BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    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,  
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                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  

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                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

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             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  

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             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: 

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             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

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