“New York’s Department of Financial Services Snubs The New York’s Criminal Procedure Law."

NEW YORK - March 22, 2013 - PRLog -- The New York Professional Bondsmen & Agents (The NYPBA), and president and principal lobbyist for New York’s bail bond industry, and New York State Professional Bondsman George C. Zouvelos, respond to NY DFS Docket No. 2010-0039-C, a Department ‘test case’, which has illegally condemned the rights of sureties and all New York Bondsmen to mitigate losses utilizing contingency clauses after the posting of bond--in clear violation of Constitutional and New York laws and doctrines.

“The recent Departmental findings in 2010-0039C and extra-legal actions violate basic precepts of New York and United States Constitutional law. The Department, has specifically, violated the Separation of Powers Doctrine, Due Process and Equal Protection Rights, and the Contract Clause. The Department has totally disregarded longstanding and unambiguous legislation; and has wrongfully infringed on authority vested solely for the New York’s Legislature and the Judicial branch. The Department based its findings on the false testimony of their ‘so called’ industry expert. We have dubbed this intentional dishonesty as ‘The Mark Wolin / Seneca Insurance Ephialt's of Trachis* Bail Canons’; which we have disproven in their entirety. The only thing the bail industry can say to Mr. Wolin’s alleged ‘expert’ and intellectually dishonest testimony is, ‘Sic semper tyrannis’,” said George Zouvelos.

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“We remain confident that Judicial review of these matters would certainly sustain that the “separation of powers” doctrine which has been impermissibly crossed here, in clear violation of the Constitution of the State of New York and the United States. Moreover, the actions and methodologies utilized by the Department and the eventual findings totally ignore the “contract clause” which forbids governmental intrusion into private contractual matters unrelated to regulatory matters. If the Department does not correct itself, the extinction of New York Professional Bondsmen and the commercial bail industry is imminent. In the alternative, only swift Court intervention can stop the Department from destroying a well established industry which provides valuable social function to the public, and alleviates the costs and stresses on the criminal justice system and taxpayers,” stated George Zouvelos.

The NYPBA maintains that the Judicial branch, in criminal and civil Courts, have always sustained the New York Professional Bail Bondsman’s and bail sureties’ contractual provisions which provide full disclosure and understanding to their consumers and to those released from jail on ‘bail bond’, without fail. The Department’s impermissible actions deviate from, and are, in clear violation of the law which demands that Bondsmen disclose to the Court their enforceable indemnity remedies as defined in New York Criminal Procedure law 520.20 (4) (ii), in each ‘Bail Affidavit’ while posting a bond with the Court. By contravening the law the Department has caused a major Constitutional crisis, and if not immediately self-corrected will lead to the extinction of the New York commercial bail industry and Professional Bail Bondsmen operating in New York state.

“For the government, through the Department, to illegally extend Bondsmen’s and bail sureties obligations and liabilities, by now suggesting that the statutory ‘premium and compensation’ also covers any and all contingencies of a private bail contract, which may occur after the bond was posted; does not only tortuously interfere and alter a Bondsmen’s and sureties’ contract, but also is unlawful, financially untenable, and reckless. If the Department is permitted to continue in this manner, it will completely eviscerate all Bondsmen and bail sureties’ private contractual rights to protect themselves against non-compliant clients and fugitive criminal defendants. It is illegal for the Department under the present laws to forbid licensed professional sureties, after financially fully binding themselves to the Courts, to be forcefully exposed, left unprotected and stripped of all binding legal remedies against its indemnities. If this is permitted, no Bondsman or bail insurance company would have any reason to remain in, or conduct bail business in the State of New York,” said Zouvelos.

The NYPBA contends that under these illegal conditions unilaterally perpetrated by the Department relating to 2010-0039C, without legislative enactment, no Bail Bondsman or bail insurance carrier would be able to operate with any hope of profit in New York. The extinction of New York Bail Bondsman crisis was previously addressed at the time New York State Senator Hon. DeFrancisco maintained while arguing the position in favor of increasing the ‘premium and compensation’ for the “giving of bail” only, stated as follows:

“I think these fees that were set in the 70’s aren't even substantial enough to do the paperwork that has to be prepared in order to get the individual released from jail, and all I’m doing is basically conforming our laws with what more than 40 States have done since 1970 and place the bail at a reasonable figure so that we will still have a bail bonds business in the State of New York available for defendants.” Page 2087 New York State Governor’s Bill Jacket, 1997, Chapter 400.

The recent First Department decision of Matter of Mayfield v. New York State Division of Parole, 93 A.D. 98, 938 N.Y.S.2d 290 1st Dept. 2012) held:

“It is true that a regulation adopted by an agency in implementation of the statutory scheme it is empowered to enforce, is to be read, if possible, in a manner consistent with, rather than in opposition to, the governing statute. However the Court cannot contort statutory language and elide legislative intent.”

An Insurance Department’s illegal actions have been addressed by the High Courts in other States. This strict rule of law was clearly enunciated only two months ago in, Two Jinn v. Idaho Department of Insurance, Docket # 38759, January 11, 2013, where the Idaho Supreme Court, in reviewing an Insurance Department’s illegal attempts to expand its purview, as the New York Insurance Department is attempting in New York.

“The plain test of I.C. section 41-1-42 permits a bail bond company to contemporaneously write a bail bond and contract with a client to indemnify the company..”and further noted that “the ability to enter freely into contracts that are neither illegal nor violate public policies is a substantial right” and further held that, “Therefore, we hold that merely contracting for future indemnity that is contingent on uncertain future events does not constitute a charge or collection within the meaning of the statute.” emphasis added.

Idaho’s Insurance Law regarding premium and compensation are even more comprehensive and thorough than New York’s Insurance law. However, that state’s highest Appellate Court recognized that the financial risks a Bail Bondsman assumes after the bail bond is posted is daunting.

The Bail Bondsman’s private bail contract / indemnity agreements have always been universal upheld for example in the Court decision of, Lee v. Thorpe, 147 P.3d 443 (2006, Sup. Ct Utah) the highest Court in Utah succinctly stated that the, “relationship between the Plaintiff’s and the defendants was one of Contract Law, and their interactions were consistent with that contract”-- and further solidified the point that “parties to a contract regarding the subject matter of that contract, the contractual relationship controls and the parties are not permitted to assert actions in tort in an attempt to circumvent the bargain they agreed on.”

he New York Court of Appeals in, Polan v. State of New York Insurance Department, 3 N.Y. 3d 54, 814 N.E.2d 789 (2004), condemned this type of illegal action by the New York Department of Insurance. Obviously the Department has not learned its lesson,” Zouvelos.

The Polan Court tested the authority of New York’s Superintendant of Insurance to promulgate rules which were not contained in the law or the legislative intent, and which contravened longstanding practices.

“When interpreting a statute, we turn first to its text as the best evidence of the Legislature’s intent. As a general rule, a statute’s plain language is dispositive.” Deference to an administrative agency’s “special competence or expertise does not come into play where, as is the case here, we are called upon to decide a question of pure statutory reading and analysis, dependent only on accurate legislative intent.” The Polan Court went further and stated in part...“we are unwilling to infer a legislative intent when to do so would upset longstanding industry practice …and, concluded that the Court would not “infer a mandate for radical change absent a clearer legislative command.”

The Polan Court tested the authority of New York’s Superintendant of Insurance to promulgate rules which were not contained in the law or the legislative intent, and which contravened longstanding practices.

“Our final reply** was sent yesterday to the New York Superintendant of Financial Services urging him not to ratify, and to dismiss with prejudice, the findings of NY DFS Docket No. 2010-0039-C. We expect that the Superintendant of the Department of Financial Services would acknowledge and follow precedent, and would fully comply with the letter of unambiguous law--especially in the face of the Polan edict.

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