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Judges' Inaction, Inattention Leave Many Seniors at Risk

Probate courts are supposed to watch conservators' conduct and discipline those who abuse their authority. They've failed dismally in this vital role.

November 14, 2005|Jack Leonard, Robin Fields and Evelyn Larrubia | Times Staff Writers

Emmeline Frey was wheeled toward the bench, escorted by a family friend. She was 93 years old and frail, suffering from dementia and a broken hip.

In San Diego County's busy Probate Court, it was up to Judge Thomas R. Mitchell to decide how to preserve the $1 million she had amassed pinching pennies over a lifetime. On the recommendation of Frey's attorney, he appointed a professional conservator named Donna Daum.

Frey's affairs were now in the hands of a caretaker acting under court supervision. Her money should have been safe.

It was not.

Daum gave her son, a car salesman turned financial advisor, more than $500,000 of Frey's savings to invest. Over the next four years, the investments lost more than $100,000 in value while the son collected commissions.

Mitchell, who described himself as the "super father" of the seniors who entered his courtroom, never questioned what Daum was doing with her client's money or why her son was involved.

The case illustrates how inaction and inattention by the courts have left many elderly Californians vulnerable to abuse by the very people entrusted with their care.

Professional conservators wield enormous power over people deemed too infirm to look after themselves. They choose their doctors, control their bank accounts and decide where they will live -- even who can visit them.

Probate courts, which appoint conservators, are supposed to monitor their conduct, scrutinize their financial reports and fine or remove those who misuse their authority.

Yet the courts have failed dismally in this vital role.

A Times examination of more than 2,400 conservatorship cases since 1997 found that judges frequently overlooked incompetence, neglect and outright theft.

Some conservators steered business to friends and relatives without protest or punishment from the courts, records show. Some failed to pay their clients' bills. Others pocketed their cash and jewelry.

In most cases, evidence of these abuses was in the courts' own files.

An online registry created six years ago to identify and track problem conservators has proved a failure. The reason: Most county courts have ignored it, even though participation is mandatory.

"The real problem is sloth, taking the easy way," said Marc Hankin, a Los Angeles attorney who helped write laws on elder abuse.

"The last thing the judge wants to do is make a decision."

Probate judges say that they do their best, but that the courts are swamped with cases and short of staff.

The conservatorship system was designed to help family members take care of loved ones. Now, more and more cases are handled by for-profit caretakers like Daum, whose fees are paid from their clients' bank accounts.

Elderly wards often have no surviving friends or family members to speak up for them. Yet the culture of the probate courts, stuck in an earlier era, reflexively grants conservators the benefit of the doubt.

They are assumed to be acting in their clients' best interests -- in some cases even when their own filings with the court suggest otherwise.

"If no one complains, the court isn't out there to investigate," said retired Judge Robert Letteau, who supervised probate courts in Santa Monica and downtown Los Angeles from 1995 to 2002. "If stuff's being stolen, misappropriated, we wouldn't know about it."

Paying a Steep Price

For years, Emmeline Frey managed her husband's tuna fishing business, keeping the books, buying equipment for his 42-foot trawler and saving as much as she could for their retirement.

After he died, Frey guarded her nest egg. She rarely ate out. She wore jeans until they were threadbare. She told a friend she would never take a risk on the stock market, preferring the security of savings accounts.

Under conservatorship, however, Frey had no say in what happened to her money.

That was for her conservator to decide. Yet Daum, a former administrator at a social service agency, had little investment experience. So, beginning in late 2000, she entrusted her son, Timothy J. Spalla, with at least $3 million belonging to 13 of her court-appointed clients.

Only three years earlier, Spalla had been working at a Dodge dealership in Wisconsin.

The first sign that something was amiss came in November 2002, when Daum disclosed in a report to the court that Spalla had put Frey's money in mutual funds. Conservators must get court approval for such an investment. Daum had not.

Spalla's investments did poorly, and his mother's clients paid the price -- along with his commissions.

In Frey's case, Spalla took a gamble on aggressive growth funds that took a beating after the stock market began to tumble in 2000.

Because his mother had nearly emptied Frey's bank accounts, he had to sell fund shares each month -- often at a steep loss -- to raise money for her living expenses.

By the time Frey died in February 2004, Spalla's investment decisions had cost her about $105,000 -- 14% of the cash she had at the beginning of her conservatorship -- judging from Daum's reports to the court.

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