BILL NUMBER: AB 2365	CHAPTERED
	BILL TEXT

	CHAPTER  385
	FILED WITH SECRETARY OF STATE  SEPTEMBER 27, 2010
	APPROVED BY GOVERNOR  SEPTEMBER 25, 2010
	PASSED THE SENATE  AUGUST 9, 2010
	PASSED THE ASSEMBLY  AUGUST 12, 2010
	AMENDED IN SENATE  AUGUST 2, 2010
	AMENDED IN ASSEMBLY  APRIL 8, 2010

INTRODUCED BY   Assembly Member Lieu

                        FEBRUARY 19, 2010

   An act to amend Sections 401, 402, 404, 405, 406, 407, 408, 409.1,
409.3, and 409.4 of, and to add Sections 409.14, 812, and 829 to,
the Military and Veterans Code, relating to veterans.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2365, Lieu. Veterans affairs: administration.
   Existing law provides legal rights, as specified, for service
members in regard to credit agreements, court proceedings, interest
liabilities, eviction proceedings, contracts, mortgages and trusts,
leases, life insurance policies, taxes and assessments, and health
insurance policies.
   This bill would hold a person who violates any of the specified
rights liable for actual damages, reasonable attorney's fees, and
costs incurred by an injured party. This bill would also waive the
filing fee and court costs for a party seeking to enforce the rights.

   Existing law authorizes a service member to apply to the court for
relief of an obligation, liability, tax, or assessment, as
specified. Existing law requires a party to provide notice before the
court grants relief. Existing law requires the court to provide a
hearing before granting or denying relief.
   This bill would require the court to set a hearing date within 25
days after a petition is filed, unless good cause is shown to delay
the date of the hearing. This bill would prohibit the court from
charging a filing fee or court costs for filing a petition for
relief.
   Existing law, the California Military Families Financial Relief
Act and the California Military Families Financial Relief Act of
2005, provides financial relief, as specified, for a service member
who is called to active duty.
   This bill would hold a person who violates these specified rights
of service members liable for actual damages, reasonable attorney's
fees, and costs incurred by a person seeking to enforce the rights.
This bill would also waive the filing fee and court costs for a
person seeking to enforce the specified rights.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 401 of the Military and Veterans Code is
amended to read:
   401.  (a) Application by a service member for, or receipt by a
service member of, a stay, postponement, or suspension pursuant to
this chapter in the payment of any tax, fine, penalty, insurance
premium, or other civil obligation or liability of that person shall
not itself, without regard to other considerations, provide the basis
for any of the following:
   (1) A determination by any lender or other person that the service
member is unable to pay any civil obligation or liability in
accordance with its terms.
   (2) With respect to a credit transaction between a creditor and
the service member, any of the following:
   (A) A denial or revocation of credit by the creditor.
   (B) A change by the creditor in the terms of an existing credit
arrangement.
   (C) A refusal by the creditor to grant credit to the service
member in substantially the amount or on substantially the terms
requested.
   (3) An adverse report relating to the creditworthiness of the
service member by or to any person or entity engaged in the practice
of assembling or evaluating consumer credit information.
   (4) A refusal by an insurer to insure the service member.
   (b) Any person violating any provision of this section is liable
for actual damages, reasonable attorney's fees, and costs incurred by
the injured party.
   (c) Any person violating any provision of this section is guilty
of a misdemeanor, and shall be punishable by imprisonment not to
exceed one year or by a fine not to exceed one thousand dollars
($1,000), or both.
  SEC. 2.  Section 402 of the Military and Veterans Code is amended
to read:
   402.  (a) In any action or proceeding commenced in any court, if
there shall be a default of any appearance by the defendant, the
plaintiff, before entering judgment shall file in the court a
declaration under penalty of perjury setting forth facts showing that
the defendant is not in the military service. If unable to file that
declaration, the plaintiff shall, in lieu thereof, file a
declaration setting forth either that the defendant is in the service
or that the plaintiff is not able to determine whether or not the
defendant is in the service. If a declaration is not filed showing
that the defendant is not in the military service, no judgment shall
be entered without first securing an order of court directing that
entry, and no order shall be made if the defendant is in the military
service until after the court appoints an attorney to represent the
defendant and protect his or her interest, and the court shall, on
application, make that appointment. Unless it appears that the
defendant is not in the military service the court may require, as a
condition before judgment is entered, that the plaintiff file a bond
approved by the court conditioned to indemnify the defendant, if in
the military service, against any loss or damage that he or she may
suffer by reason of any judgment should the judgment be thereafter
set aside in whole or in part. The court may make such other and
further order or enter that judgment as in its opinion may be
necessary to protect the rights of the defendant under this section.
   (b) Any person who shall, for purposes of this section, make or
use a declaration declared to be true under penalty of perjury,
knowing it to be false, is guilty of a misdemeanor and shall be
punishable by imprisonment not to exceed one year or by a fine not to
exceed one thousand dollars ($1,000), or both. That person also is
liable for actual damages, reasonable attorney's fees, and costs
incurred by the injured party.
   (c) In any action or proceeding in which a service member is a
party, if the service member does not personally appear therein or is
not represented by an authorized attorney, the court may appoint an
attorney to represent him or her. In that case a bond may be required
and an order made to protect the rights of the service member.
However, no attorney appointed under this chapter to protect a
service member shall have the power to waive any right of the person
for whom he or she is appointed or bind him or her by his or her
acts.
   (d) If any judgment shall be rendered in any action or proceeding
governed by this chapter against any service member during the period
of that service or within 30 days thereafter, and it appears that
the service member was prejudiced by reason of his or her military
service in making his or her defense thereto, the judgment may, upon
application made by the service member or his or her legal
representative not later than 90 days after the termination of the
service, be opened by the court rendering the same and the defendant
or his or her legal representative let in to defend; provided the
application states a meritorious or legal defense to the action or
some part thereof. Vacating, setting aside, or reversing any judgment
by reason of this chapter shall not impair any right or title
acquired by any bona fide purchaser for value under that judgment.
  SEC. 3.  Section 404 of the Military and Veterans Code is amended
to read:
   404.  (a) The period of military service shall not be included in
computing any period now or hereafter to be limited by any law,
regulation, or order for the bringing of any action or proceeding in
any court, board, bureau, commission, department, or other agency of
government by or against any service member or by or against his or
her heirs, executors, administrators, or assigns, whether the cause
of action or the right or privilege to institute the action or
proceeding accrued prior to or during the period of service, nor
shall any part of the period be included in computing any period now
or hereafter provided by any law for the redemption of real property
sold or forfeited to enforce any obligation, tax, or assessment.
   (b) This section shall not apply with respect to any period of
limitation prescribed by or under the federal Internal Revenue Code.
   (c) Any person violating this section shall be liable for actual
damages, reasonable attorney's fees, and costs incurred by the
injured party.
   (d) Any person violating any provision of this section is guilty
of a misdemeanor, and shall be punishable by imprisonment not to
exceed one year or by a fine not to exceed one thousand dollars
($1,000), or both.
  SEC. 4.  Section 405 of the Military and Veterans Code is amended
to read:
   405.  (a) No obligation or liability bearing interest at a rate in
excess of 6 percent per year incurred by a service member before
that person's entry into service shall, during any part of the period
of military service, bear interest at a rate in excess of 6 percent
per year unless, in the opinion of the court, upon application
thereto by the obligee, the ability of the service member to pay
interest upon that obligation or liability at a rate in excess of 6
percent per year is not materially affected by reason of that
service, in which case the court may make that order as in its
opinion may be just. As used in this section, "interest" includes
service charges, renewal charges, fees, or any other charges, except
bona fide insurance, in respect of any obligation or liability.
   (b) Any person violating this section shall be liable for actual
damages, reasonable attorney's fees, and costs incurred by the
injured party.
  SEC. 5.  Section 406 of the Military and Veterans Code is amended
to read:
   406.  (a) No eviction or distress shall be made during the period
of military service specified in Section 400, during which a service
member is called to active state service pursuant to Section 143 or
146 or active federal service pursuant to Title 10 or 32 of the
United States Code or active duty, until 30 days after the service
member is released from active service or duty if the premises are
occupied primarily for dwelling purposes by the spouse, children, or
other dependents of a service member, except upon leave of court
granted upon application therefor or granted in an action or
proceeding affecting the right of possession.
   (b) On any application or in any action under this section, the
court may on its own motion, and shall, on application, stay the
proceedings for the period specified in subdivision (a) or rather
than granting a complete stay, the court may require the tenant to
make regular partial payments during the service member's period of
military service, or the court may make any other order that it finds
to be just, unless the court finds that the ability of the tenant to
pay the agreed rent is not materially affected by that military
service. Where that stay is made by the court, the owner of the
premises shall be entitled, upon application therefor, to relief in
respect of those premises similar to that granted persons in military
service in Sections 407, 408, and 409.1 to that extent and for that
period as may appear to the court to be just.
   (c) Any person violating this section shall be liable for actual
damages, reasonable attorney's fees, and costs incurred by the
injured party.
   (d) Any person who knowingly takes part in any eviction or
distress as provided in this section or who attempts to do so, is
guilty of a misdemeanor, and shall be punishable by imprisonment not
to exceed one year or by a fine not to exceed one thousand dollars
($1,000), or both.
  SEC. 6.  Section 407 of the Military and Veterans Code is amended
to read:
   407.  (a) No person who has received, or whose assignor has
received, under a contract for the purchase of real or personal
property, a deposit or installment of the purchase price, or a
deposit or installment under the contract, from a person or from the
assigner of a person who, after the date of payment of the deposit or
installment, has entered military service, shall exercise any right
or option under that contract to rescind or terminate the contract or
resume possession of the property for nonpayment of any installment
due or for any other breach of its terms occurring prior to or during
the period of that military service, except by action in a court of
competent jurisdiction.
   (b) Upon the hearing of that action as provided in subdivision
(a), the court may order the repayment of prior installments or
deposits or any part, as a condition of terminating the contract and
resuming possession of the property, or may, in its discretion, on
its own motion, and shall, on application to it by the service member
or some person on the service member's behalf, order a stay of
proceedings as the court deems just, unless in the opinion of the
court, the ability of the defendant to comply with the terms of the
contract is not materially affected by reason of the service; or it
may make any other disposition of the case as may be equitable to
conserve the interests of all parties.
   (c) Any person violating this section shall be liable for actual
damages, reasonable attorney's fees, and costs incurred by the
injured party.
   (d) Any person who shall knowingly resume possession of property
that is the subject of this section in a manner other than as
provided in subdivision (a), or attempts to do so, is guilty of a
misdemeanor, and shall be punishable by imprisonment not to exceed
one year or by a fine not to exceed one thousand dollars ($1,000), or
both.
  SEC. 7.  Section 408 of the Military and Veterans Code is amended
to read:
   408.  (a) This section shall apply only to obligations secured by
mortgage, trust deed, or other security in the nature of a mortgage
upon real or personal property owned by a service member at the
commencement of the period of the military service and still so owned
by the service member whose obligations originated prior to the
person's period of military service.
   (b) In any proceeding commenced in any court during the period of
military service to enforce that obligation as provided in
subdivision (a) arising out of nonpayment of any sum due or out of
any other breach of the terms of the mortgage, trust deed, or other
security occurring prior to or during the period of the service the
court may, after hearing and in its discretion on its own motion, and
shall, on application to it by the service member or some person on
the defendant's behalf, unless in the opinion of the court the
ability of the defendant to comply with the terms of the obligation
is not materially affected by reason of the defendant's military
service, do either of the following:
   (1) Stay the proceedings for any period as the court deems just.
   (2) Make any other disposition of the case as may be equitable to
conserve the interests of all parties.
   (c) No sale, foreclosure, or seizure of property for nonpayment of
any sum due under any obligation as provided in subdivision (a), or
for any other breach of the terms thereof, whether under a power of
sale, under a judgment entered upon warrant of attorney to confess
judgment contained therein, or otherwise, shall be valid if made
during the period of military service or within three months
thereafter, except pursuant to an agreement between the parties,
unless upon an order previously granted by the court and a return
thereto made and approved by the court.
   (d) Any person violating this section shall be liable for actual
damages, reasonable attorney's fees, and costs incurred by the
injured party.
   (e) Any person who shall knowingly make or cause to be made any
sale, foreclosure, or seizure of property, defined as invalid by
subdivision (c), or attempts to do so, is guilty of a misdemeanor,
and shall be punishable by imprisonment not to exceed one year or by
a fine not to exceed one thousand dollars ($1,000), or both.
  SEC. 8.  Section 409.1 of the Military and Veterans Code is amended
to read:
   409.1.  (a) Where any life insurance policy on the life of a
service member in military service has been assigned prior to that
person's period of military service to secure the payment of any
obligation of the person, no assignee of the policy, except the
insurer in connection with a policy loan, shall, during the period of
military service of the insured or within one year thereafter,
except upon the consent in writing of the insured made during that
period or when the premiums thereon are due and unpaid or upon the
death of the insured, exercise any right or option by virtue of that
assignment unless upon leave of court granted upon an application
made therefor by the assignee. The court may thereupon refuse to
grant that leave unless in the opinion of the court the ability of
the obligor to comply with the terms of the obligation is not
materially affected by reason of his or her military service.
   (b) No person shall exercise any right to foreclose or enforce any
lien for storage of household goods, furniture, or personal effects
of a service member during that person's period of military service
and for three months thereafter, except upon an order previously
granted by a court upon application therefor and a return thereto
made and approved by the court. In that proceeding the court may,
after hearing, in its discretion on its own motion, and shall, on
petition to it by a service member or some person on his or her
behalf, unless in the opinion of the court the ability of the
defendant to pay the storage charges due is not materially affected
by reason of his or her military service, do either of the following:

   (1) Stay the proceedings as provided in this chapter.
   (2) Make that other disposition of the case as may be equitable to
conserve the interest of all parties. This section shall not be
construed in any way as affecting or as limiting the scope of Section
408.
   (c) Any person violating this section shall be liable for actual
damages, reasonable attorney's fees, and costs incurred by the
injured party.
   (d) A person violating any provision of this section is guilty of
a misdemeanor, and shall be punishable by imprisonment not to exceed
one year or by a fine not to exceed one thousand dollars ($1,000), or
both.
  SEC. 9.  Section 409.3 of the Military and Veterans Code is amended
to read:
   409.3.  (a) A service member may, at any time during his or her
period of military service or within six months thereafter, petition
a court for relief in respect of any obligation or liability incurred
by the service member prior to his or her period of military service
or in respect of any tax or assessment whether falling due prior to
or during his or her period of military service.
   (b) The court shall set a hearing on the petition within 25 days
from the date the petition is filed, unless the court shows good
cause for extending the date of the hearing. The petition shall be
served at least 10 days before the hearing. The respondent shall file
and serve a response to the petition at least five days before the
hearing.
   (c) The court shall not charge a filing fee or court costs for a
petition filed pursuant to this section.
   (d) The court, after notice and hearing, unless in its opinion the
ability of the petitioner to comply with the terms of the obligation
or liability or to pay the tax or assessment has not been materially
affected by reason of his or her military service, may grant the
following relief:
   (1) In the case of an obligation payable under its terms in
installments under a contract for the purchase of real estate, or
secured by a mortgage or other instrument in the nature of a mortgage
upon real estate, a stay of the enforcement of the obligation during
the applicant's period of military service and, from the date of
termination of the period of military service or from the date of
application if made after the service, for a period equal to the
period of the remaining life of the installment contract or other
instrument plus a period of time equal to the period of military
service of the applicant or any part of the combined period, subject
to payment of the balance of principal and accumulated interest due
and unpaid at the date of termination of the period of military
service or from the date of application, as the case may be, in equal
installments during the combined period at the rate of interest on
the unpaid balance as is prescribed in the contract, or other
instrument evidencing the obligation, for installments paid when due,
and subject to any other terms as may be just.
   (2) In the case of any other obligation, liability, tax, or
assessment, a stay of the enforcement thereof during the applicant's
period of military service and, from the date of termination of the
period of military service or from the date of application if made
after the service, for a period of time equal to the period of
military service of the applicant or any part of that period, subject
to payment of the balance of principal and accumulated interest due
and unpaid at the date of termination of the period of military
service or the date of application, as the case may be, in equal
periodic installments during the extended period at the rate of
interest as may be prescribed for the obligation, liability, tax, or
assessment, if paid when due, and subject to any other terms as may
be just.
   (e) (1) When any court has granted a stay as provided in this
section, no fine or penalty shall accrue during the period the terms
and conditions of the stay are complied with by reason of failure to
comply with the terms or conditions of the obligation, liability,
tax, or assessment in respect of which the stay was granted.
   (2) If a person has charged or accrued a fine or penalty in
violation of paragraph (1), that person shall be liable for actual
damages, reasonable attorney's fees, and costs incurred by the
injured party as a result of the violation.
   (f) Nothing in this section shall permit a service member ordered
to military service to obtain a delay, deferment, or stay on an
obligation to pay child support. Nothing in this section shall
preclude a service member ordered to military service from seeking a
modification of an order to pay child support due to a reduction in
income resulting from the order to service, or from seeking the
imposition of the maximum interest rate provided by this chapter on
arrearages in child support payments existing prior to the order to
service.
  SEC. 10.  Section 409.4 of the Military and Veterans Code is
amended to read:
   409.4.  (a) A person who by reason of military service is entitled
to the rights and benefits of this chapter shall also be entitled
upon release from that military service to reinstatement of any
health insurance that was in effect on the day before the service
commenced, and was terminated effective on a date during the period
of the service.
   (b) An exclusion or a waiting period may not be imposed in
connection with reinstatement of health insurance coverage of a
health or physical condition of a person under subdivision (a), or a
health or physical condition of any other person who is covered by
the insurance by reason of the coverage of that person, if any of the
following apply:
   (1) The condition arose before or during that person's period of
service.
   (2) An exclusion or waiting period would not have been imposed for
the condition during a period of coverage resulting from
participation by that person in the insurance.
   (3) The condition of the person has not been determined by the
Secretary of Veterans Affairs to be a disability incurred or
aggravated in the line of duty within the meaning of Section 105 of
Title 38 of the United States Code.
   (c) Any person violating this section shall be liable for actual
damages, reasonable attorney's fees, and costs incurred by the
service member or other person entitled to the benefits and
protections of this chapter.
  SEC. 11.  Section 409.14 is added to the Military and Veterans
Code, to read:
   409.14.  A service member or other person seeking to enforce
rights pursuant to this chapter shall not be required to pay a filing
fee or court costs.
  SEC. 12.  Section 812 is added to the Military and Veterans Code,
to read:
   812.  (a) A person violating any provision of this chapter shall
be liable for actual damages, reasonable attorney's fees, and costs
incurred by the service member or other person entitled to the
benefits and protections of this chapter.
   (b) A service member or other person seeking to enforce rights
pursuant to this chapter shall not be required to pay a filing fee or
court costs.
  SEC. 13.  Section 829 is added to the Military and Veterans Code,
to read:
   829.  (a) A person violating any provision of this chapter shall
be liable for actual damages, reasonable attorney's fees, and costs
incurred by the service member or other person entitled to the
benefits and protections of this chapter.
   (b) A service member or other person seeking to enforce rights
pursuant to this chapter shall not be required to pay a filing fee or
court costs.