July 22, 2013
STATE OF NEW JERSEY, Plaintiff-Respondent,
ZERUI HUANG, Defendant, and SENECA INSURANCE COMPANY, INC., Insurer-Surety; CALLAHAN BAIL BOND AGENCY, Agency-Surety; and JAMES REAP, Agent-Surety, Defendants-Appellants.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 26, 2013
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Indictment No. 11-05-0979.
Joseph G. Monaghan argued the cause for appellants.
Christopher J. Kane argued the cause for respondent.
Before Judges Messano and Kennedy.
Seneca Insurance Co. (Seneca), Callahan Bail Bond Agency (Bail Bonds), and James Reap (collectively, the Surety), appeal from the April 10, 2012, order of the Law Division, entering judgment in favor of the State of New Jersey in the amount of $150, 000, together with interest and costs. We discern the following facts from the record.
Defendant Zerui Huang, a nineteen-year-old Chinese national in the United States on a student visa, was enrolled as a student at Fairleigh Dickinson University. On February 20, 2011, Huang was arrested on a complaint-warrant issued from the Fort Lee municipal court charging him with second-degree sexual assault, N.J.S.A. 2C:14-2c(1). Bail was initially set by a Superior Court judge at $300, 000 bond only, with additional conditions that Huang have no contact with the alleged victim and surrender his Chinese passport. On March 2, in response to a bail reduction motion, the same Superior Court judge modified the bail to $150, 000 bond only, and maintained the other conditions. Bail Bonds posted a surety bond issued by Seneca.
On March 3, the court's assistant finance division manager sent the United States Immigrations and Customs Enforcement a notice advising that the court had custody of Huang's Chinese passport, together with instructions that Huang was "not permitted to apply for the issuance of any passport during the pendency of [the] action." However, on March 21, Huang's attorney, Matthew Jeon, and the assistant prosecutor assigned to the matter at the time executed a consent order that was entered by the judge. There is no dispute that the consent order was entered without notice to the Surety.
Pursuant to the consent order, Huang's passport was to be released to Jeon or his legal assistant, Sarah Hur for the purpose of renewing [Huang]'s driver's license." The order provided that the passport was to remain in Jeon's or Hur's custody at all times, and it be returned to the Bail Unit within forty-eight hours of release. The record contains a signed receipt for the passport, dated March 22, and a signed receipt that it was returned on March 24.
On or about May 18, 2011, the Bergen County grand jury indicted Huang in a single count charging him with second-degree sexual assault, N.J.S.A. 2C:14-2c(1). Huang's failure to appear in court on June 2 resulted in the issuance of a warrant for his arrest and forfeiture of the bail. On June 10, Seneca was notified of the forfeiture.
On September 27, the Surety moved to vacate the forfeiture and for other relief. In support of the motion, Callahan provided an affidavit setting forth his efforts to monitor Huang's presence in the jurisdiction, which included meeting with Huang on March 7, visiting his residence on April 13 and speaking to his roommate, who confirmed Huang's residence. Callahan further stated that on June 1, he was unable to contact Huang and the co-signor on the surety; Huang's roommate told Callahan that Huang had returned to China. Callahan called Jeon who advised him that Huang had left the United States. Callahan stated that the prosecutor's office was aware that Huang left the country on May 17 on a flight from Kennedy Airport.
After considering oral argument on January 31, 2012, the judge concluded Callahan's affidavit was "very sparse" regarding "his involvement and his monitoring" of Huang. The judge further determined that "at this point, there's no causation; there's no breach of obligation; there's nothing that rises to the level that by releasing this passport it somehow allowed and permitted [Huang] to flee." She denied the Surety's motion without prejudice.
In February 2012, the Surety moved for reconsideration. The motion was supported by Jeon's affidavit, in which he claimed that Huang contacted him in early March 2011 and inquired about obtaining his passport to renew his driver's license. Jeon contacted the assistant prosecutor, and, pursuant to a mutual agreement, prepared the consent order, which was executed by the judge.
Jeon further stated that Hur picked up the passport on March 22, and, together with "a friend of [Huang], " proceeded to the Motor Vehicle Commission (MVC) offices the next day "to renew [Huang's] driver's license." Jeon did not go, but, upon returning to the law office, Hur advised that Huang's license could not be renewed "because he was currently suspended due to accumulation [of] many points on his license." According to Jeon, defendant's license was due to be restored on April 16 after he paid a restoration fee.
Jeon also claimed that he routinely obtained passports on a "temporary basis" when representing other criminal defendants who were not citizens of the United States. His practice was to make copies of the passports and provide them to his clients, and Jeon usually did not record whether he did so in a particular case. Jeon never advised the Surety of his application for temporary custody of the passport, the consent order or that he likely copied Huang's passport.
In reply to the County's opposition brief, Callahan provided a further certification. We need not detail its contents because the judge conducted a full hearing on March 22, 2012.
Jeon testified that shortly after his release, Huang and his girlfriend contacted Jeon on several occasions to inquire about ways for Huang to leave the country. On March 8, 2011, Huang emailed Jeon about renewing his driver's license and how he could obtain "permission to go back to China for May 17th to June 29th." Jeon also testified that Huang had been in communication with his parents, who had engaged the Chinese consulate for assistance.
Sometime in March, Jeon contacted the assistant prosecutor "about obtaining [Huang's] passport" in order to renew Huang's driver's license. Huang's license was due to expire on March 10, 2011. When the assistant prosecutor agreed, Jeon forwarded a consent order to the judge. Jeon testified that he retrieved the passport from the Finance Division at 11:25 a.m. on March 22, "probably took it to [his] office, and held it in [his] office."
The next day, Jeon instructed Hur "to accompany [Huang], . . . hold the passport in her custody because the order state[d] it was [Jeon] or [Hur] that should have the custody of the passport, . . . accompany [Huang] to [MVC], and do what's necessary to have his license renewed." Jeon also instructed Hur to "bring the passport back, and not to have that passport anywhere."
Hur testified that after being instructed by Jeon that the passport "should never leave [her] hands, " she accompanied Huang to the MVC office. Hur further testified that the trip was unsuccessful, as Huang was unable to obtain an updated license. Both Jeon and Hur testified that neither of them had notified the Surety of the temporary release of Huang's passport.
On March 24, 2011, Jon Jung, an associate of Jeon, returned the passport to the Finance Division. At the hearing, neither Jeon nor Hur could remember whether anyone had made a copy of the passport for Huang. Jeon did testify that it was not unusual for his office to make copies of passports, since many of his clients were "either permanent residents or . . . undocumented aliens" who might need documentation of their "passport numbers and their status in the United States."
Callahan testified that he first learned of the release of Huang's passport when he received paperwork for the State's motion for judgment. Callahan recalled that sometime in April 2011, he "reached out to [Huang] . . . and . . . was not able to make any contact, " at which point he "knew . . . there was going to be a bail forfeiture." After realizing that Huang was missing, Callahan "[d]id some . . . running around" and learned that Huang had "fl[own] out . . . under his own name from JFK."
The judge rendered her oral opinion on April 10, 2012. She found that Jeon requested the temporary release of Huang's passport so "defendant could renew his driver's license, " which was to expire "on March 10th of 2011 or was due to expire." Since neither Jeon nor Hur could specifically recollect whether a copy of Huang's passport was made for him while it was in their custody, the judge declined to "rely on speculation of what might or could have occurred." The judge emphasized it was "important to note that [Hur] noted the importance of this passport[, ] that it not be given to [Huang]."
With regard to Huang's intentions to leave the country, the judge stated:
It's also important to note that in the emails of the defendant and [Jeon], which I reviewed,  there [are] already statements in the emails made by [Huang] to [Jeon] that he wanted to go back to see his family. As he's only a student here. He's only a transient Chinese [n]ational who came to this country on a student visa. So he never had any intentions of remaining in the United States for an extensive period of time. And it appears that that flight was already preplanned by the student that he would go home for the summer.
This led the judge to focus her attention on the period "when [Callahan] monitored [Huang], " between March 2 and June 2, 2011.
The judge expressed concern as to what Callahan reasonably should have known when agreeing to post Huang's bail:
Number one, [Callahan] met with the defendant on March 7th, 2011[, ] to discuss the defendant's obligations. At all specific times[, ] . . . Callahan knew that the defendant was residing on the Fairleigh Dickinson University Campus. Right on the license that was in one of the exhibits[, ] it gives the address of the . . . [c]ampus. So that is something that should have alerted . . . Callahan that this is a person whose . . . resident address is a campus. It's a college campus. It's a transient place. It's a place where students do not live there for long periods of time. They generally go home to their families, especially during the summer. And this is something he should have been alerted to especially since in March he should have known that the semester would end by May.
Now, none of these things were . . . presented as evidence by Frank Callahan. That when he met with the defendant on March 7th, there is absolutely no testimony or evidence presented by Frank Callahan that in his discussion with the defendant that they established the ground rules . . . of what is going to happen between . . . March 7th, 2011[, ] and the end of the year[.] [W]hat his plans are for staying in the country? What is he going to do during the summer months when he's out of school. I mean none of this evidence was presented, and someone with his level of experience, someone who has been in this business for many, many years, as he testified to, should have at least sat with the defendant on March 7th, 2011[, ] to discuss this. And put forward a monitoring system that would ensure the presence of the defendant.
The judge found unconvincing Callahan's testimony "that because the passport was with the [State], . . . '[i]t gave [Callahan] some "comfort level" that that would be the only way for [Huang] to travel.'" The judge stated, "if there is a will to leave the country . . ., you could do that[, ] [e]ven if the passport is lodged with the [State]." Ultimately, the judge found Callahan's supervision of Huang to be "unacceptable" and "nonexistent."
Considering whether the release of the passport materially increased the risk to the Surety, the judge failed to find any evidence that "defendant had to agree that the passport would always remain" with the State. In finding that the passport was released for the limited purpose of renewing Huang's driver's license, the judge concluded "there [was] no evidence . . . of a material increase in risk." She entered the order under review, and this appeal ensued.
Before us, the Surety raises the following issues:
THE STATE BREACHED ITS OBLIGATION TO THE [APPELLANTS] WHEN IT CHANGED THE TERMS OF THE BAIL AGREEMENT BY CONSENTING TO HUANG'S ATTORNEY HAVING TEMPORARY CUSTODY OF THE PASSPORT.
WHERE THE SOVEREIGN TO WHICH A BAIL BOND IS GIVEN BY ITS OWN ACTS MAKES PERFORMANCE OF THE CONDITIONS OF THE BOND IMPOSSIBLE, THE SURETIES ARE EXONERATED FROM LIABILITY UNDER THE BOND.
IT WAS NOT UNTIL THE DEFENDANT'S PASSPORT WAS RELEASED TO . . . JEON THAT DEFENDANT LEFT THE COUNTRY.
We have considered these arguments in light of the record and applicable legal standards. We affirm.
"A bail bond is essentially a surety agreement in which the defendant is the principal and the State is the creditor . . . ." State v. Calcano, 397 N.J.Super. 302, 305 (App. Div. 2007) (citing State v. Weissenburger, 189 N.J.Super. 172, 176 (App. Div. 1983), certif. denied, 194 N.J. 446 (2008). When a defendant seeks the services of a third-party surety, the "surety is bound 'according to the strict terms of its undertaking, ' and 'its obligation cannot be extended or altered beyond the terms of its agreement.'" Id . at 306 (quoting State v. Clayton, 361 N.J.Super. 388, 395 (App. Div. 2003)). "[R]elease or impairment of collateral acts to extinguish the surety's obligation." Clayton, supra, 361 N.J.Super. at 395 (citation omitted).
If the surety agreement is altered by the defendant and the State, "[t]he surety will be discharged as a matter of law . . . where the modification 'materially increases [the surety's] risk.'" Calcano, supra, 397 N.J.Super. at 306 (quoting State v. Vendrell, 197 N.J.Super. 232, 237 (App. Div. 1984)). However, "[m]odifications that do not materially change the risk are permissible." Ibid.
In Weissenburger, supra, 189 N.J.Super. at 177, without consent of the surety, the prosecutor modified the bail agreement by allowing the 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." We found that "the risk created by the agreement was in fact the cause of defendant's nonappearance and of the consequent bail forfeiture." Ibid. (emphasis added). As such, we concluded that the modification constituted a materially increased the risk to the surety. Ibid. In Clayton, supra, 361 N.J.Super. at 395, we concluded "that the court's unilateral decision to reinstate [the defendant] to bail" without notice to the surety and after the defendant's failure to appear "was just such an increased risk."
Conversely, in Calcano, supra, 397 N.J.Super. at 307, we concluded that the judge's decision to continue the defendant on bail over the surety's objection was not a material change in the surety's risk, since the defendant had kept in contact with the surety and had not missed any court appearances. We also rejected the surety's argument that its risk had materially increased after the defendant pled guilty to an offense requiring mandatory imprisonment. Ibid.
In State v. Tuthill, 389 N.J.Super. 144, 147 (App. Div.), certif. denied, 192 N.J. 69 (2007), the court erroneously discharged the defendant's surety bond; without notice to the surety, the judge reinstated the bond. The surety subsequently objected and appealed the judge's decision requiring it to issue a new bond. Ibid.
The surety argued that it detrimentally relied upon the erroneous discharge, and its subsequent discovery of the defendant's prior criminal conviction materially increased its risk upon reinstatement. Id . at 150. We rejected both claims, concluding that the surety failed to demonstrate any detrimental reliance upon the cancellation. Id . at 150-51. As to the argument that the risk insured had been materially altered, we concluded:
The court did not attempt to change any of the terms of the surety agreement or the conditions of defendant's pretrial release. In this regard, there has been no showing that the court's action was inconsistent with the terms of the bail bond or made it less likely that defendant would appear.
[Id. at 151 (emphasis added).
In the present case, the temporary release of the passport was for a limited specific purpose -- to allow Huang to renew his driver's license -- and for a brief period of time -- forty-eight hours. Furthermore, Jeon and Hur were ordered to retain custody of the passport at all times, and the evidence adduced at the hearing demonstrated they essentially complied with that condition. There was no proof that Huang ever had possession of the passport.
Unlike the facts in Weissenburger, the conditions of the consent order were non-discretionary. In the absence of any proof that Huang used the passport, or a copy of it, to flee, the Surety failed to demonstrate that "the risk created by the [consent order] was in fact the cause of defendant's nonappearance and of the consequent bail forfeiture." Weissenburger, supra, 189 N.J.Super. at 177. Furthermore, as the judge expressly found, the Surety provided little evidence of its efforts to minimize the inherent risk of posting bail for a student, known to be a foreign national with few ties to the United States, and likely to return to his native country when the school year ended.
Citing a number of out-of-state precedents, the Surety also argues that it should be exonerated because the State "ma[de] performance of the conditions of the bond impossible." The judge, however, specifically rejected any claim that the limited release of the passport under the restrictions of the consent order was a cause of Huang's flight. The Surety's argument in this regard lacks sufficient merit to warrant further discussion in a written opinion. R. 2:11-3(e)(2).