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Twojinn, Inc., A California Corporation v. District Court of the Fourth

March 18, 2011

TWOJINN, INC., A CALIFORNIA CORPORATION DULY QUALIFIED TO DO BUSINESS IN IDAHO AND DOING BUSINESS AS ALADDIN BAIL BONDS AND ANYTIME BAIL BONDS; JAMES GARSKE; AND SHANTARA CARLOCK, PLAINTIFFS-RESPONDENTS-CROSS APPELLANTS,
v.
DISTRICT COURT OF THE FOURTH JUDICIAL DISTRICT OF THE STATE OF IDAHO; DARLA S. WILLIAMSON, IN HER OFFICIAL CAPACITY AS ADMINISTRATIVE DISTRICT JUDGE FOR THE DISTRICT COURT OF THE FOURTH JUDICIAL DISTRICT; LARRY D. REINER, IN HIS OFFICIAL CAPACITY AS TRIAL COURT ADMINISTRATOR FOR THE DISTRICT COURT OF THE FOURTH JUDICIAL DISTRICT; AND DIANE BURRELL, IN HER CAPACITY AS ASSISTANT TRIAL COURT ADMINISTRATOR FOR THE DISTRICT COURT OF THE FOURTH JUDICIAL DISTRICT, DEFENDANTS-APPELLANTS-CROSS RESPONDENTS.



Appeal from the District Court of the Fourth Judicial District of the State of Idaho, in and for Ada County. The Hon. James F. Judd, Senior District Judge.

The opinion of the court was delivered by: Eismann, Chief Justice.

2011 Opinion No. 38

Stephen W. Kenyon, Clerk

The judgment of the district court is affirmed in part and reversed in part.

This appeal concerns the authority of the administrative district judge to issue regulations governing bail bond agents. We hold that the administrative district judge has authority to adopt procedural regulations, but not substantive regulations.

I. FACTS AND PROCEDURAL HISTORY

On April 12, 2007, the Plaintiffs filed this action challenging the bail bond guidelines adopted on April 16, 2004, by the Hon. Darla S. Williamson, as the Administrative District Judge of the Fourth Judicial District. The Plaintiffs are a bail bond agency licensed in the State of Idaho and two bail bond agents employed by the agency (collectively called "Bail Agents"). The Defendants are the District Court of the Fourth Judicial District of the State of Idaho and its Administrative District Judge, Trial Court Administrator, and Assistant Trial Court Administrator (collectively called "ADJ"). On August 22, 2008, ADJ adopted a revised set of bail bond guidelines ("Guidelines"), which are the subject of this litigation. The central issue is whether certain provisions of the Guidelines exceed the authority of ADJ. The dispute was tried to the district court, and it held that some of the challenged Guidelines did exceed ADJ's authority and some did not. ADJ appealed, and Bail Agents cross appealed. The specific guidelines at issue will be set forth below.

II. ANALYSIS

A. ADJ's Appeal.

In 1961, the Idaho legislature approved surety insurers issuing bail bonds. Ch. 330, § 557 1961 Idaho Sess. Laws 645, 920 (codified as Idaho Code § 41-2604). The statute also provided, "All courts, judges . . . shall accept and treat such bond, undertaking, obligation, recognizance or guaranty, when so executed by such insurer, as conforming to, and fully and completely complying with every such requirement of every such law, . . . rule or regulation." Id. In 2003, the Idaho legislature enacted legislation to specifically regulate bail agents. Ch. 104, 2003 Idaho Sess. Laws 328. The legislation "provide[d] requirements for the regulation of bail agents in this state in addition to the requirements generally applicable to producers under this chapter [Chapter 10, Title 41, Idaho Code]." Id. at §1, 328. It stated, "No person shall hold himself out to be a bail agent or sell, solicit, negotiate, advise or consult regarding the terms of bail bond contracts in this state unless that person is licensed as a producer in the line of surety insurance." Ch. 104, § 3, 2003 Idaho Sess. Laws 328, 329 (codified at Idaho Code § 41-1039). However, prior to 2009 the statutes addressing bail in trial courts did not address bail bonds because they had been enacted in 1864 before bail bonds existed. Leader v. Reiner, 143 Idaho 635, 639-40, 151 P.3d 831, 835-36 (2007). In 2009, the legislature repealed those statutes and enacted the Idaho Bail Act, Ch., 90, §§ 1 & 2, 2009 Idaho Sess. Laws 259, 259, in order "to provide a uniform and comprehensive statewide process for the administration of bail in criminal cases," id. at 260. That Act specifically addressed posting bail bonds as bail in criminal cases.

The central issue of ADJ's appeal is its general authority to regulate bail bond agents. The legislature has the authority to divide the State into judicial districts, Idaho Const. Art. V, § 11, and it has created seven judicial districts, Idaho Code § 1-801. In each judicial district there is an administrative district judge. Idaho Code § 1-703. The courts in Idaho constitute a unified and integrated judicial system for administration and supervision by the Supreme Court. Idaho Const. Art. V, § 2. The powers and duties of an administrative district judge are those established by the Supreme Court. Idaho Ct. Admin. R. 42(e); Idaho Code § 1-907. On August 4, 2005, the Supreme Court issued an order setting forth the job description, powers, and duties of an administrative district judge. That order provided that the administrative district judge in each judicial district "has administrative supervision and authority over the operation of the district courts and magistrate division in the district," including the power to "establish guidelines for bail bonds with regard to posting, forfeiture, exoneration and all other matters."

The power granted to each administrative district judge is "administrative supervision and authority" over the courts in the judicial district. The powers are administrative, to establish procedures for the operation of the courts in the judicial district. In addressing the difference between procedure and substantive law, we have stated as a general guideline: "Substantive law prescribes norms for societal conduct and punishments for violations thereof. It thus creates, defines, and regulates primary rights. In contrast, practice and procedure pertain to the essentially mechanical operations of the courts by which substantive law, rights, and remedies are effectuated." State v. Currington, 108 Idaho 539, 541, 700 P.2d 942, 944 (1985) (quoting State v. Smith, 527 P.2d 674, 677 (Wash. 1974)). Thus, the issue is whether the Guideline provisions at issue establish procedures or substantive law.

Bail agents are licensed by the Department of Insurance. Idaho Code § 41-1039. The Trial Court Administrator (TCA) maintains a list of licensed bail agents who are permitted to submit bail bonds in the Fourth Judicial District. Licensed bail agents who are not on the list cannot submit bail bonds in the District. The district court correctly held, "The ADJ has the authority to adopt procedural Bail Bond Guidelines regulating the bail bond business in the Fourth Judicial District." (Emphasis added.) It determined that various provisions of the Guidelines were substantive rather than procedural, and that ADJ has no right or power to implement, apply or enforce within the Fourth Judicial District certain Guidelines. It enjoined ADJ from further implementation, application, or enforcement of those Guidelines.

In its judgment, the court held that certain Guidelines exceeded the authority of ADJ to adopt procedural guidelines by:

ignoring the agency relationship between a bail agent and the surety or bail agency; imposing bail agent qualification standards greater than those imposed by the Idaho Department of Insurance (hereinafter "DOI"), except as they relate to a bail agent's family relationship to a Fourth Judicial District judge or a bail agent's simultaneous employment in a court-related position; [*fn1 ] requiring bail agents to ensure that a forfeited bond is paid; and providing sanctions for a bail agent's failure to pay a forfeited bond.

The guidelines it specifically held that could no longer be enforced were the following:

a. Section 1.

Section 1 contains definitions applicable to the Guidelines. In the injunction portion of the judgment, the court did not limit its injunction to specific definitions, but it did state in another part of the judgment that ADJ had no power to implement, apply, or enforce Guidelines that "Define 'bail agents' as the responsible party to ensure that a forfeited bond is timely paid, as set forth in Section 1 of the Guidelines." There are two definitions that fit within that proscription.

They are:

Bail agent - the bail; a person who offers an undertaking acceptable to the court for release of the defendant and the person to whom custody of the defendant is released. A bail agent must be licensed by the Idaho Department of Insurance as provided by Idaho Code Title 41 Chapter 10. For purposes of these Guidelines, the bail agent is considered the responsible party to ensure that a forfeited bond is timely paid, notwithstanding the right of the state or county to pursue collection of a forfeited bond from the insurance company, and notwithstanding any agreement between the bail agent and the insurance company. Bail agent also includes the supervising agent. [Emphasis added.]

Supervising Agent - a bail agent who hires, appoints, employs, or contracts another bail agent to act on his/her behalf. For the purpose of these Guidelines, the supervising agent shall be responsible for seeing that the bail bonds posted by bail agents acting on behalf of the supervising agent are timely paid. Furthermore, for the purpose of these Guidelines, no bail agency shall list more than one supervising agent, and the supervising agent shall be named on the Application to Become an Authorized Bail Agent Within the Fourth Judicial District, State of Idaho. The supervising agent must acknowledge his/her capacity as supervising agent by signing the application. [Emphasis added.]

b. Section 11.I.B. Section 11.I.B requires licensed bail agents seeking to be placed on the approved list to "[h]ave a criminal history records fingerprint check completed by the Idaho State Police Bureau of Criminal Identification (see section entitled 'Criminal History Checks')."

c. Section 11.III(A), (D), (F), (G), (H), (J), (K) & (L). These portions of the Guidelines provide that a licensed bail agent's request to be put on the approved list could be rejected for various reasons. The district court held that the request could not be rejected for the reasons following:

A. The criminal history check reveals:

(1) any felony crime for which the applicant or the applicant's proposed insurance company has been convicted, pled guilty, received a withheld judgment, or otherwise sentenced.

(2) any misdemeanor crime involving theft, fraud, or any other crime of dishonesty for which the applicant or the applicant's proposed insurance company has been convicted, pled guilty, received a withheld judgment, or otherwise sentenced within the last ten (10) years, including crimes committed before age 18 years.

(3) three or more misdemeanor crimes for which the applicant or the applicant's proposed insurance company has been convicted, pled guilty, received a withheld judgment, or otherwise sentenced within the last five (5) years, including crimes committed before age 18 years.

(4) any combination of three or more of the following in which the applicant has been convicted, pled guilty, received a withheld judgment, or otherwise sentenced: failure to appear, contempt of court, or probation violation within the last five (5) years.

D. The applicant has four or more prior violations of these Guidelines and/or previous Fourth Judicial District policies or guidelines for bail agents which have not been excused by the ...


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