LAW OFFICES OF

MARC  B.  HANKIN

A PROFESSIONAL CORPORATION

10680 WEST PICO BOULEVARD

SUITE 315

LOS ANGELES, CALIFORNIA 90064-2223

TELEPHONE  (310) 204-8989

FAX  (310) 204-8985

EMAIL:  marc@marc-hankin.org

 

 

October 7, 1999

 

James Ellis, Esq., Chair

Estate Planning, Probate and Trust Law

Section of the California State Bar Association

 

Re:  Denial of access to the judicial system.

 

 

Dear Jim:

 

                As you probably know, one of the small bodies of law to which I gave birth is the Elder Abuse and Dependent Adult Civil Protection Act (hereinafter “EADACPA”).  One of EADACPA’s purposes was to make litigable a lawsuit to recover a flagrant swindle from a small estate.  In other words, one of the Legislature’s purposes in enacting EADACPA was to make it practical for a lawyer to handle a flagrant case of abuse involving a relatively small amount, despite the fact that the victim is relatively impecunious.

 

                EADACPA is a failure in that respect.  Enclosed herewith is a hypothetical that I posed to somewhere between four hundred (400) and five hundred (500) lawyers over the last several months during speeches that I have given on various topics to probate lawyers.  Only two (2) lawyers said they would handle the case of flagrant abuse committed by a very solvent potential defendant.  On further inquiry, one of the two (2) lawyers reconsidered, and the other lawyer was a new lawyer who presumably did not know any better.  In all cases, the audience answered with a resounding “Yes,” to my question asking if the reason that they would not handle the case was because they believed that the Judge would not award them enough fees so that they could afford to handle such cases. 

 

                We must acknowledge that not all cases of abuse entail litigation that is as expensive as indicated in the hypothetical.  But enough cases are.  Every experienced colleague whom I consulted found the fee numbers to be reflective of reality.

 

                Two unmistakable implications confront us as a result of my informal survey.  One is that lawyers believe that Judges do not treat them fairly concerning fee matters.  This is not particularly newsworthy because the population at large has a low regard for lawyers, and is unlikely to be concerned with injustice to lawyers.

 

                Little public sympathy can be expected for the real human tragedy experienced by lawyers who struggle to fight for justice for the downtrodden, and who feel frustrated and betrayed by the Judges upon whom we all rely for the implementation of social policy, as enacted by the Legislature.  Lawyers simply are not generally wealthy enough to be able to handle these cases as a regular part of their practice, without being paid.   It is sad that we lawyers receive so little credit for the pro bono cases that we do handle, at great financial and emotional cost to the lawyers involved.

 

                The second implication of my informal survey is newsworthy.  One of the principal goals of the Legislature in enacting EADACPA was to provide access to the judicial system for people who do not have substantial resources.   The Legislature explicitly determined (through legislative findings) in Welfare and Institutions Code §15600(h)) that the elderly and the disabled  (who are no longer working or who cannot work) do not have sufficient access to the judicial system.  The Legislature announced in subdivision (j) that the intent of the Legislature in enacting EADACPA was to provide to those “disadvantaged classes” access to the judicial system. 

 

                Lawyers apparently do not trust EADACPA’s promise of “reasonable” attorneys fees (in Welfare and Institutions Code §15657) and the Probate Code’s promise of “reasonable” attorneys fees for lawyers representing conservators (Probate Code §§1460 et seq.).   My informal survey shows that the objective of the Legislature, to provide access to the judicial system, is not being realized.  In other words, lawyers are unwilling to handle even the best of these cases, i.e., where the risk of losing is as small as it can get, and the perpetrator is as solvent as one can want.  Why is this the case?  Lawyers are unwilling to handle a flagrantly meritorious and unmistakably winnable case because they do not trust judges to award them enough compensation so that they can afford to handle these cases.

 

                About three years ago, there was an article in the Daily Journal exposing this problem.  A copy of the article is enclosed herewith.  Shortly after the article was published, I approached the then new Presiding Judge in Probate in Los Angeles County, the Honorable Judge Gary Klausner, and asked him what he thought might be the solution to this problem.  I explained that the problem cases, where legal representation is rare, and where cases are settled are settled down the river for small sums, are the small estate cases, and contested difficult conservatorships.  Livable attorneys fees are awarded under EADACPA in the big personal injury cases and the massive big estate defalcations. 

 

                Judge Klausner told me that he thought that Judges would be willing to award fees in the small estate cases and in the difficult contested conservatorship cases; but lawyers simply have not been willing to “bite the bullet.”   He explained that some lawyers would have to set an example by handling a number such small estate cases.  I promised to “set an example,” as he suggested.

 

                I have handled (alone or with other lawyers) a number of flagrant cases of misconduct against incompetent victims.  These cases were often made particularly difficult by lawyers who purported to represent the alleged incompetent, dragging out the proceedings as long as possible.   Many of the lawyers representing the victimizers have acknowledged off the record that the fiduciaries are  “punished” by the Probate Court with a substantial reduction in fees for waging a protracted war of litigation, and that the lawyers representing the victimizers use this knowledge  in planning their strategy.  

 

                Professional conservators, including the Public Guardian, and professional trustees suffer from these practices almost as much as the lawyers who represent them.

 

                I have perceived immense pressure from the Judges adjudicating such cases to settle these cases.   This is perplexing in cases which could well be characterized as good vs. evil.  A compromise would fly in the face of EADACPA’s goal of making the victim whole and requiring the victimizer to pay all of the victim’s attorneys fees and costs.  This pressure to settle is contrary to EADACPA’s objective to force evil doers to pay for the harm that they cause. 

 

                My experience in these cases (none of which have come before Judge Klausner) is that I generally get paid for fifty percent (50%) or less of my time, and years after I have done the work.  I consider EADACPA a failure in addressing the swindles of the poor and the lower middle-class.  Over the last year or so, I have had almost $350,000 worth of my time (over the last 5 or so years of litigation, in five (5) cases) written off in contested fee matters.

 

                I no longer handle such litigated cases for such fees as the Court may allow.  If there is neither a client to bill monthly, nor a substantial contingency fee agreement, I now refuse to take the small estate cases EADACPA was designed to make litigable.  In the last several months, I have rejected a number of cases that other lawyers had rejected where I believe the victims were flagrantly abused, and may be dead or penniless by now.  It is painful to admit this even to myself.

 

                It is or should be distressing that the person who dreamed up EADACPA, and who fought for it through five (5) years in the Legislature until it was enacted, is no longer willing to handle such cases. 

 

                Enclosed here with are two lists.  One is a list of lawyers who are were willing to “come out of the closet” and admit that they do not handle such cases and/or have rejected such meritorious cases, because they did not believe that they would be awarded a reasonable fee for handling the case, and they did not believe that they could afford to handle such a case under those conditions.   Many or most of these lawyers have taken one or more such cases at some point in their lives, and will take some in the future as a sort of quasi pro bono activity.  But in enacting EADACPA, the Legislature recognized in subdivisions (h) and (j) of Section 15600 that our society cannot rely on this occasional noblese oblige activity to remedy the large number of cases that are not being handled.  And the number is increasing as the population ages.

 

                A second list enclosed herewith is another group of lawyers who have taken such cases, and who have been awarded fees so low that they have resolved not to take such cases anymore.  To put some flesh on the skeleton, those lawyers and I have listed a few cases in which they were “burned.”   In each of these cases, or in many of these cases, the Judge handling the case may have determined that the lawyer was not as efficient as he or she should have been, or did something or other that justified the reduction in fee, or that the amount in controversy simply did not justify all that litigation (the latter idea being flagrantly at odds with the objective of EADACPA, which is to make all flagrantly evil swindles litigable).   We have not listed the names of the judges involved because the problem here should not be reduced to a personal one.  It is a systemic policy problem.

 

                Some of the lawyers whose names appear on these lists do so with trepidation.  They expose themselves to criticism for [1] “being selfish,” for not taking these cases, or for [2] perhaps for having handled the listed cases deficiently in some respect, in the relevant judge’s opinion, or for [3] being a “whiner,” who whines and complains about how difficult things are, and [4] to the risk of possible retribution for having spoken out.

 

                But we are willing to expose ourselves to this criticism, and to the risks to our careers that this campaign entails, even though some of us have resolved not to take such cases anymore, for the balance of our careers.  I am one of those.

 

                Why?  We hope that this letter will begin a formal process which will culminate in a change that will unlock the doors of the Courthouse.  We hope that the younger lawyers who will replace us will be able to handle the cases we do not now handle.  We hope to help the judiciary and the bar to find a way together to provide access to the courthouse for that group which suffers the most, because they have the least education, the least resources, and are the most vulnerable, i.e., typically the small estate cases.  

 

                We hope that this process, which we anticipate will require a serious study taking time and perhaps remedial legislation, will eventually help those lawyers who come after us to come to the aid of the oppressed who have no champion.   Please bring this problem before the Executive Committee.  Perhaps this would be an appropriate topic for another joint project with the Law Revision Commission.

 

 

                Thank you for your kind consideration.

 

               

 

                Kindest regards.

 

                                                                                                                Very truly yours,

                                                                                                                               

 

                                                                               

 

                                                                                                                MARC B. HANKIN

 

MBH/jsg

Enclosures

cc:           The Honorable Judge Gary Klausner

                The Honorable Senator Teresa Hughes

                Nathanial Sterling, Executive Secretary of

                                the California Law Revision Commission

                Chris Fiero, Los Angeles County Public Guardian

                Assistant District Attorney, Ardith Javan

                Susan Aziz, Coordinator of the Fast Team

                Frank Johns, President of the National Academy of Elder Law Attorneys

 

 

 

 

 

 

List #1

People Who Generally Do Not Handle Such Cases

Or

Who Have Comments Supporting this Campaign

 

1.                From: Bruce Ross, Esq. and Robert Sacks, Esq. of Ross Sacks & Glazier “Marc – We have read your letter and agree that lawyers generally are unwilling to take meritorious cases involving small estates because lawyers believe, with good reason, that they are unlikely to be paid for substantial amounts of their time and generally thus cannot afford to handle elder abuse matters and heavily contested conservatorships. We believe further that this results in a lack of access to the judicial system for people without substantial resources. This situation should be studied in the hope that a way can be developed to rectify it.”

 

2.                From: Robert Foster, Esq.  “Marc, this letter is excellent.  We have had a little experience here, but are less and less inclined to do battle just because of the Courts seem to try to force settlement.  I really believe that the Judges are more interested in the latter than the fees, but obviously settlement means no fees or at least less. Since most cases can be lost, settlement is the usual.  We have never seen a complete open and shut case.”

 

3.               From: Russell Balisok <balisoklaw@worldnet.att.net> “I like the letter and the hypothetical. How would I have raised my hand at one of your seminars, had I been in  attendance?  Hmm.... I think I would have explored standing through a guardian ad litem,  rather than conservator, and with an ultimate judgment in hand against  Patrick, I believe I would have had no problem with the conservatorship issue afterwards. As for the poa's, could temporary letters of  conservatorship be obtained, and on the allegation (supported with some  facts) that Patrick had acted improperly, obtain an order revoking the  poa's? In the civil action, we still have the problem of the contumacious  litigant on the other side, so would I take the case for say 80k if I had to  depend on the court for an award of reasonable attorneys fees at the end?  Hmm. No. However, I would propose a fee k by which I would obtain a  percentage of all sums received, i.e., monetary and non_monetary damages,  punitive damages and attorneys fees and ask the court to approve it prior to  employment.  Then I would probably take the case and take Patrick down in my copious spare time.  Otherwise, no.”

 

4.             From Walter Haines, Esq. <wlhaines@pacbell.net>   “I have not worked on any of these cases and doubt that I would.   I do share your experience with regard to the fees generally allowed by the court even in regular cases.  etc.”

 

5.             From Carol Small Jimenez, Esq. <SmallCarol@Aol.com> “You can add me to List #1 of attorneys who would not take these cases because of the uncertainty of obtaining adequate fees.”

 

6.                From Mary L. O'Neill, Esq. <Ttfn1957@aol.com> “Marc,  Regarding your hypothetical I would only take the case if I knew that it  probably would be pro bono. These cases cannot be taken with the expectation  that fees will be awarded by the court or collected from the defendant.  Unfortunately, this reduces the number of cases an attorney can take.  An answer to the problem of the bad guy hiring an attorney for the victim is  to seek the appointment of PVP counsel. That reduces, if not eliminates,  litigation just to run up fees.”

  

7.                From Ruth A. Phelps, Esq. <rphelps@elderlawyers.com>   “I practice in a small firm of four lawyers. Two of the four lawyers are  former civil litigators, who now practice in the elder law area, including  conservatorships, planning for disability and death and probate. Our  conservatorship practice includes several cases of financial abuse.  We  would not take a case as outlined by Mr. Hankin, involving a long, hard  fought battle against a well_financed abuser, for two reasons.  First, we  are not confident that the court would award us our full fees at the end of  the battle, even though we won.  Second, we cannot participate in a lengthy  fight, over several years, and wait for payment until the end of the case.”

 

8.             From Steven Weber, Esq.  [Separate letter from Steven Weber]

 

9.             From Denis O’Neal, Esq., Santa Clara Counsel  [Separate letter from Denis O’Neal]

 

10.           From Caren Nielsen, Esq.  [Separate letter from Caren Nielsen]

 

 

List #2

People Who Have Handled Such Cases,

And, Having Been “Burned,”

Do Not Handle These Cases Anymore

 

 

 

 

 

 

 

 

 

 

The HYPOTHETICAL

ALMOST “PERFECT” CASE OF ELDER ABUSE

That I Presented to Somewhere Between

Four Hundred (400) and Five Hundred (500) Attorneys

[No lawyer would agree to handle such a case, because the lawyers said they do not believe

that the Court would award them enough fees for the lawyer to be able to afford to do handle such a case]

 

 

                Consider the following hypothetical case.  Assume that Harvey is a person over age sixty five (65) and a resident of California.  Assume that Harvey has a long history of bipolar disorder that has caused him to be hospitalized involuntarily for psychiatric disturbances many times during his lifetime.  Assume that Harvey is suffering from a progressive dementia, and that Harvey has a Folstein Mini Mental state score of 24 at the beginning of this story.  Assume further that Harvey's physicians have told his neighbors and his family that Harvey needs assistance with the most basic financial transactions, such as paying his utility bills and his rent bill.  One of Harvey's neighbors, Patrick, tells all the other neighbors and the relatives that he will take care of Harvey and relieve them of the burden of doing so.  He brings Harvey to the bank, because Harvey would not be able to find his way there alone, and gets checks to pay Harvey's utility bills and Harvey's rent, and to give Harvey enough cash to pay for the few groceries he buys each month.

                During the subsequent year, Patrick has Harvey sign a durable power of attorney for financial matters and a durable power of attorney for health-care, and a new will, leaving everything to Patrick.  Patrick is overheard by neighbors and by an Adult Protective Services worker telling Harvey that Harvey's relatives do not care about him and want to put him in a nursing home so that they can keep all of his money.

                Over the course of a year, the neighbors and family find it progressively more difficult to visit with Harvey because Harvey is always asleep or unavailable, or does not want them to visit just then, and Harvey's estate is reduced from $120,000.00 to $40,000.00, because Patrick pays himself $80,000.00 for the services that he has rendered, visiting with Harvey once or twice a month and paying Harvey's utility bills.  At the end of that one year span of time, Harvey's health seems rather poor and Harvey appears to be suffering from malnutrition and to be in need of health-care.  Patrick tells Adult Protective Services worker's and family members to quit being officious inter-meddlers, and to leave Harvey alone.

                Patrick is a wealthy real estate broker worth several million dollars at least, and Patrick has a reputation for having sued many people and for having been sued by many people, and for being a very vigorous litigator as a client of an attorney.

 

- - - - - - - - - - - - - - - - - - - - -

 

                Assume that the relatives come to you and ask you to get one of them appointed as a Conservator, or to get a professional Conservator appointed.  They tell you that they do not have the money to pay for your fees or your costs.  They ask you to handle the case for whatever fees you would be entitled to get under Probate Code Section 1460 through 1462, and for whatever fees you would be entitled to get under the Elder Abuse And Dependent Adult Civil Protection Act, Welfare And Institutions Code Section 15657 et. seq.

                Assume that Harvey's incompetence to contract is obvious and assume that the fact that Patrick has taken unfair advantage of Harvey is flagrantly obvious, and that it is obvious that you will be able to prove by clear and convincing evidence that Patrick intentionally misappropriated Harvey's funds at a time when Harvey lacked the capacity to consent to the taking.

 

                Assume that you will have to litigate a contested Conservatorship because Patrick will arrange for a very litigious lawyer to represent Harvey, and that the lawyer will seek a jury trial, and that the lawyer will try to wear you down with discovery.  Assume that you will spend $40,000.00 to $60,000.00 worth of your time on the Conservatorship litigation.  Assume further that after you win the jury trial on the Conservatorship, the Judge will appoint your client as Conservator even though Harvey will say that if someone must be appointed Conservator, he wants anyone other than your client.  Assume that after you get your client appointed as Conservator, you sue Patrick successfully, but also assume that Patrick wages a litigation war of attrition against you, trying to wear you down with discovery, but not obeying Court orders regarding your discovery and assume further that the Court is reluctant to enforce your discovery orders through contempt or any other procedure, such that you spend somewhere between $60,000.00 and $80,000.00 on the jury trial against Patrick.  Assume further that Patrick tries to evade paying the judgment, but that you're essentially going to be able to get a collection against the judgment.

 

                You understand that you are entitled to reasonable fees under Probate Code Sections 1460 through 1462 for the reasonable value of your services, even though Harvey only has $40,000.00 left to his name before you recover the $80,000.00 that was swindled away, plus any punitive damages, if you recover any.  You also recognize that under the Elder Abuse And Dependent Civil Protection Act, you're entitled to attorneys fees and costs from the perpetrator, that is to say Patrick.  You are also entitled to fees under Probate Code Section 4947.

 

                [I then raised my hand as I asked who would be willing to take this case.  Out of the over four hundred (400)  lawyers to whom I presented this hypothetical in the course of four (4) lectures, only two (2) lawyers said they would be willing to take the case, and one of them expressed reluctance when I asked for more information about why he or she was willing to take the case, and he indicated that whether he would take the case depends on the facts .]

 

                When I asked the audience if they would not take the case because they do not have confidence in the in the fact that the Court would pay them for their services in an amount that would enable them to earn a living, the answer was a resounding yes from the audience in all cases.

 

                The audience response (i.e., that only one or two lawyers out of approximately four hundred lawyers would take this case) indicates that a large group of people/a large segment of the population does not have access to the judicial system because they cannot get the legal representation that they need in order to get the remedies which our laws guarantee them.  The door to the Courthouse is closed to the largest group of people suffering from elder abuse, or suffering from self neglect (contested conservatorships) because lawyers will not take their cases because lawyers do not believe that they will get paid enough to earn a living.  It is the lower middle-class and the middle class who suffer the most financial abuse, because, unlike the wealthy class, they are least educated and have the least resources set up to protect themselves from abuse.  But it is exactly the lower class and the lower middle-class that has the least access to the judicial system because the lawyers who need to earn a living and who are in the position to help them, cannot help them because the lawyers do not believe that they will be paid.

 

                A related issue is the fact that, in addition to the fact that the public at large is being denied access to the judicial system, there is another issue which is decency to the lawyers who work their hearts out and extend their services and advance their own funds and their own time and their own overhead working for justice, only to be slapped in the face when the services have been rendered.  They are slapped in the face by the very Judges charged with the responsibility of enforcing the law.

 

 

 

 

 

 

DAILY JOURNAL ARTICLES

 

 By Anna Snider  Daily Journal Staff Writer 6/4/96

SAN FRANCISCO _ Plaintiffs attorneys are often the targets of loathing by politicians. But in passing the Elder Abuse and Dependent Adult Civil Protection Act in 1991, the California Legislature offered them a gift.   Including provisions for attorneys fees, lawmakers attempted to induce  lawyers to take cases that were seldom prosecuted, on behalf of older  people financially or physically abused.              

                The statute, unlike most tort laws, also provides for pain and suffering damages even for plaintiffs who die while the case is pending.  Although attorneys have on occasion used the law, its author, Los Angeles attorney Marc B. Hankin, worries the law is failing to attract enough  interest from the bar.  Lawyers, Hankin said, quickly realized that fees, though specifically  provided for in the elder abuse act, are rarely given in practice. Nobody trusts the attorneys fees provisions, he said. They are a big joke  even with a solvent defendant.           

                People who want to do this can't expect to get paid, Hankin added.   A few plaintiffs have prospered under the statute, Welfare and Institutions Code Section 15600 et seq., and the law has even attracted  the attention of some traditional litigation powerhouses.   

                Anybody who has clients who are older, whenever they are wronged, should  be looking at this statute, said Bruce L. Simon, a partner at Burlingame's  Cotchett & Pitre, who is litigating a class action that includes an elder  abuse claim.    Last year, an 85_year_old client of Ropers, Majeski, Kohn & Bentley and  Angell, Brunner & Angell won a $750,000 settlement, plus attorneys fees,  in Santa Clara County Superior Court against a Beverly Hills accounting  firm that allegedly siphoned $265,000 from a trust it administered for her.       Paul Stanton, a Los Angeles sole practitioner, received a judgment of  approximately $670,000, plus $90,000 in attorneys fees, for an 80_year_old man bilked by a girlfriend half his age. In what Stanton termed a  usual situation of elder abuse, the woman was leading him on and  liquidating his bank account.                 But too often, plaintiffs lawyers said, allowances for their services are denied.    When you are sitting in front of the settlement judge, attorneys fees are  the first thing the plaintiffs attorney is expected to give up, said  Denis O'Neal, a Santa Clara deputy county counsel.    Defendants never see that they are exposed to [attorneys fees]  They laugh  at you when you talk about it, O'Neal said. They say, `You are never going  to get that.'    Judges perhaps have a predisposition to say no to attorneys fees. We have  several hundred years in legal history  [establishing] that each party  pays his own way, O'Neal said.           

                As Don Green, a probate attorney in Sacramento Superior Court, explains it, We are part of a civil system that has not allowed attorneys fees. The  judges have all this psychological stuff working against them.    Judges may also have a practical reason for deferring such requests.    Attorneys fees are typically paid from whatever funds the lawyers are able  to recover from the abuser, experts explained. Often the abusers have  spent the victim's assets down to a fraction of what they once were, so  jurists may be reluctant to cut even further into them with an award of  attorneys fees.    

                Moreover, there may be simply no money recoverable for the victim. [ Abusers] dispose of money very quickly, said Michael Desmarais, of Palo Alto's Lakin Spears. And you can't find it if it is still around. Take a little old lady or man who has $250,000 to live on for the rest of their lives, Desmarais said.  Even if you get a judgment, who is going to pay it off?  It is like getting blood out of a turnip. Some of the cases where the money is gone, and there are no deep pockets are essentially judgment_proof, echoed O'Neal.

                Another factor that blunts the impact of the elder abuse law is the strict standard of proof plaintiffs must meet. According to the statute, plaintiffs must show by clear and convincing evidence that the defendant acted against them with recklessness, malice, fraud or oppression. What is abuse? It's so subjective, said Yolo County Public Guardian Doug Kaplan. Is somebody just getting a good business deal, or are they committing abuse or fraud?

                Another important part of the law is the requirement that the defendant be involved in a fiduciary relationship with the victim. Under the Welfare and Institutions Code, a fiduciary is defined as any person who has the care and custody of, or who stands in a position of trust to, an elder or dependent adult.

                In a case now pending in Santa Clara County Superior Court, the definition of fiduciary is at issue. Lawyers for the estate of Terry Mosher filed an elder abuse claim not only against a Los Altos bank manager who allegedly misappropriated at least $189,000 from her accounts, but also against his deep_pockets employer. Mosher's lawyers are putting their creative energy to work in finding ways to use the fiduciary theory to bring in additional defendants.  In Kretz v. Asplund, CV747414, the plaintiffs attorneys argue that Downey Savings and Loan ratified the manager's conduct, thereby breaching a fiduciary duty to Mosher.

                Bank lawyers say the relationship between a bank and a customer is one of a debtor and creditor. It is not a fiduciary relationship, said O'Neal, who as a lawyer for the county is associated in the case. We are going one step further  and saying a special relationship has evolved. Asplund, the bank manager, contends the funds were gifts from Mosher. Downey Savings and Loan filed a demurrer to the suit, though it was denied. The case is pending. My goal is basically to say  we can't monitor or police every relationship with an elderly person and a bank. What we need is for the law to clearly say there is a duty on these bank managers not to take advantage, O'Neal said. The message will spread and the banks will police themselves.

                Cotchett & Pitre's Simon, who is handling a class action against a mortgage lender that invokes the elder abuse law, also argues that the definition of fiduciary is broadly written. It makes no sense to view it narrowly, Simon said. People just don't push it as far as they can.

                In San Mateo Public Guardian v. Commonwealth Life Insurance Co., Providian Corp., 393961, Simon and co_counsel Niall McCarthy, along with Deputy County Counsel Steven Dylina, represent certain retirees against a lender who sold them reverse mortgages on their homes. Under these mortgages, borrowers _ who in their old age lacked sources of income _ traded equity in their homes for cash to live on.

                In court papers, the plaintiffs lawyers argue that Commonwealth and Providian used their position of power and trust to levy unconscionably high  fees  against each of their elderly clients. In addition they argue that, through certain sales practices, the corporations intended to create a relationship wherein plaintiffs and the class would repose trust and confidence in them.   As such, the lenders breached the functional equivalent of a fiduciary duty under the statute, Simon said. In a demurrer to the court, which is still pending, defense lawyers contend the elder_abuse statute was intended to address abuse of the elderly committed by family members, nursing home employees and other caretakers _ not institutions like Providian engaged in arm's_length business transactions with clients. Further, they argue lenders lacked a fiduciary relationship vis_a_vis the borrowers. Therefore, they conclude, the case falls outside the scope of the elder abuse law. With little case law in this area, however, plaintiffs attorneys like Simon argue that the definition of fiduciary is open to interpretation. They argue that the legislators who wrote the elder abuse law mandated that dealings with the elderly be invested with extra responsibility.

                The elder abuse statute's expansive definition of fiduciary is tempting to securities fraud litigators like Simon who are accustomed to bringing cases based on alleged abuse of such a duty. Simon, whose firm recovered $250 million for investors in Lincoln Savings and Loan Association against Charles H. Keating Jr. and others, called elder abuse litigation a natural offshoot of the securities fraud work we do.

                For the most part, though, the private bar _ perhaps because of a dearth of cases involving Fortune 500 defendants like Providian Corp. _ is less enthusiastic. I thought at the time [the law passed] that it was a breakthrough, said Paul J. Constantino, who specializes in conservatorships at Burlingame's Kubota, Constantino & Hartnett. I frankly don't think the statute has gotten the play it deserved. With incentives to litigate already spelled out in the code, Desmarais said, the legislation has gone as far as it can. Judges must play their part, trial lawyers said. I think judges need to be educated, O'Neal said. Let's get some triple damages and attorneys fees so that people will police themselves.

 

 

Daily Journal Article

 by Anna Snider from 10/19/95:

 

SAN FRANCISCO _ Like most attorneys, elder_abuse guru Marc B. Hankin would like to read judges' minds. Falling short of that, he will settle for a survey of their attitudes about attorneys fees.

                The 1991 Elder Abuse and Dependent Adult Civil Protection Act allows for the award of such fees, but they are rarely granted, said Hankin, an author of the law. Some proof that judges will actually support fee requests, Hankin said, could encourage plaintiffs lawyers to take on elder_abuse actions they now spurn as too high_risk. There is a whole public hue and cry about attorneys fees destroying the country, Hankin said. But this statute is just designed to make it practical for an attorney who is not willing to do pro bono work  to make a living doing good things.

                Hankin may propose a survey on these issues at a June Executive Committee meeting of the State Bar's Estate Planning, Trust and Probate Law Section. The bar and the California Judges Association could cosponsor it, he suggests. Hankin is considering these steps because people just do not trust judges to give them enough fees, Hankin said. A lot of people tell me it's because judges come from government back grounds, he added. They don't know what overhead is.

                Denis O'Neal, a Santa Clara deputy county counsel, said, unless the statute is reinforced by judges, you can't economically handle the cases. Hankin had success with a similar research project in 1995. A survey of probate judges under the auspices of the National College of Probate Judges, he said, led to clearer standards for expert testimony on mental competency in conservatorship proceedings. In the survey, judges expressed a preference for common_sense evaluations of an elder's mental condition rather than technical diagnoses. Writers of the Due Process in Competence Determinations Act of 1995 incorporated the judges' suggestions. Because of that survey, Hankin said, we knew what to put into the legislation.

                If the proposed attorneys fees survey reveals that judges will support awards under the elder abuse law, Hankin said, it would convey a message to us  and give us a tool to plunk in the faces of judges who don't [grant fees]. Hankin sees the goal of the survey as reducing uncertainty about where judges stand on this issue. For now, he said, we're not all together on the same page.

                Monterey Superior Court Judge Robert O'Farrell said, I see no harm in someone doing a canvassing. But I can't picture a judge saying, `Yes, I am reluctant to grant fees.' I presume judges would follow the statute, O'Farrell said. But since these cases don't come up on a daily basis, it is incumbent on an attorney to come forward with some authority  to show that the law really has changed and  that attorneys fees are required and desirable. _ Anna Snider