BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
AB 140 (Dickinson)
As Amended June 14, 2013
Hearing Date: June 25, 2013
Fiscal: Yes
Urgency: No
TMW
SUBJECT
Undue Influence
DESCRIPTION
This bill would provide in the Elder Abuse and Dependent Adult
Civil Protection Act a new definition of undue influence, which
would focus on excessive persuasion that causes another person
to act or refrain from action, resulting in inequity. This bill
would also provide a list of considerations for a court to
utilize in determining whether an action constituted excessive
persuasion.
This bill would also make this new definition of undue influence
the operative definition under the Probate Code.
BACKGROUND
In cases brought pursuant to the Elder Abuse and Dependent Adult
Civil Protection Act (EADACPA), existing law refers to "undue
influence" to mean the definition provided under the Civil Code,
which defines undue influence to mean using the confidence of or
real or apparent authority over another, taking an unfair
advantage over another person's weakness of mind, or taking a
grossly oppressive and unfair advantage of another person's
necessities or distress.
The author argues that the existing definition of undue
influence has been utilized since 1872 and focuses primarily on
civil contract disputes. As such, it does not fully provide an
adequate definition for probate and EADACPA cases. Rather,
courts have been left to flesh out the elements of undue
(more)
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influence.
This bill, sponsored by the California Advocates for Nursing
Home Reform, would provide, in EADACPA, a new definition of
"undue influence," which would also be used for all probate
cases.
CHANGES TO EXISTING LAW
Existing law defines "undue influence" to mean using the
confidence of or real or apparent authority over another person
to obtain an unfair advantage, taking an unfair advantage over
another person's weakness of mind, or taking a grossly
oppressive and unfair advantage of another person's necessities
or distress. (Civ. Code Sec. 1575.)
Existing law , the Elder Abuse and Dependent Adult Civil
Protection Act (EADACPA), generally provides civil protections
and remedies for victims of elder and dependent adult abuse and
neglect. (Welf. & Inst. Code Sec. 15600 et seq.)
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, as defined by Civil
Code Section 1575. (Welf. & Inst. Code Sec. 15610.30.)
Existing law , in the Probate Code, provides for actions
involving "undue influence" of elders, minors, and dependent
adults. (Prob. Code Secs. 1801, 1821, 1951, 2583, 11604,
11604.5, 15642, 21310, 21351, 21366, 21380, 21384, 21392.)
This bill , in EADACPA, would provide a new definition of "undue
influence" to mean excessive persuasion that causes another
person to act or refrain from acting and results in inequity.
This bill would require a court, in determining whether a result
was produced by undue influence, to consider all of the
following:
the vulnerability of the alleged victim. Evidence of
vulnerability may include, but is not limited to, incapacity,
illness, disability, injury, age, education, impaired
cognitive function, emotional distress, isolation, dependency,
and whether the influencer knew or should have known of the
alleged victim's vulnerability;
the influencer's apparent authority. Evidence of apparent
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authority may include, but is not limited to, status as a
fiduciary, family member, care provider, health care
professional, legal professional, spiritual adviser, expert,
or other special qualification;
the actions or tactics used by the influencer. Evidence of
actions or tactics may include, but is not limited to, all of
the following: (a) controlling necessities of life,
medication, interactions with others, access to information,
or sleep; (b) use of affection, intimidation, or coercion; and
(c) initiation of changes in personal or property rights, use
of haste or secrecy in effecting those changes, effecting
changes at inappropriate times and places, and claims of
expertise in effecting changes; and
the equity of the result. Evidence of the equity of the result
may include, but is not limited to, the economic consequences
to the alleged victim, any divergence from the alleged
victim's prior intent or course of conduct or dealing, the
relationship of the value conveyed to the value of any
services or consideration received, and the reasonableness of
the change in light of the length and nature of the
relationship.
This bill would provide that evidence of an inequitable result,
without more, is not sufficient to prove undue influence.
This bill would apply this new definition of "undue influence"
to the Probate Code, which would be intended to supplement the
common law meaning of undue influence without superseding or
interfering with the operation of that law.
COMMENT
1. Stated need for the bill
The author writes:
AB 140 would modernize the definition of undue influence for
elder financial abuse and related probate matters, a
definition that has not been revised since 1872. The new
definition that AB 140 would create defines undue influence as
excessive persuasion that causes an elder to act or refrain
from acting and that results in inequity.
Modernizing the definition of undue influence so that it is
consistent with contemporary views of vulnerability, mental
health, and fairness would bring greater clarity to the
determination of when excessive persuasion had become
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exploitative.
2. Redefining undue influence for Elder Abuse and Dependent Adult
Civil Protection Act and Probate Code cases
In cases brought pursuant to the Elder Abuse and Dependent Adult
Civil Protection Act (EADACPA), existing law refers to "undue
influence" to mean the definition provided under the Civil Code,
which defines undue influence to mean using the confidence of or
real or apparent authority over another, taking an unfair
advantage over another person's weakness of mind, or taking a
grossly oppressive and unfair advantage of another person's
necessities or distress. This bill would provide in EADACPA a
new definition of undue influence, which would focus on
excessive persuasion that causes another person to act or
refrain from action, resulting in inequity. This bill would
also provide a list of considerations for a court to utilize to
determine whether the action by the defendant constituted
excessive persuasion.
In support of this proposed change to the definition of undue
influence, proponents assert:
Elder financial abuse has reached epidemic proportions in
California as financial predators target and exploit the most
vulnerable members of our community. While financial abuse
can take many forms, elders and dependent adults are
particularly vulnerable to the undue influence of others
because of illness, isolation, lack of mobility, and
dependence. Often such manipulation does not constitute
actionable fraud but nevertheless results in grievous
exploitation and catastrophic loss. While existing law
provides civil remedies for taking an elder's property through
undue influence, the statutory definition of "undue influence"
is archaic and limited.
AB 140 would modernize this definition by providing courts
with a practical, reasonable, and workable definition that
balances the vulnerability of the victim, the apparent
authority of the influencer, the tactics employed, and the
fairness of the result.
The effects of financial abuse are particularly catastrophic
for elders because they have a limited ability to recover from
economic loss. Not only are elders more likely to require
public assistance, but they are three times more likely to die
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as a result of the trauma of exploitation. This problem will
only get worse as our population ages and life-expectancies
increase. AB 140 represents a critical opportunity to protect
our elders from the devastating effects of exploitation by
bringing the definition of undue influence into the 21st
Century.
Civil Code Section 1575 provides that undue influence consists
of taking an unfair advantage of another's weakness of mind or
taking a grossly oppressive and unfair advantage of another's
necessities or distress. Courts have been left to apply this
definition to a variety of issues regarding contracts and
transactions. In Odorizzi v. Bloomfield School District (1966)
246 Cal.App.2d 123, the court analyzed various interpretations
of undue influence provided in prior cases and established that
"[u]ndue influence . . . is a shorthand legal phrase used to
describe persuasion which tends to be coercive in nature,
persuasion which overcomes the will without convincing judgment.
The hallmark of such persuasion is high pressure, a pressure
which works on mental, moral, or emotional weakness to such an
extent that it approaches the boundaries of coercion. In this
sense, undue influence has been called overpersuasion." (Id. at
p. 130; citations omitted.) The court determined that
"overpersuasion is generally accompanied by certain
characteristics which tend to create a pattern. The pattern
usually involves several of the following elements: (1)
discussion of the transaction at an unusual or inappropriate
time, (2) consummation of the transaction in an unusual place,
(3) inconsistent demand that the business be finished at once,
(4) extreme emphasis on untoward consequences of delay, (5) the
use of multiple persuaders by the dominant side against a single
servient party, (6) absence of third-party advisers to the
servient party, (7) statements that there is no time to consult
financial advisers or attorneys. If a number of these elements
are simultaneously present, the persuasion may be characterized
as excessive." (Id. at p. 133.)
This bill would utilize the broad definition of undue influence
provided in Odorizzi, with a modified list of characteristics to
be considered in determining whether an act was the result of
undue influence. This bill would require a court to consider
the vulnerability of the victim, with appropriate factors to be
considered regarding the capacity and cognizance of the elder or
dependent adult. This bill would also require the court to
consider the influencer's apparent authority, tactics used by
the influencer, as well as the equity of the result, in finding
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or not finding undue influence. By providing a more appropriate
definition of undue influence, with specified considerations,
this bill arguably would clarify for courts and parties to the
action the evidence that must be proven or disproved in undue
influence actions. Furthermore, this bill would provide more
stringent guidelines applicable to transactions involving elders
and dependent adults to provide better protection to these
vulnerable individuals.
Recent amendments resolved the evidentiary proof concerns raised
by the California Judges Association (CJA). Accordingly, CJA
has taken a neutral position on this bill. In addition, the
author has requested to take the following amendment to clarify
that this bill would maintain the common law understanding that
undue influence includes the component that a person's free will
has been overcome by the influencer.
Author's amendment :
On page 3, in line 32, after "acting" insert "by overcoming
that person's free will"
3. Redefining undue influence for Probate Code cases
This bill would apply the new definition of undue influence to
cases filed under the Probate Code, and declare legislative
intent that this definition would supplement the common law
meaning of undue influence without superseding or interfering
with the operation of that law.
The Probate Code does not contain a definition of undue
influence, but it does contain specific information to determine
mental function deficits (Prob. Code Sec. 811) and capacity to
make decisions (Prob. Code Sec. 812.) The lack of clear
guidance on undue influence is particularly problematic for
conservatorship and guardianship cases. A recent study on undue
influence definitions and applications pointed out that "[u]ndue
influence is a complex and poorly defined legal concept which
makes it amenable to legislative action. . . . Having a
definition placed in the Probate Code in the conservatorship
section would be valuable to courts, judges, attorneys, and
community practitioners and would help to ensure more consistent
handling [of] cases involving allegations or suspicion of undue
influence. The latter could then prepare information for
conservatorship petitions that are in concert with the
definition in the Probate Code." (Undue Influence: Definitions
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and Applications; Final Report to the Borchard Foundation Center
on Law and Aging (Mar. 2010) Cal. Administrative Office of the
Courts
[as of June 15, 2013] p. 28.)
This report suggested four elements to include in the definition
of undue influence: (1) vulnerability of the victim; (2) power
differential between victim and others in positions to influence
the victim; (3) actions, tactics, or circumstances suggestive of
undue influence; and (4) actions that would be perceived as
unfair, unnatural, or unethical by objective third parties.
(Id. at p. 29.) Notably, this bill incorporates all of these
elements to be considered by a court in determining whether an
individual was the subject of undue influence.
As discussed above, this bill would provide clarity to the
definition of undue influence, with specified characteristics to
be considered with respect to the transaction at issue, in order
to provide better protection in EADACPA cases. Actions brought
under the Probate Code involve issues similar to those in
EADACPA cases - whether the individual had capacity and
cognizance of the transaction, whether the influencer used his
or her apparent authority over the individual, the tactics used
by the influencer, and the equity of the result in finding or
not finding undue influence. Furthermore, this bill would
supplement the common law usage of undue influence in probate
actions. This would enable courts to continue to develop
contemporary and evolving rules to adapt the law to new
situations and changing conditions. In this way, courts will be
able to apply the new definition of undue influence to pre-death
transactions, as well as develop a clarified body of law
regarding undue influence as it pertains to the execution of
documents in post-death cases.
Support : Alzheimer's Association; California Alliance for
Retired Americans; California Association for Health Services at
Home; California Commission on Aging; California Police Chiefs
Association; California Senior Legislature; Center of Excellence
on Elder Abuse and Neglect - UC Irvine Program in Geriatrics;
Consumer Federation of California; County Welfare Directors
Association of California; Institute on Aging; National
Association of Social Workers; Older Women's League of
California; Ohlone/East Bay Older Women's League of California;
six individuals
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Opposition : None Known
HISTORY
Source : California Advocates for Nursing Home Reform
Related Pending Legislation : AB 381 (Chau), among other things,
would authorize an award of double damages when a person has
taken, concealed, or disposed of property that belongs to a
principal under a power of attorney by the use of undue
influence in bad faith or through the commission of elder or
dependent adult financial abuse.
Prior Legislation :
SB 1140 (Steinberg, Ch. 475, Stats. 2008) established undue
influence as a third definition of financial abuse of an elder
or dependent adult.
SB 1018 (Simitian, Ch. 140, Stats. 2005) enacted the Elder and
Dependent Adult Financial Abuse Reporting Act.
AB 2611 (Simitian, Ch. 886, Stats. 2004) reduced the standard of
proof for financial abuse to preponderance of the evidence, but
allowed punitive damages upon clear and convincing evidence of
recklessness, oppression, fraud, or malice.
Prior Vote :
Assembly Committee on Judiciary (Ayes 7, Noes 2)
Assembly Committee on Aging and Long Term Care (Ayes 4, Noes 0)
Assembly Committee on Appropriations (Ayes 12, Noes 0)
Assembly Floor (Ayes 57, Noes 10)
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