BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1927
                                                                  Page  1

          Date of Hearing:  May 2, 2012

                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
                                Cameron Smyth, Chair
                     AB 1927 (Jones) - As Amended:  April 9, 2012
           
          SUBJECT  :  Easements:  maintenance:  arbitration.

           SUMMARY  :  Authorizes the owner of a right-of-way easement to 
          seek a judgment from a small claims court determining 
          proportionate liability of each owner for maintenance costs if 
          the amount of controversy is within the jurisdictional limits of 
          the small claims court.  Specifically,  this bill  :

          1)Permits disputes calling for the apportionment of easement 
            maintenance costs to be resolved in small claims court if the 
            amount in controversy is within the small claims 
            jurisdictional threshold amounts.

          2)Provides, that if an application is not made in small claims 
            court, then the application may be for the appointment of an 
            impartial arbitrator to apportion the cost.

           EXISTING LAW  :

          1)Requires the owner of an easement in the nature of a private 
            right-of-way, or of land to which the easement is attached, to 
            maintain the easement in repair.

          2)Provides that if an easement is owned by more than one person, 
            or is attached to parcels of land under different ownership, 
            the costs of maintaining the easement shall be shared by each 
            owner pursuant to the terms of any agreement entered into by 
            the owners.  Specifies that if any owner who is a party to the 
            agreement refuses to contribute to the costs, an action for 
            specific performance may be brought against that owner in a 
            court of competent jurisdiction by the other owners, either 
            jointly or severally.

          3)Authorizes, in the absence of an agreement, any owner of an 
            easement, or land to which the easement is attached, to apply 
            to any court where the right-of-way is located and that has 
            jurisdiction over the amount in controversy, for the 
            appointment of an impartial arbitrator to apportion the costs.









                                                                  AB 1927
                                                                  Page  2

          4)Specifies that the above provisions do not apply to 
            rights-of-way held or used by railroad common carriers subject 
            to the jurisdiction of the Public Utilities Commission.

          5)Provides that small claims courts have jurisdiction for an 
            action brought by a natural person, if the amount of the 
            demand does not exceed $10,000. 

           FISCAL EFFECT  :  None

           COMMENTS  :

          1)Existing law requires the owner of a right-of-way easement, or 
            in the land to which the easement attaches, to maintain the 
            easement.  Where the easement is owned by more than one 
            person, all owners are expected to contribute to the costs of 
            maintaining the easement.  Sometimes the distribution of these 
            costs is provided for by agreement between the owners, and if 
            one owner refuses to pay his or her share, the other owners 
            can bring an action for specific performance of the agreement.

            Where there is no prior agreement, however, existing law makes 
            a presumption that the costs of maintenance shall be shared in 
            proportion to the use made by each owner.  In the latter case, 
            where there is no agreement, existing law authorizes an owner 
            of the easement to apply to a court of competent jurisdiction 
            for the appointment of an impartial arbitrator to apportion 
            the costs.  Although the language of existing law is 
            permissive, some courts have interpreted this to mean that the 
            owner must apply to superior court for the appointment of an 
            arbitrator, and therefore an owner is precluded from seeking a 
            judgment directly from a small claims court, even if the 
            amount in controversy is within the jurisdictional limit of 
            the small claims court.  Because the arbitrator's award is 
            non-binding, any owner who is unhappy with the award may ask 
            the court to enter a judgment determining the proportional 
            liability of each owner. 

          2)According to the author, however, in many cases these disputes 
            involve relatively small amounts that could be determined more 
            efficiently and cost effectively by a small claims court.  For 
            example, the author notes that a $500 dispute might require 
            owners to file in superior court (which is more expensive) and 
            then go through an arbitration process with a court-appointed 
            arbitrator.  If any owner disagrees with the arbitrator's 








                                                                  AB 1927
                                                                  Page  3

            award, that owner can petition the superior court to determine 
            the proportional liability of each owner.  The author believes 
            that in appropriate cases, it would make more sense for an 
            owner or owners to seek a judgment directly from the small 
            claims court - especially given that, even after going through 
            the arbitration process, the court may be called upon to 
            determine the proportional share of each owner anyway.  This 
            bill is sponsored by the Conference of California Bar 
            Associations (CCBA).

          3)The intent of this bill is to give an owner the option of 
            seeking a judgment from small claims court where the amount in 
            controversy is within the jurisdiction of the small claims 
            court, but where the amount in controversy is more than the 
            limits of the small claims court, this bill would preserve the 
            option of applying to superior court for the appointment of an 
            impartial arbitrator to apportion the costs. 

          4)This bill would make it clear that, for amounts that are 
            within the jurisdiction of the small claims court, an owner 
            may seek a judgment (as opposed to the appointment of an 
            arbitrator) from a small claims court.  However, this bill 
            does not require an owner to file in small claims court.  
            Regardless of the amount in controversy, if the owner elects 
            not to file in small claims court, he or she may still apply 
            to superior court for the appointment of an impartial 
            arbitrator, and the case will only go to trial for a judgment 
            if a party rejects the arbitrator's determination.  It should 
            also be stressed that the change made by this bill only 
            applies where co-owners have not entered into a prior 
            agreement on apportionment of the costs.  Where there is an 
            agreement, the law will be unchanged - if an owner fails to 
            pay his or her share, then the other owners, jointly or 
            severally, may bring an action for specific performance in any 
            court of competent jurisdiction. 

           5)Support arguments  :  According to the sponsor, the Conference 
            of California Bar Associations, this bill will make it much 
            less expensive and time-consuming for the owner of an easement 
            to recover maintenance costs from all owners who are liable 
            for those costs.  

             Opposition arguments  :  None on file.

          6)This bill was heard in the Judiciary Committee on April 10, 








                                                                  AB 1927
                                                                  Page  4

            2012, and passed with a 10-0 vote on the consent calendar.

           REGISTERED SUPPORT / OPPOSITION  :

           Support
           
          Conference of California Bar Associations ÝSPONSOR]

           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Debbie Michel / L. GOV. / (916) 
          319-3958