In this alleged elder abuse lawsuit, the father of the plaintiff had obtained a mortgage loan from the defendant bank after he was found to have a form of dementia. Plaintiff's father also fell victim to various scams and transferred large amounts of money from accounts he held with the defendant bank. Plaintiff brought this action against the bank, alleging that the mortgage loan was "predatory" and constituted financial abuse of an elder, and also claiming that, based on elder abuse statutes, her father suffered injury due to the bank's failure to report suspected financial abuse in connection with the fund transfers. The trial court dismissed the complaint, and this appeal followed.
The appellate court affirmed the trial court's decision that plaintiff's claims predicated on elder abuse statutes failed as a matter of law. The court first noted that changes made after the plaintiff's father's death to the section of the elder abuse statutes which governs mandatory reporting by banks and financial institutions (CA Welf. & Inst. Code s. 15630.1) were inapplicable to her claims. The court further held that the plaintiff's complaint did not state a claim against defendant bank under section 15630.1.
The court further held that the plaintiff did not state a claim for breach of fiduciary duty or negligence under common law principles applicable to banks, citing another California appellate opinion which held that "as a general rule, a financial institution owes no duty of care to a borrower when the institution's involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money."
Finally, the court held that the plaintiff did not state a claim for financial abuse of an elder under the elder abuse statutes, as she failed to allege that the bank acted in bad faith, or with a fraudulent intent and further failed to allege that the bank knew of the schemes that victimized her father.
Ralph T. Wutscher
Kahrl Wutscher LLP
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