Plaintiff Failed To Prove Harm As Required Under Welf. & Inst. Code § 15657.5(a) Because The Approximate $400,000 In Annuities Upon Which He Based Harm Had Been Returned Pursuant To A Probate Court Order More Than A Year Before Trial, But Defendants’ § 998 Offer Was Not Reasonable Nor Made In Good Faith Given The Circumstances Of The Case.
In Lerdahl v. Milber, Case Nos. A159167/A160788 (1st Dist., Div. 5 June 22, 2021) (unpublished), plaintiff, through the conservator of his estate, sued Diane Milber (a certified public accountant and insurance agent) and members of her family for multiple causes of action, including financial elder abuse, after Milber transferred the approximate $400,000 worth of annuities she had sold him into a trust she created that named her husband as trustee, one of their sons as successor trustee, and their other son as sole beneficiary. Additionally, plaintiff alleged that Milber changed his beneficiary designations on the annuities to make her sons the beneficiaries. While the action was pending, a probate court voided the trust and ordered that all assets held in the trust be turned over to the conservator of plaintiff’s estate. About two years after plaintiff filed suit, defendants served plaintiff with a Code Civ. Proc. § 998 offer to settle for $75,000. Plaintiff refused and the case proceeded to trial.
The jury returned an unclear verdict – awarding plaintiff $0 in damages and $0 in punitive damages – although finding Milber obtained or retained plaintiff’s property for a wrongful use, or with the intent to defraud, or by undue influence, that plaintiff was 65 years of age or older at the time of the conduct, and that Milber was liable for damages to plaintiff and for punitive damages (but making no findings as to Milber’s husband except that he also obtained or retained plaintiff’s property, and no findings as to whether Milber and her husband acted with fraud, oppression, or malice). Ultimately, the trial court ordered the verdict recorded and entered judgment reflecting the jury’s special verdict – concluding the jury found plaintiff had suffered no damages because the annuities had previously been returned and no other item of damages had been requested. Additionally, the trial court denied plaintiff’s postjudgment motion for an award of attorney and conservator costs, from which plaintiff appealed, and granted plaintiff’s motion to strike or tax defendants’ memorandum of costs as to defendants’ request for $125,257.90 in expert witness fees, from which defendants appealed.
The 1/5 DCA affirmed. Plaintiff’s failure to establish liability for financial elder abuse precluded an award of attorney fees under the Elder Abuse and Dependent Adult Civil Protection Act (Elder Abuse Act; Welfare & Institutions Code § 15600 et seq.). Pursuant to § 15657.5(a), to recover fees and costs, plaintiff had to allege and prove not only the existence of a duty and its breach, but also injury and causation in order to establish the defendants’ liability. Plaintiff was unable to prove harm at trial as the only harm alleged in his complaint concerned the obtaining or retaining of his property, and the only damages sought were measured by the value of the annuities which had been returned more than a year before trial. As the panel pointed out, plaintiff could have alleged and potentially proven harm based on something other than the value of the annuities – such as pain and suffering – and the outcome of his fees request would likely have been different.
As to the denial of defendants’ expert witness fees, the appellate panel agreed with the trial court’s finding that defendants’ § 998 offer was not reasonable nor made in good faith given the circumstances of the case. The § 998 offer was made almost two years into the litigation, giving rise to a reasonable inference that plaintiff had incurred “substantial costs.” Based on plaintiff’s prospect of recovering enhanced remedies under the Elder Abuse Act, including attorney fees and punitive damages, there was no abuse of discretion in the trial court’s finding.
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