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Indiana Lumbermens Mutual Insurance Company v. Alexander
In the Court of Appeal of the State of California
4 November 2008; Cite as 2008 SOS 6044

Good Cause to Surrender bond, is Premium Refundable?

This case answers the question of whether or not a bond company may be compelled by the trial court to refund the premium when the accused was ordered arrested.

It appears that Alexander was arrested and charged with several counts of criminal acts. The appellants in this case, Indiana and Montana Bail Bonds posted a bail bond amounting to $1,365,000 to secure Alexander’s released from custody. His family paid $139,210 for the bond.

The agreement stated appellants “fully earned” the amount paid by the family upon Alexander’s release from jail.

While Alexander was free on bail, new counts of criminal acts were filed against him. The trial court also received a Texas warrant for his arrest. Consequently, the court remanded Alexander into custody by virtue of the warrant.

Thereafter, Indiana surrendered the bail bond it had posted on Alexander’s behalf and the court exonerated the same.

Consequently, Alexander moved for the court order to compel the appellants to refund the premium his family paid for his bail bond. And the court did order the refund of the entire premium. The appellants appeal, hence, this case.

In deciding the case, the Court of Appeal cited several case law. It held that “the bail bond here was a contract under which appellants guaranteed to the trial court that Alexander would appear for his court dates. (People v. Ranger Ins. Co. (1994) 31 Cal.App.4th 13, 22.)

Because appellants were at risk for paying the entire posted bailif Alexander absconded at any time, the law permitted appellants to make the premium nonrefundable. (Kiperman v. Klenshetyn (2005) 133 Cal.App.4th 934, 939 (Kiperman).) Exercising their prerogative, appellants’ bail agreement with Alexander stated appellants earned their premium immediately upon his release from custody.”

Ultimately, the Court of Appeal directed the trial court to reverse and vacate its order compelling Indiana Lumbermen’s Insurance Company and Montana Bail Bonds to refund the premium they received for posting a bail bond on behalf of Alexander. The court was directed to enter a new and different order denying Alexander’s motion for a refund.

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