Article 14 - Liability of Principal and Sureties

California Code of Civil Procedure — §§ 996.410-996.495

Sections (11)

Added by Stats. 1982, Ch. 998, Sec. 1.

(a)The beneficiary may enforce the liability on a bond against both the principal and sureties.

(b)If the beneficiary is a class of persons, any person in the class may enforce the liability on a bond in the person’s own name, without assignment of the bond.

§ 996.420

Added by Stats. 1982, Ch. 998, Sec. 1.

(a)A surety on a bond given in an action or proceeding submits itself to the jurisdiction of the court in all matters affecting its liability on the bond.

(b)This section does not apply to a bond of a public officer or fiduciary.

§ 996.430

Amended by Stats. 1998, Ch. 931, Sec. 105. Effective September 28, 1998.

(a)The liability on a bond may be enforced by civil action. Both the principal and the sureties shall be joined as parties to the action.

(b)If the bond was given in an action or proceeding, the action shall be commenced in the court in which the action or proceeding was pending. If the bond was given other than in an action or proceeding, the action shall be commenced in any court of competent jurisdiction, and the amount of damage claimed in the action, not the

amount of the bond, determines the jurisdictional classification of the case.

(c)A cause of action on a bond may be transferred and assigned as other causes of action.

§ 996.440

Added by Stats. 1982, Ch. 998, Sec. 1.

(a)If a bond is given in an action or proceeding, the liability on the bond may be enforced on motion made in the court without the necessity of an independent action.

(b)The motion shall not be made until after entry of the final judgment in the action or proceeding in which the bond is given and the time for appeal has expired or, if an appeal is taken, until the appeal is finally determined. The motion shall not be made or notice of motion served more than one year after the later of the preceding dates.

(c)Notice of motion shall be served on the principal and sureties at least 30 days before the time set for hearing of the motion. The notice shall state the amount of the claim and shall be supported by affidavits setting forth the facts on which the claim is based. The notice and affidavits shall be served in accordance with any procedure authorized by Chapter 5 (commencing with Section 1010).

(d)Judgment shall be entered against the principal and sureties in accordance with the motion unless the principal or sureties serve and file affidavits in opposition to the motion showing such facts as may be deemed by the judge hearing the motion sufficient to present a triable issue of fact. If such a showing is made, the issues to be tried shall be specified by the court. Trial shall be by the court and shall be set for the earliest date convenient to the court, allowing sufficient time for

such discovery proceedings as may be requested.

(e)The principal and sureties shall not obtain a stay of the proceedings pending determination of any conflicting claims among beneficiaries.

§ 996.450

Added by Stats. 1982, Ch. 998, Sec. 1.

No provision in a bond is valid that attempts by contract to shorten the period prescribed by Section 337 or other statute for the commencement of an action on the bond or the period prescribed by Section 996.440 for a motion to enforce a bond. This section does not apply if the principal, beneficiary, and surety accept a provision for a shorter period in a bond.

§ 996.460

Added by Stats. 1982, Ch. 998, Sec. 1.

(a)Notwithstanding Section 2845 of the Civil Code, a judgment of liability on a bond shall be in favor of the beneficiary and against the principal and sureties and shall obligate each of them jointly and severally.

(b)The judgment shall be in an amount determined by the court.

(c)A judgment that does not exhaust the full amount of the bond decreases the amount of the bond but does not discharge the bond. The liability on the bond may be enforced thereafter from time to time until the amount of the

bond is exhausted.

(d)The judgment may be enforced by the beneficiary directly against the sureties. Nothing in this section affects any right of subrogation of a surety against the principal or any right of a surety to compel the principal to satisfy the judgment.

§ 996.470

Amended by Stats. 1993, Ch. 527, Sec. 2. Effective January 1, 1994.

(a)Notwithstanding any other statute other than Section 996.480, the aggregate liability of a surety to all persons for all breaches of the condition of a bond is limited to the amount of the bond. Except as otherwise provided by statute, the liability of the principal is not limited to the amount of the bond.

(b)If a bond is given in an amount greater than the amount required by statute or by order of the court or officer pursuant to statute, the liability of the

surety on the bond is limited to the amount required by statute or by order of the court or officer, unless the amount of the bond has been increased voluntarily or by agreement of the parties to satisfy an objection to the bond made in an action or proceeding.

(c)The liability of a surety is limited to the amount stipulated in any of the following circumstances:

(1)The bond contains a stipulation pursuant to Section 995.520 that the liability of a personal surety is limited to the worth of the surety.

(2)The bond contains a stipulation that the liability of a surety is an amount less than the amount of the bond pursuant to a statute that provides that the liability of sureties in the aggregate need not exceed the amount of the bond.

§ 996.475

Added by Stats. 1984, Ch. 538, Sec. 33.3.

Nothing in this chapter is intended to limit the liability of a surety pursuant to any other statute. This section is declaratory of, and not a change in, existing law.

§ 996.480

Added by Stats. 1982, Ch. 998, Sec. 1.

(a)If the nature and extent of the liability of the principal is established by final judgment of a court and the time for appeal has expired or, if an appeal is taken, the appeal is finally determined and the judgment is affirmed:

(1)A surety may make payment on a bond without awaiting enforcement of the bond. The amount of the bond is reduced to the extent of any payment made by the surety in good faith.

(2)If the beneficiary makes a claim for payment on a bond given in an action or proceeding

after the liability of the principal is so established and the surety fails to make payment, the surety is liable for costs incurred in obtaining a judgment against the surety, including a reasonable attorney’s fee, and interest on the judgment from the date of the claim, notwithstanding Section 996.470.

(b)Partial payment of a claim by a surety shall not be considered satisfaction of the claim and the beneficiary may enforce the liability on the bond. If a right is affected or a license is suspended or revoked until payment of a claim, the right continues to be affected and the license continues to be suspended or revoked until the claim is satisfied in full.

§ 996.490

Added by Stats. 1982, Ch. 998, Sec. 1.

(a)Payment by a surety of the amount of a bond constitutes a full discharge of all the liability of the surety on the bond.

(b)Each surety is liable to contribution to cosureties who have made payment in proportion to the amount for which each surety is liable.

§ 996.495

Added by Stats. 1982, Ch. 998, Sec. 1.

A judgment of liability on a bond may be enforced in the same manner and to the same extent as other money judgments.