Opinion
DOCKET NO. A-5622-10T1
04-03-2013
STATE OF NEW JERSEY, Plaintiff-Respondent v. MICHAEL CAROFANO, Defendant, and FIRST INDEMNITY OF AMERICA INSURANCE COMPANY, Defendant-Appellant.
Edgardo F. Galleno argued the cause for appellant (Perez, Gonzalez & Galleno, LLC, attorneys; Mr. Galleno, on the brief). Joseph J. Bell, IV, argued the cause for respondent (Joseph J. Bell, Warren County Counsel, attorney; Mr. Bell, IV, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Messano and Ostrer.
On appeal from the Superior Court of New Jersey, Law Division, Warren County, Indictment No. 10-00-0134.
Edgardo F. Galleno argued the cause for appellant (Perez, Gonzalez & Galleno, LLC, attorneys; Mr. Galleno, on the brief).
Joseph J. Bell, IV, argued the cause for respondent (Joseph J. Bell, Warren County Counsel, attorney; Mr. Bell, IV, on the brief). PER CURIAM
First Indemnity of America Insurance Company (First Indemnity) appeals from the trial court's June 3, 2011 order denying its motion to vacate the forfeiture of the bail that it posted on behalf of defendant, Michael Carofano.
I.
We discern the following facts from the record. In March 2010, First Indemnity issued a $20,000 bail bond on behalf of Carofano, who was charged in Warren County with theft-related crimes. After Carofano failed to appear in court as scheduled on April 15, 2010, the court issued a warrant for his arrest and ordered the bail forfeited. Upon receiving notice of the order, First Indemnity's agent advised Carofano to surrender himself.
The record does not include a copy of the bond. Instead, as evidence of the bond, First Indemnity inexplicably includes a power of attorney executed July 16, 2010, authorizing its agent to issue a bond in the amount of $35,000 for Carofano.
He did so, with counsel, on April 26, 2010. Counsel explained that Carofano had "a mix up in the dates." Although First Indemnity did not appear, Carofano's attorney represented on the record that it had consented to the bail's reinstatement. Counsel also highlighted that Carofano had voluntarily surrendered. Without objection from the State, the court granted counsel's request to revoke the warrant and reinstate the bail.
On September 13, 2010, First Indemnity filed a motion to vacate the forfeiture (which had already been vacated), exonerate the surety, and discharge the bond. The motion was supported by a certification of Mark Staats, who described himself as a "case monitoring supervisor" of Accurate Bail Bonds (Accurate), which was First Indemnity's bail agency. Staats alleged he "was informed that the bond was reinstated without the consent of the surety," but he did not identify to whom he spoke, nor the date of his conversation. Moreover, he qualified his certification by stating it was "true to the best of [his] knowledge and ability."
The motion papers indicate they were served by mail on Joseph J. Bell, as counsel for Warren County. The County argues in its brief before us that First Indemnity never served County Counsel with its motion; instead, the court forwarded the motion to the County in April 2011.
First Indemnity also included two unsworn memoranda, dated April 28 and 29, 2010, and written by Jennifer Burns of Accurate, stating that after Accurate learned of Carofano's non-appearance, it advised him to surrender on Monday, April 26, but "[t]his office never received a phone call or any notification asking if we would like Mr. Carofano's bond re-instated." The memos asserted the court reinstated the bond "without this companies [sic] consent." The record does not include any cognizable evidence that these memos were sent to the court before they were attached to Staats's certification.
While First Indemnity's motion remained pending and unscheduled, Carofano failed to appear in court again on September 23, 2010. The court issued another bench warrant and bail forfeiture order. Carofano, accompanied by counsel, surrendered on December 9, 2010. The court apparently denied Carofano's request to reinstate the bail on that date (although neither that order, nor a transcript of the proceeding, is before us). Notice of the forfeiture was sent to First Indemnity on December 15, 2010.
Carofano then filed a motion, without notice to First Indemnity, for reconsideration of the court's December 9 order declining to reinstate the bail. Counsel represented in his certification, "The Bail Bondsman had indicated his willingness to renew the bail." The State opposed the motion.
By order dated January 18, 2011, the court remitted twenty percent of the forfeiture. In a written decision, the court deemed defendant's motion as a motion to remit bail. The court applied Schedule 2 of the Remittitur Guidelines, as defendant was no longer a fugitive and apparently did not reoffend while he was a fugitive. See N.J. Admin. Office of the Courts, Supplement to Directive #13-04, Bail - Further Revised Remittitur Guidelines at 7 (Nov. 12, 2008) ("Further Revised Remittitur Guidelines"). Applying the remission factors, the court noted First Indemnity was a commercial bondsman; defendant had been a fugitive for eleven weeks before surrendering; he provided no excuse for his extended failure to appear; and he did not submit "any evidence of the Surety's immediate substantial efforts aimed at his recapture, nor has he submitted any evidence that the Surety provided supervision while he was out on bail."
Although the court's written decision indicates in the title that the matter was decided on the papers, the court referred in the body of its opinion to the State's suggestion "[a]t oral argument[]" that minimal remission would be appropriate. The court's order also recited that there was oral argument. No transcript of the argument was provided to this court.
Carofano filed another motion to reconsider the court's January 18 order; the State opposed; and the court entered an order on February 25 denying the motion for the reasons stated in its prior written decision. There is no evidence in the record that the motion was served on First Indemnity. On March 3, 2011, the court entered a default judgment against First Indemnity, as well as Accurate, and its agent, Shawn C. Martin — in the amount of $20,000, notwithstanding the remission order. The March 2011 order also provided that if the judgment were not satisfied, First Indemnity would be disqualified to engage in the bail bond business.
Finally, on May 20, 2011, a new judge heard argument on First Indemnity's motion, which it had filed the previous September, to vacate the forfeiture, discharge the bond, and exonerate it. First Indemnity argued that the court erred in reinstating the bond on April 26, 2010; it was not noticed; and the court had unilaterally increased its risk. The County argued that First Indemnity's motion was untimely, as it was required by Rule 3:26-6(a) to object to the forfeiture within seventy-five days of receiving notice. The County also argued First Indemnity was essentially on notice of the April 26 proceeding at which the court ordered reinstatement, because its representative had advised defendant to surrender and knew he would do so on that day.
The court determined that "reinstatement of bail for the defendant did not create a material increase in the risk on Surety[.]" It further concluded "there is no compelling interests or even weighty interests of justice in setting aside this [eighty percent] forfeiture[.]" The court found First Indemnity failed to timely file a motion to vacate forfeiture under Rule 3:26-6(a), and it was aware defendant was going to surrender, but failed to appear to object to reinstatement.
First Indemnity's counsel also objected that his client did not receive notice, and therefore did not participate in the hearing on remission. The judge stated she was "not unsympathetic" to First Indemnity's argument, inasmuch as it "probably [has] the most direct and significant interest in the outcome" of the remission hearing. However, she concluded First Indemnity would need to file an appeal, as the court had already denied a motion for reconsideration.
This appeal followed. Prompted by the County's motion to dismiss the appeal pursuant to Rule 2:9-6(c), First Indemnity deposited the full amount of the judgment, after remission, with the clerk of the court pending appeal. First Indemnity presents the following points for our consideration:
THE TRIAL COURT ERRED IN DENYING THE SURETY'S MOTION TO VACATE THE BAIL FORFEITURE WHERE THE TRIAL COURT UNILATERALLY REINSTATED THE BAIL WITHOUT THE KNOWLEDGE AND CONSENT OF THE SURETY.
THE TRIAL COURT COMMITTED LEGAL ERROR WHERE AN ORDER FOR REMISSION WAS ENTERED UPON A MOTION FILED BY THE DEFENDANT'S ATTORNEY WITHOUT NOTICE TO THE SURETY AND WHERE THE ORDER WAS ENTERED WITHOUT AFFORDING THE SURETY AN OPPORTUNITY FOR A HEARING IN VIOLATION OF THE REQUIREMENTS OF PROCEDURAL DUE PROCESS CONTEMPLATED IN R. 3:26-6.
THE TRIAL COURT WAS MISTAKEN IN ITS EXERCISE OF DISCRETIONARY AUTHORITY WHEN IT APPLIED THE PARTIAL REMISSION GUIDELINES UNDER SCHEDULE TWO OF REMITTITUR GUIDELINES FOR LACK OF EVIDENCE FROM THE SURETY WHERE THE
SURETY WAS NOT NOTIFIED OF THE HEARING IN VIOLATION OF PROCEDURAL DUE PROCESS.
II.
First Indemnity challenges the court's reinstatement of the bond on April 26, 2010, after Carofano's first surrender. In the alternative, it argues that it was denied a fair opportunity to participate in the hearing, after Carofano's second surrender, at which the court considered remission of the ordered bail forfeiture. We address these in turn.
Well-settled principles govern First Indemnity's objection to the reinstatement. The bail bond is a surety agreement in which the defendant is the principal, and the government is the creditor. See, e.g., State v. Calcano, 397 N.J. Super. 302, 305 (App. Div. 2007), certif. denied, 194 N.J. 446 (2008). The law of suretyship applies. Ibid. "The surety will be discharged as a matter of law where the agreement has been modified without notice and consent and where the modification 'materially increases his risk.'" Id. at 306 (quoting State v. Vendrell, 197 N.J. Super. 232, 237 (App. Div. 1984)); see also State v. Tuthill, 389 N.J. Super. 144, 148 (App. Div. 2006), certif. denied, 192 N.J. 69 (2007); State v. Clayton, 361 N.J. Super. 388, 395 (App. Div. 2003); State v. Ceylan, 352 N.J. Super. 139, 143 (App. Div.), certif. denied, 174 N.J. 545 (2002).
First Indemnity argues it was not notified of defendant's request to reinstate the bond; it did not consent; and the reinstatement materially increased its risk. We are unpersuaded. First Indemnity was aware that Carofano would present himself to the court on April 26, 2010, because a First Indemnity representative told him to surrender after he missed his court date and the bench warrant had been issued. Although a court should generally notify a surety of a proceeding in which the court considers reinstatement, Tuthill, supra, 389 N.J. Super.at 153, such notice was not mandated under the circumstances. First Indemnity knew that Carofano would appear in court, and counsel represented that First Indemnity consented to reinstatement.
First Indemnity also has presented no cognizable evidence that it did not consent. Carofano's attorney represented on the record to the court that he had obtained First Indemnity's consent to reinstatement. The certification of Mark Staats, Accurate's employee, does not suffice to rebut the claimed consent. Staats did not rely on personal knowledge, as required by Rule 1:6-6. He relied on other persons' knowledge, stating he called the court and "was informed that the bond was reinstated without the consent of the surety." He attached memoranda from another Accurate employee asserting the bond was reinstated "without this companies [sic] consent," but those memoranda were unsworn. Lastly, Staats's certification was made to the "best of my knowledge and ability," which is inadequate. See Jacobs v. Walt Disney World, Co., 309 N.J. Super. 443, 454 (App. Div. 1998) (stating that factual assertions based upon "information and belief" are inadequate); Lippmann v. Hydro-Space Tech., Inc., 77 N.J. Super. 497, 504 (App. Div. 1962) (stating that verification "to the best of the knowledge and belief of your deponent" is defective); R. 1:6-6 (stating that affidavits supporting motions must be based "on personal knowledge, setting forth only facts which are admissible in evidence to which the affiant is competent to testify").
First Indemnity's delay until September 13, 2010 in filing its motion to set aside the April 26 reinstatement, about which it was undisputedly aware on April 28, also raises factual questions about its denial of consent.
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Lastly, First Indemnity failed to present evidence that the reinstatement materially increased its risk. The facts before the court on April 26, 2010 — as defense counsel presented them — was that defendant innocently confused his dates, implying that he did not purposely avoid court. He surrendered just eleven days after his failure to appear. Reflective that Carofano did not present an increased risk of flight, First Indemnity was content to notify him of the bench warrant, and allow him to surrender himself to court the next Monday. It did not apprehend him and transfer his custody to county officials. Cf. Clayton, supra, 361 N.J. Super. at 393-95 (finding material increase in risk where surety apprehended defendant fifteen days after failure to appear, and returned him to the custody of county officials); N.J. Admin. Office of the Courts, Supplement to Directive #13-04, Revised Judiciary Corporate Surety Bail Forfeiture and Judgment Protocol at II(A) (Oct. 22, 2008) ("If bail has been forfeited, after a fugitive's capture the bail shall not be reinstated without the surety's consent." (emphasis added)).
There is no evidence Carofano reoffended during those eleven days, or that he failed to abide by other conditions of his agreement with First Indemnity. Also indicative that risk was not materially increased, First Indemnity waited over four months, from April to September, to object to reinstatement. In sum, Carofano's non-appearance on April 15, 2010, standing alone, does not suffice to establish a material increase in risk under the circumstances. See Calcano, supra, 397 N.J. Super. at 307-08 (stating that continuation of bail after guilty plea, pending sentence, was not material increase in risk under the circumstances); Tuthill, supra, 389 N.J. Super. at 149 ("Obviously, not every modification or change in the conditions of pretrial release will materially increase the surety's risk . . . .").
We turn next to First Indemnity's argument that it was deprived of an opportunity to be heard on the motion to remit the forfeiture which the court decided absent notice to, and the participation of, First Indemnity. We agree.
"[T]he decision to remit bail and the amount of remission are matters within the sound discretion of the trial court to be exercised in the public interest." Clayton, supra, 361 N.J. Super. at 392 (citations omitted). The party seeking remission bears the burden to show it is justified. State v. Ventura, 196 N.J. 203, 213 (2008). In reviewing the trial court's decision, we ascertain whether the court applied the governing standards and policies established in our cases. Clayton, supra, 361 N.J. Super. at 392 (citations omitted); Further Revised Remittitur Guidelines, supra (setting forth guidelines to inform court's remission decision).
The County argues that First Indemnity has failed to identify an error in the court's decision to remit twenty percent of the forfeiture. It also argues that First Indemnity failed to file any objection, let alone a timely one, to the forfeiture ordered in December 2010. See R. 3:26-6(a) (stating that a written objection to a bail forfeiture must be filed within seventy-five days of notice).
However, under the special circumstances of this case, First Indemnity should be granted an opportunity to be heard on its objection. The court failed to consider, in a timely way, First Indemnity's motion objecting to the reinstatement. While that motion was pending, Carofano failed to appear a second time and the court ordered the bail forfeited again. Although it would have been advisable for First Indemnity to file another objection, directed to the December forfeiture order, First Indemnity already had sought an order discharging the bond, exonerating it, and vacating forfeiture and judgment.
Moreover, defense counsel should have provided First Indemnity notice of its December motion. Once the court deemed Carofano's motion in December to be a motion to remit the forfeiture, First Indemnity should have been noticed, and given an opportunity to be heard, particularly since its own motion remained unheard. See State (Cnty. of Bergen) v. Polanca, 332 N.J. Super. 436, 442 (App. Div.) ("Procedural due process requires notice and an opportunity to be heard . . . at a meaningful time and in a meaningful manner.") (citations and quotation omitted), certif. denied, 165 N.J. 604 (2000); see also Doe v. Poritz, 142 N.J. 1, 106 (1995) ("The minimum requirements of due process . . . are notice and the opportunity to be heard." (citations omitted)). In sum, First Indemnity should be granted a full and fair opportunity to present evidence pertinent to the remission of the forfeiture.
Reversed and remanded. We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION