BILL ANALYSIS SENATE JUDICIARY COMMITTEE Senator Ellen M. Corbett, Chair 2009-2010 Regular Session AB 680 Assemblymember Hall As Amended June 22, 2009 Hearing Date: July 1, 2009 Code of Civil Procedure; Government Code BCP:jd SUBJECT Local Government: Fees and Judgments DESCRIPTION Existing law provides that a specified amount of any fee collected by the sheriff's civil division or marshal for performing specified services must be deposited in a special fund in the county treasury for the exclusive use of the sheriff's civil division, while the remainder of the fee goes to the county. This bill would increase that amount from $10 to $15, and increase various fees for serving, executing, and processing required court notices, writs, orders, and other services provided by county sheriffs and marshals. Those increases would generally become effective January 1, 2011. This bill would revise several provisions relating to the collection of funds from judgment debtors, create an ex-parte application for relief when a levying officer has not paid funds to a person entitled to a money judgment, and exempt those actions from the Tort Claims Act. BACKGROUND The sheriff of a county is required under existing law to perform certain duties in addition to law enforcement, such as service of process, evictions, and the keeping and maintaining of property. Current law allows the sheriff to charge and collect fees to offset their costs. The fees that a sheriff may charge are set by statute. Periodically, the statutes governing the fees that a sheriff may (more) AB 680 (Hall) Page 2 of ? charge are revised to reflect increases in costs to the sheriff. This bill would revise various fees to reflect increased costs, and revise several provisions relating to the ability of a judgment creditor to collect amounts owed to them by a levying officer. CHANGES TO EXISTING LAW 1. Existing law prescribes the amounts of fees that may be charged for various services performed by county sheriffs and marshals. (Gov. Code Sec. 26720 et seq.) This bill , effective January 1, 2011, would increase the following fees from $30 to $35: The fee for serving or executing any process or notice. (Gov. Code Sec. 26721.) The fee for service of a summons, complaint, and prejudgment claim of right to possession in an action for unlawful detainer. (Gov. Code Sec. 26721.1.) The fee for serving, executing, or processing a writ of attachment, writ of execution, writ of sale, or order on real estate, and the fee for serving a record owner other than the defendant. (Gov. Code Sec. 26725.) The fee for preparing and posting the initial notice of personal property sale under a writ of attachment, execution, sale, or order of court. (Gov. Code Sec. 26728.) The fee for making a levy on personal property already in possession of the officer who is holding it under attachment in the same action. (Gov. Code Sec. 26734.) The fee for executing and delivering any other instrument (other than a certificate or deed of sale; deed or certificate of redemption). (Gov. Code Sec. 26742.) The fee for subpoenaing a witness. (Gov. Code Sec. 26743.) The fee for maintaining custody of property under levy by the use of a keeper for each day custody is maintained after the first day. (Gov. Code Sec. 26726(b).) The fee for making a not found return on specified documents required to be served, and certifying that the person or property cannot be found at the given address. (Gov. Code Sec. 26738.) This bill , effective January 1, 2011, would increase the fee for keeping and caring for property under a writ of AB 680 (Hall) Page 3 of ? attachment, execution, possession, or sale from $120 to $140, when employed for any eight-hour period or any part thereof. This bill would permit that increased fee to be charged by any additional sheriff who performs keeping services that are required, and increase the maximum amount a sheriff may receive in a 24-hour period from $240 to $280 (double the fee amount). (Gov. Code Sec. 26726(a).) This bill , effective January 1, 2011, would increase the fee that a keeper receives from $40 to 50, when, pursuant to Section 26738, a levying officer prepares a not-found return. (Gov. Code Sec. 26726(c).) This bill , effective January 1, 2011, would increase the fee for cancellation of service, or execution of any process or notice prior to its completion, from $28 to $36. (Gov. Code Sec. 26736.) 2. Existing law permits a court to issue a warrant for failure to appear pursuant to a subpoena or failure to appear pursuant to a court order, as an alternative to issuing a warrant for contempt, if certain statutory requirements are met. (Code Civ. Proc. Sec. 1993.) Existing law prescribes the fees for processing a warrant pursuant to Section 1993 that must be paid by the moving party. (Gov. Code Sec. 26744.5.) This bill , effective January 1, 2011, would increase those fees as follows: $30 to $35 to receive and process a warrant; $28 to $35 to cancel the service of the warrant; $60 to $75 if, using due diligence, the sheriff is unable to find the person at the address specified; and $75 to $85 to arrest the person. 3. Existing law provides that a $15 fee shall be assessed by the sheriff or marshal for certification of correction on each citation that requires inspection for proof of correction, as specified. (Gov. Code Sec. 26746.1.) This bill , effective January 1, 2011, would increase that fee to $17. 4. Existing law provides that $10 of any fee collected by the sheriff's civil division or marshal for performing specified services must be deposited in a special fund in the county treasury. (Gov. Code Sec. 26731.) AB 680 (Hall) Page 4 of ? This bill , effective January 1, 2011, would increase that amount to $15. 5. Existing law authorizes the sheriff to charge a $10 processing fee for each disbursement of money collected under a writ of attachment, execution, possession, or sale (except child support collections). (Gov. Code Sec. 26746.) This bill would increase that fee to $12. 6. Existing law provides that if a writ is issued to enforce a judgment, a levying officer must, among other things, compute and collect the amount of additional interest accrued on the principal amount of the judgment remaining unsatisfied from the date of issuance of the writ until the date interest ceases to accrue. Existing law permits the levying officer to adjust the amount of daily interest to reflect partial satisfaction, if the amounts collected periodically do not fully satisfy the money judgment. (Code Civ. Proc. Sec. 685.050.) This bill would, instead, require the levying officer to make that adjustment. 7. Existing law requires a levying officer to distribute the proceeds or collection of a money judgment by a writ of execution in order of priority, including to the judgment creditor to: (1) satisfy costs and interest accruing after the issuance of the writ pursuant to which the sale or collection is conducted; and (2) satisfy the amount due on the judgment with costs and interest, as entered on the writ. (Code Civ. Proc. Sec. 701.810.) This bill would clarify that the distribution of proceeds or collection from a money judgment to a judgment creditor must be in the following order: (1) any costs and interest accruing on the judgment after issuance of the writ, as specified; and (2) the principal amount due on the judgment with costs and interest as entered on the writ. 8. Existing law authorizes a person entitled to a money judgment held by a sheriff to make a demand for that money, and if the sheriff neglects or refuses to pay over to that person the amount owed, the person is authorized to recover the amount owed, 25 percent damages, and interest at a rate of AB 680 (Hall) Page 5 of ? 10 percent per month. (Gov. Code Sec. 26680.) Those provisions apply to a levying officer if: (1) the officer fails to pay the proceeds or deposit them with the court, as specified; (2) a person entitled to any of the proceeds has filed a written demand for payment with the levying officer; and (3) the levying officer has failed, within 10 days after the demand is filed, to pay the person that filed the demand the proceeds to which the person is entitled. (Code Civ. Proc. Sec. 701.820.) This bill would authorize a judgment creditor to file an ex-parte application for an order directing the levying officer to show cause why relief should not be granted pursuant to Section 26680 of the Government Code, as specified. This bill would provide that if the court finds the facts alleged in the ex-parte application to be knowingly false, or made in bad faith, the court may award costs and reasonable attorney fees to the levying officer. This bill would similarly allow the recovery of costs, including reasonable attorney's fees, under Section 26680. 9. Existing law requires the levying officer to promptly distribute the proceeds of a sale or collection to the entitled parties, and authorizes the levying officer, if proceeds are not to be received in one payment, to accumulate proceeds received during a 30 day period and make payment of those proceeds to the entitled parties within 20 days of the end of the 30-day period. (Code Civ. Proc. Sec. 701.820(c).) This bill would require the levying officer, if proceeds are not received in one payment, to make payment of those proceeds to the entitled parties within 10 days of the end of the 30-day period. 10. Existing law , the Tort Claims Act, provides that a claim for money or damages against the state or a local public entity must be presented in accordance with the terms of the Act. (Gov. Code Secs. 905, 905.2.) Existing law provides that thirteen specified claims against local public entities are exempted from the Act, including claims under the Revenue and Taxation Code, claims by public employees regarding salary and benefits, and worker's compensation claims. (Gov. Code Sect. 905.) AB 680 (Hall) Page 6 of ? This bill would exempt claims for the recovery of money from a levying officer pursuant to a money judgment under Section 26680, as specified, from the Act. COMMENT 1. Stated need for the bill According to the author: Under current law, a county sheriff's office is authorized to collect various civil fees for serving, executing, and processing required court notices, writs, orders and other services provided by a sheriff's order. While the costs associated with these services has increased dramatically in recent years, most of the civil fees have remained stagnant since 2000. Fuel prices alone have skyrocketed and personnel costs, such as pay, benefits, and other administrative costs have also increased significantly. 2. Increase in most of the fees consistent with inflation The Los Angeles County Sheriff's Department, sponsor, states that "[b]ased on the increased costs to conduct business, a moderate increase to some of the fees would greatly enhance our ability to continue to provide the same high level of service to the community." The proposed fee increases would range from five to twenty dollars for the various services provided by county sheriffs and marshals. Many of the proposed fees have not been increased since the passage of AB 1768 (Steinberg, Chapter 629, Statutes of 2000), and generally reflect their present amount adjusted for inflation. (For reference, the Bureau of Labor Statistics' CPI inflation calculator states that $30 in 2000 is the equivalent of $37.26 today.) The numerous sections for which a $30 fee would be increased to $35 reflect that change in value due to inflation. On the other hand, other sections, such as the fee for keepers (those who keep and care for property under a specified writ), were increased between 2001 and 2005. Those sections, and the date the current fee was implemented, are in the chart below. ----------------------------------------------------------------- |Government Code |Current fee / Date |Proposed fee | AB 680 (Hall) Page 7 of ? |Section |imposed | | |---------------------+---------------------+---------------------| |26726 - Keeping and |$120 for an 8 hour |$140 for an 8 hour | |caring for property |period, with a $240 |period, with a $280 | | |maximum in a 24 hour |maximum in a 24 hour | | |period. (2004) |period. (2004) | |---------------------+---------------------+---------------------| |26738 - Fee for a |$30 (2003) |$35 | |not found return | | | |---------------------+---------------------+---------------------| |26744.5 - Fees for |$30 to receive and |$35 to receive and | |processing a warrant |process the warrant |process the warrant | |pursuant to CCP 1993 |$28 to cancel |$35 to cancel | | |service |service | | |$60 if unable to |$75 if unable to | | |find the person at |find the person at | | |the address |the address | | |$75 to arrest the |$85 to arrest the | | |person |person | | |(enacted in 2005) | | |---------------------+---------------------+---------------------| |26746 - Processing |$10 (2003) |$12 | |fee for disbursement | | | |of money | | | ----------------------------------------------------------------- This bill would provide that all of the above fees would go into effect on January 1, 2011 with the exception of the increase proposed by Section 26746. That delayed enactment would prevent the imposition of the greater fees at a time when many individuals are already struggling due to decreased income and increased costs. Despite that delayed enactment, these proposed fee increases do follow several increases in civil filing fees, and present the committee with the fundamental policy choice about whether fees should be used to address a fiscal shortfall in a recession. It should be noted that nothing in this bill would affect the current ability of a litigant to seek a waiver of the above sheriffs' and marshals' fees if he or she cannot afford to pay those fees. (Gov. Code Sec. 26720.5, 68631; California Rules of Court 3.52, 3.61.) Given the current economic climate, it is unknown whether the proposed fee increases could increase the number of individuals seeking those waivers. 3. From every fee collected, sheriff may keep $15 as of January AB 680 (Hall) Page 8 of ? 1, 2011 Current law directs $10 of specified fees collected by the sheriff to a special fund in the county treasury, for the exclusive use of the sheriff's civil division. (Gov. Code Sec. 26731.) These are the fees for service of process, garnishments and levies, writs, keepers, etc that are performed by the sheriff's civil division or marshal. Section 26731 specifies that 95 percent of this special fund shall be used for equipment deemed necessary by the sheriff or marshal to execute this civil function, and 5 percent shall be used for administering the funds. AB 680 would increase this set-aside to $15 as of January 1, 2011. 4. Provisions relating to collection of funds from judgment debtors The author accepted the following provisions in the Assembly Judiciary Committee to address concerns of the California Association of Collectors (CAC) that some levying officers are not disbursing monies within the existing statutorily specified time periods. CAC states that the "failure to timely disburse the money delays payment to the judgment creditor, causes additional interest to accrue on the judgment to the detriment of the judgment debtor, and delays the filing of a satisfaction of the judgment." a. Ability for a judgment creditor to file an ex-parte application Existing law requires a levying officer to distribute the proceeds of a sale, or collection, to the persons entitled to them within 30 days after they are received. (Code Civ. Proc. Sec. 701.820.) If the levying officer (sheriff) fails to pay the proceeds in a timely manner, the person entitled to the proceeds has filed a written demand for payment, and the levying officer fails to pay within 10 days after that demand, the provisions of Section 26680 of the Government Code apply. That section provides that if a sheriff neglects or refuses to pay a person entitled to money, that person may recover that amount and 25 percent damages and interest at the rate of 10 AB 680 (Hall) Page 9 of ? percent per month from the time of demand. In addition to clarifying that the demand may be filed in person, or by certified mail, this bill would allow a judgment creditor to file an ex-parte application for an order directing the levying officer to show cause why relief should not be granted pursuant to Section 26680 of the Government Code. That order must name a date and time for the levying officer to appear not less than 20 and not more than 30 days after the filing of the application. This bill would also specify the contents of the ex-parte application and provide that if a court finds those facts to be knowingly false, or made in bad faith, the court may award costs and reasonable attorney's fees to the levying officer. Although attorney's fees are generally awarded to facilitate access to the court system, they are sometimes awarded to a defendant in the case of a frivolous or unwarranted action. In this case, the proposed attorney's fees serve to both deter judgment creditors from making false claims and to compensate levying officers for their time spent defending those claims. (This bill would also amend Section 26680 to permit the recovery of costs and reasonable attorney's fees when the sheriff has failed to pay over money entitled to the person, as specified.) b. Exemption from the Tort Claims Act Under the requirements of the Tort Claims Act, a claim must be filed with a government entity to describe the person's basis for seeking money or damages. (Gov. Code Sec. 910.) Claims must be presented within six months or one year of the accrual of the cause of action, as specified. (Gov. Code Sec. 911.2.) Upon timely receipt of a claim, the entity must grant or deny the claim. (Gov. Code Sec. 911.6.) Where compliance with the Tort Claims Act is required, no suit may be brought against the public entity for money or damages until the entity has acted on the claim filed with the entity. (Gov. Code Sec. 945.4.) Under existing law, there are thirteen specified claims against local public entities that are exempted from the Act. This bill would add claims for the recovery of a money judgment, as described in Comment 4(a). That allowance would ensure that a judgment creditor could bring their claim pursuant to the proposed ex-parte process without having to AB 680 (Hall) Page 10 of ? first submit their claim under the Tort Claims Act. Support : California Association of Legal Support Professionals; Association for Los Angeles Deputy Sheriffs; Sacramento County Sheriff's Department; Perry L. Reniff, Sheriff of Butte County; Tom Bosenko, Sheriff of Shasta County; Keith Royal, Sheriff of Nevada County; Gregory Ahern, Sheriff of Alameda County; Brian Muller, Sheriff of Mariposa County; Warren Rupe, Sheriff of Contra Costa County; Peace Officers Research Association of California (PORAC); California State Association of Counties (CSAC); Regional Council of Rural Counties (RCRC); California Correctional Supervisors Organization (CCSO); Bill Lutze, Sheriff of Inyo County; Office of the Sheriff, San Bernardino County; Phil Wowak, Acting Sheriff of Santa Cruz County; Santa Clara County Board of Supervisors; Riverside Sheriffs' Association; Jeff Neves, Sheriff of El Dorado County Opposition : None Known HISTORY Source : Los Angeles County Sheriff's Department Related Pending Legislation : None Known Prior Legislation : AB 1768 (Steinbeg, Chapter 629, Statutes of 2000), revised and increased prescribed fees charged for serving, executing and processing required court notes, writs, orders, and other services provided by sheriffs and marshals. AB 394 (Montanez, Chapter 888, Statutes of 2003), adjusted and designated the fees charged for certain civil process functions provided by sheriffs. AB 2137 (Steinberg, Chapter 327, Statutes of 2004), increased various law enforcement fees. AB 1150 (La Suer, Chapter 474, Statutes of 2005), enacted a series of requirements to govern the issuance and execution of civil arrest warrants for failure to appear pursuant to a subpoena or a court order, and established that the sheriff may obtain specified fees for the processing and execution of a warrant. AB 680 (Hall) Page 11 of ? Prior Vote : Assembly Judiciary Committee (Ayes 8, Noes 2) Assembly Floor (Ayes 64, Noes 13) **************