Opinion
B292868
02-20-2020
COUNTY OF LOS ANGELES, Plaintiff and Respondent, v. LEXINGTON NATIONAL INSURANCE CORPORATION, Defendant and Appellant.
Law Offices of Brendan Pegg and Brendan Pegg for Defendant and Appellant. Mary C. Wickham, County Counsel, Adrian Gragas, Assistant County Counsel, and Yuan Chang, 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. OSJ2141) APPEAL from a judgment of the Superior Court of Los Angeles County, Maame Frimpong, Judge. Affirmed. Law Offices of Brendan Pegg and Brendan Pegg for Defendant and Appellant. Mary C. Wickham, County Counsel, Adrian Gragas, Assistant County Counsel, and Yuan Chang, Deputy County Counsel, for Plaintiff and Respondent.
This is an appeal by Lexington National Insurance Corporation (Lexington), the surety on a bail bond ordered forfeited under Penal Code section 1305 after Michael Cartwright failed to appear at a hearing in his criminal case. After the surety failed to file a motion to set aside the forfeiture within the allotted time, the trial court entered summary judgment in favor of respondent County of Los Angeles (County). (§ 1306, subd. (a).) Lexington moved to set the summary judgment aside under section 1305.6, which permits a court to vacate summary judgment if a surety can show good cause for bringing its motion within 20 days of notice of entry of summary judgment. (§§ 1305.6, subd. (b), 1305, subd. (c)(3).) The trial court found Lexington failed to demonstrate good cause for relief and denied the motion to vacate judgment. We affirm.
Further statutory references are to the Penal Code.
FACTUAL AND PROCEDURAL BACKGROUND
Through its bail agent, Power Bail Bonds (PBB), Lexington posted a $50,000 bail bond in August 2017 to secure Cartwright's release from custody in Los Angeles County. Cartwright failed to make a required appearance on November 6, 2017, and the bond posted by Lexington was ordered forfeited.
The court clerk mailed Notice of Forfeiture to both Lexington and PBB on November 7, 2017, informing them they had 180 days (plus five days for service by mail) to surrender Cartwright or file a motion seeking relief from forfeiture. Lexington failed to seek exoneration of the forfeited bond before the 185-day period lapsed on May 11, 2018. (§ 1305, subd. (c)(3).) At some point before May 11, 2018, Cartwright was served with a warrant for his arrest in the Los Angeles case while in custody in Orange County. On June 27, 2018, the trial court entered summary judgment in favor of the County on the forfeited bond. (§ 1306, subd. (a).)
On July 17, 2018, Lexington filed the motion at issue here, seeking vacation of the judgment. (§ 1305.6, subd. (b).) Lexington argued that Cartwright was arrested on May 7, 2018, four days before expiration of the appearance period. At the time PBB was in the process of relocating its offices and its "files were in a state of upheaval." According to the declaration of John Mayer, counsel for Lexington and in-house counsel for PBB, in the "chaos" of its move and "significant staffing changes in [the same] time period," PBB's system failed to register notification (of Cartwright's custody in Orange County with a hold for the Los Angeles County case) until after May 11, 2018. Lexington claimed that due to all the confusion, no motion was filed with the Los Angeles criminal case "prior to the expiration of time," or before notice of entry of the summary judgment was entered in June 2018.
Section 1305.6 permits, "[u]pon a showing of good cause, a motion [to vacate, under section 1305, subd. (c)(3)] may be filed within 20 days from the mailing of the notice of entry of judgment under Section 1306." (§ 1305.6, subd. (b).)
The County urged the trial court to deny Lexington's motion to vacate. It argued that, other than Mayer's "vague statement that 'the case received [PBB's] standard level of diligence through the forfeiture period,'" Lexington presented "no facts showing [PBB] did anything during the appearance period," and thus no evidence its actions during the appearance period were reasonable. In addition, the County argued that the evidence did not support Lexington's claim that Cartwright was not arrested until May 7, 2018, just four days before expiration of the appearance period and in the midst of PBB's business upheaval. Rather, the evidence was unclear as to whether Cartwright was in custody in Orange County on October 6, 2017, and remained in custody, or whether he had been released and subsequently rearrested on May 7, 2018, as Lexington claimed. The County noted that Mayer declared only that PBB became aware Cartwright was "in custody" in Orange County as of May 7, 2018, not that he was arrested on that date. Moreover, Mayer acknowledged that PBB received notice of the bail forfeiture in early November 2017, but—apart from its "standard level of diligence"—presented no evidence of any action taken during the 180-day appearance period to try to locate Cartwright.
In reply, Lexington acknowledged its mistake in failing to seek exoneration of the bond during the appearance period. Nevertheless, it argued that fact could not be used against it in determining whether to grant the instant motion, because a 1305.6 motion may only be filed after summary judgment has been entered. The Legislature would not have enacted a statute providing for relief from summary judgment, without expecting the statute to be used. In other words, in every case involving a motion to vacate under 1305.6, the surety would necessarily have mistakenly failed to bring a motion within the appearance period. Thus, the only question before the trial court was whether the surety's mistake was reasonable, under the very low threshold for good cause under section 1305.6. (People v. Accredited Surety Casualty Co. (2014) 230 Cal.App.4th 548, 560-561 (Accredited) [section 1305.6's "'good cause' requirement requires a lesser showing than the good cause requirement in section 1305.4"].) "The justification for a relatively short, narrow extension need not be as demanding as the justification for an extension that doubles the length of the appearance period." (Ibid.)
"[B]ecause the law disfavors forfeitures, a surety or other interested party may move the court to extend the exoneration period up to an additional 180 days under section 1305.4. [Citations.] 'The "extension is not automatic. [The surety] has to earn any additional time by a showing of good cause. That means an explanation of what efforts [it] made to locate [the defendant] during the initial 180 days, and why such efforts were unsuccessful." [Citation.]' [Citation.]" (County of Los Angeles v. Williamsburg National Ins. Co. (2015) 235 Cal.App.4th 944, 950.) "'The good cause showing under section 1305.4 is a low threshold for the movant. If the surety demonstrates good cause by showing [(1)] due diligence in the initial 180 days, [(2)] a reasonable likelihood of success of capturing the defendant in a subsequent 180 days, and [(3)] any other relevant circumstances, the court should grant the motion.' [Citation.]" (Accredited, supra, 230 Cal.App.4th at p. 560.)
Lexington asserted that its timely motion was reasonably filed after entry of judgment, and good cause existed to vacate the summary judgment because PBB had only had a "tight four day time window" within which to seek relief under section 1305, subdivision (c)(3), before the appearance period expired, and chaos in PBB's move and staff changes resulted in the matter going unnoticed until after the appearance period expired.
Following a hearing on August 17, 2018, the trial court found Lexington failed to demonstrate good cause for relief and denied the motion to vacate.
DISCUSSION
Lexington contends it made the requisite showing of good cause for relief under section 1305.6. We conclude otherwise.
1. Bail Bond Forfeiture 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.' [Citation.]" (People v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 657 (American Contractors).)
The statutory scheme governing bail forfeiture requires the trial court to declare the bail forfeited if a criminal defendant out on bail fails to appear in court when lawfully required to do so. (§ 1305, subd. (a)(1).) After the clerk mails notice of forfeiture to the surety, the surety has 180 days (plus 5 days for mailing) within which to bring the criminal defendant into court. (§ 1305, subds. (b)-(c).) These 185 days are known as the appearance or exoneration period. (People v. The North River Ins. Co. (2011) 200 Cal.App.4th 712, 718.)
As noted above, the surety may seek an extension of the appearance period of up to an additional 180 days upon a showing of good cause. (§ 1305.4.) For example, the appearance period may be tolled in the case of a "temporary disability," such as incarceration in another jurisdiction. (§ 1305, subd. (e)(1); People v. Lexington National Ins. Corp. (2010) 181 Cal.App.4th 1485, 1491.)
During the appearance period, the surety may move to have the forfeiture vacated and the bond exonerated on specified statutory grounds. (§ 1305, subd. (c)(1); American Contractors, supra, 33 Cal.4th at p. 658.) One such ground 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 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).) But the surety is not without remedies. "Upon a showing of good cause," a surety may file a motion to vacate the summary judgment "within 20 days from the mailing of the notice of entry of judgment under Section 1306." (§ 1305.6, subd. (b).)
2. The Standard of Review
Ordinarily, we review an order denying a motion to vacate the forfeiture of a bail bond for abuse of discretion. (People v. Financial Casualty & Surety, Inc. (2017) 10 Cal.App.5th 369, 378-379.) The degree of deference afforded the trial court's ruling varies depending on the aspect of its ruling under review. (County of Los Angeles v. Fairmont Specialty Group (2009) 173 Cal.App.4th 538, 543.) Where there are factual disputes, the trial court's findings of fact will be upheld under the abuse of discretion standard if the findings are supported by substantial evidence. (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711; Accredited, supra, 230 Cal.App.4th at p. 555.) If the facts are undisputed and only legal issues are involved, we review the matter de novo. (People v. International Fidelity Ins. Co. (2012) 204 Cal.App.4th 588, 592.)
The parties disagree regarding the applicable standard of appellate review here. Lexington contends our review is de novo, as there are no factual disputes and the issue is purely legal. The County contends that because only the question whether Lexington established good cause under section 1305; subdivision (c)(3) is at issue, the appropriate standard is abuse of discretion. We need not address this question. Regardless of the standard applied, the result here would be the same. (People v. Financial Casualty & Surety, Inc. (2017) 14 Cal.App.5th 308, 312-314 (Financial Casualty).)
3. The Trial Court Did Not Err in Denying Fidelity's Motion to Vacate Summary Judgment
Section 1305 permits a surety to move to vacate a forfeiture and exonerate a bond, "[i]f, outside the county where the case is located, the defendant . . . is arrested in the underlying case within the 180-day [appearance] period." (§ 1305, subd. (c)(3).)
An "arrest" includes "a hold placed on the defendant in the underlying case while he or she is in custody on other charges." (§ 1305, subd. (i).)
Traditionally, the law disfavors forfeitures and this disfavor extends to forfeiture of bail, and statutes governing bail are generally strictly construed to avoid the harsh results of forfeiture. (Accredited, supra, 230 Cal.App.4th at p. 556; People v. Surety Ins. Co. (1985) 165 Cal.App.3d 22, 26.) "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.) It is the surety's burden to prove the statutory prerequisites justifying an order vacating a bond forfeiture. (People v. American Contractors Indemnity (1999) 74 Cal.App.4th 1037, 1041.)
"The California Supreme Court addressed section 1305, subdivision (c)(3) and the policy of strict construction to avoid forfeiture and concluded 'that motions [for relief from bail forfeiture] 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.' [Citation.]" (Accredited, supra, 230 Cal.App.4th at p. 556.)
Additional relief is available under section 1305.6, subdivision (b), which permits the court to vacate forfeiture and exonerate the bond after the appearance period if, within 20 days of mailing of notice of entry of summary judgment under section 1306, the surety can demonstrate good cause for relief. (§ 1305.6, subd. (b).) Under this statute, good cause has both an objective and a subjective component. (Accredited, supra, 230 Cal.App.4th at p. 560.) "'Good cause' . . . is established by showing the surety acted (1) reasonably and (2) in good faith." (Id. at p. 562.) In making its determination, the trial court considers the totality of the circumstances and evaluates the reasons advanced by the surety for not filing a motion within the 185-day appearance period. (Id. at p. 551.)
The parties agree that Lexington's motion to vacate following entry of summary judgment was brought in good faith. The sole question is whether the court erred in denying that motion, based on its conclusion that Lexington's actions were not reasonable. Reasonableness requires a showing of proactive steps taken by the surety. (Financial Casualty, supra, 14 Cal.App.5th at p. 318.)
Lexington's motion to vacate summary judgment was supported by the declaration John Mayer, counsel for both Lexington and PBB. Mayer declared that the Cartwright "case received [PBB's] standard level of diligence throughout the forfeiture period," but did not describe its efforts to investigate or locate Cartwright during the forfeiture period. Mayer explained only that during May 2018, PBB was undergoing relocation of its offices and significant staffing changes. As a result of this upheaval, PBB did not learn Cartwright was in custody in Orange County with a hold for the underlying case until after the appearance period lapsed.
The trial court found no factual basis to support a conclusion that Lexington's actions or its bail agent's, or the failure to file a section 1305, subdivision (c)(3) motion during the appearance period were objectively reasonable. Lexington presented no evidence suggesting what, if any, actions were taken to locate Cartwright within the appearance period. Mayer conceded that it was only after the appearance period ended and PBB had been served with notice of entry of summary judgment was served, that the company learned Cartwright was in custody.
The trial court found Lexington's claim that PBB had only four days to act was a "bit of a red herring," observing the record showed that neither Lexington nor PBB did "anything during the entire appearance period." In short, apart from Mayer's statement that "the case received [PBB's] standard level of diligence" prior to the company's move, Lexington presented no evidence in response to the court's inquiry as to what, if any, proactive efforts were undertaken to find Cartwright during the appearance period. There is no evidence as to (1) when PBB learned Cartwright was incarcerated in Orange County; (2) whether PBB contacted the Orange County Sheriff's Department to try to serve the warrant for the underlying case; (3) when PBB knew it would be moving its offices; (4) why PBB failed to take steps before its move to investigate Cartwright's location, or at least to request an extension under section 1305.4 (assuming good cause existed); or (5) how PBB's staffing changes its ability to investigate or locate Cartwright. On this record, there is no support for Lexington's contention that the trial court erred in concluding Lexington failed to establish a necessary component of the "good cause" requirement, i.e., that their actions were objectively reasonable.
Our conclusion finds support in Accredited, supra, 230 Cal.App.4th 548. There, a bond was forfeited in Fresno County. The bail agent discovered that the criminal defendant had been arrested in Sacramento County, and was on hold for the underlying Fresno case and also on warrants from two other counties. (Id. at p. 552.) Based on its belief that the criminal defendant would be returned to Fresno county before the appearance period expired, the bail agent made no move to vacate forfeiture. (Id. at pp. 563-564.) Instead, the bail agent waited until days before the appearance period was set to end before contacting the clerk in Fresno County to see if the defendant had been returned. The clerk was unable to locate the file. (Id. at p. 564.) The clerk gave the agent a minute order reflecting exoneration of a bail bond. (Id. at pp. 553, 564-565.) However, after summary judgment was entered, the bail agent learned the minute order the clerk had provided referred to an unrelated earlier bond issued for the same defendant. (Id. at p. 553.) The motion to vacate bond forfeiture (§ 1305.6, subd. (b)) was denied. (Id. at p. 554.) The court found, based on the totality of the circumstances, that the "surety had not established its decision to wait until after the expiration of the appearance period to file a motion was reasonable." (Id. at p. 565.)
In Accredited, the bail agent stated that "'[b]ased on [his] prior experience with defendants in custody, [he] believed'" the defendant would be returned to Fresno County after "'his case was completed in Sacramento.'" However, there was no evidence the belief (of a concededly "'new bail agent [who was] inexperienced with working with the courts'") was justified. Further, the declaration failed to identify an evidentiary basis for the agent's belief that Sacramento would (1) prioritize a transfer of the defendant to Fresno County (rather than another closer county from which a warrant for the defendant was also outstanding; (2) both conclude its case and transfer the defendant within the 77 days remaining in the appearance period; or (3) transfer the defendant at all, instead of sending him to prison if convicted. The agent's statements, without more, created a legitimate question about whether it was reasonable to infer that Sacramento would transfer the defendant to Fresno County before the appearance period expired. (Accredited, supra, 230 Cal.App.4th at pp. 563-564.)
In Accredited, unlike here, the bail agent learned the defendant had been arrested in Sacramento during the appearance period and, during that period, made efforts to verify the defendant was in custody for the underlying case. The agent made several unsuccessful attempts to contact the court by telephone and, when those efforts yielded no satisfactory response, went himself to the court to investigate. (Accredited, supra, 230 Cal.App.4th at p. 553.) Despite efforts undertaken prior to expiration of the appearance period, the appellate court affirmed the trial court's conclusion that the surety failed to establish the objective (reasonableness) component of the good cause requirement, i.e., "'[t]he bail agency has not established good cause as to why the motion was not filed within the appearance period.'" (Id. at p. 565.)
Here, Lexington's attempt to establish good cause was far weaker. It presented no evidence of affirmative efforts to try to locate Cartwright before the appearance period expired, nor any evidence of what, if any, effort PBB made in to prevent this case from falling through the cracks in anticipation of its move. The trial court did not err in concluding that Mayer's vague and perfunctory declaration failed to establish Lexington's conduct was reasonable. The objective (reasonableness) component of good cause requires evidence; Mayer's unsupported declaration will not suffice. (Id. at pp. 562-565.)
Lexington's reliance on Financial Casualty, supra, 14 Cal.App.5th 308, to support its contention that the trial court should have ignored its earlier inaction and focused only on the four-day period between the time it learned of Cartwright's arrest and the expiration of the 20-day period within which to seek to vacate summary judgment is misplaced. In Financial Casualty, the bond was forfeited in San Francisco County. (Id. at p. 311.) After the bail agent learned the defendant was in custody in Contra Costa County, it made several attempts to serve the San Francisco warrant so the defendant would be held and arrested in the San Francisco case. (Ibid.) The Contra Costa Sheriff's Department repeatedly told the bail agent the database contained no active warrants for the defendant. (Ibid.) The bail agent then moved to vacate the forfeiture and exonerate the bond under section 980, based on the court's failure to enter the warrant into the relevant database. That motion was denied. (Ibid.) After summary judgment was entered, the bail agent learned the defendant actually had been in custody for the underlying case within the appearance period, and filed an unsuccessful motion to vacate that judgment under section 1305.6. (Id. at p. 312.) The appellate court reversed. (Id. at pp. 315-318.) Pointing to the bail agent's repeated unsuccessful efforts to have the San Francisco warrant served on defendant based on incorrect information provided by the Contra Costa sheriff, and the agent's attempt to seek relief within the appearance period, the Court found the surety's actions were reasonable. (Id. at p. 318.) The Financial Casualty court distinguished the affirmative action taken there from the laissez faire approach taken by the surety in Accredited. (Id. at pp. 317-318.)
Financial Casualty provides no support for Lexington's contention that the trial court erred in looking beyond the four-day period before the forfeiture period expired. As in Financial Casualty, the trial court appropriately considered the totality of the bail agent's actions, including its effort to have the San Francisco warrant served within the appearance period, so the criminal defendant would be arrested in the underlying case. (Financial Casualty, supra, 14 Cal.App.5th at pp. 316-317.) The case does not support Lexington's argument that its agent's inaction prior to four-day period should not be considered. (See County of Los Angeles v. Fairmont Specialty Group (2008) 164 Cal.App.4th 1018, 1027-1029 [the trial court's inquiry must be both prospective and retrospective in determining whether to extend the period in which a bail surety may seek to have the forfeiture order vacated and bond exonerated].)
DISPOSITION
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
WILLHITE, J.
We concur:
MANELLA, P. J.
CURREY, J.