Opinion
XXXXXX/06
7-16-2009
IN THE MATTER OF REBECCA P., Petitioner, PURSUANT TO ARTICLE 81 OF THE MENTAL HYGIENE LAW FOR THE APPOINTMENT OF A GUARDIAN OF THE PROPERTY OF SHARI P., AN INCAPACITATED PERSON, Respondent.
Petitioner Rebecca P. represented by: MAZUR CARP & RUBIN, PC, by Robert M. Freedman, Esq., New York, NY, and by LAW OFFICES OF THOMAS SCIACCA, PLLC, by Thomas Sciacca, Esq., New York, NY. Respondent Shari P. represented by: MENTAL HYGIENE LEGAL SERVICE, INC., by Gloria Zeche, Esq., New York, NY. Guardian Martin Evans represented by: BRESSLER, AMERY & ROSS, P.C., by David H. Pikus, Esq. & Kenneth M. Moltner, Esq., New York, NY. Andrea P. represented by: GREENBERG TRAURIG, LLP, by Israel Rubin, Esq., New York, NY.
Petitioner Rebecca P. ("petitioner" or "Rebecca") moves for an order terminating the appointment of the Guardian of the Property Martin Evans ("Guardian Evans") pursuant to Mental Hygiene Law ("MHL") §§ 81.36(a)(1) and 81.36(d), restoring the property remaining in the hands of Guardian Evans to respondent Shari P. ("respondent," "Shari" or "Incapacitated Person") pursuant to MHL § 81.36(e), and if the above relief is not granted, removing Guardian Evans for cause. Guardian Evans opposes the third branch of the motion seeking his removal for cause, but takes no position on the other two branches of the motion, and cross-moves for an order transferring the motion to the Hon. Sherry Klein Heitler, J.S.C. pursuant to CPLR § 2217. Petitioner opposes the cross-motion and submits a reply to the motion. Both the motion and cross-motion are consolidated herein for disposition.
Procedural History
In January 2006, petitioner commenced this proceeding under Article 81 of the MHL to appoint a guardian of the property for her daughter, Shari, who was then residing in New York county . (See Exhibit "C" to the Motion.) In the verified petition, petitioner alleged that Shari suffers from "mental disorders and substance addiction, resulting in her complete inability to adequately manage her assets" and "making her a shadow of the person she once was." Id., at ¶¶ 2 and 4. Specifically, petitioner alleged a litany of self-destructive behavior as follows: (1) Shari lost custody of her daughter due, in part, to her inability to control her drug addiction and a failed suicide attempt in front of her then three-year old daughter, (2) Shari was the subject of a criminal investigation for prescription drug fraud, (3) Shari removed herself from a drug rehabilitation program against the advice of doctors, (4) Shari turned over complete control of her assets to a New Jersey attorney whom she never met before, has been disciplined three times and filed for federal bankruptcy protection, and (5) Shari has been financially exploited by unscrupulous individuals who have allegedly swindled her out of perhaps hundred of thousands of dollars. Id., at ¶ 4. In February 2006, Shari was involuntary committed to Gracie Square Hospital.
At a hearing on March 7, 2006, Shari consented to the appointment of a property guardian. The next day, the Hon. Lucindo Suarez, J.S.C., issued an order and judgment appointing Carolyn W., as Shari's property guardian. (See Exhibit "D" to the Motion.) On April 28, 2006, the Hon. Sherry Klein Heitler, J.S.C., relieved Ms. W. and appointed Guardian Evans, a retired Justice of the Supreme Court, in her place. (See Exhibit "E" to the Motion.) On May 4, 2006, Guardian Evans quickly obtained his commission to act as Shari's property guardian.
In or about November 2007, petitioner moved to remove Guardian Evans for the same or similar grounds alleged in this instant motion. (See Exhibit "1" to the Cross-Motion.) After two conferences, the Hon. Sherry Klein Heitler, J.S.C., by order dated April 11, 2008, directed Rami P. Kaminski, M.D. ("Dr. Kaminski") to conduct a psychiatric examination of Shari and provide a written report to determine whether Shari continues to need a property guardian to manage her finances. Dr. Kaminski submitted to the court a report dated June 20, 2008, wherein he recommended the continuation of the guardianship.
After a conference on February 2, 2009, this Court directed Dr. Kaminski to re-examine Shari, provide a written report and to testify at a hearing concerning whether Shari requires a property guardian. Dr. Kaminski submitted his report dated February 5, 2009, reiterating his prior recommendation for Shari's property guardian to remain in place. (See Court Exhibit "1").
Hearing and Witnesses
This Court conducted an extensive hearing of this matter on March 30, and April 6, 2009. This Court called Dr. Kaminski as a witness. Rebecca P., Shari P., and Martin Evans also testified at the hearing. Post-trial memoranda of law were submitted on May 21, 2009.
Findings of Fact
Since 2004, Shari has been estranged from her mother, Rebecca, and her sister, Andrea P. ("Andrea"). (See Exhibit "B" to the Motion at ¶ 2.) Her estrangement has continued after the appointment of Guardian Evans. Rebecca admitted that she had very little contact with Shari from 2006 through March, 2009. Her only face to face communications with Shari occurred in brief exchanges in the courthouse. Other than the brief encounters in the courthouse, Shari candidly testified that she only had one "very short" phone conversation with her mother for only a few minutes which Rebecca believed lasted for more than an hour. (Transcript at p. 104.) Rebecca acknowledges that almost all of the information she received about Shari came through Guardian Evans due to her estrangement from her daughter.
Based on his first examination of Shari in May 2008, Dr. Kaminski suspected that Shari was still abusing drugs. However, Shari denied any drug or alcohol use. In order to verify her denial, Guardian Evans arranged for a hair follicle test to screen Shari for drug use. Shari tested negative. (Court Exhibit "1".) After Dr. Kaminski reviewed the results of Shari's drug test, he examined her again in February, 2009, and opined that Shari had "lingering cognitive deficits, perhaps due to the drug abuse of the past." (Transcript at p. 127, lines 14-15.)
Rebecca now believes that Shari does not need a property guardian because she no longer abuses drugs. Rebecca points to Guardian Evans' deposit of about $10,000 a month into Shari's personal bank account in which Shari pays her own bills as a further indication that Shari is capable of managing her daily living expenses.
Notwithstanding her mother's assessments, Shari convincingly testified that she is overwhelmed and unable to manage her multi-million dollar estate and the on-going litigation. Given her past financial exploitation that precipitated the advent of this Article 81 proceeding and the complex litigation overseen by Guardian Evans to recover substantial sums allegedly misappropriated from her, Shari does not trust her judgment at her current stage of life. Shari testified to the extraordinary trusting relationship she maintains with Guardian Evans as follows:
I don't trust anybody else. I have a relationship with my guardian presently, a very good one. And it works. A good working relationship. I understand what he says. He understands what I say. And I am very comfortable. I trust him with my money.
He has made me a lot of money, thank goodness, and he also managed to save my money for me. And I am able to eat and take care of myself and so on and so forth because of it.
(Transcript at p. 109.)
Shari clearly wants Guardian Evans to "finish what he started" and his removal would have a "very negative" impact on her. (Transcript at pgs. 110 and 115.) However, Shari was confident that she will not need a guardian for the rest of her life, but realized that "today is not the date for that." (Transcript at p. 115.)
While Guardian Evans has not taken a formal position in written opposition to the motion as to whether Shari should continue with a property guardian, his testimony reiterates Dr. Kaminski's professional opinion and Shari's intuitive sense. Guardian Evans persuasively testified that Shari is currently not ready to handle all of her financial affairs as follows:
I want to make sure she knows what she is doing. Right now she is highly emotional, particularly when it comes to her family. She believes her mother and her sister have stolen money from her . . . . She is very suspicious of several other people. I want to make sure she knows exactly what she is doing and is competent to understand it before I come to any final conclusion.
(Transcript at pgs. 243-244.)
Conclusions of Law
Discharge of Guardian
The court may discharge a guardian, or modify the powers of the guardian, if the "incapacitated person has become able to exercise some or all of the powers necessary to provide for personal needs or property management which the guardian is authorized to exercise." MHL § 81.36(a)(1). The burden of proof of clear and convincing evidence rests on the person objecting to the termination of the guardianship or restoration of certain powers back to the incapacitated person. MHL § 81.36(d). The salutary purpose for placing such a burden on the objecting party, rather than on the proponent, is to "lessen the difficulty of an incapacitated person seeking to gain more control over his or her life." Law Revision Commission Comments on MHL § 81.36.
In this case, it is apparent based on clear and convincing evidence that Shari continues to require a property guardian. This conclusion is aptly supported by the expert opinion of Dr. Kaminski and the lay opinions of Guardian Evans and Shari herself.
Dr. Kaminski is a noted board certified psychiatrist who presents impeccable credentials serving as director of inpatient services at Mt. Sinai Hospital from 1985-1996, former medical director of the New York State Office of Mental Health and Commissioner of the Liaison for Clinical Affairs of the Governor of the State of New York. He is currently an associate professor of psychiatry at Columbia University and the director of the Institute of Integrative Psychiatry, which is a neuropsychiatric institute. (Transcript at p. 123.)
Dr. Kaminski examined Shari twice in the span of nine months in 2008 and 2009.
On both examinations, Dr. Kaminksi's impression was that Shari suffered from a formal thought disorder in that her pattern of thinking was not goal directed and impaired. (Transcript at p. 127.) On the first examination, Dr. Kaminski believed that Shari was abusing drugs. At the second examination, Dr. Kaminski ruled out substance abuse based on Shari's negative drug screening test result, but he thought she has "lingering cognitive deficits" due to her past drug abuse. (Transcript at p. 127.) While Dr. Kaminski believed that Shari may able to handle her day to day finances with some assistance, but it was regarding "more major decisions that involve planning and forward thinking that she would be deficient in." (Transcript at p. 133.) He noted that Shari is still unable to exercise proper judgment in her retention of professionals and fiduciaries, which was the very cause that precipitated the appointment of property guardian to protect her from financial exploitation, because she remains particularly susceptible to be preyed upon. (Transcript at p. 140.) Dr. Kaminski concluded that:
The two symptoms that I could tell that [Shari] has for sure is a formal thought disorder and inappropriate and blunted affect, which are two symptoms in psychiatry, or neuropsychiatry. . . . That would lead me to assume that she has some sort of brain disorder that renders her cognitive function to be disrupted. . . . She has the symptoms of cognitive deficits. And that renders her in my opinion as less able to make reasonable decisions.
(Transcript at pgs. 129-130.)
As stated above, while Guardian Evans testified that Shari can handle her daily expenses, he firmly believes that she is not ready to manage her financial affairs.(Transcript at p. 248.) However, Guardian Evans credibly testified that, depending on Shari's continual progress, she may not need a property guardian in the future. (Transcript at p. 242.)
Shari also emphasized that she is not ready to give up the extraordinary trusting relationship she maintains with Guardian Evans. Given her past financial exploitation and the complex litigation overseen by Guardian Evans, Shari does not trust her own impaired judgment at this juncture of her life. Shari too believes that there will come a time in the future when she does not need a property guardian, but that day has not come. (Transcript at p. 115.)
Rebecca is the lone voice advocating for the termination of the guardianship. Her testimony was based on insufficient personal knowledge, it lacked credibility and was permeated with impure motivation.
Due to Shari's estrangement with her, Rebecca has little or no personal knowledge of Shari's past behavior, current progress, or any changed circumstances that would support the instant motion to terminate this guardianship. Mobley v Perales, 108 AD2d 690 (1st Dept 1985); Matter of Melissa P., 140 AD2d 1006 (4th Dept 1988). Her testimony lacked credibility and contradicted portions of Shari's testimony which were more persuasive. Matter of Francis M., 58 AD3d 937 (3d Dept 2009) (removing co-guardian reflected the best interest of the ward, and credibility was deferred to trial court to make that determination as it had the opportunity to view the witnesses); Matter of Garett "YY", 258 AD2d 703 (3d Dept 1999) (Surrogate Court's decision to modify the guardianship order is entitled to great deference as that court had the opportunity to hear the witnesses and weigh their credibility). Moreover, it appears that Rebecca's disregard of her own daughter's plea to continue with Guardian Evans with whom Shari has developed a stable, trusting relationship and has made substantial progress over a short period, is motivated and designed to derail the family litigation that Guardian Evans is pursuing against her. Thus, Rebecca's interests are adverse to Shari's interests. The Court finds that it would not be in Shari's best interests to disregard Shari's preference for Guardian Evans to continue as her property guardian. In re Gustafson, 308 AD2d 305(1st Dept 2003); Matter of Guardianship of F.R., 12 Misc 3d 247 (Sup Ct Kings County, 2006). Ultimately, the termination of the guardianship in general, and the removal of Guardian Evans, in particular, would benefit Rebecca and be detrimental to Shari.
Removal of Property Guardian for Cause
Soon after his appointment in 2006, Guardian Evans worked diligently to safeguard and recover Shari's sizeable financial assets. In furtherance of his fiduciary duties, Guardian Evans brought claims against the New Jersey lawyer who allegedly denuded Shari's trusts of hundreds of thousands of dollars. Guardian Evans obtained a preliminary injunction prohibiting this allegedly unscrupulous lawyer from looting the trust funds and secured Shari's assets.
Guardian Evans also challenged a contract entered into by Andrea in June 2005 to sell a building jointly owned by an entity controlled by her and Shari at 147 Mulberry Street in lower Manhattan for $8,000,000. Andrea and her broker initially claimed that the $8,000,000 price was the best price that could be obtained. Guardian Evans had the contract terminated. Later, a contract for the sale of the same building for $12,300,000 was executed and closed, resulting in a substantial gain of $ 4,300,000 or a more than 50% increase above the prior contract price.
Moreover, Guardian Evans substituted himself and continued an action in Supreme Court, New York County under Index No. 602898/05 ( family litigation") that Shari previously filed against Andrea seeking, in part, an accounting and alleging breach of fiduciary duty concerning management of several family businesses. (See Exhibit "B" to the Motion.) In that action currently pending before the Hon. Judith J. Gische, J.S.C., Shari and Guardian Evans question hundreds of thousands of dollars of payments made to Rebecca in which Shari did not share in and claim that Andrea has wrongfully taken or withheld substantial sums from Shari. Rebecca and Andrea deny these allegations.
Much of Rebecca's arguments to remove Guardian Evans singularly focuses on the exorbitant cost of the family litigation described above and his conduct related thereto. Rebecca claims that Guardian Evans was "[g]enerating absurdly excessive legal fees, due largely in part to manipulative litigation tactics in flagrant violation of Orders of this Court and failure to comply with rules of Part 36 [Rules of the Chief Judge (22 NYCRR § 36)] and Article 81 [of the Mental Hygiene Law]." (Petition of Rebecca P. to Terminate Guardianship, verified on November 5, 2008, at ¶ 55[g].) Specifically, Rebecca argues that Guardian Evans was prohibited from suggesting attorneys for Shari that she ultimately retained in her own capacity in contravention of the mandated secondary appointment rules of Part 36. Rebecca claims that Guardian Evans retained and paid his own law firm without obtaining court approval. In two other areas not related to the family litigation, Rebecca chastises Guardian Evans for transferring approximately $10,000 a month into Shari's account for her to pay her monthly expenses without necessary oversight; and for allegedly "failing to file timely and complete initial and annual accounts." Id., at ¶ 55(b). In reality, Rebecca takes issue with minor defects in the 2006 and 2007 annual accounts in that Guardian Evans did not provide a statement from a medical professional concerning changes to Shari's condition pursuant to MHL § 81.31(5) and that Guardian Evans did not ask for any modifications in his powers.
As stated above, Rebecca's motion to remove Guardian Evans is permeated by impure motive. It is quite apparent that even taking into account the heavy cost of litigation that was spawned by Shari's belief that her own mother and sister have misappropriated more than a million dollars from her while she was incapacitated, Guardian Evans' watchful eyes have actually produced millions of dollars in profit for her when he successfully challenged the sale of a building for less than the market value. Guardian Evans has not manipulated the family litigation, but has been a true advocate for Shari, fulfilling his fiduciary duty.
Guardian Evans also has not violated the secondary appointment rules of Part 36 and received permission from Justice Heitler to retain his own firm on an emergency, limited and temporary basis. (See Guardian's Exhibit "D" in evidence: Order of the Hon. Sherry Klein Heitler dated May 12, 2006, and Guardian's Exhibit "E" in evidence: Order of the Hon. Sherry Klein Heitler dated June 14, 2006.) The Part 36 rules are inapplicable in this case as the right to retain an attorney does not devolve on the property guardian. Since there has not been a personal needs guardian appointed for Shari, she retained the right to hire attorneys. Given Shari's past history, it was quite understandable for Guardian Evans, who has vast experience in law both as a former Justice of the Supreme Court and in private practice, to suggest attorneys that were qualified for the task and would not financially exploit Shari. As the property guardian, Guardian Evans had a fiduciary duty to examine the bills and pay the reasonable amount for the services rendered.
The other two challenges are mere sophistry. On one hand, Rebecca argues that Shari has fully recovered so that all her property should be restored to her. Yet, on the other hand, she now argues that Guardian Evans was irresponsible by allocating to her approximately $10,000 a month to pay her own bills without the requisite oversight. The intent of newer Article 81 statute, as opposed to the old conservatorship law, was to provide the incapacitated person with the greatest amount of independence. Guardian Evans was certainly well within his discretion to provide Shari a modicum of independence by transferring a monthly lump sum so that she could pay her bills under his watchful eye and subject to review by the designated Court Examiner. In fact, the sum of money Guardian Evans gave Shari every month only represented a tiny percentage of the vast wealth Shari possessed. Shari also testified she is capable of balancing her checkbook and there has been no evidence presented that she either spent it unwisely or abused her independence. Quite frankly, this independence may have been a contributing factor in Shari's progress and may possibly lead to Shari not needing a property guardian in the future.
The last challenge concerning minor defects in the 2006 and 2007 annual accounts are not grounds for removal of Guardian Evans, but the appropriate remedy is to simply order compliance with the technical requirements. In re Gustafson, 308 AD2d 305 (1st Dept 2003) (when a guardian's annual reports were filed late, removal of the guardian was not warranted and the court may consider other remedies such as ordering compliance). In actuality, there has been two extensive reports of Dr. Kaminksi in 2008 and 2009, informing the Court and the parties of Shari's condition and functional level, that may satisfy the requirements of MHL § 81.31(5) . In addition, this Court has not confirmed the annual accounts for 2006 and 2007, but ordered a judicial settlement for the applicable period wherein Guardian Evans shall supply the required medical statement pursuant to MHL § 81.31(5). (See Order dated April 1, 2009.)
In sum, the record is replete with evidence that Guardian Evans has fulfilled his responsibility as property guardian and petitioner has brought this motion to prevent him from continuing the litigation against her and her family. In the Matter of Arnold "O", 226 AD2d 866 (3d Dept 1996) (dismissal of petition to remove guardian was appropriate when the record was replete with evidence that guardian fulfilled his responsibility, and that petitioner's conduct was designed to interfere with performance of the guardian's duties).
Conclusion
Accordingly, petitioner's motion to terminate the guardianship, restore the property back to the incapacitated person, and to remove the property guardian for cause is denied. The cross-motion to transfer petitioner's motion to Justice Heitler is denied as moot. This matter shall be placed on the Supreme Court Part 25 calendar for a conference on August 12, 2009, at 2:30 p.m.
The foregoing constitutes the decision and order of this Court. Courtesy copies of this decision and order have been sent to counsel for the parties.
Shari stated that she currently resides in Key Largo, Florida. (Transcript at p. 45.) Since Shari lived in New York County at the time of the commencement of this proceeding, this Court would not be divested of jurisdiction. In fact, all of Shari's assets and guardianship accounts remain under control of Guardian Evans and this Court. MHL §§ 81.04 and 81.05. See Matter of Mary S., 234 AD2d 300 (2d Dept 1996) (New York court had jurisdiction over daughter's proceeding to appoint a guardian for her mother when the mother was living in Maryland but had personal connections and property in New York); Matter of Le, 168 Misc 2d 384 (Sup Ct, Queens County, 1995) (New York court had jurisdiction to appoint a guardian for property management of AIP who now lived in California, as the AIP was physically present in Queens County when the guardianship proceeding was commenced); Matter of Lillian, 20 Misc 3d 215 (Sup Ct, Delaware County, 2008).