$1.25 Million Verdict in Elder Case

Dec 11, 2013

OUTCOME: $1.25 million verdict

In an unpublished decision, the Court of Appeal for the First Appellate District has affirmed a $1.25 million dollar trial verdict obtained by Tom LoSavio on behalf of The Executor of the Estate of a w ... oman who died at age 100 having had her entire estate misappropriated by her long-time live-in caregiver and the caregiver’s daughter. The trial court not only awarded return of the misappropriated funds, but entered judgment in triple that amount based on a finding that the taking was done in bad faith. For eight years prior to her death, Decedent had been in the care of a live-in, 24 hour per day, 7 day per week Caregiver. In the last two years of her life, the Caregiver and her daughter caused the Decedent to: (1) place approximately $257,000 in mortgages on her home that previously had been free of mortgages; (2) sell her home to her Caregiver’s daughter for less than its fair market value, within 1 year of placing the mortgages on it; and (3) spend in excess of $600,000 in cash proceeds from the sale of the house and the mortgages. Immediately after the sale of Decedent’s home, the Caregiver’s Daughter, who was unknown to Decedent except as the daughter of her caregiver, received $100,000 from the proceeds of that sale. The Caregiver had 26 joint bank accounts with Decedent. The Caregiver’s Daughter opened 29 accounts in the 2 years prior to the Decedent’s death. Neither the Daughter nor her mother provided any explanation as to why it was necessary to have such a large number of accounts. In total, the trial court found $285,383.65 in improper direct cash transfers to the Daughter, indirect transfers through the joint accounts and donative discount from the sale of the home. In addition, the trial court found that Daughter had wrongfully taken property from Decedent and had essentially concealed these funds by attempting to characterize the transfers as valid and neglecting to provide an accounting and had exhibited a pattern of behavior that implies bad faith dealings. The Court found the Decedent to have been a “dependent adult” by reason of her physical limitations that restricted her ability to carry out normal activities. Because the Decedent was a dependent adult any transfer to either the Caregiver or the Caregiver’s blood relative is made presumptively invalid by Probate Code §21350(a)(6)-(a)(7). No evidence was produced to rebut that presumption. Finally, the appellate Court affirmed the trial court’s finding that the Daughter acted with “undue influence” applies to a dependent adult with physical limitations as well as those with mental limitations.