BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 354 (Silva)
As Amended March 21, 2011
Hearing Date: June 7, 2011
Fiscal: No
Urgency: No
TW
SUBJECT
Estates and Trusts: Property: Wrongful Taking
DESCRIPTION
This bill would provide that when a person has taken, concealed,
or disposed of the real or personal property of a conservatee,
minor, estate of a decedent, or trust by the use of undue
influence in bad faith or through the commission of elder or
dependent adult financial abuse, the person is liable for twice
the value of the property recovered in a conservatorship,
guardianship, estate, or trust proceeding.
BACKGROUND
Since 1851, the Legislature has provided for an award of double
damages with respect to recovered property. In 2002, the
Legislature reorganized the various statutes authorizing a
probate court to decide quiet title actions involving trusts,
estates of decedents, minors, or conservatees. (SB 669
(Poochigian, Ch. 49, Stats. 2001).) As part of this
reorganization, courts were given authority to award double
damages of the value of property recovered from a person who has
wrongfully taken real or personal property from a conservatee,
minor, estate of a decedent, or trust.
This bill, sponsored by the Conference of California Bar
Associations, would extend the double damages award to instances
when the wrongful taking of real or personal property was a
result of undue influence in bad faith or through the commission
of elder or dependent adult financial abuse.
(more)
AB 354 (Silva)
Page 2 of ?
CHANGES TO EXISTING LAW
Existing law provides that a guardian, conservator, claimant,
personal representative, or trustee can file a petition with the
court to recover the real or personal property of a minor,
conservatee, estate of a decedent, or trust held by another.
(Prob. Code Sec. 850 et seq.)
Existing law provides that, if the court finds that a person has
in bad faith wrongfully taken, concealed, or disposed of
property belonging to the estate of a decedent, conservatee,
minor, or trust, the person shall be liable for twice the value
of the property recovered by an action under this part. This
remedy is in addition to any other remedies available in law to
a trustee, guardian or conservator, or personal representative
or other successor in interest of a decedent. (Prob. Code Sec.
859.)
Existing law defines "undue influence" as the use, by one in
whom a confidence is reposed by another, or who holds a real or
apparent authority over him, of such confidence or authority for
the purpose of obtaining an unfair advantage over him, taking an
unfair advantage of another's weakness of mind, or taking a
grossly oppressive and unfair advantage of another's necessities
or distress. (Civ. Code Sec. 1575.)
Existing law defines "financial abuse" as the taking, secreting,
appropriating, obtaining, or retaining real or personal property
of an elder or dependent adult for a wrongful use or with intent
to defraud, or both or by undue influence. (Welf. & Inst. Code
Sec. 15610.30.)
This bill would provide that when a person has taken, concealed,
or disposed of the real or personal property of a conservatee,
minor, estate of a decedent, or trust by the use of undue
influence in bad faith or through the commission of elder or
dependent adult financial abuse, the person is liable for twice
the value of the property recovered in a guardianship,
conservatorship, estate, or trust proceeding.
COMMENT
1. Stated need for the bill
The author writes:
Current law is unclear as to whether a person who uses elder
AB 354 (Silva)
Page 3 of ?
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 unpublished 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.
The Conference of California Bar Associations (CCBA), the
sponsor of this bill, writes:
AB 354 would eliminate the ambiguity in existing law by
amending Probate Code ÝSection] 859 to specifically include
willful undue influence and elder financial abuse as Ýthe]
bases for imposing double damages liability on wrongdoers who
prey upon the elderly and infirm.
2. Awarding double damages in cases of undue influence
This bill would provide that when a person has taken, concealed,
or disposed of real or personal property by the use of undue
influence in bad faith, the person is liable for twice the value
of the property recovered in a guardianship, conservatorship,
estate, or trust proceeding. Existing law provides an award of
double damages if the court finds that a person in bad faith
wrongfully has taken, concealed, or disposed of real or personal
property belonging to the estate of a decedent, conservatee,
minor, or trust. (Prob. Code Sec. 859.) The award is
calculated at twice the value of the property recovered.
The author argues that existing law is unclear whether a person
who uses undue influence to steal from an elder or dependent
adult is liable for the same double damages for which he or she
would be liable if the wrongful taking had been directly from
the elder's estate or trust. The California Department of
Consumer Affairs (CDCA), neutral on this bill, "finds no
AB 354 (Silva)
Page 4 of ?
objection to this bill's clarification of the law." The author
argues that, in an unpublished court decision, the court did not
award double damages when the taking involved undue influence
committed in bad faith on an elder. In that case, the court
determined whether the son's undue influence exerted on his
father in order to get his father to write checks payable to the
son constituted a wrongful taking, concealing, or disposing of
property belonging to the father's trust. (Estate of Wolf (Aug.
31, 2000, B126543) Ýnonpub. opn.] pg. 17.) The court held that
because the father gave the money to the son, albeit through
undue influence by the son, the evidence was insufficient to
prove that the son in bad faith wrongfully took, concealed, or
disposed of property in or belonging to the trust. (Id.)
On the other hand, the court in Estate of Young (2008) 160
Cal.App.4th 62, 80, 84 found that transfers of real and personal
property into trusts for which no beneficial purpose to the
testator could be found demonstrated undue influence and/or
fraud, which supported an award of double damages. It appears
that part of the confusion regarding a court's discussion of
undue influence centers around the evidence necessary to be
proven in proceedings to recover property. Under Probate Code
Section 850, the petitioner must prove that the property
rightfully belonged to the minor, conservatee, decedent, or
trust. To do so, the petitioner must provide proof that the
transfers of the property were defective. Such proof may be
shown through undue influence and fraud. Once title to the
property has been established, the court may then consider
awarding double damages against the wrongful taker of the
property upon proof that the taking was wrongful and made in bad
faith.
In Estate of Kraus (2010) 184 Cal.App.4th 103, the court, in
deciding whether to award double damages, reasoned that "Ýt]he
statutory emphasis is not on to whom the property belongs, but
whether the person in possession in bad faith wrongfully
acquired it." (Id. at 117.) Proof of wrongfully taking,
concealing, or disposing of property in bad faith requires a
higher level of evidence. This is because double damages are
punitive in nature. (See Estate of Young (2008) 160 Cal.App.4th
62, 88.)
The question becomes whether it is appropriate to award double
damages for undue influence. Undue influence arguably leads to
the wrongful taking of property. In order to prove undue
influence, existing law requires a showing that the person used
AB 354 (Silva)
Page 5 of ?
the confidence of or real or apparent authority over the victim
in order to obtain an unfair advantage over the victim, take an
unfair advantage of the victim's weakness of mind, or take a
grossly oppressive and unfair advantage of the victim's
necessities or distress. (Civ. Code Sec. 1575.) This undue
influence potentially results in the ability to wrongfully take
property away from the victim, either by gaining direct power
over the property of the victim as in the Young case, or by
influencing the victim to transfer the property in a way the
victim, if he or she had full mental and physical capacity,
would not normally have done, as in the Wolf case.
Over the years, the Legislature has enacted statutes to protect
California citizens who have a diminished ability to protect
themselves and their assets and to deter financial predators
through the use of punitive damages. (See Comment 3.) This
bill would authorize the use of punitive damages in the form of
twice the value of the property recovered when the financial
predator utilized undue influence in bad faith to obtain the
real or personal property directly from the person or trust or
by convincing the conservatee, minor, or decedent to transfer
the property. This award is in keeping with the Legislature's
history of financial protection for these cases.
3. Awarding double damages in cases of elder and dependent adult
financial abuse
This bill would provide that when a person has taken, concealed,
or disposed of the property through the commission of elder or
dependent adult financial abuse, the person is liable for twice
the value of the property recovered in a guardianship,
conservatorship, estate, or trust proceeding. In 1992, the
Legislature enacted the Elder Abuse and Dependent Adult Civil
Protection Act (EADACPA). (SB 679 (Mello, Ch. 774, Stats.
1991).) EADACPA was established in order to provide enhanced
remedies to ensure adequate representation of victims in cases
of elder or dependent adult physical and financial abuse and
neglect. In 2005, the Legislature enacted AB 2611 (Simitian,
Ch. 886, Stats. 2004), which separated out the provisions for
elder and dependent adult financial abuse.
Existing law defines "financial abuse" as the taking, secreting,
appropriating, obtaining, or retaining real or personal property
of an elder or dependent adult for a wrongful use or with intent
to defraud, or both, or by undue influence. (Welf. & Inst. Code
Sec. 15610.30.) EADACPA provides an award of punitive damages
AB 354 (Silva)
Page 6 of ?
for elder and dependent adult financial abuse. (Welf. & Inst.
Code Sec. 15657.5.)
As discussed in Comment 2, double damages are punitive in
nature. (See Estate of Young (2008) 160 Cal.App.4th 62, 88.)
This bill would authorize the use of punitive damages in the
form of twice the value of the property recovered when the
financial predator committed elder or dependent adult financial
abuse to obtain the real or personal property directly from the
person or trust or by convincing the conservatee, minor, or
decedent to transfer the property. This award is in keeping
with the Legislature's history of awarding punitive damages in
these cases.
Support : Trusts and Estates Section of the State Bar of
California
Opposition : None Known
HISTORY
Source : Conference of California Bar Associations
Related Pending Legislation : None Known
Prior Legislation : See Background and Comment 3.
Prior Vote :
Assembly Floor (Ayes 71, Noes 0)
Assembly Committee on Judiciary (Ayes 10, Noes 0)
**************