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Part II - Res Judicata Bars Financial Elder Abuse Claims On Court Approved Accountings

To continue our blog on Knox v. Dean (205 Cal.App.4th 417 (2012)), Donna (successor conservator, plaintiff, cross-defendant and appellant) appealed the trial court's decision granting Dean's (defendant, cross-complainant and respondent) motion for summary judgment or summary adjudication. Donna claimed that Dean committed financial elder abuse, breach of fiduciary duty and elder physical neglect by allowing an in-home caregiver to reside rent free in one of Blaine's apartments; allowing the apartments to deteriorate; failing to take reasonable steps to repair the apartments; failing to "monitor Blaine's physical condition" resulting to Blaine suffering from medical inattention and treatment. Donna further alleged that Dean allowed friends to rent Blaine's apartments at below-market rates, and charged for unnecessary services or services that were not actually performed, all of which led to losses to Blaine's estate.

Dean contended that Donna failed to plead sufficient facts to sustain a cause of action for breach of fiduciary duty. However, the Court of Appeal concluded that Donna's allegations were sufficient to state a cause of action for breach of fiduciary duty. The Court further concluded that res judicata bars Donna's claims to the extent they arose during the first three accounting periods since they have already been approved by the courts. Under Probate Code section 2103, when a judgment or order made pursuant to this division becomes final, it releases the guardian or conservator and the sureties from all claims of the ward or conservatee and of any persons affected thereby based upon any act or omission directly authorized, approved, or confirmed in the judgement or order. However, Donna's complaint encompasses claims that arose during the fourth accounting period, to which the defense of res judicata does not apply. Summary adjudication was therefore improper because Dean has failed to establish a complete defense to the entire cause of action. Accordingly, the Court of Appeal reversed the trial court's judgment. The matter was remanded to the trial court with directions to enter a new order denying Dean's motion for summary judgment and granting his motion for summary adjudication as to the causes of action for fraud and constructive fraud. Donna was awarded costs on appeal.

*This blog entry was not written by an Attorney and should not be construed as professional legal advice.

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