U.S. BONDS v. STATE OF GA

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Docket Number

A96A2314, A96A2315.

Attorney(S)

Brett D. Turner, for appellants. Lydia J. Sartain, District Attorney, Bernard E. Roberts III, Assistant District Attorney, for appellee.

Judges

BEASLEY, Judge, concurring specially.
McMURRAY, Presiding Judge.

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Smart Summary

Factual and Procedural Background

U.S. Bonds (the surety) executed recognizance bonds with the State of Georgia for two principals, defendants Bonilla and Echeverria. The bonds obligated the surety until the trial court excused the principals, via leave of court, from appearing "from day to day and from term to term." When each principal failed to appear as required, the trial court declared the bonds forfeited and issued writs scire facias setting execution hearings within the time period prescribed by OCGA § 17-6-71(a).

Jim Kiser, the surety's manager, appeared on the dates designated for the execution hearings, but the trial court did not call the surety or conduct the hearings on either occasion. Kiser then assumed the surety was relieved of liability and ceased searching for the principals and contacting the indemnitors who had executed the bonds.

More than 17 months after Echeverria's failure to appear and 11 months after Bonilla's failure to appear, the State reinitiated bond forfeiture proceedings and issued writs scire facias ordering appearance to show cause why judgments should not be entered on the forfeited bonds. The surety moved to be relieved of liability, arguing OCGA § 17-6-71(a) required execution hearings no later than 150 days after the principal's failure to appear. The trial court denied the motions, provided opportunities to appear and show cause, issued rules absolute as to each bond, and entered judgments in the amounts of the surety's obligations. The surety appealed; the two appeals were consolidated for disposition because the facts and legal issues are identical.

Legal Issues Presented

Whether a surety is relieved of liability on a forfeited recognizance bond because an execution hearing was not conducted within the 120-to-150 day period prescribed by OCGA § 17-6-71(a).
Whether a surety must demonstrate both legal error and concrete harm resulting from a delayed execution hearing before being relieved of liability.
Whether harm that results from the surety's own lack of diligence can support vacating a rule absolute and final judgment entered on a forfeited bond.

Arguments of the Parties

Appellant's (Surety's) Arguments

The surety argued that OCGA § 17-6-71(a) required execution hearings to be held no later than 150 days after the principals' initial failure to appear, and because the hearings were not held within that statutory period the surety was relieved of liability.
The surety further argued that the State's delay increased its risk under the bonds because, after expiration of the statutory time periods, the indemnitors who had signed the bonds were no longer available to honor their obligations; the surety relied on Jim Kiser's testimony that he had been in contact with the indemnitors when the initial hearings were set but had lost contact by the time the State reinitiated proceedings.

Appellee's (State's) Arguments

The opinion does not contain a detailed account of the appellee's legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Griffin v. State of Ga., 194 Ga. App. 624, 625	That a surety must show harm as well as error before it will be relieved of liability.	The court applied Griffin to require the surety to demonstrate harm in addition to showing that the execution hearings were not held within the statutory period; the surety did not make that showing.
Colbert v. Doe, 164 Ga. App. 618, 619 (2)	That harm resulting from a surety's own lack of diligence provides no basis for setting aside a rule absolute and final judgment.	The court relied on Colbert to reject relief where the surety's claimed harm stemmed from its own lack of diligence in tracking indemnitors.
Kwik Bond v. State of Ga., 192 Ga. App. 184, 185	That the same contractual language in a bond can bar a surety's claim of relief based on an execution hearing not being conducted within the statutory time frame.	The court cited Kwik Bond to support the conclusion that the bonds' express terms precluded the surety's assertion that it was relieved of liability because the initial execution hearings were not conducted within the 120–150 day period.
AAA Bonding Co. v. State of Ga., 192 Ga. App. 684 (1)	Rejection of the interpretation that a surety is automatically relieved after the statutory period expires.	The court noted AAA Bonding as another decision rejecting the surety's interpretation of OCGA § 17-6-71(a).
Ace Bonding Co. v. State, 180 Ga. App. 261, 262 (1)	Characterization of a court's delay beyond the statutory period as a "reprieve" that can benefit the surety.	Referenced by the concurrence to illustrate that delay beyond the statutory window can aid rather than harm a surety by postponing the time it must face judgment.
State v. Peters, 213 Ga. App. 352, 355	Support for a method of statutory construction that does not import an unexpressed legislative intention (i.e., the court should not read into the statute an automatic relief for sureties if not stated).	Quoted in the concurrence as authority for the statutory-construction approach used to reject the surety's claim that the statute implicitly relieved it of liability after 150 days.

Court's Reasoning and Analysis

The court began with the legal principle that a surety seeking relief because an execution hearing was not held within the period prescribed by OCGA § 17-6-71(a) must establish both error and resulting harm. The court cited Griffin v. State of Ga. for that proposition.

The surety's asserted harm was that the State's delay increased its risk because indemnitors were no longer available to satisfy their obligations. The only evidentiary support cited by the surety was Jim Kiser's testimony that he had been in contact with indemnitors when the initial hearings were set but had lost that contact by the time the State reinitiated proceedings many months later.

The court determined that this testimony did not demonstrate harm caused by the State's procedures. It relied on precedent holding that harm resulting from the surety's lack of diligence cannot support vacating a rule absolute and final judgment (Colbert v. Doe), and it concluded the surety's loss of contact with indemnitors stemmed from its own erroneous assumption that liability ended automatically after 150 days. The court observed that this interpretation of OCGA § 17-6-71(a) had been rejected in prior decisions (Griffin and AAA Bonding Co.), and that the bonds expressly provided the surety would remain liable until the trial court excused the principals by leave of court.

Because the alleged injury was self-created and the contractual language and precedent did not support automatic relief after the statutory period, the trial court did not err in issuing rules absolute and entering judgments for the surety's obligations.

Holding and Implications

Judgments affirmed.

Implications: The trial court's decisions issuing rules absolute and entering judgments against the surety were upheld; the surety remains liable on the forfeited bonds. The court's decision applies existing precedent requiring a surety to show actual harm (not merely procedural error) and bars relief when that harm results from the surety's own lack of diligence. The opinion does not announce a new rule of law beyond its application of prior authorities to these facts.

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U.S. BONDS v. STATE OF GEORGIA (TWO CASES).

McMURRAY, Presiding Judge.

U.S. Bonds ("the surety") entered into recognizance bonds with the State of Georgia on behalf of two principals, defendant Bonilla and defendant Echeverria. The bonds required U.S. Bonds to honor its obligations as surety until the trial court excuses the principals — via leave of court — from having to appear in court "from day to day and from term to term. . . ." When the principals failed to appear in court when they were required to do so, the trial court declared the bonds forfeited and issued writs scire facias notifying the surety that execution hearings would be conducted on dates within the time period prescribed by OCGA § 17-6-71 (a). Jim Kiser, the surety's manager, appeared in court for the execution hearing on the days designated in the writs scire facias, but on both occasions the trial court failed to call the surety or conduct the hearings. Kiser assumed the surety was relieved of liability under the bonds and, thereafter, stopped looking for the principals and contacting individuals who had executed the bonds as indemnitors.

This Code subsection pertinently provides that "[t]he judge shall, at the end of the court day, upon the failure of the principal to appear, forfeit the bond and order an execution hearing not sooner than 120 days but not later than 150 days after such failure to appear."

More than 17 months after Echeverria failed to appear in court and 11 months after Bonilla failed to appear in court, the State of Georgia reinitiated bond forfeiture proceedings and issued writs scire facias ordering the surety and the principals to appear in court to show cause why judgments should not be entered upon the forfeited bonds. The surety responded by filing motions to relieve it of liability, arguing that OCGA § 17-6-71 (a) required the execution hearings to be conducted no later than 150 days after the principals' initial failure to appear. The trial court denied these motions and, after providing the surety and the principals opportunities to appear in court to show cause why judgments should not be entered upon the forfeited bonds, issued a rule absolute as to each bond and entered judgments in the amount of the surety's obligations. These appeals followed. Because the facts and the legal issues are identical, the two cases have been consolidated for disposition in this opinion. Held:

A surety must show harm as well as error before it will be relieved of liability based on failure to conduct an execution hearing within the time prescribed by OCGA § 17-6-71 (a). Griffin v. State of Ga., 194 Ga. App. 624, 625 (2) ( 391 S.E.2d 675). In the cases sub judice, the surety argues that the State of Georgia increased its risk under the bonds by failing to conduct execution hearings within the time prescribed by OCGA § 17-6-71 (a) because — after expiration of the statutory time periods — the individuals who executed the bonds as indemnitors were no longer available to honor their respective obligations. To this end, the surety points to Jim Kiser's testimony that he was in contact with the indemnitors when the initial execution hearings were set, but that he lost contact with the indemnitors by the time the State of Georgia reinitiated the bond forfeiture proceedings. This testimony does not show that the surety was harmed by the State of Georgia's bond forfeiture procedures.

Harm resulting from a surety's own lack of diligence provides no basis for setting aside a rule absolute and final judgment. See Colbert v. Doe, 164 Ga. App. 618, 619 (2) ( 298 S.E.2d 592). In the cases sub judice, the surety's failure to keep track of its indemnitors was not caused by the delayed execution hearings. See Kwik Bond v. State of Ga., 192 Ga. App. 184, 185 ( 384 S.E.2d 207). It was the result of Jim Kiser's erroneous assumption that the surety was relieved of liability under the bonds — by operation of law — 150 days after the principals' initial failure to appear in court. This interpretation of OCGA § 17-6-71 (a) has not only been rejected by this Court in Griffin v. State of Ga., 194 Ga. App. 624, 625 (2), supra, and AAA Bonding Co. v. State of Ga., 192 Ga. App. 684 (1) ( 386 S.E.2d 50), but Jim Kiser's assumption that the surety was relieved of liability after the initial execution hearings were not conducted ignores the bonds' express terms providing that U.S. Bonds will not be relieved as surety until the trial court excuses the principals — via leave of court — from having to appear in court "from day to day and from term to term of said courts. . . ." See Kwik Bond v. State of Ga., 192 Ga. App. 184, 185, supra, where the same contractual language barred the surety's claim that it was relieved of liability because an execution hearing was not conducted within the statutory time frame. The trial court therefore did not err in issuing a rule absolute as to each bond and entering judgments in the amount of the surety's obligations.

Judgments affirmed. Birdsong, P.J., concurs. Pope, P.J., Johnson, and Blackburn, JJ., concur and also concur specially. Beasley, J., concurs specially. Ruffin, J., concurs in the judgments only.

McMURRAY, Presiding Judge.

DECIDED FEBRUARY 20, 1997 — CERT. APPLIED FOR.

BEASLEY, Judge, concurring specially.

I concur because, in this case of statutory construction, it is apparent that the legislature provided the specific time frame for the execution in order to give the surety a reasonable opportunity to find the principal. This purpose is evident from the statutory right of at least 120 days but no more than 150 days. The specificity is in accordance with the principle that "[a] surety on a criminal bond or recognizance has the right to insist that his liability should be fixed upon him according to law. [Cit.]" Griffin v. State of Ga., 194 Ga. App. 624, 625 (2) ( 391 S.E.2d 675) (1990). Thus over the years the time period has been made specific rather than open-ended, and it has been lengthened to the benefit of sureties.

The legislature does not state, in either OCGA § 17-6-71 or in OCGA § 17-6-72, the latter of which sets out conditions which will preclude forfeiture, that if the hearing is not held in 150 days, the surety will be relieved. We cannot import such an intention and result. This reasoning, a sound method of statutory construction (see State v. Peters, 213 Ga. App. 352, 355 ( 444 S.E.2d 609) (1994)), was similarly used in Griffin, supra at 625, and in AAA Bonding Co. v. State of Ga., 192 Ga. App. 684, 685 (2) ( 386 S.E.2d 50) (1989).

Where the surety has more time to find the principal before the forfeiture hearing is held and the surety must produce or pay, it has not been deprived of a statutory right but instead has gained the advantage of additional time due to court processing. In fact, it has been granted what Ace Bonding Co. v. State, 180 Ga. App. 261, 262 (1) ( 349 S.E.2d 15) (1986), refers to as a "reprieve." As quoted approvingly in Kwik Bond v. State of Ga., 192 Ga. App. 184, 185 ( 384 S.E.2d 207) (1989), "`a delay longer than public policy requires aids, rather than harms, the surety. . . .' [Cit.]" See also AAA Bonding Co., supra at 684 (1). A delay in the execution hearing delays the time when the surety must face judgment and provides additional opportunity to avoid it. If the appellant were correct, a court could not even grant a continuance to a surety who was hot on the trail of a principal. The authority to grant a continuance was recognized in AAA Bonding Co., supra.

In this instance the surety misinterpreted the law and acted, or failed to act, on that error. In this way it jeopardized its own interest instead of protecting it by taking advantage of what was in effect a grace period for it to perform what it promised in the bonds. The harm it testified was caused by the court's delay was in fact self-created.

I am authorized to state that Presiding Judge Pope, Judge Johnson, and Judge Blackburn join in this special concurrence.