BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 621| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 621 Author: Charles Calderon (D) Amended: 9/8/11 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/her recovery to the limits of protection provided by the insurance. This bill sunsets on January 1, 2015. Senate Floor Amendments of 9/8/11 correct a drafting error CONTINUED AB 621 Page 2 by ensuring that Section 2 of this bill reflects existing law. NOTE: This bill passed the Senate (37-0) on August 30, 2011 and was withdrawn from engrossing and enrolling to add this technical amendment. ANALYSIS : Existing law specifies restrictions on rental 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 CONTINUED AB 621 Page 3 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 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. CONTINUED AB 621 Page 4 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 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 9/8/11) Consumer Attorneys of California (source) Consumer Federation of California ARGUMENTS IN SUPPORT : The author's office 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, CONTINUED AB 621 Page 5 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, Wagner NO VOTE RECORDED: Furutani, Galgiani, Gorell, Bonnie Lowenthal, Mitchell, Morrell, Portantino, Vacancy RJG:kc 9/8/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED