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People v. Lexington National Ins. Corp.

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
Jun 22, 2020
No. F079713 (Cal. Ct. App. Jun. 22, 2020)

Opinion

F079713

06-22-2020

THE PEOPLE, Plaintiff and Respondent, v. LEXINGTON NATIONAL INSURANCE CORPORATION, Defendant and Appellant.

Stephanie D. Torres for Defendant and Appellant. Margo A. Raison, County Counsel, and Emily Watts Blenner, 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. BCV-19-100358)

OPINION

THE COURT APPEAL from a judgment of the Superior Court of Kern County. Karen J. Nudell, Judge. (Retired Judge of the Los Angeles County Sup. Ct. assigned by the Chief Justice pursuant to article VI, § 6 of the Cal. Const.) Stephanie D. Torres for Defendant and Appellant. Margo A. Raison, County Counsel, and Emily Watts Blenner, Deputy County Counsel, for Plaintiff and Respondent.

Before Detjen, Acting P.J., Snauffer, J. and DeSantos, J.

-ooOoo-

A surety on a bail bond appeals from an order denying its motion to vacate forfeiture, exonerate bail and set aside the summary judgment. The surety contends the criminal defendant's constitutional rights were violated during the setting of bail and, as a result, the bail bond contract was void.

We conclude the surety, as a party to the bail bond contract, has standing to raise a legal argument that, if successful, would void the bond contract. On the record presented, the surety has failed to demonstrate the criminal defendant's constitutional rights were violated in the setting of bail. Alternatively, even if such a constitutional violation had been shown, "that violation does not void the underlying bail bond." (People v. Accredited Surety & Casualty Co. (2019) 34 Cal.App.5th 891, 897 (Accredited '19).)

We therefore affirm the summary judgment granted on the bond.

FACTS & PROCEEDINGS

On December 12, 2017, defendant Antonio Reyes was arrested and booked. On December 14, 2017, a felony arraignment was held, and bail was set at $40,000. On December 24, 2017, Gotham Bail Bonds, Inc., as an agent for Lexington National Insurance Corporation (collectively, Surety), issued a bail bond in the amount of $40,000 for defendant's release. The bond stated Reyes was to appear in court on December 26, 2017.

Reyes failed to appear at the December 26, 2017, hearing. As a result, the trial court declared the bail bond forfeited and issued a bench warrant for Reyes. On December 28, 2017, the clerk of court mailed notice of the order forfeiting the bail bond to Surety. In June 2018, Surety filed a motion to extend time and the parties subsequently stipulated to extend the appearance period. In February 2019, after the extended appearance period expired without Reyes being returned to custody, the court entered an order of summary judgment against Surety on the bail bond.

Surety filed a motion to set aside summary judgment, vacate the forfeiture, and exonerate the bail bond. Surety argued the summary judgment was void and must be set aside because bail had been set arbitrarily and, thus, was unconstitutional. Surety argued bail was unconstitutionally set because when the court set bail it did not consider defendant's ability to pay or possible less restrictive release alternatives. Surety supported this argument by citing In re Humphrey (2018) 19 Cal.App.5th 1006, review granted May 23, 2018, S247278 (Humphrey) and quoting its statement that "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 ...." (Id. at p. 1044.)

Respondent opposed Surety's motion to set aside, arguing Surety lacked standing to contest the manner in which the criminal defendant's bail was set. In addition, respondent addressed the appropriate remedy for the alleged violation of the criminal defendant's constitutional rights in setting bail. Respondent argued the only remedy was a new bail hearing at which the defendant is afforded the opportunity to present evidence and argument. In respondent's view, this remedy is irrelevant to a surety's contractual obligations under the bond.

In May 2019, the trial court held a hearing on Surety's motion. Respondent's counsel referred to a case that was not mentioned in the briefing and submitted. Surety's counsel submitted on the briefs. The court stated it had read the parties' papers and it appeared the respondent had the more persuasive argument. The court denied the motion to set aside the summary judgment. Surety timely appealed.

The record on appeal consists of an appellant's appendix and reporter's transcript of the May 2019 hearing. The record does not contain a reporter's transcript of the arraignment hearing or otherwise show how bail was set. Consequently, Surety asserts "[t]here is no record that a hearing occurred on the criminal defendant's ability to pay or less restrictive alternatives to bail prior to setting bail."

DISCUSSION

I. THRESHOLD ISSUES

A. Standing

We join the Third District's conclusion that a surety, as a party to the bond contract, has standing to raise a claim based on a theory that a violation of the criminal defendant's constitutional rights rendered the contract itself void. (Accredited '19, supra, 34 Cal.App.5th at pp. 896-897.) A contrary conclusion would be difficult to reconcile with our Supreme Court's analysis of a party's standing to raise a claim that a transaction is void. (See Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939 [borrowers have standing to challenge the lender's assignment of their note and deed of trust to a third party as void, even though borrowers are not a party to transaction between lender and third party]; see generally, Code Civ. Proc., § 367 [actions "must be prosecuted in the name of the real party in interest ...."].)

B. Waiver

Respondent contends Surety's execution of the bail bond operated as a waiver of the right to claim the bond was void and the time to raise the alleged violation of the criminal defendant's constitutional rights was before Surety executed the bond. Respondent relies on the holding in Accredited '19, implying that knowledge of the specific defect is not required for a waiver because Surety was on notice that California law establishes any defects and irregularities in the proceedings preliminary to the taking of bail are considered waived by the surety when it assumes its obligations by executing the bond. (Western Surety Co. v. Municipal Court (1937) 20 Cal.App.2d 442, 443-444.)

Respondent did not raise the waiver theory in the trial court proceedings and the trial court did not identify it as a ground for its decision. For this reason, we assume, without deciding, that Surety did not intentionally relinquish a known right when it executed the bail bond contract. (See In re Sheena K. (2007) 40 Cal.4th 875, 880, fn. 1 ["waiver" defined as the intentional relinquishment or abandonment of a known right or privilege].) II. MERITS OF THE CONSTITUTIONAL CLAIM

A. Constitutional Violation in Setting Bail

The first component of Surety's theory of trial court error is that Reyes's bail was set in violation of his constitutional rights. The second component is that such a violation renders the bail bond void. Accordingly, we first address whether Surety has affirmatively demonstrated a constitutional violation occurred. (See Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [appellants have the burden of affirmatively establishing prejudicial error].)

Citing Humphrey, supra, 19 Cal.App.5th 1006, Surety contends a "[f]ailure to hold a hearing on the determination of the amount of bail and to consider the defendant's ability to pay and the possibility of less restrictive release options violated the constitutional right to due process." Surety asserts no such hearing or consideration occurred prior to the setting of the amount of Reyes's bail and, therefore, bail was set arbitrarily and in violation of constitutional requirements.

Surety's brief provides no citations to the record to support this version of the facts about what occurred in the setting of bail. (See Cal. Rules of Court, rule 8.204(a)(1)(C) [brief must support any reference to a matter in the record with a citation].) Instead, Surety states: "There is no record that a hearing occurred on the criminal defendant's ability to pay or less restrictive alternatives to bail prior to setting bail." Surety supports this statement by citing to the register of actions (i.e., docket). A docket entry for December 14, 2017, states a hearing was held and describes the nature of the proceedings as a felony arraignment. The entry includes a line stating "BAIL: $40,000.00" and another line stating "CUSTODY STATUS: IN CUSTODY." This information does not affirmatively demonstrate the facts claimed by Surety—namely, that there was (1) no hearing on the determination of the amount of bail and (2) no consideration of Reyes's ability to pay and the possibility of less restrictive release options.

It is possible that Surety's statement about the absence of a record is an argument that respondent had the burden of proving bail was set in accordance with constitutional requirements at the hearing on Surety's motion to vacate forfeiture and exonerate bail. (See Evid. Code, § 115 [definition of burden of proof].) Alternatively, it could be an argument that, at the appellate level, respondent has the burden of providing a record showing the constitutional requirements applicable to the bail setting process were followed. We reject these arguments.

In the trial court, Evidence Code section 500 assigns the burden of proof to the moving party. Here, Surety filed the motion to vacate the forfeiture and exonerate bail and, under Evidence Code section 500, it had the burden of proving the constitutional violation. We recognize this general rule has exceptions and "courts may alter the normal allocation of the burden of proof" in certain circumstances. (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1188.) Surety has cited no statute, rule of court, or judicial decision that provides for allocating the burden of proof to respondent. Moreover, Surety has not analyzed the factors typically considered in determining whether to alter the normal allocation of the burden of proof. (See Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 660-661 [factors].) Therefore, as to the allocation of the burden of proof in the trial court, Surety has not convinced us that respondent must prove bail was set in a manner that complied with Reyes's constitutional rights.

As to the burden imposed at the appellate level, we begin with the "fundamental principle of appellate procedure that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment." (Jameson v. Desta (2018) 5 Cal.5th 594, 608-609.) Thus, the appellant has the burden of providing an adequate record that allows for meaningful review. (Ibid.) " 'Failure to provide an adequate record on an issue requires that the issue be resolved against [the appellant].' " (Ibid.)

These basic principles of appellate practice apply when a surety or bail agent challenges a summary judgment entered on a bail bond or an order denying a motion to vacate forfeiture and exonerate bail. (E.g., Accredited '19, supra, 34 Cal.App.5th at pp. 899-900; People v. Indiana Lumbermens Mutual Ins. Co. (2011) 194 Cal.App.4th 45, 52.) Accordingly, we conclude these principles apply to a surety's specific claim that the bail setting process violated the criminal defendant's constitutional rights. Here, Surety has not carried its burden because the record provided does not establish a constitutional violation occurred.

B. Consequence of a Constitutional Violation in Setting Bail

As a separate and alternate ground for our decision, we consider the legal consequences that flow from a constitutional violation in the setting of a criminal defendant's bail. This issue was addressed by the Third Appellate District in Accredited '19 and more recently by the Second Appellate District in People v. The North River Ins. Co. (2020) 48 Cal.App.5th 226 (North River '20). The Third Appellate District assumed a violation of the defendant's constitutional rights and then concluded "that violation does not void the underlying bail bond." (Accredited '19, supra, 34 Cal.App.5th at p. 897.) Similarly, the Second Appellate District concluded "any noncompliance with Humphrey would, at best, render the bail order voidable as to the defendant, not as to the surety." (North River '20, supra, at p. 235.) We join these decisions in concluding that a constitutional violation in setting bail does not void the bail bond.

In reaching its conclusion, the Third District stated Penal Code sections 1305 and 1306 set forth the procedural requirements for forfeiting and exonerating bonds and these requirements are designed to protect the surety. (Accredited '19, supra, 34 Cal.App.5th at p. 899.) We recognize the bail statutes are strictly construed to avoid forfeiture, which protects the surety "and more importantly the individual citizens who pledge to the surety their property on behalf of persons seeking release from custody ...." (County of Los Angeles v. Surety Ins. Co. (1984) 162 Cal.App.3d 58, 62; see People v. Indiana Lumbermens Mutual Ins. Co. (2010) 49 Cal.4th 301, 308 [policy of strict construction].)

In comparison to the procedural requirements governing the forfeiture and the exoneration of bail, the procedural requirements for setting the amount of bail address the release of a defendant from custody on bail and are not intended to protect the surety. (Accredited '19, supra, 34 Cal.App.5th at p. 898.) "Failure to comply with the procedural requirements of setting bail is not among the statutory grounds for exoneration of the bail bond." (Id. at p. 899.) Therefore, a violation of a criminal defendant's constitutional rights in setting bail cannot be equated to a violation of the statutory procedures in Penal Code sections 1305 and 1306 and the legal consequences that flow from the respective violations are different. Each set of procedures serves a different purpose and the remedy for a procedural violation must fit that purpose. Voiding surety's obligation to pay under a bail bond because the criminal defendant's constitutional rights were violated in the bail setting process does not serve the purpose of protecting the criminal defendant's interests. Accordingly, the remedy for such a violation should not include voiding the bond contract and relieving the surety of its obligations under the bond.

In North River '20, the Second Appellate District analyzed whether the summary judgment on the bail bond was void from a jurisdictional perspective. (North River '20, supra, 48 Cal.App.5th at pp. 233-234.) The court stated a judgment is void only when the court entering that judgment lacks jurisdiction in a fundamental sense and is merely voidable when the court acts in excess of its jurisdiction. (Id. at p. 233.) The court determined the trial court's summary judgment on the bail bond was not void because the trial court at all times had fundamental jurisdiction over the subject matter and the parties. (Id. at p. 234.) The court stated "[t]he independence of bail proceedings from the underlying criminal prosecution is why any noncompliance with Humphrey during the prosecution does not affect—let alone eviscerate—the trial court's jurisdiction over the collateral bail proceedings." (Id. at p. 235.) Based on its analysis and the results of other cases, the Second Appellate District concluded any noncompliance with the bail setting principles adopted in Humphrey did not render the subsequently issued bail bond void. (Ibid.)

The other cases were People. v. Financial Casualty & Surety, Inc. (2019) 39 Cal.App.5th 1213, 1223 (Financial Casualty '19); Accredited '19, surpa, 34 Cal.App.5th 891; and People v. Accredited Surety & Casualty Co., Inc. (2004) 125 Cal.App.4th 1.
In Financial Casualty '19, the Fourth Appellate District addressed a surety's contention "that the presence of an unconstitutional condition of bail renders a bail agreement void as to all parties, including the surety." (Financial Casualty '19, supra, 39 Cal.App.5th at p. 1223.) The court concluded the presence of an unconstitutional bail condition did not constitute a failure of any of the consideration that the government gave the surety for the bail agreement and, therefore, the presence of the unconstitutional condition did not void the surety's obligation under the bail agreement. (Id. at pp. 1226-1227.)

The reasoning set forth in North River '20 and Accredited '19 is persuasive. Therefore, we conclude a violation of the criminal defendant's constitutional rights in the setting of bail does not void the underlying bond contract.

DISPOSITION

The judgment is affirmed. Respondent shall recover its costs on appeal.


Summaries of

People v. Lexington National Ins. Corp.

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
Jun 22, 2020
No. F079713 (Cal. Ct. App. Jun. 22, 2020)
Case details for

People v. Lexington National Ins. Corp.

Case Details

Full title:THE PEOPLE, Plaintiff and Respondent, v. LEXINGTON NATIONAL INSURANCE…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT

Date published: Jun 22, 2020

Citations

No. F079713 (Cal. Ct. App. Jun. 22, 2020)