BILL ANALYSIS Ó
AB 1856
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Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Roger Dickinson, Chair
AB 1856 (Wilk) - As Amended: March 20, 2014
SUBJECT : Deposit in lieu of bond.
SUMMARY : Allows cashier's checks to be deposited with an officer
in lieu of an appeal bond. Specifically, this bill :
1)Provides that the officer shall maintain the funds deposited
from the cashier's check in an interest-bearing trust account.
2)Clarifies the procedure when an officer deposits bonds or notes.
3)Makes other technical clarifications.
EXISTING LAW
1)Defines "officer" as a sheriff, marshal, clerk of court, judge
or magistrate (if there is no clerk), board, commission,
department, or other public official or entity to whom the bond
is given or with whom a copy of the bond is filed or who is
required to determine the sufficiency of the sureties or to
approve the bond. [Code of Civil Procedure, Section 995.160]
2)Defines "principal" as a person who gives a bond. [Code of
Civil Procedure, Section 995.170]
3)Provides that the principal may, instead of giving a bond,
deposit with the officer any of the following:
a) Lawful money of the United States.
b) Bearer bonds or bearer notes of the United States or the
State of California.
c) Certificates of deposit payable to the officer.
d) Savings accounts assigned to the officer.
e) Investment certificates or share accounts assigned to the
officer.
AB 1856
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f) Certificates for funds or share accounts assigned to the
officer. [Code of Civil Procedure, Section 995.710]
FISCAL EFFECT : Unknown.
COMMENTS :
According to the sponsor, the Conference of California Bar
Associations, AB 1856 updates the list of financial instruments
that may be deposited with the court in lieu of an appeal bond to
stay execution of a judgment pending appeal. The purpose of the
bill is to update the list of acceptable forms of security to
reflect current instruments of unquestioned value and thereby to
eliminate the need to expend the litigants' and court's time and
resources on unnecessary motions to have these forms of security
approved.
AB 1856 updates existing law concerning the method by which a
party can stay enforcement of a money judgment while an appeal is
pending. This measure is important to ensure that the contested
funds are kept secure for whichever side prevails after litigation
finally concludes. Updating existing law to allow the acceptance
of more modern types of collateral will presumably streamline
court processes and lower transaction costs for litigants involved
in money judgment appeals.
BACKGROUND
The Code of Civil Procedure, California's Bond and Undertaking
Law, lists qualifying deposits, which include: cash, bearer bonds,
and certificates of deposit. The Code of Civil Procedure, section
995.710 has not been updated since 1982. California's Bond and
Undertaking Law allows litigants to stay execution proceedings
while they exercise their right to appellate review of adverse
money judgments. The statutes project the interest of judgment
creditors by requiring adequate security for the payment of a
money judgment in the event it is affirmed on appeal. Because
this code section does not include cashier's checks and bonds,
judgment debtors who wish to deposit any of these appeals bond
substitutes must make special applications to the court by motion.
AB 1856
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Existing law authorizes the deposit of bearer bonds or bearer
notes but the U.S. Treasury and the states ceased issuing bearer
instruments in 1982. (26 C.F.R. 5f 103-1) While AB 1856 will not
prohibit the use of bearer bonds for a deposit in lieu of bond,
the bill will allow litigants to use U.S. Treasury and the state's
bonds.
In addition, AB 1856 allows litigants to make a deposit in lieu of
bond using a cashier's check. Existing law allows litigants to
deposit cash and certificates of deposit in lieu of an appeal
bond. While clerks sometimes accept cashier's checks, clerks
often refuse to accept them absent a court order because they are
not included in the Code of Civil Procedure.
REGISTERED SUPPORT / OPPOSITION :
Support
Conference of California Bar Associations (Sponsor)
Appellate Courts Section of the Los Angeles County Bar Association
California Appellate Law Group
Opposition
None on file
Analysis Prepared by : Kathleen O'Malley / B. & F. / (916)
319-3081