BILL ANALYSIS
AB 2365
Page 1
Date of Hearing: April 27, 2010
ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
Paul J. Cook, Chair
AB 2365 (Lieu) - As Amended: April 8, 2010
SUBJECT : Veterans affairs: administration.
SUMMARY : This bill makes a person who has violate the rights
of a service member under existing law liable for attorney's
fees, court cost and damages. Specifically, this bill :
1. Holds a person who violates these specified rights of
service members liable for actual damages, reasonable
attorney's fees, and costs incurred by a person seeking to
enforce the rights.
2. Waives waive the filing fee and court costs for a person
seeking to enforce the specified rights.
3. Requires the court to set a hearing date within 25 days
after a petition is filed, unless good cause is shown to
delay the date of the hearing.
4. Prohibits the court from charging a filing fee or court
costs for filing a petition for relief.
EXISTING LAW :
1.Provides legal rights, as specified, for service members in
regards to credit agreements, court proceedings, interest
liabilities, eviction proceedings, contracts, mortgages and
trusts, leases, life insurance policies, taxes and
assessments, and health insurance policies.
2.Authorizes a service member to apply to the court for relief
of an obligation, liability, tax, or assessment, as specified.
Existing law requires a party to provide notice before the
court grants relief. Existing law requires the court to
provide a hearing before granting or denying relief.
3.Establishes the California Military Families Financial Relief
Act and the California Military Families Financial Relief Act
of 2005, which provides financial relief for a service member
AB 2365
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who is called to active duty.
FISCAL EFFECT : Unknown
COMMENTS : Recently, the California Military Department has
coordinated with State Military Reserve Judge Advocate General
(JAG) Officers to assist deployed and deploying service members
who incur financial hardship because of their deployments and
are afforded protections under the California Military and
Veterans Code. These experienced lawyers have either counseled
or represented 22 service members over the past year. During
their representation of these service members, the JAG Officers
have experienced the need for this legislation for the reasons
expressed above. However, the resources that the California
Military Department can expend on these issues are very limited.
The author states that service members must have this
legislation so they can enforce their rights and protections on
their own accord.
Generally, these cases arise when the service members attempts
to find relief under the provisions of the California Military
and Veterans Code. Relief sought includes, but is not limited
to, a deferment of a financial obligation or reduction of an
interest rate to the statutory requirement of 6%. The service
members will send a letter and often times follow up with a
telephone call to their creditor/s. The financial institution
will then deny the service members the protections of the
Military and Veterans Code. The service member is at a
standstill. Judge Advocates in-country are limited by
regulation and geography from doing anything more than sending a
letter on behalf of the service members. The service member is
limited by geography or sophistication in enforcing his or her
rights in court.
This bill enables service members to recover an award of
reasonable attorney fees. Not only is finding an attorney to
represent a service members claimant difficult without an
attorney's fees provision, but on a typical claim the service
member cannot be made whole when a significant portion of his or
her damages award must go toward non-recoverable attorney's
fees. Finding an attorney to take such a case is nearly
impossible unless that attorney knows that reasonable
compensation will be allowed by the court for undertaking such
an action to protect the rights of a service member.
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Many of the rights sought to be enforced have either no damages
or minimal damages. The service member is primarily seeking an
order from the court compelling the lender to stop violating the
Military and Veterans Code and honor his or her requests. An
example is a case to clear up the service members' credit after
the institution has wrongfully denied the service members the
protections of the Military and Veterans Code. There would be
no damages in a case where the service members is only seeking a
court order to accurately reflect his or her credit if no
attorney's fees are available. There is no money to pay an
attorney in an injunction action.
The author believes voluntary compliance will be much more
likely if creditors know that litigation over violations of the
Military and Veterans Code may result in an award against them
of the service members' reasonable fees and costs. Due to being
deployed overseas, many service members do not have the ability
to immediately pay court fees at the time of filing because of
geographical limitations or financial hardship. This bill would
grant service members a waiver of court fees so that service
members may proceed to enforce these important protections.
This bill would also grant service members an expedited review
of their case. Under current law, a service member may not be
able to enforce these protections until the service member
returns from deployment. A delay in enforcement often puts the
service members in irreversible credit problems, regardless of
the eventual outcome of the case.
The author believes this legislation is critical because more
Citizen Soldiers and Airmen of California are being called to
active duty in Iraq and Afghanistan. As a result, the service
members and their families are suffering the hardships of these
ongoing deployments. It is necessary to provide an enforcement
mechanism to ensure the Legislature's stated intent to enable
service members to devote their entire energy to the defense
needs of the nation or state.
REGISTERED SUPPORT / OPPOSITION :
Support
California Military Department (sponsor)
National Guard Association of California
AB 2365
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Opposition
None on file.
Analysis Prepared by : Eric Worthen / V. A. / (916) 319-3550