Opinion ID: 6494892
Heading Depth: 3
Heading Rank: 3

Heading: Consolidated Motions and Circuit Court’s Disposition

Text: Upon International Fidelity’s motion, International’s Motions to Set Aside filed in the eight criminal cases were consolidated before the Hon. Richard K. Perkins in the Circuit Court of the First Circuit. International Fidelity asserted similar arguments in each case. Namely, that International Fidelity was the “surety of record” according to the POAs attached to the registered bail bonds, and that it did not receive “[the] statutorily required notice of the entry of a judgment and order of forfeiture of bail bond as required under HRS § 804-51” in any of the cases. Accordingly, it sought to set aside the Judgments and Orders of Forfeiture “as against International” because the circuit court “lacked jurisdiction over International when each of the judgments was entered” due to the court’s failure to provide International with the requisite notice. International Fidelity also argued that it would otherwise be deprived of “its rights under HRS § 804-51 and to due process.” Further, according to International Fidelity, the notice that issued to either Peppers/FBB or Fisher/AAA did not constitute notice to it, and the letters it received from the State were “payment demands” that did not satisfy the notice requirements under HRS § 804-51. Lastly, International argued that good cause existed to set aside the forfeiture judgments in at least five of the cases—Berry, Muña, Ferraris, Luna, and Nakamura—as the defendants had been apprehended and returned to State custody “within months” from when the Judiciary issued its letters. The circuit court disagreed with International Fidelity’s assertions. Instead, it determined that International Fidelity was not entitled to notice pursuant to HRS § 804-51, and that because International’s consolidated motions were filed outside the time limit imposed by HRS § 804-51, the court was “without the power to consider them.” (citing State v. Ranger Ins. Co., 83 Hawai'i 118, 124 n.5, 925 P.2d 288, 294 n.5 (1996)). In arriving at its disposition, the circuit court first analyzed the text and legislative history of HRS § 804-51 to determine whether International Fidelity was entitled to notice pursuant to that statute. Relying on a Senate Judiciary Standing Committee Report that defined “bail bondsman” as “the surety [referred to] in Chapter 804, Hawaii Revised Statutes,” 13 the court concluded “the legislature intended the term ‘surety,’ as used in the notice provisions of HRS § 804-51, to apply to bondspersons such as Pepper and Del Rio of FBB and Fisher of AAA.” Because the notice requirements of HRS § 804-51 were satisfied when notice was given to FBB or AAA, absent the filing of a motion or application showing good cause within the thirty-day period following receipt of notice by FBB or AAA, International Fidelity was “subject[ ] ... to execution on the bond.” The circuit court noted that HRS § 804-51 “requires nothing more than notice to the surety ‘of the entry of the judgment in favor of the State.’” Thus, for the sake of argument, the court concluded that even if the Judiciary was required to provide notice directly to International Fidelity, it did so by way of its mailed letters. Those letters were not “attempts to execute on the judgments,” but rather were “meant only to notify [International] of the entry of the forfeiture judgments, to demand payment, and to warn [International] of the possibility of further legal action.” Thus, “[t]o date, none of the judgments at issue in this proceeding have been executed upon.” Based on the foregoing, the circuit court denied International Fidelity’s consolidated Motions to Set Aside Judgment Entered Against International Fidelity Insurance Company. A. Appeal to the ICA International Fidelity timely appealed the circuit court’s denial of its motions, and the ICA consolidated those appeals under CAAP-12-1040. International reiterated its arguments that the forfeiture judgments should be set aside because it did not receive notice of the judgments as required by HRS § 804-51, and was therefore deprived of the opportunity to timely locate the defendants and an opportunity to be heard that is protected under procedural due process. The ICA chose to “not adopt either party’s position, but rather agree[d] with the circuit court to the extent it held that the term ‘surety’ in HRS § 804-51 refers to the bonds-persons (or bail agents) in these cases....” Nelson, 139 Hawai'i at 160, 384 P.3d at 935. In addition to elaborating on the same legislative history behind the notice requirement that had been highlighted by the circuit court, the ICA carefully examined multiple provisions of both HRS chapters 804 (governing bail) and 431 (governing insurance) to ensure that its interpretation of HRS § 804-51 was consistent with all statutory provisions. See 139 Hawai'i at 160-63, 384 P.3d at 936-39. In sum, the ICA explained that it was uneontested that Peppers, Del Rio, and Fisher were “insurance producers” governed by HRS chapter 431, article 9A. As “insurance producers,” they qualified as sureties under HRS § 804-10.5. Moreover, they had signed the bond; HRS § 804-1 requires the surety or sureties to do so. The ICA also pointed out that the definition of “bail agent” set forth in HRS § 431:9N-101 (Supp. 2015), describes the distinct roles of a licensed “insurance producer under article 9A” and an authorized “surety insurer.” See Nelson, 139 Hawai'i at 162-63, 384 P.3d at 938-39; HRS § 431:9N-101 (Supp. 2015) (“As used in this article: ‘Bail agent’ means a licensed insurance producer under article 9A who is appointed by an authorized surety insurer, furnishes bail for compensation in any court in this State, and has the power of attorney to execute or countersign bail bonds in connection with judicial proceedings.”). The ICA went on to explain that International Fidelity’s due process rights were not violated because “the notice that was provided to Peppers ... and Fisher—as required under HRS § 804-51—was reasonably calculated to apprise International Fidelity of the bail forfeiture judgments” in accordance with Klinger v. Kepano, 64 Haw. 4, 635 P.2d 938 (1981). Nelson, 139 Hawai'i at 165, 384 P.3d at 941. Additionally, the ICA ruled that the form of the forfeiture judgments was proper, and that the circuit court “properly declined to apply HRCP Rule 60(b) or any other civil procedure rule.” 139 Hawai'i at 166, 384 P.3d at 942. For these reasons, the ICA affirmed the circuit court’s October 31, 2012, “Findings of Fact, Conclusions of Law, and Order Denying International Fidelity Insurance Company’s Consolidated Motions to Set Aside Judgment Entered Against International Fidelity Insurance Company.” Id. B. Application for Writ of Certiorari International Fidelity timely applied for a writ of certiorari in each of the eight underlying criminal cases. This court consolidated those applications under SCWC-12-1040. The following two questions were raised in its Application: 1. Whether the ICA made grave errors of law in holding that Hawaii Revised Statutes § 804-51, the bail forfeiture statute, did not require the State to give a surety notice of bail forfeiture judgments before holding the surety liable, thereby depriving the surety of the 30-day search period or right to show good cause to set aside the judgments under the statute. 2. Whether the ICA made grave errors of law in holding that the failure to provide notice or an opportunity to be heard to a surety did not violate the surety’s rights to procedural due process where the surety did not receive any notice or an opportunity to be heard to contest the judgment. International Fidelity argues that the ICA erred in its interpretation of HRS § 804-51, as the statute is unambiguous and should be plainly read. According to International, the forfeiture judgments “clearly identify International as the surety, not the Bondsper-sons,” and other jurisdictions require that the state provide notice of the judgments to the surety instead of the bondsperson. International appears to also suggest that only entities that “provide surety insurance for bail bonds” can act as a “surety” in Hawaii. Because a bail bondsperson or bail agent is only authorized to “sell, solicit or negotiate surety insurance,” he or she cannot act as a “surety” as contemplated by Hawaii law. Moreover, International Fidelity posits: “[i]f [the ICA’s interpretation of HRS § 804-51] is correct, the judgment is only enforceable against the Bondspersons as the sureties, and not International. The ICA failed to explain how the judgment could then be enforced against International without notice, apparently as a second surety on the bonds.” International asks that if the ICA’s interpretation of HRS § 804-51 is upheld, the “judgments should be deemed void as against International and only enforceable against the Bondspersons.” • International Fidelity also asserts the ICA erred in determining that its due process rights were not violated. The issuance of notice to the bail bondspersons does not amount to notice to International as: (1) the bail bondspersons were merely “special agents” of International and therefore notice provided to the bondspersons “cannot be imputed to [International],” (2) other jurisdictions would require notice to International as a matter of due process.