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SB-1326 Forged or false instruments.(2019-2020)

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Date Published: 03/26/2020 09:00 PM
SB1326:v98#DOCUMENT

Amended  IN  Senate  March 26, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 1326


Introduced by Senator Morrell

February 21, 2020


An act to amend Section 115 of the Penal Code, relating to false instruments.


LEGISLATIVE COUNSEL'S DIGEST


SB 1326, as amended, Morrell. Forged or false instruments.
Under existing law, a person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony. Existing law requires a criminal court to issue a written order that the false or forged instrument be adjudged void ab initio after a person is convicted or a specified waiver is obtained for the previously described crime. Existing law requires a prosecuting agency to use specified procedures to file a motion to adjudge the false or forged instrument void, including providing written notice to an interested party within 10 calendar days, as specified. Under existing law, an “interested party” includes all parties who have recorded with the county recorder various documents including a deed, lien, mortgage, or other instrument declaring an interest in real property.
This bill would include a person who has recorded an instrument asserting any right, title, lien, or estate as an “interested party” to whom a prosecuting agency is required to provide notice.
Existing law authorizes the criminal court to decline to order that a false or forged instrument be adjudged void ab initio if the court determines that the interests of justice or the need to protect the property rights of a person or party so requires, including, but not limited to, upon a finding that the matter may be more appropriately determined in a civil proceeding. Existing law authorizes the court to take into consideration whether a person or party has filed a quiet title action seeking a judicial determination of the validity of the false or forged instrument or the status of an interested party as a bona fide purchaser or bona fide holder of an encumbrance on the property affected by the false or forged instrument.
This bill would revise and recast those provisions to instead require the criminal court to decline to make that order under the circumstances described above, including when a quiet title action or declaratory relief action has been filed by an interested party concerning the validity or enforceability of a false or forged instrument that is the subject of the motion and the instrument affects an interest in real property held by an interested party claiming they are a bona fide purchaser or encumbrancer. The bill would make conforming changes to those provisions.
The bill would provide that its changes govern all motions that have not yet been ruled on and all orders that are not yet final.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 115 of the Penal Code is amended to read:

115.
 (a) A person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in a public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony.
(b) Each instrument which is procured or offered to be filed, registered, or recorded in violation of subdivision (a) shall constitute a separate violation of this section.
(c) Except in unusual cases when the interests of justice would best be served if probation is granted, probation shall not be granted to, nor shall the execution or imposition of sentence be suspended for, any of the following persons:
(1) A person with a prior conviction under this section who is again convicted of a violation of this section in a separate proceeding.
(2) A person who is convicted of more than one violation of this section in a single proceeding, with intent to defraud another, and where the violations resulted in a cumulative financial loss exceeding one hundred thousand dollars ($100,000).
(d) For purposes of prosecution under this section, each act of procurement or of offering a false or forged instrument to be filed, registered, or recorded shall be considered a separately punishable offense.
(e) (1) After a person is convicted of a violation of this section, or a plea is entered whereby a charge alleging a violation of this section is dismissed and waiver is obtained pursuant to People v. Harvey (1979) 25 Cal.3d 754, upon written motion of the prosecuting agency, the court, after a hearing described in subdivision (f), shall issue a written order that the false or forged instrument be adjudged void ab initio if the court determines that an order is appropriate under applicable law. The order shall state whether the instrument is false or forged, or both false and forged, and describe the nature of the falsity or forgery. A copy of the instrument shall be attached to the order at the time it is issued by the court and a certified copy of the order shall be filed, registered, or recorded at the appropriate public office by the prosecuting agency.
(2) (A) If the order pertains to a false or forged instrument that has been recorded with a county recorder, an order made pursuant to this section shall be recorded in the county where the affected real property is located. The order shall also reference the county recorder’s document recording number of any notice of pendency of action recorded pursuant to paragraph (2) of subdivision (f).
(B) As to any order, notice of pendency of action, or withdrawal of notice of pendency of action recorded pursuant to this section, recording fees shall be waived pursuant to Section 27383 of the Government Code.
(f) A prosecuting agency shall use the following procedures in filing a motion under subdivision (e):
(1) Within 10 calendar days of filing a criminal complaint or indictment alleging a violation of this section, the prosecuting agency shall provide written notice by certified mail to all parties who have an interest in the property affected by the false or forged instrument, or in the instrument itself, including those described in paragraph (5).
(2) (A) Within 10 calendar days of filing a criminal complaint or indictment alleging a violation of this section, the prosecuting agency shall record a notice of pendency of action in the county in which the affected real property is located.
(B) Within 10 calendar days of the case being adjudicated or dismissed without obtaining an order pursuant to subdivision (e), the prosecuting agency shall record a withdrawal of the notice of pendency of action in the county where the affected real property is located.
(3) The written notice and notice of pendency of action described in paragraphs (1) and (2) shall inform the interested parties that a criminal action has commenced that may result in adjudications against the false or forged instrument or the property affected by the false or forged instrument, and shall notify the interested parties of their right to be heard if a motion is brought under subdivision (e) to void the false or forged instrument. The notice shall state the street address, if available, and the legal description of the affected real property.
(4) Failure of the prosecuting agency to provide written notice or record a pendency of action as required under paragraphs (1) and (2) within 10 calendar days shall not prevent the prosecuting agency from later making a motion under subdivision (e), but the court shall take the failure to provide notice or record a pendency of action as required under paragraphs (1) and (2) as reason to provide any interested parties additional time to respond to the motion. Failure of the prosecuting agency to so notify interested parties under this subdivision or record a pendency of action as required under paragraphs (1) and (2) within 10 calendar days shall create a presumption that a finding as described in paragraph (9) is necessary to protect the property rights of the interested party or parties.
(5) If the instrument sought to be declared void involves real property, “interested parties” include, but are not limited to, all parties who have recorded with the county recorder in the county where the affected property is located any of the following: a deed, lien, mortgage, deed of trust, security interest, lease, or other instrument declaring or asserting a right, title, lien, estate, or interest in, or requesting notice relating to, the property affected by the false or forged instrument as of the date of the filing of the criminal complaint or indictment.
(6) Any party not required to be noticed under paragraph (1) or (5) who nonetheless notifies the prosecuting agency in writing of the party’s desire to be notified if a motion is brought under subdivision (e) to void the false or forged instrument shall be treated as an interested party as defined in paragraph (1) or (5).
(7) The court shall set a hearing for the motion brought by the prosecuting agency under subdivision (e) no earlier than 90 calendar days from the date the motion is made. The prosecuting agency shall provide a copy by certified mail of the written motion and a notice of hearing to all interested parties described in paragraphs paragraph (1), (5), or (6), and all other persons who obtain an interest in the property prior to recordation of notice of pendency of action no later than 90 days before the hearing date set by the court. The notice shall state the street address, if available, and the legal description of the affected real property.
(8) At a hearing on a motion brought by the prosecuting agency under subdivision (e), the defendant, prosecuting agency, and interested parties described in paragraphs paragraph (1), (5), or (6), shall have a right to be heard and present information to the court. No party shall be denied a right to present information due to a lack of notice by the prosecuting agency or failure to contact the prosecuting agency or the court prior to the hearing.
(9) (A) At a hearing on a motion brought by a prosecuting agency under subdivision (e), if the court determines that the interests of justice or the need to protect the property rights of any person or party so requires, including, but not limited to, a finding that the matter may be more appropriately determined in a civil proceeding, the court may shall decline to make a determination under subdivision (e).
(B) If, prior to the hearing on the motion, any person or party files a quiet title an action that seeks a judicial determination of the validity of the same false or forged instrument that is the subject of the motion, or the status of an interested party as a bona fide purchaser of, or bona fide holder of an encumbrance on, the property affected by the false or forged instrument, the court may consider that as an additional but not dispositive factor in making its determination under subdivision (e); provided, however, that a if a quiet title action or declaratory relief action has been filed by an interested party concerning the validity or enforceability of the same false or forged instrument that is the subject of the motion, and that instrument affects an interest in real property held by an interested party claiming status of a bona fide purchaser or encumbrancer, the court shall decline to make a determination under subdivision (e). Any final judgment previously entered in that quiet title civil action shall be followed to the extent otherwise required by law. law, and shall be binding on the criminal court.
(g) As used in this section, “prosecuting agency” means a city attorney, a district attorney, the Attorney General, or other state or local agency actively prosecuting a case under this section.
(h) An order made pursuant to subdivision (e) shall be considered a judgment, and subject to appeal in accordance with, paragraph (1) of subdivision (a) of Section 904.1 of the Code of Civil Procedure.
(i) The changes made to subdivision (f) during the 2019–20 Regular Session of the Legislature shall govern all motions made under subdivision (e) that have not yet been ruled on and all orders made under subdivision (e) that are not yet final.