Amended in Senate March 24, 2014

Senate Bill No. 1026

Introduced by Senator Vidak

February 14, 2014

An act to amend begin delete Section 3291 of the Civil Code, relating to damages. end delete begin insert Sections 5705, 5710, and 6822 of the Civil Code, relating to common interest developments. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 1026, as amended, Vidak. begin delete Personal injury actions: damages: interest. end delete begin insert Common interest developments: assessment collection: notice. end insert

begin insert

The Davis-Stirling Common Interest Development Act governs the management and operation of common interest developments, except for those developments limited to industrial or commercial uses, which are governed by the Commercial and Industrial Common Interest Development Act. Each act requires specified procedures for the collection of delinquent assessments, including, but not limited to, a procedure for giving notice to an owner of a separate interest of collection actions.

end insert begin insert

This bill would allow, under certain circumstances, an association governed by either act to serve an owner or owner’s representative with notice of a foreclosure action to collect delinquent assessments by posting a copy of the notice on the owner’s separate interest in a manner most likely to give actual notice to the party to be served and mailing a copy of the notice, as specified.

end insert begin delete

Under existing law, a plaintiff in an action brought to recover damages for personal injury may claim interest on the damages alleged, as specified.

end delete begin delete

This bill would make technical, nonsubsantive changes to these provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 5705 of the end insert begin insert Civil Code end insert begin insert is amended to
read: end insert

5705.  

(a) Notwithstanding any law or any provisions of the
governing documents to the contrary, this section shall apply to
debts for assessments that arise on and after January 1, 2006.

(b) Prior to initiating a foreclosure on an owner’s separate
interest, the association shall offer the owner and, if so requested
by the owner, participate in dispute resolution pursuant to the
association’s “meet and confer” program required in Article 2
(commencing with Section 5900) of Chapter 10 or alternative
dispute resolution as set forth in Article 3 (commencing with
Section 5925) of Chapter 10. The decision to pursue dispute
resolution or a particular type of alternative dispute resolution shall
be the choice of the owner, except that binding arbitration shall
not be available if the association intends to initiate a judicial
foreclosure.

(c) The decision to initiate foreclosure of a lien for delinquent
assessments that has been validly recorded shall be made only by
the board and may not be delegated to an agent of the association.
The board shall approve the decision by a majority vote of the
directors in an executive session. The board shall record the vote
in the minutes of the next meeting of the board open to all
members. The board shall maintain the confidentiality of the owner
or owners of the separate interest by identifying the matter in the
minutes by the parcel number of the property, rather than the name
of the owner or owners. A board vote to approve foreclosure of a
lien shall take place at least 30 days prior to any public sale.

(d)  begin insert (1) end insert begin insert   end insert The board shall provide notice by personal service in
accordance with the manner of service of summons in Article 3
(commencing with Section 415.10) of Chapter 4 of Title 5 of Part
2 of the Code of Civil Procedure to an owner of a separate interest
who occupies the separate interest or to the owner’s legal
representative, if the board votes to foreclose upon the separate
interest. The board shall provide written notice to an owner of a
separate interest who does not occupy the separate interest by
first-class mail, postage prepaid, at the most current address shown
on the books of the association. In the absence of written
notification by the owner to the association, the address of the
owner’s separate interest may be treated as the owner’s mailing
address.

begin insert

(2) If after reasonable diligence the notice is not able to be
served on an owner or owner’s representative in accordance with
the manner of service set forth in paragraph (1), the association
may post a copy of the notice on the owner’s separate interest in
a manner most likely to give actual notice to the party to be served
and mail a copy of the notice by first-class mail to all known
addresses of the owner or owner’s representative. If the association
effects service by posting and mailing in accordance with this
paragraph, the association shall record a declaration of diligence,
specifying in reasonable detail the efforts made to effect service
in accordance with the manner of service of summons in Article
3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part
2 of the Code of Civil Procedure. The declaration shall contain
the name, address, and telephone number of the association, as
well as the legal description and assessor’s parcel number of the
separate interest subject to the notice.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 5710 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

5710.  

(a) Any sale by the trustee shall be conducted in
accordance with Sections 2924, 2924b, and 2924c applicable to
the exercise of powers of sale in mortgages and deeds of trust.

(b)  begin insert (1) end insert begin insert   end insert In addition to the requirements of Section 2924, the
association shall serve a notice of default on the person named as
the owner of the separate interest in the association’s records or,
if that person has designated a legal representative pursuant to this
subdivision, on that legal representative. Service shall be in
accordance with the manner of service of summons in Article 3
(commencing with Section 415.10) of Chapter 4 of Title 5 of Part
2 of the Code of Civil Procedure. An owner may designate a legal
representative in a writing that is mailed to the association in a
manner that indicates that the association has received it.

begin insert

(2) If after reasonable diligence the notice is not able to be
served on an owner or owner’s representative in accordance with
the manner of service set forth in paragraph (1), the association
may post a copy of the notice on the owner’s separate interest in
a manner most likely to give actual notice to the party to be served
and mail a copy of the notice by first-class mail to all known
addresses of the owner or owner’s representative. If the association
effects service by posting and mailing in accordance with this
paragraph, the association shall record a declaration of diligence,
specifying in reasonable detail the efforts made to effect service
in accordance with the manner of service of summons in Article
3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part
2 of the Code of Civil Procedure. The declaration shall contain
the name, address, and telephone number of the association, as
well as the legal description and assessor’s parcel number of the
separate interest subject to the notice.

end insert

(c) The fees of a trustee may not exceed the amounts prescribed
in Sections 2924c and 2924d, plus the cost of service for either of
the following:

(1) The notice of default pursuant to subdivision (b).

(2) The decision of the board to foreclose upon the separate
interest of an owner as described in subdivision (d) of Section
5705.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 6822 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

6822.  

(a) Any sale by the trustee shall be conducted in
accordance with Sections 2924, 2924b, and 2924c applicable to
the exercise of powers of sale in mortgages and deeds of trust.

(b)  begin insert (1) end insert begin insert   end insert In addition to the requirements of Section 2924, the
association shall serve a notice of default on the person named as
the owner of the separate interest in the association’s records or,
if that person has designated a legal representative pursuant to this
subdivision, on that legal representative. Service shall be in
accordance with the manner of service of summons in Article 3
(commencing with Section 415.10) of Chapter 4 of Title 5 of Part
2 of the Code of Civil Procedure. An owner may designate a legal
representative in a writing that is mailed to the association in a
manner that indicates that the association has received it.

begin insert

(2) If after reasonable diligence the notice is not able to be
served on an owner or owner’s representative in accordance with
the manner of service set forth in paragraph (1), the association
may post a copy of the notice on the owner’s separate interest in
a manner most likely to give actual notice to the party to be served
and mail a copy of the notice by first-class mail to all known
addresses of the owner or owner’s representative. If the association
effects service by posting and mailing in accordance with this
paragraph, the association shall record a declaration of diligence,
specifying in reasonable detail the efforts made to effect service
in accordance with the manner of service of summons in Article
3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part
2 of the Code of Civil Procedure. The declaration shall contain
the name, address, and telephone number of the association, as
well as the legal description and assessor’s parcel number of the
separate interest subject to the notice.

end insert

(c) The fees of a trustee may not exceed the amounts prescribed
in Sections 2924c and 2924d, plus the cost of service for the notice
of default pursuant to subdivision (b).

begin delete

SECTION 1.  

Section 3291 of the Civil Code is amended to
read:

3291.  

(a) In an action brought to recover damages for personal
injury sustained by any person resulting from or occasioned by
the tort of any other person, corporation, association, or partnership,
whether by negligence or by willful intent of the other person,
corporation, association, or partnership, and whether the injury
was fatal or otherwise, it is lawful for the plaintiff in the complaint
to claim interest on the damages alleged as provided in this section.

(b) If the plaintiff makes an offer, pursuant to Section 998 of
the Code of Civil Procedure, which the defendant does not accept
prior to trial or within 30 days, whichever occurs first, and the
plaintiff obtains a more favorable judgment, the judgment shall
bear interest at the legal rate of 10 percent per annum, calculated
from the date of the plaintiff’s first offer pursuant to Section 998
of the Code of Civil Procedure that is exceeded by the judgment,
and interest shall accrue until the satisfaction of judgment.

(c) This section shall not apply to a public entity, or to a public
employee for an act or omission within the scope of his or her
employment, and neither the public entity nor the public employee
shall be liable, directly or indirectly, to any person for any interest
imposed by this section.

end delete