California Court of Appeals, Second District, Fourth Division
HELEN J. BOUNDS et al., Petitioners,
THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent KMA GROUP et al., Real Parties in Interest.
Los Angeles County Super. Ct. No. YC068863
ORIGINAL PROCEEDINGS in mandate, prohibition and/or other appropriate relief. Stuart M. Rice, Judge. Petition granted.
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Ethan Brown Law, Ethan J. Brown and Sara C. Colon for Petitioners.
No appearance for Respondent.
Michael Leight for Real Parties in Interest.
In this proceeding, Helen J. Bounds (Bounds) and the Helen J. Bounds Living Trust (the Trust) petition for a writ of mandate compelling the trial court to vacate its order sustaining without leave to amend a demurrer to their
two causes of action for financial elder abuse alleged under the Elder Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code, §§ 15600, et seq. (the Act).
Bounds, an 88-year-old widow allegedly suffering from Alzheimer’s disease, alleges in her cross-complaint that for approximately six months, Real Parties in Interest Gerry Mayer (Mayer), Joseph Sojka (Sojka), and their associated businesses entities (KMA Group, LLC, Kopykake Enterprises, and Sojka-Nikkel Commercial Realty Group) engaged in abusive conduct, resulting in her signing, among other documents, escrow instructions authorizing the sale of real property owned by the Trust. Because escrow was cancelled, the Trust retains title to, and Bounds remains in possession of, the property. However, petitioners allege that the existence of the escrow instructions significantly impairs their right to sell the property at fair market value or to use it to secure a loan on favorable terms.
These alleged facts raise an issue of first impression: whether to allege a “taking” of a property right under the Act, it is sufficient to plead that an elder has entered into an unconsummated agreement which, in effect, significantly impairs the value of the elder’s property, or whether the Act requires that the agreement have been performed and title have been conveyed. In relevant part, the Act provides that “financial abuse” of an elder occurs when “a person or entity... [t]akes [or] assists in taking... real or personal property of an elder... for a wrongful use or with intent to defraud, or both” (§ 15610.30, subds. (a)(1) & (2), italics added) or “by undue influence.” (§ 15610.30, subd. (a)(3).) It provides that someone “takes” such property when the elder “is deprived of any property right, including by means of an agreement, donative transfer, or testamentary bequest....” (§ 15610.30, subd. (c), italics added.)
As explained more fully below, we conclude that because property rights include, among other things, the right to use and sell property (Estate of Sigourney (2001) 93 Cal.App.4th 593, 604 [113 Cal.Rptr.2d 274]), petitioners’ allegations that Bounds entered into an executory agreement which significantly impaired the value of the property owned by the Trust adequately pleads a “taking” -- that is, adequately pleads that Bounds has been “deprived of [a] property right... by means of an agreement, ” within the meaning of section 15610.30, subdivision (c). Therefore, we grant the petition and issue the writ compelling the trial court to vacate its order sustaining the demurrer to petitioners’ financial elder abuse claims.
I. The Cross-Complaint
Because this proceeding arises from the sustaining of a demurrer, we assume the truth of all facts properly pled in the operative pleading – the Second Amended Cross Complaint (SACC) -- and also accept as true all facts that may be implied or inferred from those expressly alleged. (Curcini v. County of Alameda (2008) 164 Cal.App.4th 629, 633, fn. 3 [79 Cal.Rptr.3d 383], and cases cited therein.) In addition, we consider all evidentiary facts found in the exhibits attached to the SACC (Satten v. Webb (2002) 99 Cal.App.4th 365, 375 [121 Cal.Rptr.2d 234]) as well as all judicially noticed matters (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 [6 Cal.Rptr.3d 457, 79 P.3d 569]). Below, we summarize the allegations of the cross-complaint.
Bounds is an 88-year-old widow. At all relevant times she was the trustee of the Trust, and suffered from, but had not yet been diagnosed with, Alzheimer’s disease. The Trust owns real property located at 3737 West 240th Street in Torrance, California (the real property). Wm. Bounds, Ltd. (Bounds, Ltd.), a family business founded over 40 years ago by Bounds’ late husband, operates its business on the real property. The business manufactures and sells, among other things, salt and pepper shakers. The Trust is a majority shareholder of Bounds, Ltd.
Bounds, Ltd. shares a driveway and parking lot with Kopykake Enterprises (Kopykake). Mayer is a principal of Kopykake and has operated the business for decades. In addition, Mayer is a principal of KMA Group, LLC (KMA). Bounds knows and trusts Mayer.
By mid-2012, Bounds, Ltd. was in dire need of funds to maintain the business. Bounds, without any knowledge of her family and in a deteriorating mental condition, began negotiating with Mayer to sell the real property to KMA and Kopykake. Joseph Sojka (Sojka), President of Sojka-Nikkel Commercial Realty Group (Sojka-Nikkel) also was involved in the negotiations, attempting to persuade Bounds to sell the property to Kopykake and KMA. (Sojka had a prior relationship with Mayer, Kopykake, and KMA.) Mayer and Sojka made exaggerated claims about the poor physical and financial condition of the real property to frighten Bounds into selling it at a bargain price. Sojka repeatedly tried to telephone Bounds to convince her to sell. Bounds did not understand the status or terms of the negotiations and Mayer and Sojka knew or should have known about Bounds’ cognitive failings.
In the fall of 2012, Bounds consulted with an attorney and accountant to draft a counter-offer to sell the real property for ...