Contractual Provisions

Written by Adam Peck Category: Arbitration Agreements May 17th, 2013 6 min read

three nursing homes charged for wrongful deaths Are Contractual Provisions Amounting to (a waiver of recovery of attorney fees and costs in connection with arbitration of elder abuse claims). Contrary to Public Policy? This matter pertains to California Elder Abuse Act, and in particular the attorney fees and costs remedy in section 15657, to determine whether a contractual provision in question (a waiver of recovery of attorney fees and costs in connection with arbitration of elder abuse claims) was contrary to public policy.

In section 15600, part of the Elder Abuse Act, the Legislature expressed its findings and intent in enacting the law. It declared that “The Legislature recognizes that elders and dependent adults may be subjected to abuse, neglect, or abandonment and that this state has a responsibility to protect these persons.” (§ 15600, subd. (a).) The Legislature found that the elderly and other dependent adults are particularly vulnerable to such abuse and neglect (id., subds. (b)-(e)), and are a disadvantaged class because “cases of abuse of these persons are seldom prosecuted as criminal matters, and few civil cases are brought in connection with this abuse due to problems of proof, court delays, and the lack of incentives to prosecute these suits” (id., subd. (h), added by Stats. 1991, ch. 774, § 2, p. 3476).

In 1991, the Legislature announced its intention to rectify the problem of lack of incentive to prosecute civil suits, and the primary solution offered to correct that problem was the passage of section 15657: “It is the … intent of the Legislature in adding Article 8.5 (commencing with Section 15657) to this chapter to enable interested persons to engage attorneys to take up the cause of abused elderly persons and dependent adults.” (§ 15600, subd. (j), added by Stats. 1991, ch. 774, § 2, p. 3476.)

Section 15657 provides the following enhanced civil remedies, including recovery of attorney fees and costs, in certain cases of elder abuse or neglect:

“Where it is proven by clear and convincing evidence that a defendant is liable for physical abuse as defined in Section 15610.63, or neglect as defined in Section 15610.57, and that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of this abuse, the following shall apply, in addition to all other remedies otherwise provided by law:

“(b) The limitations imposed by Section 377.34 of the Code of Civil Procedure on the damages recoverable shall not apply. However, the damages recovered shall not exceed the damages permitted to be recovered pursuant to subdivision (b) of Section 3333.2 of the Civil Code. (c) The standards set forth in subdivision (b) of Section 3294 of the Civil Code regarding the imposition of punitive damages on an employer based upon the acts of an employee shall be satisfied before any damages or attorney’s fees permitted under this section may be imposed against an employer.”

The purpose of the enhanced civil remedies in section 15657, including the recovery of attorney fees, was discussed in Delaney v. Baker (1999) 20 Cal.4th 23 [82 Cal.Rptr.2d 610, 971 P.2d 986] (Delaney). In Delaney, the Supreme Court explained that initially, the Elder Abuse Act relied on reporting and use of law enforcement to combat elder abuse.

However, when the Legislature amended the Elder Abuse Act in 1991 to include heightened civil remedies, “the focus shifted to private, civil enforcement of laws against elder abuse and neglect.” (Delaney, supra, at p. 33.) The court noted the Legislature’s express findings that infirm elderly persons and dependent adults are a vulnerable and disadvantaged class, and that few civil cases are brought in connection with such abuse and neglect due to problems of proof, court delays, and the lack of incentives to prosecute civil suits. (Ibid., citing § 15600, subd. (h).)

The court further noted that in creating the heightened civil remedies, the Legislature intended to enable interested persons to engage attorneys to take up the cause of abused elderly persons and dependent adults. (Delaney, supra, at p. 33, citing § 15600, subd. (j) and ARA Living Centers-Pacific, Inc. v. Superior Court (1993) 18 Cal.App.4th 1556, 1560 [23 Cal.Rptr.2d 224].) The discussion in Delaney also emphasized the following item of legislative history regarding enactment of the heightened civil remedies:

“As was stated in the Senate Rules Committee’s analysis of Senate Bill No. 679, `in practice, the death of the victim and the difficulty in finding an attorney to handle an abuse case where attorneys fees may not be awarded, impedes many victims from suing successfully. This bill would address the problem by: … authorizing the court to award attorney’s fees in specified cases; [and by] allowing pain and suffering damages to be awarded when a verdict of intentional and reckless abuse was handed down after the abused elder dies.’ (Sen. Rules Com., Analysis of Sen. Bill No. 679 (1991-1992 Reg. Sess.) as amended May 8, 1991, p. 3.)” (Delaney, supra, at p. 33, italics added.)

As a later Supreme Court case aptly summarized, the Legislature, in its effort to protect a particularly vulnerable portion of the population from abuse and neglect, “added to the [Elder Abuse] Act heightened civil remedies for egregious elder abuse, seeking thereby `to enable interested persons to engage attorneys to take up the cause of abused elderly persons and dependent adults.’ [Citation.]” (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 787 [11 Cal.Rptr.3d 222, 86 P.3d 290].)

In summary, the heightened remedies enacted in section 15657 were remedial measures designed to correct a significant problem affecting a highly vulnerable segment of our society. That is, elders and dependent adults were not being adequately protected from abuse and neglect under existing law because there was little incentive for attorneys to take such cases. As a solution, the heightened remedies (including attorney fees and costs) were established by the Legislature as an essential vehicle to better protect these needy individuals.

We conclude that section 15657, including the attorney fees and costs recovery provided therein, was enacted to carry out an important public purpose: that of protecting an especially vulnerable portion of our population—elders and dependent adults—by creating civil incentives for attorneys to represent victims of egregious abuse and neglect. (Delaney, supra, 20 Cal.4th at p. 33; Covenant Care, Inc. v. Superior Court, supra, 32 Cal.4th at pp. 784-785, 787.)

The basic principle declared in Civil Code section 3513: “Any one may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement.” In the discussion above, we have shown that section 15657, part of the Elder Abuse Act, including its provision for recovery of attorney fees and costs, was designed to accomplish an important public purpose.

Therefore, the rights established in section 15657 were nonwaivable and, as a result, the arbitration agreement in the instant case could not be used as a vehicle for the waiver of such important statutory rights. (Armendariz, supra, 24 Cal.4th at pp. 100-104.) (8) Where a provision in an arbitration agreement seeks to waive such rights, as was the case here, the provision is contrary to public policy and may be severed.

– from Steven Peck, Senior Attorney at Peck Law Group

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Written by Adam Peck

Expertise: Personal Injury

Adam J. Peck, ESQ is a principal with Peck Law Group, APC. In 2008, Mr. Adam Peck received his Juris Doctorate from Whittier Law School where he graduated Cum Laude. His practice is primarily dedicated to representing Elders, Dependent Adults, along with their loved ones and family members, who have suffered horrific personal injuries.