BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 2365
                                                                  Page  1

          AB 2365 (Lieu)
          As Amended  August 2, 2010
          Majority vote
          |ASSEMBLY:  |71-0 |(May 10, 2010)  |SENATE: |34-0 |(August 9,     |
          |           |     |                |        |     |2010)          |
           Original Committee Reference:    V. A.  

           SUMMARY  :   Renders a person who has violated the rights of a  
          service member under existing law liable for attorney's fees,  
          court costs, 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 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 fee for the filing of a  
            petition for relief. 

           The Senate amendments  clarify the addition of the attorney fee  
          language to two sections pertaining mostly to court actions.

           EXISTING LAW  :

          1)Provides legal rights, as specified, for service members with  
            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.

          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.  Further, existing law requires the court  


                                                                  AB 2365
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            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 provide financial relief for service members  
            called to active duty service.

           FISCAL EFFECT  :   This bill is keyed non-fiscal.

           COMMENTS  :   Obtaining the representation of an attorney is often  
          a difficult endeavor for service members seeking financial  
          relief or the enforcement of protections pertaining to  
          contractual obligations and court proceedings.  Many attorneys  
          are unwilling to represent service members in such cases because  
          damages may be minimal or non-existent.  Additionally, in  
          instances where damages are awarded to a service member because  
          of a loan default where the lender violated the Military and  
          Veterans Code, the attorney will typically take a 1/3 to 40  
          percent contingency.  This does not make the service member  
          whole again, as the loan will remain in default until the lender  
          receives the remaining 1/3 to 40 percent needed to resolve the  

          According to the author, "The service member is primarily  
          seeking an order from the court compelling the lender to stop  
          violating the law and honor his or her requests.  An example is  
          a case to defer a service member's mortgage after the  
          institution has wrongfully denied the service member the  
          deferral protections.  There would be no damages in a case where  
          the service member is only seeking a deferment.  There are no  
          damages to pay an attorney in an injunction action."    

           Analysis Prepared by  :  Eric Worthen / V.A. / (916) 319-3550

                                                               FN: 0005348