Court rules account gains do not defeat the financial elder abuse claim, reverses the trial court's 2010 cutoff, and holds that claims involving alleged tax and estate-planning advice cannot be dismissed as a matter of law
LOS ANGELES, October 13, 2026--(BUSINESS WIRE)--Reif Law Group, P.C. today announced that the California Court of Appeal has reversed a judgment that ended its clients' case against Morgan Stanley & Co., LLC and financial advisor John R. Privitelli after the close of plaintiffs' evidence at trial. The appellate court held that gains in the account did not defeat the plaintiffs' financial elder abuse claim as a matter of law, and it reversed a ruling that had limited the case to the final 21 months of a relationship that lasted roughly two decades.
In Adam DeVone et al. v. Morgan Stanley & Co., LLC et al., the Second Appellate District, Division Three, reversed the judgment in every respect but one. The case involves the estate of Maurice Voce, a barber and self-taught investor who died in 2012 at age 93. According to the opinion, Voce began trading options with Morgan Stanley's predecessor firm in the 1980s, and Privitelli took over his accounts in the 1990s, when Voce was age 74, and worked with him continuously until June 2012, communicating with him "pretty much daily," according to evidence the court cited.
The Full Relationship Is Back in the Case
The trial court found the lawsuit timely, then ruled that no conduct before September 11, 2010 could support liability or damages. The Court of Appeal held that was error. Once a claim is timely, the court explained, the plaintiff is "entitled to seek recovery for the full course of the wrongful conduct underlying that cause of action," and the statute of limitations does not "operate to constrain the scope of actionable conduct."
The court also rejected the defendants' alternative argument under the continuous accrual doctrine. Describing the doctrine generally, the court noted that it is designed to operate in a plaintiff's favor, and that the defendants' attempt to use it to confine the conduct for which plaintiffs may recover "inverts its purpose." The court held that disputed questions about when the plaintiffs knew or should have known of their claims are for the jury to decide.
In reviewing the elder abuse claim, the Court of Appeal described trial evidence reaching well before the 2010 cutoff. According to the opinion, in 1998, when Voce was 79, Morgan Stanley sent him a letter memorializing restrictions limiting his account to a covered-call strategy and capping his uncovered options positions, and a 1999 internal Morgan Stanley communication referred to reining in uncovered options because of his age while making an exception for Privitelli's branch. The court also described evidence of a February 2009 margin call after the account had fallen by nearly half over the prior year, and a roughly $900,000 loan the trusts obtained to pay off the margin debt.
Plaintiffs contend the 2010 cutoff removed most of the relationship from the case. Based on plaintiffs' analysis of the account records, Voce's accounts reflected approximately 30,690 trades and approximately $2.0 million in trading costs from 1993 to 2012, roughly 98 percent of which predate September 2010. The Court of Appeal noted plaintiffs' expert testimony that options positions expire and are generally replaced, with each replacement generating a new commission.
Account Gains Do Not Defeat the Elder Abuse Claim
The trial court dismissed the elder abuse claim after finding that "the account only grew in value," and the defendants pointed to approximately $4.2 million in net gains from 2010 to 2012. The Court of Appeal held that was error. California's Elder Abuse Act asks what a defendant "knew or should have known" at the time of the conduct, not only how the trades turned out. "Under the Elder Abuse Act, a defendant who exposes an elder to a foreseeable risk of harm does not escape liability merely because the risk did not materialize," the court wrote. The court also held that proof of a wrongful taking under the Act does not require evidence of a net financial loss.
The court described evidence that Privitelli received a December 2010 email from the family describing Voce's memory lapses, disorientation and declining health, and that Privitelli testified he was "on notice" of Voce's cognitive impairment in early 2011 and executed trades on Voce's instructions during that period. Asked at trial whether those reports should have been escalated to risk management or a supervisor, Privitelli answered, "Sure. It should have been." The court also noted testimony that Morgan Stanley had the right to revoke the trading authorization at any time, and held that a jury could weigh the firm's decision not to do so.
Claims Involving Alleged Tax and Estate-Planning Advice Are Revived
The trial court had also barred claims over alleged tax and estate-planning advice because the defendants were not hired or paid to give it. The Court of Appeal held that the scope of a broker's fiduciary duty depends on the facts of the relationship as a whole, including its duration and any advice actually given, not solely on the terms of a formal engagement. The court cited evidence of Privitelli's near-daily contact with Voce over the relationship, his Certified Financial Planner designation, and evidence that he told the trusts' estate planning attorney he had advised Voce on the tax treatment of certain gifts. Plaintiffs allege that tax advice resulted in approximately $640,000 in interest and penalties, and that related advice led to a split-dollar life insurance policy and costs exceeding $700,000.
"The defendants asked the courts to judge this case by the account balance, and the Court of Appeal disagreed," said Brandon S. Reif, of Reif Law Group, P.C., counsel for the plaintiffs. "The Elder Abuse Act asks what a financial professional knew or should have known at the time. The trial court's cutoff excluded, by our count, roughly 98 percent of the trading in this account. The Court of Appeal restored that history, and we look forward to presenting the full record to a jury."
"When a family raises concerns about an older client's cognitive decline, those concerns deserve serious attention," Reif added. "In our view, a profitable account is not a license to ignore reported concerns of mental decline due to a client aging."
The court affirmed dismissal of one theory, a breach of fiduciary duty claim based on excessive trading, and reversed the judgment in all other respects. The court emphasized that its ruling does not compel a finding of liability. The allegations have not been proven, and the defendants dispute them. The case returns to the Los Angeles County Superior Court for a new trial.
Case: Adam DeVone et al. v. Morgan Stanley & Co., LLC et al., California Court of Appeal, Second Appellate District, Division Three, Case No. B339219. Opinion filed October 8, 2026.
