We “ring” in 2022 with a recent case that again shows the long reach of statutory financial elder abuse claims in California trust and estate litigation. In Ring v. Harmon (2021) ___ Cal.App.5th ___, the Court of Appeal considered an alleged loan scheme to drain equity out of a house held in a probate estate.
Even though the loan was taken out by the elder in her capacity as personal representative of an estate, the court ruled that she could bring an elder abuse claim arising from the loss to her personal beneficial interest in the estate.
Awana Ring, at age 80, lost her daughter Vickie Atiyeh. Vickie left Awana a house. Yet, according to Awana, her son Scott Robb and grandson Zachary Robb embarked on a scheme to swipe much of the equity in the house – an inside job with outside help.
Scott and Zachary allegedly collaborated with Richard Harmon (a loan broker) to cause Awana to be appointed as personal representative of Vickie’s estate, then had Awana use her authority to take out a predatory loan at a rate of 10.99 percent. Scott and Zachary took the loan proceeds for themselves while Richard received fees and an income stream on the loan.
Awana, in her individual capacity (not as personal representative), filed a civil complaint against Scott and Zachary, along with Richard, including a claim for financial elder abuse.
The San Bernardino County Superior Court sustained Richard’s demurrer to the complaint, finding that the claims belonged to Awana only as personal representative of Vickie’s estate because it was in that fiduciary capacity that she had received the loan.
This ruling left Awana without a forum in which to assert financial elder abuse claims against Richard because “no authority supports the notion that the personal representative of an estate, acting in that capacity, has standing to bring an elder abuse claim on behalf of a beneficiary of that estate.”
The Court of Appeal found that Awana’s dual position as personal representative and beneficiary was a “special circumstance” that justified allowing her to sue based on her beneficial interest in the estate.
Awana, as an individual, held a beneficial interest in the house upon Vickie’s death. The alleged predatory loan decreased the value of her beneficial interest and thus deprived her of a property right within the meaning of Welfare and Institutions Code section 15610.30, part of the Elder Abuse and Dependent Adult Civil Protection Act (“Elder Abuse Act”).
Thus, the appellate court overruled the probate judge’s ruling on the demurrer and allowed Awana to proceed with her financial elder abuse claim against Richard.
Why was this an important ruling for Awana? As the court noted, if Awana prevails in her financial elder abuse claim, she will be entitled to an automatic award of attorney’s fees under Welfare and Institutions Code section 15657.5, but such fees may not be mandatory under her other claims.
The Ring court relied upon and extended two prior financial elder abuse cases, Wood v. Jamison (2008) 167 Cal.App.4th 156 and Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) Cal.App.5th 841, citing Mahan for the proposition that “where there is room for debate” regarding the meaning of the Elder Abuse Act, the law should be “liberally construed” to protect seniors.
Ring thus fits into a broader pattern: California appellate courts tend to allow seniors and their advocates to pursue financial elder abuse claims.