The Bond Outside the Power of Attorney
Rick holds a power of attorney from Sentinel Surety authorizing him to execute appearance bonds up to $50,000 per bond and $250,000 in aggregate outstanding liability. The instrument is dated two years ago and states on its face that it expires on December 31 of the year after issuance. It is now February 14. Rick has $210,000 outstanding. The family of Andre, who is charged with second-degree theft, asks for a $75,000 bond and urges him to 'make it work.' Rick texts Sentinel's regional manager, who replies: 'Go ahead - I'll get you the paperwork Monday.' Rick signs Sentinel's name to a $75,000 bond, attaches a copy of the expired power of attorney, and files it with the clerk. The indemnity agreement is signed by Andre's girlfriend, who is 19, works part-time, and has no bank account. The $7,500 premium is paid by Andre's mother, who signs nothing. Rick tells the family, 'This covers anything new he picks up, too.' Andre fails to appear six weeks later, and the court enters judgment on the bond.
1. Evaluate Rick's authority at each step - the per-bond limit, the aggregate limit, the expired instrument, and the manager's text - and determine who bears the $75,000 loss.
Read the worked answer
Authority comes from the written power of attorney, and Rick was outside it three times over.
Per-bond limit. $75,000 exceeds the $50,000 ceiling by $25,000. Aggregate limit. He had $40,000 of headroom ($250,000 minus $210,000), so even a $40,000 bond would have consumed all of it. The instrument itself. It expired December 31 of the year after issuance; attaching an expired power of attorney to a bond filed with the court is a misrepresentation on the face of the document, and the clerk or jail may reject it. The text. A manager's text message is not an amendment to a power of attorney. Authority to exceed a limit has to come in a form the court and the insurer can rely on - a new or amended instrument with a current date and a stated limit.
Who bears the loss: the court will look to Sentinel Surety, because Sentinel's appointed agent signed and delivered the bond and the court accepted it. Sentinel pays the judgment (or posts a supersedeas bond) and then turns to Rick under the general agreement of indemnity, which typically covers losses caused by acts outside the agent's authority, plus costs and fees. Rick also faces an administrative complaint and possible termination. The manager's 'go ahead' may shift some internal blame, but it does not bind the court and does not create authority the power of attorney withheld.
2. Set out the sequence Rick should have followed to write this bond lawfully, and how the indemnity should have been structured.
Read the worked answer
The lawful sequence is short, but every step matters:
- Read the current power of attorney. Confirm the insurer, the per-bond limit, the aggregate limit, and the expiration date.
- Compute available aggregate room from the bond register, not from memory - here, $40,000.
- If the bond exceeds either limit, request a written amendment or a new instrument with a stated amount and current date. Get it before the defendant signs anything.
- Confirm the court will accept a surety bond on that case and at that amount.
- Take the premium, issue a receipt, execute the bond, deliver the power of attorney with it, and record the bond in the register the same day.
On indemnity: Andre's girlfriend is 19, so she can contract, but a part-time worker with no bank account is not meaningful security. The person paying the premium - Andre's mother - is the real party in interest and should have signed the indemnity agreement, with her assets verified and any collateral documented and secured. The agreement should cover the full bond amount, not just the premium, plus costs of apprehension and any judgment. Collateral should be described specifically, receipted, and held for the purpose stated. A bond is only as good as the indemnitor behind it, and an agent who takes a signature from the person present rather than the person with assets has not really underwritten anything.
3. Was the statement that the bond 'covers anything new' accurate? Explain what the bond covers and the consequences of the statement.
Read the worked answer
No. A bail bond is case-specific: it secures the defendant's appearance in the case named on the bond, for the amount and conditions the court set in that case. New charges are a new case with new bail, and they can also trigger a bond revocation hearing on the original case. A court will often hold the defendant on the new charge and set a separate bond; the original surety is not obligated to cover the new amount.
The statement matters for three reasons. First, it is a misrepresentation of the contract to a consumer who is making a decision based on it, which is exactly the kind of conduct the Division investigates. Second, if the family later refuses to pay a new premium because they believed they were covered, Rick has created a dispute he cannot win on the paperwork. Third, if Andre picks up a new charge and is held, Rick's failure to explain the situation may lead the family to blame him for a revocation he could have warned them about.
The correct explanation: 'This bond covers this case only. If he is arrested again, a new bail will be set and you will need a new bond or a cash deposit. He also has to appear at every hearing on this case or the bond can be forfeited.' Put it in writing.