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California’s Elder Abuse Act: Attorney’s Fees Mandatory Upon Finding Of Financial Abuse

The California Elder Abuse and Dependent Adult Civil Protection Act, the “Elder Abuse Act,” protects elders against financial and other abuse  “by providing enhanced remedies which encourage private, civil enforcement of laws against elder abuse and neglect.”  In  Arace v. Medico Investments LLC, California’s Fourth District Court of Appeal affirmed an award of attorney fees upon a finding of financial abuse, even though no economic or noneconomic damages were assessed.

The Facts of Arace v. Medico

In 2010, Grace Miller, in her early 80s, moved into a residential care facility called Foremost.  Foremost was owned by Leonard Crites.  Elizabeth Colon was the administrator and an employee of Foremost.

In 2010, Crites purchased Miller’s home for $66,000 with the promise that Miller would be a “lifetime resident at Foremost…without charge.”  Medico Investments, LLC (“Medico”) purchased Foremost in 2012.   Colon continued to work as the administrator.  Medico was not informed about Crites’ agreement to provide Miller with lifetime residency at the facility.

In early 2013, Medico discovered that Miller was living at the facility for free.  Medico also learned that Colon had a durable power of attorney over Miller’s property and her health-care decisions.  Medico reduced Miller’s rent by 50% but sought payment for the past due account.  In 2014, Colon moved Miller out of Foremost and into a private home.

Melanie Arace, Plaintiff, is Miller’s great niece.  Arace discovered that Colon controlled Miller’s finances and had taken money from Miller and placed it in Colon’s personal account.  Arace demanded that Colon surrender the power of attorney over Miller and return $145,885.90 of Miller’s money, which Colon had deposited into her personal bank account in late 2013.

Arace then sued Medico in early 2015 for elder abuse and related claims.  Arace alleged that Medico, or its employee (Colon), engaged in multiple acts of elder abuse against Miller.  Miller passed away in December 2015.

The Jury Finds In Favor Of Plaintiff

The case was tried before a jury.  The jury:

  1. Found in favor of plaintiff on her claim for financial abuse but assessed no economic or noneconomic damages;
  2. Found in favor of plaintiff on her claim for neglect, assessed $39,296.32 in economic damages, $0 in noneconomic damages, and found that Medico acted with recklessness, oppression, or fraud; and
  3. Found that Medico was negligent, but that its negligence was not a substantial factor in causing harm to plaintiff.

Arace was awarded $39,296.32 in economic damages, $89,410 in attorney fees, and $20,995.36 in costs.

Medico appealed, arguing that plaintiff was not entitled to attorney’s fees for financial abuse or damages under her claim for neglect pursuant to the Elder Abuse Act.

What Is California’s Elder Abuse Act?

California enacted the Elder Abuse Act, found at Welf. & Inst. Code, § 15600 et seq. “to protect elders by providing enhanced remedies which encourage private, civil enforcement of laws against elder abuse and neglect.

The remedies under the Elder Abuse Act include attorney’s fees and costs.

How Is “Abuse” Defined Under California’s Elder Abuse Act?

“Abuse” is defined in California’s Elder Abuse Act, in section 15610.07(a) as:

 “[p]hysical abuse, neglect, abandonment, isolation, abduction, or other treatment with resulting physical harm or pain or mental suffering,” “deprivation by a care custodian of goods or services that are necessary to avoid physical harm or mental suffering,” or “[f]inancial abuse, as defined in Section 15610.30.”

In this case, financial abuse and neglect were at issue.

Financial Abuse Under The Elder Abuse Act

Financial abuse occurs when:

a person or entity “[t]akes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud” or “assists in 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.”

The Elder Abuse Act provides that when a plaintiff proves by a preponderance of the evidence that a defendant is liable for elder abuse, in addition to compensatory damages and other remedies, the court shall award “to the plaintiff reasonable attorney’s fees and costs.  § 15657.5(a).

Neglect Under The Elder Abuse Act

The definition of neglect is found in section 15610.57(a)(1), and speaks not of the undertaking of services, but of the failure to provide care:

Neglect is defined in section 15610.57, subdivision (a)(1), which in turn includes the negligent failure of an elder custodian “to assist in personal hygiene, or in the provision of food, clothing, or shelter,” “to provide medical care for physical and mental health needs,” “to protect from health and safety hazards,” or “to prevent malnutrition or dehydration.”

In order to receive enhanced remedies, such as attorney fees and costs, a plaintiff must prove by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of this abuse.

Award Of Attorney Fees Mandatory Upon Finding of Financial Abuse Under California’s Elder Care Act

In this case, the California appeals court upheld the award of attorney fees and costs for financial abuse, even though the jury, despite finding in favor of the plaintiff on her claim for financial abuse, assessed no economic or noneconomic damages.

Medico argued that the award of attorney’s fees was improper when the plaintiff recovered no damages.

In rejecting Medico’s argument, the appeals court noted that the fee provision in the Elder Abuse Act for financial abuse is not discretionary in nature.  Instead, it requires the award of fees where it is proven by a preponderance of the evidence that a defendant is liable for financial abuse.  The Court stated:

Here, the jury found that Medico was liable for the misappropriation of Miller’s property, that its conduct was “a substantial factor in causing harm” to Miller, and that plaintiff proved “by clear and convincing evidence that Medico” acted with “recklessness, malice, oppression or fraud.”  Under the plain language of the statute, an award of attorney fees is a mandatory form of relief regardless of whether the plaintiff is awarded any other form of relief.

The California Appeals Court took a strict and broad view of plaintiff’s entitlement to attorney’s fees and costs pursuant to the Elder Abuse Act.  This decision is encouraging for California lawyers and their clients considering whether to pursue a financial elder abuse claim who are concerned about payment of attorney fees.

 

 

 

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Sally Bergman

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Fred W. Edwards

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Nicholas P. Jellins