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Financial Elder Abuse Cases in California in the Real Estate context
This blog provides general legal information regarding the topic of financial elder abuse in California, with a focus on cases involving real estate law.We are seeing more and more applications of California’s financial elder abuse and dependent adult law that arise in a variety of real estate contexts.This is the first in several publications addressing the issue of elder abuse.
As many people know, elders (those 65 years and older) are the fastest growing segment of society in the United States.These persons have often worked very hard for what they have attained and accomplished only to find out that as they get older and perhaps more frail, other seek to take advantage of them, especially in the midst of a bad economy.Our firm is dedicated to fighting for the legal rights of seniors and dependent adults, especially where business and real estate issues are present, such as fraud, deceit, wrongful takings, coercian, duress, undue influence, abuses in power of attorney etc.
If you need a California elder abuse attorney to review your case you may contact us immediately at (877) 276-5048.The following is general legal information only, and is merely our opinion, and should not be relied on without first speaking to a lawyer to confirm the cases are accurate and up to date.The law is constantly evolving and open to interpretation.
Statutes that are relevant to the cases:
Cal. Welf. & Inst. Code § 15610.30: defines financial abuse of an elder. Subsection (a) provides that financial abuse of an elder occurs when a person does any of the following:
(1) takes the property of an elder for a wrongful use or with intent to defraud
(2) assists in taking the property of an elder for a wrongful use or with intent to defraud
(3) takes or assists in taking the property of an elder by undue influence
Subsection (b) provides that a person is considered to have taken for a wrongful use if they take the property and they knew or should have known that the conduct would likely to be harmful to the elder.
Cal. Welf. & Inst. Code §15657.5: defines the damages that are available in the event that the defendant is liable for financial elder abuse. Subsection (a) provides that a plaintiff may recover attorney’s fees and costs in addition to compensatory damages when it is proven by a preponderance of the evidence that the defendant is liable for financial abuse. Subsection (b) provides that when it is proven by a preponderance of the evidence that the defendant is liable for financial abuse and it is proven by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse, the plaintiff is entitled to all damages and fees from subsection (a) and additionally, the heirs or survivors in an elder abuse case may be awarded damages for the pain and suffering and emotional distress that the elder incurred before he or she died.
Cal. Welf. & Inst. Code § 15657.7: imposes a 4-year statute of limitations on financial elder abuse cases from the time the plaintiff discovers or, through the exercise of reasonable diligence, should have discovered, the facts constituting the financial abuse.
WARNING: DO NOT RELY ON THIS SECTION.CONTACT A CALIFORNIA ELDER ABUSE LAWYER.THERE MAY BE OTHER CAUSES OF ACTION THAT GO ALONG WITH ELDER ABUSE CASES THAT HAVE SHORTER STATUTES OF LIMITATIONS.
Financial Elder Abuse Cases in California:
Dougherty v. Gatti, WL 70690352 (2011)
This case is unreported (not citable in California courts) but the court neatly identifies all the elements necessary to recover on a financial elder abuse case.
The plaintiff must prove by a preponderance of the evidence that:
1. Defendant took or assisted in the taking of the plaintiff’s property
2. Plaintiff was an elder (above 65 years of age) or a dependant adult at the time of the conduct
3. Defendant took or assisted taking of the property for a wrongful use or with intent to defraud (wrongful use meaning that the defendant knew or should have known conduct would harm plaintiff)
4. Plaintiff was harmed; and
5. Defendant’s conduct was a substantial factor in causing plaintiff’s harm
To have your case reviewed by a California Elder Abuse lawyer, please contact Attorney Steve.
Das v. Bank of America, N.A., 186 Cal. App. 4th 727 (2010)
In 2009, the statue for financial abuse of an elder (Cal. Welf. & Inst. Code §15610.30) was amended to reduce the intent requirement for wrongful use from “acting in bad faith” to “knew of should have known that the conduct is likely to be harmful to the elder.” However, the amended statute is not retroactive in effect so a claim based on alleged financial elder abuse that occurred prior to 2009 must still prove the old standard of intent.
Appellant’s father (Kaustubh) suffered a stroke and developed dementia that severely compromised his ability to assess the motivations of other people and manage his finances. Some or all of Kaustubh’s deficiencies were readily apparent to casual observers. In early 2007, Kaustubh obtained a “suspicious” $105,000 mortgage loan from respondent bank. After a short period of time, Kaustubh defaulted on the loan and respondent foreclosed on the property.
Plaintiff appeals from judgment of dismissal in favor of defendant after the trial court sustained demurrers to complaints seeking damages for financial elder abuse against the plaintiff’s deceased father by granting him a predatory mortgage loan.
Is the plaintiff required to prove her facts according to the statute before or after is was amended in 2009?
RULE OF LAW:
Cal. Welf. & Inst. Code § 15610.30
Prior to 2009, the statute required a plaintiff to prove that the defendant committed financial elder abuse in bad faith in order to show that the defendant’s conduct was a wrongful use. In 2008, The Legislature made an amendment to the statute that became effective January 1, 2009. The amended statute only requires a plaintiff to demonstrate that the defendant knew or should have known that their conduct would likely be harmful to an elder.
Here, the appellant attempts to utilize the amended statute to support her claim but the statute became effective in 2009 and the alleged financial elder abuse occurred in 2007. The court holds that because there was no specific indication to the contrary, the amended statute was not intended to be retroactive and therefore they do not allow the appellant to use the amended statute to support her claim.
In accordance with the statute prior to its amendment, the appellant was required to demonstrate that the respondent acted in bad faith while committing financial elder abuse. Because her facts were insufficient to prove that, the court held that the lower court acted correctly in sustaining the respondent’s demurrer.
This case deals with the financial abuse of a dependant adult (which is essentially the same statute as financial abuse of an elder). It demonstrates that a successful financial elder abuse claim must demonstrate that the property was taken wrongfully or with intent to defraud.
Plaintiff Gina Stebley is a dependent adult, and the defendants had actual notice of her status. Plaintiffs borrowed on their residence and fell behind in their payments. Defendants abruptly foreclosed before informing plaintiffs or their former counsel of any decision on whether to grant a loan modification or otherwise refrain from foreclosing. Plaintiffs claim that the abruptness of the foreclosure caused them damage.
Plaintiffs Charles and Gina Stebley appeal from judgments of dismissal in favor of defendants Litton Loan Servicing LLP, Mortgage Electronic Registration Systems, Inc., Bank of New York Mellon, and WMC Mortgage, LLC, after the trial court sustained demurrers to complaints seeking damages and other relief for the purportedly wrongful foreclosure of plaintiffs’ residence.
Was the taking of the property “wrongful?”
RULE OF LAW:
Cal. Welf. & Inst. Code § 15610.30
The court agrees with the lower court’s reasoning that the just because the property was taken from a dependant adult, it does not necessarily mean that the taking was wrongful. They note that it is not tortious for a commercial lender to lend money, take collateral, and to foreclose on collateral when a debt is not paid.
Here, the plaintiffs claimed that the abruptness of the foreclosure caused them damage and was therefore wrongful. However, they failed to further explain how they incurred any such damages so the court could not find anything wrongful about the foreclosure.
In order to recover for financial elder abuse, the statute requires that the taking be wrongful or with intent to defraud or both and because the appellant’s could not prove that either element existed, the court affirmed the lower court’s decision to sustain the respondents’ demurrer.
Plaintiffs must pay respondents’ costs on appeal.
As this case points out, foreclosure cases aren’t always ripe for financial elder abuse cases.A borrower in default is not guaranteed relief by claiming elder abuse.However, there are circumstances where the loan servicer may be wrongfully “taking” money from a California senior citizen resulting in knowing damage to the Plaintiff.Call to have your case reviewed by a California elder abuse law firm.
Zimmer v. Nawabi, 566 F. Supp. 2d 1025 (2008)
Although the court is unable to decide on the appropriate damages at the time of this hearing, this case demonstrates the type of conduct that clearly constitutes financial elder abuse, even under the stricter standard that existed prior to the amendment of the statute in 2009.
The plaintiff was 79 years old at the outset of the events that follow. In 2005, an employee of the defendant contacted the plaintiff and discussed the possibility of the plaintiff refinancing her home. The plaintiff applied for a loan in 2006. The plaintiff was approved for a loan and the defendant met with her execute the loan documents. At that meeting, the defendant informed the plaintiff that her refinance would result in a single loan with a monthly payment of $2,400 for the first month and $1,500 for each month thereafter and receipt of $29,000 in cash at the close of escrow. At the end of that meeting, the defendant instructed the plaintiff to sign the loan documents without reading them, which the plaintiff did. When the plaintiff discovered that the terms of the loan were different than what the defendant had stated, he assured her that his word would supersede the written loan documents.
The plaintiff’s refinance resulted her being bound to two loans instead of one with a combined monthly payment of $3,316.26 ($3,542.93 with insurance and taxes), a rate increase in 2007, and receipt of only $4,326.87 in cash at the close of escrow. The terms of the refinance were not only worse than the defendant had represented they would be, but they were also worse than the plaintiff’s original mortgage. The defendant received $10,700 in broker fees.
After the plaintiff hired legal counsel, the defendant gave the plaintiff a “courtesy check” for $3,500 and asked her to sign what they told her was a receipt for the check. In actuality, the plaintiff had signed a release of liability.
Plaintiff initiated this action in state court and it was subsequently removed to federal court where the plaintiff now moves for summary judgment with respect to three of her state law claims against the defendant including financial abuse of an elder.
Is the plaintiff a victim of financial elder abuse?
RULE OF LAW:
Cal. Welf. & Inst. Code § 15610.30
The defendant acted in bad faith (which was the requirement prior to 2009) by not disclosing theactual terms of the loans and by instructing plaintiff to sign loan documents without actually reading them. Additionally, the broker’s fees were wrongfully obtained as result of the false statements about terms of refinance. Therefore the court held that the defendant’s conduct constituted “financial abuse” of elder under the California Elder Abuse Act.
The court sustained the plaintiff’s motion for summary judgment with respect to liability for her financial elder abuse claim against the defendant.
The plaintiff did not submit sufficient evidence with respect to the total damages she was seeking so a hearing to determine damages on the plaintiff’s financial elder abuse claim was set.
If you have a financial elder abuse case involving fraud, deceit, dishonest dealing, trickery, undul influence, or misuse of the power of attorney, contact us at (877) 276-5084.
Wood v. Jamison, 167 Cal. App. 4th 156 (2008)
The defendant in this case does not commit the taking directly in this financial elder abuse case but he assists with it and this case demonstrates that the consequences for assisting in the taking are the same as committing the taking itself because they are both equally considered elder financial abuse.
The plaintiff is the executor of Merle Peterson’s estate. At the time of these events, Peterson was 78 years old.
Peterson was approached by McComb, a scam artist, who was working in concert with the defendant. McComb convinced Peterson to take out a loan that she couldn’t afford against her primary residence so that he could open a nightclub. The defendant, an attorney, made all the loan arrangements for Peterson, despite the fact that he was not acting as her legal counsel. The defendant did not inform Peterson that the loan was inappropriate for her despite the fact that he knew she was elderly and could not afford the loan.
The defendant took a $4,000 finders fee from the proceeds of the loan and the rest were distributed directly to McComb. Peterson defaulted on the first payment of the loan and the lender initiated foreclosure proceedings. Peterson died a month later.
The plaintiff settled the foreclosure hearing with the lender for $118,322.23 and initiated this lawsuit against the defendant and McComb to recover for financial elder abuse. McComb did not answer the complaint or appear.
The trial court found Jamison committed financial abuse of an elder. The court awarded damages against Jamison in the amount of $118,322.23, the amount the plaintiff paid to the lender to settle the foreclosure. The trial court also awarded attorney fees. The defendant appeals the judgment.
Is the defendant liable for financial elder abuse if he only assisted in the majority of the taking?
RULE OF LAW:
Cal. Welf. & Inst. Code § 15610.30(a)(2)
The defendant argued that there was no evidence that he assisted McComb in committing financial elder abuse but the court didn’t agree with him. They said that he knew that McComb was going to take the proceeds from the loan with intent to defraud and even if he didn’t, any other attorney would have. Additionally they said that the defendant himself took Petereson’s property when he gave himself a finder’s fee from the proceeds of the loan because the loan proceeds were Peterson’s property.
The court felt that the lower court was correct in finding the defendant liable for elder financial abuse and they affirmed the judgment.
The court affirmed the lower court’s awarding of damages against Jamison in the amount of $118,322.23, which was what the plaintiff paid to the lending company to settle the foreclosure. The trial court also awarded attorney fees. Additionally, the plaintiff is awarded costs on appeal.
Here is another California reported case dealing with elder abuse law.
Bonfigli v. Strachan, 192 Cal. App. 4th 1302 (2011)
This case focuses on what qualifies as a taking. The lower court found that a taking had not occurred and the appellate court reversed the judgment.
Respondent was planning a large residential and commercial development project in an area where the appellants owned two parcels of land. Respondent was able to purchase one other the parcels but still needed the other parcel (Front Parcel). In 1996, the parties entered into an option contract that granted the respondent the right to purchase Front Parcel and to have power of attorney to do all things necessary or appropriate to carry out the development of Front Parcel in accordance with respondent’s current or future development plans. The option contract provided the appellants with monthly payments and was set to expire in 2001.
In 2000, the parties extended the power of attorney period to 2003. The option contract to purchase Front Parcel expired in July 2001 without being exercised.
In May 2001, prior to the expiration of the option contract, the respondents used their power of attorney to file a lot line adjustment for Front Parcel on the appellant’s behalf. The reasoning given for the lot line adjustment was that it was to reconfigure the lot line as desired by property owner. The respondents took the position that the adjustment increased the value of the appellant’s property, however, the adjustment effected the transfer of .71 acres of land from the appellants to the respondents. The appellants were never paid for this land transfer, nor were they made aware of it until 2003.
Appellants eventually sold Front Parcel for $550,000, which was $200,000 below the option price of $750,000. Prior to the appropriation of land by the respondents, Front Parcel was worth an estimated $2.5 million.
The plaintiffs are appealing a directed verdict against them regarding their financial elder abuse claim.
Did the lot line adjustment constitute a taking for the purposes of financial elder abuse?
RULE OF LAW:
Cal. Welf. & Inst. Code § 15610.30
The trial court granted respondents’ motion for a directed verdict because they did not believe that there is any clear and convincing evidence of any level required to recover for financial elder abuse. They did not believe that the lot line adjustment was a taking under the statute because the power of attorney was validly used.
Here, the court disagrees that the power of attorney was valid. Therefore there was no valid justification for the transfer of the appellant’s property without compensation and it was a taking. The court finds that these facts comprise a sufficient claim for financial elder abuse. Therefore they reverse the lower court’s ruling of a directed verdict motion.
Appellants recover costs on appeal.
Bell v. Mason, 194 Cal. App. 4th 1102 (2011)
This case does not involve an elder but it does involve a dependant adult so it uses the exact same statute. This case actually gives specific numbers for damages recovered.
The plaintiff entered into a contract to sell her house to the defendant at well below market value as a “sham” so that the plaintiff could improve her credit and then take out a loan to improve the house. The defendant did not treat the sale as a sham and eventually evicted the plaintiff from the premises.
The plaintiff claimed to be a dependant adult because she suffered from mental retardation. She additionally claimed that the defendant knew that plaintiff suffered from mental retardation and took advantage of plaintiff’s disabilities in gaining her trust and inducing her to enter into the transaction which deprived her of her home.
The trail court entered a judgment for damages in favor of the plaintiff including $204,500 in attorney fees. The defendant appeals the judgment.
Are the attorney’s fees appropriate?
RULE OF LAW:
Cal. Welf. & Inst. Code §15610.30
The defense alleged that the attorney’s fees were awarded because the plaintiff had succeeded in her financial abuse claim but that the financial abuse claim succeeded in error because the court incorrectly failed to allow evidence that established that plaintiff was not a dependant adult.
Although the court determines that the plaintiff proved sufficient facts to succeed on her financial abuse claim, they determined that the evidence that established that plaintiff was not a dependant adult was, in fact, improperly barred from trail. Therefore the plaintiff should not havesucceeded in her claim and the award of attorney fees should be reversed.
However, had the plaintiff been above the age of 65 in the exact circumstances, the attorney’s fees would likely have been affirmed because the statute is the exact same for elder and dependant adults and the other elements of financial abuse were proven.
Defendants recover costs on appeal and the damages awarded by trail court are reversed.
Conservatorship of Levitt, 93 Cal. App. 4th 544 (2002)
This case doesn’t really relate to real estate but it is a financial elder abuse case and it focuses on attorney’s fees that an attorney may be able to collect for working on a financial elder abuse case. More specifically it focuses on when an attorney’s fees might be reduced based on the value of the elder’s assets.
Both Levitt and Page were victims of financial elder abuse. Attorney Marc Hankin represented both of them and was able to win both of their financial abuse cases and place conservators in charge of their assets.
For his services with Levitt, Hankin requested $72,537.13 in attorney’s fees and $1,044.89 in expenses based on 324 hours of services at $225.00 per hour for the majority and $250.00 per hour for more recent services. Levitt’s assets were valued at an estimated $370,000 and the total of all attorney’s fees requested by all lawyers involved in the case was about $160,000.
For his services regarding Page, Hankin requested $82,515 in fees and $6,628 in costs for 363 hours in services rendered at the rate of $250 per hour. Page’s assets were valued at an estimated $130,000 and the total for all fee requests in her case was about $100,000.
The trail court ordered that Hankin be paid $64,000 for his services to Levitt and $69,000 for his services to Page, reductions of $9,582.03 and $13,414 respectively. Hankin appealed both reductions.
Should the attorney’s fees have been reduced?
RULE OF LAW:
Cal. Welf. & Inst. Code § 15657.5
Cal. Welf. & Inst. Code § 15657.1
The lower court reduced Hankin’s fees in both cases because the fees were too much considering the values of the assets of both of the elders. They noted that the courts typically do not like to award fees in excess of one-third of the value of an estate. In both cases the total fee requests were well over one-third.
Hankin claims that the court abused its discretion and that reducing his fees will set a bad precedent because it will deter lawyers from taking financial elder abuse cases, however the court is not persuaded. It is well established that the determination of what constitutes reasonable attorney’s fee is up to the court’s discretion and Cal. Welf. & Inst. Code §15657.1 clearly states that the value of an estate is an appropriate factor to consider in setting fees.
Therefore the court affirms the lower court’s reduction of Hankin’s attorney’s fees.
Hankin’s reduction in fees is affirmed and he must bear his own costs on appeal.
Financial elder abuse can take many forms, and the damages can be significant.If you have a business or real estate claim involving real or personal property contact us to discuss your case at email@example.com.Attorney Steve Vondran handles business, real estate and intellectual property matters involving financial elder abuse in California and Arizona.
Knox v. Dean, 205 Cal. App. 4th 417 (2012)
This case demonstrates how a conservator can “take” an elder’s property within the meaning of Cal. Welf. & Inst. Code § 15610.30 by not performing their duties adequately and failing to maximize profits for the elder.
In 2003, defendant became the conservator of plaintiff’s 90 year old father (Blaine). Blaine’s estate was valued at about $1.5 million and consisted of two apartment building, cars, and cash. In 2007, defendant resigned as conservator and plaintiff succeeded him.
Although defendant’s accountings of transactions that occurred in the performance of his duties were approved by probate court, plaintiff filed a complaint alleging elder financial abuse and other causes of action in 2007. Plaintiff contended that the defendant allowed a caregiver to live rent free in one of Blaine’s apartments, allowed two of his friends to rent Blaine’s apartments at below-market rents, acquiesced in improper billing from a care giving agency, overcharged Blaine’s estate for conservator services that were never performed or were unnecessary, and conspired to provide unnecessary care-giving services.
Defendant filed a motion for summary judgment on the grounds that plaintiff failed to allege facts that were sufficient to support her causes of action. The court granted defendant’s motion for summary judgment and plaintiff appealed.
Did the defendant’s conduct constitute a taking within Cal. Welf. & Inst. Code § 15610.30?
RULE OF LAW:
Cal. Welf. & Inst. Code § 15610.30
The defendant argued that plaintiff failed to allege that he “took” any property from Blaine’s estate within the meaning of Welfare and Institutions Code section 15610.30. However, the court finds that plaintiff’s allegations against the defendant, if proved, would be sufficient to establish a cause of action under Welfare and Institutions Code section 15610.30(b). Although not all of the allegations involved taking Blaine’s money in a traditional sense, the failure to collect rents or verify that billing against the estate was done properly can also deprive Blaine of money therefore they can also constitute a taking. The court concluded that plaintiff properly pleaded a cause of action for elder financial abuse and reversed the summary judgment against her.
Appellant was awarded costs.
Errico v. Pacific Capital Bank, 753 F. Supp. 2d 1034 (2010)
This case demonstrates that a lending institute can potentially commit financial elder abuse by convincing an elder to take on a less than favorable loan with the intention of collecting interest and fees.
The plaintiffs were 73 and 72 respectively at the outset of the following events. The plaintiffs allege that the defendants, who had previously acted as financial advisers to the plaintiffs, fraudulently and negligently induced the plaintiffs to obtain two loans from them to develop their property into an apartment complex. The plaintiffs further allege that as a result the plaintiffs were induced to mortgage their property to defendant and to incur interest charges, fees and other expenses associated with the loans and development of their property.
The plaintiffs alleged that the defendants represented that they would finance the entire project for 75% of the appraised value and that that never occurred. The plaintiffs allege that the defendants had no intention of delivering on the loan, but wanted to obtain fees, commissions, and the right to seize property.
Plaintiffs brought action against defendant alleging various claims including financial elder abuse. The defendant filed a motion to dismiss each of the claims.
Is the defendant liable for financial elder abuse?
RULE OF LAW:
Cal. Welf. & Inst. Code §15610.30
The court found that the plaintiff’s allegations that the defendant’s misrepresentation that they would finance the development project for 75% of the appraised value so that they could collect fees and interest could constitute a taking under Cal. Welf. & Inst. Code §15610.30.
Therefore the court held that the plaintiff had alleged sufficient facts for a financial elder abuse cause of action denied the defendant’s motion to dismiss the financial elder abuse cause of action.
California financial elder abuse may involve real estate mortgages, reverse mortgage abuse, real estate transactions, predatory lending, business fraud, partnership fraud, intellectual property theft, etc.If you are not sure if you are a victim of California Financial Elder Abuse contact Steve Vondran, Attorney.
Consumer Solutions REO, LLC v. Hillery, 658 F. Supp. 2d 1002 (2009)
This case demonstrates that if a lending company or a holder of a mortgage acts maliciously, a non-judicial foreclosure can in and of itself constitute a taking under Cal. Welf. & Inst. Code § 15610.30.
The defendant (Borrower) took out a loan against her home with New Century Mortgage. Borrower tried to rescind the loan agreement but New Century did not respond and they subsequently went bankrupt.
The plaintiff (Holder) then acquired the defendant’s promissory note from a bankruptcy sale and initiated foreclosure proceedings with Borrower.
Plaintiff (Holder) filed foreclosure action against defendant (Borrower) and defendant filed several counter-complaints against plaintiff including financial elder abuse. Holder moved to dismiss the counter complaints.
Is the defendant liable for elder financial abuse?
RULE OF LAW:
Cal. Welf. & Inst. Code § 15610.30
Borrower’s counter-complaint claims that the non-judicial foreclosure proceeding was enough to constitute a taking under §15610.30. The court notes that Holder may be protected by the qualified privilege of California Civil Code § 47(c) so long as its conduct was not malicious.
The Court notes that Borrower’s counter-complaint does suggest that Holder acted maliciously, however the alleged malice is insufficiently specific. The court dismissed the claim for elder financial abuse but gave the borrower leave to amend to include specific allegations of malice.
This is a rough sample of California elder abuse law focusing on the real estate context.We will be posting more information on this topic shortly.If you or a loved one may be a victim of California financial elder abuse, contact an elder abuse lawyer to discuss your legal rights.Attorney Steve Vondran accepts elder abuse cases in California and Arizona where he is licensed to practice law.The firm has extensive experience in business and real estate matters.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.