BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 621
Author: Charles Calderon (D)
Amended: 7/12/11 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 7/5/11
AYES: Evans, Harman, Blakeslee, Corbett, Leno
ASSEMBLY FLOOR : 47-25, 4/7/11 (Substantially amended in
Senate) - See last page for vote
SUBJECT : Vehicle rental agreements
SOURCE : Consumer Attorneys of California
DIGEST : This bill requires a rental car company that
enters into a vehicle rental agreement with a renter who is
not a resident of this country to do the following when
that renter purchases liability insurance as part of the
agreement: (1) accept service of process of any summons
and complaint against the renter for any accident resulting
from the operation of the rental car within California; and
(2) mail a copy of the summons and complaint and any other
to the renter. This bill specifies how process must be
served on the rental car company and would require that the
plaintiff agree to limit his or her recovery to the limits
of protection provided by the insurance. This bill sunsets
on January 1, 2015.
ANALYSIS : Existing law specifies restrictions on rental
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vehicle agreements and regulates a renter's liability for
loss due to theft, a rental company's loss of use, damage,
or loss to the car, damage waivers and damage waiver fees.
(Civil Code Section 1936)
Existing law provides that a rental car company may act as
a rental car agent for an authorized insurer in connection
with liability insurance, which may include uninsured
motorist coverage, that provides coverage to the renter and
is not duplicative of any standard liability coverage, for
liability arising from the negligent operation of the
rental vehicle. (Insurance Code Section 1758.85(b))
Existing law provides that a nonresident driver impliedly
consents to the appointment of the director of the
Department of Motor Vehicles (DMV) as his/her agent for
service of process in any action against the nonresident
driver for injuries caused by an accident or collision.
Existing law provides that service of process shall be made
by delivering a copy of the summons and complaint to the
director. The plaintiff must also send a copy of the
summons and complaint by registered mail to the nonresident
driver, return-receipt requested. (Vehicle Code Sections
17451, 17454, 17455, 17456)
This bill, as described in more detail below, authorizes a
rental car company that enters into a vehicle rental
agreement with a renter who is not a resident of this
country to accept service of a summons and complaint and
any other required documents against that renter when the
renter purchases liability insurance as defined in
Insurance Code Section 1758.85.
This bill requires the rental car company, if served as set
forth in this bill, to accept service of a summons and
complaint and any other required documents against the
foreign renter for any accident or collision resulting from
the operation of the rental vehicle within California
during the rental period.
This bill requires the rental car company, within 30 days
of acceptance of service of process, to provide a copy of
the summons and complaint and any other required documents
to the foreign renter by first class mail, return receipt
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requested.
This bill specifies that, if the rental car company has a
registered agent for service of process on file with the
Secretary of State, process shall be served on the rental
company's registered agent, either by first class mail,
return receipt requested, or by personal service.
This bill provides that a plaintiff who elects to serve a
foreign renter by delivering a copy of the summons and
complaint and any other required documents to the rental
car company as provided by this bill shall agree to limit
his/her recovery against the foreign renter and the rental
car company to the limits of the protection extended by the
liability insurance.
This bill sunsets on January 1, 2015.
Background
Existing law provides that in certain instances an
individual is deemed to have consented to the appointment
of another entity to serve as his/her agent for service of
process. For example, under the Vehicle Code, out-of-state
drivers impliedly consent to the appointment of the DMV's
director as their agent for service of process in any
action against that nonresident driver for injuries caused
by an accident or collision. Similarly, this bill,
sponsored by the Consumer Attorneys of California, requires
a rental car company to accept service of process for
out-of-country renters when those renters purchase
liability insurance as a part of the vehicle rental
agreement. This bill is nearly identical to last year's AB
2059 (Calderon), 2009-10 Session, which was vetoed by
Governor Schwarzenegger.
Prior Legislation
AB 2059 (Calderon), 2009-10 Session, passed the Senate
(24-12) on August 31, 2010. As noted in the Background,
this bill is nearly identical to AB 2059. The bill was
vetoed by Governor Schwarzenegger who stated:
"This bill provides a mechanism for service of legal
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process on non-residents who cause injuries involving
rental cars in California, by allowing process to be
served to the rental company. While I appreciate the
challenging nature of serving process on people who live
out of the country, it does not seem reasonable or
justified to simply shift that burden from the plaintiff
to the rental car company."
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/12/11)
Consumer Attorneys of California (source)
Consumer Federation of California
ARGUMENTS IN SUPPORT : The author and this bill's
sponsors assert that this bill is necessary because
"Ýs]ervice of process on out of country defendants is
complicated, expensive, and difficult as (1) the onerous
provisions of the Hague Convention of 1965 On the Service
Abroad of Judicial and Extrajudicial Documents in Civil or
Commercial Matters must be met; (2) not all countries have
agreed to the Hague Convention; (3) the paperwork must be
translated into the language of the defendant; and (4) a
service processor must be located." Legal commentators
have also noted the complexity of serving international
defendants.
ASSEMBLY FLOOR : 47-25, 4/7/11
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes,
Gatto, Gordon, Hall, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Lara, Ma, Mendoza, Monning, Pan,
Perea, V. Manuel Pérez, Skinner, Solorio, Swanson,
Torres, Wieckowski, Williams, Yamada, John A. Pérez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Fletcher, Garrick, Grove, Hagman, Halderman, Harkey,
Jeffries, Jones, Knight, Logue, Mansoor, Miller,
Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Valadao,
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Wagner
NO VOTE RECORDED: Furutani, Galgiani, Gorell, Bonnie
Lowenthal, Mitchell, Morrell, Portantino, Vacancy
RJG:kc 7/12/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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