AB 1856 Assembly Bill

BILL NUMBER: AB 1856	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Wilk

                        FEBRUARY 19, 2014

   An act to amend Sections 995.710, 995.720, 995.740, and 995.760 of
the Code of Civil Procedure, relating to civil actions.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1856, as introduced, Wilk. Deposit in lieu of bond.
   Existing law allows, among other things, bearer bonds and bearer
notes of the United States or this state and certificates of deposit
payable, not exceeding the federally insured amount, issued by banks
or savings associations authorized to do business in this state and
insured by the Federal Deposit Insurance Corporation to be deposit
with the officer, as defined, in lieu of a bond required by an action
or proceeding, except as provided.
   This bill would allow all bonds and notes of the United States or
the State of California and cashiers checks, payable to the officer,
to be deposit with the officer in lieu of a bond, as specified.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 995.710 of the Code of Civil Procedure is
amended to read:
   995.710.  (a) Except as provided in subdivision (e) or to the
extent the statute providing for a bond precludes a deposit in lieu
of bond or limits the form of deposit, the principal may  , 
instead of giving a bond, deposit with the officer any of the
following:
   (1) Lawful money of the United States. The money shall be
maintained by the officer in an interest-bearing trust account.
   (2)  Bearer bonds or bearer notes   Bonds
  or notes, including   bearer bonds and bearer
notes,  of the United States or the State of California. The
deposit of a bond or note pursuant to this section shall be
accomplished by filing with the court, and serving upon all parties
and the appropriate officer of the bank holding the bond or note,
instructions executed by the person or entity holding title to the
bond or note that the county treasurer of the county where the
judgment was entered is the custodian of that account for the purpose
of staying enforcement of the judgment, and that the title holder
assigns to the Treasurer the right to collect, sell, or otherwise
apply the bond or note to enforce the judgment debtor's liability
pursuant to Section 995.760. 
   (3) Certificates of deposit payable to the officer, not exceeding
the federally insured amount,  or a cashier's check made payable
to the officer,  issued by banks or savings associations
authorized to do business in this state and insured by the Federal
Deposit Insurance Corporation.  A cashier's check shall be
deposited by the officer in an interest- bearing trust account and
cleared by the bank. 
   (4) Savings accounts assigned to the officer, not exceeding the
federally insured amount, together with evidence of the deposit in
the savings accounts with banks authorized to do business in this
state and insured by the Federal Deposit Insurance Corporation.
   (5) Investment certificates or share accounts assigned to the
officer, not exceeding the federally insured amount, issued by
savings associations authorized to do business in this state and
insured by the Federal Deposit Insurance Corporation.
   (6) Certificates for funds or share accounts assigned to the
officer, not exceeding the guaranteed amount, issued by a credit
union, as defined in Section 14002 of the Financial Code, whose share
deposits are guaranteed by the National Credit Union Administration
or guaranteed by any other agency approved by the Department of
Financial Institutions.
   (b) The deposit shall be in an amount or have a face value, or
 ,  in the case of  bearer  bonds or
 bearer  notes ,  have a market value,
equal to or in excess of the amount that would be required to be
secured by the bond if the bond were given by an admitted surety
insurer. Notwithstanding any other provision of this chapter, in the
case of a deposit of  bearer  bonds or 
bearer  notes other than in an action or proceeding, the
officer may, in the officer's discretion, require that the amount of
the deposit be determined not by the market value of the bonds or
notes but by a formula based on the principal amount of the bonds or
notes.
   (c) The deposit shall be accompanied by an agreement executed by
the principal authorizing the officer to collect, sell, or otherwise
apply the deposit to enforce the liability of the principal on the
deposit. The agreement shall include the address at which the
principal may be served with notices, papers, and other documents
under this chapter.
   (d) The officer may prescribe terms and conditions to implement
this section.
   (e) This section  may   does  not
 be utilized after January 1, 1999, for   apply
to  deposits with the Secretary of State.  Any principal
who made a deposit with the Secretary of State pursuant to this
section prior to January 1, 1999, may continue to utilize that
deposit in lieu of a bond pursuant to this section and the statute
that prescribes a bond; however, the deposit shall not be renewable
pursuant to this section. 
  SEC. 2.  Section 995.720 of the Code of Civil Procedure is amended
to read:
   995.720.  (a) The market value of  bonds or notes, including
 bearer bonds  or   and  bearer
 notes   notes,  shall be agreed upon by
stipulation of the principal and beneficiary or, if the bonds or
notes are given in an action or proceeding and the principal and
beneficiary are unable to agree, the market value shall be determined
by court order in the manner prescribed in this section. A certified
copy of the stipulation or court order shall be delivered to the
officer at the time of the deposit of the bonds or notes.
   (b) If the bonds or notes are given in an action or proceeding,
the principal may file a written application with the court to
determine the market value of the bonds or notes. The application
shall be served upon the beneficiary and proof of service shall be
filed with the application. The application shall contain all of the
following:
   (1) A specific description of the bonds or notes.
   (2) A statement of the current market value of the bonds or notes
as of the date of the filing of the application.
   (3) A statement of the amount of the bonds or notes that the
principal believes would be equal to the required amount of the
deposit.
   (c) The application pursuant to subdivision (b) shall be heard by
the court not less than five days or more than 10 days after service
of the application. If at the time of the hearing no objection is
made to the current market value of the bonds or notes alleged in the
application, the court shall fix the amount of the bonds or notes on
the basis of the market value alleged in the application. If the
beneficiary contends that the current market value of the bonds or
notes is less than alleged in the application, the principal shall
offer evidence in support of the application, and the beneficiary may
offer evidence in opposition. At the conclusion of the hearing, the
court shall make an order determining the market value of the bonds
or notes and shall fix and determine the amount of the bonds or notes
to be deposited by the principal.
  SEC. 3.  Section 995.740 of the Code of Civil Procedure is amended
to read:
   995.740.  If no proceedings are pending to enforce the liability
of the principal on the deposit, the officer shall:
   (a) Pay quarterly, on demand, any interest on the deposit, when
earned in accordance with the terms of the account or certificate, to
the principal.
   (b) Deliver to the principal, on demand, any interest coupons
attached to  bonds or notes, including  bearer bonds
 or   and  bearer  notes 
 notes,  as the interest coupons become due and payable, or
pay annually any interest payable on the bonds or notes.
  SEC. 4.  Section 995.760 of the Code of Civil Procedure is amended
to read:
   995.760.  (a) If the principal does not pay the amount of the
liability on the deposit within the time prescribed in Section
995.750, the deposit shall be collected, sold, or otherwise applied
to the liability upon order of the court that entered the judgment of
liability, made upon five days' notice to the parties.
   (b)  Bearer   Bonds or notes, including
bearer  bonds  or   and  bearer
 notes   notes,  without a prevailing
market price shall be sold at public auction. Notice of sale shall be
served on the principal.  Bearer bonds or bearer 
 Bonds or  notes having a prevailing market price may be
sold at private sale at a price not lower than the prevailing market
price.
   (c) The deposit shall be distributed in the following order:
   (1) First, to pay the cost of collection, sale, or other
application of the deposit.
   (2) Second, to pay the judgment of liability of the principal on
the deposit.
   (3) Third, the remainder, if any, shall be returned to the
principal.