Opinion
2020-0187
06-17-2020
In the MATTER OF the Application of S.M., Petitioner, Pursuant to Article 81 of the Mental Hygiene Law For the Appointing of a Guardian of the Person and Property of W.L., an Alleged Incapacitated Person.
Greg Catarella, Esq., Court appointed counsel to Dr. L. Amy B. Egitton, Esq., for Petitioner Mariette Geldenhuys, Esq., Court Evaluator
Greg Catarella, Esq., Court appointed counsel to Dr. L.
Amy B. Egitton, Esq., for Petitioner
Mariette Geldenhuys, Esq., Court Evaluator
David H. Guy, J. S.M. petitioned this Court for the appointment of a guardian under Article 81 of the Mental Hygiene Law for W.L. (Dr. L.), by petition filed April 10, 2020. On April 14, 2020, the Court issued an Order to Show Cause appointing Mariette Geldenhuys, Esq. as Court Evaluator and Greg S. Catarella, Esq. as counsel to Dr. L. and granting Petitioner limited temporary guardianship authority. Petitioner is an attorney; his law partner, Amy Egitton, Esq., appeared to represent him in his capacity as Petitioner.
The matter was before the Court on May 15, 2020, via Skype for Business. The Court held a conference with Petitioner, the attorneys of record, and the Court Evaluator. The parties, including Dr. L., consented to the issuance of a Temporary Order in lieu of going forward with a hearing on the matter. The Court's Temporary Order, dated May 29, 2020, confirmed Petitioner's authority as agent under Power of Attorney ("POA") for Dr. L. and as co-trustee of the Dr. L. Revocable Trust.
At the conclusion of the May 15 appearance the Court invited the Court Evaluator, counsel for Dr. L., Petitioner, and Petitioner's counsel to submit affirmations of services for their work in connection with this matter. The Temporary Order set the fees for Dr. L.'s counsel and the Court Evaluator and directed payment of those fees from Dr. L.'s resources. The Court deferred on the issue of Petitioner's fees and those of his counsel, addressed in this Decision.
Petitioner submitted an affirmation of fees and disbursements dated May 22, 2020. Ms. Egitton also submitted an affirmation of attorney's fees and disbursements dated May 22, 2020. Mr. Catarella filed a reply affirmation on May 26, 2020. On May 26, 2020, Petitioner submitted a revised affirmation of fees and disbursements providing a delineation between the tasks he performed as Petitioner in this matter and the tasks he performed as Dr. L.'s agent pursuant to the POA. Petitioner also submitted a reply affirmation dated May 28, 2020, to address the response provided by Mr. Catarella.
Petitioner is Dr. L.'s long-time and trusted counsel. He has represented Dr. L. for more than twenty years. When Dr. L. perceived the need to update his estate and financial planning, he selected Petitioner to serve the dual fiduciary roles of agent under a POA and co-trustee of the revocable trust. Those documents were prepared by Petitioner at Dr. L.'s request. Petitioner also has an additional fiduciary responsibility to Dr. L., as his attorney.
In his affirmation, Petitioner sets forth his services rendered in connection with Dr. L.'s matters commencing mid-March 2020, at the time the Article 81 proceeding was initiated and filed. He requests the Court allow the payment of some $55,000 in fees, the stated value of Petitioner's services at his standard rate of $350 per hour, plus $660 of disbursements, all from Dr. L.'s resources. Ms. Egitton submitted an affirmation detailing her services rendered as counsel to petitioner in the Article 81 proceedings, totaling nearly $10,000 at her standard rate, which are also requested to be allowed and paid from Dr. L.'s resources.
Mr. Catarella filed a response to Petitioner's fee request, on behalf of Dr. L., arguing that Petitioner should not be compensated at his regular attorney hourly billing rate for services rendered as agent under the POA. Mr. Catarella also argues that to the extent Petitioner chose to retain his own counsel in the Article 81 proceeding, he cannot be compensated for that time, which is not usually compensable for a non-attorney petitioner in an Article 81 matter, and should alternatively be viewed as duplicative of Ms. Egitton's services.
It is not disputed that Petitioner is a long-term trusted legal advisor to Dr. L. Dr. L.'s wife passed away a year ago and his children are young minors, not able to assist their father with the complex needs he currently faces for the foreseeable future. Nor is it evident that other family or friends are in a position to effectively assist Dr. L., particularly with his financial and legal needs. Dr. L.'s decision to put Petitioner in a fiduciary role is sensible and appropriate. Petitioner's action to confirm and potentially expand his authority to assist Dr. L. through this proceeding is viewed by the Court as appropriate, even though the petition may not ultimately result in the appointment of a guardian. Dr. L.'s situation contains legal and financial complexities. The time spent by Petitioner on Dr. L.'s matters, including the Article 81, is not surprising. The complicating factor is Petitioner's status as an attorney. Before this proceeding, Petitioner's services to Dr. L., some of which undoubtedly have been more in the nature of sage counsel than strict legal advice, have been billed to and paid by Dr. L. With the commencement of the Article 81 the Court assumes oversight of Petitioner's fees, for that proceeding and for his service as agent.
Courts typically award attorneys compensation for services as guardian at a lower rate than for services as a lawyer, deeming a component of those services administrative rather than legal. See, e.g., Matter of Reitano v. Dept. of Social Servs. , 90 A.D.3d 934, 934 N.Y.S.2d 710 (2d Dept. 2011). This Court has commonly compensated for attorney guardian services at half the rate of legal services. Services rendered by an attorney as agent under a POA should arguably be discounted on the same basis. Petitioner concedes as much in his reply affirmation, including his citation to Matter of Berzins , 2015 NY Misc. LEXIS 2425 (Sur Ct, New York County 2015).
General Obligations Law § 5-1506 provides that an agent acting under a POA may be compensated if the POA so provides, but does not provide a structure, or any baseline, for that compensation. Dr. L.'s POA allows for "reasonable compensation" but is silent on the rate. Where the document is silent it falls to the court to determine reasonable compensation for an agent's services. Id. ; GOL § 5-1510(2)(d). There is a dearth of case law guidance on this issue. Berzins , where Surrogate Mella was setting the allowable fees for services of a decedent's long-time counsel as her agent under POA, is directly on point, to the extent Petitioner seeks to be compensated as Dr. L.'s agent. In our case, the objective discussed at the initial hearing was confirming Petitioner's unimpeded ability to fully assist Dr. L. with property management through the existing POA; efforts and compensation of Petitioner going forward will hopefully be as agent, not as guardian.
The court in Berzins reviewed the agent's time records and considered "the respective values of the various levels of services that [the agent] provided" to determine the attorney agent was entitled to compensation at seventy percent (70%) of his standard legal hourly rate. Id. at *5. Here Petitioner argues that his work as agent under POA was guided by his tax and planning expertise, his knowledge of Dr. L.'s situation, and their discussions, justifying compensation at his full hourly rate.
The number awarded in the body of the decision computes to 65% of petitioner's standard rate. The footnote discloses that the court awarded a higher number but credited the estate for a portion already paid. The total allowed agent compensation was 70% of the petitioner's standard hourly attorney rate.
--------
Certainly, Petitioner's expertise benefits Dr. L. At the same time, a component of the work as agent is more mechanical or administrative than legal in nature. Analyzing Petitioner's affirmations and assessing the current situation and services provided, the Court finds reasonable compensation for Petitioner as agent under Dr. L.'s POA is seventy-five percent (75%) of his standard hourly rate. The requested disbursements are also allowed.
With respect to Petitioner's request for compensation for the time spent in connection with the Article 81 proceeding, Dr. L.'s counsel is correct that the typical petitioner in an Article 81 proceeding is not compensated for petitioner-related tasks that are not truly legal in nature. This is not a typical Article 81 proceeding. The complicating factor here again is Petitioner's status as an attorney seeking to carry out his fiduciary duties to Dr. L. Dr. L.'s complex situation is well-served by experienced and trusted counsel. Dr. L. could not have expected Petitioner to handle his affairs and take steps necessary to fully effectuate the fiduciary authority that Dr. L. bestowed on him without reasonable compensation for his time and work. The Court finds no basis, nor does counsel raise any, to indicate that Petitioner's motives were not appropriate in bringing this proceeding. It has proven helpful for Dr. L. See, e.g., Matter of S.B. (E.K.) , 60 Misc. 3d 735, 748, 79 N.Y.S.3d 874 (Sup. Ct., Chemung County 2018) ; Matter of Kurt T. , 64 A.D.3d 819, 823, 881 N.Y.S.2d 688 (3d Dept. 2009).
Petitioner chose to retain one of his partners to serve as his counsel in this proceeding. That decision necessarily doubles the number of potential billers and leads to some duplication of effort and instances of consultation between two attorneys who both bill their time. The Court is not critical of Petitioner retaining counsel; there is indeed a credible basis for the adage that the lawyer who represents himself has a fool for a client. A petitioner's counsel may be compensated from the resources of the alleged incapacitated person even when the petition is not granted, in the Court's discretion. MHL § 81.16(f).
One factor in the Court's review of this request is the sheer size of the requested fee in proportion to Dr. L.'s liquid resources. The current combined fee request for Petitioner and Ms. Egitton for the Article 81 proceeding is $33,000, quite substantial for a matter which has not yet had any hearing. Dr. L. has substantial resources, but also has two minor children who rely upon him for support, and his own future needs are uncertain. Dr. L. has retired from practice, so he now relies on his retirement savings to provide everything he and his minor children need.
The Court is not second-guessing Petitioner's or his counsel's handling of their case but reviewing whether all the efforts expended are appropriately chargeable to Dr. L.'s resources. EPTL § 81.16(f); Hobson-Williams v. Jackson , 10 Misc. 3d 58, 809 N.Y.S.2d 771 (2d Dept. 2005) ; NYSBA Commission on Professional Ethics Opinion 689 (1997). Considering all the factors and circumstances, the Court allows the fee of $24,750 to Petitioner and Ms. Egitton, to be allocated between them in whatever manner they or their firm deems appropriate. The requested disbursements are also allowed.
In furtherance of this Decision, it is
ORDERED, that Petitioner, as fiduciary for Dr. L., shall pay to himself, from the funds of Dr. L., the sum of $23,900 for services rendered as agent under power of attorney through May 19, 2020, plus the sum of $282.64 for disbursements allowed; and it is further
ORDERED, that Petitioner, as fiduciary for Dr. L., shall pay to himself and Amy B. Egitton, Esq., the sum of $24,750 for services rendered as petitioner's counsel through May 18, 2020, plus $380 in disbursements allowed.
This Decision constitutes the Order of the Court.