December 9, 2011
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
SEAN HAMMOND, DEFENDANT, AND ABLE BAIL BONDS, L.L.C., AGENT OF ACCREDITED SURETY AND CASUALTY COMPANY, INC., DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Morris County, Indictment No. 09-01-01221.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 26, 2011
Before Judges Harris and Koblitz.
Defendant Sean Hammond was charged with criminal attempt to commit extortion, N.J.S.A. 2C:5-1a(3) and N.J.S.A. 2C:20-5a, and terroristic threats, N.J.S.A. 2C:12-3a. Able Bail Bonds,
L.L.C., agent of Accredited Surety & Casualty Company, Inc., (Able), posted a $40,000 bail bond for defendant on September 24, 2009. Defendant failed to appear on two separate occasions. After each failure to appear, bail was initially forfeited and an arrest warrant issued without notice to Able. On both occasions bail was later reinstated, again without notice to Able. When defendant did not appear for a third time, a warrant was again issued and bail forfeited. The court thereafter notified Able of the warrant and bail forfeiture.
Able subsequently moved for exoneration and discharge of the bond on the basis that the court failed to provide notice of the two prior non-appearances and bail bond reinstatements and notification of the third warrant was late. Able appeals the motion judge's August 18, 2010 order denying its application. After reviewing the record in light of the contentions advanced on appeal, we remand for further fact-finding regarding the cause of the second reinstatement and for reconsideration of Able's application.
Defendant initially failed to appear in Morris County Superior Court for an early disposition conference (EDC) on October 13, 2009. As a result, an arrest warrant was issued and bail forfeited. Two days later, defendant appeared in court voluntarily, without having been contacted or pursued by law enforcement. He was wearing a hospital band on his wrist. Upon learning that defendant was hospitalized at the time of the scheduled conference, the court vacated the arrest warrant and reinstated bail with the prosecutor's consent. Able did not receive notice of defendant's failure to appear, the arrest warrant or the bail forfeiture, and therefore could not consent to the reinstatement of bail.
Defendant then failed to appear at the rescheduled EDC date of November 2, 2009. The court once again issued an arrest warrant and forfeited bail without notifying Able.
At the request of the Morris County Criminal Division Manager, the court vacated the arrest warrant and reinstated bail on January 11, 2010, for unspecified administrative reasons. Once again, Able did not consent to the bail reinstatement.
Defendant thereafter failed to appear on February 18, 2010, for a scheduled arraignment. The court issued an arrest warrant and ordered bail forfeited. Notice of bail forfeiture was generated on March 3, 2010. Able received this notice on March 8, 2010.
On May 31, 2010, Able filed a motion to exonerate pursuant to Rule 3:26-7. The motion judge found that George Pena, an owner of Able, acknowledged in his testimony that although Able had regular contact with defendant before November 18, 2009, it had no further contact with him until February 6, 2010, even though defendant was instructed to call Able every two weeks.*fn1
On February 6, an Able representative spoke directly to defendant and later sent him notice informing him of his February 18 court date.
Pena testified that Able hired three private investigators who developed evidence that defendant may have gone with a friend to China.*fn2 To our knowledge, defendant remains a fugitive.
On appeal, Able argues that it is entitled to complete exoneration and discharge of the bond. Able cites to Rule 3:26-6 in seeking exoneration because of the court's failure to provide notice of the October 13 and November 2 non-appearances and the resulting bail forfeitures and because bail was reinstated by the court on both October 15 and on January 11 without Able's consent, which materially increased the surety's risk. Also, pursuant to Rule 3:26-6, Able contends that notice is the appropriate remedy.
All persons charged with a crime "shall be bailable before conviction on such terms as, in the judgment of the court, will ensure their presence in court when required." State v. Ventura, 196 N.J. 203, 212 (2008) (citing R. 3:26-1(a)). Furthermore, "a person admitted to bail is required, together with that person's sureties, to sign and execute a recognizance," which "shall be conditioned upon the defendant's appearance at all stages of the proceedings until final determination of the matter, unless otherwise ordered by the court." Ibid. (citing R. 3:26-4(a)). Thus, the primary purpose of bail is to secure a defendant's appearance in court. State v. Calcano, 397 N.J. Super. 302, 306 (App. Div. 2007) (citing State v. Korecky, 169 N.J. 364, 375-76 (2001)). When a defendant fails to appear, Rule 3:26-6(a) requires the court "on its own motion" to "order forfeiture of the bail" and to "forthwith send notice of the forfeiture, by ordinary mail, to . . . any surety or insurer, bail agent or agency whose names appear on the bail recognizance. . . ." R. 3:26-6(a).
The motion judge acknowledged that bail was reinstated without notice to or consent from Able, contrary to the requirements of Rule 3:26-6. His discussion, however, focused on Rule 3:26-7, which governs exoneration and remittance of bails. It states as follows:
When the condition of the recognizance has been satisfied or the forfeiture thereof has been set aside or remitted, the court shall exonerate the obligors and release any bail. A surety may be exonerated by a deposit of cash in the amount of the recognizance or by a timely surrender of the defendant into custody.
The motion judge concluded that, notwithstanding the court's failure to provide the requisite notice, the defendant was a fugitive and, thus, "'the essential undertaking of the surety remain[ed] unsatisfied.'" (citing State v. Harmon, 361 N.J. Super. 250, 255 (App. Div. 2003).
Able relies heavily on State v. Hawkins as support for its entitlement to complete exoneration. 382 N.J. Super. 458 (App. Div. 2006). In Hawkins, the surety appealed, claiming that it was entitled to exoneration based on the State's failure to comply with the notice requirement of Rule 3:26-6(a) after the defendant's non-appearance. We agreed, finding that "had [the surety] been given notice of [the] defendant's failure to appear and any resulting forfeiture, it could have sought to surrender [the] defendant and moved for exoneration pursuant to Rule 3:26- 7." Id. at 467. We further held that the failure "to provide notice to [the surety] of [the] defendant's failure to appear . . . require[d] reversal as a matter of law." Ibid.
Similarly, Able was not given notice of defendant's October 13 or November 2 failure to appear. Nor did Able consent to the bail reinstatements of October 15 or January 11. Able argues that, as a result, it should be relieved of its obligation under the bail agreement. A critical distinction, however, is the fact that Able moves for exoneration while defendant remains a fugitive. In Hawkins, the defendant was in custody when the surety moved for remission of the bond. We have found that "where [the] defendant remains a fugitive when the remission motion is made, the essential undertaking of the surety remains unsatisfied, and the denial of any remission is entirely appropriate." Harmon, supra, 361 N.J. Super. at 255.
To exonerate Able while defendant remains a fugitive would relieve it of any reasonable incentive to fulfill its "essential undertaking" of recapturing defendant. Ibid.; see State v. de la Hoya, 359 N.J. Super. 194, 199 (App. Div. 2003); Clayton, 361 N.J. Super. 388, 392-93 (App. Div. 2003). The motion judge must consider this ramification when deciding whether to exonerate Able. If the motion judge finds that Able should have been notified of defendant's November nonappearance, and that Able was prevented from carrying out its obligation to locate defendant due to the failure to notify, then exoneration is appropriate even if defendant is not rearrested. If the State's failure to follow the notice requirements prevented Able from carrying out its obligation to apprehend defendant, it would be inequitable to leave Able without a remedy. "[T]he equitable discretion of the trial court" will govern "the decision [whether] to remit bail and the amount of remission." de la Hoya, supra, 359 N.J. Super. at 198-99.
Able also points to the factors to be considered by courts when exercising that discretion. These factors include the corporate status of the surety, the surety's supervision of the defendant while released on bail, the surety's efforts to ensure the fugitive's return, the length of time between the fugitive's non-appearance and return, both the prejudice to the State and the expenses incurred by it resulting from the fugitive's non-appearance, recapture, and enforcement of the forfeiture, and whether reimbursement of the State's expenses will adequately satisfy the interests of justice. [de la Hoya, supra, 359 N.J. Super. at 198-99.]
Able asserts that the motion judge erred by failing to explicitly consider these factors when denying Able's motion. A number of the factors are not relevant as defendant has not been recaptured. However, if the failure to recover defendant is due to the lack of timely notice to Able of the various warrants, defendant's fugitive status should not preclude exoneration.
Able also contends that it should be discharged as a matter of law because the October and January bail reinstatements materially increased its risk. Able focuses on the court's failure to provide notice of defendant's non-appearances and failure to obtain consent to both reinstatements as materially increasing the risk of its undertaking.
A bail bond is the functional equivalent of a surety agreement in which "the defendant is the principal and the creditor is the State." State v. Weissenburger, 189 N.J. Super. 172, 176 (App. Div. 1983); see also State v. Tuthill, 389 N.J. Super. 144, 147-48 (App. Div. 2006), certif. denied, 192 N.J. 69 (2007); Clayton, supra, 361 N.J. Super. at 395. Thus, the legal principles of suretyship apply to bail bonds. Clayton, supra, 361 N.J. Super. at 395 (citing Weissenburger, supra, 189 N.J. Super. at 176). "The extent of the surety's undertaking is defined by the terms of the bail agreement." Tuthill, supra, 389 N.J. Super. at 148 (citing State v. Ceylan, 352 N.J. Super. 139, 143 (App. Div. 2002)). It is a "well-settled principle of suretyship" that a surety's liability is limited to the "strict terms of its undertaking," and, as a result, "its obligation can not be extended or altered beyond the terms of its agreement." Ibid. (citing Clayton, supra, 361 N.J. Super. at 395).
A surety will be discharged as a matter of law where the bail agreement is modified without notice and consent and where the modification materially increases its risk. State v. Calcano, 397 N.J. Super. 302, 306 (App. Div. 2007) (internal citations omitted). "Modifications that do not materially change the risk are permissible." Ibid. (citing Tuthill, supra, 389 N.J. Super. at 149-50.
Able relies primarily on Clayton in asserting that it should be exonerated because of the court's failure to provide notice of the bail forfeitures and obtain consent to reinstatement. Clayton, supra, 361 N.J. Super. 388. In Clayton, the defendant failed to appear and was subsequently recaptured by the surety. Id. at 393-94. The trial court reinstated bail without notice to or consent from the surety and released the defendant. Id. at 394. The defendant again failed to appear and notice of forfeiture was sent to the surety. Ibid. The surety filed a motion to vacate the forfeiture based on lack of notice and consent to the reinstatement. Ibid. The motion was denied. Ibid. The defendant was thereafter apprehended and returned to authorities. Ibid. The surety filed another motion to vacate the forfeiture. Ibid. The trial court determined that $13,750 of the $20,000 bond should be forfeited and the balance remitted. Ibid. We vacated that order and directed the entire amount returned, holding that, under the circumstances, the trial court "did not have the authority to effect a reinstatement of the bail bond without the consent of the surety." Id. at 395. Importantly, in Clayton, unlike here, the defendant had been rearrested.
The motion judge concluded that the October non-appearance was illness-related and that defendant voluntarily turned himself in two days later. The defendant's non-appearance did not result from any act or agreement with the State and the original terms of the Able contract were unaffected. See Weissenburger, supra, 187 N.J. Super. 172. Thus, he found no material increase in risk. Although the judge should have notified Able prior to reinstating the bail, we agree with the motion judge's assessment that the October non-appearance did not materially increase Able's risk.
The motion judge determined that "the January 11, 2010, reinstatement was done administratively and did not constitute a material increase of the risk to the [s]urety as [d]efendant was a fugitive." These findings are not supported by the record. "Findings by the trial judge are considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). Without knowing more information about the January 11 administrative decision to vacate the November 2 arrest warrant, the motion judge did not have a sufficient basis from which to determine whether the lack of notice increased Able's risk. If the November 2 warrant was improperly issued, then the vacation of that warrant without notice to Able may not have increased the risk at all. Defendant was, however, given notice in person of the November 2 EDC when he appeared on October 15. Thus, his November 2 non-appearance raises concern. If he was facing a new indictment when he failed to appear, as speculated by the motion judge, it is hard to understand why that situation would result in a vacation of the warrant. With more facts, the motion judge will be able to balance the applicable factors, including defendant's continued absence, to reach an equitable decision.
Reversed and remanded. We do not retain jurisdiction.