BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
SB 702 (Anderson)
As Introduced
Hearing Date: May 7, 2013
Fiscal: No
Urgency: No
RD
SUBJECT
Application for Entry of Default Judgment
DESCRIPTION
This bill would require an application for default judgment to
include the following:
the name of the plaintiff;
a statement that the plaintiff is the sole party entitled to
the money or damages at issue, or has authority to assert the
rights of all parties entitled to the money or damages at
issue;
the original or a copy of the written agreement giving rise to
the claim for money or damages, or the original or a copy of
any other document demonstrating that the defendant agreed to,
or otherwise incurred, the obligation giving rise to the claim
for money or damages;
the amount of the money or damages sought;
the amount of costs, if any, sought and the basis therefor;
the amount of attorney's fees, if any, sought and the basis
therefore;
a proof of service of the summons for each party to be
included in the default judgment;
a request to enter default, if not already filed, as
specified;
a proposed form of judgment; and
any other information required by the court.
This bill would also permit a party seeking the entry of a
default judgment pursuant to existing law who has been
authorized to use affidavits in lieu of personal testimony to
use affidavits in order to comply with the above requirements.
(more)
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BACKGROUND
A default judgment is essentially a judgment on the merits in
favor of the plaintiff without a trial and without any defense
or arguments presented by or on behalf of a defendant. Under
the various provisions of Section 585 of the Code of Civil
Procedure, default judgments may be entered upon written
application of the plaintiff where a defendant fails to answer a
complaint, as specified. That section contains different
requirements that must be met before entry of default judgment
depending on if the complaint involves an action arising out of
contract or judgment for the recovery of money or damages, or is
related to any other action. (Compare Code Civ. Proc. Sec.
585(a) to Sec. 585(b).) That section also provides separate
requirements for cases in which service of summons was made on
the defendant by publication, which provides constructive
notice; as opposed to other forms of service such as, for
example, personal service, which provides actual notice of the
summons. (Code Civ. Proc. Sec. 585(c).)
In recent years, a Judicial Council working group has reportedly
sought to address issues relating to the need for
standardization in default judgment applications. In doing so,
that working group specifically examined issues raised by debt
collectors relating to the varying documentation currently
required by different courts when a creditor or collector seeks
a default judgment against a defendant (the debtor) who has
failed to answer their complaint.
This bill, sponsored by the California Association of
Collectors, seeks to standardize the information that a party
would have to submit in an application for default judgment and
permit the use of affidavits in lieu of testimony for those
purposes, as specified.
CHANGES TO EXISTING LAW
Existing law provides that judgment may be had, if the defendant
fails to answer the complaint, as follows:
1)In an action arising upon contract or judgment for the
recovery of money or damages only, if the defendant has (or if
more than one defendant, if any of the defendants have) been
served, other than by publication, and fails to respond in one
of several specified manners, the clerk must, upon written
application of the plaintiff and proof of service of summons,
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file the default of the defendant(s) so served and immediately
thereafter enter judgment for the principal amount demanded in
the complaint in specified statements, or a lesser amount if
credit has been acknowledged, together with interest allowed
by law or in accordance with the terms of the contract, and
the costs against the defendant or defendants, or against one
or more of the defendants.
2)In other actions, if the defendant has been served, other than
by publication, and fails to respond in one of several
specified manners, the clerk must, upon written application of
the plaintiff, enter the default of the defendant. The
plaintiff thereafter may apply to the court for the relief
demanded in the complaint. The court is required to hear the
evidence offered by the plaintiff, and to render judgment in
the plaintiff's favor for that relief, not exceeding the
amount stated in the complaint in specified statements, as
appears by the evidence to be just. If the taking of an
account, or the proof of any fact, is necessary to enable the
court to give judgment or to carry the judgment into effect,
the court is permitted to take the account or hear the proof,
or to, in its discretion, order a reference for that purpose.
If the action is for the recovery of damages, in whole or in
part, the court may order the damages to be assessed by a
jury; or if, to determine the amount of damages, the
examination of a long account is involved, by a reference as
above provided.
3)In all actions where the service of the summons was by
publication, upon the expiration of the time for answering,
and upon proof of the publication and that the defendant has
failed to respond in one of several specified manners, the
clerk must, upon written application of the plaintiff, enter
the default of the defendant. The plaintiff thereafter may
apply to the court for the relief demanded in the complaint;
and the court must hear the evidence offered by the plaintiff,
and render judgment in the plaintiff's favor for that relief,
not exceeding the amount stated in the complaint in specified
statements, as appears by the evidence to be just. The
subdivision provides various other requirements for the court
and the plaintiff for specified cases. (Code Civ. Proc. Sec.
585(a)-(c).)
Existing law provides that in cases referred to numbers (2) and
(3) above, or upon an application to have attorneys' fees fixed
by the court pursuant to number (1), the court in its discretion
may permit the use of affidavits, in lieu of personal testimony,
as to all or any part of the evidence or proof required or
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permitted to be offered, received, or heard in those cases. The
facts stated in the affidavit or affidavits must be within the
personal knowledge of the affiant and must be set forth with
particularity, and each affidavit must show affirmatively that
the affiant, if sworn as a witness, can testify competently
thereto. (Code Civ. Proc. Sec. 585(d).)
Existing Rule of Court prescribes the forms to be used by a
party seeking a default judgment on declarations. The following
information, among other things, must be included in the
documents filed with the clerk:
except in unlawful detainer cases, a brief summary of the case
identifying the parties and the nature of plaintiff's claim;
declarations or other admissible evidence in support of the
judgment requested;
interest computations as necessary;
a memorandum of costs and disbursements;
a dismissal of all parties against whom judgment is not sought
or an application for separate judgment against certain
parties under specified laws, supported by a showing of
grounds for each judgment; and
a request for attorney fees if allowed by statute or by the
agreement of the parties. (Cal. Rules of Court, Rule 3.1800.)
This bill would require a plaintiff applying for a default
judgment to include the following information in his or her
application:
the name of the plaintiff;
a statement that the plaintiff is the sole party entitled to
the money or damages at issue, or has authority to assert the
rights of all parties entitled to the money or damages at
issue;
the original or a copy of the written agreement giving rise to
the claim for money or damages, or the original or a copy of
any other document demonstrating that the defendant agreed to,
or otherwise incurred, the obligation giving rise to the claim
for money or damages;
the amount of the money or damages sought;
the amount of costs, if any, sought and the basis therefor;
the amount of attorney's fees, if any, sought and the basis
therefore;
a proof of service of summons for each party to be included in
the default judgment;
a request to enter default, if not already filed, pursuant to
the above California Rule of Court;
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a proposed form of judgment; and
any other information required by the court.
This bill would permit a party seeking the entry of a default
judgment pursuant to existing law who has been authorized to use
affidavits in lieu of personal testimony to use affidavits in
order to comply with this section.
COMMENT
1. Stated need for the bill
According to the author, "[w]hen it comes to processing filings
and judgments in trial courts, existing law reflects an
unfortunate lack of uniformity across multiple jurisdictions,
which deprives participants and scarce courtroom resources of
efficiency that could otherwise be attained. Senate Bill 702
seeks to create some standardization and uniformity in filings
and paperwork [relating to default judgments] to increase
efficiency."
The sponsor of this bill, California Association of Collectors
(CAC), writes:
CAC has been concerned over the increasing difficulties faced
by our members in processing filings and judgments in
California trial courts. While many of the hurdles in
accessing our courts today are related to the significant cuts
in trial court funding [ . . . ], it is also clear that in a
world where companies and individuals file in multiple
jurisdictions, variations in documentation and paperwork
requirements create delays and confusion.
CAC began discussions with the State Judicial Council several
years ago. As a response, the Judicial Council set up a
Collections Case Management Working Group representing all
stakeholders. SB 702 is intended to implement some of the
ideas discussed, in particular to provide greater
standardization and uniformity with filing [requirements] in
California. We believe that this may reduce costs, create
efficiencies and move cases through the system in a faster,
more efficient manner. The bill does recognize the right of
the individual courts to maintain any needed variances, but
would be a first step toward more standardization in these
filings.
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2. Narrowing the bill to default judgments in actions for
money or damages
This bill seeks to standardize information that would need to be
provided in an application for default judgment sought under
existing Section 585 of the Code of Civil Procedure (which
generally governs when default judgments may be rendered).
These include, among other things: a statement that the
plaintiff is the sole party entitled to the money or damages at
issue, or has authority to assert the rights of all parties
entitled to the money or damages at issue; the original or a
copy of the written agreement giving rise to the claim for money
or damages, or the original or a copy of any other document
demonstrating that the defendant agreed to, or otherwise
incurred, the obligation giving rise to the claim for money or
damages; and the amount of the money or damages sought.
Sponsored by the California Association of Collectors, this bill
is related to a Judicial Council working group, comprised of
various stakeholders, including the courts, consumer groups, and
collectors in an effort to address concerns specifically brought
to Judicial Council's attention by collectors in relation to
disparate requirements for default judgments. In background
materials provided to this Committee, the author, with respect
to the Judicial Council's Collection Case Management Working
Group, notes:
The group was formed about at least 18 months ago and perhaps
two years ago now. The group has examined the need and
possibility of developing a sort of check list for default
judgments with the thought that Judicial Council may be able
to adopt a rule to implement such a check list. We have had
in-person meetings, conference calls and video conferences.
The group is comprised of judges, representatives of Judicial
Council, consumer advocates, and creditors' attorneys.
The group obtained the internal check lists used by various
courts in assessing default judgment application packages,
discussed the viability of drafting a state wide check list
and analyzed the issues involved. A goal expressed by most,
if not all, of the members was to achieve a consensus of what
needed to be submitted with a default judgment application
package in order to avoid the varying standards that exist
between the various counties now. Of course, we needed to
include the ability of the judges to exercise judicial
discretion.
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With 58 counties, there have developed a number of varying
standards for the documents and information that needs to be
submitted in support of a default application package. The
goal of the bill is to standardize the items to be included in
the package in the hope of creating more efficiencies for the
courts and the users.
Staff notes that, as currently drafted, many of the elements
required for an application for default judgment are relevant
only to those parties (such as a debt collector) seeking a
judgment for recovery of money damages. For example, the bill
requires the application to state that the plaintiff is the sole
party entitled to the money or damages at issue, or has the
authority, as specified. In the context of a non-money default
judgment, those criteria would create confusion for the parties
and the court - that confusion would appear to be inconsistent
with the goal of providing clarity for the all parties.
Accordingly, it may be appropriate to limit this bill to
applications for default judgments relating to the recovery of
money or damages.
Staff also notes that the bill could also inadvertently limit
the information that a court may request of a judgment debtor by
allowing that debtor to provide either: (1) an original or copy
of the written agreement giving rise to the claim for money or
damages; or (2) the original or a copy of any other document
demonstrating that the defendant agreed to the obligation. The
information provided to the court to support the fact that the
debt is actually owed by that actual defendant, to the
plaintiff, for that actual amount, is critical to ensuring
against injustice to a party who is not there and has no one
there to represent their interests. While the bill does reserve
some discretion for the courts by allowing the court to request
additional information, in providing this "A or B" choice for
the plaintiff, some courts may be unsure whether the Legislature
intended for the court to exercise discretion here as long as
the plaintiff chooses one of those authorized methods of
documentation.
In order to address these concerns and to narrow the bill as
suggested above, the following amendments are suggested:
Suggested Amendments
On page 1, line 4, strike "pursuant to Section 585" and insert
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"pursuant to subdivision (a) of Section 585"
On page 2, strike lines 4-8 and renumber accordingly
On page 2, line 9, after "money or damages sought" insert "and
the basis therefor"
On page 2, line 18, strike "Any other information required by
the court" and insert "Any other information or documentation
required by the court or other provision of law"
It should be noted that this bill is seeking to codify the form
for a default judgment before recommendations have been made by
the Judicial Council's working group on the issue. The author
and sponsor should work with the stakeholders of that group to
ensure that the language of this bill reflects the intent of the
group so as not to create a situation where subsequent
legislation is required to conform this bill to the final
recommendations of the group.
3. Affidavits in lieu of testimony
This bill authorizes a party seeking the entry of a default
judgment who has been authorized to use affidavits in lieu of
personal testimony to use affidavits in order to comply with
this the requirements of this bill. In light of the above
narrowing suggested amendments, further clarifying amendments
are required to similarly narrow the scope of the affidavit
provision.
Existing Section 585(d) authorizes the broad use of affidavits
in lieu of testimony for some default judgment applications,
but, with respect to default judgments that are sought in
actions arising out of contract or judgment for the recovery of
money or damages, the authorization is much more limited.
Specifically, the use of affidavits in lieu of testimony for
these specific actions is limited to where an application is
made to have attorneys' fees fixed by the court.
Given the amendments to narrow the bill pursuant to Comment 2
above, it is important to ensure that the affidavits will be
used only to the same extent that has been deemed appropriate
for these specific types of default judgments under existing
law. Accordingly, the following amendment is suggested to
include that limitation:
Suggested Amendments
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On page 2, strike lines 19-22, and insert "A party seeking the
entry of a default judgment pursuant to subdivision (a) of
Section 585 may use affidavits in order to comply with this
section only to the extent permitted under subdivision (d) of
that section."
4. Debt collectors and default judgments
It should be noted that a large percentage of debt collection
actions reportedly result in default judgments.
That being said, the goal of this bill being to provide for some
standardization of what needs to be included for an application
for default judgment would serve to assist not just the
plaintiff's (in this case, the creditor or debt collector), but
also the courts by proving some minimal standards of what an
application should look like in order to hopefully provide the
courts what they need and reduce the need for continuances. As
suggested to be amended in Comment 2 above, this bill would
arguably help achieve that goal, while retaining flexibility
within the courts to require additional information or
documentation as deemed necessary in a particular case, or as
otherwise required by another provision of law.
Support : None Known
Opposition : None Known
HISTORY
Source : California Association of Collectors
Related Pending Legislation : SB 233 (Leno and Correa) would
enact the Fair Debt Buying Practices Act to, among other things,
add to the Code of Civil Procedure that in a case involving
consumer debt, as defined, if the defendant debtor appears for
trial on the scheduled trial date, and the plaintiff debt buyer
either fails to appear or is not prepared to proceed to trial,
and the court does not find a good cause for continuance, the
court may, in its discretion, dismiss the action with or without
prejudice. Notwithstanding any other law, in this instance, the
court may award the defendant debtor's costs of preparing for
trial, including, but not limited to, lost wages and
transportation expenses. This bill is set to be heard in this
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Committee on May 7, 2013.
Prior Legislation : None Known
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