U.S. v. Velez
| Decision Date | 16 December 1982 |
| Docket Number | No. 81-5890,81-5890 |
| Parties | UNITED STATES of America, Plaintiff-Appellee v. Caesar VELEZ, et al., Defendants, Wayne Spath, Appellant. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Michael D. Gelety, Fort Lauderdale, Fla., for appellant.
Bruce A. Zimet, Asst. U.S. Atty., Miami, Fla., for plaintiff-appellee.
Appeal from the United States District Court for the Southern District of Florida.
Before HILL and HENDERSON, Circuit Judges, and GARZA *, Senior Circuit Judge.
This appeal is the result of the unique plight of a bondsman who justifiably believed that he had obtained a valid reduction of his obligation on a bail bond, only to discover, to his dismay, that he was liable for the original amount. We agree with the surety that justice does not require the forfeiture ordered by the district court. We therefore vacate that order, and remand the case for remission of the amount forfeited.
In late 1979, Caesar Velez was arrested and indicted for the possession and distribution of cocaine, and a conspiracy to distribute cocaine, in violation of 21 U.S.C. Secs. 841 and 846. At the arraignment, the magistrate released the defendant on a $60,000.00 surety bond. The appellant, Wayne Spath, acting as an agent for the corporate surety (American Druggists' Insurance Company), then executed the bond, which was approved by the magistrate.
Velez subsequently petitioned the court to reduce the amount of the bond. On April 30, 1980, the magistrate held a hearing to consider the defendant's request. At that hearing, the bondsman informed the court that he was losing part of his security, a certificate of deposit belonging to the defendant's sister, and that he therefore was contemplating surrendering the defendant to the court. Instead of reducing bail, the magistrate suggested restructuring the bond by reducing the corporate surety's obligation to $30,000.00 and obtaining a $30,000.00 personal surety bond secured by a lien on property belonging to the defendant's sister. The magistrate then reset the hearing for the following day to allow the parties time to arrange for a lien on the property.
On the next day, the magistrate formally approved this proposal made at the previous day's conference. The government then inquired of the court if it would be necessary to execute a new surety bond in contemplation of this change. In response, the magistrate advised the bondsman that to effect the modification, it would be necessary to deliver to the court a certified copy of the Affidavit of Lien on the property, and either rewrite the existing bond or submit a notarized statement confirming a continuing obligation for $30,000.00. In an effort to comply with those instructions, Spath delivered to the magistrate copies of the Notice of Filing of Lien and the Affidavit of Lien, as well as the requested notarized statement. 1 Those documents evidenced the fact that a lien on real property, in favor of the United States government, had been filed in the appropriate county office. Apparently, the defendant and his sister never formally executed a personal surety bond. 2
Afterwards, Velez absconded prior to the second day of his trial. The government then sought an order of forfeiture of the original $60,000.00 bond. The bondsman urged the government to correct its motion to reflect the magistrate's amendment, but the government did not act. The district court entered an order forfeiting the entire amount of the original bond. Soon afterward, the bondsman moved the court, pursuant to Fed.R.Crim.P. 46(e), to set aside or remit the forfeiture order. In support of his motion, Spath cited the modification of the original agreement. Moreover, the magistrate acknowledged her earlier intent to reduce the corporate surety's obligation and recommended to the district judge that the motion be granted. The government continued to oppose any reduction, arguing that the defendant's failure to execute a personal surety bond nullified the new agreement. The district court ruled favorably to the government and denied the motion. The bondsman then petitioned the court to reconsider its order, and requested a hearing. He also provided the district judge with transcripts of the two hearings at which the magistrate restructured the bond. After the hearing, the judge expressed the opinion that because a personal surety bond was never executed, there was no satisfaction of the condition precedent to the modification. He subsequently entered a written order affirming the original forfeiture. Spath appeals this adverse judgment.
On appeal, both the bondsman and the government focus on whether the defendant's compliance with the magistrate's directive effected a valid modification of the bond agreement. Their debate centers on the proper application of the common law axiom that a bond agreement should be interpreted as a contract between the parties. United States v. Miller, 539 F.2d 445, 447 (5th Cir.1976). Nevertheless, we find the answer in Fed.R.Crim.P. 46(e), a provision specifically designed to prevent inequitable forfeitures. 3
Rule 46(e) confers on the district court the authority to set aside or remit an order of forfeiture "if it appears that justice does not require ... enforcement." The equitable nature of this power endows the district court with broad discretion to determine appropriateness of remission. See, e.g., United States v. Bass, 573 F.2d 258, 259 (5th Cir.1978). For that reason, the district court's decision may not be disturbed unless it is arbitrary and capricious. United States v. Skipper, 633 F.2d 1177, 1180 (5th Cir.1981). In the usual case, the court will examine a variety of factors to determine if the district court arbitrarily exercised its discretion. For example, the court will evaluate the cost and inconvenience to the government, the amount of resulting delay, the stage of the proceedings when the defendant absconds, the deliberateness of the breach, the prejudice to the government, and the public interest and necessity of obtaining the accused's presence. See United States v. Parr, 594 F.2d 440, 444 (5th Cir.1979). Here, however, these concerns are not particularly applicable, since this set of facts does not present the customary context governing remission cases. In most instances the surety seeks a reduction after the defendant has been returned to the court's jurisdiction. See, e.g., Bass, 573 F.2d at 260. That situation is not present in this appeal. But regardless of the different circumstances, several considerations still lead us to conclude that the district court abused its discretion in refusing to reduce the forfeiture order to $30,000.00. 4
More significantly, this confusing state of affairs is a direct result of the bondsman's reliance upon the magistrate's decision and accompanying instructions on the implementation of that order. The magistrate directed Spath to send her a copy of the Affidavit of Lien, after its filing in the county office, and a statement confirming an obligation for $30,000.00. The bondsman promptly complied with this direction. There is no indication that the magistrate placed the burden on Spath to obtain a personal surety bond executed by the defendant and his sister. Rather, the record shows that the bondsman met every condition imposed by the magistrate to effectuate a reduction in his obligation. In fact, both the government and the district court recognize that the surety is blameless in this case. Under these circumstances, the integrity of our judicial system demands that the bondsman is entitled to rely upon the magistrate's oral representations, 5 especially when no written procedure existed for modifying a bond agreement. 6
Spath not only relied upon the magistrate, but he did so to his detriment. After the magistrate approved restructuring the agreement, the surety released the sister's certificate of deposit and also refrained from surrendering the defendant as was his original plan. Additionally, since the magistrate offered an alternative solution, Spath did not execute a new corporate surety bond, which would have clearly reflected his reduced obligation. Finally, believing that he was assuming a risk of only $30,000.00, he allowed the lien on the sister's property to run in favor of the government. Thus, he foreclosed the...
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