Here's your gift ... Now give it back!!

Can I give you a gift and then sue to get it back? That’s the scenario Chapman University (located in Orange, California) faced earlier this year when a leading philanthropist (and all-around rich guy) Mr. James Emmi pledged $12 million to Chapman University…and then changed his mind about it. Or did he? According to a report in the Orange County Register, Mr. Emmi actually never intended to make the gift in the first place. Instead, the lawsuit alleges, Chapman University President James Doti put undue pressure on Mr. Emmi to make the gift. Mr. Doti is alleged to have wined and dine the elder Mr. Emmi and pressured him to make the $12 million commitment to the University, which is alleged to be 60% of the Emmi’s total estate value.

Less than a month after its filing, the lawsuit was settled under a confidential settlement agreement that appeared to allow Chapman University to keep $3 million that was received by the University, and most likely cancelling the remaining $9 million obligation.

When the lawsuit was filed by Mr. Emmi against Chapman University, they used a cause of action well known to us: Financial Elder Abuse. Yes, the application of that statute can be far ranging. The allegations were grounded in the idea that Mr. Emmi was susceptible to inducement and confusion (i.e., undue influence) due to his advanced age. And that Mr. Doti “preyed” on Mr. Emmis weaknesses. Under the Financial Elder Abuse statute, obtaining the property of an elder by the exercise of undue influence is one of the ways in which elder abuse can be proved in court. With the right set of facts and evidence, the undue influence prong can be triggered in a wide array of circumstances, including in the context of a charitable gift.

That does not mean that everything an elder does is the product of undue influence. But it does mean that elder abuse can occur where you least expect it. Most people think of elder abuse as a scam artist stealing an elder’s life savings, but it does not need to be that extreme. Mr. Emmi’s allegations show that even those with substantial means can be the victims of an alleged elder abuse claim.