BILL ANALYSIS �
AB 1856
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1856 (Wilk)
As Amended June 10, 2014
Majority vote
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|ASSEMBLY: |78-0 |(April 28, |SENATE: |35-0 |(July 3, 2014) |
| | |2014) | | | |
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Original Committee Reference: B. & F.
SUMMARY : Expands California's Bond and Undertakings Law to
include a cashier's check, made payable to a designated officer,
issued by a bank, savings association, or credit union
authorized to do business in this state, among the assets that
may be deposited in lieu of bond. Specifically, this bill :
1)Requires the money to be held in trust by the officer in
interest bearing deposit or share account.
2)Provides that, except as specified or to the extent a statute
providing for a bond precludes a deposit in lieu of bond or
limits the form of deposit, a person may instead of giving a
bond and without prior court approval, deposit with a
designated officer any asset permitted by the Bond and
Undertakings Law.
3)Provides that all bonds or notes, including bearer bonds and
bearer notes, of the United States or the State of California,
may be deposited in lieu of bond under the Bond and
Undertakings Law. This bill would specify the terms upon
which the deposit of a bond or note shall be accomplished.
4)Makes other technical clarifications.
The Senate amendments further clarify the intent of the bill.
EXISTING LAW :
1)Defines "officer" as a sheriff, marshal, clerk of court, judge
or magistrate (if there is no clerk), board, commission,
department, or other public official or entity to whom the
bond is given or with whom a copy of the bond is filed or who
is required to determine the sufficiency of the sureties or to
AB 1856
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approve the bond. [Code of Civil Procedure Section 995.160]
2)Defines "principal" as a person who gives a bond. [Code of
Civil Procedure Section 995.170]
3)Provides that the principal may, instead of giving a bond,
deposit with the officer any of the following:
a) Lawful money of the United States.
b) Bearer bonds or bearer notes of the United States or the
State of California.
c) Certificates of deposit payable to the officer.
d) Savings accounts assigned to the officer.
e) Investment certificates or share accounts assigned to
the officer.
f) Certificates for funds or share accounts assigned to the
officer. [Code of Civil Procedure Section 995.710]
AS PASSED BY THE ASSEMBLY , this bill is substantially similar to
the version passed by the Senate.
FISCAL EFFECT : None
COMMENTS : According to the sponsor, the Conference of
California Bar Associations, this bill updates the list of
financial instruments that may be deposited with the court in
lieu of an appeal bond to stay execution of a judgment pending
appeal. The purpose of the bill is to update the list of
acceptable forms of security to reflect current instruments of
unquestioned value and thereby to eliminate the need to expend
the litigants' and court's time and resources on unnecessary
motions to have these forms of security approved.
This bill updates existing law concerning the method by which a
party can stay enforcement of a money judgment while an appeal
is pending. This measure is important to ensure that the
contested funds are kept secure for whichever side prevails
after litigation finally concludes. Updating existing law to
allow the acceptance of more modern types of collateral will
presumably streamline court processes and lower transaction
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costs for litigants involved in money judgment appeals.
Background. The Code of Civil Procedure, California's Bond and
Undertaking Law, lists qualifying deposits, which include:
cash, bearer bonds, and certificates of deposit. The Code of
Civil Procedure Section 995.710, has not been updated since
1982. California's Bond and Undertaking Law allows litigants to
stay execution proceedings while they exercise their right to
appellate review of adverse money judgments. The statutes
project the interest of judgment creditors by requiring adequate
security for the payment of a money judgment in the event it is
affirmed on appeal. Because this code section does not include
cashier's checks and bonds, judgment debtors who wish to deposit
any of these appeals bond substitutes must make special
applications to the court by motion.
Existing law authorizes the deposit of bearer bonds or bearer
notes but the United States Treasury and the states ceased
issuing bearer instruments in 1982. (26 Code of Federal
Regulations 5f 103-1). While this bill will not prohibit the
use of bearer bonds for a deposit in lieu of bond, the bill will
allow litigants to use United States Treasury and the state's
bonds.
In addition, this bill allows litigants to make a deposit in
lieu of bond using a cashier's check. Existing law allows
litigants to deposit cash and certificates of deposit in lieu of
an appeal bond. While clerks sometimes accept cashier's checks,
clerks often refuse to accept them absent a court order because
they are not included in the Code of Civil Procedure.
Analysis Prepared by : Kathleen O'Malley / B. & F. / (916)
319-3081 FN:
0004037