California Legal Implications: Mandatory Attorney’s Fees in Financial Elder Abuse Cases
A landmark ruling from the California Court of Appeal has strengthened protections for seniors by confirming that victims of financial elder abuse are entitled to attorney’s fees even if no monetary damages are awarded. As detailed in the opinion from the Fourth District Court of Appeal, the court in *Arace v. Medico Investments* held that the statutory requirement to award legal fees is mandatory once liability is proven, regardless of whether the jury awards compensation for that specific claim., the court in *Arace v. Medico Investments* held that the statutory requirement to award legal fees is mandatory once liability is proven, regardless of whether the jury awards compensation for that specific claim.
For California families, this decision reinforces the importance of vigilant estate planning and the legal recourse available when a loved one is exploited. It ensures that bad actors cannot simply return stolen funds to avoid paying the legal costs incurred by the victim’s family to recover those assets.
Understanding the Case and Financial Elder Abuse
In this case, an employee at a residential care facility obtained a Power of Attorney over a resident and transferred approximately $145,000 into her own account. When the resident’s great-niece discovered the theft, she demanded the return of the funds and the surrender of the Power of Attorney. The employee complied and returned the money. However, the great-niece, acting as the Successor Trustee and personal representative of the estate, proceeded with a lawsuit regarding financial elder abuse, neglect, and negligence., neglect, and negligence.
The jury found the defendants liable for financial elder abuse but awarded zero damages for that specific claim, likely because the funds had already been returned. Despite the lack of damages, the court awarded attorney’s fees to the plaintiff. The Court of Appeal affirmed this, citing that under the California Welfare and Institutions Code, fee-shifting is not discretionary; it is a mandatory penalty designed to deter abuse and encourage attorneys to represent vulnerable seniors., fee-shifting is not discretionary; it is a mandatory penalty designed to deter abuse and encourage attorneys to represent vulnerable seniors.
The Role of Fiduciaries in Estate Planning
This case highlights the critical importance of selecting trustworthy agents when creating a Durable Power of Attorney or naming a Trustee. The abuse in this case stemmed from an individual in a position of trust who exploited that access.. The abuse in this case stemmed from an individual in a position of trust who exploited that access.
Effective estate planning involves more than just drafting documents; it requires careful selection of fiduciaries who will act in the best interest of the principal. When a fiduciary duty is breached, families must know that California law provides robust mechanisms—such as the mandatory fee-shifting statute—to hold abusers accountable. is breached, families must know that California law provides robust mechanisms—such as the mandatory fee-shifting statute—to hold abusers accountable.
Why This Ruling Matters for California Residents
The ruling in *Arace v. Medico Investments* serves as a powerful deterrent against undue influence and theft. It ensures that predators cannot escape the financial burden of a lawsuit simply by returning what they stole after being caught. For families, this removes a significant barrier to seeking justice: the fear that the cost of litigation might outweigh the recovered assets. and theft. It ensures that predators cannot escape the financial burden of a lawsuit simply by returning what they stole after being caught. For families, this removes a significant barrier to seeking justice: the fear that the cost of litigation might outweigh the recovered assets.
If you suspect a loved one is a victim of abuse, or if you need to establish a protective Living Trust to safeguard assets, consulting with an experienced estate planning attorney is the first step toward security. is the first step toward security.
About This Case
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Legal Disclaimer
This article is for informational purposes only. Consult with a qualified California estate planning attorney for advice specific to your situation.