BILL ANALYSIS �
AB 1388
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1388 (Wieckowski)
As Amended June 10, 2011
Majority vote
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|ASSEMBLY: |49-26|(May 2, 2011) |SENATE: |24-13|(August 29, |
| | | | | |2011) |
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|COMMITTEE VOTE: |6-3 |(September 6, 2011) |RECOMMENDATION: |concur |
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Original Committee Reference: JUD.
SUMMARY : Allows the court to grant a judgment debtor's claim of
exemption from wage garnishment in cases where the underlying debt
was incurred for medical care or hospital services rendered to the
judgment debtor or his or her family. Specifically, this bill
deletes the current exception for "common necessaries of life" to
the general rule that exempts from wage garnishment the portion of
the judgment debtor's earnings that he or she proves is necessary
to support himself or herself and his or her family, and makes
other clarifying and conforming changes.
The Senate amendments :
1)Delete the current exception for "common necessaries of life" to
the general rule that exempts from wage garnishment the portion
of the judgment debtor's earnings that he or she proves is
necessary to support himself or herself and his or her family.
In other words, where the exemption from wage garnishment is
currently unavailable for debts incurred for the "common
necessaries of life," under the Senate amendments, the exemption
would be available without regard to this former exception.
2)Clarify that the above exemption from wage garnishment remains
unavailable for debts incurred pursuant to an order or award for
the payment of attorney's fees in certain divorce, custody, and
support cases (pursuant to Family Code Sections 2030, 3121, and
3557), as specified.
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3)Make conforming changes to Government Code Section 68632 to
correct a cross reference in that statute to the use of the term
"common necessaries of life" as used in a paragraph deleted by
this bill.
EXISTING LAW :
1)Exempts from levy, with certain categorical exceptions, the
portion of a judgment debtor's earnings which the judgment debtor
proves is necessary for the support of the judgment debtor or his
or her family supported in whole or in part by the judgment
debtor.
2)Provides that the above exemption is not available if any of the
following exceptions applies:
a) The debt was incurred for the common necessaries of life
furnished to the judgment debtor or the family of the judgment
debtor;
b) The debt was incurred for personal services rendered by an
employee or former employee of the judgment debtor;
c) The order is a withholding order for support to collect
delinquent amounts payable under a judgment for the support of
a child, or spouse or former spouse, of the judgment debtor;
or,
d) The order is a state tax order, governed by Article 4
(commencing with Civil Code of Procedure (CCP) Section
706.070).
3)Provides that hospital services rendered to a judgment debtor or
his or her family constitute a "common necessary of life" for
which the debtor is not entitled to exemption from levy or
earnings withholding pursuant to CCP Section 706.051. (J.J.
MacIntyre Co. v. Duren (1981) 118 Cal.App.3d Supp. 16.)
4)Establishes that the rendering of legal services and the
advancement of costs of litigation giving rise to a pendente lite
award to any attorney in a marriage dissolution action qualify as
"common necessaries of life" for the benefit of the indigent
AB 1388
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spouse, thereby allowing enforcement of the award by a writ of
execution on the other spouse's earnings against a claim of
exemption of those earnings. (In re Marriage of Pallesi (1977)
73 Cal. App. 3d 424.)
AS PASSED BY THE ASSEMBLY , this bill was substantially similar to
the version approved by the Senate.
FISCAL EFFECT : None
COMMENTS : According to the author, the working poor in California
remain at risk of falling into hunger and homelessness when they
are unable to pay medical bills because existing case law
effectively prevents a judgment debtor from obtaining an exemption
from wage garnishment for that portion of his or her earnings
needed for the support of the debtor and his or her family when the
underlying debt was incurred for medical care for the debtor or his
family. This bill makes this exemption from wage garnishment
available to a judgment debtor where the underlying debt was
incurred for medical care. As a result, this bill merely allows
the court in medical debt cases to consider the debtor's claim that
his current financial hardship requires a certain portion of his
wages to be exempted from wage garnishment for the support of the
debtor and his family, and allows the court to exercise its
existing authority to fashion a partial payment plan or otherwise
modify the terms of the earnings withholding order. However, the
judgment debtor is not permanently relieved of any portion of the
underlying medical debt under this bill.
Section 706.051(c) of the Code of Civil Procedure provides that an
exemption from wage garnishment for the support of a judgment
debtor and his or her family "is not available if...�t]he debt was
incurred for the common necessaries of life (emphasis added)
furnished to the judgment debtor or the family of the judgment
debtor." Case law, J.J. MacIntyre Co. v. Duren (1981) 118
Cal.App.3d Supp. 16, explicitly holds that medical care or hospital
services constitute a "common necessary of life" for the purpose of
determining whether the exception for common necessaries of life
should apply to disallow the hardship exemption. Legal service
attorneys contacted by the Judiciary Committee report that when
judgment creditors file a notice of opposition to the claim of
exemption in medical debt cases, they typically cite the "common
necessaries of life" exception and the J.J. MacIntyre decision as
the basis for which the claim of exemption should be denied by the
court.
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This bill deletes the existing exception to the hardship exemption
for "common necessaries of life." In other words, where the
hardship exemption from wage garnishment is currently unavailable
for debts incurred for the "common necessaries of life," under the
Senate amendments, the exemption would be available without regard
to this former exception. In effect, this bill would permit but
not require the court to grant a judgment debtor's claim of
exemption from wage garnishment in cases where the underlying debt
was incurred for medical care or hospital services rendered to the
judgment debtor or his or her family. The bill does not affect the
right of a debtor to file a claim of exemption, nor of a creditor
to file a notice of opposition to the claim to obtain a court
hearing to decide the matter.
Under this bill, the judgment debtor will still have to submit a
detailed financial statement to demonstrate the portion of his or
her earnings that he or she contends should be exempt from
garnishment for the necessary support of his or her family. The
court will still have to determine the merit of the judgment
debtor's claim of exemption, but it would allow approval of the
claim in cases of medical debt where the court is currently
constrained by the J.J. MacIntyre decision. Importantly, this bill
does not discharge the underlying debt. Regardless of whether the
court approves the claim of exemption or not, the underlying
judgment is still valid and can be collected in the future,
including interest.
The bill also clarifies that the above exemption from wage
garnishment remains unavailable for debts incurred pursuant to an
order or award for the payment of attorney's fees in certain
divorce, custody, and support cases (pursuant to Sections 2030,
3121, and 3557 of the Family Code), as specified. The Senate
amendments narrow, not broaden, the scope of the bill to ensure
that its effect is only with respect to wage garnishment in medical
debt cases, and to ensure it does not upset existing law or public
policy unrelated to medical debt. The bill effectively preserves
the status quo with respect to wage garnishment and court orders
for attorney fees in certain family law matters, and does not
create new rights or means of enforcing these orders.
Finally, this bill makes conforming changes to Section 68632 of the
Government Code (relating to waiver of court fees and costs) to
correct a cross reference in that statute to the "common
necessaries of life" provision deleted by this bill. These changes
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are necessary to ensure that current application of those sections
of the Family and Government Codes, in those particular contexts,
remains unchanged by the deletion of the "common necessaries of
life" exception under this bill.
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334
FN: 0002732