Opinion
A156791
02-28-2020
PEOPLE OF THE STATE OF CALIFORNIA, Plaintiff and Respondent, v. BANKERS INSURANCE COMPANY, Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. 17CR011241)
Bankers Insurance Company (Bankers) appeals from an order denying its motion to vacate the forfeiture of a bail bond and to exonerate the bond, as well as the court's subsequent entry of summary judgment against Bankers on the bond. Bankers contends the court erred, because the court had lost jurisdiction over the bond when it did not declare the bond was forfeited upon the defendant's first unexcused failure to appear (Pen. Code, § 1305), and Bankers' later request for an extension of the exoneration period did not preclude it from obtaining relief. We agree with Bankers and reverse.
I. FACTS AND PROCEDURAL HISTORY
In April 2017, defendant Cody Rice entered a plea of not guilty to multiple charges. The court set bail at $50,000 and continued the matter to June 29, 2017 for a felony pretrial hearing.
In May 2017, All-Pro Bail Bonds, as agent for Bankers, posted a $50,000 bond for the release of the defendant from custody. The June 29, 2017 appearance date was noted on the bail receipt.
The defendant did not appear at the June 29, 2017 hearing. Although a court reporter is listed in the clerk's minutes, the hearing was not transcribed or recorded, and the minutes do not reflect any excuse for the defendant's failure to appear. Nevertheless, the court did not declare that the bail bond was forfeited, but instead issued a bench warrant and continued the matter to June 30, 2017. The record does not reflect any objection under Penal Code section 1305, subdivision (a).
All statutory references herein are to the Penal Code. As discussed post, section 1305, subdivision (a) requires the court to forfeit a bail bond upon the defendant's failure to appear without sufficient excuse; the failure to do so precludes the court from later forfeiting the bond or imposing judgment against the surety on the bond.
The defendant again failed to appear on June 30, 2017. The hearing was not transcribed or recorded, and the clerk's minutes do not note any excuse for the failure to appear. The court did not declare the bond forfeited, but continued the matter to July 10, 2017.
On July 10, 2017, the defendant again failed to appear. The court did not declare the bond forfeited, but continued the hearing to the following day.
On July 11, 2017, the defendant was present in court and signed a Waiver of Defendant's Personal Appearance pursuant to section 977, waiving his appearance unless ordered by the court. Defense counsel appeared for the defendant at the next three pretrial hearings.
On October 13, 2017, defense counsel again appeared for the defendant, who was not in court. This time, the court continued the matter to October 19, 2017 and ordered the defendant's personal appearance. The defendant did not appear at the hearing on October 19, 2017. The record indicates that the issue requiring his appearance—his failure to pay his attorney—had been resolved before the hearing. The matter was continued to January 25, 2018 for a preliminary hearing.
On January 25, 2018, the defendant failed to appear for the preliminary hearing. Defense counsel stated that he "thought [the defendant] was going to here today" and requested a hold of the bench warrant until "next Thursday." The prosecutor objected, summarizing the defendant's failures to appear. Noting there were "significant mental health issues," the court held the bench warrant and continued the matter to February 1, 2018 for his personal appearance. The court did not declare a forfeiture of the bond; nor is there any indication that the issue of that bond was raised.
On February 1, 2018, the defendant did not appear. The minute order reflects that bail was declared forfeited. The court granted defense counsel's motion to withdraw, issued a $100,000 bench warrant, and continued the matter to July 31, 2018 for summary judgment proceedings on the bond. There is no indication that anyone brought to the court's attention that the bond had not been forfeited at the defendant's initial failure to appear.
Notice of forfeiture of the bond was mailed by the clerk of the court to Bankers on February 21, 2018. By statute, Bankers had 185 days (180 days plus five days for mailing) from the date of notice - that is, through August 24, 2018 - to file a motion for the forfeiture to be vacated and the bond exonerated. (See § 1305, subds. (b)(1) & (c).)
On July 27, 2018, Bankers moved to extend the exoneration period by 180 days (giving Bankers more time to produce the defendant), and supported its motion with a declaration from its agent detailing his efforts to locate the defendant. (See § 1305.4.) Respondent Alameda County did not oppose the motion. There is no indication of anyone informing the court that the bond that was forfeited in February 2018 had not been declared forfeited upon the defendant's initial failure to appear, or raising whether the court still had jurisdiction over the bond.
On August 16, 2018, the court granted Bankers' motion to extend the exoneration period, giving Bankers until February 12, 2019 to produce the defendant.
On January 24, 2019, within the extended exoneration period, Bankers filed a motion to vacate the forfeiture of the bail bond and exonerate the bond, claiming for the first time that the court had lost jurisdiction over the bond by not declaring a forfeiture upon the defendant's failure to appear at the June 29, 2017 and October 19, 2017 hearings.
The County opposed the motion to vacate. It conceded that the trial court had lost jurisdiction because there was no record supporting the court's decision to continue the hearing upon defendant's non-appearance on June 29, 2017. The County argued, however, that Bankers should be "judicially estopped from asserting lack of jurisdiction now after it consented to the Court's jurisdiction by seeking and receiving an extension of the exoneration period."
Bankers filed a reply brief in support of its motion, arguing that estoppel did not apply under these circumstances.
The trial court heard and denied Bankers' motion to vacate the bond on February 22, 2019 and ordered entry of summary judgment against Bankers on the bond. The court explained that it "agree[d] with county counsel." Judgment was entered accordingly on February 26, 2019.
Bankers thereafter filed this appeal from the order denying its motion to vacate forfeiture and exonerate bail and from the judgment.
II. DISCUSSION
A. Statutory Scheme
Under section 1305, subdivision (a)(1), whenever a criminal defendant fails to appear, without "sufficient excuse," at a proceeding where his presence is lawfully required, the court "shall" declare the bail bond forfeited. If "the court has reason to believe that sufficient excuse may exist for the failure to appear," it may continue the matter "for a period it deems reasonable to enable the defendant to appear without ordering a forfeiture of bail," and then forfeit the bail if the defendant does not appear at the continued hearing. (§ 1305.1.) For such a continuance to be valid, however, the trial court must create a record that supports it. (People v. Allegheny Casualty Co. (2007) 41 Cal.4th 704, 718 (Allegheny Casualty).)
Section 1305, subdivision (a)(1) reads: "A court shall in open court declare forfeited the undertaking of bail or the money or property deposited as bail if, without sufficient excuse, a defendant fails to appear for any of the following: [¶] (A) Arraignment. [¶] (B) Trial. [¶] (C) Judgment. [¶] (D) Any other occasion prior to the pronouncement of judgment if the defendant's presence in court is lawfully required. [¶] (E) To surrender himself or herself in execution of the judgment after appeal."
Once a forfeiture is declared, and if the bond exceeds $400, the court clerk must mail notice of the forfeiture to the surety within 30 days. (§ 1305, subd. (b).) The prompt forfeiture and ensuing notice are important, for only by such notice may the surety learn that the defendant must be tracked down and returned to court. (See People v. United Bonding Ins. Co. (1971) 5 Cal.3d 898, 906 (United Bonding).)
The surety then has 185 days from the mailing of the forfeiture notice - a period called the "exoneration period" - to produce the defendant (or show that the defendant is in custody) and move to vacate the forfeiture of the bond and exonerate it (meaning, essentially, that no one can be liable on the bond anymore). (§ 1305, subd. (b) & (c)(1)-(3); People v. Granite State Ins. Co. (2003) 114 Cal.App.4th 758, 762.) In some circumstances, the exoneration period may be extended. (§ 1305.4.)
Once the period for exoneration has expired, the trial court "shall enter a summary judgment against each bondsman named in the bond in the amount for which the bondsman is bound." (§ 1306, subd. (a).)
The procedures for forfeiture of bail in sections 1305 and 1306 are strictly construed in favor of the surety. (People v. National Automobile and Casualty Ins. Co. (2002) 98 Cal.App.4th 277, 288.)
B. Failure to Forfeit the Bond Precluded Later Forfeiture and Judgment
The parties to this appeal agree that the trial court failed to declare the bond forfeited as mandated by section 1305. The defendant did not appear in court when lawfully required on June 29, 2017 (as well as on June 30, 2017 and October 19, 2017). The record does not reflect an excuse for the defendant's absence on June 29, 2017. Based on the state of the record, and in light of the fact that a sufficient excuse is not to be presumed, the court was obligated to declare forfeiture of the bond on June 29, 2017. (Allegheny Casualty, supra, 41 Cal.4th at pp. 717-718 [a record silent as to the reason for the defendant's non-appearance does not support a continuance without the forfeiture of the bail bond]; United Bonding, supra, 5 Cal.3d at p. 907 ["Court minutes which fail to disclose that the court has expressly excused a nonappearance on a record which is silent as to a defendant's reasons therefor, will require a reviewing court to conclude that a nonappearance was without sufficient excuse and that the right to declare a forfeiture not having been exercised was foreclosed."].)
The parties also basically agree on the consequences of the court's failure to forfeit the bond. First, by the court failing to forfeit the bond in June 2017, the bond was exonerated by operation of law and the court lost jurisdiction to forfeit the bond at any later time. (People v. Safety National Casualty Corp. (2016) 62 Cal.4th 703, 710 ["If the court fails to declare a forfeiture at the time of the defendant's unexcused absence, it is without jurisdiction to do so later."]; People v. Bankers Ins. Co. (2009) 171 Cal.App.4th 1529, 1532 [the court lost "jurisdiction to later declare a forfeiture of the bond"]; United Bonding, supra, 5 Cal.3d at p. 907 ["[T]he court's failure to declare a forfeiture upon a nonappearance without sufficient excuse . . . deprives the court of jurisdiction to later declare a forfeiture."].) The court therefore had no jurisdiction to declare the bond forfeited in February 2018.
Second, the court lost jurisdiction to enter summary judgment on the bond. (People v. Amwest Surety Ins. Co. (2004) 125 Cal.App.4th 547, 550, 553-554 (Amwest) [court's failure to forfeit bail in open court pursuant to § 1305, subd. (a) exonerated the bond by operation of law and the subsequently-entered judgment was therefore void]; People v. Bankers Ins. Co. (2010) 182 Cal.App.4th 582, 588 (Bankers Insurance) ["Once the trial court failed to declare the bond forfeited in open court, the bond was exonerated by operation of law and the ensuing summary judgment was void."]; People v. Surety Ins. Co. (1985) 165 Cal.App.3d 22, 30 [without an adequate basis for the court's continuance of the hearing without bail forfeiture, the forfeiture should have been ordered immediately, and the later order of forfeiture and summary judgment were without jurisdiction and thus a nullity]; County of Orange v. Lexington Nat. Ins. Corp. (2006) 140 Cal.App.4th 1488, 1492-1493 [§ 1305 is a "jurisdictional prescription[]" and failure to follow it "renders a summary judgment on the bail bond void"].) The judgment entered against Bankers on February 2019 is therefore void and, as such, subject to attack at any time. (Amwest, supra, 125 Cal.App.4th at pp. 553-554.)
The trial court nonetheless denied Bankers' motion to vacate the forfeiture of the bond and exonerate it, and proceeded to enter summary judgment, agreeing with county counsel that Bankers' motion to extend the exoneration period precluded it from arguing that the court lost jurisdiction over the bond. As discussed next, the court's application of judicial estoppel was erroneous.
Respondent insists it is not arguing that Bankers should be equitably estopped from asserting lack of jurisdiction, but that Bankers should be judicially estopped. It concedes that mistakes of law generally do not provide grounds for equitable estoppel. (People v. Stuyvesant Ins. Co. (1968) 261 Cal.App.2d 773, 784.)
C. Judicial Estoppel
It is well-established that parties cannot confer "fundamental jurisdiction" - a court's power to determine a case and its authority over the subject matter - by waiver, estoppel, or consent. (Kabran v. Sharp Memorial Hospital (2017) 2 Cal.5th 330, 339.) The act of a court lacking fundamental jurisdiction is null and void. (Ibid.) Parties may, however, be precluded under such doctrines from challenging a court's act that is merely "in excess" of its jurisdiction - that is, where the court has authority over the subject matter but fails to proceed in the manner prescribed by law. (Id. at pp. 339-340.)
The failure to forfeit a bond pursuant to section 1305 has been said to cause the court to lose fundamental jurisdiction over the bond, such that a later entry of judgment on the bond is void. (See, e.g., Amwest, supra, 125 Cal.App.4th at p. 550 [failure to forfeit bail pursuant to § 1305 was not merely an act in excess of jurisdiction, but a loss of "fundamental jurisdiction" such that the later judgment was "void"].) As such, the court in this case lost jurisdiction upon its failure to comply with section 1305, regardless of what Bankers did thereafter, and it is difficult to see how the judicial estoppel doctrine could be used to produce a different result. We nevertheless consider respondent's arguments based on the case law, and then conclude that, even if the judicial estoppel doctrine were available generally, it was certainly not established here.
1. Case Law
Respondent concedes that the judicial estoppel doctrine has not been applied in the circumstances of this case. However, respondent argues, appellate courts have held that bail sureties who acquiesce in a trial court's act in excess of its jurisdiction may be estopped from later challenging that exercise of jurisdiction.
The cases cited by respondent are inapposite. First, they involved only acts by a court that were deemed in excess of jurisdiction, and they did not suggest that the failure to forfeit a bond could be characterized as such an act. To the contrary, one of the cases on which respondent relies - Bankers Insurance - distinguishes the situation where, as here, the court " 'no longer had jurisdiction to declare a forfeiture' " because the court had failed to follow the requirements of section 1305, and summary judgment on the bond was "void." (People v. Bankers Insurance (2010) 182 Cal.App.4th 1377, 1385-1386 fn.10.)
Second, the cases on which respondent relies involved a different type of surety conduct. The sureties in those cases had sought or agreed to an extension or tolling of the exoneration period, so it was held that they could not later reverse course and claim the extension or tolling was invalid or the entry of summary judgment was untimely. (People v. Accredited Surety & Casualty Company, Inc. (2013) 220 Cal.App.4th 1137, 1141, 1150-1151, disapproved of on other grounds by People v. Financial Casualty & Surety, Inc. (2016) 2 Cal.5th 35, 46 [surety agreed with People that exoneration period would be extended to a certain date, and court issued the order; after the surety failed to produce defendant and the court entered summary judgment, surety was estopped from seeking to set aside the judgment on the ground that the court extended the exoneration period beyond what the statute allowed]; Bankers Insurance, supra, 182 Cal.App.4th at pp. 1381-1382, 1385, disapproved of on other grounds by People v. Financial Casualty & Surety, Inc. (2016) 2 Cal.5th 35, 46 [surety obtained an order extending the exoneration period beyond the maximum allowed under the statute; after surety failed to produce the defendant, the court entered summary judgment; surety was estopped from arguing that the court entered summary judgment more than 90 days after the true deadline for the exoneration period]; People v. National Auto. and Cas. Ins. Co.(2000) 82 Cal.App.4th 120, 123-124, 127 [stipulated order to extend the exoneration period was not timely entered, an act in excess of the court's jurisdiction; after the surety failed to produce the defendant and the court entered summary judgment, surety was estopped from arguing that the court lost jurisdiction to enter judgment due to the untimely entry of the order]; County of Los Angeles v. Ranger Insurance Company (1999) 70 Cal.App.4th 10, 12-15, 18-19 [surety obtained a 30-day tolling of the exoneration period; after the surety failed to apprehend the defendant and the court entered summary judgment, surety was estopped from arguing that the court lacked jurisdiction to toll the exoneration period and summary judgment was therefore entered too late].)
Thus, in the cases respondent cites, the sureties were challenging the validity of summary judgments based on an error that was caused by the court granting the relief requested by the sureties - in other words, an error the sureties had helped create. Here, Bankers is not claiming the judgment should be set aside because of the extension Bankers requested; instead, it claims the judgment should be set aside because the court on its own failed to forfeit the bond when it was statutorily required to.
None of the cases respondent cites lead us to conclude that a party could be judicially estopped from challenging a void judgment.
2. Elements of Judicial Estoppel
Even if judicial estoppel were not inapplicable per se, it was not established here. Judicial estoppel arises only where (1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position; (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake. (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 183.)
These elements were not met. As to the first and fourth elements, it cannot be said that Bankers took two diametrically opposed positions. In seeking an extension of the exoneration period, Bankers did not make any explicit argument regarding jurisdiction, much less lead the court to make a finding that it had jurisdiction. Bankers merely asserted there was good cause to give Bankers more time to find the defendant, a position that is not entirely inconsistent with urging that the court no longer had jurisdiction over the bond. And while Bankers' filing of the motion implicitly assumed that the court had jurisdiction - as did respondent - the question of jurisdiction was never raised, pursued, or determined.
Furthermore, as to the fifth element required for judicial estoppel, there is no evidence suggesting that Bankers' first position - that more time should be given to find the defendant and, implicitly, the court still had jurisdiction over the bond - was taken for any reason other than Bankers' ignorance or mistake. After all, if Bankers had realized that the court lacked jurisdiction to declare the bond forfeited in February 2018 and could not as a matter of law enter summary judgment on the bond, Bankers likely would not have gone to the expense of seeking an extension of the time to find the defendant, and presumably expend time and resources trying to find him, with no hope of obtaining anything more than the remedy it could have obtained immediately by simply telling the court, "you have no jurisdiction." Simply put, the record does not support the court's implicit finding of judicial estoppel.
3. Respondent's Policy Arguments
Respondent claims that Bankers "hoodwinked the trial court by leading it to believe that it had continuing jurisdiction over the bond when it did not - wasting judicial time and resources." Respondent also asserts that "if a trial court lacks jurisdiction over a bail bond because of some procedural error occurring in the forfeiture of bail, it is incumbent upon the surety to promptly bring that issue to the Court's attention, or at the very latest before the exoneration period expires." And respondent admonishes us that failing to apply judicial estoppel in instances like these would allow sureties to "continue wasting judicial resources by requiring trial courts to review papers and hear argument on extension motions which should never have been filed in the first place," and sureties "should not be permitted to continue to strain already limited executive and judicial resources with unnecessary extension requests when jurisdictional arguments could and should have been raised instead or at least in the alternative."
But it could equally be said that, if a surety proceeds as if a court has jurisdiction when it in fact does not, respondent should come forward to advise the court that it lacks jurisdiction to rule on the motion - and in fact the bail was not properly forfeited and the bond should be exonerated because the court had lost jurisdiction - rather than waiting to see if the surety is able to return the defendant to court and, if not, requiring the surety to fork over the money on a bond that had already been exonerated as a matter of law.
Indeed, while judicial estoppel does not require a showing of prejudice to the other party, the lack of prejudice to respondent in this case negates its policy arguments. Respondent is not prejudiced by a reversal of the summary judgment, since as a matter of law it was not entitled to any money under the bond. Respondent was not prejudiced by Bankers bringing the motion to extend the exoneration period, since respondent did not even oppose the motion. Although the extension delayed the matter, respondent points to no prejudice from this delay, and the People could have benefitted from Bankers' further efforts to locate and apprehend the defendant.
Based on the record, this is simply not the case where the doctrine of judicial estoppel should be applied. "The courts invoke judicial estoppel to prevent judicial fraud from a litigant's deceitful assertion of a position completely inconsistent with one previously asserted, thus compromising the integrity of the administration of justice by creating a risk of conflicting judicial determinations." (ABF Capital Corp. v. Berglass (2005) 130 Cal.App.4th 825, 832. Italics added.) "[B]ecause judicial estoppel is an extraordinary and equitable remedy that can impinge on the truth-seeking function of the court and produce harsh consequences, it must be 'applied with caution and limited to egregious circumstances.' " (Minish v. Hanuman Fellowship (2013) 214 Cal.App.4th 437, 449.) Here, the court made a mistake in not declaring a forfeiture, and Bankers (and respondent) made a mistake in not catching it. This falls far short of anything that would allow us to affirm a judgment that the trial court had no jurisdiction to enter.
The trial court erred in denying Bankers' motion to vacate the forfeiture and exonerate the bond, and further erred in entering summary judgment against Bankers on the bond.
III. DISPOSITION
The judgment against Bankers and the order denying Bankers' motion to vacate the forfeiture and exonerate the bond are reversed. The trial court is directed to enter an order vacating the forfeiture and exonerating the bond.
/s/_________
NEEDHAM, J. We concur. /s/_________
SIMONS, ACTING P.J. /s/_________
BURNS, J.