June 2, 2010
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
ERIC GIUSINI, DEFENDANT, AND ALLEGHENY CASUALTY COMPANY, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Camden County, Indictment No. 04-10-4008.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted May 10, 2010
Before Judges Lisa and Baxter.
Defendant Allegheny Casualty Corporation (Allegheny or the surety) appeals from a May 6, 2009 Law Division Order denying its motion to set aside an earlier $7,500 judgment on a forfeited bail. On appeal, the surety argues that when defendant, Eric Giusini, failed to appear for a court proceeding, the judge lacked the authority to thereafter reinstate the bail without its consent. We agree. We therefore reverse the order of May 6, 2009 and remand for further proceedings.
On March 5, 2005, Allegheny posted a $7,500 bond on behalf of Giusini, which resulted in Giusini's release from the Camden County Correctional Facility (CCCF). According to the surety, Giusini "checked in" by telephone on both March 8 and March 15, 2005. When Giusini failed to appear for a required court appearance on March 28, 2005, a bench warrant was issued and a judge declared the bail forfeited.
On April 26, 2005, Giusini was arrested on unrelated motor vehicle charges in Gloucester County and was incarcerated in the Gloucester County Correctional Facility. The judge in Camden County was apparently notified of Giusini's apprehension and, on April 27, 2005, converted the March 28, 2005 bench warrant to a bench warrant/detainer. In addition to modifying the bench warrant, the judge reinstated the bail that had been deemed forfeited on March 28, 2005. This April 27, 2005 reinstatement of the bail was accomplished without consulting Allegheny and without obtaining Allegheny's consent to that reinstatement. On May 10, 2005, when Giusini's Gloucester County charges were resolved, he was transported to the CCCF in accordance with Camden County's bench warrant/detainer.
However, on May 6, 2005, after Giusini was apprehended in Gloucester County, but before he was released from the CCCF on May 11, 2005, the surety had filed a pro se "MOTION TO RELEASE FORFEITURE, REINSTATE AND DISCHARGE BAIL." The motion sought the following relief: "please reinstate and discharge my bond" (emphasis added). There is no record of that motion ever being scheduled for a hearing or addressed by a judge.
Because the judge had reinstated Giusini's bail, Giusini was released from the CCCF the day he arrived, May 10, 2005. If there were any court appearances required between May 2005 and October 2007, the parties have not so advised us.
The record establishes that Giusini's next court appearance was scheduled for October 3, 2007. When he failed to appear, the judge issued a bench warrant for his arrest and issued an order forfeiting the bail that had been reinstated in April 2005. Notice of the October 3, 2007 forfeiture was not mailed to the surety until April 17, 2008. Default judgment was entered on July 7, 2008.
On July 11, 2008, Allegheny filed a motion to vacate the bail forfeiture and resulting judgment. The hearing on Allegheny's motion was delayed for several months while the surety unsuccessfully attempted to obtain a transcript of the April 27 and May 13, 2005 proceedings in Camden County. Ultimately, the surety's motion came before the Law Division for a hearing on February 26, 2009. The judge denied the surety's motion for exoneration. We quote the relevant portions of the judge's findings of fact and conclusions of law in their entirety:
Don Burton, [the surety], wrote to the Court and said reinstate and discharge my bond. He acknowledged that... Mr. Giusini had been a fugitive for 30 days, that he received a notice of the forfeiture, and rather than do anything else, he wrote to the Court on May 6, 2005, pleading, "Please reinstate and discharge my bond."
Now, given the fact that the words "reinstate" and "discharge" have opposite meanings, he did nothing for two years, and did nothing for three years. He's a professional bondsman. I see absolutely nothing in the record that would have risen or sunk to the level of an improper reinstatement of a bond, and particularly pursuant to State v. Clayton. As counsel cites in his brief, it's [a] well settled principle... that the surety is only chargeable according to the strict terms of its undertaking, and that as a result its obligation cannot be extended or altered beyond the terms of its agreement. While that's true, but for the letter he sent to [the] [j]udge saying, "please reinstate and discharge my bond."
On the basis of that, the [c]court is unable to find any legal or factual basis with regard to which it can release --discharge, dismiss the default judgment and release and exonerate this surety.
Anything else, counsel?
[COUNSEL FOR THE SURETY]: No. Your Honor. That's all.
THE COURT: Hopefully, your client will have the wisdom to use the fine services of an attorney in the future. And given the fact that he's a professional, given the fact that two years -- for two years he did nothing, given the fact that for two years he was aware of the existence of this forfeiture, given the fact that it languished until sometime much later, there's not an indicator in the file that would suggest that he intended to do anything other than have his bond reinstated on behalf of Eric Giusini.
On appeal, relying on our opinion in State v. Clayton, 361 N.J. Super. 388, 395 (App. Div. 2003), the surety argues that a court may not modify or alter the terms of a bail recognizance without the consent of the surety and that any increase in the risk of the bond, not consented to by the surety, will operate to discharge the bond as a matter of law if the modification materially increases the risk the surety assumed.
Allegheny points out that Giusini had already failed to appear in court on one occasion before it agreed to post a bond for him in March 2005.*fn1 For that reason, according to Allegheny, upon learning of Giusini's failure to appear on March 28, 2005 in Camden County and his arrest on the Gloucester County motor vehicle charges in April 2005, it filed a timely motion to vacate the forfeiture and discharge the bail. Allegheny maintains the Law Division's February 26, 2009 decision, which was memorialized in a confirming order of May 6, 2009, improperly ignored the substance of Allegheny's May 6, 2005 motion, and instead "chastised the surety for filing a pro se motion that [the court] concluded was confusing." Allegheny maintains the trial court's focus "should have been on the reinstatement of the bond, not the [wording of] the surety's pro se motion." Allegheny also argues:
Finally, it should be noted that defendant was re-arrested for another offense (motor vehicle charges) one month after failing to appear. The [G]uidelines promulgated by the Administrative Office of the Courts set forth, in Directive 13-04, the various factors and guidelines Courts must consider when determining the amount of remission a surety is entitled from a bail forfeiture. One category adds enhanced penalties where the defendant is re-arrested for a new crime. Obviously, since the AOC considers the re-arrest of a defendant after a bail forfeiture for a new offense so seriously, so should a court before it reinstates a bail. In fact, in this matter, the defendant had failed to appear twice before the court reinstated the bond without the consent of the surety.
The County urges us to affirm the order under review, arguing that "the bail bond was actually reinstated at the specific request of the owner Don Burton." The County maintains that the Law Division was correct when it determined there was no evidence to indicate that the surety intended to do anything other than secure the reinstatement of its bail bond.
As Allegheny correctly argues, "[i]t has long been recognized that a bail bond 'constitutes a surety agreement in which the defendant is the principal and the creditor is the State.'" State v. Ceylan, 352 N.J. Super. 139, 143 (App. Div. 2002) (quoting State v. Weissenburger, 189 N.J. Super. 172, 176 (App. Div. 1983)). Because "[t]he undertaking of a surety is defined by the terms of the bail bond and applicable law[,]... [a] modification of the terms of a surety agreement by the [court] without the surety's consent operates to discharge the surety, if the modification materially increases the risk assumed." Ibid. (internal citations omitted).
In Ceylan, we concluded that the trial court abused its discretion when it refused to permit the surety to surrender the defendant and obtain exoneration on the recognizance bond once the defendant was convicted at trial on an unrelated charge. Id. at 145. We concluded that because the risk of flight by the defendant "had changed materially from that existing prior to trial [on the unrelated charge]" the judge abused his discretion by permitting defendant to remain free on bail, and by denying the surety's motion for exoneration. Id. at 144-45.
In Clayton, we were faced with facts similar to the present matter. After being notified that the defendant was a fugitive, the surety, Lexington National Insurance Company (Lexington), commenced an investigation, apprehended the defendant and returned him to the custody of the Camden County authorities. Supra, 361 N.J. Super. at 394. "Unbeknownst to the surety, however, following the date on which it turned [the defendant] over to the authorities, the judge in Camden County set aside the forfeiture on his own motion, and the judge, without notice to Lexington, then reinstated the original bail and released [the defendant] again." Ibid. The defendant thereafter again failed to appear, and upon being notified, Lexington again returned him to the Camden County authorities. Ibid.
After holding that "the principles of suretyship apply to bail bonds," id. at 395, we observed that "it is a well-settled principle of suretyship that the surety is only chargeable according to its undertaking and that, as a result, its obligation cannot be extended or altered beyond the terms of its agreement." Ibid. Applying basic principles of suretyship law, we held that the judge's decision to again release the defendant, "his appearance secured only by the previously issued bond of Lexington," had materially increased Lexington's risk without its consent, thereby rendering the order of reinstatement a nullity. Ibid. For that reason, and because Lexington had "prompt[ly] return[ed]" the defendant and had filed a timely objection to the entry of judgment of forfeiture, see R. 3:26-6, we held that Lexington was entitled to the return of 100% of its bail. Id. at 395-96.
As is clear from both Ceylan and Clayton, a court may not -- by reinstating a previously forfeited bail -- subject a surety to a risk that is materially greater than the risk it voluntarily assumed when it initially wrote the bail. As we recognized in both of those cases, a surety should be afforded the opportunity to decide whether it is willing to again be placed on the risk after a defendant failed to appear for court proceedings following the surety's issuance of the recognizance.
Clayton, supra, 361 N.J. at 395; Ceylan, supra, 352 N.J. Super. at 143. Here, as in Clayton, once defendant became a fugitive, Allegheny's "willingness to underwrite a further bail would have been at best debatable." Supra, 361 N.J. Super. at 395. While we recognize that Giusini was already a fugitive at the time Allegheny posted the recognizance bond on his behalf in March 2005, Giusini's failure to appear for court a mere twenty-three days after Allegheny posted the recognizance on March 5, 2005, and his arrest on new charges in Gloucester County, would have alerted any reasonably prudent surety that Giusini was not a good risk.
We recognize that in Clayton the actions taken by Lexington after the defendant became a fugitive were more extensive, or at least more successful, than the actions Allegheny took here, as Lexington was able to recapture the defendant only to have the court, shortly thereafter, reinstate the bail without its knowledge. Id. at 394. Although that factual distinction does exist between Clayton and the present matter, we are satisfied that the basic principle articulated by both Ceylan and Clayton remains the same, namely that a court may not subject a surety to an increased risk of a defendant's failure to appear unless the surety has been consulted and has consented. We will address the consequences of this factual distinction between Clayton and the present matter shortly.
In any event, by reinstating the bail without Allegheny's consent in April 2005, the court materially increased Allegheny's risk by exposing Allegheny to the possibility that defendant would become, for the third time, a fugitive. Had the court afforded Allegheny that option, and had Allegheny refused to consent to the reinstatement of the bail, Allegheny would have been in a far better posture during any subsequent bail forfeiture judgment hearing than it was in once the court reinstated the bail and Giusini became a fugitive for the third time. That is because, as the Remittitur Guidelines issued by the Administrative Office of the Courts specify, different criteria apply if, at the time of the motion, the defendant is a fugitive than if he is not. See Directive #13-04 (Guidelines) 6-8 (as supplemented Nov. 12, 2008).
In particular, Remission Schedule 1 grants no remission if the defendant is still a fugitive when the remission motion is made, while Remission Schedules 2 and 3 authorize partial remission when the defendant is no longer a fugitive at the time the motion is made. Thus, by reinstating the bail in April 2005 without Allegheny's consent, the judge put Allegheny in a position where Giusini remained a fugitive at the time the bail remission hearing was conducted.
If instead the court had afforded Allegheny the opportunity to refuse to consent to the reinstatement of Giusini's bail in April 2005, Giusini at that point would have remained in custody and would have been a fugitive for only four weeks. That is a far different posture from the circumstances that confronted Allegheny in 2009. As is evident, by reinstating the bail without Allegheny's consent, the court materially altered the risk that Allegheny had assumed when it posted the bond in March 2005. The court's failure to obtain Allegheny's consent to such an increased risk rendered the judge's April 25, 2005 decision to reinstate the bail a "nullity." Clayton, supra, 361 N.J. Super. at 395.
We therefore remand for a hearing during which the judge shall consider what portion of the $7,500 recognizance Allegheny posted in March 2005 should be remitted to Allegheny. In making that decision, the judge must apply the Guidelines in the same manner as the Guidelines would have been applied in April 2005 had the improper reinstatement of the bail not occurred. Stated differently, Allegheny's right to remission shall be determined based only upon the facts as they existed on April 27, 2005.
We now describe the factors to be applied during that hearing. Unlike Clayton, in which the surety had apprehended the defendant and had returned him to the custody of authorities in the days before the judge improperly reinstated the bail, supra, 361 N.J. Super. at 394, here Giusini was not apprehended by any effort of Allegheny. Instead, he was returned to custody in Camden County only because the Gloucester County authorities notified Camden County of his whereabouts and arranged for his return to the CCCF. For that reason, we do not consider Allegheny to be entitled to the same 100% remission afforded to Lexington in Clayton. See id. at 394.
On remand, the judge should apply Remission Schedule 2, which is controlling whenever the defendant "is not a fugitive when [the] remission motion [was] made and defendant did not commit a new crime while a fugitive." Guidelines, supra, at 7. While Schedule 2 applies when the defendant is not a fugitive when the motion is made, and here Giusini was a fugitive at that time, Remission Schedule 2 is nonetheless the appropriate Schedule, because had Allegheny been consulted, it would have refused to consent to a reinstatement of the bail. If the judge had not improperly reinstated the bail on April 27, 2005, Giusini would not have been afforded the opportunity to again become a fugitive. Thus, Allegheny is entitled to the "not a fugitive" standard of Schedule 2.
Moreover, although Giusini did commit motor vehicle offenses before Allegheny filed its motion, a motor vehicle offense is not a "crime," and therefore Allegheny is entitled to the benefit of the "did not commit a new crime" standard encompassed in Schedule 2. In requiring the judge on remand to apply Schedule 2 and determine the percentage of remission to which Allegheny is entitled, we expressly disagree with the judge's conclusion on February 26, 2009 that Allegheny's May 6, 2005 motion had asked the judge to reinstate the bail it had posted in March 2005 and thereby keep it on the risk. Allegheny's May 2005 motion closed with the words "Please reinstate and discharge my bond." The only reasonable interpretation of Allegheny's motion is that it sought to extinguish any risk of further non-appearance by Giusini.
Reversed and remanded.