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Second Circuit Certifies Question of Law in Bail Forfeiture Case to New York Court of Appeals

by Lonnie Burton

On November 15, 2016, the U.S. Court of Appeals for the Second Circuit asked the New York Court of Appeals to resolve a question of New York law in a case in which an arrestee sued a bail agent for refusing to return the bail fee after the trial court declined to accept the bond.

The case started in 2011 when Arthur Bogoraz was arrested in Puerto Rico in connection with a New York multi-million dollar insurance fraud indictment. Bogoraz's bail was set at $2,000,000. Bogoraz eventually found a bail agent -- International Fidelity Insurance Company -- to post the bond for him, for a fee of just over $120,000. Pursuant to New York law, a court must then conduct a bail sufficiency hearing to approve or deny the bond.

After a hearing, and after the bond company fulfilled its obligation to post the bond, the court .rejected it, holding that Bogoraz "failed to meet his burden at the bail bond source hearing" to prove that the bond "originates from a legitimate source and is not the fruit of criminal or unlawful conduct."

Bogoraz then sought the return of his $120,000 fee, and the bond compare refused. Bogoraz sued the bond company in federal court, arguing. they were not entitled to keep the fee because Bogoraz was never released from custody and thus the company was never exposed to the risk that Bogoraz would not appear in court. The company, on the other hand, maintained that it fulfilled its contractual oblibations and thereby earned the premium.

The federal district court sided with the bond company, saying it could find no controlling New York precedent on the issue and that the language of the agreement was ambiguous as to whether the bond company was entitled to keep their premium in these circumstances. The district court found that the parties did not intend for the premium to be returned in the event the bond was not accepted by the court and thus the company was entitled to keep it. Bogoraz appealed.

The Second Circuit, however, determined that it was unable to decide the issue without the help of the New York state courts. Consequently, they certified the following question to the New York Court of Appeals pursuant to 2d Cir. Local Rule 27.2 and § 500.27(a) of the New York Rules of Court:

"Whether an entity engaged in the 'bail business,' as defined in NYIL § 6801(a)(1), may retain its 'premium or compensation," as described in NYIL § 6804(a), where a bond posted pursuant to NYCPL § 520.20 is denied at a bail-sufficiency hearing conducted pursuant to NYCPL § 520.30, and the criminal defendant that is the subject of the bond is never admitted to bail."

The New York Court of Appeals may accept or decline the certified question. PLN will report all further developments in this case. See: Gevorkyan, Bogoraz, et al., v. Judelson, No. 15-3249-cv (2d. Cir. 2016).

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Related legal case

Gevorkyan, Bogoraz, et al., v. Judelson



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