Bill Text: CA SB393 | 2009-2010 | Regular Session | Amended
Bill Title: Judgments: interest.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2010-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB393 Detail]
Download: California-2009-SB393-Amended.html
BILL NUMBER: SB 393 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 4, 2009
INTRODUCED BY Senator Harman
( Coauthor: Assembly Member
Huber )
FEBRUARY 26, 2009
An act to amend Section 3291 of the Civil Code, and to amend
Section 685.010 of the Code of Civil Procedure, relating to
judgments.
LEGISLATIVE COUNSEL'S DIGEST
SB 393, as amended, Harman. Judgments: interest.
The California Constitution provides that the rate of interest on
a judgment rendered in any court of this state shall be set by the
Legislature at not more than 10% per annum. Existing law provides
that interest accrues at the rate of 10% per annum on the principal
amount of a money judgment remaining unsatisfied.
This bill would provide that interest accrues on the principal
amount of a money judgment remaining unsatisfied at a rate that is
the lesser of 10% per annum or an amount equal to the prime rate
determined and published by the Board of Governors of the Federal
Reserve System, as specified, plus 2% on the day the judgment is
entered.
Under existing law, if the plaintiff makes an offer that 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% per annum
calculated from the date of the plaintiff's first offer that is
exceeded by the judgment.
This bill would provide, if the plaintiff makes an offer that the
defendant does not accept prior to trial or within 30 days, whichever
occurs first, and the plaintiff obtains a more favorable judgment,
that the portion of the judgment awarded as compensatory damages for
personal injury shall bear interest at a rate, calculated from the
date of the plaintiff's first offer that is exceeded by the judgment,
that is the lesser of 10% per annum or an amount equal to the prime
rate determined and published by the Board of Governors of the
Federal Reserve System, as specified, plus 2% on the day the judgment
is entered.
This bill would instead provide that interest accrues at the
federal short-term rate plus 2%, except as otherwise provided in a
written contract, not to exceed 10% per annum on those judgments, as
specified. The bill would require the Controller to annually
establish the interest rate, as specified, and notify the auditor in
each county of that rate.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 3291 of the Civil Code is amended to read:
3291. (a) In any 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 that the defendant does not accept prior to
trial or within 30 days, whichever occurs first, and the plaintiff
obtains a more favorable judgment, the portion of the
judgment awarded as compensatory damages for personal injury shall
bear interest at a rate that is the lesser of the following,
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 award of judgment:
(1) Ten percent per annum.
(2) An amount equal
to the prime rate determined by the Board of Governors of the
Federal Reserve System, as published in Statistical Release H.15, or
any publication that may supersede it, plus 2 percent on the day the
judgment is entered. judgment shall bear interest at
the rate determined annually by th e Controller pursuant to
subdivision (c), except as otherwise provided in a
written contract, not to exceed 10 percent per annum calculated from
the date of the plaintiff's first offer pursuant to Section 998 of
the Code of Civil Procedure which is exceeded by the judgment, and
interest shall accrue until the satisfaction of judgment .
(c) On the 15th day of October of each year, the Controller shall
ascertain the current federal short-term rate. For purposes of any
section requiring interest to be computed at the rate per annum
required by this section, the federal short-term rate as ascertained
by the Controller, rounded to the nearest whole number percent, plus
2 percent, in a total amount not to exceed 10 percent, shall be the
interest rate per annum used in making the computation for interest
that accrues during the following year. Within 10 days after the
interest rate per annum is determined under this section, the
Controller shall notify the auditor of each county in writing of that
rate of interest.
(d) As used in this section, "federal short-term rate" means the
rate of the average market yield on outstanding marketable
obligations of the United States with remaining periods to maturity
of three years or less, as determined under Section 1274 of the
Internal Revenue Code of 1986 (26 U.S.C. 1274), for July of the
current year.
(c)
(e) This section shall not apply to a public entity, or
to a public employee for an act or omission within the scope of
employment. Neither the public entity nor the public employee shall
be liable, directly or indirectly, to any person for any interest
imposed by this section.
SEC. 2. Section 685.010 of the Code of Civil
Procedure is amended to read:
685.010. (a) Interest accrues on the principal amount of a money
judgment remaining unsatisfied at a rate that is the lesser of the
following:
(1) Ten percent per annum.
(2) An amount equal to the prime rate determined by the Board of
Governors of the Federal Reserve System, as published in Statistical
Release H.15, or any publication that may supersede it, plus 2
percent on the day the judgment is entered.
(b) The Legislature reserves the right to change the rate of
interest provided in subdivision (a) at any time to a lower rate per
annum, regardless of the date of entry of the judgment or the date
any obligation upon which the judgment is based was incurred.
SEC. 2. Section 685.010 of the Code of
Civil Procedure is amended to read:
685.010. (a) Interest accrues at the rate of
rate determined annually by the Controller pursuant to
subdivision (b), except as otherwise provided in a written contract,
not to exceed 10 percent per annum on the principal amount of a
money judgment remaining unsatisfied.
(b) The Legislature reserves the right to change the rate of
interest provided in subdivision (a) at any time to a rate of less
than 10 percent per annum, regardless of the date of entry of the
judgment or the date any obligation upon which the judgment is based
was incurred. A change in the rate of interest may be made applicable
only to the interest that accrues after the operative date of the
statute that changes the rate.
(b) On the 15th day of October of each year, the Controller shall
ascertain the current federal short-term rate. For purposes of any
section requiring interest to be computed at the rate per annum
required by this section, the federal short-term rate as ascertained
by the Controller, rounded to the nearest whole number percent, plus
2 percent, in a total amount not to exceed 10 percent, shall be the
interest rate per annum used in making the computation for interest
that accrues during the following year. Within 10 days after the
interest rate per annum is determined under this section, the
Controller shall notify the auditor of each county in writing of that
rate of interest.
(c) As used in this section, "federal short-term rate" means the
rate of the average market yield on outstanding marketable
obligations of the United States with remaining periods to maturity
of three years or less, as determined under Section 1274 of the
Internal Revenue Code of 1986 (26 U.S.C. 1274), for July of the
current year.
SEC. 3. This act shall apply to all cases pending on, or filed on
or after, January 1, 2010.
