Attorneys for Appellant Attorney for
Appellees
Steve Carter Dane L. Tubergen
Attorney General of Indiana Fort Wayne,
Indiana
Christopher L. Lafuse
Deputy Attorney General of Indiana
Indianapolis, Indiana
____________________________________________________________________________
__
In the
Indiana Supreme Court
_________________________________
No. 21S04-0312-CR-604
State of Indiana,
Appellant (Plaintiff
below),
v.
Steve Boles, Brian J. Beahn,
Christopher D. Burton,
Steven L. Hardin, Charles R.
Hoover, Jody L. Johnson,
Thomas McKinney, John H.
Stephenson, Tony A. Thomas,
Defendants below,
v.
Frontier Insurance Company,
and Accredited Surety &
Casualty Company, Inc.,
Appellees (Sureties
below).
_________________________________
Appeal from the Fayette Superior Court, No. 21D01-9912-CM-891, 21D01-9905-
CM-343, 21D01-9707-CM-503, 21D01-9702-CM-146, 21D01-9711-CM-833, 21D01-9906-
CM-388, 21D01-9710-CM-769, 21D01-9901-CM-037, 21D01-9908-DF-547
The Honorable Frank W. Messer, Judge
_________________________________
On Petition To Transfer from the Indiana Court of Appeals, No. 21A04-0302-
CR-94
_________________________________
June 29, 2004
Sullivan, Justice.
Nine defendants failed to appear in court and, pursuant to statute,
the clerk of the court imposed late surrender fees on the sureties
representing the defendants. The trial court vacated the fees because
notice of the appearance date was not provided to the sureties and because
the fees were not imposed by court order. We reverse, finding that notice
of the appearance date was not required, and that the clerk has the
requisite authority, to impose late surrender fees.
Background
These nine criminal cases have been consolidated for purposes of this
appeal. In seven of these nine cases, the defendants were charged with
misdemeanors; one was charged with an infraction, a misdemeanor, and a
Class D felony; and one was charged with a misdemeanor and two Class D
felonies. In each of the nine, the defendants were granted bail after
executing bail bonds pursuant to Indiana Code § 35-33-8-3.2(a)(1)(A)
(1998). This statute permits defendants to use a bail agent approved by
the Commissioner of the Department of Insurance and given the power of
attorney by an insurer (surety) to post bail for the defendant in return
for a premium. Ind. Code § 27-10-1-4 (1998). The premium is the amount
the defendant pays the bail agent to post the bail. See Ind. Code § 27-10-
1-8 (1998); Lake County Clerk’s Office v. Smith, 766 N.E.2d 707, 709-10
(Ind. 2002). If the defendant appears when required, the bond money posted
by the surety is returned to it. Ind. Code § 27-10-2-5(a) (1998); Ind.
Code § 27-10-2-6 (1998).
However, the defendants in each of these nine cases failed to appear
in the Fayette Superior Court at some point in their respective proceedings
when required. Their failure to appear implicates the two statutes that
are at the heart of this dispute. The first, Indiana Code § 27-10-2-8
(1998) (“Section 8”), provides:
(a) The court shall give the bail agent or insurer legal notice
of the defendant’s trial or hearing at least seventy-two (72)
hours before the defendant’s appearance is required unless the
appearance is scheduled within seventy-two (72) hours from the
execution of the bond.
(b) The defendant’s failure to appear constitutes a breach of
the undertaking. The court before which the cause is pending
shall make a record of the breach at which time section 12 of
this chapter then applies.
The second, Indiana Code § 27-10-2-12 (1998) (“Section 12”), provides:
(a) If a defendant does not appear as provided in the bond:
(1) the court shall:
(A) issue a warrant for the defendant’s arrest; and
(B) order the bail agent and the surety to surrender
the defendant to the court immediately;
(2) the clerk shall mail notice of the order to both:
(A) the bail agent; and
(B) the surety;
* * *
(b) The bail agent or surety must:
(1) produce the defendant; or
(2) prove within three hundred sixty-five (365) days:
(A) that the appearance of the defendant was
prevented:
(i) by the defendant’s illness or death;
(ii) because the defendant was at the scheduled time
of appearance or currently is in the custody of the
United States, a state, or a political subdivision of
the United States or a state; or
(iii) because the notice required was not given; and
(B) the defendant’s absence was not with the consent
or connivance of the sureties.
(c) If the bail agent or surety does not comply with the
terms of subsection (b) within one hundred twenty (120)
days after the mailing of the notice required under
subsection (a)(2), a late surrender fee shall be assessed
against the bail agent or surety [pursuant to the
provisions of the statute].
Section 8(b) defines a breach of a bail agent or surety’s undertaking.
If there is a breach, that sets in motion the process under Section 12,
whereby a bail agent or surety can be assessed late surrender fees and can
be required to forfeit the bond. See Lake County, 766 N.E.2d at 710;
Accredited Sur. & Cas. Co. v. State, 565 N.E.2d 1131, 1132 (Ind. Ct. App.
1991). Once the clerk mails notice to the bail agent and surety that a
defendant has failed to appear, the bail agent or surety has 365 days to
produce the defendant or show good cause why either has not, as set out in
Section 12(b)(2). One hundred twenty days after notice, however, late
surrender fees begin to be assessed against the bail agent or surety. I.C.
§ 27-10-2-12(c). The late fees must be paid when the bail agent or surety
produces the defendant or after the expiration of 365 days, whichever
happens first. Id.
The amount of late surrender fees assessed depends on when the bail
agent or surety produces the defendant, and the amount ranges from 20% of
the face value of the bond after 120 days to 80% of the face value of the
bond after 240 days. Id. Although the surety can be released from the
bond if the defendant is produced within 365 days, the practical effect of
assessing late surrender fees seems to be to reduce the amount of money the
surety is entitled to have returned to it. If the defendant is not
produced within 365 days, then the court will order forfeited an amount
equal to 20% of the face value of the bond. This amount will not be
returned to the surety.
As noted, each of these nine defendants were granted bail but failed
to appear when required. The record does not reflect whether the bail
agents or sureties were notified of the date and time for which the
defendants were scheduled to appear. In each such instance, the court
issued a warrant for the re-arrest of the defendant and notified the bail
agent and surety[1] of the defendant’s failure to appear and order for re-
arrest.
In each case, after a defendant finally appeared or 365 days had
expired, the clerk of the court assessed late fees against the sureties
pursuant to the statute. The sureties made motions to vacate the
imposition of late surrender fees and to be released from any obligation on
the bonds, claiming the fees were imposed without court order, the late
fees were not incurred or due, and the bail bonds had expired. The court
held a hearing and later granted the sureties’ motions. The trial court
cited the three reasons given by the sureties as its rationale for vacating
the late surrender fees and releasing the sureties. The State appealed the
court’s order.
The Court of Appeals ruled against the State and affirmed the trial
court. State v. Boles, 792 N.E.2d 553, 554 (Ind. Ct. App. 2003). The
court held that notice under Section 8(a), which the sureties did not
receive, was required before late surrender fees could be imposed. Id. at
558-59. The court also held that the clerk of the court lacks authority to
impose late surrender fees under both the bail statute and the Indiana
Constitution. Id. at 559-60. We granted transfer, 804 N.E.2d 760 (Ind.
2003) (table), and we now reverse the trial court.
Discussion
I
The first question raised on appeal is whether the notice provision in
Section 8 is a condition precedent to imposing late surrender fees on a
bail agent or surety. Phrased differently, the issue is the effect of
failure to provide notice under Section 8. The State argues that notice
under Section 8 is not a condition precedent to imposing late fees. The
sureties respond that Section 8 notice is a condition precedent to a
breach, and only after there is a breach does Section 12 apply and late
fees can be assessed. Section 8(a) does state that the bail agent or
surety “shall” be given this notice and so it appears mandatory. United
Rural Elec. Membership Corp. v. Ind. & Mich. Elec. Co., 549 N.E.2d 1019,
1022 (Ind. 1990) (“When the word ‘shall’ appears in a statute, it is
construed as mandatory rather than directory unless it appears clear from
the context or the purpose of the statute that the legislature intended a
different meaning.”); accord State v. Indianapolis Newspapers, Inc., 716
N.E.2d 943, 947 (Ind. 1999). But on further inspection, we conclude that a
surety does not enjoy any recourse for failure to receive that notice.
Before 1985, Indiana bail law explicitly conditioned a breach of a
bail agent or surety’s undertaking on notice having been given to the bail
agent or surety. The Bail Act of 1961 read:
If there is a breach of the undertaking, the court before which
the cause is pending shall make a record thereof and shall
declare the undertaking, and any money or bonds that have been
deposited as bail, forfeited: Provided, however, the bail
bondsman or the insurer shall have had legal notice of the trial
or hearing of defendant at least seventy-two [72] hours before
required appearance of defendant, unless the appearance is
scheduled within that time from the execution of bond.
Ind. Code § 35-4-5-8 (1975) (emphasis added).
When this statute was in place, forfeiture was automatic. Id.; Ind.
Code § 35-4-5-10 (1975); Ind. Code § 35-4-5-12 (1975). The law provided
that “[i]n case the defendant shall not appear as provided in the bond, the
court shall thereupon declare the bond forfeited . . . .” I.C. § 35-4-5-
12. Because such a drastic measure was taken against the bail agent or
surety when a defendant did not appear, it was important that the bail
agent or surety have notice of a defendant’s appearance date before either
could be held to have breached its undertaking.
In 1985, this structure was changed with a new bail statute. See P.L.
261-1985, § 1. Section 8 was added in substantially similar form to that
in effect today. It is also similar to the Bail Act of 1961, except for
the important fact that the conditional language was removed. Rules of
statutory construction suggest that this change matters. We have stated on
numerous occasions that “A fundamental rule of statutory construction is
that an amendment changing a prior statute indicates a legislative
intention that the meaning of the statute has changed.” United Nat’l Ins.
Co. v. DePrizio, 705 N.E.2d 455, 460 (Ind. 1999); accord Gingerich v.
State, 228 Ind. 440, 445 (Ind. 1950); Chism v. State, 203 Ind. 241, 244
(Ind. 1932); Sec. Trust Corp. v. Estate of Fisher, 797 N.E.2d 789, 793
(Ind. Ct. App. 2003); trans. denied, 2004 Ind. LEXIS 179 (Ind. Feb. 24,
2004). We have also relied on a rule of statutory construction to the
effect that when language from an earlier version of a statute is deleted,
the Legislature intended to change the law by removing that language. Joe
v. Lebow, 670 N.E.2d 9, 19 (Ind. Ct. App. 1996); Frey v. Review Bd. of Ind.
Employment Sec. Div., 446 N.E.2d 1341, 1344 (Ind. Ct. App. 1983).
At the same time that Section 8 was changed, Section 12 was added and
it eliminated provisions making forfeiture automatic. See P.L. 261-1985, §
1. The 1985 version of Section 12 gave bondsman 90 days to produce the
defendant or prove certain facts before late surrender fees were assessed.
P.L. 261-1985, § 12, c.2, s.12. After 210 days, if the bondsman did not
comply, part of the bond was forfeited. Id. Unlike under the previous
bail law, under Section 12, a breach of the bail agent and surety’s
undertaking did not result in automatic forfeiture of the bond. The breach
started the clock running for the imposition of late surrender fees and
ultimately forfeiture, but nothing happened at the moment of the breach.
This is true under the current Section 12. What is important here is that
the conditional language of Section 8 was removed at the same time that the
law was changed so that forfeiture was no longer automatic. These
simultaneous changes in the bail law indicate to us that the Legislature
does not intend Section 8(a) notice to be a condition precedent to a breach
of the undertaking.
This construction does not render the section a nullity, as the
sureties contend. It sets out the ideal procedure to be followed but
recognizes the practical difficulties of having to provide notice every
time a defendant has a trial or hearing date. Moreover, industry practice
supports this view. Counsel for the sureties stated at oral argument that
most counties do not issue notice to the bail agent or surety every time a
defendant has a trial or hearing date. He acknowledged that that would be
“very cumbersome and extremely expensive.” He also acknowledged that there
are no practical consequences for failure to receive a Section 8 notice and
nothing would be different if Section 8 were repealed, except that it
begins the running of the time period in which the bail agent or surety
must comply with Section 12.
We find that the change in the statutory language and the deletion of
the conditional language was intended to make the two provisions of Section
8 independent of one another. Under Section 8(a), notice must be provided,
but that notice does not affect whether there is a breach under Section
8(b). The trial court’s failure to provide Section 8(a) notice to the bail
agents or sureties of the defendants’ appearance dates therefore is not a
defense to the imposition of late surrender fees or forfeiture.
II
The second question on appeal is whether the clerk of the court has
the authority to assess late surrender fees against a bail agent or surety.
As previously mentioned, at the point the late surrender fees became due
and owing, the clerk in these cases assessed the fees without an explicit
court order to that effect. We find that the clerk does have this
authority, and that such action by the clerk violates neither the bail
statute nor the Indiana Constitution.
Turning first to the sureties’ argument that such action by the clerk
was not authorized under the bail statute, we find Section 12 instructive.
The language of Section 12 differs between the provision relating to late
surrender fees and that relating to forfeiture. Section 12(c) states that
“a late surrender fee shall be assessed against the bail agent or surety.”
I.C. § 27-10-2-12(c) (emphasis added). It makes no reference to judicial
action. In contrast, Section 12(d) states that “the court shall declare
forfeited an amount equal to 20% of the face value of the bond.” I.C. § 27-
10-2-12(d) (emphasis added). It specifically requires judicial action for
forfeiture. We find that this difference in treatment indicates the
Legislature’s intent that assessment of late surrender fees does not
require explicit judicial action whereas forfeiture can only occur upon a
declaration thereof by the court.
In finding that the clerk lacks authority to assess late surrender
fees, the Court of Appeals found the following sentence in Section 12(e) of
consequence: “Proceedings relative to the bond, forfeiture of a bond,
judgment on the forfeiture, execution of judgment, or stay of proceedings
shall be in the court in which the bond was posted.” I.C. § 27-10-2-12(e).
But this subsection does not prescribe when proceedings are required. It
dictates only that if there are such proceedings, they are to be held in
the court in which the bond at issue was posted, as opposed to permitting
collateral attack in, for example, the court where the criminal proceedings
are actually held. This interpretation is supported by the preceding
Section 12(d), which states as to forfeiture, the court shall enter the
“judgment . . . without pleadings and without change of judge or change of
venue.” I.C. § 27-10-2-12(d).
The sureties also rely on language of Section 12(e) that provides that
“[c]osts and late surrender fee[s] assessed against a bail agent or surety
under subsection (c) shall be satisfied without further order of the court
as provided in subsection (f).” I.C. § 27-10-2-12(e). They argue that the
“phrase ‘without further order of the court’ implies that there was . . .
an actual order of the court in the first place.” (Br. in Resp. to Pet. to
Transfer at 11.) This interpretation is incorrect. In fact, the language
in Section 12(e) relates to the satisfaction of costs and fees assessed
against a bail agent or surety. Section 12(f) provides that if the insurer
does not pay costs and fees as assessed, the Commissioner of the Department
of Insurance will pay them after receiving notice from the clerk of the
court. The Section 12(e) language, then, means that after receiving notice
from the clerk, the Commissioner is required to make the payments without
having to be ordered to do so by the court. It is not relevant to the
issue of the clerk’s authority to assess late surrender fees.
Finally, both the Court of Appeals and the sureties have pointed to
Lake County, 766 N.E.2d at 710, which, in describing the statute, said “if
the bail agent or surety does not comply . . . then the court shall assess
a late surrender fee.” In that case, however, the question of who could
actually assess the fees was not in issue. “Court” often refers generally
not only to the judge but also to those who carry out its ministerial
functions. The reference in Lake County should be understood in that
context.
We find that Section 12 does not prohibit the clerk of the court from
assessing late surrender fees.
Article VII, § 1, of the Indiana Constitution also does not prohibit
the clerk from assessing late surrender fees. From time to time, we have
been called upon to distinguish between those acts which our State
Constitution requires to be performed by judges and those which can be
performed on behalf of the court by others. See, e.g., Floyd v. State, 650
N.E.2d 28 (Ind. 1994); State ex rel. Smith v. Starke Circuit Court, 275
Ind. 483, 417 N.E.2d 1115 (1981); Shoultz v. McPheeters, 79 Ind. 373
(1881). The statutory provision for assessing late surrender fees is self-
executing; no judicial act is necessary. The fees are imposed by operation
of law, and the clerk performs the ministerial task of assessing those fees
as set out in the statute. The Constitution does not prohibit this.
III
The final question on appeal is whether the trial court properly
vacated the late surrender fees. The State argues that the trial court’s
vacation of late surrender fees was “clearly erroneous.” (Pet. to Transfer
at 4.)
The only statutory authority for a trial court to vacate late
surrender fees is contained in Indiana Code § 27-10-2-12(e).[2] It states
in relevant part:
The court may waive the late surrender fee . . . if the
following conditions are met:
(1) A written request is filed with the court and the
prosecutor.
(2) The surety or bail agent provides evidence satisfactory
to the court that diligent efforts were made to locate the
defendant.
In vacating the late surrender fees and releasing the sureties, the
trial court stated as its rationale that “the late surrender fees were
imposed without order or authorization of the Court, that the late
surrender fees were not due under Indiana law, and the imposition of those
fees should be vacated, and that the bail bond in this cause has expired
and should be released.” (E.g., Appellant’s App. at 33.)
These are not proper grounds for vacating late surrender fees under
the statute. Additionally, as earlier stated, late surrender fees can be
assessed without a court order. And, according to the records, it
certainly appears that late surrender fees were due under the law. We
therefore remand these cases to the trial court to rule on the motions to
vacate the late surrender fees in a manner consistent with this opinion.
No question is raised as to the release of the sureties and we do not
address that issue.
Conclusion
We find that notice to a bail agent or surety under Section 8(a) is
not required in order to impose late surrender fees upon a bail agent or
surety under Section 12(c) or to find a forfeiture of a bond under Section
12(d). We also find that the clerk of the court has the authority to
impose late surrender fees. Having previously granted transfer, Ind.
Appellate Rule 58(A), we reverse the judgments of the trial court in these
nine cases and remand them to the trial court to review its orders vacating
the late surrender fees.
Dickson, Boehm, and Rucker, JJ., concur. Shepard, C.J., is not
participating.
-----------------------
[1] Either Frontier Insurance Company or Accredited Surety & Casualty
Company, Inc. was the surety on the bail bonds for each defendant.
[2] Implicitly, there is an additional ground for the court to vacate
late surrender fees. Under Indiana Code § 27-10-2-12(b)(2)(A)(iii), the
failure of the court to provide notice to the bail agent and surety that an
order has issued for the surrender of the defendant is a defense to the
imposition of late surrender fees. If late surrender fees are imposed
despite this lack of notice, then presumably the court could vacate those
late surrender fees. See Accredited Sur. & Cas. Co. v. State, 565 N.E.2d
1131, 1132 (Ind. Ct. App. 1991) (stating that notice under Section 12 is a
condition precedent to the forfeiture of a bond); accord Frontier Ins. Co.
v. State, 769 N.E.2d 654, 657 (Ind. Ct. App. 2002).