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