5D02-3617 Allegheny v. Roche

SUPREME COURT CASES

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State: Florida

Court: Florida Fifth District Court

Docket No: 5D02-3617

Case Date: 11/01/2004

Preview:IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT JULY TERM 2004

ALLEGHENY CASUALTY COMPANY, Appellant, v. CASE NO. 5D02-3617

ROCHE SURETY, INC., Appellee. / Opinion filed November 4, 2004 Appeal from the Circuit Court for Citrus County, Patricia Thomas, Judge. Gregg M. Paley and Andrew S. Goldwyn of Paley & Goldwyn, P.L., Boca Raton, for Appellant. Fred Carrington and Terron M. Carrington of Carrington & Carrington, P.A., Clearwater, for Appellee. THOMPSON, J. Allegheny Casualty Company ("Alleghany") appeals a judgment and an award of attorney's fees in favor of Roche Surety, Inc. ("Roche"). We reverse and remand. Alfredo and Maria Del Carmen Doborganes are bail bondsmen. In April 1994, they entered a contract with Allegheny under which Allegheny would act as a surety for bail bonds written by the Doborganeses. As part of the contract, the Doborganeses deposited funds with Allegheny to cover

liabilities on bonds the Doborganeses wrote. These funds, called "build-up funds," are held in trust by Allegheny for the Doborganeses. The contract required the Doborganeses to deposit two percent of every bond they wrote, and hence, apparently, the term "build-up." Under the contract, Allegheny was entitled to retain the funds until its liability "on any and all bonds" was fully discharged. When the Doborganeses and Allegheny ceased doing business with each other, the Doborganeses entered a surety contract with Roche. The Doborganeses assigned Roche the funds held in trust by Allegheny, but Allegheny refused to release the funds to Roche, mainly because there were allegedly several bonds the Doborganeses had written for which there were no discharges. The evidence of these undischarged bonds consists of six, small, handwritten receipts, presumably written by one of the Doborganeses, for defendants in Dade, Monroe, and Broward (or Brevard) Counties between 1994 and 1997. Two receipts are for $5,000 each (Dade), one is for $1,000 (Monroe), one is for $15,000 (Brevard or Broward), one is for $7,500 (Dade), and one is for $20,000 (Dade). Although Roche had an affidavit from the Clerk of the Court in Dade County stating that there was no record of two or three of the four bonds issued in Dade, Roche did not have discharges for any of the bonds.1 Alleghany refused Roche's offer to indemnify Alleghany for any losses it might incur in connection with the bonds.

At one of the hearings below, Allegheny's counsel told the court that the Doborganeses said in their depositions that they lost their records when a lessor disposed of their property because they did not pay a storage bill. -2-

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Roche sued Allegheny for a declaratory judgment that Allegheny was obliged to turn over the funds. Alleghany claimed that it was not so obliged because there were outstanding, undischarged liabilities on bonds written by the Doborganeses. Further, Alleghany contended that it was relieved of its obligation under the contract to return the money to the Doborganeses because they breached the contract by assigning it and by writing bonds for other surety companies during the term of the contract with Allegheny. The court granted Roche's motion for summary judgment and awarded it attorney's fees. Allegheny argues that the court erred in entering judgment for Roche because there remain, outstanding, undischarged bonds. Allegheny further argues that since there are outstanding liabilities, the Doborganeses had no interest in the fund to assign, and thus Roche, standing in the shoes of the Doborganeses, has no claim. The contract states that on termination of the contract, and once all bonds written by the Doborganeses were discharged, the build-up fund would be returned to the Doborganeses: In the event of the termination of the agreement, then after all liability of the Company [i.e. Allegheny] on any and all bonds written by the Producer [i.e. the Doborganeses] shall have been fully discharged and all obligations of the Producer hereunder fully met, the said fund or such balance shall then be returned to the Producer with interest thereon.

The trial court ruled that the bonds were discharged under section 903.31(1), Florida Statutes, which provides that bonds expire 36 months after they have been posted: (1) Within 10 business days after the conditions of a bond have been satisfied or the forfeiture discharged or remitted, the court shall order the bond canceled and, if the surety has attached a certificate of cancellation to the original bond, shall furnish an executed certificate of cancellation to the surety without cost. An adjudication of guilt or innocence of the defendant shall satisfy the conditions of the bond. The originalappearance bond shall expire 36 months after such bond has been posted for the release of the defendant from custody. This subsection does not apply to -3-

cases in which a bond has been declared forfeited. (emphasis supplied). Allegheny argues that the underlined portion of the statute, upon which Roche relies, is not applicable to the bonds in question because it was added to the statute by amendment in 1999,2 after the bonds were written. We agree that the statute does not apply retrospectively. First, section 903.31(1) affects substantive rights because it affects the counties' rights in forfeitable bail bonds. As a general rule, in the absence of clear legislative intent to the contrary, a law affecting substantive rights is presumed to apply prospectively. Arrow Air, Inc., v. Walsh, 645 So. 2d 422 (Fla. 1994). Generally, it is impermissible for an amendment to a statute of limitations to extinguish an existing claim. See Polk County BOCC v. Special Disability Trust Fund, 791 So. 2d 581, 583 (Fla. 1st DCA 2001). Such an amendment can, however, shorten the limitations period applicable to the prior claim if the intent to make the amendment retroactive is clearly expressed, and if a reasonable time is allowed within which to seek enforcement of such claim. Id. The amendment at issue here is similar to a statute of limitations because it extinguishes a county's right to forfeiture of bonds. If the amendment applied retrospectively, any bond that became three years old on the date the amendment was effective would expire, but there is no provision in the amendment for a reasonable time to seek enforcement of a county's right to forfeit the bond. Hence, because there is no showing of a legislative intent to have the statute apply retrospectively, we must conclude that the amendment was not intended to be applied retrospectively and that therefore the trial court erred in ruling that the bonds were discharged by operation of law. 3
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See Chapter 99-303,

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