BILL ANALYSIS                                                                                                                                                                                                    






                             SENATE JUDICIARY COMMITTEE
                           Senator Ellen M. Corbett, Chair
                              2009-2010 Regular Session


          AB 2619 (Block)
          As Amended April 28, 2010
          Hearing Date: June 15, 2010
          Fiscal: No
          Urgency: No
          TW:jd
                    

                                        SUBJECT
                                           
              Elder and Dependent Adult Abuse:  Restitution:  Earnings  
                                 Withholding Orders

                                      DESCRIPTION  

          This bill would authorize wage garnishments against defendants  
          convicted of elder or dependent adult financial abuse.

                                      BACKGROUND  

          In 1982, the Legislature recognized a need to protect elder and  
          dependent adults from abuse and exploitation, including  
          financial abuse.  The Elder Abuse and Dependent Adult Civil  
          Protection Act (EADACPA) was enacted to provide adult protective  
          services agencies, local long-term care ombudsman programs,  
          local law enforcement agencies, and other interested parties the  
          ability to use any means necessary to protect elder and  
          dependent adults from abuse.  (AB 1805 (Felando, Ch. 1184,  
          Stats. 1982).)

          In furtherance of the Legislature's intent to protect elder and  
          dependent adults, the Legislature enumerated several crimes for  
          injury to elder or dependent adults.  (SB 1681 (Mello, Ch. 594,  
          Stats. 1984).)  SB 1681 also created a civil cause of action for  
          financial abuse of elder and dependent adults.

          This bill would authorize victims of elder and dependent adult  
          financial abuse to collect on judgments through wage  
          garnishment.

                                CHANGES TO EXISTING LAW
                                                                (more)



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           Existing law  defines financial abuse of an elder or dependent  
          adult as the taking, secreting, appropriating, obtaining, or  
          retaining real or personal property of an elder or dependent  
          adult for a wrongful use or with intent to defraud, or both.   
          (Welf. & Inst. Code Sec. 15610.30.)
           Existing law  provides for the issuance of a writ of attachment  
          in any action for damages stemming from the financial abuse of  
          an elder or dependent adult.  (Welf. & Inst. Code Sec.  
          15657.01.)

           Existing law  authorizes courts to award attorney's fees and  
          costs, compensatory damages, and all other remedies otherwise  
          provided by law to victims of elder or dependent adult abuse.   
          (Welf. & Inst. Code. Sec. 15657.5.)

           Existing law  allows courts to issue withholding orders such as  
          to create a lien (wage garnishment) against employees owing  
          judgments.  (Code Civ. Proc. Sec. 706.010 et seq.)

           Existing law  provides that a lien continues for a period of one  
          year from the date the earnings of the judgment debtor become  
          payable unless the amount required to be withheld pursuant to  
          the order is paid as required by law.  (Code Civ. Proc. Sec.  
          706.029.)

           Existing law  provides that child support withholding orders are  
          given priority over all other withholding orders.  (Code Civ.  
          Proc. Sec. 706.031.)

           Existing law  provides that tax withholding orders are given  
          priority after support withholding orders.  (Code Civ. Proc.  
          Sec. 706.077.)

           This bill  would authorize a court to issue an earnings  
          withholding order against a person found guilty of elder or  
          dependent financial abuse.

           This bill  would require the application for issuance of an  
          earnings withholding order to specify how much of the judgment  
          stems from a financial abuse claim.
           
          This bill , effective January 1, 2012, would prioritize elder or  
          dependent abuse withholding orders after child support and tax  
          withholding orders.

                                                                      



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           This bill  would instruct employers not to withhold earnings  
          under an elder or dependent abuse order unless child support,  
          tax, and prior elder or dependent abuse orders have expired.

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          
            This [bill] allows victims of elder and dependent adult  
            financial abuse, who are victorious in court but unable to  
            collect from the defendant, a better opportunity to collect  
            restitution through wage garnishment. . . . The bill would  
            give priority to an "earnings withholding order for elder or  
            dependent adult financial abuse" over any other earnings  
            withholding order, and therefore moves victims of elder or  
            dependent adult financial abuse to the front of the line to  
            collect wages.  However, earnings withholding orders for  
            spousal and child support and for taxes will still have  
            priority over all other withholding orders including elder or  
            dependent adult financial abuse.  AB 2916 also provides that  
            changes to the priority of these withholding orders not be  
            effective until January 1, 2012 so as to provide ample time  
            for all forms to be updated for employers.

          A supporter of the bill, Insurance Brokers and Agents of the  
          West, further describes the need for this bill as follows:

            Unfortunately, as with any business, there are some bad actors  
            in the insurance marketplace.  In a case where a rogue agent  
            may have committed actions considered to be elder and  
            financial abuse, he or she may be ordered to pay restitution  
            for several cases of fraud and the cost of paying the fines  
            and restitution renders them insolvent. . . . We believe if a  
            rogue insurance agent is convicted of elder and dependent  
            financial abuse, the victim should absolutely be made whole  
            again.  AB 2619 recognizes the seriousness of these abuses and  
            would make their restitution a high priority when it comes to  
            wage garnishment.
          
          2.  Due process for the defendant   

          AB 707 (McAlister, Chapter 1364, Statutes of 1982) overhauled  
          money judgment enforcements under the Code of Civil Procedure.   
          One of the goals in revising the law was to balance the  
                                                                      



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          interests and rights of debtors, creditors, and third parties.    
          AB 707 authorized courts to issue withholding orders whereby  
          employers would subtract specified amounts from the defendant's  
          paycheck in order to provide plaintiffs with judgment recovery.   
           AB 707 set up various procedures necessary to collect a  
          judgment through wage garnishment so that the defendant's rights  
          were adequately protected and the plaintiff would receive  
          restitution.  AB 707 also established wage garnishment priority  
          for child support orders.  

          This bill would provide a method for victims of elder or  
          dependent adult financial abuse to collect their awarded  
          judgments through wage garnishments against defendants.  This  
          method effectively provides these plaintiffs with an appropriate  
          mechanism with which to collect on their judgment while  
          protecting rights of defendants.  Included in the plaintiff's  
          judgment may be reasonable attorney's fees and costs incurred by  
          the victim.  To receive attorney's fees and costs, the victim  
          would have to prove by a preponderance of the evidence that the  
          defendant was liable for financial abuse.  (Welf. & Inst. Code  
          Sec. 15657.5(a).)  The victim may also be awarded compensatory  
          damages.  To receive compensatory damages, the victim would have  
          to prove by clear and convincing evidence that the defendant was  
          guilty of recklessness, oppression, fraud, or malice in the  
          commission of financial abuse.  (Welf. & Inst. Code Sec.  
          15657.5(b).)  The defendant is given an opportunity in court to  
          present evidence to dispute the victim's claims, and the victim  
          must present a minimum level of evidence in order to win  
          attorney's fees and costs and a higher level of evidence to win  
          compensatory damages.  Further, Code of Civil Procedure Section  
          706.010 et seq. provides exemptions and limitations on wage  
          garnishments which protect the defendant in certain  
          circumstances.

          Under this bill, when a defendant has failed to pay the  
          plaintiff's judgment or the defendant has become insolvent, the  
          plaintiff would be able to collect the judgment through a wage  
          withholdings order which would garnish a portion of the  
          defendant's wages.  Given that defendants have the ability to  
          defend themselves in court and Code of Civil Procedure wage  
          garnishment protections, the mechanism provided by this bill for  
          plaintiff's to collect on their judgment is fair to both the  
          plaintiff and the defendant.

          3.  Legislature's intent to protect victims of elder and  
            dependent adult abuse
                                                                      



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          In accordance with the Legislature's explicit intent under the  
          EADACPA to protect victims of elder and dependent adult abuse,  
          this bill would allow these victims the ability to recover money  
          awarded to the victims by the court.   In many instances,  
          victims of elder and dependent financial abuse have difficulty  
          collecting on the awarded judgments because the defendant fails  
          to pay or becomes insolvent at the hands of other creditors.  In  
          these instances, the defendants not only receive the financial  
          gain stolen from the victims but also fail to pay the court's  
          judgment.  

          Victims of elder and dependent adult financial abuse are  
          particularly vulnerable because they have a decreased ability to  
          protect themselves from scam artists.  In the event the elder or  
          dependent adult relies on a caretaker for their medical needs,  
          the elder or dependent adult who is a victim of financial abuse  
          may then become a financial burden on their caretakers.  By  
          allowing these vulnerable victims to recover through wage  
          garnishment the monies lost to unscrupulous defendants, this  
          bill would provide a necessary avenue for the victims to  
          recover.  


           Support  :  Consumer Attorneys of California; Insurance Brokers  
          and Agents of the West; National Association of Insurance and  
          Financial Advisors of California

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Author

           Related Pending Legislation  :  None Known

          Prior Legislation  :  See Background and Comment 2.

           Prior Vote  :

          Assembly Judiciary Committee (Ayes 10, Noes 0) 
          Assembly Floor (Ayes 71, Noes 0) 

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