BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 381
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          ASSEMBLY THIRD READING
          AB 381 (Chau)
          As Amended April 1, 2013
          Majority vote 

           JUDICIARY           9-0                                         
           
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          |Ayes:|Wieckowski, Wagner,       |     |                          |
          |     |Alejo, Chau, Dickinson,   |     |                          |
          |     |Garcia, Maienschein,      |     |                          |
          |     |Muratsuchi, Stone         |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
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           SUMMARY  :  Extends existing double damage provisions in the  
          Probate Code to a person who misappropriates property through  
          undue influence in bad faith, or through acts of financial elder  
          abuse, and provides that the person shall also be liable for  
          attorney's fees and costs in addition to those double damages.   
          Specifically,  this bill  :  

          1)Provides that a person who has taken, concealed, or disposed  
            of property belonging to a conservatee, a minor, an elder, a  
            dependent adult, a trust, the estate of a decedent, or has  
            taken, concealed, or disposed of property by the use of undue  
            influence in bad faith, or through the commission of elder or  
            dependent adult financial abuse, as defined, shall be liable  
            for reasonable attorney's fees and costs.  Specifies that the  
            remedies provided by this provision shall be in addition to  
            any other remedies available in law to a trustee, guardian or  
            conservator, or a person authorized to bring an action  
            pursuant to the Elder and Dependent Adult Civil Protection Act  
            (EDACPA).

          2)Provides that if a court finds that a person has in bad faith  
            wrongfully taken, concealed, or disposed of property belonging  
            to a principal under a power of attorney, or has taken,  
            concealed, or disposed of property by use of undue influence  
            in bad faith or through the commission of elder abuse or  
            dependent adult financial abuse, as defined, the person shall  
            be liable for twice the value of the property recovered and  
            shall also be liable for reasonable attorney's fees and costs.  









                                                                  AB 381
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           EXISTING LAW  :

          1)Provides that a person found liable for taking, concealing, or  
            disposing of property belonging to the estate of a decedent,  
            conservatee, minor, or trust through the use of undue  
            influence in bad faith, or through the commission of elder or  
            dependent adult financial abuse, is liable for twice the value  
            of the property taken.  

          2)Provides that a person who, in bad faith, wrongfully takes,  
            conceals, or disposes of property belonging to a principal  
            under a power of attorney is liable for twice the value of the  
            property taken.  

          3)Establishes EDACPA to protect elderly and dependent adults  
            from abuse, including financial abuse.  

          4)Provides that "financial abuse" occurs when a person takes,  
            secretes, appropriates, obtains, or retains real or personal  
            property of an elder or dependent adult for a wrongful use, or  
            with intent to defraud, or by undue influence, or when a  
            person assists another in that conduct.  

          5)Requires, when it is proven by a preponderance of the evidence  
            that the defendant is liable for financial abuse of an elder  
            or dependent adult, the court to award compensatory damages  
            and attorney's fees and costs.  

           FISCAL EFFECT  :  None 

           COMMENTS  :  According to the author, financial abuse of elders  
          and dependent adults has increased in recent years and will most  
          likely continue to do so as the Baby Boom generation ages.  In  
          2011 the Legislature enacted and the Governor signed AB 354  
          (Silva) Chapter 55, Statutes of 2011.  That legislation  
          specified that Probate Code Section 859, which assessed double  
          damages against persons who misappropriated property belonging  
          to the estate of a decedent, conservatee, minor, or trust, would  
          also apply to a person who misappropriated property through the  
          use of undue influence or who committed financial abuse of an  
          elder or dependent adult.  However, AB 354 did not extend the  
          double damage provisions in Probate Code Section 4231.5 - which  
          applies when a person exercising power of attorney  








                                                                  AB 381
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          misappropriates property belonging to a principal - to cases of  
          elder and dependent adult financial abuse.

          This bill - which is sponsored by the Conference of California  
          Bar Associations (CCBA) - would, the author believes, correct  
          two shortcomings of AB 354 of 2011.  First, it would extend the  
          double damages provisions of Probate Code Section 4231.5 to a  
          person who takes property by undue influence in bad faith, or  
          through a commission of financial abuse of an elder or dependent  
          adult.  Second, for both sections of the Probate Code, this bill  
          would make the person who commits the wrongful act liable for  
          reasonable attorney's fees and costs, in addition to the double  
          damages.  According to the author, even with double damages,  
          there are instances in which the attorney's fees incurred exceed  
          the damages recovered. 

          According to the sponsor, the CCBA, this measure will "extend  
          current protections against misappropriation of property by  
          attorneys-in-fact to elders, dependent adults, and victims of  
          the attorney-in-facts bad faith undue influence.  The bill also  
          would add attorney's fees and costs to the award in successful  
          cases to recover property that has been misappropriated from  
          conservatees, minors, elders, dependent adults, decedent's  
          estates, or victims of bad faith undue influence, so that  
          rightful property owners do not have to make a decision as to  
          whether they can afford to recover their property, because the  
          attorney fees and costs might exceed the value (or even twice  
          the value) of the property recovered."  CCBA notes that AB 354  
          of 2011 - which CCBA also sponsored - assessed double damages  
          against persons who misappropriated property from conservatees,  
          wards, decedent's estates, and other vulnerable persons, also  
          protected victims of elder and dependent adult abuse, but it did  
          not make similar changes to the power of attorney law (Probate  
          Code Section 4231.5).  "AB 381 fills that gap," CCBA writes,  
          "ensuring that elders, dependent adults, and victims of bad  
          faith undue influence are also protected from bad faith  
          misappropriation by attorneys-in-fact."  However, CCBA adds,  
          these protections "are only valuable if people can use them, and  
          there are many instances where the attorney's fees incurred  
          seeking redress are likely to exceed even twice the value of  
          property that had been misappropriated."

          The Executive Committee of the Trusts & Estates Section of the  
          State Bar (TEXCOM) opposes this bill unless it is amended to  








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          remove the provisions awarding attorney's fees and costs.  It  
          supports extending the double damages provided for in Probate  
          Code Section 4231.5 (the power of attorney provision) to persons  
          who misappropriate property by undue influence, or by committing  
          financial abuse against an elder or dependent adult.  TEXCOM  
          argues and cites case law in support of its view that the  
          "double-recovery remedy is [already] a punitive remedy."  TEXCOM  
          claims that this bill will add attorney's fees and costs "as a  
          separate punitive remedy."  TEXCOM believes that adding  
          attorney's fees and costs to an already punitive double-recovery  
          remedy is especially problematic in these types of cases, which  
          often involve "intra-family disputes that are difficult to  
          resolve because of emotional issues.  Because the alleged victim  
          in many of these cases is dead or incapacitated and the  
          circumstances ambiguous, it is difficult to know the alleged  
          victim's intent, for example, in creating a joint tenancy  
          account or in making a gift.  Raising the bar in an already  
          difficult situation even higher" will make "these fraught cases  
          even more difficult to settle and further burden the courts."   
          Finally, TEXCOM argues that the additional remedy of attorney's  
          fees is not necessary because attorney's fees are already  
          available to successful litigants in elder abuse cases. 


           Analysis Prepared by  :    Thomas Clark / JUD. / (916) 319-2334 


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