As our population ages, it is only natural there are more transactions where one of the parties is a senior citizen. Parties to a transaction need to remember that the Elder Abuse Dependent Adult Civil Protection Act (EADACPA) applies to transactions with seniors.
If it is believed that an elder has been taken advantage of in a transaction, it may lead to an elder abuse complaint being brought on behalf of the senior.
An attorney representing a senior in a transaction may want to consider obtaining a determination of the client’s mental state. The American Bar Association model Rules of Professional Conduct 1.14, comment six, lists five factors for a practitioner to consider in evaluating the capacity of a client:
- The client’s ability to articulate reasoning leading to a decision;
- Variability of state of mind;
- The ability to appreciate consequences of a decision;
- The substantive fairness of the decision;
- The consistency of a decision with the known long term commitments and values of the client.
A recent California case makes it easier to bring an elder abuse claim on behalf of a senior. One of the factors that must be established in an elder abuse claim is that the defendant took, secreted, appropriated, obtained, or retained real or personal property of an elder. A California Appellate Court in Bounds v. Superior Court (2014) 229 Cal 4th 468 recently held in a real estate transaction that in order to allege a “taking,” it was sufficient to plead that an elder had entered into a real estate agreement that significantly impaired the value of the elder’s property. It did not matter that the agreement had not been performed and title had not transferred. In Bounds, an 88 year old widow suffering from Alzheimer’s alleged that her property was taken even though the court found that the escrow was canceled and the agreement was not consummated. The Court of Appeal found that because “property rights” including the right to use and sell property had been adversely affected, she had properly alleged a “taking” under the statute.
Anyone interacting with or for a senior in a business transaction should be aware of these issues.