Arace v. Medico Investments, LLC

Filed 3/24/20; Certified for Publication 5/11/20 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
MELANIE ARACE, as Personal
Representative, etc.,
E071194
Plaintiff and Respondent,
(Super.Ct.No. CIVDS1504449)
v.
OPINION
MEDICO INVESTMENTS, LLC,
Defendant and Appellant.
APPEAL from the Superior Court of San Bernardino County. Brian S. McCarville,
Judge. Affirmed.
Pope & Gentile and Daniel K. Gentile for Defendant and Appellant.
Law Office of Susan D. Stein, Susan D. Stein; Law Office of Michael G. York and
Michael G. York, for Plaintiff and Respondent.
Plaintiff and respondent Melanie Arace, as personal representative and successor
in interest for Grace R. Miller (Miller) and trustee of the Grace R. Miller Trust dated May
8, 2002, initiated this action for elder abuse against Medico Investments, LLC (Medico),
a residential care facility, and others. Plaintiff alleged that Medico, or its employee
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Elizabeth Colon (Colon), engaged in multiple acts of elder abuse of Miller. The jury
found in favor of plaintiff, who was awarded damages, attorney fees, and costs.
On appeal, Medico contends (1) the trial court erred in denying its motion to
continue the trial based on the unavailability of a material witness; (2) the trial court erred
in awarding attorney fees and costs; and (3) plaintiff was not entitled to economic
damages under her claim for elder abuse (neglect) since the jury declined to award
noneconomic damages. We affirm.
I. PROCEDURAL BACKGROUND AND FACTS 1
Plaintiff’s great-aunt, Miller (born in 1927), was a resident of Foremost Senior
Campus (Foremost), a residential care facility for the elderly, from March 31, 2010 to
April 1, 2014. Foremost was owned by Leonard Crites, and Colon was an employee of
Foremost. In 2010, Crites purchased Miller’s home for $66,000 with the promise that she
would be “a lifetime resident at Foremost . . . without charge.” In May 2012, Medico
purchased Foremost in a short sale and retained Colon as the administrator. Medico was
not informed about Crites’s agreement to provide Miller with free lifetime residency.
In early 2013, after discovering that Miller was living at Foremost rent free,
Medico brought this information to Colon’s attention. Around the same time, Medico
learned that Colon had a durable power of attorney over Miller’s property and health care
decisions, having obtained it on February 11, 2013. At Colon’s request, Medico allowed
1 According to Medico, the “facts are largely undisputed. To the extent there is
any dispute regarding the facts, the dispute is not material as this appeal involves only
legal issues.”
2
Miller to remain at Foremost and reduced her monthly charge by 50 percent. However,
since Colon had power of attorney, Medico sought payment for Miller’s past due
account. During her stay, Miller was well taken care of by the staff at Foremost. She
remained there until March 27, 2014, when Colon moved Miller out of Foremost and into
a private home.
By late 2014, plaintiff contacted Miller and discovered that Colon controlled
Miller’s finances. In February 2015, upon plaintiff’s demand, Colon surrendered her
power of attorney over Miller and $145,885.90 of Miller’s money, which Colon had
deposited into her personal bank account in late 2013.
On April 1, 2015, plaintiff initiated this action. In December 2015, Miller passed
away. On April 11, 2016, a first amended complaint for damages was filed alleging: (1)
fraud/constructive fraud; (2) conversion; (3) fraud; (4) breach of fiduciary duty; (5)
intentional infliction of emotional distress; (6) elder abuse; (7) negligence against Medico
on the grounds it was liable for Colon’s alleged misappropriation of Miller’s assets; and
(8) negligent supervision.
Plaintiffs’ claims were tried before a jury. The special verdict form contained three
causes of actions against Medico: financial abuse, neglect, and negligence. The jury
found in favor of plaintiff on her claim for financial abuse but assessed no economic or
noneconomic damages. The jury also found in favor of plaintiff on her claim for neglect,
assessed $39,296.32 in economic damages, $0 in noneconomic damages, and found that
Medico acted with recklessness, oppression, or fraud. Finally, the jury found that Medico
was negligent, but its negligence was not a substantial factor in causing harm to plaintiff.
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Judgment was entered for plaintiff, who was awarded $39,296.32 in economic damages,
$89,410 in attorney fees, and $20,995.36 in costs.
II. DISCUSSION
A. The Trial Court Properly Denied Medico’s Motion to Continue Trial.
Medico argues the trial court abused its discretion in denying the motion for a
continuance. We disagree.
1. Further background information.
On November 13, 2017, the day set for trial to begin, Medico’s counsel requested
a continuance to mid-December 2017 on the grounds Colon, a material witness, was
unavailable due to medical complications. Plaintiff’s counsel opposed the request for the
following reasons: (1) The trial had already been continued two times (from May 22 to
July 24, 2017, due to Medico’s counsel’s engagement in another trial, and from July 24 to
Nov. 13, 2017, based upon Medico’s counsel’s personal health issue); (2) on October 19,
2017, Medico’s counsel asked “to again continue trial because he had a ‘very important
family gathering on Monday, Tuesday and Thursday’ of Thanksgiving week,” but no
mutually agreeable date was available; (3) plaintiff’s counsel contacted Colon, who stated
she did not “anticipate being cleared to travel before the end of January, 2018”; and (4)
Colon’s deposition was taken on October 22, 2015, while she was a party to this litigation
and represented by counsel, Medico’s counsel received notice of the deposition but chose
not to attend, and the deposition “adequately covers all aspects” of Colon’s expected
testimony. Plaintiff’s counsel declared, “I am informed and believe that there is no
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reasonable probability that [Colon] will ever be able to attend trial and provide
testimony.”
The request was denied and trial proceeded on November 13, 2017.
2. Applicable legal principles.
“The decision to grant or deny a continuance is committed to the sound discretion
of the trial court. [Citation.] The trial court’s exercise of that discretion will be upheld if
it is based on a reasoned judgment and complies with legal principles and policies
appropriate to the case before the court. [Citation.] A reviewing court may not disturb
the exercise of discretion by a trial court in the absence of a clear abuse thereof appearing
in the record. [Citation.] The burden rests on the complaining party to demonstrate from
the record that such an abuse has occurred.” (Forthmann v. Boyer (2002) 97 Cal. App. 4th
977, 984-985.)
The trial court’s discretion in granting or denying continuances is guided by the
California Rules of Court, rule 3.1332. Under rule 3.1332(c), motions for “continuances
of trials are disfavored” and may be granted only upon a showing of good cause, which
includes the unavailability of an essential lay witness due to illness (rule 3.1332(c)(1)),
along with “[a] party’s excused inability to obtain essential testimony . . . or other
material evidence despite diligent efforts” (rule 3.1332(c)(6)). Other factors to be
considered by the trial court include: (1) the proximity to the trial date; (2) whether there
was any previous continuance or delay of trial due to any party; (3) the length of the
continuance requested; (4) the availability of alternative means to address the problem
that gave rise to the motion for a continuance; (5) the prejudice that parties or witnesses
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will suffer as a result of the continuance; (6) if the case is entitled to preferential trial
setting; (7) the trial court’s calendar; (8) if trial counsel is engaged in another trial;
(9) whether all parties have stipulated to a continuance; (10) whether the interests of
justice are best served by a continuance; and (11) any other facts or circumstances
relevant to the fair determination of the motion. (Rule 3.1332(d).)
3. Analysis.
Here, Medico argues that since it is vicariously liable for its employee’s actions, it
was substantially prejudiced by Colon’s absence because “no one could explain or deny
the vast allegations made against her.” Acknowledging its absence at Colon’s deposition,
Medico explains that “it would not be reasonable (or competent) for Medico’s counsel to
question its own employee regarding the events which were the subject of the litigation.”
For the following reasons, we conclude Medico failed to show good cause for a
continuance of trial.
First, Medico’s request for a continuance was filed at the 11th hour, the day trial
was set to begin. Second, the record is void of any explanation why Colon’s live
testimony was essential to Medico’s defense. 2 On appeal, Medico makes a general claim
of prejudice because Colon was not present at trial to defend her actions; however, it fails
2 Medico failed to include a reporter’s transcript of the November 13, 2017
hearing. Although it claims that it “did all it could to procure the transcript,” we note that
Medico has also failed to provide any adequate substitute such as a settled or agreed upon
statement of the hearing. “In numerous situations, appellate courts have refused to reach
the merits of an appellant’s claims because no reporter’s transcript of a pertinent
proceeding or a suitable substitute was provided.” (Foust v. San Jose Construction Co.,
Inc. (2011) 198 Cal. App. 4th 181, 186-187.) We, however, will address the merits of
Medico’s claim.
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to identify what exculpatory evidence she could have provided at trial that she had not
provided at her deposition, which was taken on October 22, 2015 while she was a named
defendant and represented by counsel. Third, Medico failed to attend Colon’s deposition.
Fourth, Medico takes opposing positions on Colon’s testimony. On the one hand, it
justifies its absence at her deposition on the grounds “no employer faced with vicarious
liability exposure would depose its own employee when” its employee’s statements could
and would be used against the employer. On the other hand, it asserts that her testimony
was so essential to the trial that without her presence Medico “was significantly
prejudiced.” Fifth, evidence of Colon’s actions was introduced via documents, testimony
from other witnesses, and Colon’s deposition testimony. Finally, since Medico has stated
that “this appeal involves only legal issues,” we are hard-pressed to comprehend the
prejudice Medico has suffered due to Colon’s absence. There is no assertion that had the
trial been continued to permit Colon to testify, the verdict would have been different. We
therefore conclude that the trial court did not abuse its discretion when it denied Medico’s
request to continue trial.
B. Plaintiff Is Entitled to Damages and Attorney Fees.
Medico argues plaintiff is not entitled to attorney fees under her claim for financial
abuse or damages under her claim for neglect pursuant to the Elder Abuse and Dependent
Adult Civil Protection Act (Elder Abuse Act). (Welf. & Inst. Code, § 15600 et seq.) 3 As
we explain, we disagree.
3 All further statutory references are to the Welfare & Institutions Code unless
otherwise stated.
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1. Applicable legal principles.
The Legislature enacted the Elder Abuse Act “to protect elders by providing
enhanced remedies which encourage private, civil enforcement of laws against elder
abuse and neglect.” (Negrete v. Fid. & Guar. Life Ins. Co. (C.D. Cal. 2006)
444 F. Supp. 2d 998, 1001.) These remedies include reasonable attorney fees and costs.
(§§ 15657, subd. (a), 15657.5, subd. (a).) The Elder Abuse Act defines “abuse” as
“[p]hysical abuse, neglect, abandonment, isolation, abduction, or other treatment with
resulting physical harm or pain or mental suffering,” “deprivation by a care custodian of
goods or services that are necessary to avoid physical harm or mental suffering,” or
“[f]inancial abuse, as defined in Section 15610.30.” (§ 15610.07, subd. (a).)
Only two types of statutory elder abuse are relevant to this case: financial and
neglect. Financial abuse occurs when a person or entity “[t]akes, secretes, appropriates,
obtains, or retains real or personal property of an elder or dependent adult for a wrongful
use or with intent to defraud” or “assists in taking, secreting, appropriating, obtaining, or
retaining real or personal property of an elder or dependent adult for a wrongful use or
with intent to defraud.” (§ 15610.30, subd. (a)(1), (a)(2).) When a plaintiff proves “by a
preponderance of the evidence that a defendant is liable for financial abuse, as defined in
Section 15610.30, in addition to compensatory damages and all other remedies otherwise
provided by law, the court shall award to the plaintiff reasonable attorney’s fees and
costs.” (§ 15657.5, subd. (a), italics added.)
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Neglect is defined in section 15610.57, subdivision (a)(1), which in turn includes
the negligent failure of an elder custodian “to assist in personal hygiene, or in the
provision of food, clothing, or shelter,” “to provide medical care for physical and mental
health needs,” “to protect from health and safety hazards,” or “to prevent malnutrition or
dehydration.” (§ 15610.57, subd. (b)(1)-(b)(4), italics added.) Thus, the statutory
definition of “neglect” speaks not of the undertaking of services, but of the failure to
provide care. (Cf. Delaney v. Baker (1999) 20 Cal. 4th 23, 34.) This form of abuse is
distinct from financial abuse because in order to recover enhanced remedies, including
attorney fees and costs, a plaintiff must prove “by clear and convincing evidence” that the
defendant “has been guilty of recklessness, oppression, fraud, or malice in the
commission of this abuse.” (§ 15657; see § 15610.07, subd. (a).)
2. Analysis.
a. The award of attorney fees and costs for financial abuse was
proper.
According to the special verdict form, the jury found Medico or its employee took,
hid, appropriated, obtained or retained Miller’s property with the intent to defraud or by
undue influence, and that this conduct was a substantial factor in causing harm to Miller.
The jury did not assess any economic or noneconomic damages. “Whether attorney fees
may be awarded is a question of law, which we review de novo.” (Dzwonkowski v.
Spinella (2011) 200 Cal. App. 4th 930, 934.)
Medico argues that when a plaintiff recovers no damages “there is no legitimate
basis upon which the court should deviate from the fundamental rule which requires that
9
a plaintiff suffer actual damages before it is deemed a prevailing party entitled to recover
attorney’s fees and costs.” We disagree. The attorney fee provision in section 15657.5 is
not discretionary in nature. Instead, section 15657.5, subdivision (a), states that “[w]here
it is proven by a preponderance of the evidence that a defendant is liable for financial
abuse, as defined in Section 15610.30, in addition to compensatory damages and all other
remedies otherwise provided by law, the court shall award to the plaintiff reasonable
attorney’s fees and costs.” (§ 15657.5, subd. (a), italics added.)
Here, the jury found that Medico was liable for the misappropriation of Miller’s
property, that its conduct was “a substantial factor in causing harm” to Miller, and that
plaintiff proved “by clear and convincing evidence that Medico” acted with
“recklessness, malice, oppression or fraud.” Under the plain language of the statute, an
award of attorney fees is a mandatory form of relief regardless of whether the plaintiff is
awarded any other form of relief. 4
4 We reject Medico’s attempt to cherry-pick jury instructions in support of its
interpretation of the special verdict forms. According to Medico, the “jury was
meticulously instructed as to the types of damages which it could award,” and that it
“must find” that Miller was harmed in order for plaintiff to establish her claim for
financial abuse. Given these “clear and unequivocal instructions,” Medico argues “the
jury spoke very loudly when it found that there was no harm to Miller.” Not so. The jury
was also instructed that plaintiff was seeking damages from Medico “under more than
one legal theory. However, each item of damages may be awarded only once, regardless
of the number of legal theories alleged.” Given this specific instruction, it is equally
arguable that the jury did not believe it could award the $39,296.32 in damages under
both the financial abuse and the neglect causes of action. (See, e.g., OCM Principal
Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal. App. 4th 835,
877-880 [jury’s award of $0 in damages was jury’s effort to avoid double recovery].)
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b. The economic damages award for elder abuse (neglect) was
proper.
Relying solely on the language in section 15610.57, Medico contends plaintiff is
not entitled to the damages award of $39,296.32 since the jury found Miller did not suffer
any physical harm, pain, or mental suffering. We disagree.
Regarding the claim of elder abuse (neglect), plaintiff’s counsel argued to the jury
that Medico failed to protect Miller by failing to have her assessed as to her ability to
handle her own financial needs, and by ratifying Colon’s actions instead of reporting her
conduct to the applicable authorities. 5 Based on Medico’s failure to protect Miller,
plaintiff sought $109,201 in economic damages and asked the jury to calculate the
amount of noneconomic damages for Miller’s “pain, suffering or emotional distress
incurred before death.” In response, Medico’s counsel directed the jury to consult the
5 In particular, counsel argued, “[T]here were multiple opportunities for Medico
to protect Grace Miller. If they had done what they should have done. If they had done a
preadmission appraisal, they would have seen and had a doctor’s report. There would
have been no question that this woman has some dementia. She’s unable to handle her
own financial needs. That’s a basic need. We need to go to the Department of Aging.
We need to get a responsible person appointed. That was an opportunity to protect Grace
Miller from the diversion of her money. [¶] The second opportunity came as soon as
they knew there was a power of attorney, shortly in February 2013. They had an
opportunity as a mandated reporter to report this. There would therefore be an
investigation. There would be an accounting. Elizabeth Colon would be gone, lose her
license as an administrator. She’d be gone. The money would never have made it from
the unclaimed funds to Elizabeth Colon’s house and then in her account.”
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jury instructions regarding damages, arguing any licensing violation arising from Colon’s
power of attorney over Miller does not “necessarily mean” Miller suffered emotional
distress. 6
The jury was charged with finding, inter alia, whether plaintiff had proven Miller
was harmed and Medico was a substantial factor in causing her harm. (CACI No. 3103.)
Jurors were told that damages “fall into two categories called economic damages and
noneconomic damages.” Economic damages include “[a]mounts paid for room and
board to” Foremost and the “[a]mount of money diverted by Elizabeth Colon for her own
use or unaccounted for by Elizabeth Colon.” Noneconomic damages include “[p]ast
mental suffering, loss of enjoyment of life, inconvenience, anxiety, humiliation, [and]
emotional distress.” According to the special verdict form for elder abuse (neglect), the
jury assessed $39,296.32 in economic damages and $0 in noneconomic damages.
Medico argues that “[b]y its very definition, elder abuse by neglect, under [section
15610.07,] subdivision (a)(1) must be accompanied by a physical manifestation from the
alleged neglect.” However, neither section 15610.57, which defines neglect, nor the
6 He argued, “If we violated a license, there’s no causal connection between a
violation of a license regulation and the amount of damages that the plaintiff is asking
for. [¶] . . . There’s jury instructions on that. . . . [¶] With the power of attorney, okay,
you’re not supposed to have a power of attorney. A lawyer says you can have a power of
attorney. What does that mean? Does one necessarily mean that there’s emotional
distress and you should award those damages? No, it doesn’t mean that at all. Use your
common sense. That’s what you’re here for.”
12
standard jury instruction for neglect (CACI No. 3103), 7 which was given to the jury,
require an award of damages for physical harm, pain, or mental suffering. Moreover,
Medico never challenged the jury instruction at the trial level, nor does it do so now.
Rather, Medico’s counsel concurred in the instructions provided to the jury and argued
Medico’s actions did not warrant noneconomic damages. As such, we conclude the
award of economic damages for plaintiff’s elder abuse (neglect) claim was proper.
7 CACI No. 3103 provides: “[Name of plaintiff] claims that [he/she/[name of
decedent]] was neglected by [[name of individual defendant]/ [and] [name of employer
defendant]] in violation of the Elder Abuse and Dependent Adult Civil Protection Act.
To establish this claim, [name of plaintiff] must prove all of the following: [¶] 1. That
[[name of individual defendant]/[name of employer defendant]’s employee] had a
substantial caretaking or custodial relationship with [name of plaintiff/decedent],
involving ongoing responsibility for [his/her] basic needs, which an able-bodied and fully
competent adult would ordinarily be capable of managing without assistance; [¶]
2. That [name of plaintiff/decedent] was [65 years of age or older/a dependent adult]
while [he/she] was in [[name of individual defendant]’s/[name of employer defendant]’s
employee’s] care or custody; [¶] 3. That [[name of individual defendant]/[name of
employer defendant]’s employee] failed to use the degree of care that a reasonable person
in the same situation would have used in providing for [name of plaintiff/decedent]’s
basic needs, including [insert one or more of the following:] [¶] [assisting in personal
hygiene or in the provision of food, clothing, or shelter;] [¶] [providing medical care for
physical and mental health needs;] [¶] [protecting [name of plaintiff/decedent] from
health and safety hazards;] [¶] [preventing malnutrition or dehydration;] [¶] [insert
other grounds for neglect;] [¶] 4. That [name of plaintiff/decedent] was harmed; and
[¶] 5. That [[name of individual defendant]’s/[name of employer defendant]’s
employee’s] conduct was a substantial factor in causing [name of plaintiff/decedent]’s
harm.” (Boldface and italics omitted.)
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III. DISPOSITION
The judgment is affirmed. Respondent is awarded costs on appeal.
McKINSTER
Acting P. J.
We concur:
FIELDS
J.
RAPHAEL
J.
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Filed 5/11/20
CERTIFIED FOR PARTIAL PUBLICATION *
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
ORDER
MELANIE ARACE, as Personal
Representative, etc.,
Plaintiff and Respondent, E071194
v.
MEDICO INVESTMENTS, LLC, (Super.Ct.No. CIVDS1504449)
Defendant and Appellant.
The court has reviewed requests filed (1) April 29, 2020, by Senior Advocacy
Services, (2) April 30, 2020, by California Long-Term Care Ombudsman Association,
(3) April 30, 2020, by Galanti & Copenhaver, Inc., (4) May 8, 2020, by California
Advocates for Nursing Home Reform, (5) May 8, 2020, by the Institute on Aging, and
(6) Legal Assistance for Seniors, to partially publish the nonpublished opinion filed in the
above matter March 24, 2020.
Under California Rules of Court, rule 8.1120(a)(3), the requests are
untimely. However, the time to file is extended 30 days pursuant to the Emergency
Order under rule 8.66, and we therefore have jurisdiction to decide on the publication
requests. Accordingly, we are granting the requests because the opinion: (1) invokes a
previously overlooked rule of law or reaffirms a principle of law not applied in a recently
reported decision; (2) advances a new interpretation of a statute; and (3) involves a legal
issue of continuing public interest. (Cal. Rules of Court, rule 8.1105(c)(2), (c)(4), (c)(6).)
*Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is
certified for publication with the exception of parts II(A) and II(B)(2)(b).
1
IT IS SO ORDERED that said opinion be certified for partial publication pursuant
to California Rules of Court, rule 8.1105(b).
McKINSTER
Acting P. J.
We concur:
FIELDS
J.
RAPHAEL
J.
2