Plaintiffs who sue for financial elder abuse run the risk that defendants will spend ill-gotten gains before they can be recovered. To address this problem, the California Legislature gave plaintiffs the opportunity to “attach” or freeze assets at the outset of a case.
The Court of Appeal, in Royals v. Lu (2022) 81 Cal.App.5th 328, recently shed light on pretrial right to attach orders in the context of claims under California’s Elder Abuse Act. Procedurally, applications must be detailed. Substantively, they must be limited to alleged compensatory damages and cannot be based on statutory penalties or punitive damages – thus putting a lid on the amount to be attached.
A Stepparent Dispute Flares Into Litigation
Royals arose, like so many other trust and estate disputes, from conflict between stepparent and stepchild.
Chambers Daniel Adams was married to Cornelia Adams for 56 years. They had a daughter, Lisa Royals. Cornelia died. Chambers, at age 95, married Meng Jing Lu, age 59. According to Lu, Royals never accepted the marriage and saw it as a threat to Royals’ inheritance.
Chambers died in 2019 after four years of marriage to Lu.
Royals filed a petition in Contra Costa County Superior Court, accusing Lu of financial elder abuse and breach of spousal fiduciary duty. According to Royals, Chambers had no need for cash late in his life, but nonetheless suddenly encumbered his home in Orinda with a second mortgage, sold a vacation property in Sea Ranch, and deposited the proceeds into accounts controlled by Lu.
In essence, Royals’ theory was that her father intended to leave all assets to her and nothing to his wife Lu, but Lu thwarted his plan by misappropriating assets before his death. Royals claimed, on information and belief, that the total of the misappropriated funds was “at least $1,095,000.”
On the same day Royals filed her petition, she applied for a pretrial writ of attachment in the amount of $3,440,000. In her attachment application, filed on Judicial Council form AT-105, Royals checked a box indicating that the facts showing her entitlement to judgment were set forth in her petition. Other than that, there was no evidentiary support for the requested attachment. Nor was there any explanation as to why she sought attachment in the amount of $3,440,000.
Lu filed extensive evidence opposing the attachment application, including seven declarations under penalty of perjury. The declarations “describe Adams’ courtship of Lu, which began in 2011, several years before their marriage; Lu’s decision to move from Las Vegas to Orinda to cohabitate with Adams; his proposal of marriage and her decision to accept the proposal in 2015; and the observations of people who knew the couple about the genuineness of Adams’ affection for Lu.”
In a cross-petition, Lu accused Royals manipulating Chambers into signing a trust amendment with the objective of defeating his true testamentary intent and depriving Lu of the financial provision he intended to make for her outside of the probate process.
The probate court, after a brief hearing, granted Royals’ application for an attachment order in the full amount requested. The court did not explain its ruling or indicate that it had considered Lu’s evidentiary submissions.
How to Balance Two Statutory Schemes?
The Court of Appeal addressed the interplay of California’s Elder Abuse Act and Attachment Law.
The Elder Abuse Act, “a remedial scheme designed to protect a vulnerable class of citizens, is generally construed broadly in favor of plaintiffs seeking relief on behalf of elders, while the Attachment Law, which authorizes ‘a harsh remedy [that] . . . causes the defendant to lose control of his property before the plaintiff’s claim is adjudicated,’ is generally construed strictly according to the letter of its statutory terms.”
In 2007, the Legislature strengthened the Elder Abuse Act by authorizing plaintiffs to seek prejudgment attachment to preserve the elder’s assets wrongfully held by defendant until judgment is rendered. The authorization is found in California Welfare and Institutions Code section 15657.01.
Yet prejudgment attachments are not to be lightly granted. Instead, as the Court of Appeal explained, the plaintiff must make a specific evidentiary showing per the terms of the Attachment Law, found at Code of Civil Procedure sections 481.010–493.060.
Royals’ request was highly noncompliant.
For example, an attachment application must be supported by evidence, in the form of a verified pleading or affidavit, based on firsthand knowledge. Since Royals made allegations on “information and belief,” she failed to show that her request was based on facts she knew.
Royals also failed to plead a definite amount of compensatory damages.
“The trial court,” said the Court of Appeal, “might have insisted upon an evidentiary and legal foundation providing more specifics, but in the end did not question the requested attachment amount and simply rubber-stamped it.”
More substantively, the appellate court found that claims for statutory penalties or punitive damages could not be used to boost the dollar amount of an attachment order. “While it is true that the Elder Abuse Act must be broadly construed in favor of elders, the paramount importance of ensuring that the Attachment Law conforms to due process standards must carry the day.”
Thus, the right to attach order must be limited to “well-supported claims for compensatory relief along with associated requests for attorney fees and costs.”
Royals gives California lawyers a roadmap for seeking and opposing applications for attachment orders in the context of financial elder abuse claims.
Applications will require careful preparation with ample supporting detail because they are subject to judicial scrutiny. A slap dash application should be denied and an order granting it may be reversed on appeal.