Karine Gevorkyan, et al., Appellants,v.Ira Judelson, Respondent.BriefN.Y.June 1, 2017To Be Argued By: Jonathan Svetkey (Time Requested: 30 Minutes) CTQ-2 0 16-00004 COURT OF APPEALS STATE OF NEW YORK KARINE GEVORKY AN, ARTHUR BOGORAZ, INNA MOLD AVER and SAM MOLD AVER Appellants, -against- IRA JUDELSON, Respondent. ON APPEAL FROM THE QUESTEION CERTIFIED BY THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT INDOCKETNO. 15-3249 Dated: March 1, 2017 BRIEF FOR RESPONDENT IRA JUDELSON Jonathan S vetkey Watters & Svetkey, LLP Attorneys for Ira Judelson 60 East 42nd Street- Suite 1427 New York, New York 10165 (917) 751-1734 TABLE OF CONTENTS TABLE OF AUTHORITIES ................................................................................... i PRELIMINARY STATEMENT ............................................................................ 1 The Facts ............................................................................................................... 1 Summary of Argument .... ... ...... ... .. . .. .. .. . . .. .. . ...... ..... .. .. .. .. .... .. .... ...... ...... ... .. . ...... .... 2 ARGUMENT POINT I THE PLAIN LANGUAGE OF THE BAIL BOND STATUTE ALLOWS THE BONDSMAN TO RETAIN THE PREMIUM/COMPENSATION UPON POSTING THE BOND ........................................................................................ 3 The Bail Bond Statute ................................................ 3 Criminal Procedure Law Bond Provisions Do Not Make Retention Of The Bail Bond Premium/Compensation Contingent On Passing A Surety Hearing Or Upon The Release Of The Defendant ........................................ 4 The Bail Bond Statute Does Not Condition Retention Of The Premium Or Compensation On A Defendant's Release ................................ 6 The Legislation's Design Of Providing A Single Fee For Services Rather Than Allowing A Bondsman To Charge For Time, Work and Expenses As Well As The Legislative History Of The Statute Permits The Bondsman To Retain The Premium Even If A Defendant Is Unable To Prevail At A Surety Hearing ............................ 7 Interpreting The Bail Bond Statute To Require Return Of The Premium If The Defendant Is Not Released Would Undermine The Purpose Of The Statute ...... 8 The Bail Bond Statute, Procedures And State Agency Oversight Of The Industry Provide Sufficient Protection Of Defendants And Their Families .............. 9 POINT II GENERAL INSURANCE LAW PRINCIPLES ARE NOT RELEVANT TO THE BAIL BOND STATUTE ...................................................................................... 10 The Bail Bond Statute Does Not Make The Retention Of The Premium Dependent On The Risk Associated With The Bond ............................................................... 12 POINT III THERE IS NO ISSUE OF CONTRACT LAW CERTIFIED FOR THIS COURT'S REVIEW ............................................................................................................. 13 Appellants' Contract Arguments Were Rejected By The United States District Court After Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 CONCLUSION ....................................................................................................... 20 CERTIFICATE OF WORD COMPLIANCE TABLE OF AUTHORITIES CASES PAGE Commonwealth of Northern Mariana Islands v. Canadian Imperial Bank of Commerce, 21 N.Y.3d 55 (2013) ..................................................................... 4, 12 Johnson-Roberts v. Ira Judelson Bail Bonds, 140 A.D.3d 509 (1st Dept. 2016) .. 5 McKinnon v. Int'l Fid Ins. Co., 182 Misc.2d 517 (N.Y. County 1999) ............... 7 People ex rel. Aidala v.Warden, Rikers Island Corr. Facility, 100 A.D.3d 667 (2d Dept. 2012) ......................................................................................................... 18 People v. Finnegan, 85 N.Y.2d 53 (1995) ............................................................ 12 STATUTES New York State Criminal Procedure Law § 520.20, ...................... 1, 4 New York State Criminal Procedure Law CPL 520.30 ..................... 1, 4 New York State Insurance Law § 6801 .................................. 1 New York State Insurance Law § 6802(k) .............................. .1 0 New York State Insurance Law§ 6804(a) & (b)(l) ...................... 1, 3 OTHER AUTHORITIES 1997 Senate Bill 114 NY. Legis Senate S-114. 1997-1998 ............................... .... 7 New York Department of Financial Services Office of General Counsel opinion dated November 23,2010, entitled "Earned Commissions on Bail Bonds," ...... 6 A.G. Schneidem1an Announces Conviction And Jail Time In Multi-millionDollarlnsuranceScheme,"http://www.ag.ny.gov/press-release/ag-Sch neiderman-Announces-Conviction-And-Jail-Time-In-Multi-million-Dollar-Insuran ce-Scheme (June 26, 2013) ........................................... 17 i COURT OF APPEALS STATE OF NEW YORK - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - -~ KARINE GEVORKYAN, ARTHUR BOGORAZ, INNA MOLDA VER and SAM MOLD AVER Appellants, -against- CTQ-2016-00004 IRA JUDELSON, Respondent. ---------------------------------------------------------------~ PRELIMINARY STATEMENT The answer to the certified question is yes, ". . . an entity engaged in the "bail business," as defined in NYIL section 6801(a)(1), may retain its "premium or compensations," as described in NYIL section 6804(a), where a bond posted pursuant to NYCPL section 520.20 is denied at a bail-sufficiency hearing conducted pursuant to NYCPL section 520.30, and the criminal defendant that is the subject ofthe bond is never admitted to bail." A. 13. The Facts No counterfactual statement will be given. Respondent will rely on the factual findings and conclusions of law rendered by Justice Richard M. Berman after trial in the United States District Court as set out in pages 29-56 of the appendix filed with appellants' brief. Summary of Argument The plain language of the bail bond statute allows the bondsman to retain the premium/compensation for posting the bond even if the defendant fails to pass surety and is not released from prison. This conclusion follows as well from the legislatures' intent to promote the bail bond industry while protecting defendants and their families. They were able to serve both interests by establishing a single fee for the bondsman's work rather than allowing him to lodge unlimited charges for services and expenditures. Moreover, the defendant and his family's interests are protected by the involvement of defense counsel in preparing for and conducting the surety hearing, the judge presiding over the proceedings and the New York State Department of Insurance which oversees bail bondsmen and their practices. A bail bond is a unique insurance product rendering general insurance law principles and rules governing other types of insurance coverage inapplicable to an analysis of the bail bond statute. Finally, there is no certified question before this Court concemmg the contract between the parties. 2 ARGUMENT POINT I THE PLAIN LANGUAGE OF THE BAIL BOND STATUTE ALLOWS THE BONDSMAN TO RETAIN THE PREMIUM/COMPENSATION UPON POSTING THE BOND The Bail Bond Statute The statute governing bail bonds provides in relevant part that: (a) The premium or compensation for giving bail bond or depositing money or property as bail shall not exceed ten per centum of the amount of such bond or deposit in cases where such bonds or deposits do not exceed the sum of three thousand dollars. Where such bonds or deposits exceed the sum of three thousand dollars, the premium shall not exceed ten per centum of the first three thousand dollars and eight per centum of the excess amount over three thousand dollars up to ten thousand dollars and six per centum of the excess amount over ten thousand dollars ... (b) No person or corporation shall: ( 1) charge or receive, directly or indirectly, any greater compensation for making a deposit for bail or giving bail .... N.Y. Ins. Law§ 6804(a) & (b)(l) (McKinney 2000) The language of the statute establishes without qualification the premium or compensation for, "giving bail bond". It does not condition the bail bondsman's retention of the premium or compensation on any other event. Thus, there is nothing in the statute that would prohibit the bail bondsman from retaining the premium after, "giving bail bond" or "giving bail." This follows from the rules of statutory construction which state that, " our 'starting point' is 'the language itself, giving effect to the plain meaning 3 thereof' ... 'where the statutory language is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used" .... Moreover, 'it is fundamental that a court, interpreting a statute, should attempt to effectuate the intent of the legislature." Commonwealth of Northern Mariana Islands v. Canadian Imperial Bank of Commerce, 21 N.Y.3d 55, 60 (20 13 )(citations omitted). Criminal Procedure Law Bond Provisions Do Not Make Retention Of The Bail Bond Premium/Compensation Contingent On Passing A Surety Hearing Or Upon The Release Of The Defendant Further, neither of the two statutes governing the bail bond process prohibits a bondsman from retaining the premium or compensation if the defendant is not released from jail because he fails to establish the bona fides of the security he has pledged to support the bond. CPL 520.20 provides in relevant part that, 1. (a) Except as provided in paragraph (b) when a bail bond is to be posted in satisfaction of bail, the obligor or obligors must submit to the court a bail bond in the amount fixed, executed in the form prescribed in subdivision two, accompanied by a justifying affidavit of each obligor, executed in the form prescribed in subdivision four ... Whereas, CPL 520.30, pennits the court to conduct a surety hearing under certain circumstances as follows: 4 1. Following the posting of a bail bond and the justifying affidavit or affidavits or the posting of cash bail, the court may conduct an inquiry for the purpose of determining the reliability of the obligors or person posting cash bail, the value and sufficiency of any security offered, and whether any feature of the undertaking contravenes public policy; provided that before undertaking an inquiry, of a person posting cash bail the court, after application of the district attorney, must have had reasonable cause to believe that the person posting cash bail is not in rightful possession of money posted as cash bail or that such money constitutes the fi·uits of criminal or unlawful conduct. The court may inquire into any matter stated or required to be stated in the justifying affidavits, and may also inquire into other matters appropriate to the determination, which include but are not limited to the following ... 3. At the conclusion of the inquiry, the court must issue an order either approving or disapproving the bail The bail bond statute uses the term "giving bail bond" or "giving bond" whereas the criminal procedure law calls the same event "posting" a bail bond. There is no dispute that Judelson gave or posted the bail bond satisfying all three statutory sections. See e.g. A. 253; "cut slip", stating, "Arthur Bogoraz who is detained by you on a commitment to answer a charge for the crime(s) of 176.30 having given Sufficient bail to answer the same, you are commended forthwith to produce defendant in Part 50 for bail sufficiency Hearing." (emphasis supplied). These statutes provide that a bail bondman's exclusive means of compensation is the bail bond premium which it establishes by design is earned upon the bail bondsman, "giving bail bond" or "posting" a bail bond. Cf. Johnson-Roberts v. Ira Judelson Bail Bonds, 140 A.D.3d 509,510 (1st Dept. 20 16)( affirming default judgment against defendant bail bondsman because, "although execution of the bond is a condition precedent for retaining a premium payment, defendants failed to present any documentary evidence that they had 5 actually executed and posted any bond"); see also New York Department of Financial Services Office of General Counsel opinion, "Earned Commissions on Bail Bonds", OGC op. No. 10-11-15, dated November 23, 2010. (answering, "At what point in the execution of a bail bond transaction does the bail bond agent earn its commission?", by finding that, "despite preparing for the issuance of a bail bond, the court often does not issue a bond, usually [because] ... the court does not approve use of the bond after a [sufficiency] hearing pursuant to N.Y. Crim. Law section 520.30", which is not a barrier to the earning of a commission because, "the bail bond agent earns a commission when the bail bond is placed"). A. 51-52. The Bail Bond Statute Does Not Condition Retention Of The Premium Or Compensation On A Defendant's Release The statute contains no provision that earning the bail bond premium is contingent on a court finding that the collateral posted to secure the bail bond originated from a legitimate source. The absence of such a condition makes sense since the bail bondsman is not posting the collateral; it is pledged by those people connected to the defendant seeking his release. 6 The Legislation's Design Of Providing A Single Fee For Services Rather Than Allowing A Bondsman To Charge For Time, Work and Expenses As Well As The Legislative History Of The Statute Permits The Bondsman To Retain The Premium Even If A Defendant Is Unable To Prevail At An Examination Of Surety The statute's overriding design is to limit a bail bondsman's fee to a single percentage of the bond. In this fashion it prevents the bail bondsmen from charging for time, work and the expenses associated with posting the bond and preparing for and participating in a surety hearing and any work thereafter. See McKinnon v. Int'l Fid Ins. Co., 182 Misc.2d 517 (N.Y. County 1999)(finding that section 6804 precludes the addition of expenses beyond the percentages allowed by the statute). The legislative history of the statute, sparse as it is, supports the conclusion that the absence of any language limiting retaining the premium or compensation allows the bondsman to keep his fee independent of the defendant's release. The legislation raising rates commensurate with those allowed in other states was enacted to facilitate the issuing of bail bonds. It recognized that there is a public interest in promoting the bail bond industry because it would reduce the prison population. 1997 Senate Bill114 NY. Legis Senate S-114. 1997-1998. The legislature made a choice to limit the bondsman's fee to ensure that bond premium/compensation was not an open-ended expense. It creates a uniform charge. It is not anomalous to allow the bondsman to retain the premium as appellants' claim [Brief page 18] but constitutes a specific trade off of providing a set fee for services and expenses rather than allowing for unlimited individual 7 charges. That the premium is graduated to the amount of the bond recognizes that the higher the bond the more work is required to find sureties, compile the security to support it and prepare for and participate in a likely examination of surety. Interpreting The Bail Bond Statute To Require The Return Of The Premium If The Defendant Is Not Released Would Undermine The Purpose Of The Statute In light of the foregoing, appellants' analysis is contrary to the statutory language and legislature's intent. Moreover, if accepted, it would wreak havoc on bail bond practices. It would create vast uncertainty for the bondsman who would have to consider whether to spend the time and money necessary for the surety hearing knowing that absent the defendant's release he would not be reimbursed for expenses or compensated for his work. Bail bondsmen would be reluctant or refuse to post bond knowing that the premium would be contingent on the defendant's release from prison over which the bondsman has no control. Under appellants' formulation, a bail bondsman who posts a bond but fails to secure the release of the defendant due to an immigration or parole hold would not be allowed to keep the premium. A. 193, 211, 221. This would cut off or, at best, significantly reduce, the availability of bonds for defendants in this situation. An entire class of defendants - constitutionally presumed innocent - would be incarcerated for the duration of the pending criminal proceedings. Already overextended prisons would have to deal with an expanding prison population. Thus, accepting appellants' argument would undermine the purpose of the statute. 8 The Bail Bond Statute, Procedures And State Agency Oversight Of The Industry Provide Sufficient Protection Of Defendants And Their Families I Further, there are too many safeguards inherent in the bail bond procedure to support appellants' concern that the current statute allows bail bondsmen to post bonds and collect a premium without regard to whether a defendant would succeed at a sufficiency hearing. Brief page 2. Their argument ignores in the first instance, that the bondsman's business model is based upon his or her ability to get people out of jail. The bail bondsman has every incentive to work toward that end with the time, expenditures and zeal exhibited by Judelson here. A. 232 [Judelson trial testimony: "over hundreds of hours ... also appraisals, title searches legal costs ... I have to have attorneys look over paper work"]; A. 268-273 [Judelson affidavit describing time, work and expenditures]. A bondsman who posts and walks will very shortly find himself out of business. In addition, it is defendant's counsel who conducts the surety hearing and necessarily is involved in the bond proceedings from their inception. A. 34, paragraph 22 & A. 248-249. Counsel, in overseeing this process, provides strong protection against an unscrupulous bail bondsman. The court conducting the surety hearing certainly would be able to flag any questionable behavior by the bondsman as well. And if suspicion of wrongdoing arises, the New York State Insurance Department which regulates bail bondsmen can investigate and discipline the 9 bondsman or refer the matter for criminal prosecution should the circumstances warrant. See NYIL 6802(k). Finally, answering the certification in the negative would constitute a modification of the statute. As the Second Circuit observed, the statute, "was intended by the legislature to secure compensation for bail bond agents and to protect defendants and their families at a critical juncture in criminal proceedings." A. 12. Although this Court is in a better position than the Second Circuit to evaluate, "[t]he proper balance between these competing interests", [A. 12], the legislature already made that determination. Any change in the statute must be left to the legislature who can best determine after hearings and investigation into bail bond practices whether the current percentage based compensation or a fee for services and reimbursement of expenses would protect defendants and their families while ensuring that bail is available to the widest range of defendants possible. Accordingly, the certified question should be answered in the affirmative. POINT II GENERAL INSURANCE LAW PRINCIPLES ARE NOT RELEVANT TO THE BAIL BOND STATUTE 10 As the Second Circuit states in its decision, What law ... [appellants] do cite at best requires the return of 'unearned premiums' in other areas of insurance-i.e., automobile, life and home insurance. On the basis of these cases, they argue that insurers may not retain premiums covering periods in which they were A. 10. not exposed to risk. In essence, they ask us to establish and apply a new (and potentially broad) principle to all contracts governed by the NYIL which is that the premium must follow the risk. We are reluctant to go down this path. These cases, which involve very different areas of insurance law, do not meaningfully address, let alone resolve, the issues that are dispositive of this appeal The entire line of cases and statutes appellants cite at pages 28-32 of their brief are inapplicable to the posting of a bail bond. None of the insurance law sections appellants cite refers to bail bonds nor do any of the statutes affecting bail bonds include a reference to these sections. Car, fire, homeowners and finance insurance involve contractual arrangements where a premium is paid to cover the insured interest for a specific period of time. If the policy is cancelled prior to the expiration of that time frame, a portion of the premium is refunded. A bail bond provides security to ensure that the defendant returns to court and covers an indefinite time frame. It also involves a completely different procedure and fee structure. Indeed, none of the insurance arrangements cited by plaintiffs require court approval. They also do not have hearings to determine if the insured's money comes from a legitimate source. Accordingly, there are no analogous insurance products whose governing principles could be applied to the bail bond statute or the bail bond as an insurance product. 11 The Bail Bond Statute Does Not Make The Retention Of The Premium Dependent On The Risk Associated With The Bond Nothing in statute conditions premium compensation on risk to the bondsman or release of the defendant. Cf. Commonwealth of Northern Mariana Islands v. Canadian Imperial Bank of Commerce, 21 N.Y.3d 55, 60-61 (2013)(" ... we have previously observed that the failure of the legislature to include a term in a statute is a significant indication that its exclusion was intended", citing People v. Finnegan, 85 N.Y.2d 53, 58 (1995)("We have firmly held that the failure of the legislature to include a substantive, significant prescription in a statute is a strong indication that its exclusion was intended"). · The omission of such a condition makes sense since the nature of risk in the bail bond context is vastly different than any other insurance product. Although the bail bondsman must pay the court the bail amount if the defendant fails to return to court, that "risk" is offset by the security he obtains from the bonds guarantors. Moreover, a bondsman generally will require and obtain security in an amount that exceeds the bond thereby ensuring that he will be reimbursed for the bond amount he pays to the court. Thus, he has eliminated the "risk" associated with the defendant's release and possibility that he might not return to court. Appellants assertion that Judelson or any other bondsman is being paid merely to post a piece of paper [Brief at 25] and therefore receives a windfall [Brief at 15] if the defendant cannot pass a surety hearing is a fallacy. Judelson 12 engaged in extensive work and expense to prepare for and participate in the surety hearing. See A. 232 [Judelson trial testimony: "over hundreds of hours ... also appraisals, title searches legal costs ... I have to have attorneys look over paper work"]; A. 268-273 [Judelson affidavit describing time, work and expenditures]. He repeated these efforts and declined a second fee to which he was entitled when he posted a second bond at appellant's request. A. 271, 273. The current statutory framework and bail bond process does not support appellants' claim that a bondsman receives a premium for little or no work. POINT III THERE IS NO ISSUE OF CONTRACT LAW CERTIFIED FOR THIS COURT'S REVIEW Appellants incorrectly assert that, "[t]he certified question poses both a statutory and contractual issue." Brief pages 21-24. The contract is not in question here. The Second Circuit decision notes that if New York law permits a bail bond agent to retain its premium following the rejection of a bail package at a sufficiency hearing, "the question becomes simply one of contract interpretation for this Court." A. 12. There is no unresolved issue of contract law applicable to this case and none certified by the Second Circuit. A. 13. Appellants' Contract Arguments Were Rejected By The United States District Court After Trial The contract argument appellants present, moreover, was made to the trial court and rejected. The court found, "that the bail bond ... [contract between the 13 parties] is ambiguous on its face as to when the premium is earned by the bail bondsman" [A 41, District Court Decision paragraph 43], and held that, "[p]ursuant to the terms of the Bail Bond ... [contract], as supplemented with extrinsic evidence, Defendant is entitled to retain the bond premium in the amount of$120,260." A. 49, District Court Decision paragraph 65. There was no possibility that appellants misunderstood the nature of their agreement with Judelson. Gevorkyan had numerous conversations and meetings with Judelson [A. 96-97, 110, 268]. He explained all aspects of the bail bond process to her including that the bail bond premium is earned upon the execution ofthe bond. A. 201-202. The bail bond contract paper work signed by appellants stated that, "[a]pplication is hereby made to you by the undersigned to execute or procure the execution of a bail bond ... of $2,000,000 on behalf of Arthur Bogoraz ... "., and provides that, "[t]he undersigned jointly and severally agree to pay the sum of $120,560 as a premium upon the execution of the bond .... ".A 244. It included in another provision that the parties agreed that, "[i]n consideration of the International Fidelity Insurance company ... executing. . . the bond. . . we the undersigned, hereby jointly and severally convenant and agree as follows: First - That we will immediately pay to the Company the premium for the bond herein ... . "A. 255, see also A. 102. 14 Karine Gevorkyan signed both documents and acknowledged in her trial testimony that she asked Ira Judelson to obtain the execution of a bail bond. A. 97-98, 100-101. Judge Berman found that, ". . . the defense testimony . . . was more credible than Plaintiffs' testimony ... on the issue of when, under the Bail Bond Application, the premium is earned." And that, "[a]mong other reasons, the defense witnesses' testimony was more forthright, clear, and consistent than that of the Plaintiffs' testimony." A. 41, District Court Decision paragraph 50. The trial court credited J udelson' s testimony that, " [ w ]hen Karine [Gevorkyan] came to me ... I expressed to her everything, from soup to nuts, what was going to happen here. And when all the properties, which I went over, and where the money was coming from to do my diligence, to make sure that this tries to pass [sufficiency]. She understood everything from top to bottom, including that when the bond is executed she would lose her premium." A. 4 7-48, District Court Decision paragraph 61. Also credited was his testimony that he explained during a six hour plus March 26, 2012 meeting that, "when all the documents had been executed I once again explained to [Gevorkyan] and Mr. and Ms. Moldaver that once the bond was posted the Premium fee would be earned and it would not be returned even if the Defendant didn't get out of jail because the [Sufficiency] Exam failed." A. 48, District Court Decision paragraph 61. 15 The court also believed the testimony of Judelson's employee, Yusef Jabr, who stated that, during the March 26, 2012 meeting, he "established that the premium ... will be lost once the bail is posted ... [and] [Gevorkyan] was very well aware that once the bond is posted, the fee is earned ... because me and [Judelson] brought it up to her in the office there, and she said, I already know that. [An employee] from Empire [Bail Bonds] explained that to me thoroughly." A. 48, District Court Decision paragraph 62. Appellants' protest that they should not be held to their agreement with Judelson because they are not, "sophisticated in the business of bail bonds." Brief page 24. But Gevorklyan, was well versed in bond procedures before she contacted Judelson to have him post bond for her husband. She previously had met with at least two bail bond companies. Both declined to post the bond. These were not hit or miss encounters but involved multiple conversations with employees of these companies concerning premiums and fees. A. 30-31,90-91,258-260. Gevorkyan had a masters degree in business and finance and had worked as an accountant. A. 86-87, 257. The Moldavers were highly educated and ran separate businesses for years. A. 136-137, 254, 265. Bogoraz himself was well positioned to detect any overreaching since the criminal charges to which he eventually pled guilty were based upon his having orchestrated a highly complex no-fault insurance fraud scheme for many years. He stole millions of dollars from 16 insurance companies by using information he had taken from doctors involved in his operation. He set up corporations, forged signatures on leases and bank documents and filed false no-fault claims and laundered the proceeds. See "A.G. Schneiderman Announces Conviction And Jail Time In Multi-millionDollarinsuranceScheme",http://www.ag.ny.gov/press-release/ag-Sch eiderman-Announces-Conviction-AndJ ail-time-In-Multi-million-Dollar-Insurance- Scheme (June 26, 2013). It follows from the trial court's fact findings and the parties' testimony that appellants knew that Judelson was not just presenting a piece of paper to a clerk and, "hop[ing] for the best" [Brief page 25], but that they were paying $120,560 so that Judelson would post the bond because that was the only way they could get the surety hearing. By the time Karine Gevorkyan contacted Ira Judelson she had substantial exposure to bail bond procedures. Other bail bond companies did not want to get involved with Bogaraz's $2,000,000 bail because he had fled from New York to the Ukraine the day before he was to surrender to face a 61 count indictment charging him with running a multi-million dollar no-fault insurance fraud scheme and had skipped bail on a prior unrelated case. A. 30 District Court Decision paragraph 8 & A. 268. Indeed, she had told Judelson that no one wanted to go down the path to execute the bond. A. 227. 17 As a matter of her history with the bail bondsmen before Ira Judelson and his natural concern about getting involved in a project that no one else would touch, it cannot be doubted that she knew, and that he otherwise advised her, that the premium was gone once the bond was posted, regardless of the outcome of the surety hearing. Someone in her position, desperate to get her husband out of jail, approaching her last resort, with indemnitors who she evidently believed would survive a surety hearing [A. 269, 276], would spend the $120,000 in an attempt to secure his liberty. Thus, in the end, the parties clearly understood what was at stake and that the premium was the price of moving forward even if Arthur Bogoraz was not released from custody. Ultimately, appellants have only themselves to blame for the failure of Bogoraz to be released from jail. They were the ones responsible for convincing the court examining surety that the funds came from a legitimate source. As Gevorkyan admitted at trial, the judge denied the bail package, "[b ]ecause we failed to prove enough, or provide enough proof to show that the funds were clean." A. 115. See People ex rel. Aidala v.Warden, Rikers Island Corr. Facility, 100 A.D.3d 667 (2d Dept. 2012)("[T]he petitioner [Bogoraz] has the burden of proving by a preponderance of the evidence that the cash or collateral posted to secure a bail bond originates from a legitimate source and is not the fruit of criminal or unlawful conduct. . . . Under the circumstances presented here, . . 18 .[Bogoraz] failed to meet his burden at the bail bond source hearing.")(citations omitted). Judelson accomplished what no other bail bondsman was willing to do which was to execute the bond so that appellants could have the opportunity to establish the bona fides of the surety necessary to secure Bogoraz's release. Judelson fulfilled his obligation under the contract to appellants. Appellants were unable to fulfill their obligation to the court examining the surety. The bail bond statute allows the bondsman to retain the premium even if the defendant fails an examination of surety and is not released from jail. This outcome follows from a plain reading of the statute as well as from the legislature's intent to limit a bail bondsman's fee to a specific percentage of the bond rather than allow for unlimited charges for services and expenses. Whether or not this constitutes a proper balance between promoting the issuance of bail bonds while ensuring defendants and their families are protected was a legislative decision in the first instance. Defendant submits that the proper balance was reached. But even if a review of bail bond practices pursuant to the statute reveal that adjustments should be made, they would have to come from the legislature, not the courts. Accordingly, this Court should find that a bail bondsman may retain the premium for posting the bond even though the defendant was not released from prison because he failed to prevail at a surety hearing. 19 CONCLUSION FOR THE FOREGOING REASONS, THE CERTIFIED QUESTION SHOULD BE ANSWERED IN THE AFFIRMATIVE Dated: 20 CERTIFICATE OF COMPLIANCE This brief was prepared on a computer. The processing system was Word. There are no footnotes. Headings are no larger than 15 point. This brief was prepared using times new roman typeface, 14 point, double spaced and consists of 4,702 words, and was produced on white opaque unglazed recycled paper. Jonathan Svetkey (393 Watters & Svetkey, LLP Attorneys for Ira Judelson 60 East 42"d Street - Suite 1427 New Yor~ New York 10165 (917) 751-1734