American Liberty Bail Bonds v. Garamendi

• Decision Date: 28 July 2006
• Docket Number: No. B183344.,B183344.
• Court: California Court of Appeals Court of Appeals
• Parties: AMERICAN LIBERTY BAIL BONDS, INC., Plaintiff and Respondent, v. John GARAMENDI, as Insurance Commissioner, etc., et al., Defendants and Appellants. Adnan Mustafa Yousef, Plaintiff and Appellant, v. John Garamendi, as Insurance Commissioner, etc., et al., Defendants and Respondents.

46 Cal.Rptr.3d 541

141 Cal.App.4th 1044

AMERICAN LIBERTY BAIL BONDS, INC., Plaintiff and Respondent, v. John GARAMENDI, as Insurance Commissioner, etc., et al., Defendants and Appellants.

Adnan Mustafa Yousef, Plaintiff and Appellant, v. John Garamendi, as Insurance Commissioner, etc., et al., Defendants and Respondents.

No. B183344.

Court of Appeal, Second District, Division 3.

July 28, 2006.

Bill Lockyer, Attorney General, W. Dean Freeman, Mark P. Richelson, and Brian D. Wesley, Deputy Attorneys General for Defendants and Appellants and for Defendants and Respondents.

Barger & Wolen, Robert W. Hogeboom, Robert J. Cerny, and Suh Choi, Los Angeles, for Plaintiff and Respondent and for Plaintiff and Appellant.

ALDRICH, J.

INTRODUCTION

Adnan Mustafa Yousef and his company, American Liberty Bail Bonds, Inc. (American Liberty), are licensed bail agents. In 2004, the Orange County District Attorney filed a felony complaint charging them with various crimes relating to their bail bond business. Based on that felony complaint, California's Insurance Commissioner, John Garamendi, and the California Department of Insurance (collectively the Commissioner), suspended Yousef and American Liberty from "participating in the business of an insurer or production agency." The Commissioner issued the suspension order under Insurance Code section 1748.5, subdivision (e)(1), which provides that if a "subject person" has been charged with certain types of crimes and if the Commissioner finds that a failure to issue a suspension order threatens an insurer's solvency or may cause financial or other injury to any person, then the Commissioner shall immediately suspend that subject person from participating in the business of an insurer or production agency. Section 1748.5, subdivision (e)(1), neither gives a subject person the right to a presuspension hearing nor were Yousef and American Liberty given a presuspension hearing.

Yousef filed a petition for writ of mandate in the superior court claiming, among other things, that the failure of Insurance Code section 1748.5, subdivision (e)(1), to provide a presuspension hearing violates due process and that the postsuspension hearing that is provided under that section also violates due process. American Liberty filed a petition for writ of mandate that also raised these due process arguments, as well as the argument that section 1748.5, subdivision (e)(1), applies only to natural persons, and not to entities such as corporations. The superior court rejected Yousef's due process arguments, but agreed with American Liberty that the statute applies only to natural persons.

No appellate court has interpreted Insurance Code section 1748.5, subdivision (e)(1). Relying, however, in part on United States Supreme Court authority, we conclude that the Commissioner did not violate Yousef's due process rights in suspending his license under section 1748.5, subdivision (e)(1). Relying on the plain language of the section and its legislative history, we also conclude that the section applies only to natural persons. We therefore affirm the judgments.

FACTUAL AND PROCEDURAL BACKGROUND

I. The Commissioner issues an order of immediate suspension.

American Liberty is licensed by the Department of Insurance to act as a bail agent. Yousef, who also was a licensed bail agent, is American Liberty's sole shareholder. American Liberty employs about 25 people and has more than 15 offices in Southern California. In 2003, it produced about $180 million in gross bail.

On September 14, 2004, the Orange County District Attorney filed a felony criminal complaint naming, among others, American Liberty and Yousef as defendants. An amended felony complaint charged them with violations of the Penal and Insurance Codes, namely, conspiracy to commit a kidnapping, kidnapping for extortion, conspiracy to commit unlawful bail solicitation, 20 counts of undertaking bail without a license, conspiracy to commit grand theft, conspiracy to knowingly commit performing a notarial act on a false or forged trust deed, conspiracy to falsify a trust deed, conspiracy to make, alter or pass documents, grand theft, and conspiracy to commit embezzlement. All counts arose out of American Liberty's and Yousef's bail bond business. For example, the complaint alleged that a bail bond had been posted for a man who then refused to sign a bail bond agreement and to pay fees. Yousef participated in a scheme to abduct the man from his home, to transport him to American Liberty's offices, and to force him to sign a bail bond agreement. The complaint also alleged that Yousef employed unlicensed bail agents and that he forged a trust deed document to secure a lien against property without the property owner's knowledge or consent.

Soon after the felony criminal complaint was filed, the Commissioner, on September 23, 2004, issued an order of immediate suspension under Insurance Code¹ section 1748.5, subdivision (e)(1) (hereafter section 1748.5(e)(1)). The order stated, "[B]ased on the matters set forth herein, Respondents . . . have been charged in a felony complaint, . . . the Felony Complaint alleges misconduct committed in Respondents' capacity as licensed production agents, and, [¶] . . . based upon the foregoing, the Commissioner . . . finds that failure to immediately issue this Order may cause present and future financial or other injury to any person within the meaning of Insurance Code section 1748.5(e)(1)(B)." American Liberty and Yousef were therefore immediately suspended from "EMPLOYMENT WITH ANY PRODUCTION AGENCY OR PARTICIPATION IN ANY MANNER IN THE CONDUCT OF THE BUSINESS OF AN INSURER OR ANY INSURANCE PRODUCTION AGENCY, INCLUDING BAIL BOND AGENC[IES], EXCEPT WITH THE PRIOR CONSENT OF THE INSURANCE COMMISSIONER." The order also notified American Liberty and Yousef that within 30 days after the order was issued they could file an application for a hearing on the order, which hearing would be scheduled within 15 days after the application was filed.²

II. The petitions for writ of mandate.

Instead of applying for a hearing on the order, American Liberty and Yousef filed petitions for writ of mandate³ under California Code of Civil Procedure section 1085. They argued that section 1748.5(e)(1) violates due process because it permits subject persons to be immediately suspended without a predeprivation hearing, the suspension may be based solely on the filing of a criminal complaint, the postdeprivation hearing is illusory, and the section is vague and overbroad. American Liberty also argued that section 1748.5(e)(1) applies to individuals and not to corporations. After full briefing on the petitions, the trial court denied Yousef's petition, but granted American Liberty's petition. The trial court found that section 1748.5(e)(1) does not violate due process, but that "subject person" as used in section 1748.5 means a natural person and excludes corporations such as American Liberty.⁴

The trial court issued the judgments. Thereafter, the Commissioner filed a timely appeal from the judgment in American Liberty's favor, and Yousef filed a timely appeal from the judgment against him.

DISCUSSION

I. Standard of review.

Code of Civil Procedure section 1085, subdivision (a), states: "A writ of mandate may be issued by any court to any inferior tribunal, corporation, board, or person, to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station, or to compel the admission of a party to the use and enjoyment of a right . . . ." Mandamus will lie to compel an official both to exercise his or her discretion, if he or she is required by law to do so, and to exercise it under a proper interpretation of the applicable law. (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 442, 261 Cal.Rptr. 574, 777 P.2d 610.) To be entitled to relief, a petitioner must show that the respondent has a clear, present, and ministerial duty to perform an act in obedience to the mandate of legal authority and that the petitioner has a clear, present, and beneficial right to performance of that duty entitling it to a writ of mandate. (Kavanaugh v. West Sonoma County Union High School Dist. (2003) 29 Cal.4th 911, 916, 129 Cal. Rptr.2d 811, 62 P.3d 54.) Where, as here, the trial court's decision on a petition for writ of mandate did not turn on disputed facts, the trial court's legal interpretation of the Insurance Code is subject to de novo review. (Ibid.)

II. A corporation is not a "subject person" under section 1748.5(e)(1).

The trial court, when it granted American Liberty's petition for writ of mandate, found that the definition of "subject person" in section 1748.5 refers only to individuals, and not to entities like American Liberty. Rules of statutory construction and legislative history compel us to agree.

Our task in construing a statute is to ascertain and effectuate the legislative intent. (Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 715, 3 Cal.Rptr.3d 623, 74 P.3d 726.) We first look at the words themselves because they are the most reliable indicator of legislative intent. (Ibid.) We give the words of a statute their ordinary and usual meaning and construe them in the context of the statute as a whole. (Ibid.) If the plain language of the statute is unambiguous and does not involve an absurdity, the plain meaning governs. (People v. Garcia (2002) 28 Cal.4th 1166, 1172, 124 Cal. Rptr.2d 464, 52 P.3d 648.) We examine statutory language in the context of the statutory framework as a whole in order to determine the scope and purpose of a particular statute and harmonize it with the various parts of the statutory scheme. (Coalition of Concerned Communities, Inc. v. City of Los Angeles (2004) 34 Cal.4th 733, 737, 21 Cal.Rptr.3d 676, 101 P.3d 563.) If the statute is ambiguous, we may consider a variety of extrinsic aids, including legislative history, the...