C.A. 1st;
A146330

The First Appellate District affirmed a judgment. The court held that wrongful acts allegedly directed at a limited liability company by a third party did not give an individual shareholder standing to sue that third party for elder abuse.

Septuagenarian James Hilliard owned a controlling interest in the James Crystal Companies (JCC), a limited liability company that owned and operated radio stations. Over a period of years, JCC borrowed $18.9 million from Wells Fargo Capital Finance, LLC, secured by JCC's assets, which exceeded $50 million. JCC defaulted on the loan. Hilliard subsequently agreed to enter into various transactions to sell off JCC assets at well below market value in order for Wells Fargo to deem JCC's loan paid in full for cash payments well below the loan's actual value. Despite those sales and without notice to Hilliard, Wells Fargo sold JCC's loan to another entity, which thereafter sought to collect the full balance due on the loan. Hilliard sued Wells Fargo and managing officer Kevin Harbour for elder abuse, alleging that they “took, appropriated, obtained and retained” Hilliard's property, JCC, for a wrongful use and with the intent to defraud in violation of the Elder Abuse and Dependent Adult Civil Protection Act.