Senior citizen who held controlling interest in corporate borrower could not state elder abuse claim against lender that foreclosed on borrower; the senior citizen suffered only derivative harm; any damage claim belonged solely to the corporate borrower. Hilliard, a 78-year-old, owned a controlling interest in Crystal Companies, which owned radio stations. Wells Fargo lent $20 million to Crystal Companies, taking a security interest in all of their property. Crystal Companies were constantly in default after 2004, but Wells Fargo didn’t foreclose. Instead, it offered Hilliard the chance to cure or at least catch up on some overdue payments by selling his ranch and later by selling a radio station. Nevertheless the default continued, and Wells Fargo eventually sold the loan to a third party that immediately foreclosed. Hilliard sued for financial elder abuse, claiming Wells Fargo had deprived him of his property interest in the Crystal Companies because the third party foreclosure resulted in the third party buying the Companies out of bankruptcy to pay the judgment it had obtained against them. This decision holds that Hilliard lacks standing to bring the claim because it is a derivative claim belonging to Crystal Companies, not a claim he owns in his individual capacity. And the elder abuse statute does nothing to change that circumstance despite the fact that the Crystal Companies obviously could not bring an elder abuse claim themselves. It does not confer standing that would not otherwise exist.
California Court of Appeal, First District, Division 2 (Kline, P.J.); June 1, 2017 (published June 16, 2017); 2017 WL 2617669