Conservatee right to live in personal residence, and sale of personal residence – new 2020 law changes – forwarding from Weintraub Tobin

The following is a link to a discussion by attorney Carlena Tapella at Weintraub Tobin about two new conservatee personal residence rights beginning in 2020. https://www.weintraub.com/blogs/theres-no-place-like-home-heightened-evidentiary-standard-for-moving-conservatees-from-their-personal-residence

As discussed by Ms. Tapella, under present law it is presumed that the personal residence of the conservatee is the least restrictive and most appropriate residence where the conservatee should live. But beginning in 2020 that presumption can only be overcome by clear and convincing evidence, which is a significantly higher standard. Amended Probate Code Section 2352.5 will in part read: “In any hearing to determine if removal of the conservatee from the conservatee’s personal residence is appropriate, that presumption may be overcome by clear and convincing evidence.” And the petitioner or conservator also will be required to determine and establish the appropriate level of care, including the most appropriate residence. Amended Section 2352.5 will also in part read that: If the conservatee is living at a location other than the conservatee’s personal residence at the commencement of the proceeding, that determination shall either include a plan to return the conservatee to their personal residence or an explanation of the limitations or restrictions on a return of the conservatee to their personal residence in the foreseeable future.”

In recent years several California Court decisions have significantly increased the rights of conservatees and prospective conservatees, including, for example, the right to a jury trial on at least some of the conservatorship issues. You should also be aware that a conservatee and a prospective conservatee also have the right to oppose the conservatorship and the conditions of the conservatorship, and also the right to be represented by an attorney – and in appropriate circumstances the Court will appoint an attorney to represent the conservatee or prospective conservatee. The Courts have recognized that a conservatorship proceeding is an action in which the person who has filed the petition is requesting the Court (the State or government) to limit or to take away or to restrict some of the prospective conservatee’s constitutional rights and rights to personal freedom and freedom of choice and decision making. You will see in some of my prior blog posts discussions about certain aspects of conservatorships.

At the link above Ms. Tapella also discusses 2020 changes that put restrictions on the sale of the conservatee’s residence. Amended Probate Code Section 2540 will in part read: “In seeking authorization to sell a conservatee’s present or former personal residence, the conservator shall notify the court that the present or former personal residence is proposed to be sold and that the conservator has discussed the proposed sale with the conservatee . . . . and whether the conservatee supports or is opposed to the proposed sale and shall describe the circumstances that necessitate the proposed sale, including whether the conservatee has the ability to live in the personal residence and why other alternatives, including, but not limited to, in-home care services, are not available. The court, in its discretion, may require the court investigator to discuss the proposed sale with the conservatee.”

The law of conservatorships, and conservatorship proceedings and administrations, including the responsibilities and rights of conservatees and conservators, continue to become more specialized and complicated, and conservatee rights continue to increase and be recognized by the California Legislature and by the Courts.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Probate Court Disputes and Litigation

  • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries and beneficiaries; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business and Business-Related Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; and Nonprofit Entities

  • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
  • Misappropriation of trade secrets
  • M&A disputes
  • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes
  • Buy-sell disputes
  • Funding and share dilution disputes
  • Accounting, lost profits, and royalty disputes and damages
  • Access to corporate and business records disputes
  • Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations and Governance

  • Corporate and business internal investigations
  • Board, audit committee and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, etc.

The following are copies of the tables of contents of three of the more formal materials that I have written over the years about accounting/auditing, audit committees, and related legal topics – Accounting and Its Legal Implications was my first formal effort, which resulted in a published book that had more of an accounting and auditing focus; Chapter 5A, Audit Committee Functions and Responsibilities, for the California Continuing Education of the Bar has a more legal focus; and the most recent Tate’s Excellent Audit Committee Guide (February 2017) also has a more legal focus:

Accounting and Its Legal Implications

Chapter 5A, Audit Committee Functions and Responsibilities, CEB Advising and Defending Corporate Directors and Officers

Tate’s Excellent Audit Committee Guide

The following are other summary materials that you might find useful:

OVERVIEW OF A RISK MANAGEMENT PROCESS THAT YOU CAN USE 03162018

Audit Committee 5 Lines of Success, Diligence, and Defense - David Tate, Esq, 05052018

COSO Enterprise Risk Management Framework ERM Components and Principles

From a prior blog post which you can find at https://wp.me/p75iWX-dk if the below scan is too difficult to read:

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As we head into House impeachment testimony, consider witness credibility . . . (forwarding post from D&O, audit committee, etc., blog)

I am forwarding this post from my D&O, audit committee, governance, etc., blog at http://auditcommitteeupdate.com

Witness credibility is one of the many crucial elements at trial. If you view and listen to impeachment testimony in the House of Representatives consider the credibility of the witnesses. In broad terms, the credibility of a witness pertains to his or her believability as a person and possible bias, personal knowledge and ability to perceive the event about which he or she is testifying, and actual testimony provided. Credibility is also established by the questions that are allowed to be asked and that are asked of the witness on direct examination, and is attacked by questions that are allowed to be asked and that are asked on cross examination of the witness. Also consider the nature of the questions that are being asked – for example, are they leading (suggestive of the answer that is desired), are they more questioner speech than question to the witness, are they really the most important questions that you would like to know or are they missing important issues and questions, etc.?

To be sure the processes and procedures that are being allowed and that are being followed in the House impeachment action are not the same as processes and procedures that would be allowed and followed in a court trial, and typical court procedural and evidentiary rules are not being allowed or followed in the impeachment action. However, below, for example, I have pasted California Evidence Code Section 780 which pertains to and discusses some, but not all, aspects of witness credibility in a California trial. Enjoy.

California Evidence Code Section 780

Except as otherwise provided by statute, the court or jury may consider in determining the credibility of a witness any matter that has any tendency in reason to prove or disprove the truthfulness of his testimony at the hearing, including but not limited to any of the following:

(a) His demeanor while testifying and the manner in which he testifies.

(b) The character of his testimony.

(c) The extent of his capacity to perceive, to recollect, or to communicate any matter about which he testifies.

(d) The extent of his opportunity to perceive any matter about which he testifies.

(e) His character for honesty or veracity or their opposites.

(f) The existence or nonexistence of a bias, interest, or other motive.

(g) A statement previously made by him that is consistent with his testimony at the hearing.

(h) A statement made by him that is inconsistent with any part of his testimony at the hearing.

(i) The existence or nonexistence of any fact testified to by him.

(j) His attitude toward the action in which he testifies or toward the giving of testimony.

(k) His admission of untruthfulness.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Probate Court Disputes and Litigation

  • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries and beneficiaries; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business and Business-Related Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; and Nonprofit Entities

  • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
  • Misappropriation of trade secrets
  • M&A disputes
  • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes
  • Buy-sell disputes
  • Funding and share dilution disputes
  • Accounting, lost profits, and royalty disputes and damages
  • Access to corporate and business records disputes
  • Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations and Governance

  • Corporate and business internal investigations
  • Board, audit committee and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, etc.

The following are copies of the tables of contents of three of the more formal materials that I have written over the years about accounting/auditing, audit committees, and related legal topics – Accounting and Its Legal Implications was my first formal effort, which resulted in a published book that had more of an accounting and auditing focus; Chapter 5A, Audit Committee Functions and Responsibilities, for the California Continuing Education of the Bar has a more legal focus; and the most recent Tate’s Excellent Audit Committee Guide (February 2017) also has a more legal focus:

Accounting and Its Legal Implications

Chapter 5A, Audit Committee Functions and Responsibilities, CEB Advising and Defending Corporate Directors and Officers

Tate’s Excellent Audit Committee Guide

The following are other summary materials that you might find useful:

OVERVIEW OF A RISK MANAGEMENT PROCESS THAT YOU CAN USE 03162018

Audit Committee 5 Lines of Success, Diligence, and Defense - David Tate, Esq, 05052018

COSO Enterprise Risk Management Framework ERM Components and Principles

From a prior blog post which you can find at https://wp.me/p75iWX-dk if the below scan is too difficult to read:

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Who Can File A Petition Relating To A Power Of Attorney – Almost Anyone, Including Any Interested Person Or Friend

If you have a question or dispute about how a power of attorney operates, or how it should be or is being used, the California Probate Code allows almost anyone to file a petition with the Court for instructions or other remedies. See the provisions of Probate Code Sections 4540 and 4541 below.

Also note, there are powers of attorney for financial and asset management, and powers of attorney for health care and daily living – although some of the provisions are similar, there are important differences. And, perhaps outside of common knowledge, it is not always clear when, for how long, and for what decision making a person can become and becomes an attorney in fact, what decisions can be made, what decisions are legally prudent, and what people and resources, including the principal, might be or in circumstances should be or must be consulted about the matter at hand and possible options for decision making. 

California Probate Code Section 4540 provides as follows:

Subject to Section 4503, a petition may be filed under this part by any of the following persons:

(a) The attorney-in-fact.

(b) The principal.

(c) The spouse of the principal.

(d) A relative of the principal.

(e) The conservator of the person or estate of the principal.

(f) The court investigator, described in Section 1454, of the county where the power of attorney was executed or where the principal resides.

(g) The public guardian of the county where the power of attorney was executed or where the principal resides.

(h) The personal representative or trustee of the principal’s estate.

(i) The principal’s successor in interest.

(j) A person who is requested in writing by an attorney-in-fact to take action.

(k) Any other interested person or friend of the principal.

California Probate Code Section 4541 provides as follows:

A petition may be filed under this part for any one or more of the following purposes:

(a) Determining whether the power of attorney is in effect or has terminated.

(b) Passing on the acts or proposed acts of the attorney-in-fact, including approval of authority to disobey the principal’s instructions pursuant to subdivision (b) of Section 4234.

(c) Compelling the attorney-in-fact to submit the attorney-in-fact’s accounts or report the attorney-in-fact’s acts as attorney-in-fact to the principal, the spouse of the principal, the conservator of the person or the estate of the principal, or to any other person required by the court in its discretion, if the attorney-in-fact has failed to submit an accounting or report within 60 days after written request from the person filing the petition.

(d) Declaring that the authority of the attorney-in-fact is revoked on a determination by the court of all of the following:

(1) The attorney-in-fact has violated or is unfit to perform the fiduciary duties under the power of attorney.

(2) At the time of the determination by the court, the principal lacks the capacity to give or to revoke a power of attorney.

(3) The revocation of the attorney-in-fact’s authority is in the best interest of the principal or the principal’s estate.

(e) Approving the resignation of the attorney-in-fact:

(1) If the attorney-in-fact is subject to a duty to act under Section 4230, the court may approve the resignation, subject to any orders the court determines are necessary to protect the principal’s interests.

(2) If the attorney-in-fact is not subject to a duty to act under Section 4230, the court shall approve the resignation, subject to the court’s discretion to require the attorney-in-fact to give notice to other interested persons.

(f) Compelling a third person to honor the authority of an attorney-in-fact.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Probate Court Disputes and Litigation

  • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries and beneficiaries; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business and Business-Related Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; and Nonprofit Entities

  • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; breach of the covenant of good faith and fair dealing; etc.
  • Misappropriation of trade secrets
  • M&A disputes
  • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, voting, etc., disputes
  • Buy-sell disputes
  • Funding and share dilution disputes
  • Accounting, lost profits, and royalty disputes
  • Access to corporate and business records disputes
  • Employee, employer and workplace disputes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations and Governance

  • Corporate and business internal investigations
  • Board, audit committee and special committee governance and processes, disputes, conflicts of interest, independence, etc.

* * * * *

New California Case, Levin v. Winston-Levin: Probate Code §859 Undue Influence Also Requires A Finding Of Bad Faith, And Depending On The Circumstances A Finding Of Undue Influence Could Invalidate The Entire Document, Or Only A Part Thereof

In Levin v. Winston-Levin (California Court of Appeal, Fourth Appellate District, Case No. G056353, filed September 13, 2019), the court made two noteworthy holdings:

1.  To recover double damages under the Cal. Probate Code §859 prong pertaining to undue influence, in addition to a finding of undue influence there must also be a finding that the undue influence was in bad faith. While one might presume that undue influence is in bad faith, as the court noted, Cal. Welfare & Institutions Code §15610.70 which defines undue influence as excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity, directs a court to consider four primary factors which are then further broken down: the vulnerability of the victim, the influencer’s apparent authority, the actions or tactics used by the influencer, and the equity of the results – thus, it is entirely possible that a court might find that there was undue influence but no bad faith by the influencer.

I also note that there are very few appellate decisions pertaining to Cal. Probate Code §850, et al., which is surprising in light of the somewhat frequency that §850 is pleaded. It is my view that §850, §859, and the other sections relating thereto, are not particularly well drafted which can lead to confusion about applicability in situations that are on the fringe.

2.  It is the general rule that if the whole document (in this case a will) is the result of the presence of undue influence, the will is totally invalidated, but that if only a part of the will was procured by undue influence, that part may be rejected as void, but the remainder which is the outcome of the testator’s free will remains valid if it is not inconsistent with and can be separated from the part that is invalid. In Levin the court also compared the result if the entire will was invalidated or with the result if only a part of the will was invalidated, and compared those results with what was established about the decedent’s overall historical estate planning wishes and intentions.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this website. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

 

California State Bar Task Force Identifies 16 Options to Significantly Change the Practice of Law

While attending a BASF reception event this past Friday evening I introduced myself to two attorney attendees who were already engaged in a discussion. I did not know either of the two attorneys. As it turns out, the discussion was about a topic that I had heard nothing about – a California State Bar Task Force evaluating and apparently recommending changes – significant changes – to the practice of law. Occasionally I post discussions about the practice of law in this blog or in my other blog (D&O, audit committees, risk management, etc., http://auditcommitteeupdate.com), including, for example, somewhat recent posts about rule of professional responsibility changes pertaining to conflicts of interest, confidentiality, and attorney as a witness rules.

One of the attorneys from this past Friday evening emailed some additional information to me about the State Bar Task Force. The materials, and the possible changes that are being evaluated are detailed and significant, including, for example, options for expanding the practice of law by non-attorneys and business entities that are not law firms, allowing non-attorney ownership of law firms, changing confidentiality and conflict rules, changing limitations on the sharing of fees with non-lawyers, and more.

Frankly, it would take me considerable time to evaluate the possible changes, of which it appears that there are or could be 16 options that are proposed. Thus, for your additional information and reading, below I have provided links to some of the Task Force materials.

The following is part of the State Bar’s description of the Task Force’s assignment: The State Bar Board appointed a Task Force on Access Through Innovation of Legal Services (ATILS) and assigned it to identify possible regulatory changes to remove barriers to innovation in the delivery of legal services by lawyers and others. ATILS was charged with balancing dual goals: consumer protection and increased access to legal services. ATILS has developed 16 concept options for possible regulatory changes, and the Task Force is now seeking public input to help evaluate these ideas.

The following is a Task Force chart that broadly illustrates areas of possible change. Note that this chart does not list or illustrate the individual options that are being considered – also note that if the chart is somewhat difficult to read in this format you will also find a version of the chart by clicking on the Options for Regulatory Reform link below:

The following is a link to a rather long pdf report by the Task Force – I note that the report description indicates “Tentative Recommendations,” indicating or suggesting that although hearings are ongoing the Task Force appears to have already reached tentative recommendations: Board of Trustees Agenda Item 701 JULY 2019: State Bar Task Force on Access Through Innovation of Legal Services Report: Request to Circulate Tentative Recommendations for Public Comment

The following is a link to the Task Force’s website with the heading: Options for Regulatory Reform: http://www.calbar.ca.gov/About-Us/Our-Mission/Protecting-the-Public/Public-Comment/Public-Comment-Archives/2019-Public-Comment/Options-for-Regulatory-Reforms-to-Promote-Access-to-Justice

The following is a link to the Task Force’s primary website: http://www.calbar.ca.gov/About-Us/Who-We-Are/Committees-Commissions/Task-Force-on-Access-Through-Innovation-of-Legal-Services/Task-Force-on-Access-Through-Innovation-of-Legal-Services

These Task Force materials are important for all attorneys, prospective attorneys, law schools, and providers or potential providers of legal services. Currently I have no insight as to which if any changes will be made; however, I am sure that more on these topics will follow.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this website. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the new Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

The following are copies of the tables of contents of three of the more formal materials that I have written over the years about accounting/auditing, audit committees, and related legal topics – Accounting and Its Legal Implications was my first formal effort, which resulted in a published book that had more of an accounting and auditing focus; Chapter 5A, Audit Committee Functions and Responsibilities, for the California Continuing Education of the Bar has a more legal focus; and the most recent Tate’s Excellent Audit Committee Guide (February 2017) also has a more legal focus:

Accounting and Its Legal Implications

Chapter 5A, Audit Committee Functions and Responsibilities, CEB Advising and Defending Corporate Directors and Officers

Tate’s Excellent Audit Committee Guide

The following are other summary materials that you might find useful:

OVERVIEW OF A RISK MANAGEMENT PROCESS THAT YOU CAN USE 03162018

Audit Committee 5 Lines of Success, Diligence, and Defense - David Tate, Esq, 05052018

COSO Enterprise Risk Management Framework ERM Components and Principles

From a prior blog post which you can find at https://wp.me/p75iWX-dk if the below scan is too difficult to read:

* * * * *

 

Discussions About Powers of Attorney – Responsibilities and Rights (Part 1)

I am writing a couple of posts discussing powers of attorney under the California Probate Code. One of my current cases involves responsibilities and rights under financial and healthcare powers of attorney. A prior case in litigation involved whether or not to disconnect mom from medical equipment that was believed to be keeping her alive. Some of the discussion in these posts will be from a talk that I presented for the Professional Fiduciary Association of California.

Responsibilities and rights under a power of attorney are determined by the wording of the power of attorney itself, statutes, case law, and the facts and circumstances of the situation. These can be complicated issues. Although the wording of the power of attorney is extremely important, and that wording should be where the determination of responsibilities and rights starts, as you will see in these posts, the wording of the power of attorney does not give the complete answer. There are lengthy chapters and books written on these topics – in this and a couple of following posts I will be discussing some of the statutory provisions that govern responsibilities and rights under powers of attorneys under the California Probate Code.

Under the California Probate Code powers of attorney are discussed at Probate Code §§4000-4545.

Thus, for example, California Probate Code §§4050 and 4051 provide as follows:

Probate Section 4050:

(a) This division applies to the following:

(1) Durable powers of attorney, other than powers of attorney for health care governed by Division 4.7 (commencing with Section 4600).

(2) Statutory form powers of attorney under Part 3 (commencing with Section 4400).

(3) Any other power of attorney that incorporates or refers to this division or the provisions of this division.

(b) This division does not apply to the following:

(1) A power of attorney to the extent that the authority of the attorney-in-fact is coupled with an interest in the subject of the power of attorney.

(2) Reciprocal or interinsurance exchanges and their contracts, subscribers, attorneys-in-fact, agents, and representatives.

(3) A proxy given by an attorney-in-fact to another person to exercise voting rights.

(c) This division is not intended to affect the validity of any instrument or arrangement that is not described in subdivision (a).

Probate Section 4051:

Except where this division provides a specific rule, the general law of agency, including Article 2 (commencing with Section 2019) of Chapter 2 of Title 6 of, and Title 9 (commencing with Section 2295) of, Part 4 of Division 3 of the Civil Code, applies to powers of attorney.

In relevant part, California Civil Code Sections 2019, 2020 and 2022 provide:

Civil Code Section 2019 – an agent must not exceed the limits of his actual authority.

Civil Code Section 2020 – an agent must use ordinary diligence and keep his or her principal informed of his or her acts.

Civil Code Section 2022 – a mere agent of an agent is not responsible as such to the principal of the latter.

Thus, whereas the power of attorney might appear to say or suggest that the attorney-in-fact has absolute authority at least in the circumstances that are listed, you can see that, nevertheless, the attorney-in-fact cannot exceed his or her actual authority, he or she has to use at least ordinary diligence unless the power of attorney states otherwise, and the attorney-in-fact must keep his or her principal informed of his or her acts. And these are themes and requirements that run throughout the statutes that more specifically discuss responsibilities and rights, and that will be discussed in future posts.

Every case and situation is different. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this website. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only. I am also the new Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

 

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COSO Enterprise Risk Management Framework ERM Components and Principles

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New California case – the consequences to the attorney for failing to disclose a conflict can be significant – possible disqualification and possible denial of fees

In Sheppard, Mullin, Richter & Hampton v. J-M Manufacturing Company, Inc. a motion to disqualify the law firm from representing a client was granted. The firm represented a manufacturing company in a federal qui tam action brought on behalf of a number of public entities, while at the same time also represented one of those public entities in matters entirely unrelated to the qui tam suit.

Although both clients executed engagement agreements that contained blanket waivers of all conflicts of interest, both current and future, the waivers failed to list the specific then existing actual conflict. Note, there was no evidence that the conflict in any way prejudiced either client, or that the firm breached any duty of loyalty, or that there was any intent to not disclose the conflict. The issue was simply that the firm failed, inadvertently, to satisfy a Rule of Professional Conduct, in this case the disclosure of an actual conflict involving current clients. The case pertained to Rule of Professional Conduct 3-310(C)(3), which is now Rule 1.7 as of November 1, 2018. The case is Sheppard, Mullin, Richter & Hampton (2018) 6 Cal. 5th 59, and is a California Supreme Court case.

In relevant part, the Court held that “To be informed, the client’s consent to dual representation must be based on disclosure of all material facts the attorney knows and can reveal.” The fact that the client was sophisticated, and also had corporate counsel who was involved, were irrelevant. “The transaction [i.e., the engagement agreement] was entered under terms that undermined an ethical rule designed for the protection of the client as well as for the preservation of public confidence in the legal profession.”

As a result, the law firm was disqualified from representing the manufacturing company client, and the engagement agreement was rendered unenforceable because when the client executed the conflict waiver the client had not been sufficiently informed of the conflict(s). The entire engagement agreement (including the arbitration clause therein) was held to be unenforceable.

The firm was then stuck in the position of having to prove entitlement to recovery of attorneys’ fees under quantum meruit. The case was remanded to the trial court on the quantum meruit issue – the attorneys’ fees issue had already been determined in a prior arbitration proceeding; however, that ruling was vacated because the arbitration clause which was in the engagement agreement also was invalid. Although the case was remanded on the quantum meruit issue, the decision contains a good discussion about quantum meruit and possible recovery thereunder, and what is required to establish recovery of attorneys’ fees under quantum meruit in a situation such as this, which isn’t a simple walk in the park.

Although in Sheppard, Mullin the existence of the actual, then existing conflict in was self-evident, you should be mindful that actual or potential conflicts can be numerous and need to be carefully considered in proceedings involving estate planning, or trust and estate administration, or the probate court. And you should also consider the possible applicability of not only Rule 1.7, but also Rules 1.9, 1.10, 3.7, 1.6, and possibly others. See also other posts on this blog pertaining to the revised Rules of Professional Conduct as of November 1, 2018.

Thanks for reading this post. If you have found value in this post, I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Every case situation is different. You do need to consult with professionals about your particular situation. This post is not a solicitation for services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Blogs: California trust, estate, and elder abuse litigation and contentious administrations http://californiaestatetrust.com; D&O, audit committee, governance and risk management http://auditcommitteeupdate.com