U.S v. Arnaiz

• Decision Date: 13 August 1987
• Docket Number: No. 85-1089,85-1089
• Citation: 842 F.2d 217
• Parties: UNITED STATES of America, Plaintiff, v. Ismael Felipe ARNAIZ, et al., Defendant-Appellee, v. ALL STATE BAIL BONDS, INC. and Jerry Miller, Movants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 217

842 F.2d 217

105 A.L.R.Fed. 703

UNITED STATES of America, Plaintiff, v. Ismael Felipe ARNAIZ, et al., Defendant-Appellee, v. ALL STATE BAIL BONDS, INC. and Jerry Miller, Movants-Appellants.

No. 85-1089.

United States Court of Appeals, Ninth Circuit.

Submitted Aug. 13, 1987. ^*

Decided March 11, 1988.

Robert M. Haggard, Coral Gables, Fla., for movants-appellants.

A.P. Walter, Jr., Coral Gables, Fla., for defendant-appellee.

Appeal from the United States District Court for the District of Arizona.

Before SCHROEDER, POOLE and KOZINSKI, Circuit Judges.

POOLE, Circuit Judge:

Appellant All State Bail Bonds, Inc. (All State) challenges the jurisdiction of the district court to order All State to return to defendant Arnaiz the collateral and one-half of the premium paid to obtain a corporate surety bond. We reverse the district court's order regarding the premium, but we affirm its jurisdiction to order the return of the collateral.

We begin with a brief statement of the facts. ¹ In March of 1984, Arnaiz was indicted on a variety of federal drug charges. He obtained a $250,000 corporate surety bond from All State Bail Bonds, through its agent, Jerry Miller. On October 15, 1984, All State surrendered Arnaiz to the United States Marshal. A U.S. Magistrate relieved All State of its suretyship obligations, exonerating the bond and ordering All State to return to Arnaiz his collateral ($12,000). The magistrate's order was affirmed by the district court on October 19.

On October 26, Arnaiz moved to recover the premium on the bond. All State failed to respond, and on November 16, the district court ordered All State to return half of the premium ($15,000). All State's motion for reconsideration of the orders to return the collateral and premium was denied on March 15, 1985, and All State brought this appeal. ²

On April 8, 1985, the district court granted All State's motion for a stay pending appeal:

The Application for Stay submitted by All-State Bail Bonds, Inc. is GRANTED. The Court's Order dated November 16, 1984, was in the nature of a default due to the surety's failure to respond. Subsequently, the surety failed to show good cause for setting aside the default. However, the Court is now concerned that, notwithstanding the surety's failure to respond, the Court may not have had jurisdiction to enter its judgment. See Rader v. Manufacturers Casualty Insurance Company of Philadelphia, 242 F.2d 419 (2d Cir.1957).

Under these circumstances, it appears only proper that a Stay should be entered pending resolution of the matter by the Court of Appeals.

The district court revised this order two days later, specifying that the stay did not apply to the collateral posted by Arnaiz:

The Court does not believe that the collateral stands in the same position as the premium paid by ARNAIZ for his bail bond. As such, it is not directly involved in the jurisdictional question raised by All-State Bonds, Inc., and therefore should be returned to ARNAIZ.

It is not disputed that the district court had jurisdiction to exonerate the bond upon All State's surrender of Arnaiz. 18 U.S.C. Sec. 3149; Fed.R.Crim.Proc. 46. Thus, the issue presented to this court is a narrow one: did the district court have jurisdiction to order All State to return to Arnaiz all of the collateral and one-half the premium paid to obtain the exonerated bond? The issue appears to be one of first impression in the federal courts. The parties have directed us to a handful of cases, none of which directly addresses the precise issue presented here.

For reasons that will be discussed below, we agree with the district court that the collateral does not stand in the same position as the premium paid by Arnaiz. We will first address the question of the premium.

I

In determining whether the district court had jurisdiction, we must bear in mind the "fundamental precept that federal courts are courts of limited jurisdiction." Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 2403, 57 L.Ed.2d 274 (1978). "A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." General Atomic Co. v. United Nuclear Corp., 655 F.2d 968, 968-69 (9th Cir.1981), cert. denied, 455 U.S. 948, 102 S.Ct. 1449, 71 L.Ed.2d 662 (1982). Consequently, a district court only has such authority as has been "expressly or impliedly granted by an act of Congress." Koch v. Zuieback, 316 F.2d 1, 3 (9th Cir.1963). ³

Here, the district court had jurisdiction over the criminal case under 18 U.S.C. Sec. 3231, and the district judge had power to conduct bail proceedings under 18 U.S.C. Secs. 3141 and 3041. The bond was exonerated upon surrender of the defendant under 18 U.S.C. Sec. 3149 and Rule 46(f) of the Federal Rules of Criminal Procedure. ⁴ None of these provisions expressly allows adjudication of a dispute regarding the bond premium. The question is whether such power can fairly be implied as necessarily ancillary to the exoneration of the bond. To answer this question, we must determine whether the premium dispute is so closely related to the purposes of the bail provisions that denial of jurisdiction would necessarily interfere with the district court's ability to carry out its statutory mandate.

We find nothing to indicate that Congress intended to extend jurisdiction to a contractual dispute over the bond premium. The purpose of bail is to secure the presence of the defendant. United States v. Velez, 693 F.2d 1081, 1084 (11th Cir.1982); United States v. Parr, 594 F.2d 440, 442 (5th Cir.1979). This purpose is fulfilled by the surrender of the defendant as a condition of exoneration. The statutes speak only of the rights and obligations of the parties in connection with the appearance guarantee; however, the outcome of the premium dispute will have no effect on the defendant's appearance in court.

On this point, we agree with the reasoning of the district court in United States v. Soucy, 60 F.Supp. 500 (D.Minn.1945). That case involved a dispute between two co-sureties on the bail bond of the defendant. The defendant failed to appear, and judgment on the forfeited bond was paid by one of the co-sureties, who then made a motion to recover contribution from the other surety. The district court held that it did not have jurisdiction:

It must be remembered that the judgment herein was entered in a matter which pertains exclusively to proceedings which were invoked by the United States as against the sureties on the bond. The only jurisdiction of this Court which the United States invoked was in the criminal proceeding and the enforcement of the bail contract therein.... [The co-sureties'] rights as between themselves by reason of anything growing out of their bail contract or by reason of any equitable rights which may inure to either one is of no concern to the government. The petition herein, therefore, cannot be properly characterized as an ancillary proceeding because when the rights of the government became satisfied by reason of its recovery on the bail bond, ... [t]he purpose for which the jurisdiction of this Court was invoked had been fulfilled.

60 F.Supp. at 503-04. While Soucy was decided before the current bail provisions were enacted, we find nothing in the current provisions to change the result. We disagree with Arnaiz' contention that Soucy should be distinguished as a dispute between co-sureties, rather than between the principal and a single surety; both disputes arose out of the bail contract, and neither is so intimately connected with the government's object of securing the defendant's appearance in court that it compels adjudication in a federal forum.

Nor can jurisdiction over the bond premium dispute be implied by Rule 46(e)(3). ⁵ Subdivision (e) expressly applies only to the liability of the surety where there has been a forfeiture of bail. Again, only the liability of the surety upon the appearance guarantee is implicated. Rule 46(e) cannot be read to make any contractual claim against a bail bondsman, no matter how unrelated to the appearance guarantee, enforceable on motion.

Finally, the district court's order regarding the premium cannot be sustained under 28 U.S.C. Sec. 1352, which provides The district courts shall have original jurisdiction, concurrent with State courts, of any action on a bond executed under any law of the United States ...

In the first place, Arnaiz did not bring an original action in the district court; instead, he made a motion for the refund following exoneration of the bond in his criminal case. Secondly, Arnaiz' action to recover the premium would be barred under the case which concerned the district court here, Rader v. Manufacturers Casualty Insurance Co., 242 F.2d 419 (2d Cir.1957). Rader involved a suit brought by indemnitors against a surety in an effort to invalidate the indemnity agreement under which they agreed to reimburse the surety for its loss in connection with a forfeited bail bond. The Second Circuit held that the district court lacked jurisdiction, because a suit involving the indemnity agreement was not an action "on a bond" within the meaning of section 1352:

Plaintiffs, by their present action attack the validity of the indemnity agreement dated November 30, 1949, the confession of judgment dated December 1, 1949, and the agreement of June 12, 1959. None of these were required to be executed by any law of the United States in connection with the giving of a surety bail bond. The various agreements under attack are collateral arrangements of the surety and indemnitors and were executed to afford protection to the defendant surety company and its agents, and did not inure to the benefit of the United States.

242 F.2d at 427. We believe the holding in Rader would apply to bar Arnaiz' claim here. A suit "on a bond" concerns only the beneficiary's right to recovery against the surety, and the narrow inquiry is whether the...