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Financial Exploitation: Using NRS 159.091 to Recover Property

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By Kim Boyer
Nevada Lawyer April 2002

Many of our elderly are being financially exploited, usually by family members, neighbors or friends.  Filing a civil lawsuit to recover the property can be costly and time consuming.  An effective way to recover real property or personal property is by using NRS 159.091 in a guardianship proceeding.

To proceed under NRS 159.091, the guardian can file a petition alleging that someone “has or is suspected or having concealed, embezzled, converted, or disposed of any property of the ward.”  A citation should then be issued to the alleged exploiter for the return of the money or property.

The guardianship court will hold a hearing to determine whether the ward was competent to make loans or gifts.  In Nevada, it is relatively easy to obtain a guardianship, based on the liberal definition of incompetence in NRS 159.019.  Our courts have found that an individual can be adjudicated as incompetent for the purpose of obtaining a guardianship, yet the individual can still be legally capable of making gifts and executing trusts or wills.  Thus, the issue of capacity for making gifts must be examined at the hearing.

In some jurisdictions, the higher contractual capacity standard is required to make gifts.  In other jurisdictions, only the lesser testamentary capacity standard is required.  Nevada law is silent as to the level of capacity required for making gifts.  In Ross v. Giacomo, the Nevada Supreme Court ruled on shifting the burden of proof to the alleged donee (the alleged exploiter).   The Nevada Supreme Court stated:  ” . . . where the alleged donor lacks such mental vigor as to enable him to protect himself against imposition, the burden shifts to the alleged donee to prove by clear and satisfactory evidence that the gift was freely and voluntarily made by the donor.”  Ross v. Giacomo, 97 Nev. 550, 557, 635 P.2d 298, 302 (1981).

If the court finds the property was converted, embezzled, or disposed, the guardian can pursue double damages as provided in NRS 41.1395 and NRS 143.120.  NRS 41.1395(1) states that “if an older or a vulnerable person . . . suffers a loss of money or property caused by an exploitation, the person who caused the . . . loss is liable for two times the actual damages incurred.”

Guardianship Commissioner Jennifer Henry recently issued a memorandum to the members of the Elder Law Section of the State Bar regarding the NRS 159.091 analysis.  In the memo she states that the first Nevada Supreme Court case regarding NRS 159.091 was dismissed because the order was not a final appealable order.  According to this unpublished opinion, few, if any, of the orders entered during the “life” of a guardianship case are appealable.  All the orders in a guardianship case become appealable upon the final judgment, which is the termination of the guardianship case.  If an issue has been resolved and the attorney or litigant believes it should be a final appealable order, certification under NRCP 54(b) should be sought from the District Court.

The good news is that the Nevada Supreme Court, in the unpublished opinion, seemed to embrace the use of NRS 159.091 in a guardianship proceeding and the imposition of double damages under NRS 143.120 and NRS 41.1395.  The Supreme Court found that a separate action to try title to property was not required.

If you are interested in obtaining the latest information in Elder Law, I encourage you to join the Elder Law Section of the State Bar of Nevada.  In Las Vegas, monthly meetings are held on the second Wednesday of each month in the third floor library at Family Court.