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Senate Bill 1395 (Kopp 1987)

Chapter 677, Statutes of 1987 - SB 1395

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In 1987, Civil Code sections 1432 and 1543 and Code of Civil Procedure sections 877 and 877.6, pertaining to settlements by co-obligors, were amended following legislative passage of Senate Bill 1395.  (See Exhibit #1d)  Senator Quentin Kopp introduced Senate Bill 1395 on March 6, 1987.  (See Exhibit #1a)  This legislation was based on State Bar Conference of Delegates Resolution 4‑9‑85, which was drafted and proposed by the Orange County Bar Association.  (See Exhibits #3 and #4)

 

While before the Legislature, the measure was heard by the Senate Committee on Judiciary and the Assembly Committee on Judiciary.  (See Exhibits #3 and #7)  The bill was amended only once, at the suggestion of the Senate Committee on Judiciary, before being enrolled and sent to the Governor for his signature.  (See Exhibits #1b and #2)  Senate Bill 1395 was signed by

Governor George Deukmejian and recorded by the Secretary of State on September 16, 1987 as Chapter 677 of the Statutes of 1987.  (See Exhibits #1d and #2)

 

The Office of Senate Floor Analyses prepared a Third Reading analysis of Senate Bill 1395 as last amended on May 28, 1987 which summarized the bill as follows:

 

This bill would apply the tort contribution and good faith settlement statutes to the settlement of obligations arising out of a joint contract.  An obligor who made a good faith settlement of a claim arising from a joint obligation would not be liable for any contribution claim by the non-settling co-obligors.  This bill would not apply to co-obligors who have expressly agreed in writing to an apportionment of liability for the losses amongst themselves.  The bill would only apply to contracts made on or after January 1, 1988.

 

This bill also states that a release of one of two or more joint debtors does not extinguish the obligations of any of the others, unless they are mere guarantors; nor does it affect their right to contribution from him or her, except as provided in Section 877 of the Code of Civil Procedure.

 

The purpose of this bill is to encourage settlements of contractual disputes involving joint obligors.

(See Exhibit #5)