Opinion
B295900
03-16-2021
THE PEOPLE, Plaintiff and Respondent, v. BANKERS INSURANCE COMPANY, Defendant and Appellant.
Law Office of John Rorabaugh, John Mark Rorabaugh and Crystal L. Rorabaugh for Defendant and Appellant. Office of the County Counsel, Mary C. Wickham, County Counsel, Adrian G. Gragas, Assistant County Counsel, and David D. Lee, 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. SJ4395) 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. Office of the County Counsel, Mary C. Wickham, County Counsel, Adrian G. Gragas, Assistant County Counsel, and David D. Lee, Deputy County Counsel, for Plaintiff and Respondent.
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INTRODUCTION
Appellant Bankers Insurance Company (Bankers) executed a bail bond to secure the release from custody of criminal defendant Mohammed Bakhey Aldossari, promising to guarantee Aldossari's appearance in court or pay $100,000 (the amount at which bail had been set). Aldossari then fled the country. The trial court ordered the bond forfeited, and later entered summary judgment against Bankers on the bond.
Bankers moved to set aside the judgment under Code of Civil Procedure section 473, subdivision (d), which provides that a trial court "may . . . set aside any void judgment or order." Bankers argued the judgment was void because the court had failed to inquire into Aldossari's ability to pay bail, as required by In re Humphrey (2018) 19 Cal.App.5th 1006 (Humphrey), review granted May 23, 2018, ordered to have precedential effect in part August 26, 2020, S247278. Bankers did not raise the issue of unconscionability. The court denied the motion, reasoning, inter alia, that even if Humphrey error occurred, it did not abrogate Bankers's obligations under the bond.
On appeal from the court's order denying its motion, Bankers contends the court erred because (1) the court violated Humphrey's requirements in setting bail, rendering the judgment entered on the bail bond void; and (2) the bail-setting order was an unconscionable contract between Aldossari and the state. We reject both contentions. First, as held by other courts that have consistently rejected sureties' Humphrey claims (including the court that decided Humphrey), even if Humphrey error occurred, it did not void the bail bond or the judgment entered thereon. Second, Bankers forfeited its unconscionability claim by failing to raise it in the trial court, and, in any event, the claim is meritless because it is directed at a judicial order, not a contract. Accordingly, we affirm.
BACKGROUND
A. The Judgment on the Bail Bond
In April 2016, the People charged Mohammed Bakhey Aldossari with causing injury by driving under the influence of alcohol. The trial court set bail in the amount of $100,000 in reliance on the bail schedule, without inquiring into Aldossari's ability to pay.
On April 27, 2016, Bankers executed a bail bond. In exchange for the People's release of Aldossari from custody, Bankers promised to pay $100,000 if Aldossari failed to appear as required. Bankers agreed that summary judgment could be entered against it in the same amount if the court ordered the bond forfeited.
After his release from custody, Aldossari fled the country. On July 29, 2016, he failed to make a required court appearance.
On August 4, 2016, the court ordered the bail bond forfeited, and mailed notice of the forfeiture to Bankers. On April 3, 2017, upon application by the clerk of the court, the court entered summary judgment against Bankers in the amount of $100,000 (plus court costs).
B. Bankers's Motion to Set Aside the Judgment
On October 15, 2018, Bankers filed a motion under Code of Civil Procedure section 473 to set aside the judgment, discharge the forfeiture, and exonerate bail. Relying on Humphrey, supra, 19 Cal.App.5th 1006, rev.gr., Bankers argued the bail-setting order was void because the trial court had set the amount of bail without inquiring into Aldossari's ability to pay, in violation of his due process and equal protection rights. Bankers further argued the asserted Humphrey error rendered the bail bond and the judgment entered thereon void. Bankers did not raise the issue of unconscionability.
In Humphrey, a defendant remained incarcerated pending trial, even though the trial court had found the defendant suitable for release under specified conditions, because the court had set bail in an amount the defendant was unable to pay. (Humphrey, supra, 19 Cal.App.5th at 1014, 1045, rev. gr.) The defendant challenged his continued incarceration by filing a petition for a writ of habeas corpus, which was granted by Division Two of the First District Court of Appeal. (Id. at 1014, 1022.) The Humphrey court concluded the trial court had violated the defendant's due process and equal protection rights by failing to consider his ability to pay and less restrictive alternatives to money bail, and remanded to the trial court with instructions to consider those matters at a new bail hearing. (Id. at 1041-1049.)
In opposition to the motion, the People argued that any procedural errors in setting bail, including Humphrey error, did not render a bail bond void. They further argued: (1) Bankers lacked standing to assert Aldossari's constitutional rights, as necessary to maintain its Humphrey claim; (2) Bankers waived its Humphrey claim when it executed the bail bond; (3) Humphrey could not be applied retroactively in the manner Bankers requested; and (4) no Humphrey error occurred because Aldossari posted bail and was released from custody.
In reply, Bankers generally repeated the arguments in its opening brief, again without raising the issue of unconscionability. At a hearing on the motion, counsel submitted on the briefing, and the court took the matter under submission.
C. The Trial Court's Ruling
On December 21, 2018, the court denied Bankers's motion to set aside the judgment. The court reasoned, "[N]othing in Humphrey abrogates the surety's contractual duty to pay the bond amount it is obliged to pay due to Defendant's failure to appear as it guaranteed." As alternative grounds for denying the motion, the court reasoned that (1) Bankers lacked standing to assert Aldossari's constitutional rights; (2) Humphrey did not apply retroactively to cases in which the defendant posted bail and was released from custody; (3) Bankers failed to show any prejudicial constitutional error under Humphrey, as Humphrey did not hold that the mere use of a bail schedule is unconstitutional, and Aldossari's posting of bail showed he was not prejudiced by the omission of an inquiry into his ability to pay; and (4) the court lacked authority to rule that another trial judge had erred in setting bail.
Aldossari's bail was set by Judge Karla Kerlin. Bankers's motion to set aside the judgment was denied by Judge Victoria B. Wilson.
Bankers timely appealed.
DISCUSSION
Bankers contends the trial court erred by denying its motion to set aside the judgment because (1) the court violated Humphrey's requirements in setting bail, rendering the judgment entered on the bail bond void; and (2) the bail-setting order was an unconscionable contract between Aldossari and the state. We reject both claims.
A. Humphrey Claim
The trial court properly rejected Bankers's Humphrey claim as a ground for setting aside the judgment under Code of Civil Procedure section 473, subdivision (d). Even assuming the court committed Humphrey error in the underlying bail-setting proceedings, the error did not void the judgment entered on the bail bond. "Time and again, courts have ruled that errors in a trial court's setting of bail during the criminal prosecution do not let the surety off the hook in the collateral bail proceedings." (People v. North River Insurance Co. (2020) 48 Cal.App.5th 226, 235 (North River); see also People v. Financial Casualty & Surety, Inc. (2019) 39 Cal.App.5th 1213, 1223-1227 [surety remained liable on bail bond, despite unconstitutional imposition of bail condition requiring defendant to waive Fourth Amendment rights]; People v. Accredited Surety & Casualty Co., Inc. (2004) 125 Cal.App.4th 1, 6-8 [same, despite trial court's failure to consider statutory factors bearing on amount of bail]; Continental Cas. Co. v. State of California (1974) 41 Cal.App.3d 259, 260-262 [same, despite unconstitutional addition of penalties to amount of bail].) Humphrey error is no different. (See People v. Accredited Surety & Casualty Co. (2019) 34 Cal.App.5th 891, 899 [surety remained liable on bail bond, regardless of any Humphrey error in underlying bail-setting procedure]; North River, supra, at 234 [same]; People v. American Surety Company (2020) 55 Cal.App.5th 265, 271 (American Surety) [same].)
We adopt the reasoning set forth in North River and related cases. A judgment is void only if the court acts without "fundamental authority over the subject matter, question presented, or party'" -- rather than merely acting in excess of jurisdiction, as where the court fails to comply with certain procedural requirements. (North River, supra, 48 Cal.App.5th at 233-234.) As implied by Humphrey's disposition -- viz., remand to the trial court with instructions to consider additional matters at a new bail hearing -- Humphrey found only a procedural error, not any absence of fundamental authority. (See Humphrey, supra, 19 Cal.App.5th at 1041-1049, rev. gr.) Indeed, despite asserting Humphrey error, Bankers does not dispute that "the trial court at all times had fundamental jurisdiction over the subject matter and the parties." (North River, supra, 48 Cal.App.5th at 234.) We conclude that even if Humphrey error occurred, Bankers failed to show the judgment entered on its bail bond was void, as required to set aside the judgment and exonerate Bankers from its obligations under the bond.
At worst, the asserted Humphrey error rendered the bail-setting order an act in excess of jurisdiction, and the judgment entered on the bail bond voidable. (See North River, supra, 48 Cal.App.5th at 234.) But Code of Civil Procedure section 473, subdivision (d) provides no relief from a voidable judgment. (Ibid.)
We find nothing inappropriate in holding Bankers to its bargain. Like the American Surety court (the same court that decided Humphrey), "we would be loath to sustain [the surety's] argument because it would produce the anomalous result that [the surety] would reap a windfall, keeping the bond premium without running any risk of being held to account on the bond." (American Surety, supra, 55 Cal.App.5th at 272; accord, North River, supra, 48 Cal.App.5th at 239 [sustaining of identical argument would "allow the sureties to have their cake and eat it too" and convert Humphrey into "a lottery ticket of staggering proportions to the bail bond industry"]; cf. Continental Cas. Co. v. State of California, supra, 41 Cal.App.3d at 262 ["The appellant bondsmen wish to change the terms of their contract with the state because the state incorrectly determined the amount of the money to be forfeited upon nonappearance of the bailee. Allowing restitution of a portion of the money forfeited would result in unjust enrichment of the surety"].)
None of the cases Bankers cites concerning void bonds are apposite. Several concerned bonds unrelated to bail. (See Taylor v. Exnicious (1925) 197 Cal. 443, 445-447 [receiver's bond]; Shaugnessy v. American Surety Co. (1903) 138 Cal. 543, 544-546 [contractor's bond]; Coburn v. Townsend (1894) 103 Cal. 233, 235 [bond in condemnation proceedings].) Another concerned a bail bond voided by the court's unilateral change of its terms after its execution. (See People v. Lexington National Ins. Corp. (2015) 242 Cal.App.4th 1098, 1103-1105.) Others involved defects in bail bonds themselves, rather than errors in the underlying bail-setting procedure. (See People v. Accredited Surety & Casualty Co. (2012) 209 Cal.App.4th 617, 622 [bond increased bail beyond amount fixed by court, and was unsupported by consideration because defendant was not in custody and therefore could not be released in exchange for surety's promise]; People v. International Fidelity Ins. Co. (2012) 204 Cal.App.4th 588, 595 [part of consideration for bond -- viz., reduction of risk by purported existence of prior bond -- was invalid because prior bond had been exonerated by operation of law upon defendant's remand to custody]; County of Merced v. Shaffer (1919) 40 Cal.App. 163, 167-168 [bond increased bail beyond amount fixed by court, and failed to promise sureties would pay it].) A final case involved bail set without fundamental authority, rather than any procedural error in the exercise of such authority. (See City and County of San Francisco v. Hartnett (1905) 1 Cal.App. 652, 653-656 [bail set by clerk, not court].)
Other cases cited by Bankers did not address whether any bond was void. (See, e.g., Kiperman v. Klenshetyn (2005) 133 Cal.App.4th 934, 939-940 [trial court abused its discretion by ordering surety to return premiums on two bail bonds, where surety did not surrender defendant on first bond and surrendered him with good cause on second].) The same is true of Timbs v. Indiana (2019) 139 S.Ct. 682, on which Bankers relied at oral argument. In Timbs, lower state courts rejected the State of Indiana's civil claim for forfeiture of a convicted criminal defendant's vehicle, concluding forfeiture would be tantamount to an unconstitutionally excessive fine. (Id. at 686.) The Indiana Supreme Court reversed (without deciding whether forfeiture would be excessive), holding the Excessive Fines Clause of the Eighth Amendment did not apply to the states. (Ibid.) The United States Supreme Court vacated the judgment of the Indiana Supreme Court, holding the Excessive Fines Clause applies to the states via the Due Process Clause of the Fourteenth Amendment. (Id. at 687-691.) Timbs is inapposite, as it did not conduct a proportionality analysis or discuss bail, let alone consider whether the setting of bail in an amount disproportionate to the defendant's ability to pay might void a subsequently executed bail bond.
In sum, any Humphrey error did not void the judgment. Thus, the trial court properly rejected Bankers's Humphrey claim as a ground for setting aside the judgment under Code of Civil Procedure section 473, subdivision (d).
In light of our holding that any Humphrey error did not void the judgment, we need not address the People's alternative arguments raised below and reasserted on appeal.
B. Unconscionability Claim
Bankers forfeited its unconscionability claim by failing to raise the issue in the trial court. (See, e.g., Bikkina v. Mahadevan (2015) 241 Cal.App.4th 70, 92 [generally, party's failure to raise issue in trial court forfeits issue on appeal].) Bankers's failure to raise the issue deprived the People of notice of any need to develop the record with evidence bearing on unconscionability, as the People were entitled to do. (See Civ. Code, § 1670.5, subd. (b) [upon claim that contract is unconscionable, "the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination"]; cf. Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 236 ["'numerous'" factual issues may bear on unconscionability].) It would therefore be unfair to the People to reach the merits of Bankers's unconscionability claim on appeal. (See Bikkina v. Mahadevan, supra, 241 Cal.App.4th at 92 [declining to review forfeited contention "[g]iven that the parties did not develop the factual record below to allow for a fair review"].)
Even had Bankers preserved its unconscionability claim for appeal, we would find it meritless as a matter of law. The claim is directed at the bail-setting order, which Bankers characterizes as a contract between Aldossari and the state. But the bail-setting order was not a contract, as it did not require Aldossari's consent. (See Civ. Code, § 1550 [mutual consent is essential element of any contract]; Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 789 [same].) In the bail bond context, the defendant and the state do not contract with each other; rather, they each contract with the surety. (North River, supra, 48 Cal.App.5th at 235 [defendant's release on bail bond is function of two contracts, in which surety contracts with (1) defendant, who pays premium and promises to pay full amount of bond in event of nonappearance in exchange for surety's posting of bond; and (2) the state, which releases defendant in exchange for surety's promise to guarantee defendant's appearance or pay amount of bond].)
Bankers argues that North River and similar cases misunderstood the relevant contractual relationships, but cites no authority contrary to those cases. In the trial court, Bankers characterized the relevant contractual relationships in a manner consistent with North River: "As between the surety and the [defendant], the surety promises to arrange for the [defendant]'s conditional liberty in exchange for the [defendant]'s promise of payment. As between the surety and the [state], the surety promises to produce the person of the [defendant], or a sum certain in his stead, at time of trial in exchange for the [state]'s promise to permit the surety to arrange for the [defendant]'s conditional liberty while at the same time exercising constructive custody over him." Further, in both the trial court and this court, Bankers supported its characterizations of the bail bond by citing People v. Safety National Casualty Corp. (2016) 62 Cal.4th 703 (Safety National). There, despite stating that a bail bond is a contract "'involving'" the defendant (whose appearance the surety promises to guarantee), our Supreme Court recognized that a bail bond is a contract "'"between the surety and the government . . . ."'" (Id. at 709, 715, italics added.) The court further recognized that the proceedings on the bail bond are "'independent from and collateral to'" the underlying criminal prosecution in which bail was set. (Id. at 709.) Thus, Safety National does not support Bankers's challenge to North River. Nor does it support Bankers's characterization of the underlying bail-setting order as a contract between the defendant and the state.
DISPOSITION
The order denying Bankers's motion to set aside the judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
MANELLA, P. J. We concur: WILLHITE, J. CURREY, J.