SENATE TAX, BUSINESS AND TRANSPORTATION

COMMITTEE SUBSTITUTE FOR

SENATE BILL 189

55th legislature - STATE OF NEW MEXICO - first session, 2021

 

 

 

 

 

 

 

AN ACT

RELATING TO FINANCIAL EXPLOITATION; ENACTING THE FINANCIAL EXPLOITATION ACT; CREATING A CIVIL CAUSE OF ACTION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Financial Exploitation Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Financial Exploitation Act:

          A. "caregiver" means a person who has been entrusted with or who has assumed responsibility for the care of an eligible adult or the eligible adult's property and may include a family member that is related to the eligible adult by blood or marriage; a court-appointed guardian or conservator; an adult living in the same household as the eligible adult; a health care provider; or an employee or volunteer of an adult daycare, assisted living or residential care facility, group home, nursing home, hospital, mental health treatment center or continuing care community or a service provider of such entity;

          B. "confidential relationship" means a relationship of confidence and trust between an eligible adult and another person, including but not limited to a family member; business associate or partner; financial advisor; caregiver; health care or mental health care provider; legal professional; or clergy member, imam, minister, priest, rabbi or similar religious or spiritual advisor;

          C. "eligible adult" means a person eighteen years of age or older with cognitive impairment or a mental, physical or developmental condition or a person who is experiencing other circumstances that cause the person to be susceptible to undue influence or substantially impaired in the ability to provide adequately for the person's personal or financial affairs or protection, regardless of whether the person has been adjudicated pursuant to Section 45-5-303 NMSA 1978;

          D. "fiduciary relationship" means an agreement or arrangement that creates fiduciary duties owed from one person to another and includes the relationship between a principal and an attorney-in-fact pursuant to a power of attorney; a conservator and a protected person; a trustee and a beneficiary; a financial advisor or broker and an account owner; or a representative payee and a beneficiary;

          E. "financial exploitation" means:

                (1) the wrongful or unauthorized taking, conversion, withholding, appropriation or use of an eligible adult's assets, including money or other property; or

                (2) an act or omission taken by a trusted person to obtain the benefit, control or use of an eligible adult's assets, including money or other property, through the use of deception, intimidation or undue influence;

          F. "transaction" means an agreement; contract; conveyance; deed; encumbrance; gift; guarantee; loan; mortgage; pledge; purchase; sale; title transfer; transfer of money, security or other financial asset or real or personal property; or withdrawal from a financial, investment or securities account or changes to ownership on such account, but excludes wills, trusts or transfer on death designations or instruments of a similar type;

          G. "trusted person" means:

                (1) a caregiver, health care or mental health care provider;

                (2) a person upon whom an eligible adult is dependent and with whom the eligible adult has a confidential or fiduciary relationship; or

                (3) a person in a position of authority, including an eligible adult's family member, financial advisor, legal professional, clergy member, imam, minister, priest, rabbi or similar religious or spiritual advisor; and

          H. "undue influence" means excessive persuasion or domination of the decision-making process of an eligible adult by a trusted person that causes an eligible adult to consent to a transaction or refrain from consenting to a transaction that would reasonably be expected to result in financial harm to the eligible adult, including controlling the eligible adult's interaction with others, access to information or necessaries of life; using affection, intimidation or coercion; or initiating changes in the eligible adult's personal or property rights in haste, secrecy or at inappropriate times and places. The fact that an eligible adult had independent legal counsel with respect to the transaction is evidence that the transaction was not the product of financial exploitation, but shall not be dispositive on whether the issue of financial exploitation occurred.

     SECTION 3. [NEW MATERIAL] CIVIL REMEDIES.--

          A. An eligible adult or an attorney-in-fact, conservator, guardian who has been granted financial powers by the court, temporary conservator or trustee acting for or on behalf of an eligible adult may commence a civil action in a court of competent jurisdiction against a person suspected of financially exploiting an eligible adult in order to:

                (1) return property;

                (2) stop or enjoin a transaction;

                (3) return any profit received from a transaction;

                (4) seek compensatory damages for a transaction; or

                (5) void or rescind a transaction.

          B. To prevail on a claim made pursuant to this section, the plaintiff shall prove by a preponderance of the evidence that financial exploitation occurred.

          C. Punitive damages shall be awarded when a plaintiff proves that the defendant committed financial exploitation and:

                (1) acted with knowledge that the transaction was wrongful;

                (2) made a transaction in indifference or reckless disregard for the financial interests of the eligible adult that resulted in financial harm to the eligible adult; and

                (3) failed to cure the alleged financial exploitation within fifteen days of receiving notice of intent to seek relief from the plaintiff.

          D. If a plaintiff prevails against a defendant on a financial exploitation claim, the plaintiff may recover reasonable attorney fees and any costs incurred while pursuing such relief.

          E. A remedy obtained pursuant to this section shall not limit in any way the right, title and interest of a good faith purchaser, mortgagee, holder of a security interest or other third party who obtains an interest in property transferred from an eligible adult.

          F. Relief obtained pursuant to this section shall not affect the value of a mortgage.

          G. Nothing in this section shall limit any other cause of action under the laws of this state.

          H. When a plaintiff dies during the course of a civil proceeding initiated pursuant to this section, the personal representative of the plaintiff's estate may continue with the proceeding; provided that no proceeding made pursuant to this section shall be initiated after the plaintiff's death.

          I. A person who is found to have committed financial exploitation is liable for payment of the following to the eligible adult:

                (1) the amount of restitution required to restore the value of the property that the eligible adult would have had if the financial exploitation had not occurred; and

                (2) any profit the defendant received through the financial exploitation.

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