Reported / Citable
Background
Maurice Voce accumulated roughly $19 million through decades of stock-options trading with Morgan Stanley and adviser John Privitelli. As Voce entered his nineties, relatives became concerned about cognitive decline while trading and the commissions it generated continued. Trustees and Voce’s estate later sued Morgan Stanley and Privitelli for financial elder abuse and breach of fiduciary duty.
The plaintiffs said the defendants continued risky trading despite signs of vulnerability and also gave damaging tax and estate-planning advice. After the plaintiffs presented their evidence, the superior court granted nonsuit—ending the claims before the jury could decide them. It also treated the statute of limitations as a backward-looking damages window that categorically excluded conduct occurring before a particular date. The plaintiffs appealed.
The Court’s Holding
The Second District reversed most of the judgment. Once a claim is timely under California’s delayed-discovery rule, the limitations period ordinarily determines whether the action may proceed; it does not automatically erase damages from earlier conduct that forms part of the timely claim. Questions about when the plaintiffs discovered or reasonably should have discovered the wrongdoing depended on disputed facts and belonged to the jury.
The financial elder-abuse claim also had enough evidence to reach a jury. A wrongful taking can occur when a defendant knows or should know that conduct is likely to harm an elder, and the account’s overall increase does not necessarily eliminate the alleged taking. The jury could consider commissions generated after the adviser allegedly knew of Voce’s diminished capacity, along with evidence about the relationship, risk, and defendants’ knowledge. The appellate court did not decide liability; it held only that plaintiffs had presented a prima facie case.
The court likewise revived fiduciary-duty theories involving tax and estate planning. A professional relationship’s scope depends on the actual course of dealing, not solely on the written engagement or whether the professional received a separate fee for each type of advice. Evidence that Privitelli communicated frequently, held himself out as a certified financial planner, knew Voce’s circumstances, and actually gave tax advice could support a broader duty.
One theory remained dismissed. Plaintiffs claimed excessive options trading, or churning, but their expert disclaimed an opinion on churning and they offered no industry benchmark showing that the trading or commissions were excessive. Because breach of fiduciary duty requires actual damage, the jury could not infer compensable churning from trading volume alone, particularly where the trades produced net gains.
Key Takeaways
- A timely delayed-discovery claim does not automatically lose damages merely because some challenged conduct predates a limitations-period lookback.
- Investment gains do not necessarily defeat financial elder abuse when commissions or other property were allegedly taken through harmful conduct.
- The scope of a broker or financial adviser’s fiduciary duty can expand through the parties’ real-world course of dealing.
- A churning theory generally needs expert evidence placing turnover, commissions, and the client’s objectives in an industry context.
Why It Matters
The decision is important for families, trustees, and financial institutions dealing with aging investors. Capacity concerns, repeated adviser contact, and advice beyond a formal engagement can create fact questions that cannot be resolved from account gains or contract labels alone. Firms should document capacity responses and define—and follow—the actual scope of services.
For trial lawyers, the ruling separates two proof models. Elder-abuse liability can focus on a wrongful taking and anticipated harm, while fiduciary-duty damages still require proof of loss caused by the breach. Specialized securities theories such as churning need a qualified expert who applies recognized measures rather than leaving the jury to speculate.