AB571: Bill Text

LRB-3971/2

RPN/PJK/RAC:cs:ch

2001 - 2002 LEGISLATURE

2001 Assembly BILL 571

October 16, 2001 - Introduced by Veterans and Military Affairs. Referred to Committee on Veterans and Military Affairs.

AB571,1,2 An Act to amend 45.53 (title); and to create 21.75 of the statutes; relating to: the rights of persons who are called into active state service.

Analysis by the Legislative Reference Bureau

Under current federal law, persons who are in active service in the U.S. armed forces and their dependents are given certain protections related to lawsuits, leases, obligations and contracts for the period that they are in active service. Generally, these protections are provided under federal law only if the service in the military materially affects the armed forces member's ability to meet the obligation. In most cases, the armed forces member may waive the protections afforded by the law if he or she does so in writing after entering the armed forces.

Under federal law, all interest on obligations incurred before entry into the armed forces is capped at six percent for the duration of the military service. The federal law tolls the running of all statutes of limitations during the period of active service with respect to civil and administrative proceedings involving the service member as either a plaintiff or a defendant. The federal law stays all civil actions affecting the service member, including actions to repossess property and garnishment actions. Under the federal law, if in a court action a default judgment is requested, the person requesting the default judgment must submit an affidavit regarding the military status of the opposing party, and the court is required to appoint an attorney for the other party if he or she may be in military service. That attorney may seek a stay of the proceedings under federal law. Federal law also allows the reopening of a default judgment if that judgment was entered against a service member during or with 30 days after his or her period of active service.

Under federal law, members of the U.S. armed forces and their dependents are protected from eviction from their dwelling if the monthly rent does not exceed $1200. In addition, the federal law allows a service member to terminate a lease occupied as a dwelling or for professional, business, or agricultural purposes if the lease was entered into before the service member was called into active service. In this situation, the service member does not need to be materially affected to terminate the lease. The federal law allows a court to stay the enforcement of installment contracts, storage liens, and mortgage obligations.

This bill provides these same benefits to persons who are called into state service either as part of the state national guard or as part of the state militia.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB571, s. 1 Section 1. 21.75 of the statutes is created to read:

AB571,2,3 21.75 Soldiers' and sailors' relief act; state service. (1) Definitions. In this section:

AB571,2,8 (a) "Active state service" means active service for 30 days or more in the national guard or the state defense force under an order of the governor issued under this chapter or active service for 30 days or more in the national guard under 32 USC 502 (f) or 506 that is not considered to be "service in the uniformed services," as defined in 38 USC 4303 (13).

AB571,2,9 (b) "Court" means a court of record.

AB571,2,10 (c) "Department" means the department of military affairs.

AB571,2,12 (d) "Service member" means a person who may be called into active state service.

AB571,3,2 (e) "Period of active state service" means the period beginning on the date on which the service member receives an order to enter active state service and ending on the date of the service member's release from active state service or death while in active state service.

AB571,3,7 (2) Protection of persons secondarily liable. (a) If this section results in the stay or suspension of any obligation, liability, court action, order, writ, or judgment, the court that issued the stay or suspension may grant the same remedy to sureties, guarantors, endorsers, and others subject to the obligation, liability, court action, order, writ, or judgment.

AB571,3,13 (b) If a service member is the principal on a criminal bail bond and his or her active state service causes the surety upon the bond to be prevented from enforcing the attendance of the service member at court, the court shall not enforce the provisions of the bond during the service member's period of active state service and may either during or after the period of active service discharge the surety and exonerate the bail.

AB571,3,22 (c) A surety, guarantor, endorser, or other person subject to the obligation, liability, court action, order, writ, or judgment under par. (a) or (b) may waive in writing the rights afforded by this subsection, except that the waiver is not valid unless the waiver is executed as an instrument separate from the obligation, liability, court action, order, writ, or judgment. The waiver under this paragraph is not valid after the beginning of the period of active state service if executed by a service member who subsequently is called into active state service. The waiver under this paragraph is not valid if executed by a dependent of a service member unless the waiver is executed during the period of active state service.

AB571,4,3 (3) Effect on rights under a written agreement. This section does not prevent the modification, termination, or cancelation of any contract, lease, bailment, or secured obligation, or the repossession, retention, foreclosure, sale, or forfeiture of property that is security for any obligation or which has been purchased or received under a contract, lease, or bailment under a written agreement of the parties if that agreement is executed during or after the period of active state service.

AB571,4,7 (4) Exercise of rights. No person may use the fact that a service member has applied for, or received, a stay, postponement, or suspension in the payment of a tax, fine, penalty, insurance premium, or other civil obligation or liability as the basis for doing any of the following:

AB571,4,10 (a) If the person is a lender, determining that the service member is unable to pay any such civil obligation or liability in accordance with the terms of the obligation or liability.

AB571,4,14 (b) If the person is a creditor, denying or revoking any credit extended to the service member, changing the terms of a credit agreement to which the service member is a party, or refusing to grant credit to the service member in substantially the amount or on substantially the terms requested by the service member.

AB571,4,17 (c) If the person is in the business of assembling or evaluating consumer credit information, making an adverse report on the creditworthiness of the service member.

AB571,4,18 (d) If the person is an insurer, refusing to insure the service member.

AB571,5,10 (5) Default judgments, affidavits, and attorney representation. (a) If, in any court action, there is a default of any appearance of the defendant, the plaintiff, when requesting a default judgment, shall file with the court an affidavit setting forth facts showing that the defendant is not in active state service. If the plaintiff is unable to file such an affidavit, the plaintiff shall, when requesting a default judgment, file an affidavit setting forth that the defendant is in active state service or that the plaintiff is unable to determine if the defendant is in active state service. If an affidavit is not filed showing that the defendant is not in active state service, a default judgment may not be entered without a court order. A court may not order the entry of a default judgment if the defendant is in active state service until the court has appointed an attorney to represent the defendant and protect the defendant's interests. Unless the court determines that the defendant is not in active state service, the court may require, as a condition of entering judgment, the plaintiff to file a bond to indemnify the defendant, if he or she is in active state service, against any loss or damage resulting from the judgment if any part of the judgment is later set aside. The court may make any other order as may be necessary to protect the interests of the defendant under this section.

AB571,5,15 (b) If a judgment is rendered in a court action against a service member during the period of active state service or within 30 days after the end of that period of active state service, and it appears that the service member was prejudiced in making a defense by reason of his or her active state service, the court may reopen that judgment if all of the following conditions exist:

AB571,5,17 1. The service member moves the court to reopen the judgment within 90 days after his or her period of active state service ends.

AB571,5,18 2. The service member has a meritorious or legal defense to the action.

AB571,5,21 (c) Vacating, setting aside, or reversing a judgment under this subsection does not impair any right or title acquired by a bona fide purchaser for value under the judgment.

AB571,5,24 (d) Any person who shall make or use an affidavit required under this subsection that he or knows to be false shall be fined not more than $10,000 or imprisoned for not more than 9 months, or both.

AB571,6,7 (6) Stay of action. During any stage of a court action in which a service member in active state service is involved as a party, or within 60 days after the end of the period of active state service, the court in which the action is pending may on its own motion, and shall, on application of the service member or some person acting on behalf of the service member, stay the action unless the court determines that the service member's ability to represent his or her interest in the action is not materially affected by reason of his or her active state service.

AB571,6,16 (7) Stay or vacation of executions or attachments. In any court action that is commenced against a service member before or after entering active state service, or within 60 days after the period of active state service ends, the court may on its own motion, and shall, on application of the service member or some person acting on behalf of the service member, stay the execution of any judgment or order entered against the service member, or stay or vacate any attachment or garnishment regarding the service member's property, unless the court determines that the service member's ability to comply with the judgment or order is not materially affected by reason of his or her active state service.

AB571,6,20 (8) Duration and terms of stays. (a) Any stay of any action, attachment, execution, or garnishment under this section may be ordered for the period of the active state service and 3 months after that period has ended, or for any part of that time.

AB571,6,23 (b) Any stay under par. (a) may be subject to such terms as may be just, including the payment of installments in an amount and at the times that the court determines.

AB571,6,25 (c) If the service member is a codefendant in an action, the plaintiff may, by leave of the court, proceed against the other codefendants.

AB571,7,7 (9) Statutes of limitations. The period of active state service may not be included in computing any period for the bringing of any action or proceeding in any court or before any public agency, as defined in s. 36.54 (2) (a) 2., by or against a person in active state service or by or against his or her heirs, executors, administrators or assigns, whether the cause of action or proceeding or the right to bring the action or proceeding accrued before or during the period of active state service.

AB571,7,19 (10) Maximum interest rate. Notwithstanding ss. 138.04, 138.09 (7) (b), (bm), (bn), and (bp), 138.12 (10) (a), 218.0101 to 218.0163, 422.201 (2), (3), (9), and (10s), 422.205 (1), and 422.206 (2), no obligation or liability bearing interest at a rate in excess of 6 percent per year incurred by a service member in active state service before his or her entry into that service may, during any part of the period of active state service, bear interest in excess of 6 percent per year except by court order. If, upon application by an obligee, a court determines that the ability of the service member to pay interest upon the obligation or liability at a rate in excess of 6 percent per year is not materially affected by reason of his or her active state service, the court may make any order that is just. In this subsection, "interest" includes service charges, renewal charges, fees, or other charges, other than insurance, in respect to the obligation or liability.

AB571,7,24 (11) Eviction stay. (a) No eviction may be made during the period of active state service in respect to any premises for which the agreed rent does not exceed $1,200 per month, occupied chiefly for dwelling purposes by the spouse, children, or other dependents of a service member who is in active state service, except upon order of a court in an action affecting the right of possession.

AB571,8,8 (b) In an action for eviction under par. (a), the court may on its own motion, and shall, on application of the service member or some person acting on behalf of the service member, stay the proceedings for not longer than 3 months unless the court determines that the ability of the tenant to pay the agreed rent is not materially affected by the active state service. The court may make any other order in the eviction action as it considers necessary and just. If a stay or order is issued under this paragraph, the court may, upon the request of the owner of the premises, make any other order as may be applicable to conserve the interests of all of the parties.

AB571,8,11 (c) Any person who knowingly takes part in any eviction prohibited under par. (a) except as provided in this subsection, or attempts to do so, shall be fined not more than $10,000 or imprisoned not more than 9 months, or both.

AB571,8,16 (12) Action to enforce obligation secured by mortgage. (a) In this subsection, "obligation" means an obligation of a service member in active state service that was incurred before the service member's period of active state service began and that is secured by a mortgage, deed of trust, or other security in the nature of a mortgage on real or personal property that is owned by the service member.

AB571,8,24 (b) If a court action against a service member is commenced during the service member's period of active state service to enforce an obligation for nonpayment of any sum due or for any other breach of terms occurring before or during the service member's period of active state service, the court shall hold a hearing on the matter. Unless the court determines that the service member's ability to comply with the terms of the obligation is not materially affected by reason of his or her active state service, the court on its own motion may, or upon application of the service member or another person on his or her behalf shall, do any of the following:

AB571,8,25 1. Stay the action as provided in this section.

AB571,9,2 2. Make such other disposition of the case as the court determines is equitable to the interests of all parties.