BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 156|
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VETO
Bill No: SB 156
Author: Beall (D), et al.
Amended: 8/19/13
Vote: 21
SENATE JUDICIARY COMMITTEE : 7-0, 4/23/13
AYES: Evans, Walters, Anderson, Corbett, Jackson, Leno, Monning
SENATE FLOOR : 37-0, 4/29/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Monning, Nielsen, Padilla,
Pavley, Price, Roth, Steinberg, Walters, Wolk, Wright, Wyland,
Yee
NO VOTE RECORDED: Liu, Vacancy, Vacancy
ASSEMBLY FLOOR : 55-22, 8/26/13 - See last page for vote
SENATE FLOOR : 26-12, 8/30/13
AYES: Beall, Block, Calderon, Corbett, Correa, De León,
DeSaulnier, Evans, Galgiani, Hancock, Hernandez, Hill, Hueso,
Jackson, Lara, Leno, Lieu, Liu, Monning, Padilla, Pavley,
Roth, Steinberg, Torres, Wright, Yee
NOES: Anderson, Berryhill, Cannella, Emmerson, Fuller, Gaines,
Huff, Knight, Nielsen, Vidak, Walters, Wyland
NO VOTE RECORDED: Wolk, Vacancy
SUBJECT : Conservatorships and guardianships: attorney's fees
SOURCE : California Senior Legislature
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DIGEST : This bill prohibits a guardian or conservator from
being compensated from the estate for any costs or fees,
including attorney's fees, incurred in defending the
compensation in the petition, if the court reduces or denies the
compensation requested in the petition.
ANALYSIS :
Existing law:
1.Requires that a guardian or conservator be allowed payment for
reasonable expenses incurred in the exercise of the powers and
performance of his/her duties (including costs of surety bonds
furnished, reasonable attorney's fees, and other just and
reasonable compensation for services rendered to the adult
(conservatee) or minor child (ward)) and for other reasonable
expenses, 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 at that time or to the
guardian's or conservator's attorney for services rendered to
that time. (Prob. Code Sec. 2640 (a).)
3.Requires, upon the hearing, the court to make an order
allowing, (a) any compensation requested in the petition the
court determines is just and reasonable to the guardian or
conservator of the estate and/or person for services rendered,
and (b) any compensation requested in the petition the court
determines is reasonable to the guardian's or conservator's
attorney for services rendered. The compensation allowed to
the guardian or conservator of the person or estate, and to
the attorney, may, in the discretion of the court, include
compensation for services rendered before the date of the
order appointing the guardian or conservator. The
compensation allowed shall thereupon be charged to the estate.
(Prob. Code Sec. 2640 (c).)
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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, unless the court determines that the
opposition was made in good faith, based on the interests of
the ward or conservatee. (Prob. Code Sections. 2623 (b), 2640
(d).)
5.Prohibits 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 provided specified actions have been taken.
This bill prohibits a guardian or conservator from being
compensated from the estate for any costs or fees, including
attorney's fees, incurred in defending the compensation in the
petition, if the court reduces or denies the compensation
requested in the petition.
Background
In California, if an adult is unable to manage his/her financial
matters, a conservator of the estate may be appointed by a court
to manage the adult's (conservatee's) financial matters. If the
adult is unable to manage his/her medical and personal
decisions, a conservator of the person may be appointed.
Similarly, a guardian of the estate or person may be appointed
for a ward.
A guardian or conservator 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
or personal matters. The guardian or conservator is required to
file a petition for fees for services rendered with the court.
If the fee petition is challenged (filed as an objection to the
fee petition), presumably by an individual acting on behalf of
the conservatee or ward, and the guardian or conservator does
not prevail on the fee petition, the guardian or conservator is
prohibited from receiving compensation from the estate for any
costs or fees that the guardian or conservator incurred in
litigating the fee petition, unless the court determines that
the guardian's or conservator's opposition to the fee petition
objection was made in good faith, based on the interests of the
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ward or conservatee.
A recent Mercury News article exposed a problem with the
difficulty of conservatees and wards in challenging exorbitant
fee petitions. The article reported that "a six-month
investigation by this newspaper found a small group of Santa
Clara County'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." (de Sá, Santa Clara County's
court-appointed personal and estate managers are handing out
costly and questionable bills, Mercury News (June 30, 2012)
[as of Apr. 14, 2013].) Conservatees and wards,
under existing law, may be required to pay the litigation costs
of the conservator and guardian, but existing law does not
similarly allow a conservatee or ward to recover their
litigation costs, even if he/she is successful in challenging
the fee petition.
This bill alters the existing one-way fee shifting provision and
provides a two-way fee shifting provision to authorize an award
of attorney's fees and costs to the prevailing objector to a fee
petition.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 8/27/13)
California Senior Legislature (source)
California Public Defenders Association
Santa Clara County Board of Supervisors
OPPOSITION : (Verified 8/27/13)
Professional Fiduciary Association of California
ARGUMENTS IN SUPPORT : According to the author's office,
conserved adults who are being overcharged by estate managers
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face a dilemma when they go to court to contest questionable
costs: They must pay the conservator's legal fees - even if a
judge ultimately finds the conservators had filed unjustified or
exorbitant bills. Many times, this gap in the law has placed
California's elderly and disabled adults in the untenable
position of choosing to accept the overcharges solely because it
will cost more to challenge them in court, win or lose.
ARGUMENTS IN OPPOSITION : The Professional Fiduciary
Association of California (PFAC) writes, "As amended, SB 156
would create an unbalanced and unreasonable new prohibition
against court-appointed guardians and conservators receiving
their costs and fees in defending their petition for
compensation when-ever the court reduces the amount requested in
the petition by even one dollar.
PFAC is also troubled that this legislation would have a
negative impact on the population the Members serve as licensed
professional fiduciaries by actively discouraging the qualified
and the concerned from entering the profession or continuing to
take on these types of cases.
In addition, the amendments significantly revise the substance
and public policy issues that were considered by the Assembly
Judiciary Committee when the bill was heard on June 19 and PFAC
had a "neutral" position. The bill in its current form has not
been considered in a policy committee hearing."
GOVERNOR'S VETO MESSAGE:
"I am returning Senate Bill 156 without my signature.
This bill would eliminate a court's discretion to compensate
a guardian or conservator from the conservatee's estate for
costs incurred to defend a fee request if the court reduces
the fee request by even a small amount.
I believe that judges exercise their discretion under
existing law governing compensation for defense costs in a
fair and balanced way. Nevertheless, the bill could have
improved the process had the last amendment to the bill not
eliminated the three qualifying criteria under which a judge
could award some or all of the defense costs. I cannot sign
this bill without them."
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ASSEMBLY FLOOR : 55-22, 8/26/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bloom, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong,
Frazier, Garcia, Gomez, Gonzalez, Gordon, Gray, Hall, Roger
Hernández, Holden, Jones-Sawyer, Levine, Linder, Logue,
Lowenthal, Medina, Melendez, Mitchell, Mullin, Muratsuchi,
Nazarian, Pan, Perea, V. Manuel Pérez, Quirk, Quirk-Silva,
Rendon, Salas, Skinner, Stone, Ting, Weber, Wieckowski,
Williams, Yamada, John A. Pérez
NOES: Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Beth
Gaines, Gatto, Gorell, Grove, Hagman, Harkey, Jones,
Maienschein, Mansoor, Morrell, Nestande, Olsen, Patterson,
Wagner, Waldron, Wilk
NO VOTE RECORDED: Fox, Vacancy, Vacancy
AL:ejd 1/6/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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