BILL ANALYSIS Ó
AB 381
Page 1
ASSEMBLY THIRD READING
AB 381 (Chau)
As Amended April 11, 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
reasonable attorney's fees and costs at the discretion of the
court, except as otherwise provided by law. 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, may be liable for
reasonable attorney's fees and costs at the discretion of the
court, except as otherwise required by law. Specifies that
the remedies provided by this provision shall be in addition
to any other remedies available in law to 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,
except as otherwise required by law may also be liable for
reasonable attorney's fees and costs at the discretion of the
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court.
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
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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 permit the court, in its discretion, to award 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
remove the provisions awarding attorney's fees and costs. It
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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
FN: 0000154