Court: District Court of Appeal of Florida; August 18, 1987; Florida; State Appellate Court
In November 1981, Allied Fidelity Insurance Company issued a $125,000 appearance bond for Dana Green, who was facing drug-related charges in Virginia. Dana Green's parents, Robert and Anita Green, provided a note and mortgage as collateral for the bond. Following Dana Green's failure to appear in court, the bond was forfeited, prompting Allied Fidelity to initiate foreclosure proceedings on the mortgage and seek a judgment against Dana Green.
The trial court dismissed the foreclosure action, citing Allied Fidelity's failure to file an affidavit required by section 903.14 of the Florida Statutes, which mandates that a surety must submit an affidavit detailing any security received for the bond. The court ruled that since the mortgage was executed in Florida, it was subject to Florida law, including this affidavit requirement.
Section 903.14 is a procedural statute that aims to limit the security a surety can claim from an indemnitor and ensures that indemnification agreements are documented. It also protects the indemnitor from liabilities beyond the terms specified in the affidavit. Upon bond forfeiture, the bond and affidavits are to be transmitted to the appropriate circuit court clerk, creating a lien on the described real property for two years or until a final determination of related actions.
However, the court found that these procedural requirements pertain only to bonds posted in Florida courts and do not extend to bonds filed in foreign jurisdictions like Virginia, which lacks similar affidavit requirements. Consequently, the trial court's dismissal was an error because the affidavit requirement of section 903.14 did not apply to the bond executed in Virginia. Allied Fidelity should be permitted to proceed with its foreclosure action.
The order has been reversed and remanded for further proceedings, with Judges Shivers and Nimmons concurring. Section 903.14 equates an indemnitor with a surety, transferring the risk of loss to the indemnitor upon bond forfeiture, making them the true bondsman. Requiring written indemnity agreements allows indemnitors to safeguard the property at risk. In United Bonding Insurance Co. v. Tuggle, the court recognized this principle. Additionally, in Ewing v. Kaplan, the affidavit's purpose was to notify the sheriff of the indemnitor’s interest, enabling them to claim the surety's right to recapture the defendant and avert bond estreature. In this case, the mortgage restricts the surety's recovery from indemnitors to the mortgaged property's value, effectively limiting indemnitors’ liability to the terms established when the bond was issued, achieving the same statutory outcome despite the absence of an affidavit.
