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146033 - In re Forfeiture of Bail Bond

In re Forfeiture of Bail Bond
_______________________
The People of the State of Michigan,
 
Jason W. Williams
 
Plaintiff-Appellee,
 
v
(Appeal from Ct of Appeals)
 
 
(Wayne - Hathaway, M.)
 
Corey Deshawn Gaston,
 
 
 
Defendant,
 
and
You Walk Bail Bond Agency,
 
James J. Makowski
 
Surety-Appellant.
 


Summary

​Corey Gaston was charged with first-degree home invasion, first-degree and second-degree criminal sexual conduct, and kidnapping. The trial judge ordered him held in jail pending trial, unless he posted a $50,000 cash or surety bond. Gaston arranged for You Walk Bail Bond Agency to post his bond, and he was released from jail on November 7, 2007. Gaston then missed two court dates in February 2008, including his scheduled trial. The trial judge ordered that Gaston be arrested and returned to jail. The trial judge also ordered that the bond posted by You Walk Bail Bond Agency was forfeited, with a judgment to enter against both Gaston and the surety bond agency. Gaston was never apprehended and is currently on the United States Marshals Service list of the 15 most wanted fugitives.

Three years later, on February 8, 2011, the trial judge sent notice to the bond agency requiring it to appear before the court and explain (or “show cause”) why judgment should not enter in the full amount of the bond. In response, the bond agency filed a motion to set aside the bond forfeiture. The bond agency argued that it could not be held liable in light of the trial court’s three-year delay in providing the bond agency notice of Gaston’s failure to appear. Under MCL 765.28, the bond agency argued, the trial court was obligated to provide notice of Gaston’s non-appearance within seven days. That statute requires: “If default is made in any recognizance in a court of record, the default shall be entered on the record by the clerk of the court. After the default is entered, the court shall give each surety immediate notice not to exceed 7 days after the date of the failure to appear. . . . Each surety shall be given an opportunity to appear before the court on a day certain and show cause why judgment should not be entered against the surety for the full amount of the bail or surety bond. . . .” [Emphasis added.] Likewise, Michigan Court Rule 6.106(I) required the court to mail notice “immediately” to anyone who posted bail or bond once the defendant fails to comply with the terms of his release and the court orders forfeiture of the bond.

The trial court denied the motion to set aside the bond forfeiture, relying on In re Forfeiture of Bail Bond (People v Moore), 276 Mich App 482 (2007). In In re Forfeiture, the Court of Appeals affirmed a trial court’s decision to forfeit bail bonds despite the trial court’s failure to provide timely notice of the default. In that case, the appeals court emphasized that deadlines for governmental agencies – such as a trial court – are generally directive in nature, and are not limitations that bar further action by the governmental agency. A governmental agency may be barred from further action only when the statute requires a governmental agency to act within a certain time and provides a consequence for failing to act. MCL 765.28 did not set forth a consequence, the appeals court held, and so the 7-day deadline was merely directive in nature. With regard to the bond posted by You Walk Bail Bond Agency, the trial court concluded that In re Forfeiture provided it with the authority to enter judgment despite the three-year delay in notice. The court entered a $150,000 judgment against Gaston; the court also entered judgment against the bond agency in the amount of $50,000.

You Walk Bail Bond Agency appealed the trial court’s entry of judgment to the Court of Appeals, arguing that In re Forfeiture was wrongly decided. The bond agency emphasized that MCL 765.28 required the trial court to notify the agency of Gaston’s non-appearance within seven days; the statute uses the word “shall” and the deadline is mandatory, the bond agency argued. The trial court’s failure to provide timely notice impeded the agency’s ability to track down Gaston and present him to the court, thus avoiding forfeiture of the bond; immediate notice of Gaston’s default was essential, claimed the bond agency, so that it could perform its contract.

In an unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s decision. It agreed that In re Forfeiture provided the trial court with authority to enter judgment against the bond agency. MCL 765.28 does use the word “shall” in connection with the 7-day notice period, held the panel, but the statute does not contain any language that would prevent a trial court from entering judgment against a bond agency when notice is not given within that seven-day period.

You Walk Bail Bond Agency filed an application for leave to appeal to the Supreme Court. In an order dated February 8, 2013, the Supreme Court granted leave to appeal. The Court directed, “The parties shall address: (1) whether a court’s failure to comply with the 7-day notice provision of MCL 765.28 bars forfeiture of a bail bond posted by a surety; and (2) whether In re Forfeiture of Bail Bond, 276 Mich App 482 (2007), holding that the 7-day notice provision is directory rather than mandatory, was correctly decided.” In response to the arguments made by You Walk Bail Bond Agency, the Wayne County Prosecutor has filed a brief arguing that In re Forfeiture was properly decided, and that entry of judgment against the bond company is barred only if the bond agency was actually prejudiced by the trial court’s failure to provide notice within seven days.