DAS v. BANK of America

• Citation: 186 Cal.App.4th 727,112 Cal.Rptr.3d 439
• Decision Date: 13 October 2010
• Docket Number: No. B221002.,B221002.
• Parties: Baishali DAS, Plaintiff and Appellant, v. BANK OF AMERICA, N.A., Defendant and Respondent.
• Court: California Court of Appeals

186 Cal.App.4th 727

112 Cal.Rptr.3d 439

Baishali DAS, Plaintiff and Appellant,

v.BANK OF AMERICA, N.A., Defendant and Respondent.

No. B221002.

Court of Appeal, Second District, Division 4, California.

June 28, 2010.

Review Denied Oct. 13, 2010.

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Baishali Kaustubh, in pro. per., for Plaintiff and Appellant.

Severson & Werson, Chaise R. Bivin, Eduardo Martorell, Irvine, and Jan T. Chilton, San Francisco, for Defendant and Respondent.

MANELLA, J.

Appellant Baishali Das asserted claims based on the elder abuse statutes (Welf. & Inst.Code, § 15600 et seq.), alleging that respondent Bank of America, N.A., failed to report financial abuse involving her father (now deceased), and engaged in other misconduct regarding him. ¹ AFTER SUSTAINING Demurrers to appellant's claims without leave to amend, the trial court entered a judgment of dismissal. Although appellant's complaints vividly depict the reprehensible victimization of her father by third parties, they allege no facts supporting claims against respondent. We therefore affirm.

FACTS

Appellant's original and first amended complaints allege the following facts: Kaustubh K. Das, appellant's father, was born in 1933. ² In August 2004, Kaustubh experienced a stroke or strokes. He was found to have brain tumors, and developed ischemic-vascular dementia. His ability to move and speak was impaired; he experienced deficits in language, communication, reasoning, personality, and judgment; and he experienced mood swings. As a result, his ability to assess the consequences of his actions and the motivations of other people was “severely compromised,” as was his capacity to manage his finances. In addition, Kaustubh experienced problems with drooling, acted in a confused and disorganized manner, and used a wheelchair. Some or all of his deficiencies were “readily apparent to the eyes of even casual observers.”

In late 2006 or early 2007, Kaustubh committed himself to a series of real estate transactions. In the course of these transactions, he obtained a “suspicious” $105,000 mortgage loan from respondent bank regarding a parcel of property in Georgia. Within a short period of time, he became delinquent on the loan payments, and respondent foreclosed on the property.

As a result of the loss of the property, Kaustubh became despondent, and his condition deteriorated. In attempting to achieve a financial recovery, he fell prey to a series of illegal lottery scams. The perpetrators of these scams lured their victims with promises of lottery winnings, and instructed the victims to pay taxes by wire in order to claim their prizes. In connection with the scams, Kaustubh liquidated his assets, placed the funds in his accounts held by respondent, and repeatedly instructed respondent to transfer sums to bank accounts in other countries. Respondent complied with his instructions. The transferred sums exceeded $300,000.

In arranging the transfers, Kaustubh requested “hundreds” of blank wire forms, and some of respondent's employees “wonder[ed]” about his state of mind. Despite the suspicious nature of the transfers, respondent never made a report of suspected financial abuse to a local law enforcement or adult protective agency, as required under the elder abuse statutes (§ 15630.1, subd. (d)(1)). After the last transfer in June 2008, Kaustubh became depressed, suffered a massive organ failure, and died in August 2008.

PROCEDURAL BACKGROUND

Kaustubh's daughter, appellant Das, initiated the underlying action in April 2009. Her original complaint contained seven causes of action, six of which were predicated on the elder abuse statutes. The first of the latter claims alleged that respondent had breached its fiduciary duties by making a loan to Kaustubh while negligently or intentionally ignoring the financial risks it posed to him. The claim asserted that the loan was therefore “predatory” and constituted financial abuse of an elder. The remaining claims based on the elder abuse statutes alleged that Kaustubh suffered injury due to respondent's failure to report suspected financial abuse in connection with the transfers of funds. In this regard, the sixth claim asserted that respondent's alleged reporting failures caused Kaustubh severe pain and suffering. The seventh claim alleged that respondent's conduct constituted negligent infliction of emotional distress to Kaustubh. On August 14, 2009, Los Angeles Superior Court Judge Raul A. Sahagun sustained respondent's demurrer to appellant's original complaint, and granted her leave to amend only the first and sixth causes of action.

Appellant's first amended complaint contained two claims resembling the first and sixth causes of action in her original complaint, with no material modifications of the alleged facts. On November 13, 2009, Los Angeles Superior Court Judge Thomas I. McKnew sustained respondent's demurrer to both claims of the first amended complaint and denied leave to amend. A judgment of dismissal was entered November 30, 2009. This appeal followed.

DISCUSSION

Appellant contends the trial court erred in determining that her claims predicated on the elder abuse statutes fail as a matter of law. ³ For the reasons explained below, we disagree.

A. Standards of Review

[1] “Because a demurrer both tests the legal sufficiency of the complaint and involves the trial court's discretion, an appellate court employs two separate standards of review on appeal. [Citation.] ... Appellate courts first review the complaint de novo to determine whether or not the ... complaint alleges facts sufficient to state a cause of action under any legal theory, [citation], or in other words, to determine whether or not the trial court erroneously sustained the demurrer as a matter of law. [Citation.]” ( Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879, 6 Cal.Rptr.2d 151, fn. omitted.) “Second, if a trial court sustains a demurrer without leave to amend, appellate courts determine whether or not the plaintiff could amend the complaint to state a cause of action. [Citation.]” ( Id. at p. 879, fn. 9, 6 Cal.Rptr.2d 151.)

[2] [3] Under the first standard of review, “we examine the complaint's factual allegations to determine whether they state a cause of action on any available legal theory. [Citation.] We treat the demurrer as admitting all material facts which were properly pleaded. [Citation.] However, we will not assume the truth of contentions, deductions, or conclusions of fact or law [citation], and we may disregard any allegations that are contrary to the law or to a fact of which judicial notice may be taken. [Citation.]” ( Ellenberger v. Espinosa (1994) 30 Cal.App.4th 943, 947, 36 Cal.Rptr.2d 360.)

[4] Under the second standard of review, the burden falls upon the plaintiff to show what facts he or she could plead to cure the existing defects in the complaint. ( Cantu v. Resolution Trust Corp., supra, 4 Cal.App.4th at p. 890, 6 Cal.Rptr.2d 151.) “To meet this burden, a plaintiff must submit a proposed amended complaint or, on appeal, enumerate the facts and demonstrate how those facts establish a cause of action.” ( Ibid.)

B. Elder Abuse Statutes

We begin by examining the elder abuse statutes material to appellant's contentions. Since 1982, the Legislature has enacted numerous measures to prevent the abuse of elders. (See ARA Living Centers–Pacific, Inc. v. Superior Court (1993) 18 Cal.App.4th 1556, 1559–1560, 23 Cal.Rptr.2d 224; Zimmer v. Nawabi (E.D.Cal.2008) 566 F.Supp.2d 1025, 1033–1034.) Generally, “the Legislature has proceeded carefully and diligently in its effort to curb the worst practices against our elders.” (Balisok, Elder Abuse Litigation (The Rutter Group 2008) ¶ 1:22, p. 1–3.)

Pertinent here are section 15610.30, which defines “ ‘[f]inancial abuse’ of an elder,” and section 15657.5, which identifies remedies for financial abuse. ⁴ As effective during the events alleged in appellant's complaints (2006–2008), section 15610.30 provided: “(a) ‘Financial abuse’ of an elder ... occurs when a person or entity does any of the following: [¶] (1) Takes, secretes, appropriates, or retains real or personal property of an elder ... to [sic] a wrongful use or with intent to defraud, or both. [¶] (2) Assists in taking, secreting, appropriating, or retaining real or personal property of an elder ... to [sic] a wrongful use or with intent to defraud, or both. [¶] (b) A person or entity shall be deemed to have taken, secreted, appropriated, or retained property for a wrongful use if, among other things, the person or entity takes, secretes, appropriates or retains possession of property in bad faith.” Furthermore, during the period in question, section 15657.5 provided that in proven instances of financial abuse, a court could properly award attorney's fees, costs, and damages in excess of enumerated statutory limits, “in addition to all other remedies otherwise provided by law.” ⁵

Also pertinent here is section 15630.1, which was enacted as a provision of the Financial Elder Abuse Reporting Act of 2005 (Stats.2005, ch. 140, § 4, No. 4 Deering's Adv. Legis. Service, pp. 191–193.) This provision declares banks and other financial institutions to be “mandated reporter[s] of suspected financial abuse of an elder,” in cases of “financial abuse” as defined in accordance with section 15630. (§ 15630.1, subds. (a), (b), (c).) As mandated reporters, banks are obliged to report “suspected financial abuse” they encounter “in connection with providing financial services with respect to an elder” to local law enforcement or adult protective services agencies (§ 15630.1, subd. (d)(1)). ⁶ Failure to comply with this obligation may subject a bank to civil penalties ( § 15630.1, subd. (f)). Regarding the enforcement of the reporting obligation, subdivision (g) of section 15630.1 (subdivision (g)) states: “(1)...