Opinion
H036251
12-19-2011
THE PEOPLE, Plaintiff and Appellant, v. BANKERS INSURANCE COMPANY, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Santa Clara County Super. Ct. No. C1069763)
Following Phuong Tan Pham's warrantless arrest on certain criminal charges, but prior to a criminal complaint being filed against him, defendant Bankers Insurance Company (Bankers) issued a bail bond for Pham's release from jail. The complaint that was eventually filed included one of the original charges, and further alleged Pham had three prior strike convictions. Pham failed to appear at a preliminary hearing and the trial court ordered the bail forfeited. The trial court subsequently granted Bankers' motion to vacate the forfeiture and exonerate the bail on the ground that, following issuance of the bail bond, the People had substantially increased the risk to Bankers by including the prior strike allegations in the criminal complaint against Pham.
On appeal, the People contend the plain language of the bail agreement provides that Bankers would ensure Pham's appearance on any charge in any accusatory pleading filed against him. The People also argue the prosecution had no duty to notify Bankers it was alleging Pham had suffered prior strike convictions. According to the People, Bankers knew or could have easily discovered those prior strike allegations and surrendered Pham, eliminating the risk that he would fail to appear as ordered.
We agree and shall reverse.
I. FACTUAL AND PROCEDURAL BACKGROUND
On February 6, 2010, Pham was arrested, without a warrant, on charges of violating Health and Safety Code section 11358 (cultivation of marijuana) and Penal Code section 498, subdivision (b)(1) (diversion of utility services). The following day, Bankers posted bail in the amount of $100,000 for Pham's release from custody. Pham's next court appearance, on February 22, 2010, was noted on the bond. The bond also warranted that Pham "will appear in the above named court on the date above set forth to answer any charge in any accusatory pleading based upon the acts supporting the complaint filed against him/her and all duly authorized amendments thereof, in whatever court it may be filed and prosecuted, and will at all times hold him/herself amendable [sic] to the orders and process of the court and, if convicted, will appear for pronouncement of judgement [sic] or grant of probation; or if he/she fails to perform either of these conditions, that [Bankers], a Florida Corporation, will pay to the People of the state of California the sum of [$100,000]."
On February 19, 2010, the Santa Clara County District Attorney filed a complaint charging Pham, along with two codefendants, with one count of cultivating marijuana (Health & Saf. Code, § 11358). The complaint further alleged that Pham had suffered three prior strike convictions within the meaning of Penal Code sections 667, subdivisions (b) through (i) and 1170.12.
On February 22, 2010, Pham and his codefendants appeared in court. When counsel for one of Pham's codefendants asked if the case was "appropriate for Terrain[e] Street," where adult drug court is held, the judge responded that Pham's "three-strike position" precluded such a transfer. The judge asked the prosecutor if she had information about Pham's strike priors and, after she indicated she did, a discussion was held off the record. Bail remained as set and the judge ordered Pham to appear on March 22, 2010.
When Pham failed to appear on March 22, 2010, the judge forfeited bail and issued a bench warrant. Bankers moved to vacate forfeiture, and its motion was heard on September 13, 2010. The court granted the motion, finding the risk of the contract entered into by Bankers had changed when the complaint alleging Pham's strike priors was filed without notice to Bankers.
II. DISCUSSION
A. Standard of review
The parties disagree on the appropriate standard of review. The People contend that this court is to conduct a de novo review, since the primary issue involves the interpretation of Bankers' contract. Bankers counters that an order on a motion to vacate forfeiture of bail is reviewed for abuse of discretion.
It is true that an order denying a motion to vacate the forfeiture of a bail bond is normally reviewed for abuse of discretion. (People v. Bankers Ins. Co. (2010) 181 Cal.App.4th 1, 5.) However, where the evidence is not in dispute, and the primary issue is one of statutory construction or contract interpretation, the standard of review is de novo. (People v. American Bankers Ins. Co. (1992) 4 Cal.App.4th 348, 350.)
The predominant issue on appeal in this case is how to interpret the language of Bankers' contract. The trial court resolved no factual disputes in reaching its conclusion that the risk on Bankers' bail bond was materially increased when the prosecution alleged in its complaint that Pham had three prior strike convictions. Accordingly, our review is de novo.
B. The trial court erred in vacating forfeiture of the bond
A bail bond is in the nature of a contract between the government and the surety through which the surety guarantees that the defendant will appear under risk of forfeiture of the bond. (People v. Amwest Surety Ins. Co. (1991) 229 Cal.App.3d 351, 356.) The scope of the surety's risk is defined by the terms of the bond agreement and applicable statutes. (People v. North Beach Bonding Co. (1974) 36 Cal.App.3d 663, 668.) As appellate courts have noted, "[t]he forfeiture or exoneration of bail is entirely a statutory procedure, and forfeiture proceedings are governed entirely by the special statutes [Penal Code sections 1305-1309] applicable thereto." (People v. Ranger Ins. Co. (1998) 66 Cal.App.4th 1549, 1552.) There is no common law defense to a forfeiture of bail on the ground that a surety's risk has been materially increased. (People v. Bankers Ins. Co., supra, 181 Cal.App.4th at p. 6.)
We are not dealing with a case in which there was a failure to follow the statutory scheme applicable to bail forfeitures. Instead, notwithstanding the absence of a statutory notice violation, Bankers convinced the trial court to vacate forfeiture of bail because the complaint, which was filed after Bankers posted Pham's bond and added strike prior allegations, materially increased the risk of Pham's flight. The trial court erred; there is no such common law defense of materially increased risk. Even if there were, however, Bankers' risk did not increase beyond that which it initially agreed to undertake.
In determining the limits of the surety's risk, we look to the provisions of the bond itself, along with applicable statutes. (People v. North Beach Bonding Co., supra, 36 Cal.App.3d at p. 668.) Here, Bankers undertook that Pham would appear in court "to answer any charge in any accusatory pleading based upon the acts supporting the complaint filed against him/her and all duly authorized amendments thereof, in whatever court it may be filed and prosecuted, and will at all times hold him/herself amendable [sic] to the orders and process of the court . . . ; or if he/she fails to perform either of these conditions, that [Bankers], a Florida Corporation, will pay to the People of the state of California the sum of [$100,000]." (Italics added.) At the time it issued the bond, Bankers was aware of at least the following: (1) Pham had been arrested on charges of cultivating marijuana and diverting utility services; (2) the magistrate had set Pham's bail in the amount of $100,000; and (3) no complaint had yet been filed. In spite of this, Bankers expressly agreed to guarantee Pham's appearance in court to answer "any charge in any accusatory pleading" based on the acts supporting the as-yet unfiled complaint. When that complaint was filed, on February 19, 2010, it charged Pham with cultivation of marijuana, but further alleged that he had three prior strike convictions.
The prosecution, for undisclosed reasons, elected to drop the misdemeanor diversion of utility services charge.
In County of Los Angeles v. American Contractors Indemnity Co. (2011) 198 Cal.App.4th 175, the surety issued a bond for the release of a criminal defendant who had been arrested on charges of violating Penal Code section 273.5, subdivision (a) (willful infliction of corporal injury on, among others, a cohabitant). (County of Los Angeles v. American Contractors Indemnity Co., supra, at p. 177.) The bond provided that the defendant would appear in court to " 'answer any charge in any accusatory pleading based upon the acts supporting the complaint filed against him.' " (Id. at p. 179.) At the time the bond was issued, no complaint had yet been filed. When it was filed, the complaint included the original charge on inflicting corporal injury on a cohabitant, as well as a charge of failure to register as a sex offender and failure to file a change of address. (Ibid.) The complaint further alleged two prior strike convictions, and those prior strikes were discussed at defendant's arraignment. (Id. at p. 177.) When the defendant subsequently failed to appear for a pretrial conference, the bond was forfeited and summary judgment entered against the surety on the forfeited bond. (Id. at pp. 177-178.)
On appeal, the court affirmed, finding that the surety had guaranteed the defendant's "appearance on charges that would be made in a future complaint." (County of Los Angeles v. American Contractors Indemnity Co., supra, 198 Cal.App.4th at p. 179.) The additional charges and the prior strikes allegations, which appeared in the complaint filed after the surety had issued a bond, did not result in a material change to the contractual risk undertaken by the surety. (Id. at pp. 179-180.) The court noted that the surety " 'was free to monitor the case and determine what charges ultimately were made in the original complaint, and free to surrender [the defendant] pursuant to Penal Code section 1300 if it believed the bond was inadequate to cover the flight risk presented by the complaint.' " (Id. at p. 180, quoting People v. Bankers Ins. Co., supra, 181 Cal.App.4th at p. 6.)
Bankers claims that strike prior enhancements have "nothing to do with 'acts supporting the complaint,' " and thus cannot fall within the scope of the risk it undertook in furnishing bail to Pham. This argument goes too far. A prior felony conviction, by its nature, involves a different crime than the one for which a defendant is currently being charged. However, a sentence enhancement cannot stand on its own; it must be attached to a current violation. Accepting Bankers' position would mean that once a surety has posted bail, the addition of sentence enhancement allegations to the charges against the defendant would always result in a material increase to the surety's risk, thus entitling it to vacate forfeiture of the bond if the defendant subsequently fails to appear. We decline to provide sureties with such a "get out of jail free" card. To find otherwise ignores the broad language of the undertaking Bankers provided in its bond.
It is not unreasonable to view the risk of the prior-felony-conviction sentence enhancement as encompassed within the terms of the bond agreement. Obviously, the maximum potential sentence Pham faced if convicted of the two charges at issue when the bond was posted, i.e., felony cultivation of marijuana and misdemeanor diversion of utility services, was significantly less than the maximum possible 25 years to life sentence to which he was exposed under the complaint. Bankers issued its bond before the complaint was filed, thus undertaking the risk that the subsequently-filed complaint would include allegations, such as allegations of prior strike convictions, that increased the range of possible sentences. As the court in People v. Bankers Ins. Co., supra, 181 Cal.App.4th at page 6, aptly noted, the surety is "free to monitor the case and determine what charges ultimately were made in the original complaint." We see no reason why a surety, having undertaken an open-ended commitment, should not subsequently take steps, such as reviewing the complaint or attending court proceedings, that may let it ascertain the limits of that commitment.
Of course, if convicted, Pham could move to strike one or more of his strike priors pursuant to People v. Superior Court (Romero) (1996) 13 Cal.4th 497, though the trial court would be under no obligation to do so.
The two California cases Bankers relies on to support its exoneration argument, People v. Resolute Ins. Co. (1975) 50 Cal.App.3d 433 and People v. Surety Ins. Co. (1983) 139 Cal.App.3d 848, are not applicable. Those cases involved situations where the bond was exonerated due to the trial courts' failure to provide notice to the sureties as required by Penal Code section 1303 when the bail provided in connection with one criminal prosecution is transferred to another prosecution. (See People v. Resolute Ins. Co., supra, at p. 437 ["The court's failure to follow a strict statutory direction designed for the surety's protection exonerated the surety."]; People v. Surety Ins. Co., supra, at p. 854 ["We hold [Penal Code] section 1303 requires the called-for notice of transfer of the bail without regard to similarity of the pleadings or the parties."].) There is no such statute requiring notice to a surety that has issued a bond to a criminal defendant before a complaint is filed, let alone a statute providing that the surety is entitled to exoneration of its bond without such notice. Under these circumstances, we presume the surety, being aware that no complaint has yet been filed, has a sufficient incentive to learn exactly what is alleged in any complaint that is subsequently filed against the defendant.
In the absence of an applicable statute, it is simply the contractual language of the bond--not the change in potential sentencing outcomes--which defines and limits the surety's risk. In this case, the broad language of the bond itself encompassed the sentence-enhancement allegations pleaded by the complaint. Accordingly, we reject Bankers' contentions that the complaint, filed without notice to Bankers, exceeded the terms of Bankers' agreement and materially increased its contractually assumed risk.
C. Renewal of exoneration period
Bankers seeks a renewal of its 180-day exoneration period and a revival of its right to apply for a 180-day extension pursuant to Penal Code section 1305.4. The People offer no opinion on this request in the reply brief.
We presume Bankers, in an abundance of caution, continued to make an effort to locate Pham pending a decision on its motion to vacate, and it is therefore entitled to whatever remains of its original 180-day exoneration period upon remand. Assuming that period did not expire, it may make its application for a statutory extension to the trial court.
III. DISPOSITION
The order granting Bankers' motion to set aside the forfeiture of the bail bond and to determine that the bond was exonerated is reversed. The trial court is directed to enter a new order denying Bankers' motion. Costs on appeal are awarded to the People.
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Premo, Acting P.J.
WE CONCUR:
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Mihara, J.
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Judge of the Santa Clara County Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
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