BILL NUMBER: SB 641 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 16, 2015
AMENDED IN ASSEMBLY JULY 8, 2015
INTRODUCED BY Senator Wieckowski
FEBRUARY 27, 2015
An act to add Section 1788.61 to the Civil Code, relating to debt
buying.
LEGISLATIVE COUNSEL'S DIGEST
SB 641, as amended, Wieckowski. Debt buying: default judgment.
(1) Existing law, the Fair Debt Buying Practices Act, regulates
the practice of buying charged-off consumer debt, as defined, sold or
resold on or after January 1, 2014, for collection purposes and
prescribes the circumstances pursuant to which the debt buyer may
bring suit. The act prohibits a court from entering a default or
other judgment in an action initiated by a debt buyer against a
debtor unless business records, authenticated through a sworn
declaration, are submitted by the debt buyer to the court to
establish the facts required to be alleged, as specified.
This bill would permit a debtor person
to serve and file a notice of motion and motion to set aside a
default or default judgment and for leave to defend an action
relating to debt, if service of a summons did not result in actual
notice to the debtor person in time to
defend an action brought by a debt buyer and a default or default
judgment has been entered against the debtor
person in the action. The bill would require a debtor
the person to make this service and filing
within 6 years after entry of the default judgment or 180 days of the
first actual notice of the action, whichever is earlier.
earl ier, except in cases of identity theft
or mistaken identity, in which case the service and filing is to be
made within 180 days of the first actual notice of the action.
The bill would prescribe requirements for the filing, which would
include an affidavit submitted to the court under oath and
showing that the party's
person's lack of actual notice in time to defend the action
was not caused by his or her avoidance of service or inexcusable
neglect. By expanding the crime of perjury, the bill would impose a
state-mandated local program. The bill would permit a court to set
aside the default or default judgment on whatever terms as may be
just and allow the party to defend the action. The bill would apply
to a judgment entered on and after January 1. 2010.
1, 2010, except as specified.
(2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1788.61 is added to the Civil Code, to read:
1788.61. (a) (1) Notwithstanding Section
473.5 of the Code of Civil Procedure, if service of a summons has not
resulted in actual notice to a debtor person
in time to defend an action brought by a debt buyer and a
default or default judgment has been entered against the
debtor person in the action, the debtor
person may serve and file a notice of motion
and motion to set aside the default or default judgment and for leave
to defend the action. The
(2) Except as provided in paragraph (3),
the notice of motion shall be served and filed within
the earlier of:
(1) Six
a reasonable time, but in no event exceeding the earlier of:
(A) Six years after
entry of the default or default judgment against the debtor.
person.
(2) Within 180
(B) One hundred eighty days of
the first actual notice of the action.
(3) Notwithstanding paragraph (2), in the case of identity theft
or mistaken identity, the notice of motion shall be served and filed
within a reasonable time, but in no event exceeding 180 days of the
first actual notice of the action.
(b) A notice of motion to set aside a default or default judgment
and for leave to defend the action shall designate as the time for
making the motion a date prescribed by Section 1005 of the Code of
Civil Procedure, and it shall be accompanied by an affidavit showing
under oath that the party's person's
lack of actual notice in time to defend the action was not caused by
his or her avoidance of service or inexcusable neglect. The
party person shall serve and file with the
notice a copy of the answer, motion, or other pleading proposed to be
filed in the action. In contesting the motion to set aside the
judgment or default judgment, a debt buyer may introduce, and the
court may consider, evidence relating to the document retention
policies of the process server who appears on the proof of service of
the summons and complaint.
(c) Upon a finding by the court that the motion was made within
the period permitted by subdivision (a) and that debtor's
the person's lack of actual notice in time to
defend the action was not caused by his or her avoidance of service
or inexcusable neglect, the court may set aside the default or
default judgment on whatever terms as may be just and allow the party
to defend the action. If the validity of the judgment is not
challenged, the court may select an appropriate remedy other than
setting aside the default or default judgment.
(d) This section shall apply to a default or default judgment
entered on or after January 1, 2010. 2010,
except in the case of identity theft or mistaken identity, in which
case this section shall apply regardless of the date of the default
or default judgment.
(e) This section shall not limit the equitable authority of the
court or other available remedies under law.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.