BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2013-2014 Regular Session
SB 1343 (Wyland)
As Amended April 21, 2014
Hearing Date: May 6, 2014
Fiscal: No
Urgency: No
TMW
SUBJECT
Civil Procedure: Property Subject to Attachment
DESCRIPTION
Existing law, the Elder Abuse and Dependent Adult Civil
Protection Act (EADACPA), provides for prejudgment attachment to
the defendant's property in an elder or dependent adult
financial abuse case, subject to the limitations (i.e., certain
community property and property necessary for the support of the
defendant and defendant's family) under provisions in the Code
of Civil Procedure (Attachment Law). This bill would amend the
Attachment Law to authorize prejudgment attachment to any
property of a defendant in an elder or dependent adult financial
abuse civil case.
BACKGROUND
The Elder Abuse and Dependent Adult Civil Protection Act
(EADACPA) (Welf. & Inst. Code Sec. 15600 et seq.) was enacted in
1994 to provide protection for the growing number of elders and
dependent adults who were being victimized by unscrupulous
individuals, even by family members, but had little chance of
recovering money and property stolen from them. The EADACPA's
intent was to encourage private attorneys to pursue claims of
abuse of an elder or dependent adult, including financial abuse,
by providing for enhanced remedies including recovery of
reasonable attorney's fees. This intent had largely been
unrealized because many attorneys will not take these cases
because of the uncertainty of recovery. To rectify this
problem, SB 611 (Steinberg, Ch. 45, Stats. 2011) authorized
prejudgment attachment of the defendant's property, subject to
(more)
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exemptions under the Attachment Law (Code Civ. Proc. Sec.
487.010 et seq.), which helped to ensure some amount of recovery
in an elder or dependent adult financial abuse action.
Attachment is an ancillary or provisional remedy to aid in the
collection of a money demand by seizure of property in advance
of trial and judgment. The money or property is held as
security for eventual satisfaction of the judgment, unless
released by the giving of other security. Attachment cannot be
invoked unless a main action has been properly initiated; it is
a remedy that is wholly statutory, and its scope and procedure
are defined and limited by the Attachment Law statutes.
Attachment Law limits the use of attachments to commercial
transactions and prohibits them in consumer transactions.
This bill would extend the existing prejudgment attachment
statute to authorize an elder or dependent adult financial abuse
victim to attach any of the defendant's property before the
defendant has been found liable.
CHANGES TO EXISTING LAW
Existing law , the Elder Abuse and Dependent Adult Civil
Protection Act (EADACPA), provides civil remedies to victims of
elder or dependent adult physical abuse, neglect, abduction, or
financial abuse, including recovery of damages and attorney's
fees. (Welf. & Inst. Code Sec. 15600 et seq.)
Existing law requires a showing by a preponderance of the
evidence that a defendant is liable for financial abuse of an
elder or dependent adult. However, in order to recover damages
for pain, suffering, or disfigurement on behalf of a deceased
elder or dependent adult, existing law also requires proof by
clear and convincing evidence that the defendant has been guilty
of recklessness, oppression, fraud, or malice in the commission
of the abuse. (Welf. & Inst. Code Sec. 15657.5.)
Existing law provides that, notwithstanding the prejudgment
attachment requirements under the Code of Civil Procedure, an
attachment may be issued in any action for damages for financial
abuse of an elder or dependent adult. Existing law specifies
that the other provisions of the Code of Civil Procedure not
inconsistent with this authorization shall govern the issuance
of an attachment. Existing law also provides that an attachment
may be issued whether or not other forms of relief are demanded.
(Welf. & Inst. Code Sec. 15657.01.)
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Existing law , the Attachment Law (Code Civ. Proc. Sec. 481.010
et seq.), secures the assets of a debtor through seizure of the
debtor's assets prior to litigation and judgment of a creditor's
claim. The Attachment Law provides for a noticed hearing on a
petition for a writ of attachment (in exceptional circumstances,
an ex parte petition may be filed), with a supporting affidavit
detailing the property to be attached, the amount to be secured,
and, if appropriate, an estimate of attorney's fees and costs.
Existing law also provides for a defendant to oppose the order
of attachment by filing of a notice of opposition and supporting
affidavit, or by filing a claim of exemption for exempt
property, as defined. (Code Civ. Proc. Sec. 483.010 et seq.)
Existing law provides that the following property of a defendant
is subject to attachment:
where the defendant is a corporation, all corporate property
for which a method of levy is provided by statute;
where the defendant is a partnership or other unincorporated
association, all partnership or association property for which
a method of levy is provided by statute; and
where the defendant is a natural person, all of the following
property:
o interests in real property except leasehold estates with
unexpired terms of less than one year;
o accounts receivable, chattel paper, and general
intangibles arising out of the conduct by the defendant of
a trade, business, or profession, except any such
individual claim with a principal balance of less than
$150;
o equipment;
o farm products;
o inventory;
o final money judgments arising out of the conduct by the
defendant of a trade, business, or profession;
o money on the premises where a trade, business, or
profession is conducted by the defendant and, except for
the first $1,000, money located elsewhere than on such
premises and deposit accounts, but, if the defendant has
more than one deposit account or has at least one deposit
account and money located elsewhere than on the premises
where a trade, business, or profession is conducted by the
defendant, the court, upon application of the plaintiff,
may order that the writ of attachment be levied so that an
aggregate amount of $1,000 in the form of such money and in
such accounts remains free of levy;
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o negotiable documents of title;
o instruments;
o securities; and
o minerals or the like (including oil and gas) to be
extracted. (Code Civ. Proc. Sec. 487.010(a)-(c).)
Existing law provides that where the defendant is a natural
person whose property listed above is community property, that
community property is subject to attachment if the community
property would be subject to enforcement of the judgment
obtained in the action in which the attachment is sought.
Unless the provision or context otherwise requires, if community
property that is subject to attachment is sought to be attached:
(1) if attachment applies to any property of that defendant or
to obligations owed to the defendant, then it also applies to
the community property interest of the spouse of the defendant
and to obligations owed to either spouse that are community
property; and
(2) if attachment applies to property in the possession or under
the control of the defendant, then it also applies to community
property in the possession or under the control of the spouse of
the defendant. (Code Civ. Proc. Sec. 487.010(d).)
Existing law provides that, except as provided under the Uniform
Fraudulent Transfer Act (Civ. Code Sec. 3439), the following
property is exempt from attachment:
all property exempt from enforcement of a money judgment;
property which is necessary for the support of a defendant who
is a natural person or the family of such defendant supported
in whole or in part by the defendant;
earnings; and
all property not listed in the attachment statute. (Code Civ.
Proc. Sec. 487.020.)
This bill would add to the above list of property subject to
attachment, in the case of an attachment issued in an elder or
dependent adult financial case, any property of the defendant.
COMMENT
1. Stated need for the bill
The author writes:
The procedures for obtaining a writ of attachment are provided
by [Code of Civil Procedure Section] 481.010 et seq. In
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general, attachment is only available in commercial
transactions and limits the property of the defendant subject
to attachment to commercial property. Nevertheless, [Welfare
& Institutions Code Section] 15657.01 authorizes the issuance
of a writ of attachment in "any action for damages" for
financial abuse. While some instances of financial abuse
arise in commercial transactions, most arise between
individuals, such as when a child wrongfully takes the
property of an elderly parent. In such a situation, while the
elder is authorized to obtain a writ of attachment by [Welfare
& Institutions Code Section] 15657.01, [Code of Civil
Procedure Section] 487.010 limits the property of the
defendant subject to attachment to commercial property, of
which there is none. Accordingly, the effectiveness of the
attachment procedure is greatly limited in most financial
abuse cases.
This bill revises [Code of Civil Procedure Section] 487.010 to
provide that for orders of attachment issued for financial
abuse matters, any property of the defendant is subject to
attachment.
2. Attachment: use and procedure
Attachment is a well-established procedure that, when used
correctly according to the statutory scheme, seizes and imposes
lien rights on the defendant's property, and secures for the
plaintiff a fund from which any later judgment may be satisfied.
The attachment procedure provides numerous safeguards against
abuse and requires judicial oversight. Among other things, the
plaintiff must demonstrate a probability of success at a noticed
hearing and usually must post a bond for 150 percent of the
amount attached in order to protect the defendant from loss in
the event plaintiff's action is unsuccessful. Further,
attachment permits a plaintiff to determine early in the case
whether proceeding with the litigation is justified, especially
if the defendant's financial status is in question. If the
plaintiff's case is strong and demonstrated at the hearing on
the attachment order, attachment could result in an early
resolution of the case. Attachment is almost never pursued
where a defendant is financially secure because it would not be
necessary nor would the attachment justify the cost and effort
of obtaining the writ. Generally, attachment is authorized only
where the following conditions apply:
the claim is a contract claim for money (Code Civ. Proc. Sec.
483.010(a));
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a minimum amount is claimed (Code Civ. Proc. Sec. 483.010(a));
the claim is not secured or the security is valueless (Code
Civ. Proc. Sec. 483.010(b)); and
the claim arises out of a commercial transaction (Code Civ.
Proc. Sec. 483.010(a)).
While attachment is generally available only for claims arising
out of commercial transactions (and not for consumer
transactions), the remedy has been made applicable by statute to
other situations as follows:
an action by the Director of Food and Agriculture to recover
fees (Food & Ag. Code Sec. 281);
attaching a vessel with all furnishings when summons is served
(Harbor & Nav. Code Sec. 495.1);
an action for recovery of public funds paid to person engaged
in unlawful sale of controlled substances (Health & Saf. Code
Sec. 11501);
an action to collect sales and use tax (Rev. and Tax. Code
Sec. 6713);
an action of an injured worker against his or her employer
(Labor Code Sec. 3707);
mechanic's liens (Civ. Code Sec. 3152);
a lien foreclosure suit involving manufactured timber products
(Civ. Code Sec. 3065a); and
a civil action filed under the Elder Abuse and Dependent Adult
Civil Protection Act (EADACPA) for elder or dependent adult
physical abuse, neglect, or financial abuse (Welf. & Inst.
Code Sec. 15657.01).
A writ of attachment empowers the plaintiff (abused elder or
dependent adult or their personal representative) to levy on the
defendant's assets (including property of plaintiff wrongfully
taken) through the sheriff, who will take possession of the
property or funds or impose liens on the property. The
defendant is protected through an undertaking (a bond) that the
plaintiff is required to post prior to issuance of the writ. To
obtain the writ of attachment, the plaintiff must show the
probable validity of the claim of financial abuse, and not
necessarily a showing of irreparable harm.
3. Due process and legislative history
Existing law authorizes a plaintiff in an elder or dependent
adult financial abuse action to attach the defendant's property,
subject to specified exemptions. This bill would expand the
ability for elder and dependent adult financial abuse victims to
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obtain prejudgment attachment of any of the defendant's
property, without exemption.
A review of the legislative history of SB 611 (Steinberg, Ch.
45, Stats. 2007), the bill that added the existing EADACPA
attachment provision, shows that, initially, it would have
amended the Attachment Law to provide for financial abuse case
attachment. That bill was amended in this Committee to instead
provide for attachment under EADACPA. SB 611 was negotiated
through various stakeholders, including proponents of this bill,
and was approved by this Committee with specified terms.
However, this bill potentially unravels that negotiated language
and provides for broader property attachment than that provided
for any other civil case. This broad attachment also
potentially runs afoul of well-established attachment
limitations and concerns about due process.
A review of legislative and case history reveals that the
existing limited scope of property subject to attachment and the
judicial processes required therefor came after the California
Supreme Court held that California's attachment scheme existing
at that time was unconstitutional and in violation of the Fifth
and Fourteenth Amendments because the statute authorized the
deprivation of a debtor's property without prior notice or
hearing, and had not been narrowly drawn to confine such
deprivation to extraordinary circumstances in which a state or
creditor's interest of overriding significance might justify
summary procedures. (Randone v. Appellate Dep't of Superior
Court (1971) 5 Cal.3d 536, 540.)
Subsequently, the attachment law was significantly revised and
discussed further in Advance Transformer Co. v. Superior Court
(1974) 44 Cal.App.3d 127, 140-141, in which the court noted that
"[b]oth the provisions of the Act and its legislative history
indicate that its purpose was to restore, on an interim basis,
the availability of attachments in commercial actions only and
to limit its applicability even in such actions so as to
eliminate specific objections voiced in Randone to the then
existing attachment procedures. The purpose of the Act, which
was Senate Bill 1048, is described in Comment, Attachment in
California, 4 Pacific Law Journal 146, 152, as follows: 'The
main purpose of Senate Bill 1048 is to restore the attachment
remedy in commercial situations in which one business has
furnished goods on credit or loaned money to another business.'
[Citation omitted.] . . .While the Court in Randone was
concerned about the plight of a poor consumer in rendering its
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decision, it considered it necessary to declare the attachment
statutes unconstitutional in toto, and indicated that it was not
the responsibility of the Court to revise the statute so as to
save those portions which could constitutionally be applied."
The court further noted that Act also sought to "[eliminate the]
Supreme Court's objection to the extreme hardship which the use
of attachment procedures in consumer cases often entailed."
(Id.)
This bill reignites the due process concerns discussed in
Randone as a result of the broad attachment authorization on the
defendant's property, potentially without notice and hearing,
because existing attachment law provides for ex parte
application and issuance of an attachment (without prior notice
of attachment given to the defendant). The existing limitations
on attachment include all property exempt from enforcement of a
money judgment, property which is necessary for the support of a
defendant who is a natural person or the family of such
defendant supported in whole or in part by the defendant, and
the defendant's earnings. (Code Civ. Proc. Sec. 487.020.)
However, this bill would authorize attachment of all money
earned by the defendant and all property otherwise necessary for
the support of the defendant or the defendant's family,
potentially without any notice to the defendant or opportunity
to claim an exemption before the property was attached. This
potentially could force the defendant and the defendant's family
into insolvency and potentially requiring state and federal
financial assistance.
Although no opposition to this bill has been received by staff,
a proponent acknowledges that there are no known instances where
the financial abuse victim was unable to adequately attach
property of the defendant, but he is concerned that a savvy
defendant or his or her attorney may finally claim an
appropriate attachment exemption because the property specified
in the plaintiff's application for writ of attachment is not
statutorily authorized to be attached. The proponent also
acknowledges that there may be some concern about the lack of
any exemptions authorized by this bill. To address this
concern, the author proposes to amend the bill to limit
attachment of certain community property if that property would
be subject to enforcement of the judgment. However, this
amendment merely incorporates the existing community property
limitation over property the plaintiff is already authorized to
attach. Yet, it does not address any other type of community
property not specifically listed in the attachment statute,
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which could be attached under this bill.
Further, the proponent asserts that the attachment exemption
statute (which the defendant must use in a timely manner to
assert an exemption of property from attachment) would properly
provide the defendant the ability to claim an established
exemption. However, despite that argument, this bill clearly
states that for an EADACPA financial abuse victim, "any property
of the defendant" is subject to attachment, thus, nothing is
exempt.
The Committee should consider whether it is appropriate to
authorize attachment of all of the defendant's property,
potentially in violation of due process protections, leading to
insolvency, before the defendant is even proven liable for the
allegations. Furthermore, given that the plaintiff must post a
bond to cover the attachment, it is unclear whether the
plaintiff could afford to attach all of the defendant's
property.
SHOULD THIS BILL AUTHORIZE ATTACHMENT OVER ALL OF THE
DEFENDANT'S PROPERTY WITHOUT ANY EXEMPTION OTHERWISE RECOGNIZED
UNDER ATTACHMENT LAW?
Support : None Known
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation :
SB 611 (Steinberg, Ch. 45, Stats. 2007) See Background; Comment
3.
SB 1048 (Zenovich and Coombs, Ch. 550, Stats. 1972) See
Background; Comment 3.
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