BILL ANALYSIS �
SB 522
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SENATE THIRD READING
SB 522 (Hueso)
As Amended September 3, 2013
Majority vote
SENATE VOTE :38-0
HUMAN SERVICES 7-0 APPROPRIATIONS 13-0
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|Ayes:|Stone, Maienschein, |Ayes:|Gatto, Bocanegra, |
| |Ammiano, | |Bradford, |
| |Ian Calderon, Garcia, | |Ian Calderon, Campos, |
| |Grove, Hall | |Eggman, Gomez, Hall, |
| | | |Holden, Linder, Pan, |
| | | |Quirk, Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Clarifies liability coverage of the Foster Family
Homes and Small Family Home Insurance Fund (Fund).
Specifically, this bill :
1)Limits the Fund liability exclusions to only those criminal or
intentional acts committed by a foster parent.
2)Requires, for purposes of limiting the liability of the Fund,
that multiple incidences of a general course of conduct to be
considered one "occurrence," regardless of the period of time
during which the acts occurred.
3)Prohibits the Fund from being liable for any loss arising out
of the dishonest, fraudulent, criminal, or intentional act of
any person if the date of the loss is prior to July 1, 2013.
4)Restricts the Fund's liability to only once for damages
arising from one occurrence.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
The defendant in the Brandon S. v. The State of California
lawsuit that drove previous bills on the subject of limiting
liability for foster parents was asking for $250,000 in damages.
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Under this bill, it is likely that he would have received those
damages from the fund. Depending on how many similar cases are
brought forward, it could cost the fund in excess of $250,000
per case (Fund).
COMMENTS :
Foster Family Homes and Small Family Home Insurance Fund
background : The Fund was created by the Legislature in 1986 to
provide gap liability coverage to licensed foster family homes
and small family homes. Prior to the creation of the Fund,
licensed foster family home operators cited they were routinely
denied homeowner's and other types of insurance based on their
status as foster parents or related activities. The Fund, along
with companion changes in policy governing insurance coverage
(INS 676.7), allowed foster family homes indemnification for
liability incurred during the course of providing related
services. This effort was aimed at ensuring the state could
recruit and retain qualified foster family providers.
Once licensed, a foster family home is covered by the Fund for
claims totaling up to $300,000 in a single year for valid claims
submitted by foster children, or their parents or guardians,
which occur as a result of the activities of the foster parent,
while the child resides in the home. The original $300,000 cap
was enacted in 1986 and has not changed in the over 20 years
since. According to DSS, in fiscal year 2008-09, there were 22
new claims submitted to the Fund, of which $346,999 were paid in
claim settlements. In 2009-10 there was a balance of $5,391,000
in unspent funds, although the current Fund balance is at
$2,391,000. The Fund averages 30-35 claim requests per year.
Following the Fund's creation in 1986, DSS issued an All County
Letter (ACL No. 86-102) providing guidance to county welfare
directors in which the department stated, regarding applicable
exclusions, "In addition, certain acts are not covered, such as
losses arising out of a criminal act on the part of the foster
parent or bodily injury arising out of the operation or use of a
motor vehicle, aircraft or watercraft." [Emphasis added.]
The statutory language creating the Fund lists several
exclusions, including, "any loss arising out of a dishonest,
fraudulent, criminal, or intentional act." This bill would
narrow the existing exclusions by clarifying that those criminal
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or intentional acts must be committed by the foster parent,
consistent with exclusions enumerated in current law. This
change would result in a requirement that the Fund pay damages
for claims arising out of injury to foster children as a result
of intentional or criminal acts committed by third parties.
Brandon S. v. The State of California : This bill seeks to amend
existing law following an Appeals Court ruling which upheld the
lower court's decision for the defendant in the case of Brandon
S. v. The State of California ex rel. Foster Family Home and
Small Family Home Insurance Fund ((2009) 174 Cal.App.4th 815).
The case pertained to a foster child who was sexually abused by
the minor stepson of his licensed foster parent. The child,
Brandon S., filed a claim with the Fund seeking damages for
emotional and physical injuries, but because the stepson
admitted to the molestation charge, Brandon's claim was denied
on the basis that all criminal and intentional acts are excluded
from coverage in statute.
Judge Willhite wrote in the majority opinion for the Brandon S.
case, "Although legitimate policy questions are raised by the
legislative decision to exclude coverage for a claim like
Brandon's, we decline to rewrite the statutory language and
depart from governing principles of statutory construction to
reach the result Brandon seeks. That is a task for the
Legislature."
This bill is substantially similar to AB 2206 (Hill), 2010,
which was held on the Assembly Appropriations suspense file. In
July 2010, Assembly Member Hill requested an audit to focus on
the administration of the Fund and to assess the feasibility of
expanding the Fund's coverage to Foster Family Agencies as well
as the Kinship Guardian Assistance Payment program. The
California Bureau of State Audits issued the report in September
2011.
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089
FN:
0002274
SB 522
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