Brown vetoes bill to halt probate ‘fee on fee’ gouging (CA)

After years in court, Danny Reed won his fight to protect his savings from a court-appointed trustee and team of lawyers, but on Tuesday a bill intended to help others like the San Jose disabled man stopped short on the governor’s desk.

Gov. Jerry Brown vetoed Senate Bill 156, legislation designed to stop conservators and their lawyers from gouging elderly and disabled residents who rely on California’s courts to oversee their care.

State Sen. Jim Beall introduced the bill after this newspaper’s series “Loss of Trust” exposed a little-known feature of California probate courts that leaves elderly and disabled adults paying for both sides of a legal fight when, like Reed, they contest excessive charges billed to their estate. When Reed challenged $108,000 in fees for 4¿1/2 months work, his trustee turned around and billed him another $146,000 to defend his original charges.

While Beall’s legislation would have prevented those so-called “fees on fees,” the governor on Tuesday said a late amendment that limited judges’ ability to award fees in some cases forced him to use his veto pen.

“I believe that judges exercise their discretion under existing law governing compensation for defense costs in a fair and balanced way,” Brown wrote in his veto message.

In Reed’s case, an appellate court eventually threw out all of Silicon Valley trustee Thomas Thorpe’s and his lawyers’ charges, but only after a pair of lawyers took on the brain-injured, partially paralyzed 37-year-old man’s case pro-bono.

Brown killed the bill because the final version lacked the very same provisions that Reed and his attorney, Matt Crosby, said had watered down the bill to the point of uselessness.

“I was so happy that the bill was moving forward with the original language — I’m shocked, I don’t know what to say,” Reed said Tuesday, clearly disappointed that his long fight had ended in defeat on the governor’s desk. “I was so happy things were going to be set right.”

Staffers for the Professional Fiduciary Association of California — which had opposed the bill — couldn’t be reached for comment Tuesday evening.

Brown said he couldn’t sign the bill without earlier provisions that would have let judges grant additional fee requests if the court found the conservator had made a reasonable, good-faith attempt to informally resolve disputed fees; had acted in good faith in defending the fee petition; and it was in the ward’s or conservatee’s best interest to pay the fee.

Crosby, who’d helped advise Beall on drafting the bill, had said in July he was abandoning the bill because those provisions created too large a loophole.

With the governor’s veto, a quirk in state law will continue to set California apart from most other states by allowing “fees-on-fees,” sticking incapacitated adults with the bill for both sides of a legal fight over excessive service charges, whether they win or lose their argument.

That means people like Reed “in this untenable position of damned if he does and damned if he doesn’t,” fight back, Crosby said Tuesday.

Beall issued a statement calling the veto “a huge setback.”

“We need laws that protect our loved ones from harm and that is all this bill was trying to do,” he said. “In no other business can you send someone a bill, and when they complain about that bill, you get to send them another bill for dealing with the complaint.”

Reed said he hopes Beall or another lawmaker will pursue this issue again next year: “It’s of critical importance — there are too many people being taken advantage of.”


Brown vetoes bill to halt probate ‘fee on fee’ gouging
Josh Richman
September 25, 2013
Contra Costa Times

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