Source: https://directorofficernews.com/2013/10/20/new-california-undue-influence-statute-and-what-it-means/
Timestamp: 2018-12-15 01:13:25
Document Index: 31081219

Matched Legal Cases: ['§15610', '§86', '§15610', '§86', '§15610', '§15610', '§15610', '§15610', '§15610', '§15610', '§15610', '§709']

New California Undue Influence Statute And What It Means | AUDIT COMMITTEES, D&O, BUSINESS, COMPLIANCE, RISK, AUDITING, INVESTIGATIONS & LITIGATION
New California Undue Influence Statute And What It Means
Posted on October 20, 2013 by David Tate, Esq.
On October 9, 2013, Governor Brown signed new legislation adding a new statutory definition of undue influence at California Welfare & Institutions Code §15610.70 and amending other related statutes. I have copied below at the end of this post the information and wording of the legislation from the following California legislative page: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB140.
I haven’t been following this legislation. And as I haven’t read anything about the intended purpose of the legislation, why it was needed, or what improvement it is intended to accomplish, my below comments about the new law are uninfluenced based on the wording of the statutory changes and the current existing law on undue influence. I have been involved in mental capacity, fraud, and undue influence, and will and trust contest cases for most of my legal career. I also invite you to provide your comments about the new law.
MY THOUGHTS ON THE LEGISLATION
On my initial reading my first thoughts were that the new statutes for the most part primarily follow and codify existing law. And indeed many of the provisions do mirror existing case and common law, and new Probate Code §86 further specifies: “’Undue influence’” has the same meaning as defined in Section 15610.70 of the Welfare and Institutions Code. It is the intent of the Legislature that this section supplement the common law meaning of undue influence without superseding or interfering with the operation of that law.”
The primary changes occur in new California Welfare and Institutions Code §15610.70 which adds or codifies the statutory definition of undue influence, but, as stated at §86, does not supersede the common law meaning which still exists. You can read the actual wording of §15610.70 below yourself. My comments pertain to the changes which don’t necessarily mirror existing case and common law and the possible overall impact of the statue.
Initially, as §15610.70 now presents a statutory definition of undue influence, that definition will be easier to present to a jury as a standard of care. Consideration should also be given to whether there are per se violation possibilities and instructions. Those issues might need to be determined by future court decisions.
New Welfare and Institutions Code §15610.70(a) provides that the following primary issue areas will be considered when determining if there has been undue influence: (1) the vulnerability of the victim; (2) the influencer’s apparent authority; (3) the actions or tactics used by the influencer; (4) the equity of the result (however, §15610.70(b) provides that evidence of inequitable result alone without more is not sufficient to prove undue influence).
Most of the §15610.70(a)(1) criteria relating to the vulnerability of the victim already exist in current common law. I do note however that the statute includes the victim’s age and education as two of the possible criteria. I would not consider either age or education as evidence of undue influence without more. And I provide additional comments below about the “education” criteria.
I assume that the §15610.70(a)(2) criteria pertaining to the influencer’s apparent authority means the apparent authority that the accused influencer has or had from the victim’s perspective although that might be an issue for determination by future case decisions. I note that the statute includes as evidence of the apparent authority the accused influencer’s status as a fiduciary, family member, care provider, health care professional, legal professional, spiritual adviser, expert, or other qualification. Depending on your perspective, the statute might be viewed as in part pertaining to or targeting professionals and, of course, clergy. The statute doesn’t list CPAs/accountants, financial advisors, bankers or stockbrokers but it does include overflow “expert” and “other qualification” categories. Who, for example, is an “expert”?
Most of the §15610.70(a)(3) criteria relating to the actions or tactics of the accused influencer already exist in common law. I do note however one listed category of action or tactic: the accused influencer’s “claims of expertise” which again could be viewed as in part pertaining to or targeting professionals.
ADDITIONAL POSSIBLE UNCERTAINTIES
Under the statue can an accused influencer be found guilty or liable for undue influence if he or she had no intent to unduly influence and/or can the accused influencer be found guilty or liable for undue influence if he or she did not benefit or wrongfully intend for another person to benefit from the influence? So, for example, what about the situation of an estate planning attorney, a CPA/accountant, a financial advisor, a banker or a stockbroker, influencing a client to do something with the client’s money or assets, but not wrongfully intending or acting? Can the influence, e.g., advice, or even possible negligent advice or actions now possibly constitute undue influence? And if so, will those actions be covered by malpractice coverage without reservation of rights? More issues to be determined by further court decisions.
The following is copied and pasted from the California legislative link that I provided above.
AB 140, Dickinson. Undue influence.
Existing law provides that financial abuse of an elder or dependent adult occurs when, among other instances, a person or entity takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an elder or dependent adult by undue influence, as defined.
Existing law makes failing to report, or impeding or inhibiting a report of, among other things, financial abuse of an elder or dependent adult, in violation of certain reporting requirements a misdemeanor. Existing law also makes it a misdemeanor for any caretaker of an elder or dependent adult to violate any provision of law proscribing theft or embezzlement, with respect to the property of that elder or dependent adult.
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