To support efforts to protect vulnerable seniors, California allows plaintiffs who prevail on financial‑elder‑abuse claims to recover their attorney fees and costs from defendants. But when those protective efforts involve multiple, overlapping legal actions, how should the resulting fees be allocated?

That was the issue presented in a case recently decided by the California Court of Appeal (Haun v Pagano).

Background: Two Months of Undue Influence

In late 2019, Charles Frazier, 83 and suffering from cancer, could no longer live independently in his San Diego-area home. When he was released from the hospital on November 15, Frazier moved into the Escondido home of Michael Pagano and his wife Kelly, his close friends.

Three weeks after Frazier moved in, the Paganos took him to meet with the Paganos’ estate planning attorney to revise his existing estate plan; Frazier wanted to remove his estranged daughter from his trust.

Frazier and the Paganos met with their attorney three times over the next two weeks, during which a new trust was executed on December 20, 2019 (“2019 Trust”). It provided for the Paganos to receive a large portion of Frazier’s assets. Kelly also facilitated the transfer of Frazier’s assets to the new trust.

Days later, Frazier’s health declined further. On January 6, 2020, at Kelly’s request and without seeing Frazier in person, Frazier’s oncologist provided a letter of incapacity certifying that Frazier was unable to manage his financial or personal affairs. Such a letter can be used to trigger successor trustees in a trust or to activate a power of attorney.

The Paganos moved Frazier into a hospice care facility on January 8, 2020. The following day, Frazier’s nephews, Jeff Frazier (“Jeff”) and Theodore Haun (“Haun”), visited him and learned for the first time of the new trust.

Frazier told his nephews that he had not wanted to sign the new trust but felt pressured by the Pagonos. He asked them to help him hire a new attorney to change his estate plan back to its earlier form (distributing the assets to Frazier’s siblings). They did so, and Frazier executed a new trust on January 11, 2020 (“2020 Trust”).

Frazier passed away on January 20, 2020.

All Parties Claim Elder Financial Abuse Against Each Other

Two days later, Kelly filed a civil lawsuit in San Diego Superior Court, against Jeff, Haun, the new attorney, and the notary public who witnessed the 2020 Trust, alleging that their actions constituted financial abuse of Frazier. Kelly asked the court to protect the Paganos’ rights under the 2019 Trust, which Frazier had executed in December while living in their home.

In May of 2020, Haun, as trustee of the later-dated 2020 Trust, filed a petition in probate court alleging financial elder abuse against the Paganos and seeking confirmation that the most recent 2020 Trust was enforceable.

Kelly Pagano filed a competing petition in probate court the following month, alleging that Jeff and Haun had also committed financial elder abuse and asking the probate court to settle the parties’ rights under the 2019 Trust and 2020 Trust.

The Probate Court Decides in Favor of Huan and the 2020 Trust

The probate court stayed Kelly’s civil action and held a trial on the two probate petitions in a consolidated proceeding that lasted eight days.

In its statement of judgment, the probate court stated there was “no question” that the nephews and the Paganos all “loved and respected Frazier,” and that the Paganos had provided him with “significant care and love … in his last days.”

But it determined that the Paganos had exercised undue influence on Frazier, and that the 2019 Trust “provided an undue profit to the Paganos.”

In contrast, it said, Haun and Jeff had not unduly influenced Frazier in the preparation of the 2020 Trust, nor did the trust provide an undue profit to them.

The probate court granted Haun’s petition, including finding that the Paganos had committed financial elder abuse, and denied Kelly’s petition.

The probate court’s judgment meant that Haun was a successful plaintiff/petitioner of a financial elder abuse claim (his claim against the Paganos) as well as a successful defendant of a financial elder abuse claim (the Paganos’ claim against him).

The probate court awarded Haun damages of more than $39,000 and doubled that under a provision of the Probate Code imposing penalties on individuals who are found to have unduly influenced an elder. It said the issue of attorney’s fees and cost would be litigated separately.

Haun filed a motion requesting more than $595,000 in attorney’s fees, noting that his law firm had put in 1,656 hours of service during three years of litigation. The probate court granted the fee request after reducing the amount to just over $536,000.

Appellate Court Affirms the Award of Attorney’s Fees to Haun

The Paganos appealed the probate court’s decision. Relying on the 2004 case Carver v. Chevron, they argued that attorney fees are not recoverable when they arise from overlapping actions, specifically, when some claims allow fee shifting and others provide only a unilateral right to fees.

According to the Paganos, Haun was not entitled to any fees because the work performed on his financial elder abuse claim overlapped with the work performed defending against their claim against him. As a result, they contended that Haun, as a successful defendant on the elder abuse claim, could not recover attorney fees.

The appellate court rejected these arguments. It explained that, as the petitioner in the probate action, Haun was the equivalent of a plaintiff, not a defendant.

In addition, although he successfully defended against Kelly’s financial elder abuse claim, he was not seeking fees under a contractual provision or statute awarding fees to a prevailing defendant, unlike the parties in the cases the Paganos cited.

The court noted: “In contrast to those cases, the legislative intention to encourage financial elder abuse claims is not undermined by awarding overlapping fees to Haun as the prevailing petitioner.” Accordingly, the court concluded that the probate court’s fee award did not conflict with legislative intent.

The justices affirmed the probate court’s decision and awarded Haun his costs on appeal.

By James Andrade