On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Indictment No. 07-04-0472.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad and Messano.
Defendant, Safety National Casualty Corporation (Safety National), appeals from an order of the Law Division denying its motion to be exonerated of its obligations under the surety bond and for the bond to be discharged. Safety National argues the court erroneously reinstated the bail bond without notice to or consent of the surety, thereby materially increasing the risk of the undertaking, mandating discharge of the surety. Safety National further contends the court failed to articulate the reasons for its determination. We are not persuaded by the surety's arguments and affirm.
Surety National posted a $10,000 bail bond for defendant, Cheynell Johnson. Although defendant had appeared in court previously with regard to the underlying criminal matter, on November 7, 2007, unbeknownst to defendant and her attorney, defendant's bail was revoked and a warrant was issued as a result of her failure to appear on two occasions to meet with her probation officer to complete the pre-sentence investigation (PSI) report. Defendant and her attorney appeared in court on November l6, 2007 for sentencing. Defendant represented that she had not received any notices from probation and was unaware of the appointments. She explained she had moved and had informed the court of her new address. The court records, however, reflected defendant's old address, as apparently did the bail bond. Defendant's attorney confirmed he had her updated address and phone number, which he gladly would have provided to the probation officer had he been contacted. Judge Pereksta was satisfied there was some plausible miscommunication, noted defendant's new address and phone number, rescheduled the PSI interview, and vacated the warrant and reinstated the bail. On December 24, 2007, Safety National filed a motion to Stay the Entry of Judgment or the Execution of the Judgment, and to Vacate the Forfeiture, Exonerate the Surety and Discharge the Bond based on the court's recall of the warrant and reinstatement of bond. Defendant failed to appear at sentencing on January 29, 2008, and a warrant was reissued and bail was revoked. Defendant remains a fugitive.
At argument on May 7, 2008, Safety National contended it was improper for the court to unilaterally revoke the warrant and reinstate defendant to bail in November without its knowledge or consent. The surety argued that if it had been notified when defendant surrendered and had been given the opportunity to attend the hearing, its attorney would have had the opportunity to provide relevant testimony. For example, counsel would have informed the court that defendant failed to apprise the surety of her new address and that the apparent failure to provide the court with her new address was a violation of the terms and conditions of the bond. Counsel further would have argued that after defendant's initial failure to appear at the two PSI conferences, which it believed was indicative of a reluctance to be sentenced, bail should not have been reinstated. Safety National acknowledged that after the surety was consulted and made its arguments, the court could find there was a "special reason" for the reinstatement, i.e., the defendant was hit by a car on the way to court or was in the hospital at the time or could not make that particular court date. However, having been denied input or consent, Safety National argued it was entitled as a matter of law to be discharged of its obligation under the bond on the ground that the court's action unilaterally and materially altered a condition of the bond and increased the risk assumed by the surety. Safety National relied on State v. Clayton, 361 N.J. Super. 388, 395 (App. Div. 2003), and State v. Weissenburger, 189 N.J. Super. 172, 176-77 (App. Div. l983), in support of its position.
Judge Pereksta found the cases cited by Safety National to be inapposite, particularly distinguishing Clayton on the basis that here there was good cause for the reinstatement. The court reiterated that defendant voluntarily appeared with her attorney in court for the initially scheduled sentencing and represented that she never received notice of the appointments though she had provided the court with her new address. Although defendant's attorney had her new address, the court records did not reflect the change. Defendant's new address and phone number were placed on the record. The judge explained she was satisfied there was a miscommunication regarding defendant's address -- she "c[ould]n't say for certain that [defendant] did not tell the Court of the new address" and "at the time" she was "not satisfied [defendant] didn't advise the Court" of it, surmising that "[i]t could have been a problem by court staff[;]
[i]t could have been that she told someone, and it didn't make its way into the file." Otherwise, the court explained it would not have revoked the warrant and reinstated the bail. Accordingly, the court denied Safety National's motion for exoneration. The court entered an order on May 22, 2008, which Safety National appealed.
On appeal, Safety National makes the same argument raised to the trial court, additionally contending the court failed to articulate the reasons for its determination. At oral argument, Safety National's counsel urged that the court's reinstatement without providing the surety notice and an opportunity to be heard created the unilateral alteration of the bond and increased risk, regardless of the fact that defendant voluntarily appeared in court with her attorney on the initial sentencing date and provided a new address. It emphasized that the surety is a party with a significant interest in the proceedings, and submitted that such unilateral and arbitrary conduct by the court will thwart public policy as it will discourage sureties from posting pretrial bonds.
A bail bond is essentially a surety agreement in which the defendant is the principal and the creditor is the State, thus the agreement is subject to the same legal principles applicable to the construction and consequences of surety agreements in general. Weissenburger, supra, 189 N.J. Super. at 176. It is a well-settled principle of suretyship that a surety is bound only "according to the strict terms of its undertaking" and "its obligation cannot be extended or altered beyond the terms of its agreement." Clayton, supra, 361 N.J. Super. at 395. Thus, the unilateral alteration of the terms of the undertaking by the principal and creditor without the consent of the surety will discharge the surety if the modification materially increases the risk of the undertaking. Id.; Weissenburger, supra, 189 N.J. Super. at 176.
The situations in Weissenburger and Clayton presented just such an increased risk. In Weissenburger, the bonding company's risk was materially and adversely affected by the government's action. After the surety issued a bail bond, the defendant and the prosecutor's office entered into a plea agreement in which the defendant, who had agreed to cooperate with police in effecting arrests, was permitted to leave the jurisdiction and relocate upon his belief that there was an emergent threat to himself or his girlfriend, with the prosecutor thereafter to investigate those threats. Id. at l74. The surety was never advised of the agreement. Id. at l75. Defendant eventually fled a few days prior to sentencing. Ibid. We found defendant's nonappearance resulted from the agreement between defendant and the prosecutor. Id. at l77. Accordingly, we held the government should not be permitted to recover against the surety for not producing the principal, when the government itself consented to the defendant's placing himself beyond its reach and control, which was a material modification of the terms of the bail contract, without notice to the surety. Id. at 176-77. We stated:
There can be no question that the agreement here reached between defendant and the prosecutor, acting with apparent authority for the State, materially increased the surety's risk of defendant's nonappearance. Insofar as the surety was aware, defendant was required to remain in New Jersey and had undertaken to appear in court as required and to remain in New Jersey unless otherwise permitted by the court on notice to it. The agreement, however, authorized defendant to exercise his own discretion and judgment in determining whether the nature and circumstances of an emergent threat warranted his flight without his having to give prior notice either to the prosecutor or to the court. That authorization itself materially increased the surety's risk, whether or not defendant ultimately exercised his authorized discretion properly. It is further clear that the risk created by the agreement was in fact the cause of defendant's nonappearance and of the consequent bail forfeiture since whether or not defendant properly exercised his right under the agreement, he nevertheless relied on the agreement in taking flight without prior notice.
Since we have concluded that the prosecutor's agreement requires the release of the surety, it is clear that the forfeiture must be set aside and the ...