Opinion
No. 11927/99.
2013-05-20
In the Matter of the Final Accounting of Carlos G. GARCIA, Esq., Guardian of the Person and Property of Anita B., An Incapacitated Person Now Deceased.
Hon. John M. Czygier, Jr., Suffolk County Surrogate, Riverhead. Carlos G. Garcia, Esq., Guardian/Administrator of Estate of Anita B. Brentwood.
Hon. John M. Czygier, Jr., Suffolk County Surrogate, Riverhead. Carlos G. Garcia, Esq., Guardian/Administrator of Estate of Anita B. Brentwood.
Thomas J. Casey, Esq., Court Examiner, Huntington.
Karen Ann Casey, Esq., Huntington.
Sunny Holder, Phoenix, AZ.
H. PATRICK LEIS, J.
ORDERED that the Guardian's motion seeking reconsideration of the Order dated June 3, 2010, holding the Guardian personally chargeable with the fees to be awarded to the Referee is hereby denied, and it is further
ORDERED that the Referee is hereby awarded fees in the amount of $10,912.50 and disbursements of $365.88 which sum shall be paid by the Guardian, Carlos G. Garcia, Esq. within ninety (90) days of the date hereof, and it is further
ORDERED that within thirty days of the date hereof, the balance remaining in the Guardianship estate, in the amount of $6,246.09, shall be advanced to the Referee in partial payment of her fee as awarded herein, and it is further
ORDERED that within ninety (90) days of the date hereof, the Guardian shall reimburse the Estate of Anita B. the amount advanced to the Referee from the guardianship estate and shall remit the balance of her fee to the Referee, and it is further
ORDERED that if the sum of $6,246.09 is not deposited into the Estate of Anita B. within ninety days of the date hereof, with proof of such deposit to be filed with the Court within that time, this order and judgment may be docketed ( seeCPLR 2222) to preserve a lien against Carlos G. Garcia, Esq., and it is further
ORDERED that this matter shall be placed on the final account compliance calendar on August 15, 2013, to monitor the filing of the proof of payment to the Referee and the deposit to the estate account as discussed herein.
MEMORANDUM
This case was transferred to the undersigned on April 29, 2013. The facts herein detail the urgent need for the constant calendering and review of guardianship matters to assure the compliance with Court directives. The Guardian herein served his ward, Anita B., for approximately fourteen months until her death which occurred over twelve years ago. The Court finds that the conduct of the Guardian in failing to comply for over twelve years, with Court directives to file a final account detailing his actions as property management guardian is without justification and beyond explanation. This, coupled with the Guardian's conduct in paying himself $3,000.00 from estate funds, $2,000.00 of which was not authorized by the Court, as well as paying himself $4,000.00 in legal fees for the sale of the decedent's cooperative apartment, also without Court approval, compels the Court to forward a copy of this decision to the Grievance Committee for the Tenth Judicial District for a determination concerning the Guardian's conduct in this matter. Furthermore, the Court finds the Guardian's blatant disregard of Court Orders, and instructions from court clerks and the Court Attorney Referee monitoring final accounts, to be inexcusable. Indeed, such disregard necessitated the appointment of a Referee to take and state the final account on behalf of the Guardian, resulting in unnecessary fees to the guardianship estate.
While many guardianship departments within the Second Judicial Department are now utilizing compliance calendars to monitor compliance with the Court's directives in the filing of annual accounts, this case demonstrates the need to calendar the final account proceeding, especially when guardians are directed to amend and to correct their final accounts. This is of critical importance where the precipitating event for the filing of the final account is the death of the ward since the Court Examiner no longer plays a role in monitoring the guardianship estate after such death. In this case, many years passed with a continued failure by the Guardian to cooperate with the court clerks and ultimately with the Court Attorney Referee then assigned to conduct compliance conferences for final accounts. It was not until the appointment of a Referee, ten years after the death of the incapacitated person, that a complete and accurate final account was prepared and submitted by that Referee to the Court.
The following more explicitly details the facts of this case.
In this Article 81 guardianship proceeding, on June 23, 1999, Carlos G. Garcia, Esq. was appointed as Temporary Guardian for Anita B. Thereafter, on September 16, 1999, Mr. Garcia was appointed as the Guardian of the Personal Needs and Property Management of Anita B. It appears that for the duration of the guardianship, Ms. B. maintained her own checking account and paid many, if not most, of her expenses herself. In addition, her social security payments were deposited into her personal account and not the guardianship account. On October 27, 1999, real property in which Ms. B. held an interest was sold by the Guardian. The proceeds from the sale were deposited into the guardianship account.
Anita B. passed away on December 4, 2000. In February, 2002, the Guardian sought leave to file his final account. An Order, dated February 27, 2002, directed the Guardian to file his final account and to cause its judicial settlement.
It should be noted that on February 20, 2002, Carlos G. Garcia, Esq., filed a petition with the Surrogate's Court, Suffolk County, seeking his appointment as Administrator of the Estate of Anita B. In the petition, a copy of which was provided by the Referee, his interest was represented as “Attorney for Distributee, Sunny Holder (Daughter of Deceased).” The Surrogate was not notified of Mr. Garcia's prior appointment as Guardian. On August 8, 2002, Letters of Administration were issued by the Surrogate.
The Court finds that the Guardian filed his final account and motion on May 20, 2002 (motion no. 003). The motion was made returnable on June 17, 2002, and was deemed fully submitted on that date. According to the notes contained in the Court's file, upon audit by the Clerk, the accounting was found defective and Mr. Garcia was notified of its deficiencies. During a conversation between the clerk and the Guardian on April 8, 2003, it was agreed that Mr. Garcia would amend the final account to correct the errors contained therein. Apparently, a similar conversation was held on July 14, 2003.
As there was no compliance calendar at that time for final accountings, the failure to resubmit a proper final accounting was not discovered for five years.
More than five years later, in 2008, a notice was sent to the Guardian advising him of his failure to amend and resubmit the final accounting. Said notice scheduled a compliance conference for October 8, 2008, before the Court Attorney Referee, Patrick McCarthy. The Guardian appeared for the conference and requested an adjournment to November 26, 2008, to submit the amended accounting. The Guardian again appeared for a conference on January 14, 2009, and requested yet another adjournment to afford him time to obtain documents. An adjournment was granted to March 18, 2009. The Guardian failed to appear for a conference on that date or submit his accounting prior thereto.
By Order dated April 28, 2009, the Court referenced the Guardian's failure to comply with the Court's request for additional information and documentation and directed the Guardian to appear for a conference on May 26, 2009. According to notations made to the Court's file, the conference was then adjourned to June 23, 2009, July 22, 2009, August 13, 2009, September 10, 2009 and November 18, 2009.
An Order was issued on April 29, 2010, providing the Guardian one final opportunity to file his final account and to cause its judicial settlement. The Guardian was advised that his failure to comply could result in the appointment of a Referee with the cost to be chargeable to him personally. A compliance conference was scheduled for June 2, 2010. Upon the Guardian's failure to appear for the conference or to contact the Court to explain his absence, on June 3, 2010, the Court appointed Karen A. Casey, Esq. as Referee for the purpose of taking and stating the Guardian's final account.
Due to the Guardian's failure to cooperate with the Referee, it was necessary for the Court to issue an Order, dated July 14, 2010, directing the Guardian to furnish the Referee with the file and any other documentation in his possession pertaining to this guardianship. A compliance conference was scheduled for August 4, 2010, to make certain that the Guardian complied.
The Guardian did appear for a conference with the Court Attorney Referee on the scheduled date. It was at that conference that the Guardian advised that he had, in fact, filed his amended final account with motion on October 12, 2009. The motion was returnable on November 2, 2009 (motion no. 004). Apparently, the final account had been referred to the clerk for audit. The audit of the “amended” final account, however, revealed errors similar to the first final account.
Upon auditing the final account submitted by the Guardian in 2009, the Court found that estate expenses and assets were included in the guardianship accounting. For instance, the Guardian included as income to the guardianship estate the sale of a cooperative apartment which sale occurred in 2003. Mr. Garcia represented the Estate of Anita B. in that transaction. In addition, the Guardian continued to include disbursements that Anita B. had made from her personal checking account and income that was deposited directly into that account. Therefore, once again, and after seven years, the Guardian's final account was improper and incorrect.
Since the Referee's final account had not been submitted by November, 2010, a conference was scheduled for December 8, 2010, and both the Referee and the Guardian were directed to appear. The Referee advised the Court of her inability to account for a majority of the proceeds resulting from the Guardian's sale of real property in which Anita B. had an interest. Ms. Casey also reported to the Court several other concerns which needed to be addressed by the Guardian. Mr. Garcia did not attend the conference nor did he contact the Court to seek an adjournment or explain his absence.
On March 1, 2011, the Referee submitted a comprehensive final account focused on this guardianship proceeding. While the Referee also included information pertaining to the estate proceeding, that is an issue to be addressed by the Surrogate. In her final account, the Referee discussed her continued inability to locate more than $19,000.00 from the sale of the aforementioned real property. Apparently, the Guardian was unable to account for the distribution of the sale proceeds.
After considerable effort on the part of the Referee (which resulted in a Supplemental Report), her persistent requests for information from the Guardian, and an Order dated November 16, 2011 which directed the Guardian to produce documentation supporting the distribution of the proceeds, in December, 2011, Mr. Garcia provided evidence to account for the missing funds. Thereafter, the Referee communicated to the Court her satisfaction with the explanation given by the Guardian.
On February 1, 2012, the Guardian submitted to the Court a third final accounting. For the third time, this accounting commingled Anita B.'s personal account, guardianship and estate activity. Since this account did not isolate Mr. Garcia's activities as Guardian or address the concerns raised by the Referee and the Court, it will be filed with the County Clerk's office and will not be considered herein. The Court finds it worth mentioning, however, that Mr. Garcia remains in possession of the estate account containing more than $80,000.00. While, again, the administration proceeding is a matter for the Surrogate's Court, the Court finds it outrageous that Mr. Garcia has inexplicably retained these funds for all of these years.
Mr. Garcia's appointment as permanent Guardian for Anita B. continued for only fourteen months until her death in 2000. The judicial settlement of the Guardian's final account has remained outstanding for more than twelve years. The main reason for the delay appears to have been due to the Guardian's failure to properly account for his activities as Guardian, his failure to attend Court conferences, his failure to provide requested information and documentation, and his failure to submit a proper and correct final account. The aforementioned has caused the Court to appoint a Referee to account for the property management acts of the Guardian. To burden the estate with the cost of that Referee would be unfair and unjust. Therefore, the cost of the Referee shall be borne by the Guardian whose actions necessitated the appointment.
In the Order and Judgment, Mr. Garcia was awarded compensation of $1,000.00 for his services as Temporary Guardian. According to information supplied by the Guardian and the Referee, on September 3, 2003, the Guardian paid himself $3,000.00 from the estate account. In the accounts submitted by the Guardian in 2009 and 2012, this fee was entitled “Guardianship Fee.” However, the additional amount of $2,000.00 was not authorized by the Court. Since these funds were paid from the estate account and not the guardianship account, this is an issue that must be addressed by the Surrogate.
Furthermore, the Referee has advised that Carlos G. Garcia, Esq., paid himself $4,000.00 in legal fees for the sale of the deceased's cooperative apartment. In addition, he has been unable to account for the remainder of the purchaser's downpayment in the amount of $3,452.35 which was deposited into his escrow account. Again, since these are estate issues, they are referred to the Surrogate along with a copy of this decision.
According to the final account submitted in 2009, a claim is made by Carlos G. Garcia, Esq., against the guardianship estate for commissions in the amount of $15,000.00 and legal fees in the amount of $5,000.00. With regard to compensation, the order of appointment clearly states that “the compensation of the Guardian shall be in accordance with the actual services rendered and also in accordance with Mental Hygiene Law Section 81.28.” Furthermore, the order provides, “that all persons seeking fees from this Court shall serve and file an affirmation or affidavit of services setting forth, with particularity, the services rendered, the time expended in the rendering of those services, and the usual charge that is made for the rendering of such services, such affirmation to be filed by the settlement date of this order.”
Contrary to the clear and comprehendible directions provided in the Order and Judgment and despite an opportunity of more than twelve years, Carlos G. Garcia, Esq., failed to submit an affirmation and time records accounting for his time and supporting the fees requested by him for the fourteen months that he served as Guardian or for the legal services he provided during the course of the guardianship.
Mental Hygiene Law § 81.28(b) provides: “If the Court finds that the guardian has failed to discharge his or her duties satisfactorily in any respect, the Court may deny or reduce the compensation which would otherwise be allowed.” Here, although there is not even a hint of a suggestion that Carlos G. Garcia, Esq. failed to fulfill his personal care duties as Guardian during the lifetime of Anita B., the duty to file a final report and account is one of the obligations of a Guardian ( seeMental Hygiene Law § 81.33). This he failed to do in a timely or even reasonable manner. As a consequence, it is appropriate to deny the Guardian compensation ( see Matter of Kaplan, 205 A.D.2d 326, 614 N.Y.S.2d 123 [1st Dept.1994] [Co–Conservator's “delay in handing over the books and records of the conservatorship to her co-conservator's accountant contributed to the delay of almost six years after the conservator's death in the filing of the final accounting, and warrants denial of the balance of the commissions to her”] ).
The Referee shall be compensated for the considerable time and effort she expended in resolving this final account matter. According to the affirmations of services submitted by Ms. Casey, 57.7 hours were expended by her in tracing guardianship funds, sorting through expenses paid by the Guardian and those paid by Ms. B., distinguishing between the assets and expenses of the guardianship and the estate, and preparing an accurate and comprehensive final account. Ms. Casey spent a considerable amount of time investigating the sale of property in which Ms. B. had an interest. The proceeds from this sale, which occurred in 1999, constituted the bulk of the guardianship estate. Karen Ann Casey, Esq., the Referee appointed by this Court to take and state the final account on behalf of Carlos Garcia, Esq. as Guardian of Anita B. is hereby awarded $10,912.50 plus disbursements in the amount of $365.88. The fees awarded were calculated at the rate of $225.00 per hour for 48.5 hours of legal services. The Court finds this amount to be reasonable and customary based upon the size of the guardianship estate and the exemplary services rendered..
In making the determination of the amount to be awarded the Court has considered:
(1) the time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented, (2) the attorney's experience, ability, and reputation, (3) the amount involved and the benefit flowing to the ward as a result of the attorney's services, (4) the fees awarded in similar cases, (5) the contingency or certainty of compensation, (6) the results obtained, and (7) the responsibility involved.
(Matter of Theodore T. (Charles T.), 78 AD3d 955, 912 N.Y.S.2d 72 [2d Dept 2010]; Matter of Heckl, 67 AD3d 1361, 891 N.Y.S.2d 214 [4th Dept 2009]; Matter of Anne M. T., 64 AD3d 784, 882 N.Y.S.2d 715 [2d Dept 2009]; Matter of Lillian A., 56 AD3d 767, 868 N.Y.S.2d 695 [2d Dept 2008].) Reimbursement for disbursements has not been allowed to the Referee for copying or mailing since the Court considers such expenses to be part of an attorney's overhead. (Matter of DeLuca, 2013 N.Y. Slip Op 30716(U) [Sur Ct, Nassau County 2013]; Matter of Graham, 238 A.D.2d 682, 656 N.Y.S.2d 434 [3d Dept 1997]; Matter of Diamond, 219 A.D.2d 717, 631 N.Y.S.2d 748 [2d Dept 1995] ).
The compensation to the Referee, in the sum of $11,278.38 shall be paid by the Guardian within ninety days of the date herein. However, to ensure that the Referee receives her compensation, or a part thereof, in an expeditious manner, the Court directs that the balance of the funds remaining in the guardianship estate, in the amount of $6,246.09, be advanced immediately to the Referee. Within the ninety-day period stated herein, the Guardian shall reimburse the Estate of Anita B. for the funds paid to the Referee and shall pay the balance of the fee owed to the Referee.