Amended in Assembly May 6, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 748


Introduced by Assembly Member Eggman

February 21, 2013


An act to amend Sectionbegin delete 3291end deletebegin insert 3287end insert of the Civil Code, and to amend Sectionsbegin delete 906, 965.5,end deletebegin insert 965.5end insert and 970.1 of the Government Code, relating to judgments.

LEGISLATIVE COUNSEL’S DIGEST

AB 748, as amended, Eggman. Judgments against the state: interest.

Existing lawbegin delete bars a suit for money or damages against a public entity on a cause of action for which a claim is required to be presented, until a written claim has been presented to the public entity and acted upon by the California Victim Compensation and Government Claims Board, the governing body of a local public entity, the Judicial Council, or the Trustees of the California State University, as applicable, or has been deemed to have been rejected, except as specified.end deletebegin insert authorizes a person to collect interest on damages prior to entry of judgment in the action, including an action against a public entity, as specified.end insert

The California Constitution requires the Legislature to set the rate of interest upon a judgment rendered in any court of this state at not more than 10% per annum. In the absence of the setting of such a rate by the Legislature, the California Constitution provides that the rate of interest on any judgment rendered in a court is 7% per annum.

begin insert

This bill would provide that, unless another provision of law or a collective bargaining contract provides a different interest rate, interest accrues in a tax or inverse condemnation claim against a public entity that results in a judgment against the public entity at a rate equal to the weekly average one year constant maturity United States Treasury yield, not to exceed 7% per annum. The bill would also provide that when the judgment becomes enforceable pursuant to existing law interest accrues at an annual rate equal to the weekly average one year constant maturity United States Treasury yield at the time of the judgment plus 2%.

end insert

Existing law provides that no interest is payable on the amount allowed by the California Victim Compensation and Government Claims Board on a claim if payment of the claim is subject to approval of an appropriation by the Legislature. However, if the appropriation is made, interest on the amount appropriated for the payment of the claim commences to accrue 180 days after the effective date of the law by which the appropriation is enacted.

Existing law requires the Treasurer to invest or make deposits in banks and savings and loan associations of revenues in the Pooled Money Investment Account in accordance with designations specified by the Pooled Money Investment Board.

begin delete

This bill would provide that interest on the amount of a judgment or settlement for the payment of money against the state shall accrue on the amount allowed on the claim at no more than the average Pooled Money Investment Account rate for the previous fiscal year, but not to exceed 7% per annum. The bill would provide that this accrual rate also applies to interest on the amount of a judgment for the payment of money against local public entities, except as otherwise provided by contract.

end delete
begin delete

Existing law provides for a legal rate of interest of 10% per annum on civil judgments arising out of tort claims, as specified. Existing law does not permit interest to accrue on a judgment against a public entity or employee for an act or omission within the scope of employment.

end delete
begin delete

This bill would provide that in any judgment against a public entity or employee not arising out of an act or omission within the scope of employment, interest may accrue at a rate not more than the average Pooled Money Investment Account rate for the previous fiscal year, but not to exceed 7% per annum.

end delete
begin insert

This bill would provide that, unless another provision of law or a collective bargaining contract provides a different interest rate, interest on a tax or inverse condemnation judgment or settlement for the payment of moneys against the state commences to accrue 180 days from the date of the final judgment or settlement and accrues at a rate equal to the weekly average one year constant maturity United States Treasury yield at the time of the judgment or settlement plus 2%, but not to exceed 7% per annum.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 3287 of the end insertbegin insertCivil Codeend insertbegin insert is amended to
2read:end insert

3

3287.  

(a) begin deleteEvery end deletebegin insertA end insertperson who is entitled to recover damages
4certain, or capable of being made certain by calculation, and the
5right to recover which is vested inbegin delete himend deletebegin insert the personend insert upon a particular
6day, is entitled also to recover interest thereon from that day, except
7begin delete during such time asend deletebegin insert whenend insert the debtor is prevented by law, or by the
8act of the creditor from paying the debt. This section is applicable
9to recovery of damages and interest from anybegin delete suchend delete debtor,
10including the state or any county, city, city and county, municipal
11corporation, public district, public agency, or any political
12subdivision of the state.

13(b) Every person who is entitled under any judgment to receive
14damages based upon a cause of action in contract where the claim
15was unliquidated, may also recover interest thereon from a date
16prior to the entry of judgment as the court may, in its discretion,
17fix, but in no event earlier than the date the action was filed.

begin insert

18(c) Unless another statute or a collective bargaining contract
19provides a different interest rate, in a tax or inverse condemnation
20claim against a public entity that results in a judgment against the
21public entity, interest shall accrue at a rate equal to the weekly
22average one year constant maturity United States Treasury yield,
23but shall not exceed 7 percent per annum. That rate shall control
24until the judgment becomes enforceable under Section 965.5 or
25970.1, at which time interest shall accrue at an annual rate equal
26to the weekly average one year constant maturity United States
27Treasury yield at the time of the judgment plus 2 percent.

end insert
begin delete
28

SECTION 1.  

Section 3291 of the Civil Code is amended to
29read:

30

3291.  

(a) In any action brought to recover damages for personal
31injury sustained by any person resulting from or occasioned by
32the tort of any other person, corporation, association, or partnership,
33whether by negligence or by willful intent of the other person,
P4    1corporation, association, or partnership, and whether the injury
2was fatal or otherwise, it is lawful for the plaintiff in the complaint
3to claim interest on the damages alleged as provided in this section.

4(b) If the plaintiff makes an offer pursuant to Section 998 of the
5Code of Civil Procedure which the defendant does not accept prior
6to trial or within 30 days, whichever occurs first, and the plaintiff
7obtains a more favorable judgment, the judgment shall bear interest
8at the legal rate of 10 percent per annum calculated from the date
9of the plaintiff’s first offer pursuant to Section 998 of the Code of
10Civil Procedure which is exceeded by the judgment, and interest
11shall accrue until the satisfaction of judgment.

12(c) This section shall not apply to a public entity, or to a public
13employee for an act or omission within the scope of employment,
14and neither the public entity nor the public employee shall be liable,
15directly or indirectly, to any person for any interest imposed by
16this section.

17(d) Notwithstanding subdivision (c), in any action against a
18public entity or public employee not excluded by this section that
19results in a judgment against the public entity or public employee,
20interest shall accrue on the amount allowed on the claim at no
21more than the average Pooled Money Investment Account rate for
22the previous fiscal year, but shall not exceed 7 percent per annum.

23

SEC. 2.  

Section 906 of the Government Code is amended to
24read:

25

906.  

(a) As used in this section, “amount allowed on the claim”
26means the amount allowed by the California Victim Compensation
27and Government Claims Board on a claim allowed, in whole or in
28part, or the amount offered by the board to settle or compromise
29a claim.

30(b) Except as otherwise provided in this subdivision, no interest
31is payable on the amount allowed on the claim if payment of the
32claim is subject to approval of an appropriation by the Legislature.
33If an appropriation is made for the payment of a claim described
34in this subdivision, interest on the amount appropriated for the
35payment of the claim commences to accrue 180 days after the
36effective date of the act by which the appropriation is enacted.

37(c) Interest shall accrue on the amount allowed on the claim at
38no more than the average Pooled Money Investment Account rate
39for the previous fiscal year, but shall not exceed 7 percent per
40annum.

end delete
P5    1

begin deleteSEC. 3.end delete
2begin insertSEC. 2.end insert  

Section 965.5 of the Government Code is amended to
3read:

4

965.5.  

(a) A judgment for the payment of money against the
5state or a state agency is enforceable until 10 years after the time
6the judgment becomes final or, if the judgment is payable in
7installments, until 10 years after the final installment becomes due.

8(b) A judgment for the payment of money against the state or
9a state agency is not enforceable under Title 9 (commencing with
10Section 680.010) of Part 2 of the Code of Civil Procedure, but is
11enforceable under this chapter.

begin delete

12(c) Interest on the amount of a judgment or settlement for the
13payment of money against the state shall commence to accrue 180
14days from the date of the final judgment or settlement and shall
15accrue on the amount allowed on the claim at no more than the
16average Pooled Money Investment Account rate for the previous
17fiscal year, but shall not exceed 7 percent per annum.

end delete

18begin insert(c)end insertbegin insertend insertbegin insertUnless another statute or a collective bargaining contract
19provides a different interest rate, interest on a tax or inverse
20condemnation judgment or settlement for the payment of moneys
21against the state shall commence to accrue 180 days from the date
22of the final judgment or settlement and shall accrue at a rate equal
23to the weekly average one year constant maturity United States
24Treasury yield at the time of the judgment or settlement plus 2
25percent, but shall not exceed 7 percent per annum.end insert
This subdivision
26does not apply to any claim approved by the California Victim
27Compensation and Government Claims Board.

28

begin deleteSEC. 4.end delete
29begin insertSEC. 3.end insert  

Section 970.1 of the Government Code is amended to
30read:

31

970.1.  

(a) A judgment is enforceable until 10 years after the
32time the judgment becomes final or, if the judgment is payable in
33installments, until 10 years after the final installment becomes due.

34(b) A judgment, whether or not final, is not enforceable under
35Title 9 (commencing with Section 680.010) of Part 2 of the Code
36of Civil Procedure but is enforceable under this article after it
37becomes final.

begin delete

38(c) Except as otherwise provided by the contract, the interest
39shall accrue on the amount allowed on the claim at no more than
P6    1the average Pooled Money Investment Account rate for the
2 previous fiscal year, but shall not exceed 7 percent per annum.

end delete

3begin insert(c)end insertbegin insertend insertbegin insertUnless another statute or a collective bargaining contract
4provides a different interest rate, interest on a tax or inverse
5condemnation judgment or settlement against a local public entity
6shall accrue at a rate equal to the weekly average one year
7constant maturity United States Treasury yield at the time of the
8judgment or settlement plus 2 percent,end insert


CORRECTIONS:

Text--Page 6.




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