BILL NUMBER: AB 1459 CHAPTERED BILL TEXT CHAPTER 618 FILED WITH SECRETARY OF STATE OCTOBER 6, 2005 APPROVED BY GOVERNOR OCTOBER 6, 2005 PASSED THE ASSEMBLY SEPTEMBER 7, 2005 PASSED THE SENATE SEPTEMBER 6, 2005 AMENDED IN SENATE AUGUST 30, 2005 AMENDED IN SENATE AUGUST 15, 2005 AMENDED IN SENATE JULY 6, 2005 AMENDED IN SENATE JUNE 21, 2005 AMENDED IN ASSEMBLY MAY 18, 2005 AMENDED IN ASSEMBLY MAY 11, 2005 AMENDED IN ASSEMBLY MAY 4, 2005 AMENDED IN ASSEMBLY APRIL 19, 2005 INTRODUCED BY Assembly Member Canciamilla (Principal coauthor: Senator Simitian) FEBRUARY 22, 2005 An act to amend Sections 116.240, 116.610, and 116.940 of, and to add Sections 116.221 and 116.222 to, the Code of Civil Procedure, relating to small claims court. LEGISLATIVE COUNSEL'S DIGEST AB 1459, Canciamilla Small claims court: jurisdiction. (1) Existing law specifies that the jurisdiction of the small claims court includes various actions in which the demand does not exceed $5,000, with certain exceptions. This bill would increase the small claims court jurisdiction over actions brought by a natural person, if the amount does not exceed $7,500, with specified exceptions. The bill would also require, in small claims court actions to enforce the payment of a debt, that the statement of calculation of liability separately state the original debt, and other payments to the debt, as specified. (2) Existing law authorizes small claims court cases to be heard by temporary judges who are members of the State Bar, and who are sworn and empowered to act in this capacity. On and after July 1, 2006, this bill would require temporary judges, prior to serving in small claims court, and every 3 years thereafter, to take a course of study, offered by the courts on ethics and substantive law under rules adopted by the Judicial Council, covering specified state, federal, and local laws, with assistance from the Department of Consumer Affairs, if fiscally able to provide that assistance. (3) Existing law requires each small claims court advisory service, offered without charge to litigants and potential litigants, to provide individual personal advisory services, in person or by telephone, and by any other means reasonably calculated to provide timely and appropriate assistance. This bill would require the topics covered by individual personal advisory services to include preparation of small claims court filings, procedures, including procedures related to the conduct of the hearing, and information on the collection of small claims court judgments. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. (a) The Legislature finds and declares that the quality of and access to justice in small claims court in California varies widely from jurisdiction to jurisdiction. The small claims court system should be improved in the following ways: (1) Commissioners and temporary judges adjudicate many complex issues including, but not limited to, consumer law, rent deposit law, tort law, and contract law. In a report commissioned by the Administrative Office of the Courts, entitled the "California Three Track Civil Litigation Study," Policy Studies, Incorporated reported that paid court commissioners, "see the full panoply of issues raised in small claims cases, and part of their job is to become knowledgeable in the areas of law likely to arise in small claims court. Further, they have the time and duty to research issues of law likely to arise in small claims court... (and those) that arise with which they are not familiar." The potential knowledge gap between temporary judges and commissioners should be narrowed through increased use of commissioners and the use of well-trained, qualified temporary judges in small claims court in order to ensure an improved ability to deliver justice. (2) For advisers, improvements need to be made in the availability of in-person assistance, in the knowledge and experience of the advisers, and in the advice being given or supervised by attorneys, so that the assistance can include advice about how to present and defend a claim. (3) Qualified interpreters are not available in many jurisdictions in California. With the increasing linguistic diversity in California's population in recent decades, the need for interpreter services has grown proportionately. (b) (1) It is the intent of the Legislature to raise the jurisdictional limit for natural persons only. The jurisdictional increase in this act is limited to natural persons, and is subject to other existing restrictions. It is the intent of the Legislature in limiting the increase to natural persons that other forms of persons, including, but not limited to, corporations, partnerships, unincorporated associations, governmental entities, and any other forms of persons as may now exist or may exist in the future, other than individuals, do not qualify for the jurisdictional increase under this act. (2) It is the intent of the Legislature that the jurisdictional limit of subdivision (a) of Section 116.231 of the Code of Civil Procedure and subdivision (c) of Section 116.220 of the Code of Civil Procedure shall not be changed by this legislation. (3) It is the intent of the Legislature that jurisdictional limits shall not be raised again, particularly with respect to individuals as defendants, until services are funded at a level sufficient to provide all of the following: (A) In-person advice from advisers who are legal professionals. (B) Staffing levels that are adequate to meet the demand, and also adequate to permit the small claims court advisory service to provide services to both parties in a small claims court case without conflicts of interest. (C) Professional, well-trained, compensated decisionmakers, in small claims court in all counties in California, who meet standards established by the Judicial Council. (4) It is the intent of the Legislature that temporary judges should be well-trained and knowledgeable of state and federal consumer laws, including, but not limited to, rent deposit law, the state and federal Fair Debt Collection Practices Acts, the federal Truth in Lending Act, the federal Fair Credit Billing Act, the federal Electronic Fund Transfer Act, tort law, online purchasing law and other contract law, defenses to contract claims, defenses to debts, and other laws determined by the Judicial Council and the courts to be important in the adjudication of small claims cases. SEC. 2. Section 116.221 is added to the Code of Civil Procedure, to read: 116.221. In addition to the jurisdiction conferred by Section 116.220, the small claims court has jurisdiction in an action brought by a natural person, if the amount of the demand does not exceed seven thousand five hundred dollars ($7,500), except for actions otherwise prohibited by subdivision (c) of Section 116.220 or subdivision (a) of Section 116.231. SEC. 3. Section 116.222 is added to the Code of Civil Procedure, to read: 116.222. If the action is to enforce the payment of a debt, the statement of calculation of liability shall separately state the original debt, each payment credited to the debt, each fee and charge added to the debt, each payment credited against those fees and charges, all other debits or charges to the account, and an explanation of the nature of those fees, charges, debits, and all other credits to the debt, by source and amount. SEC. 4. Section 116.240 of the Code of Civil Procedure is amended to read: 116.240. (a) With the consent of the parties who appear at the hearing, the court may order a case to be heard by a temporary judge who is a member of the State Bar, and who has been sworn and empowered to act until final determination of the case. (b) Prior to serving as a temporary judge in small claims court, on and after July 1, 2006, and at least every three years thereafter, each temporary judge shall take the course of study offered by the courts on ethics and substantive law under rules adopted by the Judicial Council. The course shall include, but not be limited to, state and federal consumer laws, landlord-tenant law along with any applicable county specific rent deposit law, the state and federal Fair Debt Collection Practices Acts, the federal Truth in Lending Act, the federal Fair Credit Billing Act, the federal Electronic Fund Transfer Act, tort law, and contract law, including defenses to contracts and defenses to debts. On substantive law, the courts may receive assistance from the Department of Consumer Affairs, to the extent that the department is fiscally able to provide that assistance. SEC. 5. Section 116.610 of the Code of Civil Procedure is amended to read: 116.610. (a) The small claims court shall give judgment for damages, or equitable relief, or both damages and equitable relief, within the jurisdictional limits stated in Sections 116.220 and 116.231, and may make any orders as to time of payment or otherwise as the court deems just and equitable for the resolution of the dispute. (b) The court may, at its discretion or on request of any party, continue the matter to a later date in order to permit and encourage the parties to attempt resolution by informal or alternative means. (c) The judgment shall include a determination whether the judgment resulted from a motor vehicle accident on a California highway caused by the defendant's operation of a motor vehicle, or by the operation by some other individual, of a motor vehicle registered in the defendant's name. (d) If the defendant has filed a claim against the plaintiff, or if the judgment is against two or more defendants, the judgment, and the statement of decision if one is rendered, shall specify the basis for and the character and amount of the liability of each of the parties, including, in the case of multiple judgment debtors, whether the liability of each is joint or several. (e) If specific property is referred to in the judgment, whether it be personal or real, tangible or intangible, the property shall be identified with sufficient detail to permit efficient implementation or enforcement of the judgment. (f) In an action against several defendants, the court may, in its discretion, render judgment against one or more of them, leaving the action to proceed against the others, whenever a several judgment is proper. (g) (1) The prevailing party is entitled to the costs of the action, including the costs of serving the order for the appearance of the defendant. (2) Notwithstanding paragraph (1) of this subdivision and subdivision (b) of Section 1032, the amount of the small claims court fee paid by a party pursuant to subdivision (c) of Section 116.230 that exceeds the amount that would have been paid if the party had paid the fee pursuant to subdivision (b) of Section 116.230 shall not be recoverable as costs. (h) When the court renders judgment, the clerk shall promptly deliver or mail notice of entry of the judgment to the parties, and shall execute a certificate of personal delivery or mailing and place it in the file. (i) The notice of entry of judgment shall be on a form approved or adopted by the Judicial Council. SEC. 6. Section 116.940 of the Code of Civil Procedure is amended to read: 116.940. (a) Except as otherwise provided in this section or in rules adopted by the Judicial Council, which are consistent with the requirements of this section, the characteristics of the small claims advisory service required by Section 116.260 shall be determined by each county in accordance with local needs and conditions. (b) Each advisory service shall provide the following services: (1) Individual personal advisory services, in person or by telephone, and by any other means reasonably calculated to provide timely and appropriate assistance. The topics covered by individual personal advisory services shall include, but not be limited to, preparation of small claims court filings, procedures, including procedures related to the conduct of the hearing, and information on the collection of small claims court judgments. (2) Recorded telephone messages may be used to supplement the individual personal advisory services, but shall not be the sole means of providing advice available in the county. (3) Adjacent counties may provide advisory services jointly. (c) In any county in which the number of small claims actions filed annually is 1,000 or less as averaged over the immediately preceding two fiscal years, the county may elect to exempt itself from the requirements set forth in subdivision (b). This exemption shall be formally noticed through the adoption of a resolution by the board of supervisors. If a county so exempts itself, the county shall nevertheless provide the following minimum advisory services in accordance with rules adopted by the Judicial Council: (1) Recorded telephone messages providing general information relating to small claims actions filed in the county shall be provided during regular business hours. (2) Small claims information booklets shall be provided in the court clerk's office of each superior court, the county administrator' s office, other appropriate county offices, and in any other location that is convenient to prospective small claims litigants in the county. (d) The advisory service shall operate in conjunction and cooperation with the small claims division, and shall be administered so as to avoid the existence or appearance of a conflict of interest between the individuals providing the advisory services and any party to a particular small claims action or any judicial officer deciding small claims actions. (e) Advisers may be volunteers, and shall be members of the State Bar, law students, paralegals, or persons experienced in resolving minor disputes, and shall be familiar with small claims court rules and procedures. Advisers may not appear in court as an advocate for any party. (f) Advisers, including independent contractors, other employees, and volunteers have the immunity conferred by Section 818.9 of the Government Code with respect to advice provided as a public service on behalf of a court or county to small claims litigants and potential litigants under this chapter.