BILL ANALYSIS Ó
SB 156
Page 1
SENATE THIRD READING
SB 156 (Beall)
As Amended June 19, 2013
Majority vote
SENATE VOTE :37-0
JUDICIARY 9-0
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|Ayes:|Wieckowski, Wagner, | | |
| |Alejo, Chau, Dickinson, | | |
| |Garcia, Maienschein, | | |
| |Muratsuchi, Stone | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Substantially limits a guardian or conservator from
collecting "fees on fees." Specifically, this bill :
1)Provides that a guardian or conservator may not be compensated
from the ward's or conservatee's estate for any costs or fees,
including attorney's fees, that the guardian or conservator
incurred in defending the compensation in the petition, which
compensation the court reduced or denied.
2)Provides, however, if the guardian or conservator proves to
the satisfaction of the court all of the following, then the
court has the discretion to grant or deny, in whole or in
part, an additional fee request:
a) The guardian or conservator made a reasonable and good
faith attempt at an informal resolution of each issue
presented by the objection to the compensation in the
petition;
b) The guardian or conservator acted in good faith and with
substantial justification in defending the petition, taking
into consideration the objections thereto, if any; and
c) It is in the best interest of the ward or conservatee to
make such an award.
EXISTING LAW :
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1)Requires that a conservator or guardian be allowed payment for
reasonable expenses incurred in the exercise of the powers and
performance of his or her duties, including costs of surety
bonds furnished, reasonable attorney's fees, and other just
and reasonable compensation for services rendered to the
conservatee or ward, as specified.
2)Provides that, at any time after the filing of the inventory
and appraisal, but not before the expiration of 90 days from
the issuance of letters or any other period of time as the
court for good cause orders, the guardian or conservator of
the estate may petition the court for an order fixing and
allowing compensation to the guardian or conservator of the
estate or person for services rendered to that time or to the
guardian's or conservator's attorney for services rendered to
that time.
3)Requires the court, at a hearing on the fee petition, to make
an order allowing a) any compensation requested that the court
determines is just and reasonable to the guardian or
conservator for services rendered, and b) any compensation
requested that the court determines is reasonable to the
guardian's or conservator's attorney for services rendered.
Allows the compensation to the guardian or conservator, and to
the attorney, in the discretion of the court, to include
compensation for services rendered before the date of the
order appointing the guardian or conservator. Provides that
the compensation allowed be charged to the estate.
4)Provides that the guardian or conservator shall not be
compensated from the estate for any costs or fees that the
guardian or conservator incurred in unsuccessfully opposing a
petition, or other request or action, made by or on behalf of
the ward or conservatee, including a fee petition, unless the
court determines that the opposition was made in good faith,
based on the best interests of the ward or conservatee.
FISCAL EFFECT : None
COMMENTS : A guardian or conservator may be appointed to manage
the affairs of a child or an adult who is unable to do so for
himself or herself. The guardian or conservator is authorized
to charge the ward's or conservatee's estate for services
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rendered in connection with managing their financial or personal
matters. If a fee petition is challenged today, the guardian or
conservator can charge the estate fees for opposing the
challenge to the fee petition, even in some cases if they lose,
provided they acted in good faith and in the best interest of
the ward or conservatee. This bill seeks to limit those "fees
on fees."
In November 2005, the Los Angeles Times published an in-depth
investigatory series, called "Guardians for Profit," which
dramatically exposed the failings of California's
conservatorship system for elderly and dependent adults. (Robin
Fields, Evelyn Larrubia, and Jack Leonard, Guardians for Profit
series, Los Angeles Times, November 13-17, 2005.) The Times'
articles included stories of private conservators who misused
the system and got themselves appointed inappropriately and then
either stole or mismanaged the money their conservatees spent a
lifetime earning; public guardians who did not have the
resources to help truly needy individuals, leaving them - poor,
alone and at risk of severe harm - to try and fend for
themselves; probate courts which did not have sufficient
resources to provide adequate oversight to catch the abuses; and
a system that provided no place for those in need to turn to for
help. The Times editorial which ran at the end of the series,
called on both the courts and elected officials to "turn this
abusive system into the honest guardianship it was meant to be."
(Deserving of Care, Los Angeles Times, November 17, 2005.)
In response to the shocking reports of abuse, the Legislature
passed the Omnibus Conservatorship and Guardianship Reform Act
(Act) of 2006, a landmark package of bills to overhaul
California's troubled conservatorship system. That legislation
was designed to remedy alarming deficiencies in California's
conservatorship system that had resulted in the abuses of
California's elderly and most vulnerable. Unfortunately, the
important new court oversights were never funded and, as a
result, are not mandated today. Thus, it is possible that some
of the same abuses which took place prior to the Act could still
be occurring today and that courts simply lack the oversight
resources to detect these abuses.
A conservator or guardian is authorized to charge the
conservatee's or ward's estate for services rendered in
connection with managing the conservatee's or ward's financial
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or personal matters. The conservator or guardian is required to
file a petition for fees for services rendered with the court.
The Omnibus Conservatorship and Guardianship Reform Act
substantially limited when conservators could collect "fees on
fees." Under that Act, if a fee petition is challenged,
presumably by an individual acting on behalf of the conservatee
or ward, and the conservator or guardian lose, the guardian or
conservator is prohibited from receiving compensation from the
estate for any costs or fees that he or she incurred in
litigating the fee petition, unless the court determines that
the opposition to the fee petition objection was made in good
faith, based on the best interests of the ward or conservatee.
Thus to get "fees on fees" when the conservatee or guardian
loses a fee petition, that person must be able to show that he
or she acted in good faith and in the best interest of the
conservatee or ward.
Unfortunately, problems with some conservators have continued.
A recent Mercury News series exposed a problem that conservatees
and wards may have in challenging exorbitant fee petitions. The
article reported that "a six-month investigation by this
newspaper found a small group of [Santa Clara] [C]ounty's
court-appointed personal and estate managers are handing out
costly and questionable bills -- and charging even more if they
are challenged. The troubling trend is enriching these private
professionals -- working as conservators and trustees -- and
their attorneys, with eye-popping rates that threaten to force
their vulnerable clients onto government assistance to survive."
(Karen de Sá, Santa Clara County's court-appointed personal and
estate managers are handing out costly and questionable bills,
Mercury News, June 30, 2012.)
The Mercury News article noted additional examples of
conservators charging inappropriate fees, but families being
reluctant to challenge those fees, based on the possibility of
being awarded "fees on fees": "In one case reviewed by this
newspaper, a conservator charged a Belmont dementia patient
$1,062 to help celebrate her birthday. Another billed an
incapacitated Sunnyvale couple $26,946, including attorneys'
fees, for the 12 days she spent sorting through mail and
orchestrating a cleanup of their roach-infested home." (Id.)
As discussed above, current law permits conservators and
guardians to get their litigation costs paid for by the
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conservatee's or ward's estates, but limits this if they
unsuccessfully opposed the ward or conservatee.
This bill very substantially reduces the risk that a ward or
conservatee who wins a challenge to a fee petition will have to
pay "fees on fees." As discussed above, current law provides
that, if a conservator or guardian is unsuccessful in defending
his or her fee petition, the conservator or guardian is not to
be compensated for the fees incurred in the unsuccessful
defense, unless the court determines that the conservator's or
guardian's defense was made in good faith, based on the best
interests of the conservatee or ward.
This bill significantly tightens that provision by prohibiting
conservators and guardians from receiving any compensation for
unsuccessfully defending their fee petitions, unless the
guardian or conservator proves to the satisfaction of the court
all of the following: 1) The guardian or conservator made a
reasonable and good faith attempt at an informal resolution of
each issue presented by the objection to the compensation in the
petition; 2) the guardian or conservator acted in good faith and
with substantial justification in defending the petition, taking
into consideration the objections thereto, if any; and 3) it is
in the best interest of the ward or conservatee to make an award
of costs or fees. Even in that case, the court may choose to
award some or all of the fees, but certainly retains the
discretion to deny any "fees on fees."
Analysis Prepared by : Leora Gershenzon / JUD. / (916)
319-2334 FN: 0001253