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July 2013

Daily Journal Article Showcases Defense Win By Partners Stuart Gordon and Reg Reilly in Financial Elder Abuse Case

On June 28, Gordon & Rees founding partner Stuart M. Gordon and partner James R. "Reg" Reilly won a complete defense judgment in a California financial elder abuse case – a victory featured in the July 11 Daily Journal.

The article, titled "Gordon & Rees Gets Defense Win in Elder Abuse Case," discusses the lengthy and costly four-year litigation in Bellows, et al. v. Bellows, et al., which pitted brother against brother in a battle involving their mother's estate. The plaintiffs’ groundless allegations included undue influence, fraud, breach of fiduciary duty, and financial elder abuse, among others.  Representing defendant Philip M. Vannucci, Mr. Gordon and Mr. Reilly successfully defended the causes of action, which Superior Court Judge David Nelson ruled were not supported by the evidence.

Plaintiff Donald Bellows, on behalf of himself and his mother Beverly’s estate, and joined by his wife Gail, sued his brother Fred Bellows and Beverly's attorney, Philip M. Vannucci of Ukiah. The plaintiffs alleged both men exerted undue influence over Beverly so that she would place the bulk of her estate into a pay-on-death (POD) bank account that would transfer the assets entirely to Fred Bellows at the time of her death.

Mr. Gordon and Mr. Reilly, who represented Vannucci, successfully attacked the plaintiffs' argument that Vannucci's undue influence caused Beverly to open the POD account and that he owed a fiduciary duty to Donald – the potential beneficiary – to inform him that Beverly had done so. The court agreed with the defense, noting that Vannucci did not breach his duty or act in any way that harmed Donald or Beverly.

In addition, Mr. Gordon and Mr. Reilly successfully persuaded the court that the professional negligence and breach of fiduciary duty causes of action against Vannucci were barred by the one-year statute of limitations, because the plaintiffs knew – more than a year before filing suit – that Vannucci represented Beverly in her estate planning.

The plaintiffs were seeking treble damages under the financial elder abuse causes of action against both defendants Fred Bellows and Vannucci, which would have been well over $6 million if the plaintiffs had prevailed. The potential damage amount was based on the POD funds with interest thereon since the time of Beverly’s death in December 2008 of almost $500,000 and attorneys' fees and costs of more than $1.5 million.

The trial involved complex testimony regarding the authenticity of documents and signatures; Beverly's mental competence; the duties of financial advisers; and a probate lawyer's standard of care. The court also reviewed video-recorded testimony from the deposition of plaintiff Donald Bellows, who died while the suit was pending.

With nearly 75 years of litigation experience between them, Mr. Gordon and Mr. Reilly carefully crafted their defense strategy to rebut the plaintiffs' allegations. For example, the plaintiffs had claimed the defendants committed financial elder abuse not only of Beverly, but also of Donald. However, the court roundly rejected these allegations by interpreting the old and new versions of the financial elder abuse law, California Welfare and Institutions Code Section 15610.30, to find that no financial elder abuse had occurred.

After a four-week bench trial, Judge Nelson issued a thoughtful and comprehensive 37-page opinion, ruling for the defendants on all claims and stating the plaintiffs take nothing. "The court is mindful of the effort and substantial attorney fees that have been expended by the plaintiffs in pursuing their objectives in this case. Plaintiffs and their litigation attorney had a theory of a conspiracy by Fred and his attorney to manipulate and defraud Beverly.
. . . The Court finds that the facts do not support this view. . . . Plaintiffs have not submitted sufficient evidence to bear the burden of proof placed on them and judgment is for the defendants on all causes of action," Judge Nelson wrote.

To read the Daily Journal article, click here.

Stuart M. Gordon