BILL ANALYSIS �
AB 1698
Page 1
ASSEMBLY THIRD READING
AB 1698 (Wagner)
As Amended May 28, 2014
Majority vote
PUBLIC SAFETY 4-0
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|Ayes:|Ammiano, Jones-Sawyer, |
| |Quirk, Stone |
| | |
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SUMMARY : Allows the court, upon motion of the prosecutor and
after a holding a hearing on the matter, to issue an order
voiding a false or forged instrument at its inception when a
defendant is convicted of filing, registering, or recording such
an instrument. Specifically, this bill :
1)Permits a court, upon motion of the prosecuting agency and
after holding a hearing, to issue a written order declaring a
false or forged instrument to be judged void at its inception
when a defendant is convicted of offering a false or forged
instrument for filing, or when a defendant enters a plea in
which a charge of offering a false or forged instrument is
dismissed, but he or she agrees to let the court consider the
dismissed charge for purposes of sentencing.
2)Requires the order to state whether the instrument is false,
forged, or both, and to describe the nature of the falsity or
forgery.
3)Requires a copy of the false or forged instrument be attached
to the court order.
4)Requires that a certified copy of the court order be filed,
registered, or recorded.
5)Requires that the order be recorded with a county recorder if
the order pertains to a false or forged instrument that has
been recorded with a county recorder.
6)Requires the order to reference the county recorder's document
recording number of any pendency of action.
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7)States that specified recording fees are waived.
8)Requires the prosecuting agency to do the following when
filing a motion to have a false or forged deed voided at its
inception:
a) Provide written notice by certified mail to all parties
who have an interest in the affected property within 10
calendar days of the filing of the criminal complaint;
b) Record a notice of pendency of action in the county in
which the affected property is located within 10 calendar
days of the filing of the criminal complaint;
c) Record a withdrawal of pendency of action in the county
in which the affected property is located if the case is
adjudicated or dismissed without obtaining an order to
declare the deed void.
9)Provides that the written notice and notice of pendency of
action must inform the interested parties that a criminal
action has begun, and of the right to be heard, and
identifying the property by street address and legal
description, if available.
10)States that failure of the prosecuting agency to timely
provide written notice or to record a pending of action will
not prohibit the agency from subsequently moving to declare
the false or forged deed void at its inception, but the court
must consider the omission as a reason to provide any
interested parties with more time to respond, and will create
a presumption that a civil proceeding is necessary to protect
the interests of the parties.
11)States that if the instrument sought to be declared void
involves real property, then "interested parties" include, but
are not limited to, all parties who have recorded a deed,
lien, mortgage, deed of trust, security interest, lease, or
other instrument declaring an interest in the property.
12)Allows notice to be given to a party who is not required to
receive it, if the party notifies the prosecuting agency in
writing of its desire to be notified of a motion to void a
false or forged instrument.
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13)Requires the court to set a hearing on the motion to void a
false or forged deed at which the defendant, prosecuting
agency, and interested parties have the right to be heard and
to present information to the court.
14)States that the court may decline to rule on the motion if it
decides that the matter would be more appropriately determined
in a civil proceeding in order to protect the interests of the
parties or the property rights of any person.
15)Provides that, if prior to a hearing on a motion to void a
false or forged deed, a party files a quiet title action
seeking a determination of the validity of the same false or
forged instrument, the court should take that into
consideration in making its determination.
16)States that a final judgment previously entered in a quiet
title action shall be followed to the extent otherwise
required by law.
17)Defines "prosecuting agency" as "a city attorney, a district
attorney, the Attorney General, or other state or local agency
actively prosecuting a case under this section."
18)Provides that an order declaring a false or forged deed void
at its inception as a result of the criminal conviction is a
judgment and is subject to appeal under specified provisions
of the Code of Civil Procedure.
EXISTING LAW :
1)Makes it a felony to knowingly procure, or offer any false or
forged document to be filed, registered, or recorded in any
public office within this state, which instrument, if genuine
might be filed, registered or recorded under any law of this
state or of the United States.
2)States that each instrument offered to be filed, registered,
or recorded is a separate violation.
3)Provides that a person who, with intent to defraud, signs the
name of another person or of a fictitious person to specified
items, knowing that he or she has no authority to do so, is
guilty of forgery.
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4)Defines grand theft generally as when the value of the money,
labor or real or personal property taken is more than $950.
5)Makes participation in a fraudulent conveyance a misdemeanor.
6)Defines mortgage fraud for the purpose of criminal
prosecution.
7)Permits a party to file a civil action, commonly known as a
"quiet title action," to establish title against adverse
claims to real or personal property or any interest therein.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS :
1)Author's statement: According to the author, "Penal Code (PC)
Section 115 makes filing a false or forged real estate deed or
other instruments a felony. But criminal courts can currently
only void forged deeds, not false ones. AB 1698 will amend PC
115 to specifically allow courts to void false and forged
deeds.
"A forged deed is where someone signs someone else's name
without permission. A false deed is where no forgery occurs,
but the deed is nonetheless false or untrue. In California, a
forged deed has long been held to be void under the law. But
there is no law that allows a judge to void a false deed.
This requires a homeowner or business who has been victimized
by false deeds to go to civil court for a 'quiet title action'
at their own expense, even after the bad guys are convicted in
criminal court.
"False deeds cost homeowners, business, and realtors unnecessary
time and money. False deeds create vacant homes in
neighborhoods, which leads to diminished property values,
blight, and potential for increased crime. The perpetrators
of these schemes tend to prey on vulnerable populations in the
poorest neighborhoods that have been hit hard by foreclosures.
"AB 1698 is an opportunity to help those victims without
creating a new crime, enhancing sentences, increasing the
prison population, or putting additional strain on the state
budget."
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2)Distinction between forged and false documents: The purpose
of Penal Code section 115 is to preserve the integrity of
public documents. (People v. Denman (2013) 218 Cal.App.4th
800, 808-809.) The statute differentiates between false and
forged documents, but clearly proscribes either kind of
instrument. (Generes v. Justice Court (1980) 106 Cal.App.3d
678, 682.)
A forgery is a "writing which falsely purports to be the writing
of another..." made with the "intent to defraud." (Wutzke v.
Bill Reid Painting Service, Inc. (1984) 151 Cal.App.3d 36,
41-42.)
A false instrument is one "that has the effect of defrauding one
who acts on the instrument as genuine." (Generes v. Justice
Court, supra, 106 Cal.App.3d at p. 682.) In the context of a
deed, the court explained in more detail the notion of a false
deed: "Here the lack of an ownership interest in the land
goes to the deception itself. If Generes did not own the
interest she purported to convey, the instrument she filed was
clearly false. Having no right to grant or convey an
easement, her recording of a deed transferring an easement
would establish a cloud on the title of those persons who
lawfully owned interests in the land. A title searcher
encountering the spurious document who acted upon it as
genuine would of course be materially deceived." (Ibid.)
3)Distinction between void and voidable instruments: "A deed is
void if the grantor's signature is forged or if the grantor is
unaware of the nature of what he or she is signing." (Schiavon
v. Arnaudo Brothers (2000) 84 Cal.App.4th 374, 378.) Such a
deed is void ab initio; it constitutes a nullity, and cannot
be made the foundation of a good title, even by a bona fide
encumbrancer. (Erickson v. Bohme (1955) 130 Cal.App.2d 553,
557; Wutzke v. Bill Reid Painting Service, Inc., supra, 151
Cal.App.3d at p. 43.)
"A voidable deed, on the other hand, is one where the grantor is
aware of what he or she is executing, but has been induced to
do so through fraudulent misrepresentations." (Schiavon v.
Arnaudo Brothers, supra, 84 Cal.App.4th at p. 378.)
Ordinarily, a bona fide purchaser or encumbrancer may rely on
and enforce voidable instruments. (See Fallon v. Triangle
Management Services, Inc. (1985) 169 Cal.App.3d 1103, 1106;
accord, Schiavon, supra, 84 Cal.App.4th at p. 378; see also
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Wutzke, supra, 151 Cal.App.3d at pp. 42-43 [innocent
encumbrancer entitled to same protections as innocent
purchaser].)
Please see the policy committee analysis for a full discussion
of this bill.
Analysis Prepared by : Sandy Uribe / PUB. S. / (916) 319-3744
FN: 0003864