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Wednesday, January 31, 2007

New Bail Bill Filed in House

A new bail bond bill (HB586) was filed in the Missouri House by Representative Brian Yates. It is the same as SB153 filed by Senator Engler last December. Whether you are a general agent or an agent, you will be affected by these changes. If you have an opinion to share, contact your senator and representative. If you think these changes would be harmful to your business ask them to remove the bail language from these bills.

Here is my take on the bail bond language in these bills:

■SB153 and HB586 increase the CD required by the state from $10,000 to $20,000 then allows the DIFP to quintuple the CD to $100,000 based on some future regulations that have not been written yet. Whether a company has 100 agents or 1 agent, it will be required to file the same amount in CDs, creating a higher percentage of overhead for small or family-owned bail bond companies. It creates other new regulatory fees without disclosing what the cost will be.

■The bill does not fix the problem we have with felons in the bail bond business. It does not remove the 15-year felony clause. This bill continues to allow the licensing of convicted felons. Under this bill, felons can be licensed as bail bond agents as long as they do not meet the statutory definition of “dangerous felon.” Examples of felons not covered by this statute would be those convicted of possession of child pornography, possession, manufacture, or distribution of drugs, felony stealing, and felon in possession of a firearm. The bill gives only lip-service to the problem by requiring a criminal background screen which is already being required by the Department. Instructs licensees arrested for a felony to report the arrest to the Department but does not instruct the Department on how to act upon this information.

■The bill transfers the bail bond qualification process from the local judges and places it upon the Office of State Courts Administrator. The cost associated with this filing is not disclosed. Although the nation-wide bail bond loss rate is 4%, but the bill requires a bail bond company to have assets to cover 100% of the bonds in force. This provision creates an unfair advantage for insurance companies, who are exempt from this provision.

■Requires that a bail bond agent wishing to leave a company, file an affidavit saying there are no outstanding premiums owed the company. The former general agent can cancel the authority of his former agent by filing an affidavit with the Department of Insurance. 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. Misappropriation of premium is already against the law. If an agent has misappropriated bail bond premium, there is already legal remedies for the company. The company can file charges with the local prosecutor, file a complaint with the Department for misappropriation of premium, or sue the agent for the premium.

■ Requires the Department to notify general agents of bail bond forfeitures within 48 hours. I assume the drafters of this bill meant to say upon notice of unsatisfied judgments, the Department must notify general agents. Courts do not routinely notice the Department of a “notice of forfeiture.” Since most forfeitures are set aside and do not result in judgment, this language creates the onerous task of notification of forfeitures by courts and the Department even though forfeitures rarely result in unsatisfied judgments. (Unpaid judgments are already reported to the Department by law.)

■Requires the Department to issue a photographic identification but does not disclose how the picture is to be obtained or what increased cost will be.

Friday, January 26, 2007

CDT Interviews Jetton About Bail Law

Jason Rosenbaum of the Columbia Daily Tribune Politics Blog interviewed House Speaker Rod Jetton concerning felons in the bail bond business. In answer to Rosenbaum’s question concerning allowing felons to have a bail bond license, Jetton answered, “…. people with felonies shouldn’t have bail bond licenses..” Jetton went on to say that he would have to read the language before deciding how to vote. The Tribune also interviewed Senator Frank Barnitz who said, ““I absolutely don’t think that felons should get bail bond licenses.”

The Columbia Tribune has been following the issue since the Missouri Senate race between newly elected
Senator Wes Shoemyer and former Representative Bob Behnen. Shoemyer televised ads criticizing Behnen’s role in passage of the bill in 2004 which, among other things, allowed convicted felons to become bail bondsmen. (Behnen lost the Senate race to Shoemyer in November 2006.) The Lee Clause (SB1122) that Shoemyer criticized was promoted by the bail association while Lee Jackson was in a leadership position. Jackson had been denied a general bail bond license because of his previous felony convictions. After passage of the bill, Jackson applied for his general bail bond license which was later denied. The same year that the bill became law, Jackson was arrested by the ATF for allegedly conspiring to murder his competitor, former state representative Jerry Cox. Jackson awaits trial on those charges. For a comprehensive look at the events surrounding the passage of this bill, see my post “Law and Sausage.”

Wednesday, January 24, 2007

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. The list is distributed to local courts via electronic means.

1) Billy Corn Sr., general agent, Cassville, MO-1 judgment
2) L&C Investment Group, president-Douglas Cheatham of Blue Springs, MO- judgment appealed, case in litigation
3) Sherry Goodin, inactive general agent of Marshall, MO-8 unsatisfied judgments

The judgments against David McKinney, A Way Out Investments, and A Aaron’s Bonding have been dropped from the judgment section of the list. However, these companies now are listed in the section dealing with pending disciplinary action.

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.

Monday, January 22, 2007

DIFP Enforcement Actions

The Department of Insurance (DIFP) has filed new enforcement actions on its web site.

1) The DIFP has filed complaints against Kristin Vickers, Ulis Vickers, and U&K Investments, Inc. In its complaint, the DIFP alleges that the Vickers and their company committed fraud, misrepresentation or bribery in securing a license by claiming to be citizens of the State of Missouri when they were from that State of Kansas. The case is set for August 17, 2007.

2) The DIFP has filed a motion for remedy in the original complaint filed against Cody Ice and C&M Bonding, Inc. The motion asks the Administrative Hearing Commission (AHC) to issue an order stating that C&M and Ice are deemed to have admitted that facts alleged in the DIFP's original complaint. The DIFP quotes state regulation stating that the AHC can issue this order when respondents fail to answer the complaint within thirty days. The hearing is currently scheduled for April 18, 2007.

Dotson/Jackson Trial Officially Postponed

The Dotson/Jackson trial has been officially postponed. A new date has not been posted at this time. Last week Dotson filed his second waiver of speedy trial. In that waiver, Dotson and his attorney say they have been informed that the US government may seek a second or superseding indictment concerning a potential RICO violation. If this were to occur, the waiver states, Dotson and/or Jackson would be facing two separate trials.

Thursday, January 11, 2007

Dotson/Jackson Trial??????

Although I usually do not speculate on this site, today I will make an exception. In reading the most recent court documents in the Dotson/Jackson case, I conclude that another continuance in underway. Today, Jackson filed a written waiver of speedy trial. I can't think of one reason a defendant would sign a speedy trial waiver this close to trial date unless talks were underway for another continuance. In the January 7th order setting forth trial procedures, the judge ruled that no new continuances would be granted unless a fully executed written waiver accompanied the request. Ah, the wheels of justice turn slowly.

Bondsman Virgil Lee Jackson continues to be held on federal charges for conspiracy to commit murder and felon in possession of a firearm. Glen Dotson, also a Missouri licensed bondsman, is charged with furnishing the firearm to Jackson. Dotson is no longer in federal custody. He was granted a bond after executing a waiver of speedy trial after the last trial continuance in October 2006. The intended victim of the conspiracy was competitor Gerald Cox.

To review the Jackson/Dotson developments follow these links:

Lee Jackson held on federal charges 4/1/2006
Dotson Arrested/New Charges for Jackson 6/2/2006
Dotson/Jackson trial postponed 6/8/2006
Arraignment 6/13/2006
Trial postponed again 10/28/2006
Dotson Freed on Bond 11/15/2006
Jackson Accused of Another Murder Plot 11/22/2006

Sunday, January 7, 2007

Former Agent Appeals DIFP License Refusal

Gregory Billingsley of Macon, MO has appealed the DIFP’s October 2006 decision to refuse to grant him a bail bond license. According to the Department’s ruling, Billingsley previously held a general bail bond license from 1996 to 1999. The DIFP alleges in their decision that Billingsley surrendered his general bail bond license after he had numerous unsatisfied judgments. Billingsley’s $10,000 CD was attached to satisfy some of the judgments. DIFP refused to grant Billingsley’s recent application for a bail bond license, stating that he failed to meet qualifications for surety under MO Supreme Court rules, had demonstrated incompetence, and had violated obligations imposed by the laws of this state by not satisfying the previous judgments against him. Billingsley appealed the DIFP ruling to the Administrative Hearing Commission. That hearing is scheduled for April 2, 2007.

Saturday, January 6, 2007

MO Bail Bond Co. Files Lawsuit Against DIFP

L&C Investments, President Doug Cheatham, and two agents, Randy Garrison and Shelli Perrey, have filed a lawsuit in U.S. District Court against the Missouri Department of Insurance and several Department employees. The suit names former Director Dale Finke, Investigator Robert Volkmer, Kathryn Turner as Senior Counsel for the Consumer Affairs Division, and Kevin Hall as legal representative for the Department.

L&C and its agents filed two counts of conspiracy, negligence, slander, libel and 14th amendment claims against the DIFP and its employees. L&C alleges Department employees conspired to force a refund of a disputed bond fee, delayed licensing for plaintiffs, improperly filed an appealed bail bond judgment on the OSCA list, and committed slander and libel against plaintiffs to the Missouri courts and members of the bail bond profession. In its count of negligence, L&C alleges the DIFP allowed L&C to become a licensed general bail bond corporation and then in September 2006, without a change in rule or law, the DIFP ruled that corporations were no longer in compliance of licensing laws, and required L&C to cease writing bonds or to write bonds under a secondary insurance contract.

The lawsuit was filed in US District Court, Western District of Missouri.

Friday, January 5, 2007

DIFP Director Retires: Ommen Named Replacement

Governor Matt Blunt announced that he has accepted the retirement notice given to him by Department of Insurance, Financial Institutions and Professional Registration (DIFP) Director Dale Finke. Blunt named Doug Ommen as Finke’s replacement at DIFP. Ommen, of Jefferson City, is the current deputy director and general counsel for the department. Ommen holds a bachelor’s degree from Rockhurst College and a juris doctorate from Saint Louis University. Before joining DIFP, Ommen served as commissioner of securities at the Secretary of State’s Office from January 2001 until December 2004.