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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