§ 1798.97.3. — 1798.97.3. (Added by Stats. 2022, Ch. 989, Sec. 2.)

(a)
(1)
A debtor may bring an action against a claimant to establish that a particular debt, or portion thereof, is coerced debt.
(2)
In an action brought by a claimant to recover a particular debt against the debtor, the debtor may file a cross-complaint to establish that the particular debt, or portion thereof, is coerced debt. The notice described in subdivision (f) of Section 1798.97.2 shall not be required as a prerequisite to filing a cross-complaint.
(3)
A debtor shall plead the allegations of coerced debt with particularity and shall do either of the following:
(A)
Attach the
documents provided to the claimant pursuant to subdivision (b) of Section 1798.97.2 to any complaint.
(B)
Attach the documents identified in subdivision (b) of Section 1798.97.2 to any cross-complaint.
(b)
If the debtor establishes by a preponderance of the evidence in an action described in subdivision (a) that the particular debt, or portion thereof, is coerced debt, the debtor shall be entitled to the following relief:
(1)
A declaratory judgment that the debtor is not obligated to the claimant on the particular debt, or portion thereof, that is coerced debt.
(2)
An injunction prohibiting the claimant from holding or attempting to hold the debtor personally liable on the particular debt, or portion thereof, that is coerced debt, and prohibiting the
claimant from enforcing a judgment related to the particular debt, or portion thereof, that is coerced debt against the debtor.
(3)
An order dismissing any cause of action brought by the claimant to enforce or collect on the particular debt from the debtor or, if only a portion of the debt is established as coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the particular debt that is not coerced debt.
(c)
(1)
If the debtor establishes by a preponderance of the evidence in an action described in subdivision (a) that the particular debt, or portion thereof, is coerced debt, the court shall issue a judgment in favor of the claimant against the person or persons who coerced the debtor into incurring the debt in the amount of the debt, or portion thereof, that is coerced debt, provided
that the person or persons who coerced the debtor into incurring the debt or debts has been brought within the jurisdiction of the court and joined as a party to the action and the evidence supports such a judgment.
(2)
The court presiding over the action shall take appropriate steps necessary to prevent abuse, as defined in Section 6203 of the Family Code, of the debtor or an immediate family member of the debtor, including, but not limited to, sealing court records, redacting personally identifiable information about the debtor and any immediate family member of the debtor, and directing that any deposition or evidentiary hearing be conducted remotely.
(d)
A debtor who files knowingly false motions, pleadings, or other papers or engages in other tactics that are frivolous or intended to cause unnecessary delay against a claimant shall be liable for the claimant’s attorney’s fees
and costs in defending the lawsuit.
(e)
The claimant may move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.
(f)
Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing, and may use all rights and remedies, to collect by any lawful means that claim, or portion thereof, from the person or persons determined to have coerced the debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.
(g)
The statute of limitations for a claimant to bring an action to collect coerced debt from any person determined to have coerced the debt shall run from the date of the court’s determination that the person caused the duress, intimidation, threat of
force, force, fraud, or undue influence giving rise to the coerced debt at issue and shall be brought within five years of that determination.

Legislative History

Added by Stats. 2022, Ch. 989, Sec. 2. (SB 975) Effective January 1, 2023.