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Persuasive Authority

These comments focus on and summarize the financial abuse issues of unpublished decisions issued by the California Courts of Appeal. They are not intended to fully brief these cases. Cases which are cited but that do not include comments may be of interest but do not directly involve financial abuse issues. Cases are listed by date of decision with the most recent at the top. Legislative changes are noted in red. Decisions issued after March 25, 2016 have not been digested.


INDEX TO DECISIONS

Abusive loans
25, 27, 33, 35, 40, 52, 57, 61, 81

Annuities
1, 13, 31, 32, 39

Assisting
8, 69

Attachment
72

Attorney’s fees and costs
2, 43, 55, 58, 62, 66

Bankruptcy
42

Collateral source rule
46

Commercial activities of elder
29

Compensatory damages
11, 32, 73

Conversion
26, 36, 62

Definition
15, 17, 18, 20, 25, 29, 37, 55, 60, 64, 67, 70

Defraud
84, 86, 90

Dependent adult
65, 80

Fiduciary
25, 31, 77, 85

Harmful
51, 63, 72, 85, 89

History and purpose of EADACPA
6, 27, 29, 64

Independent cause of action
1, 19, 22, 24, 27, 28, 32, 33, 39, 41, 44, 82

Instruments
65

Intent to defraud
10

Intentional interference with expectation of inheritance
64

Jury
54

Probate Code 259
55, 61

Probate Code 21350/21380
61, 65

Probate proceedings
21, 34, 43, 48, 54

Property of an elder
14, 29, 47, 50, 58, 70, 80, 81

Protective orders
3, 38, 60

Punitive damages
11, 16, 32, 38, 73

Representative
79,

Retroactivity of statutory revisions
49, 71, 77

Services not received
80

Standing
9, 48, 59, 68, 82

Statute of limitations
1, 39, 48, 56, 63, 74, 78, 82, 83, 88, 89, 91

Taking, secreting, appropriating, obtaining, or retaining
13, 23, 24, 38, 55

Undue influence
11, 19, 34, 48, 65, 75, 77

Unlawful detainer
66

Vicarious liability, employers
8, 30

WIC 15600
87

Wrongful use
4, 5, 7, 12, 20, 26, 31, 37, 38, 53, 85, 90


91.  Taylor v. Finley (2nd Dist.) March 25, 2016
In 2006, elder sold his home for $350,000 and moved to an assisted living facility. Grandson took elder to an attorney, where a will and trust were prepared in which grandson was named executor and trustee as well as primary beneficiary. The proceeds from the sale of the house were deposited in a joint bank account in the names of elder and grandson. The account was then used to pay for elder’s expenses and to fund grandson’s business. In 2007, daughter accused grandson of manipulating elder, coercing him to sell his house, and using the sale proceeds for his own personal gain. The funds were depleted by the time elder died in 2008. In 2010, daughter petitioned to open probate and to administer elder’s estate and received special letters of administration to investigate whether the estate had any assets. In 2011, daughter filed a petition against grandson in the estate case asserting claims for financial abuse, fraud, undue influence and declaratory relief, citing Probate Code section 17200. The probate court sustained grandson’s demurrer to the financial abuse petition, declined to open probate, and instead granted daughter special letters to pursue an action against grandson. The court explained that the financial abuse petition was improperly filed as a trust action in the estate case without alleging a trust. Daughter then filed a civil action for financial abuse, fraud, undue influence and declaratory relief, which was ordered related to the probate case. Grandson moved for summary judgment on the grounds that the action was barred by the four-year statute of limitation for financial abuse. In granting the motion, the court ruled that the financial abuse claim was barred because daughter had made accusations of financial abuse against grandson as early as 2007, but she did not file the civil complaint until more than four years later.

On appeal, the DCA observed that the financial abuse claim was based on the opening of the joint account at the end of 2006, which allowed grandson unfettered access to the proceeds from the sale of elder’s house. Since the right to pursue a financial abuse claim belonged to the elder and daughter thereafter succeeded to those rights when she was named special administrator, her suspicions as to the existence of wrongful conduct were irrelevant. While daughter argued that the statute of limitations had been tolled by the elder’s lack of capacity, no evidence was submitted to support this allegation. In affirming the granting of the motion for summary judgment, the DCA considered that daughter had asserted the common law presumption of undue influence but then recognized the trial court’s determination that grandson had carried his burden to show he had not taken unfair advantage of elder. This is surprising since a motion for summary judgment does not properly weigh competing evidence but only seeks to determine if any evidence exists to support the claim.


90.  Elssmann v. California Preparatory College (4th Dist.) January 29, 2016
Elder loaned money to an entity organized to operate a private college and received in return a promissory note. The college defaulted on the note. Elder sued college for breach of contract and principals for fraud, negligent misrepresentation, and financial abuse. At trial, plaintiff’s expert testified that around the time of the loan the college had negative equity of between $52 million and $111 million. The trial court non-suited the tort claims against the principals, and judgment was entered against the college for breach of contract. Elder appealed.

In affirming the non-suit, the DCA observed that if the elder were “unable to state a claim of fraud and negligent misrepresentation, [then] she also fails to state a claim of elder abuse.” This reasoning ignores the statutory provision that wrongful use may occur solely where the taker knew or should have known that the conduct is likely to be harmful to the elder. Thus had non-suit not been entered, the jury might have concluded that the principals should have known that the investment was so risky that it was probable that the elder would be harmed. While the principals did not “take” the elder’s funds, they may very well have assisted the college in doing so.


89.  Olson v. Steckler (4th Dist.) 2015 WL 5178436
In 2006, elders invested in a real estate venture. As a requirement of participating in the transaction, elders represented that they were accredited investors having a net worth in excess of $1 million and experience in business and financial matters. The investment failed and elders sued investment advisors for, among other things, financial abuse. The trial court sustained defendants’ demurrer to the financial abuse cause of action on the grounds that the statute does not apply to a wealthy, accredited investor choosing to engage in a risky investment, stating: “These people went in and affirmatively stated they were accredited investors . . . . I think there would be a real problem as a matter of public policy in California if we say that people over 65 can't do things because it falls under the elder abuse statutes.” Elders appealed.

In affirming the sustaining of the demurrer, the DCA declined to consider the trial court’s public policy rationale for the decision because the issue was inadequately briefed. Rather, it determined that the action was not timely under the four year statute of limitations of WIC 15657.7.

Whether the protections of the financial abuse statutes extend to all elders, including those that may be wealthy and sophisticated, is a fundamental issue that has never been addressed by the decisional courts. While the legislative justifications of EADACPA (WIC 15600) are clearly to protect a class of residents that is generally regarded as particularly vulnerable to exploitation, the definition of financial abuse (WIC 15610.30) recognizes no such distinction. Financial abuse occurs where the defendant “knew or should have known that this conduct is likely to be harmful to the elder.” Thus the statute focuses on the subjective and objective state of mind of the wrongdoer prior to the consequences manifesting and not on the elder's state of mind. While the word “likely” suggests a prediction that an adverse consequence is more probable to occur than not, the entire term “likely to be harmful to the elder” qualifies this prediction. Potential consequences of decisions are rarely only beneficial or only harmful; it is far more common that the potential for both benefit and harm simultaneously exists. Thus, whether a defendant knew or should have known that conduct is likely to be harmful should properly consider both the relative probabilities that benefit and harm will result as well as the potential measure of such consequences. For example, the convenience store owner who sells an elder a lottery ticket knows that the overwhelmingly likely probability is that the elder will lose the purchase price. However, the measure of the consequences are that the potential benefit is winning $100 million while the potential harm is losing $1. Thus, the net likelihood of “harm to the elder” may very well be minimal. For a high wealth elder, buying $10,000 in lottery tickets might not be characterized as “likely to be harmful” while the same transaction for an impoverished elder might be. In the context of the Olson case, a reasonable statutory interpretation might be to consider the likelihood of harm and benefit of the investment, the potential measure of the various consequences, and the extent to which the elder would be impacted should the harm occur. Importantly, none of these potential factors involve an examination of the elder’s state of mind or sophistication.


Johnson v. Syed (2nd Dist.) 2015 WL 4314049


88.  ARI-NBCC 2 v. Argus (4th Dist.) 2015 WL 3959070
Plaintiffs alleged that they were defrauded in a real estate investment scheme and sued defendants on various counts, including financial abuse. The trial court sustained demurrers without leave to amend on the basis of the running of the statute of limitations.

The DCA reversed to permit plaintiffs to amend the complaint. In doing so, it recognized that WIC 15657.7 establishes a four year limitation period that provides for delayed discovery. However, there exists a rebuttable presumption that a plaintiff has knowledge of the wrongful cause of an injury and therefore must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to make earlier discovery despite reasonable diligence. Conclusory allegations are insufficient.


87.  Farhoomand v. Caine (4th Dist.) 2015 WL 3897099
Plaintiff sued defendant for various counts arising out of business dealings, and defendant cross-complained for among other things, financial abuse. A jury found in favor of plaintiff and against defendant on the cross-complaint. Defendant appealed.

Defendant’s appeal was based, in part, on the assertion that the trial court had improperly prevented defendant from introducing evidence that plaintiff had been cultivating marijuana. Defendant argued that WIC 15600 recognizes that a caretaker's abuse of alcohol or drugs can be a factor that contributes to elder abuse and therefor should properly have been considered in defendant’s financial abuse claim. In affirming the verdict, the DCA observed that evidence of marijuana cultivation is not probative of whether the person cultivating it took or retained another person's property for a wrongful use, with intent to defraud, or by undue influence as required to prove financial abuse of an elder.


Stuart v. Allen Matkins (4 Dist.) 2015 WL 2406125


86.  Frisbie v. ADA Service Corp. (1st Dist.) 2015 WL 1736286
Elderly couple obtained a loan on their home, and thereafter filed suit against lenders for financial abuse alleging that the terms of the loan had been misrepresented and unsuitable. The trial court granted defendants’ motion for summary judgment, and elders appealed. The DCA affirmed the dismissal finding that elders had offered no evidence creating a triable issue of fact.


85.  Silliman v. Silliman (4th Dist.) 2015 WL 1576611
Beginning in 2001, elder entered into an oral partnership with his son and daughter-in-law (defendants) involving the purchase and sale of multiple pieces of real property and variously titled bank accounts. In 2009, elder sued defendants on several counts including breach of fiduciary duty and financial abuse. The equitable issues were first tried to the court, which found that elder’s testimony lacked credibility and determined that defendants had not breached their fiduciary duties to elder. The court then granted defendants’ motion for judgment on the financial abuse count based upon these findings. Elder appealed. The DCA affirmed the entry of judgment based on the trial court’s findings, holding that financial abuse could not occur in the absence of a breach of fiduciary duty.

While the decision references and applies text from WIC 15610.30 as it existed both before and after the statutory revisions effective January 1, 2009, it fails to distinguish which law applied at the time of the allegedly wrongful conduct. The most interesting aspect of this decision is the DCA’s determination that the duties of a fiduciary necessarily include the duties imposed by the financial abuse statute. The duties of a fiduciary are generally characterized as requiring loyalty, care, good faith, and fair dealing. (Enea v. Superior Court (2005) 132 Cal.App.4th 1559, 1565.) WIC 15610.30 defines wrongful use as including, among other things, where the defendant knew or should have known that his conduct is likely to be harmful to the elder. Thus the standards for a fiduciary focus on the duties of the fiduciary while the standard for financial abuse focuses on the affect of conduct on the elder. Can a fiduciary act disloyally, carelessly, in bad faith, or unfairly and still not know, or should know, that it would be likely to be harmful to the principal? It’s certainly hard to imagine such conduct.


84.  Carrasco v. HSBC Bank (6th Dist.) 2015 WL 1321713
Elders obtained a home loan, defaulted, and title was taken by private foreclosure. Elders then filed suit alleging, among other things, that the bank took their property with the intent to defraud and thereby committed financial abuse. The trial court sustained bank’s demurrer without leave to amend, and elders appealed. The DCA affirmed, observing that a cause of action for financial abuse based on the intent to defraud must be pled with particularity, and a complaint that merely alleges that the foreclosure caused the elder to lose the home is insufficient, citing Stebley v. Litton Loan Servicing (Mandatory Authority, digest 22.)


83.  Paregian v. Rippey (3 Dist.) 2015 WL 900613
In 2002, elder received a check in connection with a commercial transaction. Elder misplaced the check and asked defendant to issue another. Defendant claimed that the amount of the check needed to be adjusted before another would be issued. In 2004, defendant told elder that elder had already cashed the check and that the money was no longer owed. In 2011, elder found the misplaced check and demanded payment. Defendant refused and elder filed suit, claiming among other things, financial abuse. Plaintiff asserted that the delay in bringing suit was based upon elder’s “diminished memory, and diminished capacity to handle his complicated affairs.” Defendant’s demurrer on the basis of timeliness was sustained. Elder appealed.

The DCA affirmed the decision and applied the “delayed discovery rule” to WIC 15657.7, which requires that the complaint plead with particularity the factual bases for the delay in discovery.


82.  Noval v. Frost (4th Dist.) 2015 WL 294865
Plaintiff, one of decedent’s children, filed a series of lawsuits against his siblings alleging multiple causes of action, including financial abuse. Siblings demurred claiming that elder abuse was not an independent cause of action and that plaintiff lacked standing. The trial court sustained the demurrer on the basis that the complaint was barred by the statute of limitations sua sponte. Plaintiff appealed.

In reversing the sustaining of the demurrer, the DCA held that elder abuse is an independent cause of action, criticized the trial court for raising the statute of limitations issue sua sponte, and found that, as pled, plaintiff had standing under Welf. & Instit. Code § 15657.3. The DCA further held that the issue of whether the action was time barred was a question of fact and that the complaint alleged sufficient facts so that the demurrer should have been overruled on that basis.


81.  Johnson v. Senior Funding Associates (4th Dist.) 2014 WL 6700494
In 1998, 61 year old man acquired title to property and thereafter married 60 year old woman. In 2004, when both were elders, defendant solicited husband to initiate a reverse mortgage loan on the property. At the solicitation, defendant allegedly learned that elders were married and made misrepresentations as to the terms of the prospective reverse mortgage. The loan was made and the deed of trust identified husband as “unmarried.” Thereafter, husband executed a quitclaim deed in favor of himself and wife, and shortly thereafter, he executed a second quitclaim deed in favor of a revocable living trust benefiting himself and wife. In 2006, defendant solicited husband to initiate another reverse mortgage that would extinguish the earlier reverse mortgage. In completing the second reverse mortgage, defendant allegedly “tricked” wife into signing an interspousal transfer in favor of husband. In 2009, husband died. Defendant then foreclosed on the property, and wife sued, alleging among other things, financial abuse. Defendant’s demurrer was sustained and wife appealed. The DCA affirmed the dismissal, principally on the bases that wife did not have title to the property at the time the alleged misrepresentations were made in 2004 and because the 2004 loan had been successfully paid off.

Unfortunately, the underlying facts of this case are unclear making it difficult to evaluate. Nevertheless, there are some troubling statements in the DCA’s decision. The allegedly wrongful conduct occurred in 2004 and 2006; however, the DCA applied the definition of financial abuse enacted in 2008. It also applied the requirement of “recklessness, oppression, fraud, or malice” of WIC 15657, applicable to physical abuse and neglect and not financial abuse. The decision then concludes that the financial abuse count must fail because wife did not hold title to the property at the time of the allegedly wrongful taking. Of course, record title to real property is not the only potential basis for a taking; under the terms of a reverse mortgage, a surviving spouse has rights even if she is not on title. It also appears that the wife, as successor in interest, did not attempt to pursue the potential financial abuse claim of her deceased husband.


 Griffiths v. Pacific Coast Builders, Inc. (3d Dist.) 2014 WL 6065906


80.  Breliant v. Fujihara (2nd Dist.) 2014 WL 5361715
An unlicensed and self-styled drug “interventionist” and his joint venturers were sued by the mother of a young heroine addict for wrongful death, physical abuse and neglect, financial abuse, and related counts. The trial court sustained a demurrer without leave to amend and mother appealed. In reversing the demurrer, the DCA held that the complaint stated a cause of action for dependent adult abuse because, among other things, the complaint alleged that daughter paid for services that she did not receive.


79.  Pynoos v. Massman (2d Dist.) 2014 WL 5282153
Elder was trustee and sole beneficiary of a trust that owned interests in a limited partnership that dissolved and distributed its assets. Thereafter elder, as trustee, sued general partner for an allegedly inadequate distribution and included a count for financial abuse. The trial court sustained defendant’s demurrer without leave to amend, apparently drawing a distinction between the right of the elder to pursue a financial abuse count as an individual rather than as trustee.

On appeal, defendant argued that property held in trust may only be treated as the “personal property” of an elder if the trust is revocable, and the trust and the elder are one and the same, ostensibly when the elder is the trustee and sole beneficiary. The DCA rejected these distinctions but noted that the elder must still have a sufficiently definite interest in the property allegedly taken to sue for elder abuse. Thus, prudent practice would suggest naming the elder as plaintiff both individually and as trustee of the trust.


78.  Kevorkian v. Hurlbutt (Dist. 5) 2014 WL 5035950
Two elderly sisters employed attorney to represent them in connection with several probate and trust administration matters. The disputes were mediated and resolved by settlement. Thereafter, the sisters filed suit against attorney. Attorney’s motion for summary judgment based on the running of the four year statute of limitations of WIC 15657.7, among other things, was granted and sisters appealed. The DCA affirmed, noting that the sisters had presented no evidence indicating that reasonable diligence could have uncovered the alleged injury only at a later time.


77.  Bellows v. Bellows (1st Dist.) 2014 WL 5035354
Elder executed a revocable living trust and pour over will that divided her estate equally between her two sons. There followed a series of estate plan revisions and non-probate transfers initiated by the two sons by which elder’s estate would either be divided unequally in favor of son 1 or would be divided equally between them. Upon elder’s death, a substantial non-probate transfer resulted in an unequal division of the estate in favor of son 1. Son 2 filed suit as a successor in interest to elder and on his own behalf. On behalf of elder, the complaint sought to invalidate the non-probate transfer based on undue influence and damages for breach of fiduciary duty and financial abuse. On behalf of son 2, the complaint asserted breach of fiduciary duty and financial abuse. (Although the decision is not explicit, apparently son 2 was either an elder or dependent adult and therefore able to assert a financial abuse count on his own behalf.) The counts asserted by son 2 on his own behalf were based on allegations that as successor trustee, son 1 had conditioned the distribution of an undisputed portion of the trust assets to son 2 upon the signing of a release in violation of Probate Code § 16004.5. At trial, son 2 sought to shift the burden of proof to son 1 to prove that the non-probate transfer had not been accomplished through undue influence. In considering the presumption, the court applied the standard applicable to invalidating a testamentary instrument, namely: the existence of a confidential relationship; active participation in creating the instrument; and undue profit. The court found no active participation nor undue profit, and even if there had been, that son 1 had rebutted the presumption.

On appeal, son 2 asserted that the trial court had applied the incorrect standard and should have applied Probate Code § 16004(c), which presumes that a trustee breaches his fiduciary duty when he obtains an advantage in a transaction with the principal. The DCA side-stepped this issue by recognizing the trial court finding that son 1 had presented sufficient evidence to rebut any presumption of undue influence. With regard to the claim that son 1 had breached his fiduciary duty to son 2 by conditioning distribution of an undisputed portion of the estate on the execution of a release, the DCA noted that this tactic, while wrongful, did not necessarily constitute a breach of fiduciary duty. And even if it triggered the presumption of Probate Code § 16004(c), the court retains discretion to excuse a trustee if he has acted reasonably and in good faith under Probate Code § 16440(b). The DCA held that the trial court’s statement of decision implied that it had done so. With regard to the financial abuse counts of both elder and son 2, the trial court applied the definition of financial abuse effective prior to January 1, 2009. The DCA affirmed this decision holding that the statutory changes were substantive and citing Das v. Bank of America (see Mandatory Authority, digest 17).


76.  Croteau v. Bernier (4th Dist.) 2014 WL 4198781
Elder employed her son to remodel her house. A dispute over the work arose and elder sued son and son cross-complained. After a bench trial, judgment was entered denying recovery to both elder and son. Thereafter, son filed a new action against elder for malicious prosecution and defamation. Elder then filed a cross-complaint for financial abuse and related counts. The financial abuse count was based on allegations that son had falsified documents that were presented at trial in the first lawsuit to take “financial advantage, appropriate, and convert [elder’s] money for [son’s] own personal use and enjoyment.” Son then filed an anti-SLAPP motion, which the trial court granted; elder appealed.

In evaluating the requirements for granting the anti-SLAPP motion, the DCA considered, among other things, the likelihood of elder prevailing on the financial abuse count. Based on the trial court’s finding that neither elder nor son were credible, the DCA concluded that elder could not show a probability of prevailing. It therefore did not need to decide whether the litigation privilege of Civil Code § 47 applied.


75.  Marble v. Fibiger (2nd Dist.) 2014 WL 3809061
Elder and her sister were beneficiaries under a bypass trust created by their parents and were named successor co-trustees upon the death of the surviving parent. Surviving parent died and shortly thereafter, elder was hospitalized and declined to act as co-trustee of the bypass trust. Sister presented various documents to elder while elder was hospitalized, which elder signed, including an agreement to waive elder’s interest in the bypass trust in exchange for a payment of $125,000. Elder died and shortly thereafter, sister deposited $125,000 from the bypass trust into an account in the name of the elder’s estate. Elder’s children filed a petition seeking, among other things, damages for financial abuse, recovery of the assets of the bypass trust pursuant to Probate Code § 850, and double the amount so recovered pursuant to Probate Code § 859. The matter was submitted upon stipulated evidence, and the probate court found financial abuse and awarded compensatory and punitive damages and ordered the return of the assets pursuant to Probate Code §§ 850 and 859. Sister appealed.

The DCA reviewed the stipulated evidence and found that it failed to establish that sister’s conduct constituted undue influence and therefore reversed the financial abuse and 850/859 judgment. However, it is interesting to note that the probate court’s judgment expressly concluded that sister “took elder’s property with the execution of the hospital documents [and that] the taking was done with intent to defraud or for a wrongful use or undue influence. . . .” Welf. & Instit. Code § 15610.30(b) provides that taking property for a wrongful use means, among other things, that the defendant knew or should have known that the taking is likely to be harmful to the elder. While the decision does not disclose the value of elder’s interest in the bypass trust, presumably it was substantially more than the $125,000 or the elder’s children would not have pursued this action. Accordingly, while there may not have been stipulated evidence sufficient to support the finding of undue influence, there probably was sufficient evidence to support a finding that defendant should have known that the taking would be harmful to the elder and therefore constituted taking for a wrongful use.


74.  Matlock v. J.P. Morgan Chase Bank (2nd Dist.) 2014 WL 3353260
Borrower, apparently an elder, brought suit against bank alleging predatory lending practices and included a count for financial abuse. Defendant’s demurrer to the financial abuse count was sustained without leave to amend based on the expiration of the statute of limitations. The DCA affirmed the decision noting that while elder might not have fully appreciated the consequences of the loan terms, he did acknowledge reading and accepting them, and therefore the four year statute of limitations had not been tolled.


73.  Riggs v. Baldoni (2nd Dist.) 2014 WL 2612469
Elder had a long history of psychiatric problems. Defendant, a neighbor and acquaintance of elder, convinced elder to sign a deed conveying elder’s home to defendant. Thereafter, defendant convinced elder to sign a durable power of attorney for health care and then moved her to an assisted care facility. Upon entry to the facility, a physician diagnosed elder with dementia. Elder became agitated, had difficulty sleeping, stopped eating, and was transferred to a hospital where it was recommended that a feeding tube be introduced. Defendant refused to authorize the feeding tube, and elder was sent back to the assisted care facility without the feeding tube. Shortly thereafter, elder was found unconscious and was returned to the hospital where a feeding tube was inserted. Elder was then discharged to hospice where she died a week later. Plaintiff, the administrator of elder’s estate, filed suit against defendant alleging financial abuse. The jury returned a verdict for the estate and awarded $320,000 in special damages, $100,000 in general damages, and $100,000 in punitive damages. Defendant moved for a new trial based on jury misconduct, which the trial court granted. Plaintiff appealed and defendant cross-appealed.

The DCA reversed the granting of the new trial based on jury misconduct and affirmed the verdict on the basis of substantial evidence. This case is primarily interesting for the DCA’s discussion of the connection between the elder’s agitation, inability to sleep, medication to calm her down, and the award of general damages for emotional distress. It is also interesting to consider whether a wrongful death action might have been brought for defendant’s refusal to authorize the feeding tube.


72.  Lim v. Villa Garfield, Inc. (2nd Dist.) 2014 WL 2466558
Defendant developed senior affordable housing that it sold as condominiums to elders. Elders brought an action against defendant for various causes of action, including financial abuse. Elders sought a right to attach order, which the trial court granted. Defendant appealed.

In reviewing the granting of the attachment order, the DCA considered whether elders had “submitted sufficient admissible evidence to support their claims.” It determined that elders had failed to produce the preliminary facts necessary to prove that they were low or moderate income households and failed to prove that each had been overcharged pursuant to a formula based on the annual income of each elder. Accordingly, the DCA reversed the granting of the right to attach order. The decision does not describe the facts upon which the financial abuse count was based nor reveal the nature of the other causes of action. The DCA’s review of the evidence on these issues suggests that the merit of the action was evaluated based upon whether the defendant had breached an obligation to sell the units to the elders at a designated “affordable” price. However, it is possible for financial abuse to arise out of a transaction even where the defendant has not breached the terms of the contract. For example, a defendant may sell an investment to an elder where the defendant knew or should have known that the transaction would be harmful to the elder.


71.  Sanders v. Langmuir-Logan (4th Dist.) 2014 WL 1917679
In 1995, defendant, an attorney, licensed securities dealer, stockbroker, and registered investment advisor, convinced elders to use assets of their trust to purchase an interest in an LLC which defendant controlled. Thereafter, defendant mismanaged the assets of the LLC and defrauded elders by personally obtaining assets of the LLC and providing false and misleading financial statements. Following elders’ deaths, the successor trustee filed an action and included a count for financial abuse. The trial court found in favor of elders and defendant appealed.

The DCA applied the definition of financial abuse applicable at the time of the wrongful conduct and noted that the evidence presented was sufficient to demonstrate the requisite bad faith.


70.  Holt v. Denholm (4th Dist.) 2014 WL 1666128
Elder was the income beneficiary of a complex trust in which her son was the trustee. Other beneficiaries sought various probate remedies alleging mismanagement and wrongful taking by the trustee and included a count for financial abuse. The trial court found that the trust entitled the elder to as much trust income as she might need, that any taking did not affect the income actually distributed to elder, and found against plaintiffs on the financial abuse count.

The DCA affirmed, stating: “As an income beneficiary, [elder] had the right to collect whatever cash she needed from the Trust during her lifetime. Two experts testified [trustee’s] conduct did not financially harm [elder], and this evidence amply supports the court’s judgment on the financial elder abuse claim. We find no authority, and the [plaintiffs] cite to none, holding an elder person collecting all the money she requires and desires from a trust during her lifetime can be called the victim of financial elder abuse.” The DCA’s focus on the lack of “financial” harm to the elder implies that harm that is not pecuniary might not satisfy the definition of financial abuse. While Welfare & Institutions Code § 15610.30 does define the term “financial” abuse, subsection (c) clearly includes in the definition the taking of “any property right” and is not limited to financial harm. In this case, it is not revealed whether any non-pecuniary property right of the elder might have been affected.


69.  Fazeli v. Williamson (6th Dist.) 2014 WL 1297033 
Elder was the victim of a Ponzi scheme involving investments in real property. Plaintiff brought an action, including a count for financial abuse, against defendant and several title insurance companies. The trial court sustained title insurers’ demurrers without leave to amend.

The DCA affirmed on the bases that the complaint failed to allege that defendants committed any wrongful act themselves nor that they had knowledge of the perpetrators fraudulent conduct, citing Das v. Bank of America (Mandatory Authority Digest 17).


68.  Konstin v. Bomar (1st Dist.) 2014 WL 988983 
Wife and husband created an estate plan consisting of pour-over wills and a family trust that provided that at the death of the survivor, their estate was to be distributed equally to their son and daughters. The estate plan was amended a number of times with various inter vivos transfers to children. Among these estate plan revisions was a 2006 will of wife that transferred all assets to the trustee of the family trust, to be distributed “as therein provided.” By contrast, a 2009 will of wife poured all wife’s non-trust assets into the survivor’s trust, of which husband was the sole beneficiary. Soon after wife’s death, son as successor trustee, sent daughters notice pursuant to Probate Code § 16061.7(a)(1), which triggered a 120 day period in which to contest the trust. After this period had run, daughters sued son for elder abuse and related causes of action that had belonged to mother. Daughters asserted that the 2009 will and corresponding restated trust had been obtained by fraud or undue influence, and therefore the causes of action must pass through the 2006 pour-over will and then into the trusts, including the bypass trust of which daughters were beneficiaries. Since son was both successor trustee and alleged abuser, daughters claimed standing pursuant to Welfare & Institutions Code § 15657.3. Son’s demurrer that daughters lacked standing was sustained and daughters appealed.

The DCA noted that even if the 2009 will were invalid, the proper interpretation of the 2006 will also required that the assets be distributed as provided by the 2009 trust because the 2006 will contemplated the potential amendment of the trust. Since the 2009 trust restatement could not be attacked because the limitation period had run, daughters would not be beneficiaries under the application of either the 2006 or 2009 wills, had no cognizable interest, and therefore lacked standing pursuant to Lickter v. Lickter (see Mandatory Authority, digest 19). Affirmed.


67.  Mack v. Shannahan (4th Dist.) 2014 WL 257235
Elder, an attorney, was involved in a contentious divorce and hired a forensic accountant to assist in the evaluation of assets in an effort to characterize certain retirement funds as elder’s separate property. On elder’s urging, the accountant initially pursued this approach but then decided that there was insufficient legal basis for doing so and abandoned this approach. After an adverse outcome in the dissolution case, elder sued accountant and others in a separate action alleging breach of fiduciary duty, financial abuse, professional negligence, negligent misrepresentation and breach of contract. After extensive litigation and the filing of a motion for summary judgment, elder – shortly before the motion was to be heard and a few months before trial was to commence – dismissed accountant without prejudice. Accountant was awarded his costs as the prevailing party and then filed a malicious prosecution action against elder. In return, elder filed an anti-SLAPP motion, which the court denied. Elder appealed

The DCA affirmed the denial of elder’s anti-SLAPP motion. In doing so, it considered the evidence submitted to support the underlying claims, including the financial abuse count. The DCA ruled that the financial abuse claim lacked evidentiary support and observed:

“[Accountant] proffered sufficient evidence to show no reasonable attorney would have thought that claim was tenable under the known facts, inasmuch as the evidence, if believed, supports the findings (1) that [elder] was neither an ‘infirm elderly person[ ]’ nor a ‘dependent adult[ ]’ deserving of protection in the dissolution action (see Welf. & Inst.Code, § 15600, subds. (a), (c) & (h)), as there is substantial evidence showing [elder] at all times relevant in that action was a sophisticated, highly-experienced tax specialist who aggressively pursued his own separate property theory after [his lawyer] made a tactical decision and refused to do so, including offering expert witness testimony in support of that theory . . . .”

The statutory definition of financial abuse (Welfare & Institutions Code § 15610.30) applies to all persons 65 and older and does not require that the elder be “infirm” nor “deserving of protection.” Though the referenced subsections of Welfare & Institutions Code § 15600 express the legislative justification for protecting members of this identified class of persons, all elders are protected whether vulnerable or not, and thus the DCA’s qualification as to membership is inconsistent with the text of the statute.


66. Gehlhar v. Baldwin (4th Dist. 2014) 2014 WL 173419
Elder was the sole owner of an LLC that owned and rented a residence to defendants. Shortly thereafter in 2009, elder suffered a disabling stroke, and defendants stopped paying rent. Elder and LLC obtained an unlawful detainer judgment for possession and unpaid rent; thereafter the sheriff forcibly removed defendants from the residence. Elder and the LLC then filed a second action against defendants seeking damages for breach of the lease, breach of a promissory note that defendants had previously signed to secure unpaid rent, fraud, and financial abuse. At a bifurcated trial, the court ruled that the judgment in the unlawful detainer action barred the counts for breach of the lease and the promissory note on the basis of res judicata. The fraud and financial abuse counts then proceeded to a jury trial. The jury returned a special verdict in favor of plaintiffs awarding elder a total of $20,000 in compensatory damages and a total of $200,000 in punitive damages; the verdict also found in favor of the LLC and awarded approximately $1,800 in compensatory damages but no punitive damages. Defendants filed various post-judgment motions, including a motion for new trial on the sole basis that the punitive damage award was excessive. Plaintiffs filed a motion for attorney’s fees based on the financial abuse verdict. The trial court granted an entirely new trial and denied the motion for attorney’s fees. Plaintiffs appealed.

The DCA modified the order granting the new trial, limiting it to re-trial of the punitive damages award only; it also affirmed the denial of plaintiffs’ attorney’s fee motion. While an award of attorney’s fee for a successful financial abuse action is mandatory, it appears that the DCA was sufficiently annoyed with plaintiffs’ inadequate briefing and “disingenuous” use of authority to rule that plaintiffs had waived this issue; it also denied plaintiffs costs on appeal.


Amended by Stats.2013, c. 668
Defines undue influence and provides guidance for determining if undue influence occurred by enacting 15610.70, applies the definition to financial abuse in 15610.30, and applies the definition to probate matters in Probate Code § 86.



65.  Estate of Moynes v. Ramirez (1st Dist.) 2013 WL 6498227
Decedent's executor and the successor trustee and sole beneficiary of her trust filed a probate petition to determine that real property and money were taken by decedent’s long-time caregiver and caregiver’s daughter by undue influence and for an order requiring defendant (caregiver's daughter) to reconvey the property. The property transfers were accomplished by (1) the sale of decedent's home to defendant for less than its market value; (2) a check written by decedent to defendant; and (3) establishment of joint bank accounts and certificates of deposit from which defendant received money. The trial court found that these transfers were prohibited pursuant to Probate Code 21350 et seq. and had been obtained by undue influence, ordered the return of the property, and assessed double the amounts taken pursuant to Probate Code 859. Defendant appealed.

The DCA affirmed holding that decedent’s physical as well as mental infirmities were sufficient to characterize her as dependent, and therefore the prohibitions of Probate Code 21350 applied because the transfers to defendant were donative. It held that the transfers, including the personal check, were accomplished by "instruments" within the meaning of Probate Code 45 and 21350 and that the undue influence referenced by Probate Code 21351 is broader than the definition provided by Civil Code 1575. The DCA thus determined that there was substantial evidence to affirm the trial court’s decision that the transfers were prohibited and were the product of undue influence.


64.  Kalfin v. Kalfin (4th Dist. 2013) 2013 WL 5621149
Father, an elder, had two daughters whom he named equal beneficiaries of his trust. Daughter 1 had progressive and disabling medical problems. Father became increasingly concerned about the ability of daughter 1 to manage money and therefore amended his trust by leaving everything to daughter 2. Both before and after the amendment, father had many discussions with daughter 2 about his desire for daughter 2 to provide for daughter 1 after father’s death, which daughter 2 acknowledged. Following father’s death, daughter 2 refused to assist daughter 1. Daughter 1 filed suit against daughter 2 asserting, among other things, causes of action for breach of contract, fraud, financial abuse, and several probate remedies. The financial abuse count was based upon the taking of property of a dependent adult (daughter 1) as well as the taking of property of an elder (the deceased father). A jury returned special verdicts in favor of daughter 1 for breach of contract and financial abuse of a dependent adult (daughter 1), but not on the financial abuse of an elder (father) and awarded compensatory and punitive damages. The court then awarded daughter 1 attorney’s fees and costs.

Daughter 2 appealed asserting, among other things, inconsistent findings in the financial abuse special verdicts because the jury answered “yes” to the question did daughter 2 take the father’s property for a wrongful use with regard to the financial abuse claim of daughter 1 but answered “no” to the same question with regard to the financial abuse claim of the father. In deciding that these special verdict findings were not inconsistent, the DCA observed: “[B]y answering “Yes” to the special verdict question, the jury concluded [daughter 2] took [the father’s] property ‘with the intent to defraud or for a wrongful use’ for purposes of proving financial abuse of a dependent adult, i.e., [daughter 1] because she knew her conduct was likely to harm [daughter 1].” Thus the DCA ruled that the person whose property is taken need not be the person who is harmed by the taking. This seems inconsistent with the text of Welfare & Institutions Code § 15610.30 which provides: “’Financial abuse’ of an elder . . . occurs when a person . . . takes . . . [the] property of an elder . . . for a wrongful use . . . . [if] . . . the person . . . knew or should have known that this conduct is likely to be harmful to the elder . . . .” (Emphasis added.) Use of the definite article “the” strongly suggests that the person whose property is taken must be the same person who is harmed by the taking. Moreover, the reasoning of the DCA would mean that if daughter 1 had not been a dependent adult, then she would not recover because the person harmed would not be an elder, or in this case, a dependent adult. Daughter 1 prevailed on her breach of contract count on the basis that she was a third party beneficiary of an oral agreement between daughter 2 and the father. Thus, the property taken from daughter 1 was her contractual right to be supported by daughter 2. The taking of this right of daughter 1, a dependent adult, was for a wrongful use because daughter 2 knew or should have known that it would likely be harmful to daughter 1. In addition, it would appear that daughter 1 might have brought (at least after the Beckwith v. Dahl decision, see Mandatory Authority, Digest 23) an action for intentional interference with expectation of inheritance. It also appears that the jury might have been misled with regard to the financial abuse claim of the father by not clearly identifying that the property taken from the father was his testamentary right to direct the disposition of his property. (See Abernathy v. County of Marin (1st Dist.) 2006 WL 418486, Persuasive Authority Digest 14.) The conduct of daughter 2 in taking this property right from the father constituted the taking of property of an elder for a wrongful use because she knew or should have known that defeating the father's testamentary intent would be harmful to him.

This matter again came up on appeal (2014 WL 1271021) in connection with a levy against real property owned by daughter 2. Among other issues, daughter 1 had claimed attorney's fees pursuant to Welfare & Institutions Code § 15657.5 in connection with the post-levy appeal. The DCA side-stepped this issue by directing that the trial court consider the matter.


63.  Jobe v. Kronsberg (4th Dist.) 2013 WL 3233607
Elder inherited a large amount of property but had little experience with managing finances. A loan broker convinced elder to borrow large amounts secured with various parcels of real property. A private lending group made the loans notwithstanding its knowledge that elder had inadequate income to service the loans. Foreclosure was initiated and elder sought an injunction as well as damages for financial abuse. The trial court issued a preliminary injunction and defendants sought review. In affirming the issuance of the injunction, the DCA noted the new four year statute of limitations on financial abuse (Welfare & Institutions Code § 15657.7) but affirmed the decision on the basis of equitable estoppel.


62.  Estate of Lowe v. Marques (1st Dist.) 2013 WL 3227654
Husband and wife created a revocable living trust naming their children as beneficiaries. Following the deaths of both spouses, a dispute arose between the children. Brother 1 employed attorney to represent him, both individually and as trustee of the parents’ trust. The family residence was sold and the net proceeds of sale were delivered to attorney, who failed to deposit net proceeds in his client trust account and paid himself legal fees from these funds. Thereafter, brother 2 filed a probate petition against brother 1 regarding the validity of various trust instruments, together with a complaint for damages for breach of fiduciary duty, fraud, conversion, financial abuse, and a constructive trust. Attorney was then added as a defendant. The probate court entered judgment in favor of brother 2 and against attorney on the conversion and financial abuse counts, imposed double the amount taken pursuant to Probate Code § 859, and awarded attorney’s fees and costs. Attorney appealed.

The DCA found substantial evidence to support the judgment and affirmed. In upholding the attorney’s fee award, the DCA observed that apportionment of attorney’s fees between various counts is not required where they are factually and legally intertwined and that the factual basis of the conversion claim was identical to the claim of financial abuse.


61.  Ameri v. JP Morgan Chase (4th Dist.) 2013 WL 2145088
Elder obtained a residential construction loan from defendant bank and subsequently defaulted on various provisions of the loan agreement. Bank foreclosed, and elder sued on various theories included financial abuse. Following the presentation of plaintiff’s case, bank moved for nonsuit, which the trial court granted. Elder appealed.

In affirming the judgment, the DCA observed: “[Elder], who was 67 when he entered into the loan agreement with [bank], could not—as a matter of law—prevail on his cause of action for financial elder abuse under Welfare and Institutions Code section 15600 et seq. because he did not present evidence of fraud by [bank].” The definition of financial abuse set forth in Welfare & Institutions Code § 15610.30 does not require fraud; rather, it requires an “intent to defraud.” Moreover, financial abuse may also be proven by the taking of the elder’s property for a wrongful use. Whether the elder in the this case presented any evidence of wrongful use is not revealed in the decision.


60.  Van Horn v. Morgan (2nd Dist.) 2012 WL 1620870 Elder was a long-term tenant in a house located at the rear of a lot on which the property owner, a woman’s club, had its offices. Elder paid rent to the club and received her mail at the club’s building. Defendant, the executive director of the club, filed an unlawful detainer action against elder, but thereafter dismissed it. Defendant then installed a locked mailbox at the club and refused to provide elder with a key. Elder sought to have her mail delivered to her house at the rear of the property rather than to the locked mailbox, but the post office refused stating that only the property owner could establish a separate address for elder’s house. Defendant refused to do this. Elder’s utilities were then shut off because she did not receive her bills. Elder sought an elder abuse restraining order, which the trial court granted. The order restrained defendant from interfering with elder’s receipt of her mail and ordered defendant to (1) remove the locked mailbox and allow mail to be delivered in the manner it had previously; (2) provide elder with a key to the locked mailbox; or (3) instruct the post office to establish a separate mailbox for the delivery of elder’s mail. Defendant appealed the order. On appeal, defendant argued that elder had not proven emotional distress so as to be entitled to the protective order, and that in any event the protective order was an improper mandatory order because it required defendant to take affirmative steps. The DCA determined that sufficient evidence of mental suffering had been presented to support issuance of the elder abuse restraining order. In addition, the DCA determined that the order restraining defendant from interfering with elder’s mail was prohibitive and that the alternate methods by which defendant might restore elder’s mail service were merely incidental to the restraint and did not render the order improperly mandatory.


59.  Ray v. Avery (1st Dist.) 2012 WL 294453
Elder created a trust in which plaintiff would receive a life estate in a mobile home upon elder’s death; the remainder of elder’s estate would be divided between her four grandchildren. Thereafter, elder died and plaintiff filed an action for elder abuse against one of the grandchildren. The trial court sustained the grandchild’s demurrer finding that plaintiff lacked standing as an interested party. In affirming the demurrer, the DCA cited Lickter v. Lickter (Mandatory Authority digest 19) because plaintiff’s life estate could not be impaired, defeated, or benefited by prosecution of the elder abuse claim. While the DCA recognized that the decision in Lowrie v. Lowrie (Mandatory Authority digest 6) suggested that a broad interpretation of who might be an interested party was appropriate, the 2007 revision of 15657.3 codified any expansion suggested in the Lowrie decision.


58.  Nesbitt v. Emmanuel (2nd Dist.) 2012 WL 375437
Elder sold her condo to defendant, an experienced real estate investor, and carried back a portion of the purchase price by a note and deed of trust. Defendant later appeared at elder’s residence with a notary and, without repaying any portion of the obligation, obtained the elder’s signature on a deed of reconveyance, which thereby extinguished the encumbrance. Thereafter, the defendant recorded the deed of reconveyance and obtained an additional bank loan secured by the property. Defendant then defaulted on his obligation to elder. Elder, both individually and as trustee of her trust, sued for breach of contract and elder financial abuse. In a bench trial, the court found in favor of elder on both counts and awarded punitive damages; it also awarded attorney’s fees to the elder, both individually and as trustee. 

Defendant asserted on appeal, among other things, that the trust was not entitled to attorney fees under WIC § 15657.5 because it applies only to an elder and not to an entity such as a trust. The DCA side-stepped this issue by observing that the promissory note contained an attorney’s fee provision upon which the award could properly be based. All of the actionable events in this case preceded January 1, 2009, the effective date of SB1140. Under the revised statutes, the DCA would presumably reach the same result, albeit more directly, as WIC § 15610.30(c) now provides that a person takes the property of an elder “regardless of whether the property is held directly or by a representative of an elder.” The DCA also noted the trial court’s finding that the defendant had committed an “egregious violation of the Elder Abuse Act.” A creditor is of course free to extinguish or subordinate a deed of trust – even without consideration – and while this elder apparently did not understand the consequences of her act, there is no indication that defendant actively defrauded her. Nevertheless, extinguishing the encumbrance without consideration was found to constitute a taking of property for a wrongful use. It is interesting to compare this outcome with the likely result had the plaintiff not been an elder: while failure to pay the obligation would constitute breach of contract, absent allegations of fraud, the extinguishing of the deed of trust would probably not otherwise be actionable. Accordingly, this appears to be a case where conduct that would not be wrongful if directed at a non-elder may very well be actionable as financial abuse when directed at an elder.


58.  Domio v. Domio (2nd Dist.) 2011 WL 6062017
Elder owned a home and resided there with her son, Anthony, one of elder’s four adult children. Elder appointed Anthony attorney-in-fact over her property. Anthony signed a document on elder’s behalf authorizing Anthony to transfer elder’s residence to himself, ostensibly because Anthony was caring for elder. Thereafter, Anthony signed a grant deed transferring the residence to himself. When elder was moved to a convalescent facility and out of Anthony’s presence, she signed a new power of attorney appointing her daughter, Karen, as attorney-in-fact. When elder returned to her home and was again in Anthony’s presence, she revoked the power of attorney appointing Karen. Thereafter, elder died from sepsis, and the medical examiner ruled it homicide resulting from caretaker neglect. Another son, George, was appointed personal representative of elder’s estate. Thereafter, Anthony was charged and convicted of murder and elder abuse. After trial of the civil matter, the court set aside the earlier transfer of the residence on the basis of physical abuse, neglect, and financial abuse and awarded compensatory and punitive damages. The court also awarded double damages pursuant to Probate Code § 859 and attorney’s fees. Anthony appealed. In reviewing the evidence, the DCA determined that there was substantial evidence to supporting the judgment.


57.  Stebley v. Litton Loan Servicing (3d Dist.) 2011 WL 5975655
Dependent adult was foreclosed from home and thereafter sued for damages for violations of Civil Code § 2923.5 (delays filing notice of default for 30 days so that parties may consider alternatives to foreclosure) and financial abuse. The trial court sustained demurrers without leave to amend. In affirming the demurrers, the DCA noted both that it is not tortious for a lender to pursue its economic interests by non-judicial foreclosure and that the financial abuse statute may be pre-empted by the Home Owners Loan Act (15 U.S.C. § 1641; “HOLA”).


56.  DiGirolamo v. DiGirolamo (1st Dist.) 2011 WL 4381998
Plaintiff, an adult suffering from bipolar disorder, manic-depression, and schizophrenia, sued his mother and brother for breach of fiduciary duty, failure to distribute trust assets, financial abuse of a dependent adult, fraud and forgery. After a court trial, judgment was rendered in favor of plaintiff with an award of double damages pursuant to Probate Code 859. On appeal, brother contended, among other things, that the financial abuse count was barred by a three year statute of limitations. In rejecting this contention, the DCA observed that the statute of limitations to be applied is determined by the nature of the right sued upon, not by the form of the action or the relief demanded; that is, it is governed by the gravamen of the cause of action. The DCA decided that in this case, the gravamen of the financial abuse count was breach of fiduciary duty for which a four year period of limitations applies. 

This analysis appears predicated on the view that financial abuse is not an independent cause of action since an examination of the gravamen of the cause of action would occur only if financial abuse were a form of action or relief and not a cause of action itself. While this somewhat stale issue continues to appear from time to time, it would appear that the statutory revisions of 2009 made reasonably clear that financial abuse is an independent cause of action and not merely an enhanced remedy. WIC 15657.5(a) now specifies that compensatory damages are recoverable where financial abuse is proven; moreover, WIC 15657.7 provides a four year statute of limitations for "[a]n action for damages pursuant to Sections 15657.5 and 15657.6 for financial abuse." Even before the statutory revisions of 2009, WIC 15657.01 provided that the provisional remedy of attachment is available "in any action for damages pursuant to Section 15657.5 for financial abuse." 


55.     Seigel v. Sonsino (2d Dist.) 2011 WL 4347856 
Elder suffered from dementia; her niece was appointed conservator of the person, and plaintiff was appointed conservator of the estate. Elder died and niece was appointed administrator of elder’s estate. Thereafter, plaintiff succeeded niece as administrator and filed this action against niece for physical abuse and neglect, financial abuse, and a determination that niece was prohibited from inheriting pursuant to Probate Code 259. The financial abuse count was based upon the time and expenses that had previously been incurred to obtain an order removing niece as conservator of the person. Niece demurred to both counts, which the trial court sustained without leave to amend. 

The DCA reversed the demurrer with regard to the physical abuse and neglect count. With regard to the financial abuse count, the DCA observed that in order to state a cause of action for financial abuse “the plaintiff must show the defendant took, secreted, appropriated or retained the elder's property, not simply that the defendant's misconduct caused financial harm or economic loss.” While incurring attorney’s fees as a result of a defendant’s wrongful conduct may be an element of damages, the incurring of such expenses does not itself constitute the taking of property within the meaning of the financial abuse definition. The sustaining of the demurrer to the financial abuse count was therefore affirmed. 


54.     In re Jones (3d Dist.) 2011 WL 3911036
Grandson was trustee of elder’s trust from which he allegedly wrongfully took property. A conservator was appointed for elder who then filed a petition in the probate court entitled “PETITION FOR REMOVAL OF TRUSTEE; FOR RETURN OF TRUST ASSETS; FOR FRAUD; CONVERSION AND ELDER ABUSE; [and] FOR AN ACCOUNTING.” After a bench trial, the court removed grandson as trustee, found that grandson had committed elder financial abuse, and awarded attorney’s fees. Grandson appealed. 

Grandson, in propria persona, raised various defects on appeal, all of which the DCA found to be unmeritorious, including that the probate court had denied grandson his right to a jury trial. In affirming the decision, the DCA noted that no right to a jury trial is permitted under the Probate Code’s trust administration statutes, citing Probate Code 17006. However, the DCA also affirmed the finding of financial abuse pursuant to WIC 15610.30 and the award of attorney’s fees pursuant to WIC 15657.5. While it is clear that no right to a jury exists for probate procedures relating to the internal administration of a trust, a finding of financial abuse and the awarding of damages and attorney’s fees pursuant to WIC 15657.5 is presumably a legal cause for which the right to a jury should exist. Moreover, it is unclear why the legal counts of fraud and conversion were not severed from the probate petition and transferred to a general civil department. 


53.     Cooper v. Leeper (2d Dist.) 2011 WL 1886897 
Elder hired lawyer to quiet title to her residence pursuant to an ambiguous contingent fee agreement that included a deed of trust securing lawyer’s fee. Lawyer succeeded in quieting title and thereafter foreclosed on his deed of trust. Elder filed a bankruptcy petition and lawyer’s claim was allowed. The property was sold and lawyer received the contingent fee. Thereafter, elder filed an action against lawyer for financial abuse and related claims. Notwithstanding the bankruptcy court’s adjudication of lawyer’s claim, the trial court found that lawyer’s quest for an excessive fee constituted the taking of property for a wrongful use. The DCA affirmed. 


52.     Reed v. Wells Fargo Bank (N.D. Cal.) 2011 WL 1793340 
Elderly plaintiffs filed suit to enjoin foreclosures alleging abusive mortgage practices and asserting claims for elder financial abuse. In denying defendant’s motion to dismiss the financial abuse count, the court rejected defendant’s contention that a relationship of trust was a predicate to such an action and recognized that a financial abuse claim could be asserted against a mortgage broker for making false statements about refinancing terms or against an insurer who used deceptive practices. After balancing the hardships, the court enjoined foreclosure pending further proceedings. 


51.     Hickerson v. Financial Freedom Senior Funding (2nd Dist.) 2011 WL 1587730
In 2005, an elderly couple in which the husband suffered from terminal cancer and the wife suffered from Alzheimer’s disease, was sold a reverse mortgage by defendant. Plaintiffs filed an action alleging various counts, including elder financial abuse. The trial court granted defendant’s motion for summary judgment on the financial abuse count and plaintiffs appealed. Although the allegedly actionable conduct occurred well before January 1, 2009, the DCA applied the current statute without discussing whether the revisions were retroactive. In affirming the granting of the summary judgment motion, the DCA considered whether plaintiffs’ evidence supported the contention that defendant knew or should have known that the conduct was likely to be harmful to the elders. It found that an opinion that it would be “foolish” to sell a reverse mortgage to an elder who was dying or highly likely to be institutionalized did not support a finding that the defendant was aware of plaintiffs’ conditions. Furthermore, the DCA found that an opinion that it “wouldn’t have been difficult for a non-clinical person to assess [the wife] as being impaired” also failed to support a conclusion that the sale of a reverse mortgage was likely to be harmful. 

This decision is noteworthy because it is the first instance in which an appellate court has considered the meaning of the new standard “knew or should have known that this conduct is likely to be harmful to the elder.” While evidence was offered that the husband's terminal illness rendered the reverse mortgage "harmful," plaintiffs may very well have failed to support the contention that defendant actually knew of his condition. However, it is unclear whether either the trial court or the DCA considered whether defendant "should have known" of his condition. It is of course common knowledge that elders suffer from serious medical conditions in higher proportions than the general population. Where a serious illness makes it unlikely that the elder will be able to continue living at home, a reverse mortgage may be financially catastrophic because after 12 months the reverse mortgage comes due; moreover, any net proceeds of sale will likely make the elder ineligible for Medi-Cal long term care benefits. Since this is an important consideration in determining whether a reverse mortgage might be harmful to an elder, a reverse mortgage broker may very well have a duty to inquire as to the elder's health. The existence of a duty is of course a matter of law. Here it seems that the court should have considered whether the mortgage broker had a duty to inquire as to the elders' health and thereby "should have known" of the husband's terminal illness. If so, any breach of that duty would have been a question of fact and here seems sufficiently supported to defeat the motion for summary judgment. With regard to the wife's dementia, evidence was submitted that the defendant should have recognized her impairment. The issue of whether that impairment would render the reverse mortgage harmful would similarly be a question of fact. While plaintiffs offered evidence that it would be foolish to sell a reverse mortgage to an elder who is likely to be institutionalized, it is unclear whether plaintiffs properly supported the contention that the wife was likely to be institutionalized.


50.     Hardin v. Wal-Mart Stores, Inc. (E.D. Cal.) 2011 WL 1566023
Plaintiff, an employee of defendant Wal-Mart, filed suit alleging financial abuse arising out of defendant’s refusal to permit plaintiff to work additional hours. The trial court granted defendant’s motion to dismiss, observing: “Plaintiff is not alleging that he was not paid for hours worked, but rather wages he would have earned if he had more hours. Cal. Welf. & Inst.Code § 15610.30 references ‘real or personal property.’ Under general California law, ‘The words “real property” are coextensive with lands, tenements, and hereditaments’ and ‘The words “personal property” include money, goods, chattels, things in action, and evidences of debt.’ Cal. Civ.Code § 14. Plaintiff's allegations do not qualify as either.” 


49.     McIntosh v. Mathison (1st Dist.) 2011 WL 1535401
In 2003, elder created an estate plan that divided all of her property equally between her children. Thereafter, the elder had a disagreement with her daughter and revised her estate plan to reduce the daughter’s share. Several years later, the elder and daughter re-established friendly relations and the elder revised her estate plan to again divide her estate equally between all children. In 2008, a son became disgruntled about the most recent change and persuaded the elder to again revise her estate plan to reduce the share of the daughter. The elder died and the daughter contested the most recent estate plan on the basis of undue influence and financial abuse. The trial court determined that the son had employed undue influence in obtaining the revocation of the previous plan and invalidated the most recent plan. The court also found elder financial abuse and awarded attorney’s fees to the daughter. On appeal, the DCA upheld the trial court’s findings as to undue influence. However, it reversed the award of attorney’s fees on the financial abuse claim, holding that the statutory changes effective January 1, 2009 were not retroactive and therefore at the time of the events in this case, undue influence was not a basis of financial abuse. 


48.     Estate of Kahanabetian (2nd Dist.) 2011 WL 989241
Elder’s sole relatives were six distant cousins. Four days before her death, elder executed a will leaving her entire estate to one cousin only. That cousin petitioned to probate the will and was appointed executrix. After the expiration of the time to contest the will, another cousin (petitioner) sought to invalidate the will on the basis of undue influence. Executrix’s demurrer to the petition on the grounds that the petition was not timely was sustained. Thereafter, petitioner filed a second petition (in the same probate action) alleging similar facts and asserting, among other things, a cause of action for elder financial abuse; the petition also alleged that during the elder’s lifetime, the executrix had wrongfully taken items of the elder’s personal property. The executrix’s demurrer to this petition was sustained as to all issues concerning the validity of the will. However, the court found that petitioner could proceed with respect to the claim that property of the elder had been converted during the elder’s lifetime, and petitioner was given leave to amend. Petitioner did not amend and elected to appeal. 

On appeal, the DCA affirmed the sustaining of the two demurrers. In doing so, it cited well established law that admitting a will to probate is conclusive as to its validity and cannot be collaterally attacked following expiration of the statutory period – even if the facts might also constitute financial abuse. This case highlights important differences between a will contest and a financial abuse action even where they both arise out of an allegation of undue influence. Notwithstanding the conclusive validity of the will, petitioner might have filed a separate financial abuse action and sought to have the executrix deemed to have predeceased the elder pursuant to Probate Code § 259. The result would be similar to the classic situation where a beneficiary is deemed to have predeceased a testator whom he has murdered: the will is valid but the beneficiary may not take. Assuming that the petitioner would have an economic interest in the elder’s estate if the executrix had predeceased the elder, then the petitioner would have standing pursuant to WIC 15657.3. 


47.     Bell v. Bunch (6th Dist.) 2011 WL 288476
Non-elder sought to buy a townhouse but was not creditworthy, and therefore a loan was obtained in the names of his elderly parent, and title to the property was placed in parent’s name only. Parent contributed no money to the purchase nor maintenance of the property, and all acknowledged that parent held only nominal title without any financial interest in the property. Thereafter, parent transferred title to the property into trust. Defendant induced parent to sell him the townhouse at a grossly undervalued price and numerous complaints, cross-complaints, amendments, and dismissals followed, including a count for elder financial abuse brought by the parent. A portion of the judgment was rendered in favor of parent on the elder financial abuse count and defendant appealed, contending that no property of an elder had been taken because the elder held only “naked title” without any beneficial interest. In affirming the judgment, the DCA stated: “In sum, the phrase ‘property of an elder’ as used in Welfare and Institutions Code section 15610.30, subdivision (a)(1) is clear and is so broad as to encompass a legal interest in property held by an elder and even bare legal title. The Legislature did not limit the phrase to mean only property in which the elder has a beneficial or equitable interest. And construing the statute as we do comports with the remedial and protective purpose of the Act, which with respect to financial abuse is to protect the elder's assets from being drained.” 

The facts of this case are quite complex and could be construed to find some economic interest of the elder adversely affected by the defendant’s conduct. If so, the taking of such property, either directly or indirectly, would obviously fall within the protection of the statute. However, it is unclear how public policy is promoted by characterizing as elder financial abuse the taking of only an elder’s nominal title and where no asset of the elder has been "drained." Presumably, damages are a necessary element of financial abuse and where title is nominal only no such damages exist. 


46.     McQueen v. Drumgoogle (1st Dist. 2011) 2011 WL 117653
Physically and mentally disabled elder received a life estate in the family home pursuant to the trust of elder’s deceased father. Thereafter, elder’s declining condition required her to move from the family home to a skilled nursing facility, the fees for which were at least partially paid by SSI and Medi-Cal benefits. With the assistance of an attorney, trustee sold the family home and disbursed proceeds to himself and others and the elder received nothing. A conservator was appointed for the elder, who then commenced an action for elder financial abuse and related counts. At trial, defendants contended that any disbursement of the proceeds of sale to the elder would have reduced or eliminated the elder’s eligibility for government benefits and therefore must be offset against any damages. The trial court declined to so instruct the jury, ruling that such benefits constituted collateral source. The jury found in favor of elder and awarded compensatory damages of $99,900; the court then awarded attorney’s fees of $320,748 on the elder financial abuse count. 

On appeal, defendants argued, among other things, that the trial court erred in applying the collateral source rule to the receipt of SSI and Medi-Cal benefits. The DCA disagreed, ruling that the public policy which encourages victims to secure independent protection against such losses justifies characterizing public benefits as collateral source. The Supreme Court denied review and ordered the decision de-published. 


45.     Steinbach v. Thomas (1st Dist.) 2011 WL 96394
Elder devised his estate to his granddaughter. Shortly before his death, elder sold his home to a friend of many years. Following elder’s death, granddaughter commenced an action against elder’s friend claiming that the purchase price was so low that the transaction constituted financial abuse. Following a bench trial, the court found that there was no evidence that the elder was unable to handle his affairs, that the evidence suggested that the elder might very well feel generously inclined to the friend because of her many years of friendship and support, and that in any event the purchase price paid was fairly reflective of the value of the house, which was seriously dilapidated. Accordingly, the trial court ruled that the transaction did not constitute financial abuse. 

On appeal the DCA affirmed, ruling that there was substantial evidence to support the decision. (It is interesting to note that the evidence apparently showed that the friend took the elder to meals every week, drove him to doctor’s appointments, took him for rides in the car, brought him groceries, took him on errands, and provided other services that arguably constituted “social services” pursuant to WIC § 15610.17(y) and therefore might have rendered the transaction subject to the presumption of Probate Code § 21350. Of course, the transaction was not wholly donative – only perhaps that portion that the plaintiff claimed was far below market value. In any event, the plaintiff apparently did not plead or argue this issue.) 


Vannix-Serina v. Pacific Life Ins. (2d Dist.) 2010 WL 3260413


44.     Raicevic v. Lopez (4th Dist.) 2010 WL 3248335
Elders sold real property to defendants and carried back a loan secured by the property. Thereafter, defendants proposed to substitute as collateral personal property in place of the real property and hired lawyers to represent them. Lawyers prepared an allegedly defective pledge agreement that was accepted by elders. Defendants defaulted on the loan, and elders sued defendants and lawyers, stating causes of action for elder financial abuse, fraud, negligent misrepresentation, and malpractice. The trial court granted summary judgment and elders appealed. In considering the elder financial abuse claim, the DCA noted that the law is unsettled as to whether financial abuse is an independent cause of action or must be based on “the existence of a predicate tort.” (On this issue, the court’s reference in footnote 2 to WIC 15610.07 is misleading; see comment to Persuasive Authority case digest 15, Bellue v. Young-Bellue (4th Dist. 2006) 2006 WL 1660536, below.) Since the court found triable issues of fact at least as to fraud and negligent misrepresentation, it was able to avoid this issue because in any event a predicate tort had been properly pleaded. Summary judgment as to these counts was therefore reversed. 


Estate of Hazewinkel v. Hazewinkel (4th Dist.) 2010 WL 2225511


43.     Porco v. Helm (2d Dist.) 2010 WL 1951781
Daughter was trustee of elderly father's trust and took various trust property for her own use. After father's death, sons filed probate petition against daughter seeking to remove her as trustee and recover damages. In their petition, sons requested “such attorney's fees as may be allowable by law,” and in their motion for judgment, they requested attorney's fees pursuant to W&I Code 15657.5. The probate court granted the petition and awarded attorney's fees. On appeal, the DCA affirmed stating that where a party allows a case to be tried on the assumption that certain issues are raised by the pleadings, she may not assert otherwise on appeal. 


42.     Stark v. Stark (E.D. Cal.) 2009 WL 3162250
Plaintiffs filed a probate petition against trustee seeking to compel an accounting, remove the trustee, and alleging elder financial abuse. Trustee failed to respond to the petition, a default hearing was held, and the court found trustee guilty of elder financial abuse. Thereafter, trustee filed a chapter 11 bankruptcy petition, and plaintiffs filed a complaint seeking a determination that the probate judgment was a nondischargeable debt under 11 USC § 523(a)(4). Plaintiffs then moved for summary judgment, arguing that the bankruptcy court was bound by the probate court’s factual determinations under the doctrine of collateral estoppel. The bankruptcy court granted the motion and trustee appealed. The District Court applied the Rooker-Feldman doctrine precluding a lower federal court’s review of a state court determination and found that under California law, all of the requirements of applying collateral estoppel were met by the probate court’s decision. The judgment was therefore affirmed. 


41.     Guerard v. CNA Financial Corp. (N.D.Cal.) 2009 WL 3152055
Elder purchased a long term care policy from an insurer. Elder died and her representative filed suit claiming that the elder had been denied benefits for home health care services provided by the elder’s relatives. The complaint pleaded, among other things, a cause of action for “Financial, Mental and Physical Elder Abuse--Welf. & Inst.Code s 15610.30.” In granting defendants’ motion to dismiss, the court stated that there exists “no separate cause of action for abuse under the Elder Abuse Act. The Act merely creates an additional remedy under certain, specifically delineated circumstances,” citing Berkeley v. Dowds (2007) 152 Cal.App.4th 518, ARA Living Centers v. Superior Court (1993) 18 Cal.App.4th (1993) 1556, and Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771. 

The meager facts recited in this decision do not disclose the particular bases for the “Financial, Mental and Physical Elder Abuse” count. However, the authority relied upon by the court are all cases of physical abuse. It is now reasonably clear that while physical abuse and neglect may not be independent causes of action, elder financial abuse is. (See detailed comments on Hammermueller v. North American Company, case 31.) 


40.     Consumer Solutions v. Hillery (N.D. Cal.) 2009 WL 2711264
Hillery, an elder, refinanced her home and served notice of rescission claiming violations of various federal lending laws. Lenders ignored the rescission notice and instituted non-judicial foreclosure. Thereafter, lenders filed suit, and the elder counter-complained for elder financial abuse and other counts. Lenders moved to dismiss on various bases. In dismissing the elder financial abuse count, the court ruled that as alleged in the counter-complaint, the foreclosure efforts of lenders were privileged pursuant to CC sections 47 and 2924(d). 


39.     Rand v. American National Ins. Co. (N.D. Cal.) 2009 WL 2252115 
Plaintiff filed a class action against insurer, who marketed deferred annuities to elders, pursuant to B & P §§ 17200 and 17500 (UCL) and for elder financial abuse. The UCL count was based, in part, on alleged violations of Ins. Code §§ 330 et seq., 780 et seq., and 785 et seq., the CLRA (CC § 1770 et seq.), and elder financial abuse. Defendant moved to dismiss the entire UCL count on the basis of Maradi-Shalal (1988) 46 Cal.3d 287 and its progeny. The court denied the motion because the complaint did not allege unfair claims settlement practices, but rather alleged unfair acts in marketing insurance. However with regard to the UCL count based upon violations of the CLRA, the court granted the motion because annuities are not tangible goods nor were any services provided. With regard to the UCL based on financial abuse, defendant argued that elder financial abuse does not constitute an independent cause of action and therefore cannot support a UCL claim. The court rejected this argument, citing numerous decisions which recognize elder financial abuse as an independent cause of action. On the direct elder financial abuse count, defendant argued that a three year statute of limitations barred plaintiff’s action and that financial abuse requires the same heightened pleading as fraud. The court side-stepped both of these issues by deciding that whether plaintiff should have discovered the financial abuse facts within the applicable period was a question of fact and that the allegations of the complaint were sufficient as pled. 


38.     Clark v. Clark (1st Dist.) 2009 WL 1863897
Mother, an elder, agreed to allow daughter to live in a residence owned by mother but placed various conditions on the daughter’s right to live there. Daughter moved some of her personal property into the house and occasionally slept and ate there. Thereafter, daughter printed announcements disparaging her mother which she mailed to her mother’s acquaintances, posted on the house and on public property, and placed on the windshields of cars parked at the mother’s church; the daughter also failed to comply with the conditions imposed by the mother for living in the house. Mother demanded that the daughter vacate the house and sought to exclude her by changing the locks, but daughter had the locks again changed. Daughter then recorded several mechanics’ liens against the property and then filed an action for quiet title claiming a life estate in the mother’s house and asserting other counts for damages against the mother. Mother cross-complained for elder financial abuse and related counts, including intentional infliction of emotional distress. At trial, the jury found in favor of the mother on the elder financial abuse claim, awarded compensatory damages on the IIED claim, and awarded punitive damages. Following the verdict, the trial judge awarded the mother attorney’s fees on the financial abuse claim but denied her request for a protective order. Following entry of judgment, the daughter moved for JNOV. The trial judge granted the JNOV and set aside the jury’s finding of financial abuse and vacated the IIED damages and punitive damages. Mother appealed the granting of the JNOV. 

On appeal, daughter contended that the unlawful detainer provisions of the CCP authorize a person to retain possession of residential property during the pendency of the litigation and that it would be anomalous to hold that a tenant who chooses to require a property owner to comply with the applicable law before eviction can later be sued for insisting on that legal right simply because the landlord or property owner is 65 years of age or older. In other words, asserting the right to retain residential property as authorized by the CCP cannot constitute retaining the property of an elder pursuant to W & I Code § 15610.30. The DCA avoided this issue by observing that CCP § 1161 expressly excludes a person possessing under a life estate, and therefore the daughter did not have the right to continued possession during the pendency of the litigation. The DCA went on to find sufficient basis for the denial of the protective order sought by the mother but reversed the vacating of the IIED damages and punitive damages.


37.     Stanhope v. Eagleton (4th Dist.) 2009 WL 1486669
Elder died leaving assets in a trust for which her daughter was trustee. The daughter then sued her brother for elder financial abuse and related counts alleging that the brother had wrongfully taken property from the mother prior to her death. After a bench trial, the trial court ruled in favor of the brother and against the sister on all issues. In affirming the decision, the DCA recognized that the Legislature had several times revised the elder financial abuse statute but observed: “It appears undisputed, however, that each of these versions required not only that the defendant obtain some money or property of the elder, but also that the defendant do so wrongfully. The wrongfulness element can be satisfied by fraud, constructive fraud, undue influence, embezzlement, or conversion.” It then recognized some ambiguity in the pre-2009 statute and stated: ”Leaving aside for the moment the precise limits of this statutory language, it cannot be understood to encompass a transaction that is in no way wrongful--e.g., one to which the elder knowingly and voluntarily consents or one that is in the elder's best interests.” 

The DCA’s observation that to constitute financial abuse the taking of an elder’s property must be “wrongful” is probably sound. However, the subsequent dicta that a transaction to which an elder knowingly and voluntarily consents cannot be wrongful is inconsistent with the 2009 revision, which defines wrongful use (among other things) as the taking of property of an elder where the person “knew or should have known that this conduct is likely to be harmful to the elder.” Thus this facet of wrongful use focuses entirely on the defendant’s conduct and state of mind; whether the elder knowingly and voluntarily consented to the “harmful” transaction is immaterial.


36.     La Baw v. Campbell (4th Dist.) 2009 WL 325547
Elderly plaintiff sued attorney for conversion, elder financial abuse, and related counts. A jury returned a verdict for plaintiff on all counts and awarded compensatory and punitive damages. On appeal, the DCA found sufficient evidence to support the verdict for conversion. In also upholding the verdict for financial abuse, the court stated: "Based on our conclusion that [defendant] was guilty of conversion and the undisputed evidence that [plaintiff] was an elder, there was substantial evidence of financial elder abuse." Thus, this decision suggests that whenever the property of an elder is converted, elder financial abuse occurs. 


35.     Cosio v. Simental (C.D. Cal.) 2009 WL 201827
Two plaintiffs, both elderly widows, filed a state court action against a lender and broker after they were persuaded to refinance loans on their homes which they alleged were complicated, risky, and oppressive. The complaint alleged elder financial abuse in addition to other counts. The action was removed to federal district court. Thereafter, the lender defendant moved to dismiss the financial abuse count asserting that it is preempted by the Home Owners Loan Act (HOLA), 15 U.S.C. § 1641 and its preemptive implementing regulations imposed by the Office of Thrift Supervision (OTS) at 12 C.F.R. § 560.2. In granting the defendant’s motion, the court stated that where “a plaintiff alleges conduct that touches upon a defendant’s lending practices, operations, and charges,” HOLA preempts an action for elder financial abuse. 


Amended by Stats.2008, c. 475, effective January 1, 2009
Substantially revised the definition of financial abuse (W & I Code § 15610.30) by: adding the word "obtains" to the description of prohibited conduct; adding taking property by undue influence as a basis; and revising the meaning of "wrongful use" to mean, among other things, the taking of property where the person knew or should have known that it would be harmful to the elder. Substantially revised the remedies available for financial abuse (W & I Code § 15657.5) by: authorizing the recovery of compensatory damages; and providing for vicarious liability for employers. Added W & I Code § 15657.6 providing for the recovery of financial abuse damages where property is not promptly returned to an elder who lacks capacity. Added W & I Code § 15657.7 providing for a four year statute of limitations, commencing upon discovery of the facts giving rise to the claim. 



34.     Mariani v. Kielbasa (2d Dist.) 2008 WL 4837567
Ina, an elderly widow, moved from her long-time home to reside in the home of Arlene, one of her daughters. Thereafter, Arlene's daughter, Katherine, moved into Ina's home where she paid no rent. Katherine later purchased Ina's home for substantially less than its value. Ina died. Another daughter, plaintiff, individually and as executor of Ina's estate, filed suit for elder financial abuse and sought an order directing the reconveyance of the property pursuant to Probate Code § 850 et seq. A jury found in favor of defendants on the financial abuse count. Thereafter, the judge found that the property had been purchased through undue influence and ordered its reconveyance. Both parties appealed. In affirming the decision, the DCA noted that the requirements for establishing undue influence and the elements for proving financial abuse were different and that there was nothing inconsistent between the findings of the jury and the judge. 


33.     Labrador v. Seattle Mortgage Company (N.D. Cal.) 2008 WL 4775239
Broker sold elderly plaintiff a reverse mortgage funded by defendant, and defendant paid broker a "correspondent fee." The court denied, in part, defendant's motion to dismiss deciding that the complaint sufficiently alleged a violation of federal lending regulations. In ruling on the motion to dismiss plaintiff's cause of action for elder financial abuse, the court recognized that financial abuse is an independent cause of action. 


32.     Hammermueller v. North American Company (4th Dist.) 2008 WL 4684773
In 2002, plaintiff, an elder suffering from advanced dementia, was sold a deferred annuity by an independent life agent on behalf of insurer NAC. Plaintiff filed suit against NAC asserting causes of action for fraud, negligent misrepresentation, and elder abuse. Some time after service, NAC returned plaintiff’s money, along with accrued interest. Plaintiff nevertheless pursued the action to jury trial to recover damages for emotional distress and attorney’s fees. The jury found in favor of plaintiff on all three causes of action and awarded him $4.5 million for non-economic injury, including emotional distress, and punitive damages of $14 million. The award was reduced to $8 million by remittitur. The trial court also awarded $1 million in attorney’s fees. On appeal, NAC argued that plaintiff had failed to present any evidence that he had suffered actual physical injury or financial loss, and therefore he was not entitled to recover compensatory damages for non-economic injury. The DCA agreed and reversed the judgment. In doing so, it based its decision, in part, upon the view that the elder abuse statute does not create a new independent theory of liability under which plaintiff may recover damages; rather, when proven it merely permits the recovery of additional, or enhanced, remedies. Since fraud and negligent misrepresentation require that a plaintiff sustain actual damages and no evidence in support of actual damages was presented, plaintiff is not entitled to any recovery for fraud or negligent misrepresentation, and therefore the enhanced remedies of financial abuse are unavailable. 

The reasoning of this decision is questionable on several bases. First, it appears that the plaintiff did introduce evidence of physical injury and pecuniary loss in the form of a doctor’s visit and the payment of a surrender penalty upon termination of the annuity. It is peculiar that the DCA refers to this evidence in its decision but then implicitly rejects it as constituting evidence of actual economic loss. Second, even prior to the 2004 revisions, the more compelling interpretation is that elder financial abuse constituted an independent cause of action. The Hammermueller decision relies on broad statements in Delaney that notes the Legislature’s purpose in authorizing the recovery of attorney’s fees for elder abuse was to encourage attorneys to take abuse cases. While Hammermueller recognizes that Delaney was a physical abuse case, it nevertheless applies this broad statement to financial abuse as well. However, there are important distinctions between physical abuse and financial abuse. Significantly, the conduct which would give rise to a claim for physical abuse or neglect will always constitute actionable conduct under some other theory of liability, such as battery, negligence, or malpractice. Such theories authorize the recovery of compensatory damages; where the victim is an elder and the conduct is particularly egregious and may be characterized as recklessness, oppression, fraud, or malice, W & I Code § 15657 enhances the underlying compensatory damages by imposing attorney’s fees. The justification for the enhancement is of course to encourage attorneys to take egregious cases which rise to the level of abuse. Prior to 1998, this reasoning applied equally to the taking of an elder's property. Before 1998, the statute defined the conduct in terms of "fiduciary abuse" and not "financial abuse"; that is, it applied to the taking of an elder's property by a person "who has the care or custody of, or who stands in a position of trust to" an elder. Just as in physical abuse, the wrongful taking of property by a fiduciary always constituted an underlying cause of action, that is for breach of fiduciary duty. And under EADACPA, where such conduct is particularly egregious and may be characterized as recklessness, oppression, fraud, or malice, W & I Code § 15657 enhanced the underlying compensatory damages for breach of fiduciary duty by imposing mandatory attorney’s fees. However, when the Legislature broadened the definition from fiduciaries to any person, conduct which might satisfy the statutory definition no longer necessarily constituted actionable conduct for breach of fiduciary duty, or for that matter, liability under any other theory. For example, W & I Code § 15610.30 includes in the definition of financial abuse the taking of property of an elder with the intent to defraud. A necessary element of fraud is justifiable reliance. Thus, where the elder’s reliance on a perpetrator’s misrepresentation is unreasonable, a cause of action for fraud will fail. However, reliance is not considered in the definition of financial abuse, and the statutory definition of financial abuse will nevertheless be satisfied. The broad policy statements in Delaney that imply that elder abuse may not be an independent cause of action were probably sound at the time; however, they would be inapplicable to financial abuse following the 1998 revisions. Similarly broad statements in later physical abuse cases like in Berkeley v. Dowds (2007) 152 Cal.App.4th 518 would seemingly apply to physical abuse but not to financial abuse. Moreover, since the imposition of attorney’s fees pursuant to W & I Code § 15657 is mandatory, where a plaintiff proves abuse, the court must award attorney's fees. For physical abuse, this requirement is not problematic because proof of physical abuse will always constitute proof of some underlying wrong for which compensatory damages may be awarded. But since the statutory definition of financial abuse may be satisfied by conduct which does not necessarily satisfy the requirements of any other theory of recovery, imposing mandatory attorney's fees would make little sense if financial abuse were not an independent cause of action. It is doubtful that the Legislature sought to encourage attorneys to take cases for which there is no remedy other than an award of attorney's fees. 

A fair number of unpublished decisions have either explicitly or implicitly recognized that financial abuse is an independent cause of action. (See infra.) In addition, two recent legislative revisions strongly support this view. W & I Code § 15657.01 (enacted in 2007) provides: “[A]n attachment may be issued in any action for damages pursuant to Section 15657.5 for financial abuse of an elder or dependent adult, as defined in Section 15610.30.” (Emphasis added.) Further, Senate Bill 1140 (2008) clarified that a plaintiff is entitled to recover compensatory damages when proving financial abuse. (W & I Code § 15657.5(a).) It also specifies a four year statute of limitations based on an “action for damages pursuant to Sections 15657.5 and 15657.6 for financial abuse of an elder or dependent adult, as defined in Section 15610.30.” Not only is the statutory language now clear that an "action for damages" for financial abuse is authorized, but if financial abuse were not an independent cause of action, it would make little sense to provide a period of limitations within which to bring it. 


31.     Sakai v. Merrill Lynch (N.D.Cal.) 2008 WL 4193058
Plaintiff claimed that he was improperly encouraged to exchange a fixed annuity for a variable annuity and thereafter to allow the contract to annuitize. The complaint stated counts for breach of fiduciary duty, elder financial abuse, and violation of the unfair competition law. Defendants moved for summary judgment. On the breach of fiduciary duty count, the court denied the motion based on the declarations of plaintiff’s experts. The ruling provides a useful review of fiduciary duty in the context of the broker-customer relationship. On the elder financial abuse count, the court similarly denied the motion, finding that the evidence of “inappropriate recommendations made as a result of professional negligence or a conflict of interest” were sufficient to raise a triable issue as to whether those recommendations constituted a “wrongful use.” In rejecting defendants’ argument that elder abuse requires egregious acts of abuse beyond mere negligence, the court stated: “Assuming ‘wrongful use’ . . . requires something more than negligence, the declarations of plaintiff's experts, taken together, are sufficient to raise a triable issue as to [broker’s] liability in that regard. ‘Egregiousness,’ however, is a characterization that has been applied only in the context of physical abuse or neglect by health care providers.” (Id. at page 5.) The court also denied the motion on the UCL, stating that it was derivative of plaintiff's claims for breach of fiduciary duty and elder abuse. The court rejected defendants’ claim that the alleged damages were speculative and provided a brief discussion of potential damages in an annuities context. The court did distinguish between the potential liability for damages of the broker and that of the broker’s employer by recognizing the effect of the limitation imposed by W & I Code § 15657.5(b)(2). 


30.     Vilchez v. Seville Properties (2d Dist.) 2008 WL 3877688
Elder, through her conservator, filed an action for elder financial abuse against a real estate broker and its sales agents, apparently based on misrepresentations as to the value of a property sold, the elder’s lack of capacity, and breach of fiduciary duty. After a bench trial, the court found in favor of plaintiff and awarded damages and attorney’s fees against both the broker and the sales agents. On appeal, the broker argued that the award of attorney’s fees was improper. In denying the appeal, the DCA stated: “[The broker’s] liability for attorney’s fees under the Elder Abuse Act is vicarious only to the extent that he is liable for his actions in hiring or controlling [the sales agents], in ratifying the offense or in acting with oppression, fraud or malice himself. It is not vicarious in the sense that [the broker] is liable for the wrongful conduct of [the sales agents].” The DCA approved the trial court’s findings that the broker knowingly engaged in intentional wrongful conduct and ratified the sales agents’ conduct. While its reasoning is not specifically explained, the DCA’s requirement that an employer must engage in wrongful conduct before EADACPA attorney’s fees may be assessed would seemingly be based upon W & I § 15657.5(b) which provides that the standards set forth in CC § 3294(b) must be satisfied before “any damages or attorney’s fees” may be imposed against an employer. 


29.     Putman v. Schroeder (4th Dist.) 2008 WL 2461805
A lawyer who was also an elder sued his client for unpaid fees and included a count for elder financial abuse. At the conclusion of opening statements, the trial judge granted nonsuit as to the elder financial abuse count and thereafter, the jury returned a verdict in favor of the lawyer notwithstanding evidence that the lawyer had falsified the bills. The trial judge granted defendant a new trial based upon a finding that the lawyer had committed criminal acts by intentionally overbilling the defendant and reported the lawyer to the State Bar. The lawyer appealed. The DCA affirmed the granting of nonsuit as to the financial abuse count, stating: “The cause of action for elder abuse borders on the frivolous. Elder abuse statutes were never intended to apply to professionals seeking to collect on an unpaid bill. Reading the words ‘personal property’ in Welfare and Institutions Code section 15610.30 to include unpaid bills from professionals over 65 is patently unreasonable. Besides which, such a reading would be unconstitutional as well-differentiating between a dentist who is 64 years old and a dentist who is 66 years as to ability to collect unpaid bills wouldn't pass the rational basis test. And in enacting a statutory scheme to protect elderly, vulnerable people from being taken advantage of by, among other persons, their own attorneys, the Legislature most certainly never intended to give attorneys over 65 a big stick in prosaic collection work.” (Emphasis in original.) 

This case raises for the first time the fundamental question of whether the financial abuse statutes provide remedies for harm arising out of an elder's commercial activities. While nothing in the text of the statutes expressly excludes this, permitting an elder to use the remedy in pursuit of rights arising out of the operation of a business, trade, or profession appears to have little if any connection with the public policies underlying EADACPA. Arguably, a person who competes for business against others in the marketplace ought not to receive competitive advantages simply because he is 65 or older. In this regard, there might very well be no rational basis for distinguishing between business owners who are 65 and older and those who are younger. 


28.     Oshiro v. ANMC (4th Dist.) 2008 WL 2082140
Plaintiff, an elder, transferred money to defendant ANMC, a church. Thereafter, the parties’ relationship deteriorated, and plaintiff sued defendant for various causes of action including elder financial abuse. At trial, the court determined that the transfer had been a gift and entered judgment in favor of defendant on all counts. In affirming the judgment, the DCA rejected plaintiff’s claim that the trial court had applied an improper standard in determining whether defendant’s conduct constituted financial abuse. In doing so, it quoted from Berkley v. Dowds (2007) 152 Cal.App.4th 518, 529: “The Act ‘does not create a cause of action as such, but provides for attorney fees, costs, and punitive damages under certain conditions.’” Berkley was a case involving allegations of physical abuse and not financial abuse. While physical abuse and neglect may not be independent causes of action, there is strong justification for characterizing financial abuse as an independent cause of action. This view is not only recognized by prior appellate decisions, but is so characterized by the Legislature in W & I Code § 15657.03, which provides that attachment is available “in any action for damages pursuant to Section 15657.5 for financial abuse of an elder or dependent adult, as defined in Section 15610.30.” 


27.     Zimmer v. Nawabi (E.D. Cal. 2008) 566 F.Supp.2d 1025
A loan broker induced an elder to refinance her home by making various false statements about the terms of the loan. Elder filed suit against brokerage and its employees alleging breach of contract, breach of fiduciary duty, and elder financial abuse. Plaintiff moved for summary judgment and defendants failed to provide any evidence in opposition. The court denied the motion on the breach of contract count but granted it as to the breach of fiduciary duty and elder financial abuse counts. In considering the financial abuse count, the court first observed that the purpose of EADACPA is “to protect elders by providing enhanced remedies which encourage private, civil enforcement of laws against elder abuse and neglect" citing Negrete v. F & G Ins (C.D.Cal.2006) 444 F.Supp.2d 998, 1001. It then went on to observe: “To utilize the Elder Abuse Act's enhanced remedies, a plaintiff must prove ‘by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse.’ Id. s 15657.5(b); see also id. s 15657.5(a) (preponderance of the evidence standard governs a plaintiff's ability to recover ‘all other remedies otherwise provided by law’ and reasonable attorney's fees and costs associated with the financial elder abuse claim).” 

This appears to misconstrue both the nature of the remedies themselves as well as the circumstances when they are to be applied. The proposition that EADACPA provides an “enhanced remedy,” at least with regard to financial abuse, is an historical vestige. It developed from early case law when EADACPA authorized the recovery of attorney’s fees for physical abuse, neglect, or fiduciary abuse arising out of conduct which could be characterized as recklessness, oppression, fraud, or malice. Conduct which would give rise to a claim for physical abuse (W & I Code § 15610.63) will always constitute actionable conduct under some other theory of liability, such as assault, battery, negligence, or malpractice. Similarly, conduct which would have given rise to a claim for fiduciary abuse (former § 15610) always constituted actionable conduct under a breach of fiduciary duty theory. In either instance, these independent legal theories authorized the recovery of compensatory damages. Where the victim of such actionable conduct is an elder and the conduct is done with recklessness, oppression, fraud, or malice, § 15657 “enhanced” the compensatory damages by imposing attorney’s fees as well. The justification for the enhancement was of course to encourage attorneys to take egregious cases which rose to the level of abuse.

Through various statutory revisions, fiduciary abuse was redefined as financial abuse and was severed from physical abuse. Conduct which now satisfies the statutory definition of financial abuse does not necessarily constitute actionable conduct under any other theory of liability. For example, a necessary element of fraud is justifiable reliance. However, reliance is not considered in the definition of financial abuse. Thus, where the elder’s reliance on a perpetrator’s misrepresentation is unreasonable, the statutory definition of financial abuse is still satisfied but the conduct does not constitute fraud (nor necessarily any other theory of recovery such as deceit, conversion, negligence, or breach of fiduciary duty). Where the definition of financial abuse is satisfied, the remedies specified in 15657.5 become available; they are no longer merely an enhancement of a remedy based upon breach of fiduciary duty. While the concept of an “enhanced” remedy may still have validity with regard to physical abuse, it is clear that elder financial abuse is now an independent cause of action with its own specific remedies (15657.5) and its own statute of limitations (15657.7). 

The decision is also incorrect when it states that “to utilize the Elder Abuse Act's enhanced remedies, a plaintiff must prove by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse.” Proving recklessness, etc. by clear and convincing evidence results in two consequences: (1) general damages survive the death of the elder (subsection (b)(1)); and (2) no damages may be recovered from an employer unless Civil Code § 3294(b) is satisfied. Therefore, proving recklessness is irrelevant where the elder is alive and in any event, does not result in an enhanced remedy but rather the survival of general damages. 


26.     Shore v. Possess The Land, Inc. (4th Dist.) 2008 WL 1891428
Defendant, a lender, obtained title to elderly plaintiffs’ home by foreclosure. Plaintiffs claimed that when they returned to the property to retrieve their personal property they found some of it missing, apparently discarded by defendant. Plaintiffs filed an action for damages for the loss of this property and asserted causes of action which included conversion and elder financial abuse. The jury rendered a verdict in favor of plaintiffs on the conversion count but not on the financial abuse count. Plaintiffs appealed, arguing that the verdict was defective because conversion of an elder’s property constitutes financial abuse as a matter of law. In affirming the judgment, the DCA noted that plaintiffs had filed an incomplete appellate record and stated: “The jury may have found [defendant] acted wrongfully but not in ‘bad faith’ when he disposed of plaintiffs' possessions following the foreclosure. The jury may have found [defendant] did not ‘use’ the property merely by discarding it. Thus, the jury could have reasonably found [defendant’s] wrongful control of [plaintiffs’] personal property following the foreclosure was not a ‘wrongful use’ and therefore not elder abuse.” This observation implies that bad faith is a necessary element of wrongful use. However, 15610.30(b) provides that a person shall be deemed to have taken property for a wrongful use if, “among other things,” the property is taken in bad faith. The phrase “among other things” suggests that bad faith is only one of several ways of satisfying the wrongful use element. In addition, the statement that a defendant’s “wrongful control” of property might not constitute “wrongful use” suggests that wrongful use requires that the defendant obtain some type of benefit from the taking. However, it would seem that in removing plaintiffs’ property, defendant both used and benefited from the taking because defendant desired to clear the foreclosed home of the items and accomplished this by discarding them. Moreover, the purpose of EADACPA to protect elders against the wrongful taking of property would be frustrated if it is required that elders not only be harmed by the taking but that defendants also be benefited. 


Amended by Stats.2007, c. 48, effective January 1, 2008
Creates standing for heirs, successors in interest, and interested persons where the elder has died and no personal representative exists or where the personal representative refuses to proceed by adding 15657.3. 


Amended by Stats.2007, c. 45, effective January 1, 2008 
Extends the provisional remedy of attachment to any action for financial abuse by adding 15657.01. 



25.     Toscano v. Ameriquest Mortgage Co. (E.D. Cal.) 2007 WL 3125023
Plaintiff, an elder, filed suit alleging elder financial abuse, breach of fiduciary duty, and related counts based on allegations that defendant lender orally represented proposed loan terms which were more favorable than those actually contained in the loan documents. In granting portions of defendant’s motion to dismiss, the court recognized that the 2000 amendment to W & I 15610.30 changing "fiduciary abuse" to "financial abuse" was a substantive change and that the statute no longer requires a fiduciary relationship. In addition, while the court recognized that it is possible for a fiduciary relationship to arise between a lender and a borrower, here the facts alleged were insufficient to do so. 


24.     Wolk v. Green (N.D. Cal.) 2007 WL 2572217
Plaintiff, an elder, filed suit alleging “Elder Fraud Abuse” based on allegations that defendant obtained payments through “deceptive” practices. In denying defendant’s motion to dismiss, the court acknowledged that prior courts have recognized that W & I Code 15657.5 creates a civil cause of action for elder financial abuse, citing Genton v. Vestin Reality Mortgage (USDC, SD 2007) 2007 WL 951838. It also rejected defendant’s argument that payments made to an attorney for services rendered cannot constitute “taking” or “appropriation,” citing Negrete v. F & G Life Insurance (2006) 444 F.Supp.2d 998, 1002-03. 


23.     Sonoma Foods, Inc. v. Sonoma Cheese Factory, LLC (N.D. Cal.) 2007 WL 2122638
Pursuant to a written agreement, Sonoma Foods was to transfer various trademarks to Sonoma Cheese Factory. The principal of Sonoma Cheese Factory, who was older than 65, filed suit and included a cause of action for elder financial abuse, alleging that by virtue of the agreement, the trademarks became his property, which defendant Sonoma Foods wrongfully failed to transfer. The court granted Sonoma Foods motion to dismiss the financial abuse count, observing that W & I 15610.30 requires that "property of an elder" be wrongfully retained. However, it is not clear whether the court's decision was based on plaintiff's failure to allege that the property was owned by an elder rather by an LLC, plaintiff's failure to allege that the property had been wrongfully retained, or because the plaintiff indicated at oral argument that it intended to abandon its cause of action for elder financial abuse. 


Feaster v. Wynn (1st Dist.) 2007 WL 1649414


22.     Genton v. Vestin Realty Mortgage II, Inc. (S.D. Cal.) 2007 WL 951838
Plaintiff brought an action against a corporation alleging that it was entitled to payment pursuant to an investment agreement and seeking damages for elder financial abuse. The District Court remanded the action to state court. In doing so, it rejected defendant's argument that EADACPA does not create a cause of action for financial abuse and stated that “the plain language of the [elder financial abuse] statute is sufficient to create a cause of action.” 


21.     Bethany v. Gentry (4th Dist.) 2007 WL 80965
Bethany filed a petition pursuant to Probate Code § 21320 to determine whether a proposed probate court petition would constitute a contest to testamentary instruments under which they were beneficiaries. The proposed petition sought to invalidate certain intervivos transfers and a trust amendment on various bases, including elder financial abuse. The probate court ruled that the proposed petition would not constitute a contest in violation of the no contest clauses in the instruments and Gentry appealed. In deciding the appeal (under the 2003 financial abuse statute), the DCA commented on the financial abuse count contained in the proposed petition by observing that it would not entitle Bethany to any substantive remedy other than the recovery of attorney’s fees and costs. Apparently, the proposed petition did not seek damages in addition to an order determining the validity of the transfers and amendment. The decision thus suggests that attorney’s fees might be recoverable in a probate proceeding where the violation of the financial abuse statute is raised solely to invalidate the disposition of property. This is consistent with the text of W & I Code § 15657.5(a) that provides that the financial abuse statute permits “all other remedies otherwise provided by law” (apparently including declaratory relief). 


20.     Deutsch v. Deutsch (4th Dist.) 2007 WL 80959
Elderly plaintiff filed suit seeking money owed on the purchase of his home. In affirming the judgment in favor of defendants, the DCA stated: “Thus, the viability of the elder [financial] abuse claim is dependent on whether the defendants acted in bad faith or intended to defraud [plaintiff] when they purchased the home and obtained the loan.” This implies that the first prong of the elder financial abuse state-of-mind element (“to a wrongful use”) may only be satisfied with a showing of bad faith. But, W & I Code § 15610.30(b) provides that a person shall be deemed to have taken property for a wrongful use if, “among other things,” he takes the property in bad faith. Does "among other things" mean that bad faith is only one of several ways of satisfying “wrongful use” or does it mean that bad faith is one of several elements, all of which are necessary? The former interpretation is more likely because the definition of financial abuse only requires conduct (taking, secreting, etc.) and the necessary state of mind (wrongful use, etc.) so that there would not be any "other things" required to prove financial abuse. 


19.     DeWalsche v. Genis (2d Dist.) 2006 WL 3804521
Plaintiff sued and alleged undue influence and elder financial abuse. The decision states: “The elements of a cause of action for financial elder abuse are set out in section 15610.30, subdivision (a).” This language supports the position that elder financial abuse is an independent cause of action. 


18.     Sturgeon v. King (2d Dist.) 2006 WL 3556979
Defendants argued that W & I Code § 15610.07(a) requires that financial abuse must be accompanied by “resulting physical harm or pain or mental suffering." The DCA did not reject this argument, but instead found that an allegation of having been defrauded of hundreds of thousands of dollars implied that the plaintiff sustained mental suffering. It suggested that it would have been better practice to affirmatively allege that the financial abuse caused plaintiff mental suffering. This appears to be the right decision for the wrong reason. The better reasoning would be that W & I § 15610.07(a) does not define "financial abuse" at all; that definition is provided by W & I § 15610.30. (See comment below to Bellue v. Young-Bellue 2006 WL 1660536.) 


17.     Young v. Scully (4th Dist.) 2006 WL 3412546
This decision contains some language addressing the question of whether the financial abuse statute creates a statutory duty of care, perhaps akin to negligence. It avoids answering this question by deciding the case on a procedural issue. 


16.     In re Conservatorship of Estate of Ziegler (2d Dist.) 2006 WL 2686638
In this decision, the DCA states: “Appellant appears to believe that he is entitled to a de novo review on appeal. He contends that the standard of review on appeal is the same as the plaintiff's burden in the trial court, viz., to show reckless, oppressive, fraudulent, or malicious conduct by clear and convincing evidence, before punitive damages may be imposed. (See Welf. & Inst.Code, § 15657.5, subd. (b).)” This language suggests that a plaintiff may recover punitive damages on a showing of recklessness. But that is not what 15657.5(b) provides; rather, where a plaintiff proves recklessness, the standards set forth in CC § 3294(b) must first be satisfied before any damages are recovered from an employer based upon the acts of its employee. (W & I Code § 15657.5(b)(2).) To recover punitive damages, a plaintiff must prove oppression, fraud, or malice; proving recklessness would be insufficient. (CC § 3294(a).) 


15.     Bellue v. Young-Bellue (4th Dist.) 2006 WL 1660536
After a court trial, judgment was entered for defendant based on the judge's determination that elder financial abuse requires an allegation and proof of some "resulting physical harm or pain or mental suffering" pursuant to W & I § 15610.07. The Court of Appeal reversed, holding that this subordinate clause modifies only the final element of the statute ("or other treatment . . .") and not each of the preceding elements. Thus, the DCA held that financial abuse does not require "resulting physical harm or pain or mental suffering" because that clause does not modify the earlier term "financial abuse." This appears to be the right result but the wrong reasoning. W & I § 15610.07 defines the term "abuse of an elder or dependent adult," not the term "financial abuse." The term "abuse of an elder or dependent adult" is used in various sections of EADACPA in connection with when incidents of suspected abuse must be reported. It would make little sense to define "financial abuse" in W & I § 15610.30 and then modify that statutory definition by adding yet another element ("physical harm" etc.) in a separate section defining a different term (that is, defining "abuse of an elder or dependent adult"). 


14.     Abernathy v. County of Marin (1st Dist.) 2006 WL 418486
Plaintiff was the stepson of decedent and sued Marin County and one of its social workers on several counts, including elder financial abuse. The social worker had allegedly influenced decedent to draft a will leaving decedent's property to the social worker. That will was superseded prior to decedent's death. The trial court granted defendants' motion for non-suit, but after the jury's verdict and findings on the one remaining count, granted plaintiff's motion for a new trial. On appeal, defendants contended that the alleged conduct could not constitute elder financial abuse as a matter of law because "being named in a will of a person yet to die cannot be deemed a taking of property." However, the court applied a broader characterization of the word "property" to include the right to dispose of property, even if the disposition is limited or contingent, and affirmed the granting of a new trial. The decision also contains some general language regarding an employer's ratification of an employee's elder financial abuse pursuant to W & I 15657.5. 


Bacon v. American International Group (N.D. Cal.) 2006 WL 305970


13.     Negrete v. Fidelity and Guaranty Life Ins. Co. (C.D. Cal. 2006) 444 F.Supp.2d 998
Plaintiff brought a class action against an insurer alleging, among other things, that the sale of an annuity to this elder where the annuity term exceeded the life expectancy of the elder constituted Elder Financial Abuse. The insurer moved to dismiss, arguing that the parties had engaged in an arms length commercial transaction and that such conduct could not be characterized as "taking" as prohibited by W & I 15610.30. Plaintiff argued that "taking" should be defined as "to get into one's hand or into one's possession, power or control by force or stratagem" (Webster's Third International Dictionary, Unabridged (2005)) and that "stratagem" should be defined as "a cleverly contrived trick or scheme for gaining an end." (Merriam-Webster Online Diction (10th ed., 2005)). While the court concluded that plaintiff's allegations were sufficient to state a claim, it recognized that the complaint also alleged that the insurer engaged in widespread "churning" to deplete cash values from existing policies. Accordingly, the question of whether a purely permissible commercial transaction might constitute elder financial abuse is not squarely addressed. 


Amended by Stats.2005, c. 140, effective January 1, 2006
Requires various financial institutions to report suspected incidents of elder financial abuse by adding 15630.1. 



12.     Estate of Schowalter v. Baird (1st Dist.) 2005 WL 3008440
Decedent was cared for by Baird, her neighbor and nurse. In December, decedent executed a power of attorney in favor of Baird, and in January, decedent executed a will leaving everything to Baird. The will was stored in decedent's safe deposit box. In March, Baird removed the will from the safe deposit box. In April, decedent contacted an attorney and expressed her desire to change her will. In April the Public Guardian petitioned to be appointed conservator, and the court prohibited Baird from having any contact with decedent. In May, the court appointed the Public Guardian temporary conservator and suspended Baird's power of attorney. In June the Public Guardian requested that Baird return the will; instead, Baird turned it over to her own attorney. In July, the conservator petitioned for a substituted judgment. Soon thereafter, decedent died. The trial court found that decedent had capacity at the time that she executed the will and that the will was not the product of undue influence, and therefore declined to impose a constructive trust. The court found that Baird had committed elder financial abuse by retaining the will after being asked by decedent's representative (the Public Guardian) to return it. Consequently, the court refused to admit the will to probate. 

The Court of Appeal reversed the judgment denying the will from probate on the basis that the will was valid at the time it was executed. While Baird's conduct in retaining the will constituted elder financial abuse (but see footnote 8), under these facts, denying the will from probate was an improper remedy because decedent was aware that the will was still in effect and physical possession of it was not needed to revoke or supersede it.


11.     Lai v. Lai (1st Dist.) 2005 WL 2293622 
Brother 1 sued to recover funds obtained by brother 2 from their dying mother as a consequence of the undue influence of brother 2. The trial court found undue influence and awarded restitution and punitive damages. Although the complaint did not allege elder financial abuse, prior to trial, brother 1 submitted a proposed statement of decision attached to his trial brief that for the first time proposed an award of attorney's fees based on elder abuse. In closing argument, brother 1 sought to amend the complaint to add a count for elder financial abuse. The trial court denied the motion and the Court of Appeal affirmed. The Court of Appeal also held that punitive damages can be awarded where actual injury is proven and rescission is granted and without regard to whether compensatory damages are recovered. 


10.     Ciolino v. Ryan (1st Dist.) 2005 WL 2065302
Five plaintiffs sued defendant for losses resulting from an allegedly fraudulent investment scheme. One of the plaintiffs included a count for elder financial abuse. The jury found in favor of the plaintiff on the financial abuse claim and returned special findings. However, the jury also found that the defendant did not "act with recklessness, malice, oppression or fraud." Defendant appealed, arguing that this constituted a fatal inconsistency. The Court of Appeal affirmed and stated: "In all events, the finding that [defendant] did not act fraudulently in 'tak[ing], hid[ing], appropriat[ing] or retain[ing]" [plaintiff's] property is not necessarily inconsistent with a finding that he made fraudulent misrepresentations to [plaintiff]." This comment suggests several questions: Can a defendant take property "with the intent to defraud" pursuant to W & I 15610.30(a)(1) but not be "guilty of . . . fraud" pursuant to W & I 15657.5(b)? Must elder financial abuse involve "fraudulent misrepresentations" to plaintiff? The definition of financial abuse may be satisfied when the defendant acts with the "intent to defraud"; by contrast, being guilty of fraud, requires more (a misrepresentation, knowledge of its falsity, intent, justifiable reliance, and damages). Accordingly, financial abuse should exist where a special verdict finds both an "intent to defraud" and that the defendant is not guilty of fraud; similarly, financial abuse should exist in the absence of a misrepresentation to the elder (for example, where the elder lacks capacity or the misrepresentation is never communicated). 


9.     Collord v. Fox (6th Dist.) 2005 WL 1983893
Elder had a long-term estate plan which he then changed after he arguably lacked capacity. His conservator petitioned for substituted judgment and Fox, a long-time friend of elder objected. The probate judge ruled that Fox lacked standing and allowed the substituted judgment. Fox appealed, contending that he had standing as an "interested person" pursuant to W & I 15600(j) (statement of legislative intent). The Court of Appeal considered both EADACPA and Probate Code 48 (defines "interested person") and held that Fox had neither a property right in or claim against the estate that was affected by the hearing on the substituted judgment and therefore affirmed. 


8.     Kissinger v. HSBC Bank (2nd Dist.) 2005 WL 995218
Plaintiff (apparently an elder) was defrauded by a purported broker who used a bank account at HSBC as part of his fraudulent scheme. Plaintiff sued bank on various counts, including elder financial abuse. The demurrer of HSBC was sustained and plaintiff appealed. The decision contains very limited discussion of the elder financial abuse claim. However, the Court of Appeal affirmed the sustaining of the demurrer. In doing so the Court stated: "The Elder Abuse statute requires that the person or entity charged with taking property of the elder have a 'wrongful use or with intent to defraud, or both.' Whether these elements are classified as a duty or not, the analysis of the prior causes of action states that there are no facts pled which would indicate that HSBC's actions were either 'wrongful' or performed 'with intent to defraud.'" Apparently, the Court of Appeal was looking for factual allegations of wrongdoing by HSBC by which it may have "assisted" in the abuse. This implies that Elder Financial Abuse might not be imputed to another through vicarious liability (assuming that was pled). 


Amended by Stats.2004, c.886, effective January 1, 2005
Separated the remedy for financial abuse from that for physical abuse or neglect by adding 15657.5, which lowered the standard of proof from clear and convincing evidence to a preponderance and eliminated the requirement of proving recklessness, oppression, fraud, or malice. 



7.     Castro v. Caceres (6th Dist.) 2004 WL 856870
An elder sued her daughter for financial abuse for encumbering property after elder added daughter as a joint tenant and then transferred the property entirely. The trial court found no elder abuse. The Court of Appeal affirmed observing that the "facts support that [defendant's] use of the property was not 'a wrongful use.'" This suggests that the court examined the nature of the transaction rather than the intent of the defendant in determining whether the statutory requirement of "wrongful use" had been satisfied. 


6.     Feied v. Regents of U.C. (1st Dist.) 2004 WL 378186
A former professor sued U.C. and PERS for breach of contract and elder financial abuse for failing to timely pay retirement benefits, and the trial court sustained defendants' demurrers. The Court of Appeal offered some general observations about the legislative purpose of EADACPA, citing Delaney and Community Care. It affirmed the demurrer, observing that the complaint did not allege that plaintiff was either an elder or dependent adult. However, it went on to state: "Moreover, plaintiff did not and cannot allege that either [defendant] was responsible for his physical care or managing his financial affairs. He did not allege that his situation has been, or should have been, reported to any official agency. The situation is, in short, one where a person who must be presumed competent is having a dispute about money he claims he is owned by [defendants]. We agree with the trial court that plaintiff failed to state a cause of action." These comments suggest that some fiduciary (or quasi-fiduciary) relationship must exist, that reporting is somehow required, that lack of capacity may be necessary, and that a commercial "dispute about money" may not be covered by W & I 15610.30. However, the court apparently borrowed this language ("managing his financial affairs," reporting, etc.) from the general legislative purposes recited in Delaney and Community Care, and both of these cases dealt with EADACPA before the expansion of W & I 15610.30. 


5.     Bitters v. Rutledge (1st Dist.) 2003 WL 22701482
Plaintiff sued the purchaser of her house for elder abuse to recover title claiming that defendant knew, and took advantage, of her vulnerable emotional state. At trial, plaintiff was precluded from introducing evidence as to defendant's knowledge of her emotional vulnerability; the trial court entered judgment for defendant and plaintiff appealed. The Court of Appeal affirmed, stating that in considering bad faith pursuant to W & I 15610.30(b), the only relevant knowledge is of the elder's right to have the property transferred or made readily available; the abuser's subjective knowledge on other matters is irrelevant to whether the abuser acted in bad faith. 


4.     Blevins v. Rios (2nd Dist.) 2003 WL 463555
The personal representative of an elder sued his caretaker for financial elder abuse for taking funds and unduly influencing him to name her the beneficiary of his life insurance. The trial court found elder abuse and the caretaker appealed. The Court of Appeal reviewed the facts and determined that there was sufficient evidence to support the decision, including that the money was taken by the caretaker when it was needed for the support of the elder. The court stated: "Her doing so when [the elder] clearly needed the monies for his own care was a clear violation of the Elder Abuse Act." This observation supports the view that the reasonableness of the transaction may be an element of "wrongful use." 


3.     Deprima v. Hermann (2nd Dist.) 2002 WL 31122800
An elder and an acquaintance were co-lessees of an apartment and a dispute arose over possession. The acquaintance allegedly assaulted the elder but did not strike her; moreover, the acquaintance moved some of the elder's furniture from the apartment. The elder sought a protective order pursuant to W & I 15657.03, which the trial court denied. The Court of Appeal reviewed de novo and decided that the trial court had interpreted the requirements of EADACPA incorrectly, held that the facts constituted both physical and financial abuse, and reversed. 


2.     Feist (Labow) v. Hankin (2d Dist.) 2001 WL 1657227
Attorney successfully represented an elder in an elder abuse action. The total estate was approximately $1.2 million and the attorney requested fees of $67,422; the probate court awarded $11,134.71. Attorney appealed arguing that the trial court abused its discretion by failing to provide a reasoned basis for the amount of the fee award, that the award bore no rational relation to the services reasonably rendered, and that the trial court was biased against him. While the DCA recognized that fee awards are committed to the sound discretion of the trial court, it agreed that the order was a result of bias and reversed the decision, ordering that it be reassigned to a different district of the trial court. (In a separate disciplinary proceeding, the Commission on Judicial Performance publicly admonished the trial judge.) 


Amended by Stats.2000, c.442, effective January 1, 2001
Changed the term “fiduciary abuse” to “financial abuse” and expanded its definition from fiduciaries to any “person, including, but not limited to, one who has the care or custody of, or who stands in a position of trust to [the elder]” who “takes, secretes, or appropriates their money or property, to any wrongful use, or with the intent to defraud.” (W & I Code § 15610.30.) 



Amended by Stats.1998, c.946, effective January 1, 1999
Changed the term “fiduciary abuse” to “financial abuse” and expanded its definition from fiduciaries to any “person, including, but not limited to, one who has the care or custody of, or who stands in a position of trust to [the elder]” who “takes, secretes, or appropriates their money or property, to any wrongful use, or with the intent to defraud.” (W & I Code § 15610.30.) 



1.     Sipes v. The Equitable Life Assurance Society (N.D. Cal.) 1996 WL 507308
Executrix sued insurer and agent for selling unsuitable annuities to decedent, and decedent died before annuity payments returned the principle to decedent. The complaint stated various counts, including fiduciary Elder Financial Abuse pursuant to the W & I 15610(f). On that count, the court granted summary judgment, noting that EADACPA does not create a separate statute of limitations for elder abuse; it therefore applied CCP 338(d) -- fraud or mistake -- reasoning that plaintiff's claim for fiduciary abuse arose from the same averments of concealment and fraud upon which a separate fraud count was based. The defendants also apparently contended that W & I 15657(f) -- at the time of the decision replaced by W & I 15610.30 -- does not create a private cause of action. While the court recognized that the section does not expressly create a private cause of action, it went on to address the merits of the claim because W & I 15657 provided for attorney fees "should a plaintiff successfully prosecute a claim for abuse," and noted that Article 8.5 is entitled "Civil Actions For Abuse Of Elderly Or Dependent Adults" (see page 9). 


Amended by Stats.1994, c. 594, effective January 1, 1995
Renumbered the definition of fiduciary abuse by moving it from 15610(f) to 15610.30. 



Amended by Stats.1991, c.774, effective January 1, 1992
The Act was substantially revised and renamed the Elder And Dependent Adult Civil Protection Act (EADACPA). It added a new Article 8.5 providing for civil remedies, which authorized the recovery of attorney’s fees where a plaintiff proved – by clear and convincing evidence – the existence of physical abuse, neglect, or fiduciary abuse and also proved recklessness, oppression, fraud, or malice. 



Amended by Stats.1986, c.769, effective January 1, 1987
Revised the definition of fiduciary abuse by expanding it from exploiting a “dependent adult” to exploiting an “elder or dependent adult.” (W & I Code § 15610.) 



Amended by Stats.1985, c.1120, effective January 1, 1986
In a section defining terms, the amendment coined the term “fiduciary abuse.” Fiduciary abuse applied to “any person who has the care or custody of, or who stands in a position of trust to, a dependant adult,” and a dependent adult was defined as any adult with physical or mental limitations. Fiduciary abuse occurred when such a person “takes, secretes, or appropriates [the dependent adult’s] money or property.” Incidents of fiduciary abuse were then included in those required to be reported; no civil remedies or private causes of action were authorized. (W & I Code § 15610.) 



Stats.1982, c.1184, effective January 1, 1983
Original enactment of the Abuse of the Elderly and Other Dependent Adults Act. Required the gathering of data on the suspected incidents of abuse through mandatory reporting to government social services agencies; it only covered physical and psychological abuse and neglect and did not address the economic exploitation of elders.