BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 702| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 702 Author: Anderson (R) Amended: 5/14/13 Vote: 21 SENATE JUDICIARY COMMITTEE : 6-0, 5/7/13 AYES: Evans, Anderson, Corbett, Jackson, Leno, Monning NO VOTE RECORDED: Walters SUBJECT : Application for entry of default judgment SOURCE : California Association of Collectors DIGEST : This bill requires a plaintiffs application for entry of a default judgment to include specified information, and authorizes a party that has been permitted by the court to use affidavits in lieu of personal testimony to use affidavits to comply with those requirements. ANALYSIS : Existing law: 1. Provides that judgment may be had, if the defendant fails to answer the complaint, as follows: A. 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, CONTINUED SB 702 Page 2 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, 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. B. 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. C. 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 CONTINUED SB 702 Page 3 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. 2. Provides that in cases referred to B and C above, or upon an application to have attorneys' fees fixed by the court pursuant to A, 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 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. 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 CONTINUED SB 702 Page 4 a request for attorney fees if allowed by statute or by the agreement of the parties. This bill: 1. Requires a plaintiff applying for a default judgment to include the following information in his/her application: A. The name of the plaintiff. B. 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. C. The amount of the money or damages sought. D. The amount of costs, if any, sought and the basis therefor. E. The amount of attorney's fees, if any, sought and the basis therefore. F. A proof of service of summons for each party to be included in the default judgment. G. A request to enter default, if not already filed, pursuant to the above California rule of court. H. A proposed form of judgment. I. Any other information required by the court. 2. Specifies the specific type of default judgments that CONTINUED SB 702 Page 5 affidavits can be used for. 3. Specifies that affidavits will be used only to the same extent that has been deemed appropriate for these specific types of default judgments under existing law. 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 Code of Civil Procedure Section 585, 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. 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. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 5/14/13) California Association of Collectors (source) ARGUMENTS IN SUPPORT : The sponsor of this bill, California Association of Collectors (CAC), writes: CONTINUED SB 702 Page 6 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. AL:d 5/15/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED