STATE of Alaska, OFFICE OF PUBLIC ADVOCACY, Office Of Elder Fraud & Assistance v. ESTATE OF JEAN R., Deceased, and Sidney F.
Nos. S-15326, S-15356
Supreme Court of Alaska
April 22, 2016
371 P.3d 614
FABE, Chief Justice.
Robert S. Spitzfaden, Gruening & Spitzfaden, APC, Juneau, for Appellees/Cross-Appellants.
Deborah A. Holbrook, Juneau, Co-Counsel for Appellee/Cross-Appellant Sidney F.
Before: FABE, Chief Justice, WINFREE, STOWERS, MAASSEN, and BOLGER, Justices.
OPINION
FABE, Chief Justice.
I. INTRODUCTION
The State Office of Public Advocacy (OPA) filed a petition for an ex parte protective order on behalf of an elderly woman against her adult daughter and caregiver, after receiving allegations of financial abuse made by the elderly woman‘s other family members. The superior court found those allegations to be unfounded and denied the protective order. The elderly woman‘s other daughter had previously initiated a conservatorship
The superior court awarded full reasonable fees arising from the denial of the protective order, finding that OPA‘s protective order petition was brought without “just cause,” under the fee-shifting provision of
But we conclude that
II. FACTS AND PROCEEDINGS
When this case first arose in 2012, 92-year-old Jean R.1 lived in Juneau with her 55-year-old daughter Sidney F., who served as her caregiver. Sidney had moved from Anchorage to Juneau in 2004 to care for her mother and father. In 2009 her parents requested that Sidney quit her job to provide full-time care, and Sidney did so in April 2010. Later that year Jean was diagnosed
with dementia, and in October 2010 Jean‘s husband (Sidney‘s father) died. Sidney continued to live with her mother full time, providing care and holding a power of attorney authorizing her to manage all of Jean‘s personal affairs. This case arises out of allegations about Sidney‘s expenditures raised by two of Jean‘s other children, Shelley and Geoffrey, who lived outside of Alaska.
In July 2012 Shelley petitioned to establish a conservatorship for her mother, alleging that Sidney was wasting and dissipating Jean‘s money and assets without benefit to Jean, and that Sidney was financially exploiting Jean. Shelley sought “a third party to serve as a full guardian with the powers of a conservator to protect the rights, and well-being of [Jean].” Through this action the Office of Elder Fraud and Assistance, a section of OPA, learned of Shelley‘s allegations about Sidney‘s conduct.
In August 2012 OPA filed an ex parte petition for an elder fraud protective order under
In its petition OPA asserted that ownership of Jean‘s home had been transferred to Sidney; that Jean‘s bank accounts had been overdrawn by $2,623 between January and August of 2012; that large expenditures had been made for the sole benefit of Sidney, including airline tickets to Seattle and Minnesota, supplies used to repair a trailer for Sidney‘s boyfriend, and veterinarian bills for Sidney‘s pet; and that Sidney had generated “inordinately high” grocery bills. OPA estimated the value at risk to be $54,000 per year and declared the risk to be “immediate or urgent,” citing recent overdrafts and checks made out to Sidney from Jean‘s bank account totaling $1,500. OPA requested that the court limit Sidney‘s powers of attorney to medical decisions; that housing decisions be shared between Sidney, Shelley, and Geoffrey; and that a temporary six-month conservatorship be established to handle all financial matters following the initial 20-day ex parte protective period.
Jean received a copy of OPA‘s protective order petition the day after it was filed, and she quickly filed a brief opposing the petition.2 She explained that the home had been deeded to Sidney in order to help secure additional government assistance for Jean in her old age. She also “dispute[d] the factual basis” of the allegations relating to the airplane tickets, trailer repair, and veterinarian bills. She maintained that she was “well taken care of” and that no financial abuse had taken place.
The superior court denied the ex parte petition three days after it was filed. The court briefly explained that it reached this decision because it “d[id] not find that there ha[d] been a showing of probable cause” demonstrating that an ex parte order was necessary to prevent fraud by Sidney against Jean. But the superior court indicated that it would convert OPA‘s ex parte petition into a petition for a six-month protective order under
At the end of the hearing, the superior court entered an oral order denying OPA‘s petition for an elder fraud protective order. The court credited Jean‘s and Sidney‘s explanations for the expenditures OPA had challenged, explaining that it found Jean‘s and Sidney‘s testimony more credible than the testimony from Jean‘s other children and OPA‘s staff. The superior court thus found that OPA had failed to demonstrate fraud by a preponderance of the evidence and had not made “any showing that there [had] been fraud in this case.” The court allowed that a more formalized compensation arrangement might have been better but noted that it did not find the current arrangement to be exploitation, and that it was hard to understand “how one gets to [the] place where it is felt to be exploitation.” The superior court therefore denied OPA‘s petition for an elder fraud protective order. The court allowed litigation of the conservatorship issue to continue, however.
After the superior court‘s ruling, Sidney filed a motion seeking an award of $14,025 for attorney‘s fees and costs against OPA. Jean moved for a separate attorney‘s fees award against OPA for $8,607.75. Sidney alleged that a fee award was justified under
Meanwhile, the parties continued to litigate the conservatorship petition that Shelley had filed. OPA, participating in this proceeding as an interested party, sought additional discovery and opposed Sidney and Jean‘s motion for summary judgment. In December the parties settled the remaining issues from the conservatorship petition through the Adult Guardianship Mediation Program. The parties agreed to dismiss the conservatorship petition with prejudice and agreed to support Jean‘s wish to remain in her Juneau home until her death. They established a formal compensation scheme for Sidney, and Sidney agreed to make monthly reports to Shelley and Geoffrey about her expenditures as caregiver. Sidney also agreed to put the home up for sale upon Jean‘s death. Finally, Sidney and Jean agreed not to pursue an attorney‘s fee award against Shelley or Geoffrey. Sidney and Jean explicitly reserved their right to seek attorney‘s fees from OPA.
Following the settlement of the conservatorship action, Jean again filed a motion for a fee award against OPA. She argued that OPA‘s continued litigation of the conservatorship proceeding was “in bad faith, vexatious, frivolous, and without just cause,” thereby justifying a fee award. She argued that all factual issues had been resolved by the denial of the protective order and that continuing to litigate the conservatorship petition violated principles of collateral estoppel and res judicata. Sidney moved to join and supplement Jean‘s motion shortly thereafter. She asserted that the sum of her total incurred fees had risen to $36,195 and reiterated that
The superior court awarded full reasonable fees against OPA in the elder fraud protective order proceeding, finding that OPA‘s elder fraud “petition was brought without just cause” because an “objective observer who made reasonable inquiries would [not] conclude that there was just cause for believing that there was fraud or financial exploitation.” In fact the superior court found that, far from committing fraud, Sidney had been providing loving care for her mother after quitting her job and moving home at her parents’ request. It was evident that the proceedings arising from the allegations of fraud had cost the family significant time and expense, which the superior court sought to rectify with this award of attorney‘s fees.
In the conservatorship proceeding, however, the superior court declined to award attorney‘s fees. There the superior court found that “by continuing to litigate the conservatorship proceeding” filed by the family members, OPA had not “initiated” a proceeding that was malicious, frivolous, or without just cause as required for a fee award under
III. STANDARD OF REVIEW
Although we review the reasonableness of fee awards for abuse of discretion,4 we independently review “whether the trial court properly applied the law when awarding attorney‘s fees.”5 When such an inquiry “rests on a question of statutory interpretation, we apply our independent judgment in interpreting the statute.”6 In doing so, “we look to the meaning of the language, the legislative history, and the purpose of the statute and adopt the rule of law that is most persuasive in light of precedent, reason, and policy.”7
IV. DISCUSSION
A. It Was Error To Award Attorney‘s Fees In The Elder Fraud Proceeding Because Neither AS 13.26.131 Nor Civil Rule 82 Applies.
1. The fee-shifting provision of AS 13.26.131(d) does not apply to elder fraud protective order proceedings.
Title 13, Chapter 26 of the Alaska Statutes sets up a statutory regime for protective
The cost-allocation statute applied by the superior court,
(a) Subject to (d) of this section, the [S]tate shall bear the costs of the visitor and expert appointed under
AS 13.26.106(c) .(b) Subject to (c) and (d) of this section, the respondent shall bear the costs of the attorney appointed under
AS 13.26.106(b) , of the expert appointed underAS 13.26.109(d) , of the guardian ad litem appointed underAS 13.26.025 , and of other court and guardianship costs incurred under this chapter.(c) The [S]tate shall pay all or part of the costs described in (b) of this section if the court finds that the payment is necessary to prevent the respondent from suffering financial hardship or from becoming dependent upon a government agency or a private person or agency.
The final section of
(d) The court may require the petitioner to pay all or some of the costs described in (a) and (b) of this section if the court finds that the petitioner initiated a proceeding
under this chapter that was malicious, frivolous, or without just cause.
When interpreting a statute, “we begin with the plain meaning of the statutory text.”10 Then “we apply a sliding scale-approach, where ‘[t]he plainer the statutory language is, the more convincing the evidence of contrary legislative purpose or intent must be’ in order for us to conclude that an alternative interpretation of the statute is more appropriate.”11 Here, although the meaning of the phrase “under this chapter” at first appears plain, the text of the other sections within
If we try to harmonize this conflict by applying a uniform definition of “respondent” under
Different problems would arise if we tried to apply the definition of “respondent” from the guardianship cost statute. Under this alternative, the respondent would be the person who allegedly needs protection, that is, the vulnerable adult in a protective order
proceeding.17 Under
Ultimately both of these interpretations could lead to absurd results that would conflict with the purpose of elder fraud proceedings, which is to protect elders against financial abuse.21 As a rule of statutory interpretation, we “disfavor statutory constructions that reach absurd results.”22 Moreover,
This conclusion is confirmed by the title of
2. Alaska Statute 44.21.415 creates a specific cost-recovery scheme for elder fraud proceedings, which displaces Civil Rule 82 .
To understand how the legislature intended to allocate costs in elder fraud proceedings, we look to the text and history of the statute that created the Office of Elder Fraud and Assistance (“the Office“). The 2006 enactment of
of fraud) or from the protected elder when the Office prevails on behalf of the elder:
Subject to the discretion of the court and standards established in regulation ... and taking into consideration the financial condition of the parties to a civil suit brought under this section, the office of public advocacy may seek recovery of all or part of litigation costs and fees from any party, including costs incurred during the investigation of the case, when the office of public advocacy is found to be a prevailing party after trial or settlement negotiation.30
This section also provides that the Office must generally “enter into a fee agreement with a client,”31 who is defined to be the elder in need of protection.32 The statute does not provide for any award of attorney‘s fees against OPA.33
Although not determinative of the legislature‘s intent, the regulation implementing this statute further supports our interpretation of this cost-recovery scheme. The regulation clarifies that “if the client prevails, the [Office] will first seek recovery of [its] attorney‘s fee from the defendant” and then, “if the defendant is unable to satisfy the award of the [Office‘s] attorney‘s fee, the [Office] will next seek recovery from the client [the protected elder].”34 Like the statute itself, the regulation contains no provision for a fee award against the Office even if the Office does not prevail in the case.35
Thus, this statute sets up a cost-recovery scheme that allows OPA to recover its costs
the court finds that no fraud occurred, leaving the accused and sometimes the protected person—who was not in fact in need of protection—to bear their own costs. But we must also recognize that the legislature evidently trusted the Office to focus its efforts on the most meritorious cases, and it structured the cost-recovery scheme accordingly.
Sidney argues that
A number of other states use a similar approach in the elder fraud and elder abuse context. Oregon, for instance, allows the State to recover “costs of investigation
Having concluded that
“otherwise provided by law.” In Vernon H., we concluded that the fee-shifting provision of
An examination of the Probate Rules leads us to the same conclusion.
Applying
Accordingly, in the context of elder fraud protective orders under
209, we conclude that the cost-recovery mechanism established by
Jean‘s estate argues that a fee scheme that does not provide for a fee award against OPA “promotes unnecessary or vindictive litigation sin[c]e the petitioner need not worry about an adverse fees award.” But again, the legislature chose not to create a fee-shifting mechanism that might act as such a check on OPA‘s elder fraud prosecutions, evidently trusting that the State‘s limited resources and OPA‘s prosecutorial discretion would lead the Office to focus on the most meritorious elder fraud cases. Here, the superior court was understandably concerned that OPA had imposed significant costs on Jean and Sidney by pursuing an elder fraud protective order based on allegations that were ultimately found to be “entirely without merit.” On the other hand, OPA did have some evidentiary basis for its petition at the time of filing: The record indicates that the Office reviewed bank statements, subpoenaed and reviewed financial records, interviewed Shelley and Geoffrey, communicated with the Adult Protective Services case worker in contact with Jean, and reviewed documents related to the financial expenditures at issue. Further investigation, of course, eventually
27th Leg., 1st Sess. 1:53-1:55 (Feb. 21, 2011) (testimony of Kelly Henriksen, Assistant Att‘y Gen.).
We therefore reverse the superior court‘s award of attorney‘s fees in connection with the elder fraud protective order proceeding.
B. The Superior Court Did Not Err In Denying Attorney‘s Fees Against OPA In The Conservatorship Proceeding.
On cross-appeal, Jean‘s estate and Sidney also challenge the superior court‘s denial of fees in the separate conservatorship proceeding. In reviewing this decision, we first note that the superior court properly concluded that
By its plain terms,
Sidney now argues that OPA “acted as a party from the very beginning of the case” because OPA‘s lawyers consulted with Shel-
ley and, according to Sidney‘s allegations, OPA‘s lawyers actually prepared the revised conservatorship petition that was submitted in Shelley‘s name. But the superior court found that even Shelley‘s amended petition was “signed personally by [Shelley], and not by counsel for OPA[]” and that “[t]he case was initially filed by [Shelley] ... and [there was] no reason to believe that she was prompted to do so by OPA[].” Given that Shelley filed the conservatorship petition, it is clear that she initiated the proceeding within the meaning of
The superior court was justifiably puzzled by OPA‘s decision to continue the litigation, particularly when facts such as the correct names of the passengers on the airline tickets had already come to light, and the superior court aptly noted that “[o]ne could second guess the way this case was litigated.” But we agree that OPA‘s decision to continue litigating the conservatorship cannot trigger the provision for fees against the initiator of the proceeding, even if that decision may have prolonged the case and raised costs for all parties involved. And in the settlement agreement reached in the conservatorship proceeding, Jean and Sidney agreed not to seek fees against Shelley, the only party who might otherwise be subject to fees as the initiator of that proceeding.
Jean‘s estate and Sidney also argue that a fee award is justified because collateral estoppel or res judicata should have barred OPA‘s continued litigation of the conservatorship petition after the elder fraud proceeding was closed, making OPA‘s continued litigation “vexatious, frivolous, not in good faith and without just cause.” But we need not reach this issue given our conclusion that, as a threshold matter, a fee award under
For these reasons, we conclude that the superior court did not err in declining to award fees against OPA in the conservatorship proceeding.
V. CONCLUSION
We REVERSE and VACATE the superior court‘s fee award in the elder fraud protective order proceeding. We AFFIRM the denial of attorney‘s fees in the conservatorship proceeding.