Opinion
2018-2256
05-17-2019
In the MATTER OF the Application of Helen E. MCEWEN, Petitioner FOR the appointment of a Guardian of the Person and Property of Friedl Viktoria WELTE an Alleged Incapacitated Person
Friedman and Ranzenhofer, P.C., Robert Friedman, Esq., of counsel, 74 Main St, PO Box 31, Akron, NY 14001, for Petitioner Helen E. McEwen Mental Hygiene Legal Services, Michael J. Tuohey, Esq., of counsel, Senior Attorney, Mental Hygiene Legal Service, 50 East Avenue, Suite 402, Rochester, N.Y. 14604, for Friedl Viktoria Welte, the Alleged Incapacitated Person Candice Sengillo, Esq., Deputy County Attorney, Monroe County Law Department, 39 W. Main Street, Rochester, NY 14614, for the County of Monroe Underberg & Kessler, LLP, Anna Lynch, Esq., of counsel, 300 Bausch and Lomb Building, Rochester, NY 14604, for Lifespan, the proposed Guardian.
Friedman and Ranzenhofer, P.C., Robert Friedman, Esq., of counsel, 74 Main St, PO Box 31, Akron, NY 14001, for Petitioner Helen E. McEwen
Mental Hygiene Legal Services, Michael J. Tuohey, Esq., of counsel, Senior Attorney, Mental Hygiene Legal Service, 50 East Avenue, Suite 402, Rochester, N.Y. 14604, for Friedl Viktoria Welte, the Alleged Incapacitated Person
Candice Sengillo, Esq., Deputy County Attorney, Monroe County Law Department, 39 W. Main Street, Rochester, NY 14614, for the County of Monroe
Underberg & Kessler, LLP, Anna Lynch, Esq., of counsel, 300 Bausch and Lomb Building, Rochester, NY 14604, for Lifespan, the proposed Guardian.
Christopher S. Ciaccio, J.
INTRODUCTION
In this Article 81 proceeding for the appointment of a guardian for the person and property of Friedl Welte, an alleged incapacitated person (the "AIP"), the parties seek an Order affixing reasonable compensation for services rendered in this matter.
The law firm of Friedman and Ranzenhofer, P.C., counsel for the petitioner, seeks attorney's fees and expenses pursuant to Mental Hygiene Law (MHL) § 81.16(f) in the amount of $ 49,568.16.
The court evaluator, Aaron Sperano, Esq., requests a fee pursuant to MHL § 81.10(f) of $ 23, 380.00.
Mental Hygiene Legal Services, appointed to represent the AIP pursuant to MHL § 81.10(c) (1,2 and 5), requests a fee in the amount of $ 3,225.00.
The firm of Underberg and Kessler (Anna Lynch, Esq., of counsel), counsel to the temporary guardian Lifespan, requests a fee in the amount of $ 8,830.35.
THE PROCEEDINGS AND NATURE OF THE CASE
This Article 81 proceeding was commended by an Order To Show Cause and Petition filed on April 4, 2018.
The nine-page Petition set forth in reasonably competent fashion the statutory language regarding proposed guardian powers; the AIP's assets, which included mortgage payoff proceeds in the amount of $ 362,000.00; and the persons entitled to notice. Absent from the allegations were any case-specific facts or circumstances.
Aaron Sperano, Esq. was appointed as court evaluator. Mental Hygiene Legal Services was appointed to represent the AIP.
The court appointed Lifespan as temporary guardian of the AIP's property and issued a temporary restraining order to enjoin the proceeds of the sale of a commercial property in which the AIP held a mortgage interest.
The court evaluator returned his report on June 22, 2018.
The parties made six court appearances and participated in two phone conferences. There was the initial appearance on the return of the Order To Show Cause, followed by the return of the court evaluator's report. At two subsequent appearances the court heard argument as to whether the AIP was in default for failing to serve an Answer, and as to the propriety of the petitioner's Demands for Discovery. Those Demands sought the use and/or release of the AIP's medical records; a deposition of the AIP; the AIP's financial records; and the release of the records of the Monroe County Adult Protective Services Agency, which had opened a file concerning the AIP.
Counsel for the AIP moved for a protective order and to preclude the use of medical records. That motion was granted and the requests for documents and a deposition were denied.
A hearing at which all parties appeared was held on December 17, 2018, followed by a brief court appearance for the court's decision.
The hearing lasted for approximately four and one-half hours. The petitioner called four witnesses: the financial services supervisor employed by Lifespan to administer the AIP's assets; the petitioner Helen McEwen; her brother Carl Welte; and her brother Frank Welte. The AIP testified and called one witness, one Barbara Claridge. She testified that she was a friend of Carl Welte, and that she had taken the AIP shopping on several occasions.
The facts elicited at trial were not unusual by the standards of Article 81 proceedings. The credible testimony was that the AIP had recently exhibited signs of dementia, including confusion, poor personal hygiene, inability to manage financial affairs, and poor nutrition. At the time of Lifespan's appointment, bills had gone unpaid for several months, including the utility bill, the interest on a home equity loan (which had gone into foreclosure), and health insurance premiums.
The AIP's son Carl Welte, who for at least part of the year lived in the AIP's residence, co-owned several rental properties with the AIP and had allowed the taxes on those properties to go unpaid. There was credible testimony that he had begun renovation of the basement at the AIP's house with the intention of renting out the space to tenants, but at trial evidence was presented that the basement was a shamble and the construction unfinished.
Carl Welte had allowed the AIP to travel alone by air to his house in Florida, but on one occasion, security at the airport called the Monroe County Sheriff's office because the AIP, who had flown in from Florida, was wandering the airport, speaking somewhat incoherently about a bus from the casino being late and not knowing how she would be able to get home.
Lifespan paid the overdue bills and brought the various accounts current. It set a fixed amount of money to be paid to the AIP for her to spend on personal needs.
At the conclusion of the hearing the petitioner stated that she did not object to the appointment of Lifespan as the permanent guardian for the AIP's person and property. There was general agreement among the parties that ownership of the rental properties jointly owned by Carl Welte and the AIP should be transferred to Carl alone.
DISCUSSION
Fee request of counsel for the Petitioner
Friedman and Ranzenhofer, P.C., counsel for the petitioner, now comes forward with a request for fees in the amount of $ 49,568.16. An objection was filed by Mental Hygiene Legal Services (Michael Tuohey, Esq.) on behalf of the AIP.
It is well-settled that Supreme Court has broad discretion to decide the reasonable compensation to be awarded as attorney's fees in a guardianship proceeding even in the absence of objections (see Mental Health Law section 81.16 ( [f]; Ricciuti v. Lombardi , 256 AD2d 892, 893, 682 NYS2d 264 [3d Dept 1998] ). In doing so it must provide a "clear and concise explanation with reference to the following factors: (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" ( In re Tijuana M. , 303 AD2d 681, 682, 756 NYS2d 796 [2d Dept 2003] ; see also Matter of Mavis L., 285 AD2d 509 [1st Dept 2001] ; Matter of Freeman, 34 NY2d 1 [1974] ; Matter of Stark, 174 AD2d 746 [3rd Dept 1991] ).
Moreover, "the starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides the Court with an objective basis on which to make an initial estimate of the value of the attorney's services by the prevailing hourly rate for similar legal work in the community" (see Noghrey v. Town of Brookhaven , 17 Misc 3d 1102(A), 851 NYS2d 59 [Sup Ct 2007] ). As an additional consideration, it is noted that "while time records need not be overly detailed, the records must be sufficiently specific so that a court may assess the reasonableness of the time expended in relation to the work performed (see Noghrey v. Town of Brookhaven , supra) .
Here, considering the lack of complexity of the issues and the ease with which the desired result was obtained, the total hours spent by counsel for the Petitioner, approximately 181 hours, seems grossly excessive.
The proceeding did not pose any unusual issues. The AIP was shown to have substantial assets, but those have been managed competently by the efforts of the temporary guardian. The extent of the AIP's inability to attend to her financial and personal needs was easily shown. Without objection the proceeds of the sale of the mortgaged property were set aside and deposited with the court.
An unreasonable amount of time was billed for "non-issues," i.e., matters on which there should have been no argument and no expenditure of time.
The petitioner demanded that the AIP serve a Response or Answer to the Petition, not unprecedented (see In re Elmer Q , 250 AD2d 256, 258, 681 NYS2d 637, 638 [3d Dept 1998] ), but not the general practice in an Article 81 proceeding. Counsel argued that the AIP was in "default," however, the failure to serve an Answer in an Article 81 proceeding does not result in a default; no court would allow a "default" by the AIP for her failure to serve a pleading, if the result is to work against the AIP's health and welfare without a hearing.
The petitioner's extensive "Omnibus" Article 31 discovery demands, which demanded "voluminous and confidential discovery responses from the AIP" (Attorney for the AIP Michael Tuohey's Affidavit in support of a protective order), were unnecessary. The Petitioner was in possession of sufficient information (indeed, the court evaluator had already performed the work of itemizing the assets and provided the report to the parties) to be able to prevail at the hearing without the production of the documents requested in the "Omnibus Demand." Lifespan too provided information regarding the AIP's finances - the Lifespan supervisor was the petitioner's main witness. The petitioner was able to testify regarding the circumstances of her mother's living conditions, health and hygiene, and cognitive abilities. The demand for the AIP's medical records was ill-informed: it is well-settled that an AIP's medical records are confidential, and that the AIP does not put her medical condition at issue (thus waiving her confidentiality) by being named as the subject of an Article 81 application for a guardian.
As noted by counsel for the AIP, "Guardianship proceedings are special proceedings and hearings are to be held within 30 days unless adjourned for good cause," and, "the main purpose of a special proceeding is speed and economy and the disclosure devices so relied upon in many civil actions are available in a special proceeding only by leave of the court (Tuohey Affd. At p. 2, quoting Siegel, NY Practice § 55 (6th ed.). Here, it was ultimately seen that there was no good cause for the delay occasioned by the discovery demands, the exchange of motion papers, and argument on the motions.
In his Affidavit in support of the fee application, counsel states that he is experienced in the field of guardianship matters. More than that is needed to justify a billing rate of $ 350.00 per hour. Practicing out of a Buffalo office, he is not known to this court. By contrast, Anna Lynch, counsel to Lifespan, the appointed guardian, is the managing partner of Underberg and Kessler, one of the area's largest firms, and specializes in the areas of health care and elder law. Her experience, reputation and skill are well-known to the court. Yet her billing rate is less than Mr. Friedman's, and her bill is discounted by 10% in consideration of her client Lifespan. The case cited by counsel, Matter of Patente , (T.U.), 48 Misc 3d 347 (Nassau Cnty Crt 2015), notes with approval billing rates in Nassau County of between $ 350 and $ 425 per hour in guardianship matters; however, downstate New York traditionally has higher billing rates.
Each billing entry was at a minimum six minutes, so that, for example, opening and reading an email of in some cases one line of text, which would have consumed at the most thirty seconds, was billed for six minutes. There are over 400 entries for opening and reading, or writing, an email. and many of the email entries are billed for 12 minutes or more. These emails represent more than $ 20,000.00 of the overall bill (taking the average of time spent on emails to be nine minutes, times 400 emails, divided by 60 min/hr., times $ 350/hour).
Most entries do not specify the work performed except in the vaguest of terms, such as, "email to client," or "phone conference with Colleen." This has been deemed unacceptable (see Miroglio S.P.A. v. Conway Stores, Inc., 629 F Supp2d 307, 313 (S.D.N.Y.2009) (holding that entries such as "letter to [opposing counsel]," "telephone call to [opposing counsel]" and "discussion with [opposing counsel]" are "overly vague" and "[t]hus courts commonly make percentage reductions for [them]").
There are other billing issues. Counsel billed for the presence (and travel) of an associate at court appearances. It was not apparent that the associate at any of those appearances was needed, considering the lack of complexity of any of the issues discussed. Counsel billed for "preparation" for several court appearances; it is not at all clear what preparation would have been needed, since again, the issues raised were not complex. There are bills for "research" on issues related to discovery. Even if those issues needed to be researched (which in the court's view they did not, especially by an attorney experienced in Article 81 matters) the research would not have needed to consume more than an hour with respect to each issue, not the two and sometimes more than three hours billed.
As to the result obtained, the petitioner was successful at having a guardian appointed and avoiding wasting of the assets, but it is noted that her Petition requested that she be named guardian; here, rather, Lifespan was appointed. There was opposition from the AIP, but only token. The result was never really in doubt. All counsel agreed to the appointment of Lifespan. The son Carl Welte, who was at odds with his sister (the petitioner), and with his brother Frank, never appeared as a party nor did he retain counsel. The fee was certain of being paid; there was no sense that sense that the Petition might be dismissed.
Notwithstanding the lack of serious opposition to the Petition and the certainty of getting paid, and the fact that Lifespan and/or its counsel did most of the work managing the AIP's resources to the present date, counsel seeks a fee that represents one-sixth of the AIP's net worth at the time of the hearing.
This court has had only one opportunity to award compensation to privately-retained counsel for a Petitioner. The issues were not dissimilar, the attorney's experience was extensive, the hearing took a comparable amount of time, there was extensive consultation with the Petitioner regarding an appropriate living situation for the AIP, and as an added layer of complexity, the Petitioner, a daughter, was able to act as the guardian for her mother. Thus, there was no application by an agency for fees. The fee requested by the attorney for the petitioner in that case was approximately $ 23,000.00.
In the case cited above, In re Parente, supra , the court awarded a fee of $ 28,500 to counsel. In In re Laurence H. , 51 Misc 3d 834, 839 [NY Co Ct 2016], the Court awarded $ 27,051.25 to counsel for the AIP ($ 335.00 per hour for 80.75 hours of legal services).
The Court will not engage in a "line by line adjustment" ( Noghrey v. Town of Brookhaven , 17 Misc 3d 1102(A), 851 NYS2d 59 [Sup Ct 2007] of each billing entry and where it might be inaccurate. Rather, it will exercise its discretion and reduce the billing rate and the number of hours claimed in arriving at a fee, to bring it into line with fee requests in similar cases, and in consideration of the AIP's assets. Certainly, the method used to bill for time on emails is excessive (by a factor of at least two) and is not approved. The hourly fee charged by counsel Friedman is also excessive, given the lack of evidence as to counsel's expertise in these matters.
The Court deems the reasonable rate for services rendered by Mr. Friedman is $ 275.00 per hour. Justin Friedman's time is reduced by 15 hours and his rate reduced to $ 175.00. Excessive time was spent on researching issues that were not pertinent to the goal of the Petition, which was the speedy appointment of a guardian. His appearance at court appearances did not seem necessary.
For all the reasons above, the Court hereby approves a fee in the amount of $ 27,694.00 plus expenses in the amount of $ 1,381.25, for a total of $ 29,075.25 to be paid by the guardian Lifespan out of the funds owned by the AIP.
Accordingly, it is hereby ORDERED that amount of $ 29,075.25 is to be paid to Friedman and Ranzenhofer, P.C., as reasonable compensation for their work in representing the Petitioner.
Fee request of the Court Evaluator
The court evaluator requests a fee of $ 23,380.00, which represents a billing rate of $ 300.00 per hour.
His report was comprehensive and well-written. However, a cursory review of the bill reveals several problems. One, as with the bill submitted by counsel for the petitioner, all entries for opening, reading and composing emails are at a minimum in increments of six minutes, when the actual time spent in opening and reading each email is a fraction of the time billed (e.g., a July 23 email to the court that consists of one short paragraph is billed for 12 minutes).
Another is that the bill does not reflect contemporaneously-made entries - the organization of the entries is not sequential, and details as to each entry are vague. "[F]ee applications must be accompanied by contemporaneous time records which must adequately identify the general subject matter of the work that the attorney did during each time slot. This requirement is generally not satisfied by vague entries such as ‘conference with’ or ‘call to’ a specified person, although the court may be able to deduce the nature and relevance of a generally described time entry based on its familiarity with the case or other contextual clues" ( LV v. New York City Dep't of Educ., 700 F Supp 2d 510, 526 (SDNY 2010) (holding that entries that omit information about the subject matter of the work, e.g., "meeting w/ co-counsel" and "conference w/ co-counsel," justify a reduction in the hours expended)(see also Miroglio S.P.A. v. Conway Stores, Inc., id. ). Here, the relevance of the dozens of email and conference entries to the work of the court evaluator is not clear.
The evaluator billed for several hours "researching the court evaluator statute." At $ 300.00 per hour it would not be expected that an appointed evaluator would have to research the statute. And several hours were billed for preparation for the hearing, however, Mr. Sperano did not participate in the hearing, although he was present.
His rate of $ 300.00 reflects a highly experienced court evaluator, but nowhere in his recitation of his experience does he state that he has previously performed such evaluations (although he was on the Part 36 list).
By comparison, a New York County Supreme Court awarded the court evaluator in an Article 81 proceeding $ 23,748.00 for 82.72 hours of services at the rate of $ 275.00 per hour. The court noted the evaluator's "excellent and thorough 53-page report," her role in resolving the proceeding, and that the large expenditure of time was necessary because of the "contentiousness between the parties, the numerous individuals that needed to be interviewed, the number of documents that were required to be reviewed, (and) the parties' complex financial circumstances " ( In re Laurence H. , 51 Misc 3d 834, 839 [NY Co Ct 2016] ).
Here the evaluator's report was 17 pages. The parties were not contentious (except for Carl Welte) and the financial circumstances were easy to marshal and understand.
Accordingly, in light of the foregoing and in consideration of the AIP's assets, the court fixes reasonable compensation in the amount of $ 15,000.00, reflecting a rate of $ 250.00/hr. and total time of 60 hours.
Lifespan is directed to pay the Aaron Sperano, Esq., the sum of $ 15,000.00 for services rendered.
Fee of Underberg and Kessler, counsel for the AIP
The fee request of $ 8,830.25 is reasonable and commensurate with the skill and experience of counsel, is hereby approved and is to be paid by Lifespan from the AIP's assets.
Fee of Mental Hygiene Legal Services
The fee of $ 3,225.00 is approved as well and is to be paid by Lifespan from the AIP's assets.
CONCLUSION
It is hereby ORDERED that Lifespan pay, out of the AIP's assets, the following sums for services rendered in this proceeding:
To Friedman and Ranzenhofer, P.C., $ 29,075.25;
To the court evaluator, Aaron Sperano, Esq., the sum of $ 15,000.00;
To Underberg and Kessler, counsel for the AIP, $ 8,830.25;
To Mental Hygiene Legal Services, $ 3,225.00.