BILL NUMBER: AB 1950	CHAPTERED
	BILL TEXT

	CHAPTER   856
	FILED WITH SECRETARY OF STATE   SEPTEMBER 25, 1998
	APPROVED BY GOVERNOR   SEPTEMBER 24, 1998
	PASSED THE ASSEMBLY   AUGUST 28, 1998
	PASSED THE SENATE   AUGUST 27, 1998
	AMENDED IN SENATE   AUGUST 24, 1998
	AMENDED IN SENATE   AUGUST 19, 1998
	AMENDED IN SENATE   JUNE 25, 1998
	AMENDED IN ASSEMBLY   APRIL 23, 1998

INTRODUCED BY   Assembly Member Torlakson
   (Principal coauthor:  Assembly Member Morrow)
   (Principal coauthor:  Senator Burton)

                        FEBRUARY 17, 1998

   An act to add Section 664.7 to the Code of Civil Procedure, and to
amend Section 19719 of the Revenue and Taxation Code, relating to
liability.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1950, Torlakson.  Liability:  construction defects:  insurance
defense.
   Existing law provides that if parties to pending litigation
stipulate for settlement of the case, or part thereof, as specified,
the court may enter judgment pursuant to the settlement and, if
requested, may retain jurisdiction over the parties to enforce the
settlement until its full performance.
   This bill would authorize the court to also enter this judgment
pursuant to the settlement of a pending construction defect action,
as defined, if, where a party's contribution is paid on its behalf
pursuant to a policy for insurance, the parties stipulate through
their respective counsel.
   Existing law makes it a misdemeanor for any person to attempt or
purport to exercise the powers, rights, and privileges of a
corporation that has been suspended.
   This bill would exempt from this provision any insurer or counsel
retained by an insurer on behalf of the suspended corporation who
provides a defense for the suspended corporation in a civil action
based upon a claim for personal injury, property damage, or economic
losses and prosecutes subrogation, contribution, or indemnity rights
in the name of the suspended corporation.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 664.7 is added to the Code of Civil Procedure,
to read:
   664.7.  (a) Notwithstanding Section 664.6, if parties to a pending
construction defect action stipulate personally or, where a party's
contribution is paid on its behalf pursuant to a policy of insurance,
the parties stipulate through their respective counsel, in a writing
signed by the parties outside the presence of the court or orally
before the court, for settlement of the case, or part thereof, the
court, upon motion, may enter judgment pursuant to the terms of the
settlement.  If requested by the parties, the court may retain
jurisdiction over the parties to enforce the settlement until
performance in full of the terms of the settlement.
   (b) It is the intent of the Legislature that this section modify
the holding of Levy v. Superior Court (1995), 10 Cal. 4th 578,
regarding the authority of counsel in a construction defect action to
bind a party to a settlement.
   (c) For purposes of this section, "construction defect action"
shall mean any civil action that seeks monetary recovery against a
developer, builder, design professional, general contractor, material
supplier, or subcontractor of any residential dwelling based upon a
claim for alleged defects in the design or construction of the
residential dwelling unit.
  SEC. 2.  Section 19719 of the Revenue and Taxation Code is amended
to read:
   19719.  (a) Any person who attempts or purports to exercise the
powers, rights, and privileges of a corporation that has been
suspended pursuant to Section 23301 or who transacts or attempts to
transact intrastate business in this state on behalf of a foreign
corporation, the rights and privileges of which have been forfeited
pursuant to the section, is punishable by a fine of not less than two
hundred fifty dollars ($250) and not exceeding one thousand dollars
($1,000), or by imprisonment not exceeding one year, or both fine and
imprisonment.
   (b) This section shall not apply to any insurer, or to counsel
retained by an insurer on behalf of the suspended corporation, who
provides a defense for a suspended corporation in a civil action
based upon a claim for personal injury, property damage, or economic
losses against the suspended corporation, and, in conjunction with
this defense, prosecutes subrogation, contribution, or indemnity
rights against persons or entities in the name of the suspended
corporation.
   (c) Nothing in this section shall create or limit any obligation
upon an insurer to defend a suspended corporation.