BILL ANALYSIS
AB 2059
Page 1
ASSEMBLY THIRD READING
AB 2059 (Charles Calderon)
As Amended April 22, 2010
Majority vote
JUDICIARY 7-3
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|Ayes:|Feuer, Brownley, Hill, | | |
| |Huffman, Skinner, | | |
| |Monning, Nava | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Tran, Hagman, Knight | | |
| | | | |
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SUMMARY : Provides a mechanism for service of legal process on
non-residents who cause injuries involving rental cars in
California, up to a maximum contractual limit. Specifically,
this bill :
1)Provides that, where a car rental company enters into a rental
contract with a renter who resides out of state, and the
rental car company provides third-party liability insurance to
the renter, the car rental company shall accept service of
process on behalf of the renter or authorized driver related
to any harm, loss, or damage related to the use or operation
of the rental vehicle.
2)Provides that process may be served by first-class mail,
return receipt requested, or by personal service by a
registered agent of service of process on file with the
Secretary of State and Consumer Services.
3)Requires that the rental car company shall provide a copy of
any summons and complaint so served to the renter or
authorized driver by first-class mail, return receipt
requested.
4)Provides that the rental company contract shall disclose to a
renter who is not a resident of this state a notice, which
shall appear in at least 12-point boldface type, that the
renter agrees to and authorizes the rental company to accept
service of process on his or her behalf for any harm, loss, or
AB 2059
Page 2
damage related to the use or operation of the vehicle that
occurs during the rental period.
5)Requires any plaintiff who elects to deliver process to the
rental company pursuant to these provisions agree to limit his
or her recovery against the renter, authorized driver, or
rental company to the limits of the protection provided by the
insurance coverage.
FISCAL EFFECT : None
COMMENTS : The author states that this bill will assist drivers
and the State of California by making sure that the insurance
that car renters buy can actually be relied upon as intended by
requiring the car rental company to be the agent for service of
process for claims against insured drivers who reside outside of
California.
The author explains the reason for the bill as follows:
Under current law, service of process on out of
country defendants is complicated, expensive and
difficult as (1) the onerous provisions of the Hague
Convention of 1965 On the Service Abroad of Judicial
and Extrajudicial Documents in Civil or Commercial
Matters must be met; (2) not all countries have
agreed to the Hague Convention; (3) the paperwork
must be translated into the language of the
defendant; and (4) a service processor must be
located. The losers in the current situation are
Californians who are injured or killed by an
out-of-state renter because the case cannot proceed
unless the defendant is properly served. The State
of CA suffers as well because if the defendant
cannot be served and the case not processed, the
medical bills may often end up being paid by
California taxpayers.
The sponsor of the measure, Consumer Attorneys of California
(CAOC), argues that AB 2059 will make sure drivers receive the
benefits of car rental insurance when injured by an out-of-state
or out-of-country driver.
CAOC also argues that the bill will help save the State of
AB 2059
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California money, noting that when service of process cannot be
accomplished, California often suffers financially as well. If
the defendant cannot be served and the case not processed, the
medical bills may often end up being paid by California
taxpayers. Under the normal course of a lawsuit, the medical
bills would be repaid out of the lawsuit recovery to the state
in instances where it provides medical care. However, under the
current situation, if a defendant cannot be served, he or she
(and the insurer) avoid responsibility and the victim and the
state end up paying.
Two car rental companies, Hertz Corp and Avis Budget Group,
oppose the bill. They argue that it "creates significant
liability exposure for the rental car company if it does not
succeed in providing a copy of the summons and complaint to the
driver" and that other approaches would be more helpful to
address the sponsor's objectives.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0004023