$2.1 million payout in elder abuse case

The sole heir of a 98-year-old Cloverdale woman and her mentally disabled daughter has won a $2.1 million settlement after a four-year legal battle in what's being called a major financial elder-abuse case.

The settlement includes the return of the two women's Cloverdale Boulevard property, valued at $1.1 million, and money that had been taken from them in a series of financial schemes before their deaths in 2001 and 2003, said Santa Rosa attorney Jeffrey Allen, who represented the heir, Daniel Shafer of Seattle.

Allen said the women, Jeannette China, and her daughter, Mona China, 67, were taken advantage of by their caretaker-neighbors, Charlotte McManus and her husband, Michael, a retired Sonoma County sheriff's deputy.

The McManuses' attorney, Steve Barbose, denied his clients took advantage of the Chinas. He said they settled because they didn't have the financial resources to continue fighting Shafer.

Other defendants, including a trust company and a lawyer, echoed that sentiment, saying the costs of going to trial outweighed a settlement. The defendants admitted no wrongdoing in the settlement.

"There was absolutely no abuse. The settlement is so one-sided and so unfair," Barbose said, particularly for Charlotte McManus, who he said spent years caring for the women. He said Shafer was rarely in the women's lives.

In court documents and an interview, Allen painted a picture of two vulnerable women who were conned by a series of people, starting with the caregivers and blossoming to include a host of financial and legal advisers.

After convincing the Chinas to deed their multihome property to them, Allen said, the McManuses directed the women to financial advisers, lenders and lawyers who systematically depleted the women's financial resources.

They "worked in unison to create confusion, duress and undue influence over the elder Chinas," Allen alleged, by setting up new estate plans and trusts, taking over the Cloverdale property and liquidating their life savings to purchase unnecessary and inappropriate annuity policies.

"A lot of people were involved in taking advantage of these elderly women," he said.

Barbose, however, said that Charlotte McManus served as a loving caretaker for years for the women, particularly Jeanette, in the decades they lived next door to each other off Cloverdale Boulevard.

He acknowledged that "there were things that at first blush didn't look right," but said of the two dozen Cloverdale residents who gave sworn statements in the case, none suggested any wrongdoing on the McManuses' part.

"I feel worse about this settlement than any settlement I've had in 32 years," he said.

Settlement 'appropriate'

Shafer, the women's sole heir, is a doorman at a high-end hotel in Seattle. He filed suit after coming to Cloverdale to sort out the women's estates after Mona China's 2003 death in a nursing home and finding out the McManuses owned their property.

Through his attorney, he said the settlement was appropriate.

"I was fortunate to have the time and resources to obtain justice for my great-aunt and her daughter against these predators," he said. "But it never should have gotten to this point. We all have the responsibility to look for the signs of abuse so it can be stopped or prevented."

The settlement included the McManuses relinquishing the deed to the China property, valued at $1.1 million, and a total of $1 million in cash from three advisers.

They are Dennis Dachtler, an El Dorado Hills financial planner whose investment company, Cornerstone Planning Group, sold a series of annuity policies to the elder China over a four-year period; Robert Judah, a Sacramento area annuity sales agent with Trust Production Services who handled the women's trusts, and Gregory R. Beyer, a Sacramento lawyer who filed legal papers in the women's names.

Richard Bertolino, who represented Judah, and Beyer's attorney, William Munoz, denied their clients did anything wrong. They both said it would have cost more to go to trial than to settle.

"We never admitted fault," Bertolino said. "It was a case resolved based on the economics." Dachtler's attorney didn't return calls seeking comment.

Annuities in question

The annuities generated significant sales commissions for Dachtler while containing "egregious termination penalties" for the women and their estates, Allen said.

After Jeannette China died in 2001, Charlotte McManus added her husband as a joint tenant on the deed and together they began borrowing money against the property, according to the suit.

Allen said the McManuses took out two equity loans on the Chinas' property after they took ownership, eliminating $150,000 in equity. They used the money to improve their own home and take expensive vacations, he said.

Those two loans were forgiven as part of the settlement, he said.

No elder abuse charges

Allegations of elder abuse of the Chinas had been investigated by both the Sonoma County District Attorney's Office and Adult Protection Services, but no charges were filed.

Allen said investigators appeared to focus only on physical abuse allegations and "did not explore the more subtle financial manipulations that were occurring among the various defendants under the surface."

"This is a very important case for elders," he said. "It's a good victory for elder rights and elder protection."

You can reach Staff Writer L.A. Carter at 568-5312 and lori.carter@pressdemocrat.com.