BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 2365
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          Date of Hearing:   April 27, 2010

                                 Paul J. Cook, Chair
                     AB 2365 (Lieu) - As Amended:  April 8, 2010
          SUBJECT  :   Veterans affairs: administration.

           SUMMARY  :   This bill makes a person who has violate the rights  
          of a service member under existing law liable for attorney's  
          fees, court cost and damages.   Specifically,  this bill  :  

             1.   Holds 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. 

             2.   Waives waive the filing fee and court costs for a person  
               seeking to enforce the specified rights.

             3.   Requires 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. 

             4.   Prohibits the court from charging a filing fee or court  
               costs for filing a petition for relief. 

           EXISTING LAW  :

          1.Provides legal rights, as specified, for service members in  
            regards to credit agreements, court proceedings, interest  
            liabilities, eviction proceedings, contracts, mortgages and  
            trusts, leases, life insurance policies, taxes and  
            assessments, and health insurance policies.

          2.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.

          3.Establishes the California Military Families Financial Relief  
            Act and the California Military Families Financial Relief Act  
            of 2005, which provides financial relief for a service member  


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            who is called to active duty. 

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   Recently, the California Military Department has  
          coordinated with State Military Reserve Judge Advocate General  
          (JAG) Officers to assist deployed and deploying service members  
          who incur financial hardship because of their deployments and  
          are afforded protections under the California Military and  
          Veterans Code.  These experienced lawyers have either counseled  
          or represented 22 service members over the past year.  During  
          their representation of these service members, the JAG Officers  
          have experienced the need for this legislation for the reasons  
          expressed above.  However, the resources that the California  
          Military Department can expend on these issues are very limited.  
           The author states that service members must have this  
          legislation so they can enforce their rights and protections on  
          their own accord.  

          Generally, these cases arise when the service members attempts  
          to find relief under the provisions of the California Military  
          and Veterans Code.  Relief sought includes, but is not limited  
          to, a deferment of a financial obligation or reduction of an  
          interest rate to the statutory requirement of 6%.  The service  
          members will send a letter and often times follow up with a  
          telephone call to their creditor/s.  The financial institution  
          will then deny the service members the protections of the  
          Military and Veterans Code.  The service member is at a  
          standstill.  Judge Advocates in-country are limited by  
          regulation and geography from doing anything more than sending a  
          letter on behalf of the service members.  The service member is  
          limited by geography or sophistication in enforcing his or her  
          rights in court.  

          This bill enables service members to recover an award of  
          reasonable attorney fees.  Not only is finding an attorney to  
          represent a service members claimant difficult without an  
          attorney's fees provision, but on a typical claim the service  
          member cannot be made whole when a significant portion of his or  
          her damages award must go toward non-recoverable attorney's  
          fees.  Finding an attorney to take such a case is nearly  
          impossible unless that attorney knows that reasonable  
          compensation will be allowed by the court for undertaking such  
          an action to protect the rights of a service member.  


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          Many of the rights sought to be enforced have either no damages  
          or minimal damages.  The service member is primarily seeking an  
          order from the court compelling the lender to stop violating the  
          Military and Veterans Code and honor his or her requests.  An  
          example is a case to clear up the service members' credit after  
          the institution has wrongfully denied the service members the  
          protections of the Military and Veterans Code.  There would be  
          no damages in a case where the service members is only seeking a  
          court order to accurately reflect his or her credit if no  
          attorney's fees are available.  There is no money to pay an  
          attorney in an injunction action.

          The author believes voluntary compliance will be much more  
          likely if creditors know that litigation over violations of the  
          Military and Veterans Code may result in an award against them  
          of the service members' reasonable fees and costs. Due to being  
          deployed overseas, many service members do not have the ability  
          to immediately pay court fees at the time of filing because of  
          geographical limitations or financial hardship.  This bill would  
          grant service members a waiver of court fees so that service  
          members may proceed to enforce these important protections.

          This bill would also grant service members an expedited review  
          of their case.  Under current law, a service member may not be  
          able to enforce these protections until the service member  
          returns from deployment.  A delay in enforcement often puts the  
          service members in irreversible credit problems, regardless of  
          the eventual outcome of the case.

          The author believes this legislation is critical because more  
          Citizen Soldiers and Airmen of California are being called to  
          active duty in Iraq and Afghanistan.  As a result, the service  
          members and their families are suffering the hardships of these  
          ongoing deployments.  It is necessary to provide an enforcement  
          mechanism to ensure the Legislature's stated intent to enable  
          service members to devote their entire energy to the defense  
          needs of the nation or state.


          California Military Department (sponsor)
          National Guard Association of California


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          None on file.
          Analysis Prepared by  :    Eric Worthen / V. A. / (916) 319-3550