.5th at p. 1044.)
The Court of Appeal held that, to satisfy equal protection and due process concerns, the trial court, when "ordering release conditioned on the posting of money bail," must inquire "whether the defendant has the financial ability to pay the amount of bail ordered and, if not, whether less restrictive conditions of bail are adequate to serve the government's interests." (Humphrey, supra, 19 Cal.App.5th at p. 1025.) "If the court concludes that an amount of bail the defendant is unable to pay is required to ensure his or her future court appearances, it may impose that amount only upon a determination by clear and convincing evidence that no less restrictive alternative will satisfy that purpose." (Id. at p. 1037.) Because the trial court in that case failed to conduct the requisite inquiry or make findings as to the defendant's ability to pay, the defendant was entitled to a new bail hearing. (Id. at p. 1048.)
In the instant case, the trial court held H.M.'s bail hearing on March 6, 2018—about six weeks after the decision in Humphrey and about 10 weeks before the Supreme Court granted review of that decision. The parties do not dispute that Humphrey was binding on the trial court in this case at the time it made the challenged ruling. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.)
Our Supreme Court recently affirmed the decision in Humphrey, holding that an "arrestee may not be held in custody pending trial unless the court has made an individualized determination that (1) the arrestee has the financial ability to pay, but nonetheless failed to pay, the amount of bail the court finds reasonably necessary to protect compelling government interests; or (2) detention is necessary to protect victim or public safety, or ensure the defendant's appearance, and there is clear and convincing evidence that no less restrictive alternative will reasonably vindicate those interests." (In re Humphrey, supra, 11 Cal.5th at p. 156.)
American Surety contends that the trial court, in setting H.M.'s bail in an amount that the court acknowledged he could not afford to pay, violated H.M.'s constitutional rights as established by Humphrey. Because the court failed to hold "a constitutionally sufficient hearing" in setting the bail amount, American Surety argues that its bond must be exonerated or reduced to an amount the state could enforce against H.M.
The People contend that if, arguendo, the court failed to comply with Humphrey, that failure did not affect the enforceability of American Surety's bond contract. We agree.
The People contend that the trial court complied with Humphrey, that American Surety does not have standing to assert a violation of Humphrey, and that it waived any objection to the bail setting hearing procedure by failing to object below. Because we reject American Surety's arguments on other grounds, we do not reach these issues.
B. Humphrey Does Not Compel Exoneration of American Surety's Bond
We ordinarily review the trial court's ruling on a motion to vacate a bail bond forfeiture for abuse of discretion. (People v. Bankers Ins. Co. (2010) 181 Cal.App.4th 1, 5.) To the extent the ruling involves purely legal issues, including the interpretation of constitutional provisions, statutes, or the surety bond, our review is de novo. (People v. International Fidelity Ins. Co. (2010) 185 Cal.App.4th 1391, 1395; People v. Amwest Surety Ins. Co. (1997) 56 Cal.App.4th 915, 919.)
The effect of noncompliance with Humphrey at a bail setting hearing on a surety's bail bond was addressed in People v. Accredited Surety & Casualty Co. (2019) 34 Cal.App.5th 891 (Accredited Surety). In that case, the court set the defendant's bail at $290,000. Accredited Surety & Casualty Company (Accredited) posted a bond for that amount. After the defendant thereafter failed to appear in court as required, the court ordered the bond forfeited. (Id. at p. 895) On appeal, Accredited argued that the trial court had violated the defendant's constitutional rights under Humphrey by failing to consider his ability to pay when setting the amount of bail. (Id. at p. 896.) The Court of Appeal assumed the trial court violated the defendant's rights under Humphrey, but held that the violation did not void Accredited's bond. (Id. at p. 897.)
The Accredited Surety court explained that "Humphrey was concerned with how bail setting procedures can prevent a defendant from being able to make bail. The rights addressed in Humphrey, and the procedural requirements announced by the court, are intended to guard defendants' liberty interests." (Accredited Surety, supra, 34 Cal.App.5th at p. 898.) "[N]oncompliance with the procedural requirements for setting bail," however, " 'have no legal effect on the forfeiture of bail upon defendant's failure to appear for sentencing,' " and "[n]othing in Humphrey . . . relieves the surety of its obligations under the bond once it has been executed." (Ibid.; see County of Los Angeles v. Surety Ins. Co. (1985) 165 Cal.App.3d 704, 707 ["surety may not avoid its obligations by contending there was a defect in the approval procedure"]; Western Surety Co. v. Municipal Court (1937) 20 Cal.App.2d 442, 444 ["the jurisdiction of the court which approved the bond cannot be questioned by the surety in an action thereon after forfeiture"]; accord, People v. American Surety Co. (2020) 55 Cal.App.5th 265, 271; People v. North River Ins. Co. (2020) 48 Cal.App.5th 226, 235-236 (North River).)
The Accredited Surety court also relied on the rule that " '[d]efects and irregularities, if any, in the proceedings preliminary to the taking of bail are considered as waived by the surety when it assumes its obligations as such at the time of the execution of the bond.' " (Accredited Surety, supra, 34 Cal.App.5th at p. 898, citing Western Surety Co. v. Municipal Court, supra, 20 Cal.App.2d at pp. 443-444; County of Los Angeles v. Surety Ins. Co. (1985) 164 Cal.App.3d 1221, 1225.) This rule is "well established" (People v. American Surety Co., supra, 55 Cal.App.5th at p. 271) and applies even when, as in Accredited Surety, the alleged defect and irregularity—noncompliance with Humphrey—was not evident at the time the surety issued the bond. (Accredited Surety, supra, 34 Cal.App.5th at p. 895.)
The waiver rule applies even more forcefully here, where the bail setting hearing was held after Humphrey and any noncompliance with Humphrey would have been evident at the time American Surety issued its bond. American Surety nevertheless issued its bond after that allegedly "constitutionally deficient" bail setting hearing and knew or should have known of such deficiency. By undertaking its obligations under the bond, American Surety has waived such defects as a ground for avoiding forfeiture. (See People v. American Surety Co., supra, 55 Cal.App.5th at p. 271 [by executing its bond, surety waived trial court's alleged failure to apply Humphrey].)
In North River, supra, 48 Cal.App.5th 226, Division Two of this court agreed with Accredited Surety that "errors in a trial court's setting of bail during the criminal prosecution do not let the surety off the hook." (Id. at p. 235.) In rejecting an argument that the trial court's noncompliance with Humphrey rendered the subsequent judgment on the surety bond void, the court explained that "any noncompliance with Humphrey would, at best, render the bail order voidable as to the defendant, not as to the surety." (Ibid.; accord, People v. American Surety Co., supra, 55 Cal.App.5th at p. 271.) This is because bail bond proceedings " 'are independent from and collateral to [the related criminal] prosecutions.' " (North River, supra, 48 Cal.App.5th at p. 235; see People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 657.) Noncompliance with Humphrey in setting bail, therefore, "does not affect—let alone eviscerate—the trial court's jurisdiction over the collateral bail proceedings." (North River, supra, at p. 235.)
The North River court provided two additional reasons why the surety could not rely on the trial court's noncompliance with Humphrey. First, the Humphrey decision itself limited the "effect of any noncompliance with Humphrey" by specifying "that the remedy for noncompliance is 'a new bail hearing at which . . . the court considers [the defendant's] financial resources' [citation]—not the defendant's immediate release or the invalidation of any and all subsequently issued bonds." (North River, supra, 48 Cal.App.5th at pp. 235-236; accord, People v. American Surety Co., supra, 55 Cal.App.5th at p. 271.)
Second, even if the trial court failed to comply with the procedural requirements of Humphrey, "there was no Humphrey error" in North River because the defendant was able to post bond and obtain his release. (North River, supra, 48 Cal.App.5th at p. 237.) "[W]hat Humphrey prohibits is the detention of a criminal defendant absent a consideration of his ability to pay." (Ibid.) When the defendant, despite the court's failure to consider his ability to pay the bail amount, is nevertheless released upon the posting of a bond, " 'the issues regarding the propriety of requiring bail as a condition of release raised in . . . Humphrey . . . are not presented.' " (Ibid.)
North River is factually indistinguishable from the instant case and we agree with its reasoning. As in North River, even if the trial court failed to comply with the requirements of Humphrey at the bail setting hearing, the remedy for that failure is a new, constitutionally compliant bail setting hearing for the defendant, not the exoneration of American Surety's bond.
American Surety contends that the cases we cited should not be followed because those courts misunderstood the nature of the bail contract and the surety's duties under that contract. According to American Surety, "there are two separate contracts interlinking—one between the defendant and the court, guaranteed by the surety, which requires that the penalty bail amount be paid if the defendant fails to appear in court . . . , and a separate contract between the bail agent and the indemnitor, which covers the risk of the defendant failing to appear." Under these agreements, it argues, " 'the risk of loss remains with the principal [i.e., the accused], while the surety merely lends its credit so as to guarantee payment or performance in the event that the principal defaults.' "
American Surety criticizes the North River decision in particular as an attempt "to impose a second contract on the surety to the government independent of the criminal defendant." This is erroneous, American Surety argues, because "all of the [s]urety's obligations to the [s]tate are made on behalf of the defendant. No separate consideration is given by the [s]tate to the surety." American Surety further asserts that the North River court failed to "take into consideration the fact that the indemnitors to the bail bond, not the bail surety, are ultimately liable for payment of the amount of bail posted."
American Surety's discussion of the contractual relations among the defendant, the court, and the surety misses its mark. Regardless of how the contractual arrangements are characterized, American Surety indisputably issued a bond in this matter—after Humphrey and the allegedly defective bail setting hearing—by which it promised to "pay to the [P]eople of the State of California, the sum of . . . $95,000" if H.M. failed to appear in court as required; when H.M. failed to appear as required, American Surety's obligation came due, regardless of whether its obligation was "made on behalf of the defendant" or the loss will ultimately fall upon the surety's indemnitors. (See People v. Amwest Surety Ins. Co. (1991) 229 Cal.App.3d 351, 356 [under California's bail bond system, " '[i]f the defendant fails to appear at the proper time and place, the surety becomes the absolute debtor of the state for the amount of the bond' "].) Nothing in American Surety's extensive discussion of the law of suretyship negates that obligation.
American Surety also relies on Civil Code section 2809 (section 2809), which provides: "The obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; and if in its terms it exceeds it, it is reducible in proportion to the principal obligation." Under this principle, a "surety may raise all defenses allowed to the principal and must only pay on the bond 'if the claimant establishes, without reference to the bond, a legal obligation on the part of the principal to pay. [Citation.]' [Citation.] Pursuant to [Civil Code] section 2809, if the principal is not liable on the obligation, neither is the surety." (Royster Construction Co. v. Urban West Communities (1995) 40 Cal.App.4th 1158, 1168-1169.)
Reliance on Civil Code section 2809 under analogous circumstances was rejected in County of Los Angeles v. Wilshire Ins. Co. (1975) 44 Cal.App.3d 952, 956 (Wilshire). In that case, the criminal defendant posted a bond issued by a surety for the amount of the defendant's bail plus a statutorily required penalty assessment. Our Supreme Court subsequently held that the penalty assessment violated state and federal prohibitions against excessive bail. (See McDermott v. Superior Court (1972) 6 Cal.3d 693, 696.) The defendant failed to appear and the surety's bond was forfeited. The surety argued that, under Civil Code section 2809, it should not be liable for the amount of the unconstitutional penalty because the penalty could not lawfully have been imposed on the defendant. (Wilshire, supra, 44 Cal.App.3d at p. 956.) This court rejected the argument on the ground that to do so would unjustly enrich the surety, which presumably was paid a premium for the bond that took into account the penalty assessment. (Id. at p. 957.) The same rationale applies here. American Surety was presumably paid a premium for H.M.'s bond that took into account the full $95,000 bail amount. If American Surety's obligation on the bond is reduced, the portion of the bond premium attributable to the difference between the bail amount and the reduced amount would constitute the same kind of unjust enrichment the surety would have received in Wilshire. Just as the surety was not entitled to a reduction in its bond liability in Wilshire, American Surety is not entitled to a reduction here.
In any case, the amount of American Surety's bond was never more than the amount the principal—H.M.—was required to post to obtain his release. Although American Surety contends that H.M. was not constitutionally obligated to pay that amount because the trial court allegedly failed to comply with Humphrey, any such noncompliance merely entitled H.M. to a new bail hearing at which (if he had not absconded), he would have had "the opportunity to provide evidence and argument" and to have the court consider "his financial resources and other relevant circumstances, as well as alternatives to money bail." (Humphrey, supra, 19 Cal.App.5th at p. 1048.) Thus, any noncompliance with Humphrey did not entitle H.M. to either his release or a reduced bail amount, nor entitle American Surety to have its bond exonerated or reduced. (See North River, supra, 48 Cal.App.5th at p. 236.) American Surety's suggestion that H.M.'s bail would have been less if the court had held a "constitutionally sufficient" hearing and, consequently, that it would have issued a bond for that reduced amount is baseless conjecture.
American Surety asserts that it can avoid such conjecture by having us direct the trial court to hold a hearing at which the court would determine the amount of bail H.M. was able to pay and, therefore, the maximum amount of American Surety's liability on its bond. Although H.M. would presumably be absent from that hearing, American Surety contends that the trial court could determine his ability to pay based on the financial information H.M. submitted in connection with the court's appointment of the public defender as his counsel. Aside from the fact that the court must generally keep such information confidential (§ 987, subd. (c)), and the obvious unfairness to the People, who would be unable to cross-examine H.M. about his finances, such a hearing is unnecessary. As the North River court explained, the fact that the defendant posted a bond in the amount the court required established that he "was undeniably able to do so." (North River, supra, 48 Cal.App.5th at p. 237, italics omitted; accord, People v. American Surety Co., supra, 55 Cal.App.5th at p. 271.) This inference of the defendant's "ability to post bail from the fact that he did" applies even if the funds used to pay the bond premium were obtained from defendant's friends or relatives. (North River, supra, 48 Cal.App.5th at pp. 237-238.) Therefore, the fact that H.M. posted a bond for the amount of bail, regardless of the source of the premium for the bond, establishes his ability to pay that amount. There is no need for a further hearing.
Lastly, American Surety points to rule 46(f)(2) of the Federal Rules of Criminal Procedure, which permits federal courts to set aside a bail forfeiture in whole or in part if "it appears that justice does not require bail forfeiture." Among the factors courts may consider in exercising their discretion under this rule when invoked by a surety is "the appropriateness of the amount of the bond." (United States v. Frias-Ramirez (9th Cir. 1982) 670 F.2d 849, 852; accord, United States v. Gutierrez (7th Cir. 1985) 771 F.2d 1001, 1004.) American Surety's reliance on the federal rule is misplaced for the obvious reason that the rule applies in federal courts, not California courts, and California has no analogous provision. Nor has American Surety pointed to any authority suggesting that the federal rule is constitutionally required. To the extent American Surety contends that California should adopt a similar rule, the argument is one that should be directed to the Legislature, not the courts.
C. American Surety Forfeited Its Unconscionability Argument
American Surety argues that its bond is unenforceable under principles of unconscionability. It points to the unequal bargaining power of the state vis-à-vis H.M. in "negotiating" the bail amount, the "unfair bargaining process" produced by the court's failure to abide by the "constitutionally mandated process" for setting bail, and the "perverse incentive for the [s]tate to implement high bail amounts in violation of the due process rights of criminal defendants."
As the People point out, American Surety did not assert this argument below and has therefore forfeited it on appeal. (See People v. American Surety Co., supra, 55 Cal.App.5th at p. 270.) Although reviewing courts may consider previously unasserted arguments that involve pure issues of law or where facts are undisputed (Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 89-90, fn. 6), this exception does not apply here. The defense of unconscionability "is inherently fact specific" (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 138), and American Surety asserts numerous points supporting the alleged unconscionability of the bail setting process by relying on fact-based reports and studies that were not presented to the trial court. We therefore decline to address the argument here.
The People filed a motion to strike portions of American Surety's opening brief on the ground that the studies and reports American Surety relies upon constitute new evidence, inadmissible hearsay, and matter that is not judicially noticeable. Because American Surety has forfeited the unconscionability argument for which the offending documents were cited, the motion is moot and denied on that basis.
DISPOSITION
The judgment is affirmed. Respondent is awarded its costs on appeal.
NOT TO BE PUBLISHED.
ROTHSCHILD, P. J. We concur:
CHANEY, J.
BENDIX, J.