BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 381|
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THIRD READING
Bill No: AB 381
Author: Chau (D)
Amended: 5/24/13 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 6-0, 6/4/13
AYES: Evans, Anderson, Corbett, Jackson, Leno, Monning
NO VOTE RECORDED: Walters
ASSEMBLY FLOOR : 77-0, 4/15/13 - See last page for vote
SUBJECT : Estates and trusts: undue influence and elder abuse
SOURCE : Conference of California Bar Associations
DIGEST : This bill provides that a person may be liable for
attorneys fees and costs if he/she, in bad faith, through undue
influence, or through the commission of elder abuse, has
wrongfully taken, concealed, or disposed of property that
belongs to a conservatee, minor, elder, dependent adult, trust,
or decedent's estate. This bill also provides that a person may
be liable for attorney's fees and costs if he/she, in bad faith,
has wrongfully, taken, concealed, or disposed of property that
belongs to a principal under a power of attorney. This bill
provides that a person who, by the use of undue influence in bad
faith or through the commission of elder or dependent adult
financial abuse, has taken, concealed, or disposed of property
that belongs to a principal under a power of attorney is liable
for twice the value of the property, and may be liable for
attorney's fees and costs.
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ANALYSIS : 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. (Welfare and Institutions Code (WIC)
Section 15600 et seq.)
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. (Civil Code Section 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. (WIC Section
15610.30)
Existing law requires a court to award to the plaintiff
reasonable attorney's fees and costs, compensatory damages, and
all remedies otherwise provided by law, where it is proven by a
preponderance of the evidence that a defendant is liable for
financial abuse under EADACPA. (WIC Section 15657.5(a))
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.
(Probate Code (PROB) Section 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, or has taken, concealed, or disposed of the
property by the use of undue influence in bad faith or through
the commission of elder or dependent adult financial abuse, the
person shall be liable for twice the value of the property
recovered. 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 Section 859)
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This bill provides that the person who has taken property, in
bad faith, through undue influence, or through the commission of
elder or dependent adult financial abuse, may, in the court's
discretion, also be liable for reasonable attorney's fees and
costs.
This bill makes technical and conforming revisions to the above
provision.
Existing law provides that a principal can grant to an
attorney-in-fact the authority to act on the principal's behalf
regarding the principal's real or personal property. (PROB
Section 4123)
Existing law assigns various duties that the attorney-in-fact
has to the principal. (PROB Section 4230 et seq.)
Existing law provides that if the attorney-in-fact breaches a
duty to the principal, the attorney-in-fact is chargeable with
any of the following, as appropriate under the circumstances:
Any loss or depreciation in value of the principal's
property resulting from the breach of duty, with interest;
Any profit made by the attorney-in-fact through the breach
of duty, with interest; or
Any profit that would have accrued to the principal if the
loss of profit is the result of the breach of duty. (PROB
Section 4231(a))
Existing law provides that if the attorney-in-fact has acted
reasonably and in good faith under the circumstances as known to
the attorney-in-fact, the court, in its discretion, may excuse
the attorney-in-fact in whole or in part from liability if it
would be equitable to do so. (PROB Section 4231(b))
Existing law 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, the person
shall be liable for twice the value of the property recovered by
an action to recover the property or for surcharge, in addition
to any other remedies available in law. (PROB Section
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4231.5(c))
This bill additionally authorizes 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.
This bill provides that a person who, in bad faith, through
undue influence, or through the commission of elder or dependent
adult financial abuse, has taken, concealed, or disposed of
property that belongs to a principal under a power of attorney,
the person may, in the court's discretion also be liable for
reasonable attorney's fees and costs.
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), Chapter 49, Statutes of 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.
In 2011, the Legislature enacted AB 354 (Silva, Chapter 55,
Statutes of 2011), which extended the double damage award to
actions against a person who 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 6/4/13)
Conference of California Bar Associations (source)
AFSCME
California Advocates for Nursing Home Reform
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California Alliance for Retired Americans
California Association for Health Services at Home
California Commission on Aging
California Long-Term Care Ombudsman Association
California Police Chiefs Association, Inc.
California Senior Legislature
Consumer Attorneys of California
Contra Costa County Advisory Council on Aging
County Welfare Directors Association of California
Law Offices of Steven Riess
WISE & Health Aging Elder Abuse Prevention Program
ARGUMENTS IN SUPPORT : According to the author:
Financial abuse of vulnerable California citizens,
particularly elders and dependent adults, has increased in
recent years, and will almost certainly continue to do so as
the financially strong Baby Boom generation continues to age.
In 2011, the Legislature took one of several steps (AB 354,
Chapter 55) to protect the elderly by specifying that Probate
Code [Section] 859, which assesses double damages against
persons who misappropriate the property of conservatees,
wards, decedent's estates, and other vulnerable persons, also
protected victims of elder financial abuse and bad faith undue
influence. However, the 2011 legislation didn't make a
similar change in the power of attorney law (Probate Code
[Section] 4231.5), which also provides for double damages when
an attorney-in-fact is found to have misappropriated the
property of his principal. AB 381 corrects this oversight,
ensuring that elders, dependent adults and victims of bad
faith undue influence are also protected from bad faith
misappropriation by attorneys-in-fact.
In addition, there are many instances where the attorney's
fees incurred seeking redress greatly exceed the remedy of
double the value of the property misappropriated, and the
rightful property owners have to decide whether they can
afford the cost of seeking justice. The rightful property
owners should not have to bear the burden of deciding whether
they should attempt to recover property that is rightfully
theirs because the attorney fees and costs might exceed the
value of the property, and persons acting wrongfully and/or in
bad faith should not benefit from their behavior because it is
too costly for the wronged party to seek redress. AB 381
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solves this problem by adding attorney's fees and costs to the
award in successful cases to recover property that has been
misappropriated.
ASSEMBLY FLOOR : 77-0, 4/15/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Roger Hernández, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Torres, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Harkey, Lowenthal, Vacancy
AL:k 6/4/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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