BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
AB 477 (Chau)
As Amended June 24, 2013
Hearing Date: July 2, 2013
Fiscal: Yes
Urgency: No
TMW
SUBJECT
Elder and Dependent Adult Abuse: Mandated Reporting
DESCRIPTION
This bill, in the Elder Abuse and Dependent Adult Civil
Protection Act (EADACPA), would make a notary public who has
observed or has knowledge of elder or dependent adult financial
abuse, as specified, a mandated reporter of suspected financial
abuse of elders and dependent adults. This bill would also
prohibit a notary public from performing a notarial act for an
elder or dependent adult in certain circumstances.
This bill would make a failure by a mandated reporter to report
suspected financial abuse of an elder or dependent adult subject
to civil penalties currently imposed on other mandated reporters
of elder or dependent adult abuse, and make such penalties
payable by the mandated reporter to the party bringing the
action.
This bill would add these new mandated reporters to the list of
other mandated reporters of elder and dependent adult abuse who
are immunized from criminal or civil liability for any report
required or authorized by law and make other conforming
revisions to EADACPA.
This bill would exempt financial officers, who are currently
mandated reporters under EADACPA, from the notary public
provisions.
This bill would revise the attorney-client privilege provision
under EADACPA to provide the privilege for information protected
(more)
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by the attorney-client privilege.
BACKGROUND
In 1982, the Legislature enacted AB 1805 (Felando, Ch. 1184,
Stats. 1982), the Older Californians Act, which provided
voluntary and mandatory abuse reporting provisions regarding the
actual or suspected physical or other abuse for elders. In
1985, the Legislature repealed those provisions and combined
elder and dependent adult abuse reporting provisions. (See AB
3988 (Papan, Ch. 1164, Stats. 1985).) In 1991, these
protections were titled the Elder Abuse and Dependent Adult
Civil Protection Act (EADACPA). (See SB 679 (Mello, Ch. 774,
Stats. 1991).) In 1994, the Legislature recodified and recast
elder and dependent adult abuse reporting requirements. (See SB
681 (Mello, Ch. 594, Stats. 1994).)
In 2005, the Legislature enacted SB 1018 (Simitian, Ch. 140,
Stats. 2005), which established the Financial Elder Abuse
Reporting Act of 2005 (Act) so that individuals in a position of
witnessing elder or dependent adult financial abuse would make
timely reports to law enforcement or adult protective services
in order to protect elderly and dependent adults from financial
predators. Under the Act, all officials and employees of
specified financial institutions are considered mandated
reporters of elder financial abuse. The Act immunizes these
mandated reporters from civil or criminal liability for making
these reports but provides civil penalties for failing to report
financial abuse and the failure to report resulted in death or
great bodily injury.
This bill, sponsored by the California Senior Legislature, seeks
to further protect elders and dependent adults from financial
abuse by requiring a notary public to be a mandated reporter of
elder and dependent adult financial abuse under EADACPA. This
bill would apply to notaries similar civil penalties and
requirements for financial officers established under the Act.
This bill was heard by the Senate Human Services Committee on
June 11, 2013, and passed out on a vote of 4-2.
CHANGES TO EXISTING LAW
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
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neglect and specifically requires mandated reporting by
specified entities of elder and dependent adult physical or
financial abuse. (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 provides that any person who has assumed full or
intermittent responsibility for the care or custody of an elder
or dependent adult, whether or not he or she receives
compensation, including administrators, supervisors, and any
licensed staff of a public or private facility that provides
care or services for elder or dependent adults, or any elder or
dependent adult care custodian, health practitioner, clergy
member, or employee of a county adult protective services agency
or a local law enforcement agency, is a mandated reporter of
elder and dependent adult physical or financial abuse. (Welf. &
Inst. Code Sec. 15630.)
Existing law requires county adult protective services to
report, as specified, instances of reported elder and dependent
adult financial abuse. (Welf. & Inst. Code Sec. 15640.)
Existing law , as part of the Financial Elder Abuse Reporting Act
of 2005, requires mandated reporting of elder and dependent
adult financial abuse by certain financial institutions, as
specified, and provides civil and criminal penalties for failing
to report elder and dependent adult financial abuse, as
specified. (Welf. & Inst. Code Sec. 15630.1.)
Existing law provides that mandated reporting requirements do
not require an attorney to violate his or her oath and duties
pursuant to attorney-client confidentiality privileges. (Welf.
& Inst. Code Secs. 15632(b), 15637; Evid. Code Sec. 950 et seq.)
Existing law provides that reports made by mandated reporters
are confidential and may be disclosed only to specified
entities. A confidentiality violation is a misdemeanor
punishable by up to six months in the county jail, a fine of
$500, or both. (Welf. & Inst. Code Sec. 15633.)
Existing law provides immunity from civil and criminal
prosecution to mandated reporters of elder or dependent adult
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financial abuse and authorizes specified mandated reporters to
present a claim to the California Victim Compensation and
Government Claims Board for reasonable attorney's fees incurred
if the mandated reporter prevails in action made against the
mandated reporter on the basis of making a report required under
EADACPA. (Welf. & Inst. Code Sec. 15634.)
Existing law requires the county adult protective services to
provide financial abuse instructional materials to mandated
reporters. (Welf. & Inst. Code Sec. 15655.5.)
This bill would define "mandated reporter of suspected financial
abuse of an elder or dependent adult" or "mandated reporter" to
mean notaries public.
This bill would require any notary public, who, in connection
with providing notary services, has observed or has knowledge of
suspected financial abuse of an elder or dependent adult, to
report the known or suspected instance of financial abuse by
telephone or through a confidential Internet reporting tool
immediately, or as soon as practicably possible. If reported by
telephone, the notary public must also submit a written or an
Internet report through the confidential Internet reporting tool
within two working days to the local adult protective services
agency or the local law enforcement agency.
This bill would exempt financial officers, who are currently
mandated reporters under EADACPA, from the notary public
mandated reporting provisions.
This bill would provide that when two or more mandated reporters
jointly have knowledge or reasonably suspect that financial
abuse of an elder or a dependent adult for which the report is
mandated has occurred, and when there is an agreement among
them, the telephone report or Internet report may be made by a
member of the reporting team who is selected by mutual
agreement. A single report may be made and signed by the
selected member of the reporting team, and any member of the
team who has knowledge that the member designated to report has
failed to do so would be required to make that report.
This bill would require that if the mandated reporter knows that
the elder or dependent adult resides in a long-term care
facility, the report must be made to the local ombudsman or
local law enforcement agency.
This bill would provide that an allegation by the elder or
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dependent adult, or any other person, that financial abuse has
occurred is not sufficient to trigger the reporting requirement
if both of the following conditions are met:
the mandated reporter of suspected financial abuse of an elder
or dependent adult is aware of no other corroborating or
independent evidence of the alleged financial abuse of an
elder or dependent adult; however, the mandated reporter of
suspected financial abuse of an elder or dependent adult is
not required to investigate any accusations; and
in the exercise of his or her professional judgment, the
mandated reporter of suspected financial abuse of an elder or
dependent adult reasonably believes that financial abuse of an
elder or dependent adult did not occur.
This bill would provide that failure to report financial abuse
is subject to a civil penalty up to $1,000, or if the failure to
report is willful, a civil penalty up to $5,000, which must be
paid by the mandated reporter to the party bringing the action.
This bill would provide that the civil penalty can be recovered
only in a civil action brought against the mandated reporter by
the Attorney General, district attorney, or county counsel; no
action can be brought by any person other than the Attorney
General, district attorney, or county counsel, and multiple
actions for the civil penalty cannot be brought for the same
violation.
This bill would define "suspected financial abuse of an elder or
dependent adult" to mean when a person who is required to report
observes or has knowledge of behavior or unusual circumstances
or transactions, or a pattern of behavior or unusual
circumstances or transactions, that would lead an individual
with like training or experience, based on the same facts, to
form a reasonable belief that an elder or dependent adult is the
victim of financial abuse.
This bill would make reports of suspected financial abuse of an
elder or dependent adult made by a mandated reporter a
privileged publication not subject to a defamation action.
This bill would prohibit a notary public from performing a
notarial act for an elder or dependent adult in the either of
following circumstances:
the elder or dependent adult has a demeanor that causes the
notary public to have a compelling doubt about whether the
elder or dependent adult understands the consequences of the
transaction or document requiring the notarial act; or
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in the notary public's judgment, the elder or dependent adult
is not acting of his or her own free will.
This bill would clarify that the attorney-client privilege is
not solely applicable to attorneys but rather applies to the
information that would otherwise be required to be reported.
This bill would add these new mandated reporters to the list of
other mandated reporters of elder and dependent adult abuse who
are immunized from criminal or civil liability for any report
required or authorized by law and make other conforming
revisions.
COMMENT
1. Stated need for the bill
The author writes:
AB 477 helps protect California seniors by making notaries
public mandated reporters of financial abuse of an elder or
dependent adult.
Financial elder abuse has increased in California and will
continue to do so with its growing aging population.
California has the largest population of older Americans in
the United States, with the US Census Bureau projecting the
elderly population growing from 3.7 million to 6.4 million
over the next 20 years. These projections coupled with the
baby boomer's financial strength, set the groundwork for
potential financial elder abuse.
The Elder Abuse and Dependent Adult Civil Protection Act
[(EADACPA)] currently requires certain parties and
institutions, known as mandated reporters, to report known or
suspected financial abuse of an elder or dependent adult by
telephone or through a confidential internet reporting tool
immediately, or as soon as practically possible.
In turn, notaries play a key role in lending integrity to
important transactions of commerce and law through the
verification of signatures and of legal transactions. Again,
their exposure to a wide array of legal documents places them
in a key position to recognize potential instances of
financial elder or dependent adult abuse. AB 477 further
protects California seniors by making notaries public mandated
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reporters of financial abuse of an elder or dependent adult.
2. Requiring a notary public to be a mandated reporter of elder
and dependent adult abuse
Existing law requires employees of financial institutions and
specified individuals who provide care for elders and dependent
adults to report suspected financial abuse of elders and
dependent adults. Existing law provides immunity for these
mandated reporters from criminal and civil actions for releasing
financial information under the mandated reporting statutes.
However, mandated reporters are subject to civil and criminal
penalties for failing to report financial abuse of elder and
dependents adults, as specified. This bill would add notaries
public to the list of mandated reporters of suspected elder and
dependent adult financial abuse and utilize provisions similar
to those of financial officers and employees who are mandated
reporters.
Proponents of this bill argue that notaries public "play a key
role in lending integrity to important transactions of commerce
and law through the verification of signatures and of legal
transactions. Their exposure to a wide array of legal documents
places them in a key position to recognize potential instances
of financial elder or dependent adult abuse." The author notes
that a recent brief issued by the Center of Excellence on Elder
Abuse and Neglect at the University of California, Irvine
reported that "[a]ccording to the 2010 Census, there are 4.2
million people age 65 or older in California. The best and most
recent major studies on elder abuse incidence reported that 7.6
[percent] - 10 [percent] of study participants experienced abuse
in the prior year. It is noteworthy that the study incidence
finding of 1 in 10 adults experiencing abuse did not include
financial abuse, one of the most prevalent types of elder abuse.
This research would suggest that, in California, hundreds of
thousands of vulnerable elder adults are abused annual. This is
supported by the California Attorney General's Office estimate
that 200,000 vulnerable adults (i.e. elder and dependent adults)
are abused in our state every year." (Elder Abuse Issue Brief
(Mar. 2013) Center of Excellence on Elder Abuse and Neglect,
Univ. of Cal., Irvine) p. 1.)
This brief recommended several policy actions to address elder
and dependent adult abuse, including increasing the number of
professionals required to report suspected elder and dependent
adult financial abuse. (Id. at p. 3.) Consistent with that
brief, this bill would expand the scope of individuals, to
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include notary publics, who are required to report suspected
elder and dependent adult financial abuse.
3. Information protected under attorney-client privilege
Existing law provides that mandated reporting requirements do
not require an attorney to violate his or her oath and duties
pursuant to attorney-client confidentiality privileges. (Welf.
& Inst. Code Secs. 15632(b), 15637; Evid. Code Sec. 950 et seq.)
However, this provision, specifically applicable to attorneys,
does not appear to provide the information privilege for
paralegals, legal assistants, legal secretaries, or other legal
personnel performing services for the attorney and client.
Evidence Code Section 954 provides that the relationship of
attorney and client exists between a law corporation and the
persons to whom it renders professional services, as well as
between such persons and members of the State Bar employed by
such corporation to render services to such persons.
Furthermore, a confidential communication between a client and
lawyer is defined as information transmitted between a client
and his or her lawyer in the course of that relationship and in
confidence by a means that does not disclose the information to
third persons, other than those who are present, to further the
interest of the client in the consultation or those to whom
disclosure is reasonably necessary for the transmission of the
information or the accomplishment of the purpose for which the
lawyer is consulted. (Evid. Code Sec. 952.)
In order to clarify that the mandated reporting requirements
under EADACPA do not require a mandated reporter, whether or not
an attorney, to disclose information that is confidential under
the attorney-client privilege, this bill would refocus the
privilege to apply to the information that is protected rather
than the individual who may claim the privilege. In this way, a
financial officer, employee, attorney, or other legal
professional would be able to maintain a client's
confidentiality as otherwise required by law.
4. Training a mandatory reporter
Before a potential mandated reporter becomes obligated to
report, this bill would require the notary public to have
observed or have knowledge of an incident that "reasonably
appears to be financial abuse" or he or she must "reasonably
suspect that abuse." Yet, this bill does not require notaries
public to be trained regarding signs or indications of financial
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abuse. The value of training in combination with a reporting
program was raised when the mandatory reporting provisions were
enacted for financial officers and employees in SB 1018
(Simitian, Ch. 140, Stats. 2005). At that time, the value of
training was acknowledged in a report issued by the American Bar
Association , entitled "Can Bank Tellers Tell? Legal Issues
Relating to Banks Reporting Financial Abuse of the Elderly."
Although this bill does not provide for any training
requirements, recent amendments would require the county adult
protective services to provide financial abuse instructional
materials to notary publics in the same manner these materials
are currently provided to other mandated reporters.
Furthermore, this bill bases mandatory reporting of "suspected
financial abuse of an elder or dependent adult" on whether an
individual with "like training or experience" would have a
reasonable belief that the elder or dependent adult was a victim
of financial abuse. (See proposed Welf. & Inst. Code Sec.
15630.2(g).) Presumably, a notary public, who had no formal
training to spot elder or dependent adult financial abuse but
relied on the materials received from the county adult
protective services, would have less liability for failing to
report than a person who had received formal training.
5. Penalties for failing to report: no criminal liability, civil
penalty payable notary public
Welfare and Institutions Code 15630(h) imposes both criminal and
civil penalties on mandated reporters who violate the reporting
requirements of EADACPA. However, this bill would exempt notary
publics from this provision because the other mandated reporters
are caregivers to the elder or dependent adult, and are
generally involved in their physical, emotional, psychological
and spiritual wellbeing. In their case, the failure to report
could result in serious physical harm to the elder or dependent
adult, but, in the case of the mandated reporter of financial
abuse, the immediate harm would be financial, although in the
long term this loss could have implications to the elder or
dependent adult's health and safety.
Under this bill, the failure to report would subject the notary
public to civil penalties of up to $1,000, and up to $5,000 if
the failure to report is willful. Unlike the penalties for
financial officers, which would be payable by the financial
institution, the penalties would be payable by the notary
public.
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6. Civil immunity and attorney's fees
Existing law provides immunity from civil and criminal
prosecution to mandated reporters of elder or dependent adult
financial abuse and authorizes a care custodian, clergy member,
health practitioner, employee of an adult protective services
agency, or a local law agency to present a claim to the
California Victim Compensation and Government Claims Board for
reasonable attorney's fees incurred if the mandated reporter
prevails in action made against the mandated reporter on the
basis of making a report required under EADACPA.
The National Notary Association (NNA), previously opposed,
requested that notaries public be awarded attorney's fees
incurred in defending themselves against actions brought
challenging a valid mandated report. Accordingly, the author
amended the bill to add mandated reporters to the list of other
authorized persons eligible to present a claim to the California
Victim Compensation and Government Claims Board for attorney's
fees.
7. Prohibiting notary acknowledgment of certain documents
This bill would prohibit a notary public from performing a
notarial act for an elder or dependent adult in the either of
following circumstances:
the elder or dependent adult has a demeanor that causes the
notary public to have a compelling doubt about whether the
elder or dependent adult understands the consequences of the
transaction or document requiring the notarial act; or
in the notary public's judgment, the elder or dependent adult
is not acting of his or her own free will.
Although notaries public currently are not required to
acknowledge documents, this bill would provide notaries public
with statutory authorization to decline to acknowledge documents
if there is an indication that the person may be signing the
document against their own will or a suspicion of financial
abuse. Arguably, this provision would protect the notary public
against any age discrimination claims if the notary public
declines to acknowledge documents under these circumstances.
8. Opposition concerns
The California Escrow Association (CEA) and California Land
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Title Association (CLTA), opposed unless amended, raise numerous
concerns that would apply to all notaries public, not just those
employed by escrow companies or title insurers. Notably, the
NNA has not raised any similar concerns. Yet, the reasoning
behind the concerns raised by CEA and CLTA centers on why
notaries public who provide escrow or sub-escrow services in a
real property transaction should be excluded from this bill.
The reasons asserted by CEA and CLTA for excluding these
notaries are as follows:
Forcing notaries to "second guess" or refuse to notarize
documents could have a huge and unintended impact on real
estate transactions :
Despite the opportunity for financial redress included in
the most recent version of the bill, this does not consider
the very real and significant financial implications of a
notarial act refused or improperly reported that results in
the delay of the closing of a real estate transaction out
of an abundance of caution.
The financial downside of a transaction lost because of
notary concerns or reporting is not adequately addressed in
the bill, and does not take into account that the interests
other parties (sellers, buyers, real estate brokers,
lenders, and others) that could be significantly negatively
impacted.
Escrow and title company notaries should be exempted
from the bill :
Notaries who are escrow holders and title insurers and
title insurers who act in a neutral transactional capacity
should be exempt. Most of the fraud noted by proponents is
likely attributed to documents such as powers of attorney,
executed outside of a transaction and without the benefit
of counsel, whether that transaction is estate planning by
an attorney, or a bona fide transaction such as the sale of
property.
The author asserts that the purpose of the bill is to identify
additional individuals who come in contact with seniors and
dependent adults that may be victims of financial abuse. A
notary public is the last person who could identify a concern
with the transaction before it is finalized. Furthermore, the
notary public would not have any burdens beyond those of other
mandated reporters identified by the Legislature as someone who
should report an unusual circumstance in order to protect these
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victims from financial abuse.
Support : AARP California; American Federation of State, County
and Municipal Employees, AFL-CIO; California Association for
Health Services at Home; California Commission on Aging;
California Long-Term Care Ombudsman Association; California
Police Chiefs Association, Inc.; Congress of California Seniors;
Consumer Attorneys of California; Consumer Federation of
California; County Welfare Directors Association of California;
two individuals
Opposition : California Escrow Association; California Land
Title Association; Escrow Institute of California
HISTORY
Source : California Senior Legislature
Related Pending Legislation : None Known
Prior Legislation :
AB 1525 (Allen and Alejo, Ch. 632, Stats. 2012) See Comment 4.
SB 718 (Vargas, Ch. 373, Stats. 2011) authorized a mandated
reporter to submit a report of suspected elder and dependent
adult abuse through the use of a confidential Internet reporting
tool.
SB 33 (Simitian, Ch. 372, Stats. 2011) removed the sunset date
of the Financial Elder Abuse Report Act of 2005.
SB 1018 (Simitian, Ch. 140, Stats. 2005) See Background; Comment
4.
SB 681 (Mello, Ch. 594, Stats. 1994) See Background.
SB 679 (Mello, Ch. 774, Stats. 1991) See Background.
AB 3988 (Papan, Ch. 1164, Stats. 1985) See Background.
AB 1805 (Felando, Ch. 1184, Stats. 1982) See Background.
Prior Vote :
Senate Committee on Human Services (Ayes 4, Noes 2)
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Assembly Floor (Ayes 59, Noes 16)
Assembly Committee on Aging and Long Term Care (Ayes 6, Noes 1)
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