BILL ANALYSIS Ó AB 354 Page 1 Date of Hearing: March 15, 2011 ASSEMBLY COMMITTEE ON JUDICIARY Mike Feuer, Chair AB 354 (Silva) - As Introduced: February 10, 2011 PROPOSED CONSENT (As Proposed to be Amended) SUBJECT : Trusts and Estates: Wrongful taking KEY ISSUE : IN ORDER TO HELP PREVENT FINANCIAL ABUSE AND, IN THE EVENT THAT SUCH ABUSE DOES OCCUR, TO ALLEVIATE HARM TO THE VICTIM, SHOULD THE LAW BE CLARIFIED TO REQUIRE THAT FINANCIAL ABUSE OF ELDER AND DEPENDENT ADULTS BE SUBJECT TO DOUBLE DAMAGES? FISCAL EFFECT : As currently in print this bill is keyed non-fiscal. SYNOPSIS This bill, sponsored by the Conference of California Bar Associations, seeks to clarify that a person who takes someone's property in bad faith through undue influence or through financial abuse under the Elder Abuse and Dependent Adult Protection Act (EADACPA) is liable for twice the value of the property taken. The author states that this change is necessary because at least one court, in an unpublished opinion, has held that a taking of property through undue influence was not sufficient to allow a court to order double damages. This bill will ensure that bad faith takings by undue influence, as well as financial abuse under EADACPA, can result in double damages. There is no known opposition. SUMMARY : Provides that damages of twice the value of the property is available if property is wrongfully taken. Specifically, this bill provides that if a person takes, conceals or disposes of property by the use of undue influence committed in bad faith or through the commission of financial abuse under EADACPA, that person will be liable for the value of twice the property taken. EXISTING LAW : 1)Provides, through EADACPA, civil remedies to victims of elder AB 354 Page 2 or dependent adult abuse, neglect, or abduction, including recovery of damages and attorney's fees. (Welfare & Institutions Code Section 15600 et seq.) 2)Provides that "financial abuse" under EADACPA occurs when a person takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult by undue influence, as defined. Also defines assisting another in such conduct as financial abuse. (Welfare & Institutions Code Section 15610.30.) 3)Provides that remedies for financial abuse under EADACPA include compensatory damages, attorney's fees and costs, and all other remedies otherwise provided by law. (Welfare & Institutions Code Section 15657.5.) 4)Provides that if a court finds that an individual has in bad faith wrongfully taken, concealed or disposed of property belonging to a decedent, conservatee, minor or trust, that individual shall be liable for twice the value of the property recovered. Provides that this remedy is in addition to any other remedy available. (Probate Code Section 859.) COMMENTS : The Elder Abuse and Dependent Adult Civil Protection Act was enacted in 1991 to protect elder and dependent adults from abuse and exploitation. EADACPA recognizes that elders and dependent adults may have disabilities and cognitive impairments, such as Alzheimer's disease and other dementia disorders, which often leave them incapable of seeking help and protection from others; and that elders and dependent adults suffer physical impairments and poor health, conditions that place them in a dependent and vulnerable position. Further, legislative findings codified in EADACPA state that cases of elder and dependent adult abuse are seldom prosecuted as criminal matters, and few civil cases are brought in connection with this abuse due to problems of proof, court delays, and the lack of incentives to prosecute these suits. Under EADACPA, an elder or dependent adult whose property is wrongfully taken by another may bring a civil action for financial abuse to recover the loss of the property and the expense of hiring an attorney to bring the action, along with all other remedies otherwise allowed by law. This remedy is available to the elder or dependent adult when a person takes their property for a wrongful use or with intent to defraud or AB 354 Page 3 both. Under EADACPA, wrongful use is defined as retaining possession of property where the person taking it knew, or should have known, that the elder or dependent adult had the right to have the property made readily available to him or her or representative. This bill clarifies that damages of twice the value of the property taken are available when property is taken in bad faith by undue influence or through elder financial abuse, to ensure that double damages are available in these instances. According to the author: Current law is unclear as to whether a person who uses elder abuse or intentional undue influence to steal from an elder or dependent adult is liable for the same double-damages that he or she would be liable for if the wrongful taking had been directly from the elder's estate or trust. Although there are no reported cases interpreting this provision, there has been at least one unreported appellate opinion that holds that the bad faith action of an individual, using undue influence on an elderly parent, is not sufficient to allow a trial court to award double damages. If the appellate court's view is embraced in other cases, it would threaten to undercut the broad protections the Legislature has consistently intended by enacting a series of statutes dating back to 1851 to put potential wrongdoers on notice of their exposure to double liability for bad faith taking of estate property in all trust, guardianship, and conservatorship cases. Existing law allows for double damages under the Probate Code when a court finds that property belonging to a decedent, conservatee, minor or trust has, in bad faith, been wrongfully taken, concealed or disposed of property and this is specifically in addition to any other remedy provided by law. An unpublished appellate court decision from 2000 refused to award double damages when the taking involved undue influence of a frail elder committed in bad faith. This bill clarifies that double damages are available when, in bad faith, property is taken by undue influence and when property is taken through financial abuse under EADACPA. AB 354 Page 4 Author's Amendments : In order to clarify that the bill applies specifically to financial abuse under EADACPA, the author has appropriately requested that the bill be amended as follows: On page 2, line 1, after "adult" insert: financial On page 2, lines 2 and 3, strike out "Chapter 11 (commencing with Section 15600) of Part 3 of Division 9" and insert: Section 15610.30 REGISTERED SUPPORT / OPPOSITION : Support Conference of California Bar Associations (sponsor) Opposition None on file Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334