BILL ANALYSIS                                                                                                                                                                                                    


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                                 THIRD READING

          Bill No:  AB 2365
          Author:   Lieu (D)
          Amended:  8/2/10 in Senate
          Vote:     21

           SENATE VETERANS AFFAIRS COMMITTEE  :  4-0, 6/22/10
          AYES:  Denham, Correa, Negrete McLeod, Cedillo
          NO VOTE RECORDED:  Wyland

           SENATE JUDICIARY COMMITTEE  :  4-0, 6/29/10
          AYES:  Corbett, Harman, Hancock, Leno
          NO VOTE RECORDED:  Walters

           ASSEMBLY FLOOR  :  71-0, 5/10/10 - See last page for vote

           SUBJECT  :    Veterans affairs:  administration

           SOURCE  :     California Military Department

           DIGEST  :    This bill permits a service member to recover  
          actual damages, reasonable attorneys fees, and costs from  
          any person who violates specified rights and protections of  
          the Military and Veterans Code.  This bill also grants  
          service members an expedited review of a specified petition  
          for relief, and provides that a court shall not charge a  
          filing fee or court costs for specified actions.

           ANALYSIS  :    Existing law generally provides legal rights  
          and financial protections for service members, with respect  
          to credit agreements, court proceedings, interest  


                                                               AB 2365

          liabilities, eviction proceedings, contracts, mortgages and  
          trusts, leases, life insurance policies, taxes and  
          assessments, and health insurance policies, as specified.

          Existing law, the California Military Families Financial  
          Relief Act, permits any member of the United States  
          Military Reserve or the National Guard who is called to  
          active duty as part of the Iraq and Afghanistan conflict to  
          defer payments on specified obligations while serving on  
          active duty.
          Existing law, the California Military Families Financial  
          Relief Act of 2005, provides financial protection to  
          members called into active duty regarding fees for  
          recording a power of attorney, termination of mobile  
          telephone contracts, academic tuition, state bar fees,  
          vehicle leases, and residential utility service.

          This bill provides that any person who violates the above  
          provisions shall be liable for actual damages, reasonable  
          attorney's fees, and costs incurred by the injured party.

          This bill provides that a service member or other person  
          seeking to enforce the above rights shall not be required  
          to pay a filing fee or court costs.

          Existing law permits a service member to, at any time  
          during his or her period of service or within six months  
          thereafter, apply to a court for relief from an obligation  
          or liability incurred by the member prior to his or her  
          period of military service, or from any tax or assessment  
          falling due prior to or during the period of service.

          Existing law allows the court to grant specified relief  
          after appropriate notice and hearing, unless in its opinion  
          the ability of the service member to comply with the  
          obligation or pay the tax or assessment has not been  
          materially affected by reason of the member's military  

          This bill, instead, requires a court to 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.  That petition must be served at least  


                                                               AB 2365

          10 days before the hearing, and the respondent must file  
          and serve a response to the petition at least five days  
          before the hearing.

          This bill provides that a court shall not charge a filing  
          fee or court costs for those petitions, and provide that  
          any person violating the section shall be liable for actual  
          damages, reasonable attorney's fees, and costs incurred by  
          the injured party.

          California law provides various financial and  
          consumer-related protections for service members.  Those  
          provisions generally seek to provide protections against  
          various potential adverse effects of a deployment, and  
          include provisions enacted by AB 1433 (Horton, Chapter 60,  
          Statutes of 2002), which provided financial protection with  
          regards to court proceedings, credit contract obligations,  
          rental agreements, taxes, health insurance, and eviction  
          protection, and AB 1666 (Frommer, Chapter 345, Statutes of  
          2005), which provided additional protection for members  
          called into active duty with regards to fees for recording  
          a power of attorney, termination of mobile telephone  
          contracts, academic tuition, state bar fees, vehicle  
          leases, and residential utility service.

          In order to assist service members in bringing actions to  
          protect their rights, the California Military Department,  
          sponsor, has coordinated with State Military Reserve Judge  
          Advocate General (JAG) Officers to assist service members  
          who have incurred financial hardship because of their  
          deployments.  This bill seeks to help additional service  
          members enforce their rights and protections by permitting  
          the recovery of reasonable attorney's fees and costs,  
          removing filing fees and court costs for specified actions,  
          and permitting an expedited review for certain cases.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

           SUPPORT  :   (Verified  7/26/10)

          California Military Department (source)


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          California Association of County Veterans Service Officers
          National Guard Association of California
          Vietnam Veterans of America, California State Council

           ARGUMENTS IN SUPPORT  :    According to the author's office:

               This bill would authorize service members to recover  
               an award of reasonable attorney fees.  Not only is  
               finding an attorney to represent a service member  
               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.  For example, if a creditor has  
               refused to defer a mortgage or lower the interest rate  
               to six percent for pre-service debts, the over-charged  
               interest may only amount to several hundred dollars.   
               Another significant example is if an attorney is able  
               to recover $10,000 for a service member who needs this  
               to pay a loan he or she is in default on because of  
               the lender's violation of the [Military & Veterans  
               Code] and the attorney takes a 1/3 or 40% contingency,  
               the service member will still be in default, as the  
               funds needed to clear the problem are now going to the  
               attorney.  The service member is still not out of the  
               hole?.  Further, 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 a service member a waiver of court  
               fees so that the service member 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 member in irreversible credit problems,  
               regardless of the eventual outcome of the case.

           ASSEMBLY FLOOR  :  


                                                               AB 2365

          AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill  
            Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,  
            Bradford, Brownley, Buchanan, Caballero, Charles  
            Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De  
            Leon, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,  
            Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,  
            Gilmore, Hagman, Hall, Hayashi, Hernandez, Hill, Huber,  
            Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie  
            Lowenthal, Ma, Miller, Monning, Nestande, Niello,  
            Nielsen, V. Manuel Perez, Portantino, Ruskin, Salas,  
            Silva, Skinner, Smyth, Audra Strickland, Swanson,  
            Torlakson, Torres, Torrico, Tran, Villines, Yamada, John  
            A. Perez
          NO VOTE RECORDED: De La Torre, DeVore, Harkey, Mendoza,  
            Nava, Norby, Saldana, Solorio 

          TSM:nl  7/28/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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