Opinion
No. 1998GI00074/C.
2011-12-30
In the Matter of the GUARDIANSHIP OF Alexis Lyn SENFT, Deceased.
Audrey Patrone Peartree, Esq., Harris Beach, PLLC, Rochester, Attorney for Rebecca J. Daniels, Guardian of the Property. Patrick J. Burke, Esq., Rochester, New York, Attorney for Grace Lawlor and David Stettner, Guardians of the Person.
Audrey Patrone Peartree, Esq., Harris Beach, PLLC, Rochester, Attorney for Rebecca J. Daniels, Guardian of the Property. Patrick J. Burke, Esq., Rochester, New York, Attorney for Grace Lawlor and David Stettner, Guardians of the Person.
Charles M. Pilato, Esq., Rochester, Guardian ad Litem for Alexis Lyn Senft.
EDMUND A. CALVARUSO, J.
FACTSRebecca J. Daniels was appointed as Guardian of the Property of Alexis Lyn Senft (“the Ward”) by Order of this Court on April 6, 2009 after a lengthy and contentious guardianship proceeding following the death of Alexis' mother, Laura Senft, which left Alexis an orphan. Pursuant to the wishes of the Ward, and the ultimate agreement of the parties, this Court's Order named Rebecca Daniels Guardian of the Property, and Grace Lawlor and David Stettner Guardians of the Person. The Order also awarded legal fees for the proceeding paid out of the guardianship account. Audrey Patrone Peartree, Esq., counsel for Ms. Daniels was awarded $7,443.87, counsel for Grace Lawlor and David Stettner was awarded $1,100, and the Guardian ad Litem, Charles Pilato, Esq., was awarded $5,000.
On July 24, 2011, Alexis reached the age of majority. This matter now comes before the Court as a contested Petition for Judicial Settlement of the Account of the Property Guardian pursuant to Uniform Rules for the Surrogates' Court § 207.11(c), prepared by Audrey Peartree on behalf of Rebecca Daniels. Due to the contested nature of the guardianship throughout its pendency, and the fact that Alexis reportedly refused to sign a Waiver and Consent to the accounting, the Court ordered Charles Pilato, the originally appointed Guardian ad Litem for Alexis, to continue in that capacity until the final discharge of the guardianship.
The Account indicates a total principal balance of the guardianship accounts of $615,797.26. These funds are comprised of various non-probate assets the Ward received from her deceased mother and father, accumulated social security benefits, and a one-half interest in the Estate of her aunt, Jamie St. Ives, who died on October 15, 2009 domiciled in Colorado.
As part of the accounting, Ms. Peartree also filed an Affirmation of Services detailing her request for a total of approximately $25,000.00 in legal fees to be paid from the Ward's assets. In addition to the $7,443.87 in fees paid as part of the original guardianship proceeding, and the $7,356.52 paid from the Ward's share of the Colorado Estate, an additional $10,040.00 is requested for more recent legal services incurred by the Property Guardian. Ms. Daniels also requested commissions in the amount of $22,473.92 for her own personal efforts.
On September 1, 2011, Grace Lawlor and David Stettner, through their attorney, Patrick Burke, filed Objections to the Petition for Judicial Settlement, citing numerous problems with the accounting, and in particular objecting to the payment of fees and commissions from the Ward's assets. Also on that date, the Guardian ad Litem filed a Report and Recommendation outlining similar concerns.
A chambers conference was held on September 6, 2011 at which the objections shared by Mr. Pilato and Mr. Burke were reviewed, and Ms. Peartree reasserted her client's intention to seek full commissions and attorney's fees.
On September 22, 2011, Audrey Peartree filed a Second Supplemental Affirmation of Legal Services renewing her request for full fees. On September 23, 2011, Patrick Burke filed a Supplemental Affidavit in Opposition strenuously objecting to Ms. Peartree's request for any legal fees, citing evidence of mismanagement of guardianship affairs, and the over $14,000.00 in fees already paid to Ms. Peartree from the Ward's assets in the prior and related proceedings. Mr. Burke in particular objected to Ms. Peartree's fee paid from the St. Ives Estate in Colorado for services which he argued were negligent.
After additional chambers conferences, the parties ultimately reached agreement on some elements of the dispute, leaving only the issue of the amount of fees and commissions to be paid from the Ward's assets. The parties also agreed to waive a hearing.
OPINION
A guardian of the property of an infant, “shall protect, preserve and manage the property of the infant.” SCPA 1723. Ms. Daniels has submitted an Affidavit detailing the duties she completed in fulfilling her role as the Guardian of the Property of Alexis, and in it reports that since her appointment as Guardian of the Property, her life “has been consumed” by the responsibility. Ms. Daniels did facilitate the non-probate transfer of the Ward's parents' retirement benefits and insurance policies to Alexis, but the majority of her efforts were devoted to the administration of the St. Ives Estate. Ms. Daniels had a particularly difficult time working with the Ward's adult brother, Travis. Due to these difficulties, Ms. Daniels elected to hire a personal representative' by the name of Richard E. Hopper, who was also retained as the attorney for the St. Ives Estate.
Mr. Hopper submitted monthly bills to Ms. Daniels and her attorney, Ms. Peartree, which were approved by them, and later approved by the Colorado Court. While this Court lacks jurisdiction over the details of the administration of the Colorado estate, a review of Mr. Hopper's itemized bills reveals such unreasonable mismanagement that it is shocking that Ms. Daniels and Ms. Peartree reviewed and approved them. He billed over $20,000.00 within his first 60 days, for estate and ministerial services such as picking up trash, performing car maintenance, and supervising un-receipted lawn and home care services. These services were primarily performed by Connie Hopper, presumably a relative of Mr. Hopper. Ms. Daniels approved all of the charges, and ultimately paid Mr. Hopper $76,550.00 for his services administering an estate consisting only of a residence, personal property, three motor vehicles, and approximately $400,000.00 in cash and stocks. Together with the $7,350.00 paid to Ms. Peartree for legal services related to the St. Ives Estate, and a $6,500.00 “reserve” for tax fees that Mr. Hooper withheld, the total bill for professional services relating to the St. Ives Estate was over $90,000.00.
It is clear from Ms. Daniels communications with the Court that there is significant animosity between she and the Ward, she and the Ward's brother, and she and the Ward's other guardians. This has undoubtedly made the commission of her responsibilities more difficult. However, Article 17 of the Surrogate's Court Procedure Act charges this Court with acting in the best interests of the Ward. “The Surrogate's Courts possess entirely unlimited jurisdiction over any and every legal and equitable question which may ever arise in connection with ... the regulation of guardians and wards.” Matter of Morris, 134 Misc. 374, 382, 235 N.Y.S. 461, 471 (Kings Co.1929). It seems grossly inequitable to decrease the only remaining financial assets of an orphaned child due to adults failing to work cooperatively, no matter where the fault ultimately lies.
Ms. Daniels hired counsel to assist her in the commission of her fiduciary responsibilities. Much of the attorney fees requested by Ms. Daniels were for services that should have been rendered by her as Guardian of the Property, and are therefore inappropriate to be charged against the Ward's assets. See, e.g., Matter of Gilbert, 173 Misc. 750, 752, 18 N.Y.S.2d 783, 785 (Sur. Ct. N.Y. Co.1940). Additionally, it is noted that it is the experience of this Court that infant guardians rarely, if ever, seek commissions for their duties, which are often entered into out of loyalty for the children's relatives, and made necessary by their unexpected or untimely death. In the instant proceeding, Grace Lawlor and David Stettner, have not sought commissions for their services as Guardians of the Person, despite having a discretionary entitlement pursuant to SCPA 2307(3).
It is well settled that the award of commissions and legal fees is in the discretion of the Surrogate. SCPA 2307 and 2301; Matter of Smith, 91 A.D.2d 789, 458 N.Y.S.2d 72 (3rd Dept.1982); Stortecky v. Mazzone, 85 N.Y.2d 518, 626 N.Y.S.2d 733, 650 N.E.2d 391 (1995); see also, Matter of Pati, 151 A.D.2d 1006, 542 N.Y.S.2d 445 (4th Dep't 1989). “When the fiduciary is derelict in the performance of his or her duties, the denial of commissions is within the discretion of the Surrogate.” Smith, 91 A.D.2d at 791 (3rd Dept.1982); see also Matter of Geffen, 1954, 129 N.Y.S.2d 311. The Surrogate may refuse to allow commissions to a fiduciary who, “has been guilty of some misconduct, though not necessarily gross misconduct.” Matter of Penzato, 1951, 200 Misc. 751, 106 N.Y.S.2d 74.
Based on the mismanagement of the administration of the St. Ives Estate, as well as the level to which Ms. Daniels has contributed to the unnecessary litigiousness of this guardianship from its inception, this Court declines to award commissions pursuant to SCPA § 2307.
The Surrogate's Court bears the ultimate responsibility for deciding what constitutes a reasonable attorney's fee, and the evaluation of what constitutes a reasonable attorney's fee is a matter within the sound discretion of the Court. Matter of Gluck, 279 A.D.2d 575 (2d 2001); Matter of Goliger, 58 AD3d 732 (2d Dep't 2009). Much of the legal fees incurred by Ms. Peartree were for duties that should have been conducted by Ms. Daniels as Guardian of the Property. In her Affirmations of Services, Ms. Peartree details numerous hours spent in telephone conversations with Ms. Daniels discussing bank statements, email correspondence with the Ward's financial advisor, and $700.00 charged for research on SCPA 2307, the statutory section governing a guardian's entitlement to commissions. These are services done for the benefit of Ms. Daniels, who therefore must bear the costs incurred.
While there is no hard and fast rule to determine the reasonableness of a legal fee, considerations include the time expended, difficulties involved in the matters in which services were rendered, the skill necessary to address the issues presented, the size of the estate, the professional standing of counsel, the customary rates, and the results obtained. Matter of Potts, 213 A.D. 59 (4th Dep't 1925), aff'd 241 N.Y. 593 (1925); Matter of Freeman, 40 A.D.2d 387 (4th Dep't 1973), aff'd34 N.Y.2d 1 (1974). The burden with respect to establishing the reasonable value of legal services performed rests on the attorney performing those services. Matter of Lester, 172 A.D. 509 (3d Dep't 1916). Further, an attorney may not recover attorney's fees for duties performed that are capable of being performed by lay persons. Matter of Passuello, 184 A.D.2d 108, 591 N.Y.S.2d 542 (3d Dep't 1992). The Surrogate may direct that the fiduciary pay the fees of an attorney for fiduciary services. Matter of Wolf, 147 A.D.2d 487, 537 N.Y.S.2d 585 (2d Dep't 1989); Matter of Saperstone. 258 A.D. 776, 14 N.Y.S.2d 816 (4th Dep't 1939).
Much of Ms. Peartree's efforts were expended at the behest of and for the benefit of Ms. Daniels. However, Ms. Peartee was directed by this Court to file a final accounting of the guardianship, did so competently, and shall therefore be paid, in quantum meruit for the value of her services in that regard. See, Matter of Decker, 37 Misc. 527, 76 N.Y.S. 315 (1902). The allowance for those services is set at $5,000.00.
While the Court has taken the amount of fees and commissions received from the St. Ives Estate into account in evaluating the appropriateness of additional compensation, due to a lack of jurisdiction, the Court does not direct and has never directed any action to be taken as a part of the administration of that Estate.
Therefore, in accordance with the above decision it is hereby
ORDERED, ADJUDGED and DECREED, that the Final Account of the Property Guardian be and the same hereby is judicially settled and allowed, requests for fees and commissions contained therein are hereby denied; and it is further
ORDERED, ADJUDGED and DECREED, that Audrey Patrone Peartree, Esq., as counsel for Rebecca J. Daniels be, and hereby is allowed the sum of $5,000.00 for services rendered herein, to be paid from the Ward's assets; and it is further
ORDERED, ADJUDGED and DECREED, that Charles M. Pilato, Esq., appointed Guardian ad Litem for the ward Alexis Lyn Senft be, and hereby is allowed the sum of $8,000.00 for services rendered herein, to be paid from the Ward's assets; and it is further
ORDERED, ADJUDGED and DECREED, that Rebecca J. Daniels, as Guardian of the Property of Alexis Lyn Senft, is hereby authorized and directed to pay said former infant all monies in the possession of the guardian or in any bank standing to credit as the guardian of said infant and to transfer and deliver to said former infant all other property of every character in the guardian's possession belonging to the former infant, and to execute and deliver all assignments or other instruments in writing necessary or requisite to transfer legal title and possession of said property to the former infant, and it is further
ORDERED, ADJUDGED, and DECREED, that any bank or trust company or savings and loan association or person having possession of any said former infant's estate is hereby directed to pay over and deliver same to Alexis Lyn Senft, as herein above ordered on presentation of a copy of this decree bearing the seal of the Court, and it is further
ORDERED AND DECREED that the above-described payments and transfers shall be completed within thirty days of this Order, and upon completion, Rebecca J. Daniels is hereby released and discharged as the Guardian of the Property, and the Letters of Guardianship heretofore issued are revoked; and it is further
ORDERED, ADJUDGED and DECREED, that Grace Lawlor and David Stettner, are hereby released and discharged as Guardians of the Person, and the Letters of Guardianship heretofore issued are revoked.