California Partition Law Blog
Probate Code section 859 protects certain individuals whose property or money is taken, concealed, or disposed of by another. Section 859 does this by imposing hefty penalties on anyone who wrongfully takes or conceals property belonging to certain groups.
Specifically, the statute provides:
“If a court finds that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to a conservatee, a minor, an elder, a dependent adult, a trust, or the estate of a decedent, or has taken, concealed, or disposed of the property by the use of undue influence in bad faith or through the commission of elder or dependent adult financial abuse . . . the person shall be liable for twice the value of the property recovered by an action under this part.” (Prob. Code § 859 (emphasis added).)
The person found liable may also be required to pay the other party’s attorney’s fees. (Id.)
Basically, the statute provides “double damages” when:
- a person takes property owned by a conservatee, minor, elder, dependent adult, trust, or a decedent’s estate in bad faith
- a person takes property in bad faith and by undue influence; and
- a person takes property through elder or dependent adult financial abuse
One appellate court has held that a finding of bad faith is not required when it is alleged that someone took property in the commission of elder or dependent adult financial abuse. (See Keading v. Keading (2021) 60 Cal.App.5th 1115, 1128.) Another, however, has held that when elder abuse is alleged based on a theory of undue influence, the plaintiff must show that the defendant acted in bad faith. (Levin v. Winston-Levin (2019) 39 Cal.App.5th 1025, 1035-36.)
Elder or dependent adult financial abuse is defined by the Welfare and Institutions Code, and to get double damages in this situation, the plaintiff must show that the elder is a California resident. (Hsin-Te Wang v. Chung Wang, 2022 Cal. Super. LEXIS 79221 * 1, 8-9.)
How Do Courts Apply Section 859
If a petitioner believes damages under section 859 are appropriate, they can request them when they petition the court to have the property returned.
In order to obtain double damages under section 859, the claim that someone wrongfully took property under section 850 must relate to real or “personal property constituting assets of an estate.” (Parker v. Schwarcz (2022) 84 Cal.App.5th 418, 426, 430 (holding that “communications and documents” held by a conservator were not personal property for purposes of a section 850 petition).)
One example where a person was found liable for taking property in bad faith that belonged to an estate is illustrated in Estate of Ashlock. In Estate of Ashlock, a woman forged documents to establish a “sham” business partnership between her and her deceased lover. Around the time the man was diagnosed with a regressive cognitive disorder, he gave the woman power of attorney.
She used her power of attorney and the sham partnerships to shield many of the man’s properties from the man’s heirs when the man died. (See Estate of Ashlock (2020) 45 Cal.App.5th 1066, 1071.) The appellate court confirmed that the woman had “taken” the properties in bad faith under section 859. (Id. at 1074.)
How is “twice the value” calculated?
As the statute states, the liability of the wrongdoer under section 859 is based on the value of the property that was wrongfully taken, concealed, or disposed of. Courts in California, however, are divided as to whether the wrongdoer must pay twice the value of the property on top of the property ordered to be returned.
The fourth appellate district has limited section 859’s punitive reach on individuals found liable for taking property in bad faith. In Conservatorship of Ribal, the defendant was found liable for taking $79,991 from his former domestic partner, who was later put under a conservatorship due to his lack of capacity. ((2019) 31 Cal.App.5th 519, 521.) The appeals court affirmed the trial court’s finding that under section 859, the defendant was liable for $79,991 x 2, equaling $159,982.
The conservator claimed that the defendant was required to return the $79,991 as the wrongfully taken property and pay twice the value of the property under section 859. The court rejected this argument. It reasoned that such an interpretation would entitle the rightful property owner to recover triple damages. The court believed that if the legislature had intended triple liability, it would have included “three times” the value of the property in the statute rather than “twice the value.”
The fifth appellate district disagreed with the fourth district’s interpretation. Specifically, it took issue with the fourth district’s classification of section 859’s “statutory penalty” as an award for damages. (Estate of Ashlock, 45 Cal.App.5th at 1076.) In Estate of Ashlock, the fifth district held that “Section 859 does not impose punitive damages, but it is designed to punish and deter specific misconduct.” (Id. at 1076.) The court further stated that the legislature did not intend to “merge the restorative obligation with the punitive penalty.” (Id. at 1077.) In the fifth district’s view, the “twice the value” penalty in section 859 is separate from the requirement that the defendant return wrongfully taken property under Probate Code section 856.
Consider the following example that illustrates these divergent approaches. Shawn took a collection of valuable jewels from Julie in bad faith. Julie passes away, and in probate proceedings, Julie’s estate asks the court to order Shawn to return the jewels under Probate Code section 856. The court finds that the jewels are the rightful property of Julie’s estate, and the estate demonstrates that Shawn took them in bad faith. Accordingly, the estate claims that it is entitled to twice the value of the jewels under section 859. The jewels are valued at $50,000.
In the fourth district’s view, after complying with the court’s order and returning the jewels, Shawn would only be liable for $50,000 as a penalty under section 859. Otherwise, as the court stated in Conservatorship of Ribal, Shawn would be liable for “triple damages”: $50,000 of damages by being ordered to return the jewels and $100,000 for “twice the value” of the recovered property, totaling $150,000. Under this view, the value of the property the defendant is forced to give back is merged into the calculation of “twice the value” under section 859.
The fifth district, on the other hand, would require Shawn to return the jewels and pay $100,000 as a statutory penalty under section 859. The fifth district would reason that Shawn’s obligation to return the jewels to Julie’s estate under section 856 is completely separate from his obligation to pay the “twice the value” statutory penalty under section 859. Unlike the fourth district, this approach does not view the recovered property as “damages” paid by the wrongdoer that count toward the calculation of “twice the value” under section 859.
How can the attorneys at Underwood Law Firm, P.C. help?
Section 859 is an important deterrent against the wrongful taking or concealment of property. The provision allowing for a statutory penalty of “twice the value” of recovered property serves not only to restore wronged parties but also to punish and deter misconduct that interferes with property rights. Courts disagree, however, about how to apply the “twice the value” penalty. As a result, the “correct” method for calculating “twice the value” may vary from court to court. Nonetheless, the statute’s purpose of protecting individuals’ assets from bad faith actors is clear.
It is important to understand the various methods of calculation that have been applied by California courts. The knowledgeable and experienced attorneys at Underwood Law Firm, P.C. can help guide you through these legal standards and protect your property rights when property is taken by a co-owner. Contact us today.