Dept. of Insurance Files Complaint Against C&M Bonding

The Missouri Department of Insurance (DIFP) has filed a complaint against Cody W. Ice and his company C&M Bonding, Inc. The link to the complaint is here. The Department alleges that C&M and its president received compensation by means of fraud, misrepresentation, or deception. According to the complaint, C&M posted a bond in Camden County for $250,000 and another cash bond for $5,000. The defendant was not able to secure his release because he had a detainer from the State of Illinois. Twelve days later C&M revoked both bonds and did not refund the defendant’s bond fees. The Department also seeks discipline from the Administrative Hearing Commission because it alleges C&M failed to satisfy bond forfeitures in a timely manner. The DIFP complains that C&M had two unsatisfied judgments dated August 2005 and did not satisfy them until October 2006. The hearing is set for April 18, 2007.

Link to Bail Bond Bill

I have had a lot of feedback concerning the file size of the pre-filed bail bond/insurance regulation bill (SB153) referenced in my post on December 13th. It is a large PDF file; the bail bond section begins on page 25. Here is a shortcut link to just the bail section which is 7 pages long.


SB153 Bail Section Only-7 pages

AHC Ruling: Felon Cannot be Disciplined

The Administrative Hearing Commission (AHC) has issued a ruling stating that the Department of Insurance (DIFP) has failed to make its case in the discipline of convicted felon and former bondsman, Gerald Cummings. Although Cummings failed to appear to defend himself, the AHC ruled in his favor. According to the ruling, Cummings was found guilty of possession of a controlled substance and unlawful use of a weapon. On April 18, 2005, the court suspended the imposition of sentence and placed Cummings on probation for five years. The court records submitted by the DIFP do not indicate whether the court’s findings of guilt were after trial or after a plea of guilty or nolo contendere. The DIFP offered the "Lee Clause" to support its position that Cummings was subject to discipline. The Lee Clause (374.755[2]) states:

[f]inal adjudication or a plea of guilty or nolo contendere within the past fifteen years in a criminal prosecution under any state or federal law for a felony or a crime involving moral turpitude whether or not a sentence is imposed, prior to issuance of license date[.]

The AHC ruled that final adjudication did not include a suspended imposition of sentence and certified court documents submitted by the DIFP did not state whether Cummings entered “a plea of guilty or nolo contendere” but just said he was “found guilty.” The Commission ruled that the court documents submitted failed to meet the wording of the Lee Clause. Further, the AHC said that had the DIFP submitted documentation that Cummings pleaded guilty that they would have to know when the plea occurred. The AHC spent considerable time debating the “ comma-prior to issuance of license date” indicating that the comma modifies all that goes before it and would be interpreted that discipline could be issued for those with felony convictions within 15 years before initial licensing but would not apply to felonies committed after the licensing date. The AHC did not issue a ruling on the licensing date section of the Lee Clause and said they would save that for another day.

The AHC additionally ruled that the DIFP did not have cause to discipline Cummings for refusing to respond to Department letters and refusing to furnish information to the Department. The law cited by the DIFP was in regard to the business of insurance and the AHC ruled that bail bond business has not been established as an “insurance business.”

Finally, the AHC ruled that Cummings criminal offenses were committed prior to the 2005 bail bond law and applied the 2000 version of the statute. In its ruling, the Commission stated that Cummings’ criminal offenses were not committed in the performance of his duties as a bondsman, so he was not considered to have committed misconduct. The AHC, nor the DIFP, addressed the prior statute section regarding the Missouri Supreme Court rule pertaining to the conviction of felons.

The DIFP has filed a petition for judicial review of this case in Cole County. The case number is 06AC-CC01084.

Bail Bond Bill Filed in Senate

A bail bond and insurance regulation bill has been pre-filed by Senator Engler in the Senate (SB153). This year’s bill includes language from the licensing bill submitted by the Department of Insurance last year, as well as the bail bond bill promoted by the Missouri Professional Bail Bonding Association. A summary of the provisions of the bail bond section of the bill are as follows, my comments in blue:

1) Increases the general agent's assigned CD from $10,000 to $20,000 and allows by regulation, the Department to increase the CD to $100,000.
2) “Each general bail bond agent shall file with the director and the state courts administrator, no later than December first of each year, a sworn affidavit in a form and manner prescribed by the state courts administrator attesting that the general agent has net assets with a value in excess of any personal exemptions from execution, at least equal to the aggregate amount of bonds that are subject to execution in this state. The state courts administrator may establish and assess a filing fee. This filing shall be satisfactory proof of compliance with the financial qualification under supreme court rule and no municipal and circuit court in this state may place additional financial requirements upon a general bail bond agent duly qualified with the state courts administrator.” This provision by-passes filing with the local courts and establishes a system to report to the Office of State Courts Administrator. The language states that each general agent (but not insurance companies) file an affidavit saying that his/her total net assets exceed the aggregate (total) amount of bonds written. This provision creates a “dollar for dollar” system and assumes that 100% of your bonds will result in judgment. Insurance companies are exempt from this provision and only have to prove “solvency” to the local court. Additionally, a fee is associated with this process and that fee has not been disclosed in the bill.
3) "For any new appointment of a bail bond agent, the bail bond agent shall file an affidavit with the department and the appointing general bail bond agent stating that there are no outstanding premiums owed. If outstanding premiums are owed and the bail bond agent does not satisfy such premium obligations, the former general bail bond agent shall file notice, along with supporting documents with the department, and provide such notice to the bail bond agent and the newly appointing general bail bond agent, stating under oath the fact that the bail bond agent has failed to satisfy their obligations. Upon receipt of such notification and supporting documents, the appointing general bail bond agent shall immediately cancel the newly appointed bail bond authority. Such authority shall remain cancelled until all premiums are paid." This provision was borrowed from the Florida statutes, with two important differences. First, the Florida statute includes a due-process provision which stays the cancellation of authority until the Department investigates the allegations of the former general agent. Without this provision, a former general agent can deprive an agent of the right to earn a living without due process of law. Secondly, Florida does not allow credit bonds, so any outstanding premiums would have been collected but unreported to the company. However, since Missouri allows agents to extend credit to clients, this provision could be applied to uncollected or uncollectible premiums owed both the agent and the company.
4) Upon notice by the court, the Department must notify general agents of a bail bond forfeiture within 48 hours. I assume the drafters of this bill meant to say upon notice of an unsatisfied judgment, the Department must notify general agents. Courts do not routinely notice the Department of a “notice of forfeiture” and there is no provision requiring the courts to notice the department for every forfeiture. Since most forfeitures are set aside and do not result in judgment, surely the Department is not tasked with notifying companies of every forfeiture in the state.
5) The Department is required to issue a photographic license. The bill does not specify how the picture will be obtained or what the cost might be.
6) An agent must notify the department of the name, address, and phone number for each general agent/insurance company for whom the agent writes. This information must be continually updated.
7) Requires the Missouri Highway Patrol to conduct a finger-printing and criminal background check on applications for licensure.
8) Allows the 15 year felony clause, but adds that a license MAY be refused, revoked, etc. if an applicant has been convicted of: any dangerous felony defined by section 556.061, RSMo, any felony crime of assault, any felony crime that results in the serious physical injury or death of another person, any felony crime against the administration of justice, or any felony of which deceit or fraud is an element of the offense.
9) Requires the agent to disclose the legal name his/her general agent to the defendant and on every bond written.
10) Requires every licensee to report any felony arrest to the department within 10 days. Does not instruct the Department on what they are to do with this information.

If you would like to contact your senator about this bill, here is a link to find your senator and contact information. The best ways to communicate with your elected officials are by fax, letter, or phone call. Senators get many emails, and constituent emails sometimes go unread.

Fugitive Commits Suicide With Bondsman's Gun

Defendant Clifford Skiles committed suicide in Toledo, OH by using his bondsman’s gun. His bondsman, Thomas Holmes, attempted to take him into custody when he took Holmes gun. Holmes told police he carried the unloaded gun in the trunk of his vehicle, and loaded it before he went to Skiles' mother's residence. Once inside the apartment, Mr. Holmes had the gun in a holster on his person in plain view. Skiles apparently did not want to go to jail, the two men struggled, and Holmes pulled out the gun. The two men then fought over the weapon, police said. Skiles gained possession of the gun, fled the apartment, and jumped into the back seat of a waiting vehicle, occupied by a woman and her teenage daughter. The two females got out of the vehicle when they saw the gun and Skiles shot himself, police said. Skiles staggered back to the apartment building, where police found him wounded on the top of a set of outside stairs. He died about 30 minutes later at St. Vincent Mercy Medical Center. Police said Mr. Holmes was inside the apartment and on the phone with 911 when the shooting occurred.

Unsatisfied Judgment List

The bail bond unsatisfied judgment list is compiled by the DIFP and the Missouri Office of State Courts Administrator. The following companies/general agents appear on the current list last updated on 11/3/2006. The list is distributed to local courts via electronic means.

1) A Aarons Bonding Company, administratively dissolved corporation, president- Lewis David Duncan of Excelsior Springs, MO-4 judgments
2) A Way Out Investments, Inc., president-David Bush of Blue Springs, MO, license inactive-32 unsatisfied judgments
3) L&C Investment Group, president-Douglas Cheatham of Blue Springs, MO- judgment appealed, supersedeas bond posted
4) David McKinney, inactive general agent of Independence, MO-43 unsatisfied judgments
5) Sherry Goodin, inactive general agent of Marshall, MO-8 unsatisfied judgments

Note: The judgment list does not provide the address of the company or corporate officers. I added the address, corporate presidents, and corporate status using the Missouri Secretary of State business database as well as the DIFP licensing information.

Bail Agent Impersonators Arrested

A mother and daughter who scammed citizens by impersonating bail bond agents have been arrested in the New Orleans area. The mother/daughter scam artists called intended victims (all over the age of 70) and told them that a loved one was in jail. (Some victims learned that their loved ones had never been arrested.) The team asked for a sum of money and went over to the victims’ houses and collected. One of the victims became suspicious and called police. The pair was arrested as they came to the home to collect the fake bail premium. Both the mother and daughter have been arrested for theft and conspiracy to commit theft. The original story ran here.