Bail Exoneration: the Rest of PC 1305

My last post explained how the complicated process called bail forfeiture works in California. In California, that process is governed by the first few subsections of Penal Code Section 1305 (PC 1305). The rest of the law deals with the situations where, once bail is forfeited, bail is then exonerated.

After a defendant’s bail is set and he or she misses a court date, the bail is forfeited. If the court declares that bail is forfeited, the defendant’s money goes to the county after a long period during which it might still be exonerated (more on this below). If bail is exonerated, then the “surety or depositor shall be released of all obligations under bond,” i.e., the bondsman or defendant does not have to pay.

There are a lot of ways that, once bail has been forfeited, it will then be exonerated. In fact, most of the law is written detailing those scenarios. That is especially important because few defendants deposit their own money with the court, i.e., pay cash bond, so defendants rarely reap the benefit that so much of PC 1305 tries meticulously to preserve. In this post, I explain bail exoneration via PC 1305 and illustrate the ways that the law is written to favor exoneration, which almost by definition favors bail bond companies.

I recently came across a case that adequately illustrates some of the points I make in this post, that also helps show how exoneration works in a practical sense. Below is an overview of the case before we turn to the text of the Penal Code.

How Exoneration Happens: People v. Bankers Insurance Co., 182 Cal.App.4th 582

Before we get into the case, a couple of notes on how the business side of bail bonds works. Bond companies are insurance companies. They take a risk on bailing out a defendant, and that risk has to be worthwhile for them to take it. Insurance companies are notoriously safe investors. Most if not all bail bond companies are likewise insured (pdf, page 30-31), usually by a huge bank or insurance company. That company may or may not own and/or run the bond company, but it means that in the rare case that a bond company has to pay, they call that second company. That is also the case here, which is why Bankers Insurance Company is named as a party.

The Facts:

In 2010, Vita Bail Bonds wrote a $90,000 bond for Luis Leon Vasquez to get out of jail. He missed a court appearance on January 22, 2008. Bankers Insurance Company insures Vita Bail Bonds. Because Vita is insured by Bankers, Vita is what’s known as Bankers’ agent, meaning Vita acts on Bankers’ behalf. Bankers, representing Vita, is trying to get the $90,000 back from the county, who has had a claim to the full value amount of the bond since it was forfeited.

It is important to note, however, that no money has actually changed hands – it’s just a financial obligation at that point because there is such a long period in which the bond may still be exonerated. In fact, it’s more efficient to do it that way since the bond will probably be exonerated, as happened in this case.

There was a discrepancy between the court reporter’s transcript and the court clerk’s minutes. The reporter’s transcript did not say that the judge declared the bond forfeited in open court. The clerk’s minutes did say that the judge ordered forfeiture in open court, by way of a checked box. The court clerk testified that it was her habit only to check that box when the forfeiture was “actually ordered in open court by the judge.” The deputy district attorney present at the hearing looked at his notes from that day and found that he wrote “bail forfeited” in his notes.

Reasoning:

The opinion first cited a similar case and explained that if a court did not declare the bond forfeited in open court, the court lost jurisdiction over the bond, which meant the court has no control over what happened to it.

The court correctly stated that the question was whether the court minutes (forfeiture) should have been “entitled to greater credence” than the reporter’s transcript (no forfeiture). The court then distinguished the present case from two others, in order to show that the reporter’s transcript should have been given more weight than the court minutes, which meant that there was no declaration of forfeiture in open court. Therefore, the court said, the bond was exonerated.

Rule of Law:

This is the problematic part: exoneration is the norm in PC 1305. Said the court: “If a trial court fails to declare a forfeiture in open court, it ‘no longer retain[s] ‘statutory control and jurisdiction over the bond’ [citation]’ and the bond is exonerated by operation of law.” The court had other options than simply ordering the bond forfeited. However, there was no reason for the judges to take any of those other options – forfeiture is easy. It’s widely provided for in PC 1305, which the judge can fall back on. Further, no one is going to challenge it. The county is used to never seeing that money since exoneration is so frequent, so they have no added motivation to chase after it. The defendant isn’t going to challenge them on it, because their stake in the game is gone.

Conclusion:

By most accounts, People v. Bankers Insurance Co. was correctly decided. In fact, the three sitting judges – which included the now-Chief Justice of the California Supreme Court – all agreed that it should come out that way. There is a problem in this case, but it is not the judges. It’s the law. Next I turn to an explanation of how PC 1305 functions almost exclusively to benefit bail bond companies.

Bail Exoneration is Almost Exclusively for Bail Bond Companies

Through researching bail generally, and especially the monetary aspects of it, I have found that it is helpful – perhaps unsurprisingly – to follow the money. Monetary bail is an anomaly of the criminal justice system where money equals freedom in return for certain obligations. Following the money makes it clearer to see where obligations lie and to whom.

If a defendant pays money to a bail bond company, that’s the last he or she sees of it – the deposit on a surety bond to get out of jail is non-refundable. What was formerly his or her obligation to the court, i.e., to appear at court dates, switches at that point to a financial obligation to the bond company. At least, that is how it is supposed to work: the bond company ensures that the person comes to court. However, the defendant has nothing to gain from the bond company since the deposit is non-refundable, which effectively takes the defendant out of the monetary-stakes equation. The only party that stands to gain or lose is the bond company. And, even that is just about the reinsurer of the bond company. Of course, the defendant still has an obligation to go to his or her court dates, but my point here is that his or her money is long gone.

To compare: following the money in a cash bail context reveals quite a different result. If a defendant deposits money with the court and makes all required appearances, he or she gets it back minus court fees upon order of the court, after trial (if there is a trial). The defendant in that scenario has a reason to appear – they get their money back, or most of it.

The defendant who opts for the bail bond gets nothing whether they appear or not. From that point on, the only party who is financially on the hook is the bond company. That means that if bail is to be forfeited, they are the one that loses. Likewise, if bail is exonerated, they gain. They already have the defendant’s deposit, and exoneration means they are off the hook for the other portion of the bail amount and they get to keep the deposit.

In theory, this is supposed to motivate the bond company to bring the defendant back to court. In practice, that tends not to happen, since there are so many opportunities for exoneration written into the law. What follows is a discussion of the many ways in which bond companies are released of all obligations when bail bonds are exonerated.

Bail Exoneration is Often Automatic

Bail exoneration most often occurs under PC 1305 by operation of law, which means that bail is automatically exonerated as long as certain conditions are met.

When a defendant does not appear at a court date, the judge must declare bail forfeited “in open court” (PC 1305(a)). That brings us to the first way that bail can be exonerated: the judge forgets to declare bail forfeited in open court, as explained in the case above.

Second, if the case is dismissed or there is no complaint filed within 15 days of arraignment, bail is exonerated under the exception in PC 1305(a). This is an especially poignant illustration of how PC 1305 benefits bail bond companies: a defendant still owes money to the bail bond company even though he or she is not even being charged, but the bond company does not owe anything to anyone. They simply sit back and collect their money after having done nothing except write the bond for that individual. If the case is dismissed or no complaint is filed, that likely amounts to either one or zero court appearances, which is not much of a burden on the bond company to get the would-be defendant to appear.

PC 1305 subsection (b) explains the court clerk’s obligations following a declaration of forfeiture in either of the scenarios above. It is notable that the court clerk has several responsibilities that all make life easier for bail bond companies, while the companies themselves have no obligations following forfeiture (at least, for 180 days. More on that below). The court clerk must (1) mail a notice of forfeiture to the bond company within 30 days; (2) mail a notice of forfeiture to the bail agent whose name appears on the bond; and (3) put a certificate of mailing in the court’s file (CP 1305(b)(1-3)). If the court and court clerk do not follow those directions by either mailing the required notice after 30 days have elapsed or by forgetting either of the other two steps above, bail is exonerated and the bond company is released of all obligations. Really, they haven’t had any obligations yet, though, they’ve just collected money.

Once the judge declares bail forfeited, there is an automatic 180 day window before bail is actually forfeited. Further, if the notices of forfeiture need to be mailed, it adds 5 days onto the 180 day period, “for mailing.” Because the statute calls for the notices to be mailed, it is safe to assume that the 5 days is usually if not always added, making the period just over 6 months. Under a subsequent section, 1305.4, the bond company can file a motion to extend that by up to 180 days (bringing the total to a full year), as long as they provide good cause for doing so.

Third, if the defendant appears either voluntarily or in custody during the 180 day period, the judge is required to order the forfeiture vacated and bail is exonerated (PC 1305(c)(1)). Thus, the bond company escapes liability for their debt automatically (by operation of law) if the defendant is brought to court by them or anyone else, or if the defendant turns him or herself in. Officials in Santa Clara have said that defendants most often do not miss court dates intentionally, and they often turn themselves in after missing a court date. That means exoneration of the bond and freedom from obligations for the bond company, regardless of whether they did any work to bring the defendant back to court. If the judge does not order the bond exonerated, it is exonerated anyway, by operation of law.

Fourth, under PC 1305(c)(2-3), if after forfeiture the defendant is (1) returned to custody by the bond company or (2) arrested in the county where the case is located, or (3) arrested anywhere else in the world, the bond is exonerated. Why? Because the bond company’s job is done. Re-arrest means that the defendant is back in custody, now in the unenviable position of being a defendant in two separate cases. If the defendant is back in custody, then the bond company’s obligation to bring the defendant back to court goes away – people in jail don’t miss court dates.

Fifth, in the case that the defendant suffers a permanent disability (PC 1305(d)) that prevents him or her from appearing in court – death, illness, insanity, or detention by military or civil authorities – the bond is exonerated, as long as two conditions are met. They must be actually disabled as defined above, and the disability cannot be due to help from the bail company. For a temporary disability, the conditions are similar. Surprisingly, a temporary disability is not grounds for exoneration, it simply extends the 180 day period if the court determines that the defendant will not be able to make it to court within the original 180 day period. One may wonder how the court actually finds out about a permanent or temporary disability. Likely, that information would come up when the defendant missed his or her court date, since the bail bond company has probably lost track of them. After the missed court date, someone would track down the defendant only to find him or her dead or ill, and tell the court.

Finally, subsections (f) and (g) deal with defendants who are in custody beyond the jurisdiction of the court or the state, respectively. In either of those cases, as long as the prosecuting agency decides not to seek extradition after learning where the defendant has gone, bail is exonerated. A district attorney I spoke with told me that prosecuting agencies rarely seek extradition because of problems ranging from the cost of gas to transport the defendant to conflicts in international treaties that prevent extradition.

Thus, it is even more likely that the defendant will get away with his or her crime, if he or she did actually commit it and would have been convicted, if that person runs. The bond company is all but powerless to do anything where the defendant has run far enough away. And, since prosecuting agencies rarely pursue extradition, they don’t have to do anything – the bond will be exonerated anyway. Even when the bond company does such a bad job keeping track of the defendant that he or she is able to escape to another country, the bond company makes money.

The message to take away from all of this is: bail is exonerated by operation of law if the defendant – the person who the bond company is in charge of returning to court – comes to court on his or her own or is arrested anywhere in the world within 6 months from the order of forfeiture. The only situation where the exoneration is actually a result of the bond company’s work is if the company returns the defendant to custody before trial, which defeats the purpose of writing the bond to get them out of jail in the first place. That would only happen if the bond company decides they do not want to keep track of the defendant any more. Keeping track of the defendant and returning them to court is the only reason bail bond companies exist. The system is broken, and PC 1305 is a seriously big part of the problem.

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