BILL NUMBER: AB 1321 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 4, 2012
INTRODUCED BY Assembly Member Wieckowski
FEBRUARY 18, 2011
An act to amend Section 2934 of, and to add Sections
1214.5 and 2923.7 to, the Civil Code, and to amend Section 27280 of
the Government Code, relating to mortgages and deeds of trust.
An act to amend Section 706.105 of the Code of Civil
Procedure, relating to money judgments.
LEGISLATIVE COUNSEL'S DIGEST
AB 1321, as amended, Wieckowski. Mortgages and deeds of
trust: recordation. Money judgments: earnings
withholdings.
Under existing law, an employer is required to withhold the
amounts provided by an earnings withholding order from all earnings
of the employee payable for any pay period that ends during the
withholding period. Existing law permits a judgment debtor to claim
an exemption from earnings withholding if no prior hearing has been
held concerning the earnings withholding order, or if there has been
a material change in circumstances since the last hearing concerning
the earnings withholding order. A creditor is entitled to a hearing
on a judgment debtor's claim of exemption from earnings withholding
to satisfy a money judgment if the creditor files a notice of
opposition to the claim of exemption.
This bill would require, after a judgment debtor files the claim
of exemption and financial statement with the levying officer, the
levying officer to serve the judgment debtor's employer with a copy
of the original earnings withholding order, a copy of the claim of
exemption, and a signed instruction ordering the employer to adjust
the amount of earnings withheld to reflect the amount of additional
earnings that the judgment debtor asserts are exempt. If the judgment
debtor's claim of exemption asserts that all of his or her earnings
are exempt, the instruction would order the employer to reduce the
amount of earnings withheld to zero. The bill would further require
the employer to comply with the provisions of the signed instruction.
Under this bill, if the judgment debtor does not file a timely
notice of opposition to the claim of exemption, the levying officer
would be required to serve notice upon the employer to continue
withholding earnings in compliance with the claim of exemption. This
bill would also provide that if, after a hearing, the court denies
the judgment debtor's claim in whole or in part, the clerk is
required to transmit a certified copy of the court's order to the
levying officer, who must promptly serve a notice to the judgment
debtor's employer detailing the court's order concerning the earnings
withholdings.
By increasing the duties of local ministerial officers relating to
the service of process and notice, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Existing law authorizes the recording of an instrument affecting
the title to or possession of real property, as well as the recording
of an assignment of a mortgage or a deed of trust. Under existing
law, the recordation of an interest in real property provides notice
of that interest to subsequent purchasers and mortgagees. Existing
law provides that an unrecorded conveyance of real property is void
against a duly recorded interest by a subsequent purchaser or
mortgagee, if he or she acted in good faith and paid valuable
consideration.
This bill would instead require that mortgages and deeds of trust
as well as assignments of a mortgage or a deed of trust be recorded
within 30 days of the execution of the deed or other document
creating a security interest in the real property or within 30 days
of execution of the assignment. The bill would further require that
either the promissory note or a specified certificate affirming the
existence of the promissory note be attached at the time of
recordation.
Existing law, upon a breach of the obligation of a mortgage or
transfer of an interest in property, authorizes the mortgagee,
trustee, or beneficiary to record a notice of default in the office
of the county recorder where the mortgaged or trust property is
situated.
This bill would prohibit the mortgagee, trustee, or beneficiary
from recording a notice of default until 45 days after it has
recorded the mortgage or deed of trust and any assignment of the
mortgage and deed of trust.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 706.105 of the Code
of Civil Procedure is amended to read:
706.105. (a) A judgment debtor may claim an exemption under
Section 706.051 under either of the following circumstances:
(1) No prior hearing has been held with respect to the earnings
withholding order.
(2) There has been a material change in circumstances since the
time of the last prior hearing on the earnings withholding order.
(b) A claim of exemption shall be made by filing with the levying
officer an original and one copy of (1) the judgment debtor's claim
of exemption and (2) the judgment debtor's financial statement.
(c) Promptly after the judgment debtor files the claim of
exemption and financial statement with the levying officer, the
levying officer shall serve on the employer all of the following:
(1) A copy of the original earnings withholding order.
(2) A copy of the claim of exemption filed by the judgment debtor.
(3) An instruction, signed by the levying officer, that the
employer must, until further notice, immediately reduce the amount of
earnings to be withheld under the original earnings withholding
order to reflect the amount of additional earnings claimed to be
exempt in the judgment debtor's claim of exemption, and that the
amount to be withheld shall be reduced to zero if the judgment debtor'
s claim of exemption asserts that all of the judgment debtor's
earnings are exempt.
(d) An employer who is served by the levying officer with the
documents identified in subdivision (c) shall, until further notice,
immediately reduce the amount of additional earnings claimed to be
exempt in the judgment debtor's claim of exemption. If the judgment
debtor's claim of exemption asserts that all of the judgment debtor's
earnings are exempt, the employer shall, until further notice,
immediately cease withholding any earnings whatsoever.
(c)
(e) Upon filing of the claim of exemption, the levying
officer shall promptly send to the judgment creditor, at the address
stated in the application for the earnings withholding order, by
first-class mail, postage prepaid, all of the following:
(1) A copy of the claim of exemption.
(2) A copy of the financial statement.
(3) A notice of claim of exemption. The notice shall state that
the claim of exemption has been filed and that the earnings
withholding order will be terminated, or modified to reflect the
amount of earnings claimed to be exempt in the claim of exemption,
unless a notice of opposition to the claim of exemption is filed with
the levying officer by the judgment creditor within 10 days after
the date of the mailing of the notice of claim of exemption.
(d)
(f) A judgment creditor who desires to contest a claim
of exemption shall, within 10 days after the date of the mailing of
the notice of claim of exemption, file with the levying officer a
notice of opposition to the claim of exemption.
(e)
(g) If a notice of opposition to the claim of exemption
is filed with the levying officer within the 10-day period, the
judgment creditor is entitled to a hearing on the claim of exemption.
If the judgment creditor desires a hearing on the claim of
exemption, the judgment creditor shall file a notice of motion for an
order determining the claim of exemption with the court within 10
days after the date the levying officer mailed the notice of claim of
exemption. If the notice of motion is so filed, the hearing on the
motion shall be held not later than 30 days from the date the notice
of motion was filed unless continued by the court for good cause. At
the time prescribed by subdivision (b) of Section 1005, the judgment
creditor shall give written notice of the hearing to the levying
officer and shall serve a notice of the hearing and a copy of the
notice of opposition to the claim of exemption on the judgment debtor
and, if the claim of exemption so requested, on the attorney for the
judgment debtor. Service is deemed made when the notice of the
hearing and a copy of the notice of opposition to the claim of
exemption are deposited in the mail, postage prepaid, addressed to
the judgment debtor at the address stated in the claim of exemption
and, if service on the attorney for the judgment debtor was requested
in the claim of exemption, to the attorney at the address stated in
the claim of exemption. The judgment creditor shall file proof of the
service with the court. After receiving the notice of the hearing
and before the date set for the hearing, the levying officer shall
file the claim of exemption and the notice of opposition to the claim
of exemption with the court.
(f)
(h) If the levying officer does not receive a notice of
opposition to the claim of exemption within the 10-day period after
the date of mailing of the notice of claim of exemption and a notice
of the hearing not later than 10 days after the filing of the notice
of opposition to the claim of exemption, the levying officer shall
serve on upon the employer one
of the following: a notice that the employer shall
continue withholding earnings only to the extent, if any, that the
employer has been withholding earnings pursuant to subdivision (d)
.
(1) A notice that the earnings withholding order has been
terminated if all of the judgment debtor's earnings were claimed to
be exempt.
(2) A modified earnings withholding order that reflects the amount
of earnings claimed to be exempt in the claim of exemption if only a
portion of the judgment debtor's earnings was claimed to be exempt.
(g)
(i) If, after hearing, the court orders that the
earnings withholding order be modified or terminated, the clerk shall
promptly transmit a certified copy of the order to the levying
officer who shall promptly serve on the employer of the judgment
debtor (1) a copy of the modified earnings withholding order or (2) a
notice that the earnings withholding order has been terminated. The
court may order that the earnings withholding order be terminated as
of a date that precedes the date of hearing. If the court determines
that any amount withheld pursuant to the earnings withholding order
shall be paid to the judgment debtor, the court shall make an order
directing the person who holds that amount to pay it promptly to the
judgment debtor.
(j) If, after hearing, the court denies the judgment debtor's
claim of exemption in whole or in part, the clerk shall promptly
transmit a certified copy of the court's order to the levying
officer, who shall promptly serve on the employer a notice that the
employer shall withhold earnings pursuant to the court's order.
(h)
(k) If the earnings withholding order is terminated by
the court, unless the court otherwise orders or unless there is a
material change of circumstances since the time of the last prior
hearing on the earnings withholding order, the judgment creditor may
not apply for another earnings withholding order directed to the same
employer with respect to the same judgment debtor for a period of
100 days following the date of service of the earnings withholding
order or 60 days after the date of the termination of the order,
whichever is later.
(i)
(l) If an employer has withheld and paid over amounts
pursuant to an earnings withholding order after the date of
termination of the order but prior to the receipt of notice of its
termination, the judgment debtor may recover those amounts only from
the levying officer if the levying officer still holds those amounts
or, if those amounts have been paid over to the judgment creditor,
from the judgment creditor. If the employer has withheld amounts
pursuant to an earnings withholding order after termination of the
order but has not paid over those amounts to the levying officer, the
employer shall promptly pay those amounts to the judgment debtor.
(j)
(m) An appeal lies from any court order under this
section denying a claim of exemption or modifying or terminating an
earnings withholding order. An appeal by the judgment creditor from
an order modifying or terminating the earnings withholding order does
not stay the order from which the appeal is taken. Notwithstanding
the appeal, until the order modifying or terminating the earnings
withholding order is set aside or modified, the order allowing the
claim of exemption in whole or in part shall be given the same effect
as if the appeal had not been taken.
(k)
(n) This section does not apply to a withholding order
for support or a withholding order for taxes.
SEC. 2. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.
SECTION 1. Section 1214.5 is added to the Civil
Code, to read:
1214.5. Every mortgage or deed of trust of real property shall be
recorded within 30 days of the execution of the deed or other
document creating a security interest in the real property. The
mortgage or deed of trust shall be recorded in the office of the
recorder of each county where the mortgaged or trust property or some
part or parcel thereof is situated, with either of the following
documents attached:
(a) The promissory note.
(b) A certificate that confirms the existence of the promissory
note and contains all of the following information:
(1) The date of execution of the promissory note.
(2) The identities of the parties to the promissory note.
(3) The terms of the debt, including, as applicable, the interest
rate, prepayment penalties, and other escrow items.
SEC. 2. Section 2923.7 is added to the Civil
Code, to read:
2923.7. (a) A mortgagee, trustee, or beneficiary may not file a
notice of default until 45 days after it has duly recorded the
mortgage or deed of trust and any subsequent assignments of the
mortgage or the beneficial interest under the deed of trust. Pursuant
to Sections 1214.5 and 2934, the mortgage and deed of trust and any
subsequent assignments shall be recorded with the promissory note or
certificate attached.
(b) Nothing in this section shall be construed to require the
county recorder to certify that a mortgage, deed of trust, and any
assignments of the mortgage or beneficial interest under the deed of
trust have been properly recorded prior to recording a notice of
default.
SEC. 3. Section 2934 of the Civil Code is
amended to read:
2934. (a) Any assignment of a mortgage and any assignment of the
beneficial interest under a deed of trust shall be recorded, with the
promissory note or the certificate described in subdivision (b) of
Section 1214.5 attached, within 30 days of execution of the
assignment. From the time the assignment is filed for record, it
operates as constructive notice of the contents thereof to all
persons.
(b) Any instrument by which any mortgage or deed of trust of, lien
upon, or interest in real property, (or by which any mortgage of,
lien upon, or interest in personal property a document evidencing or
creating which is required or permitted by law to be recorded), is
subordinated or waived as to priority may be recorded, and from the
time it is filed for record operates as constructive notice of the
contents thereof, to all persons.
SEC. 4. Section 27280 of the Government Code is
amended to read:
27280. (a) Except as provided in subdivision (b), any instrument
or judgment affecting the title to or possession of real property may
be recorded pursuant to this chapter.
(b) A mortgage or deed of trust shall be recorded within 30 days
of the execution of the deed or other document creating a security
interest in the real property pursuant to Section 1214.5 of the Civil
Code. An assignment of a mortgage or deed of trust shall be recorded
within 30 days of the execution of the assignment pursuant to
Section 2934 of the Civil Code.
(c) Any instrument or document submitted for recordation which
effectuates a change in ownership may be accompanied by a change in
ownership statement as provided for in Section 480 of the Revenue and
Taxation Code. Upon receipt of such change in ownership statement,
the recorder shall transmit, as soon as possible, the original
statement or true copy thereof to the county assessor along with the
recorded document as required by Section 255.7 of the Revenue and
Taxation Code. The change in ownership statement shall not be
recorded nor open and available to public inspection and shall at all
times remain confidential, except as provided in Section 408 of the
Revenue and Taxation Code.