BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2365| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED AB 2365 Page 2 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 service. 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 Page 3 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. Comments 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) AB 2365 Page 4 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 Page 5 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 **** END ****