A new case from the Court of Appeal once again illustrates the robust nature of claims under California’s Elder Abuse and Dependent Adult Civil Protection Act, also known as the Elder Abuse Act.
In Arace v. Medico Investments, LLC (2020) 48 Cal.App.5th 977, a San Bernardino County jury found the owner of a residential care facility for the elderly liable for the financial elder abuse of a resident, but did not award any damages on that claim. Nonetheless, the court properly awarded legal expenses to the plaintiff as the prevailing party. This broad view of a plaintiff’s entitlement to legal expenses shows the bite of the Elder Abuse Act and will encourage elders and their advocates to pursue financial elder abuse claims.
Grace Miller Moves Into a Senior Living Facility
When she was about 82, Grace Miller moved into Foremost Senior Campus, a residential care facility for the elderly. Foremost’s owner purchased Miller’s home for $66,000 with the promise that she would be a lifetime resident at Foremost without charge. Medico Investments, LLC bought Foremost but was not told about the agreement with Miller.
Miller provided a financial power of attorney to Elizabeth Colon, a Foremost employee who administered the facility. At Colon’s request, Medico allowed Miller to remain at Foremost at half the usual monthly charge. Colon apparently used the power of attorney to pay Medico’s charges. Colon also improperly deposited $145,885.90 of Miller’s money into Colon’s personal account.
When Melanie Arace (great-niece of Miller) discovered that Colon had gained control over Miller’s finances, Colon surrendered the power of attorney and returned the money in the account.
Facility’s Owner Loses a Jury Trial
Arace filed a lawsuit alleging that Colon or her employer Medico had engaged in multiple acts of elder abuse.
The special verdict form presented to the jury contained three causes of actions against Medico: financial abuse, neglect and negligence. The jury found in favor of plaintiff on her claim for financial abuse, but assessed no damages. The jury also found in favor of plaintiff on her claim for neglect, assessed $39,296.32 in economic damages, and determined that Medico acted with recklessness, oppression, or fraud. Finally, the jury found that Medico was negligent, but its negligence was not a substantial factor in causing harm to Miller.
Arace, as Miller’s successor in interest, was awarded the $39,296.32 in economic damages, plus $89,410 in attorney’s fees and $20,995.36 in costs. The attorney’s fees thus were more than double the actual damages awarded.
Court of Appeal Upholds Attorney’s Fees
After noting that the California Legislature enacted the Elder Abuse Act “to protect elders by providing enhanced remedies which encourage private, civil enforcement of laws against elder abuse and neglect,” the Court of Appeal reviewed the different categories of wrongs that fall within the Act.
“Financial abuse,” under Welfare and Institutions Code section 15610.30, 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.”
“Neglect,” under Welfare and Institutions Code section 15610.57, 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.” Thus, the statutory definition of “neglect” speaks not of the undertaking of services, but of the failure to provide care.
While a plaintiff who proves “financial abuse” is entitled to attorney’s fees, a plaintiff who proves “neglect” is entitled to attorney’s fees only if “clear and convincing evidence” shows that the defendant “has been guilty of recklessness, oppression, fraud, or malice in the commission of this abuse.” Hence, the road to an attorney’s fee award is easier under a “financial abuse” theory.
Arace’s counsel asked the jury to find “financial abuse” and/or “neglect” in Medico and Colon’s treatment of Miller.
As to “financial abuse,” according to the special verdict form, the jury found Medico or its employee took, hid, appropriated, obtained or retained Miller’s property with the intent to defraud or by undue influence, and that this conduct was a substantial factor in causing harm to Miller. The jury did not assess any damages.
The Court of Appeal rejected Medico’s argument that damages are a prerequisite to an award of attorney’s fees, explaining that “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 court also noted that the jury may have chosen to award damages under the “neglect” theory instead of the “financial abuse” theory because it was instructed that “each item of damages may be awarded only once, regardless of the number of legal theories alleged.”
As for the finding of “neglect,” the court also took a broad view of the Elder Abuse Act, though this portion of the opinion was not certified for publication.
Arace sought, and the jury apparently awarded, damages for amounts paid for room and board to Foremost and the amount of money diverted by Colon for her own use or for which she did not account. Medico argued that “[b]y its very definition, elder abuse by neglect . . . must be accompanied by a physical manifestation from the alleged neglect.” The court found that neither the statutory definition of “neglect,” nor the standard jury instruction for “neglect” (CACI No. 3103), require an award of damages for physical harm, pain, or mental suffering.
Hence, while the jury chose to categorize the $39,296.32 in damages to Miller as “neglect” instead of “financial abuse,” that categorization was valid and did not preclude the award of attorney’s fees under the “financial abuse” theory.
The Elder Abuse Act Has Bite
Although the jury may have been confused when presented with a verdict form that had “financial abuse” and “neglect” options, the Court of Appeal upheld the verdict and the judge’s award of legal expenses, reaffirming remedial purpose of California’s Elder Abuse Act.
California Advocates for Nursing Home Reform and other advocacy groups successfully requested publication of the portion of the opinion relating to “financial abuse.”
The opinion confirms that a plaintiff who proves “financial abuse” may obtain attorney’s fees even without proof of economic loss. While plaintiffs with economic claims may not have considered the “neglect” theory, the court’s interpretation of “neglect” seems to give it a broader reach.
Jeffrey Galvin is an attorney with Downey Brand LLP, based in Sacramento. He litigates trust and estate cases in Northern California, including disputes involving trust and probate administration, contests of trusts and wills, and financial elder abuse claims.