All posts in Legislation

Married couple should consider holding title as “community property with right of survivorship.”

More stuff I didn’t know.  Yikes, this has been around since 2001?

I finally got around to writing my case summary of Brace.  I forgot that Judge Lafferty wrote the opinion for the BAP a while back.  I can’t wait to hear his comments at the 9th Circuit Review on January 23, 2021 (click here to join the cdcbaa and see the program for free).  One thing the court commented on that I didn’t know is that there is a new “form of title,” new since 2001 I guess.   The Supreme Court said:

In addition, the rule that form of title controls at death was a key motivation for the Legislature’s 2000 enactment of Assembly Bill No. 2913, which created a new form of title: community property with a right of survivorship. (… Civ. Code, § 682.1.)  This form of ownership combines the tax benefits of holding community property at the death of one spouse — a stepped-up basis in the full value of the community property — with the right of survivorship in a joint tenancy.

Civil Code Section 682.1 says: Read more…

Thinking out loud about the new Small Business Chapter 11

Attached is a copy of my Daily Journal article entitled Thinking out loud about the new Small Business Chapter 11 published on November 27, 2019.  I’m happy to get your comments.

Daily Journal Article

On Independent Contractors and Employees in California

The California Legislature has passed AB5 which seeks to clarify the difference between independent contractors and employees.  The key feature (edited a little for brevity) is:

Section 2750.3 is added to the Labor Code, to read:

2750.3. (a) (1) … a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

(2) Notwithstanding paragraph (1), any exceptions to the terms “employee,” “employer,” “employ,” or “independent contractor,” and any extensions of employer status or liability, that are expressly made by a provision of this code, …, including, but not limited to, the definition of “employee” in subdivision 2(E) of Wage Order No. 2, shall remain in effect for the purposes set forth therein.

(3) If a court of law rules that the three-part test in paragraph (1) cannot be applied to a particular context based on grounds other than an express exception to employment status as provided under paragraph (2), then the determination of employee or independent contractor status in that context shall instead be governed by the California Supreme Court’s decision in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello).

If you need Statewide Criminal Searches look at central state and police checks repositories for felony and misdemeanors records. Information in these repositories comes from law enforcement agencies, courts and corrections agencies throughout the state.

Image result for national police history checks

ABI Commission Report on Consumer Bk

The ABI Commission just released the report on consumer bankruptcy.  You can find the summary of findings by clicking here.

Some interesting recommendations:  allow for postpetition chapter 7 attorneys fees, get rid of both credit counseling courses for a chapter 7, and increase chapter 13 debt limit to $3 million and eliminate the secured / unsecured distinction.    Interesting stuff in the full report which can be retrieved by registering your email here.  Curious what they will do with your email….

Recording Federal Court Judgment against Property of Defendant in State

Plaintiff obtains a Nevada state court judgment against defendant who owns land in California (different state).   What authorizes plaintiff to be able to record that Nevada judgment against D’s property in California?  Yes — the Full Faith & Credit Clause in Article VI of the Constitution which says states must give full faith and credit to judgments from other states.

Curve ball — what authorizes a Nevada plaintiff to obtain and record a Nevada Federal Court judgment against D’s property in same state Nevada?

Read more…

State Bar “Sections” to Separate from the State Bar, Effective as Early as January 1, 2018

From Jim Hill, Chairman of the Business Law Section of the State Bar:

The bar restructuring legislation, SB 36, passed unanimously in the Senate and has been sent to the Assembly for its consideration in the early days of the summer.  If all stays on track, we are looking for the Sections to emerge into the new entity as early as January 1, 2018.

The summary of Senate Bill 36 provides:    Read more…

California Exemptions Bill is Defeated – Note from Eric Clark

I am sorry to report that after a long two year journey, we were not able to summon the courage among the California Assembly members to pass SB 308.  The bill failed in today’s final vote and is now officially dead.

M. Erik Clark

SB 308 would have increased the homestead exemption substantially and done after with the requirement that the proceeds of sale be reinvested within six months.

U.S. Trustee Proposes Rulemaking on Ch. 11 MOR’s, Deadline for Public Comments Jan. 9, 2015

U.S. Trustee Program is authorized under §602 of the BAPCPA to issue rules that require DIP’s in non-small business cases under chapter 11 to file uniform period reports.  Now, the USTP is seeking public comment on the proposed rule that was published in the Federal Register (see link below). The proposed rule only applies to non-small businesses.  As you might know, small business debtors are currently required to use Form 25C for their MOR’s. Deadline for public comments Jan. 9th 2015

Link to PDF of Proposed Rule:

Link to USTP’s site at

California Foreclosures Down ….but Numbers May Be Misleading

For three straight quarters, California foreclosure starts remain little changed, hovering at a level last seen in early 2006. According to a market study released by DataQuick, steady economic growth and higher home values are responsible for the steady pace of new foreclosures.

Lenders and servicers in the first quarter of 2014 recorded roughly 19,000 notices of default on California house and condo owners, up 6 percent from the previous quarter.

Compared to peak numbers of roughly 135,000 in Q1 2009, foreclosure starts have dropped significantly over the intervening years. However, DataQuick posits that the numbers could be misleading.

“It may well be that the foreclosure starts in recent quarters don’t reflect the ebb and flow of financial distress as much as they reflect a steady state of workload capacity on the part of the servicers. They may well be just working their way through a backlog, stacks of paper piled high on desks,” said John Karevoll, DataQuick analyst.

This year’s first quarter was the first to see a year-over-year increase in default filings since 2009, but that gain can be attributed to new laws in California, known as the “Homeowner Bill of Rights” which took effect in January and February of last year. The laws caused lenders and services to pause, artificially decreasing notices sent to homeowners and pushing foreclosure start numbers downward.

DataQuick points out that most of the loans in California going into default are still from the 2005-2007 period. The median origination quarter reported by the company for defaulted loans is still the third quarter of 2006, noting that weak underwriting standards peaked in that period of time.

California homeowners were a median 9.8 months behind on their payments when the lender filed the notice of default. Borrowers owed a median $22,538 on a median $301,732 mortgage. There are lower numbers with the foreclosure bridging loans, this Bridging Loans for Property Development can be access by both individuals and companies to meet certain obligations. Bridge loans are usually arranged within a short time and with little documentation, they are mainly used in real estate to retrieve property from foreclosure or to close on a property quickly.

The most active companies in the foreclosure process last quarter were Wells Fargo (2,834), Bank of America (1,637), and Nationstar (1,282).

“The trustees who pursued the highest number of defaults last quarter were Quality Loan Service Corp (for Wells Fargo and others), MTC Financial (Bank of America, Greentree, JP Morgan Chase) and Western Progressive (OCWEN and Deutsche Bank),” DataQuick said.

California Assembly Bill 233 – Protecting pay checks from garnishment by private student loan lenders

California Assembly Bill 233 – Protecting pay checks from garnishment by private student loan lenders. Here is the status of the legislation. AB 233 passed the Assembly, but failed to gain State Senate approval. As things now stand, AB 233 has been put on hold in the Senate. It may be reconsidered again by the Senate in January 2014 without the necessity of being refiled in the Assembly. The bill is authored by Assemblyman Bob Wieckowski, of Fremont, California.

I am informed that once AB 233 reached the Senate, it ran into enormous opposition from lobbyists of the California Banker’s Association. They are the ones who killed it. Assemblyman Wieckowski is considering changes to the bill that might give it a better chance of passage. I personally discussed it with his staff. Private student loans are predominantly originated at what we used to call “vocational trade schools.” I note that such institutions have mostly renamed themselves “private universities.” I offered a suggestion that would prevent wage garnishment for private student loans that originated at schools with a high rate of loan defaults. Such a measurement may be indicative that the schools in question are diploma mills where little or no useful education has taking place. Thus, the students who incurred private loans attending such institutions should be protected from exploitation to repay loans incurred for a useless education. This would force the private lenders to partner with the students to assure that the education received translates into valuable market skills for the students who emerge from such schools. Do you agree? If so, let your state legislators know how you feel!

-Leon Bayer