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 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 person in time to
defend an action brought by a debt buyer and a default or default judgment has been entered against the person in the action. The bill would require 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, 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.begin insert The bill would prescribe requirements regarding documents to be submitted to a court in instances of identity theft or mistaken identity.end insert The bill would prescribe requirements for the filing, which would include an affidavit submitted to the court under oathbegin delete showingend deletebegin insert
statingend insert that 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. 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, 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 1788.61 is added to the Civil Code, to
2read:
(a) (1) Notwithstanding Section 473.5 of the Code
4of Civil Procedure, if service of a summons has not resulted in
5actual notice to a person in time to defend an action brought by a
6debt buyer and a default or default judgment has been entered
7against the person in the action, the person may serve and file a
8notice of motion and motion to set aside the default or default
9judgment and for leave to defend the action.
10(2) Except as provided in paragraph (3), the notice of motion
11shall be served and filed within
a reasonable time, but in no event
12exceeding the earlier of:
13(A) Six years after entry of the default or default judgment
14against the person.
15(B) One hundred eighty days of the first actual notice of the
16action.
P3 1(3) begin insert(A)end insertbegin insert end insert Notwithstanding paragraph (2), in the case of identity
2theft or mistaken identity, the notice of motion shall be served and
3filed within a reasonable time, but in no event exceeding 180 days
4of the first actual notice of the action.
5(B) (i) In the case of identity theft, the person alleging that he
6or she is a victim of identity theft shall provide the court with either
7a copy of a Federal Trade Commission Identity Theft Victim’s
8Complaint and Affidavit or a copy of a police report filed by the
9person alleging that he or she is the victim of an identity theft
10crime, including, but not limited to, a violation of Section 530.5
11of the Penal Code, for the specific debt associated with the
12judgment.
13(ii) In the case of mistaken identity, the moving party shall
14provide relevant information or documentation to support the
15claim that he or she is not the party named in the judgment or is
16not the person who incurred or owes the debt.
17(b) A notice of motion to set aside a default or default judgment
18and for leave to defend the action shall designate as the time for
19making the motion a date prescribed by Section 1005 of the Code
20of Civil Procedure, and it shall be accompanied by an affidavit
21begin delete showingend deletebegin insert statingend insert
under oath that the person’s lack of actual notice
22in time to defend the action was not caused by his or her avoidance
23of service or inexcusable neglect. The person shall serve and file
24with the notice a copy of the answer, motion, or other pleading
25proposed to be filed in the action.begin delete In contesting the motion to set begin insert Either party may introduce, and
26aside the judgment or default judgment, a debt buyer may
27introduce, and the court may consider, evidence relating to the
28document retention policies ofend delete
29the court may consider, evidence in support of its motion or
30opposition, including evidence relating toend insert the process server who
31appears on the proof of service of the summons and complaint.
32(c) Upon a finding by the court that the motion was made within
33the period permitted by subdivision (a) and that the person’s lack
34of actual notice in time to defend the action was not caused by his
35or her avoidance of service or inexcusable neglect, the court may
36set aside the default or default judgment on whatever terms as may
37be just and allow the party to defend the action. If the validity of
38the judgment is not challenged, the court may select an appropriate
39remedy other than setting aside the default or default judgment.
P4 1(d) This section shall apply to a default or default judgment
2entered on or after January 1, 2010, except in the case of identity
3theft or mistaken identity, in which case this section shall apply
4regardless of the date of the default or default judgment.
5(e) This section shall not limit the equitable authority of the
6court or other available remedies under law.
No reimbursement is required by this act pursuant to
8Section 6 of Article XIII B of the California Constitution because
9the only costs that may be incurred by a local agency or school
10district will be incurred because this act creates a new crime or
11infraction, eliminates a crime or infraction, or changes the penalty
12for a crime or infraction, within the meaning of Section 17556 of
13the Government Code, or changes the definition of a crime within
14the meaning of Section 6 of Article XIII B of the California
15Constitution.
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