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Appellant Brings Motion for Final Accounting

A New York Family Lawyer said that, in a guardianship proceeding pursuant to Mental Hygiene Law article 81, in which the successor guardian of the person and property of the incapacitated person moved to settle his final account, the successor guardian appeals, as limited by his brief, from so much of an order of the Supreme Court, Queens County, entered January 4, 2011, as, upon judicially settling his final account, after a hearing, imposed a surcharge against him in the sum of $123,506.59 and denied him commissions and an attorney’s fee, and the Public Administrator of Queens County, cross-appeals, as limited by her brief, from so much of the same order as denied her request, made in connection with her objections to the final account, to include 9% interest on the sum surcharged.

A New York Child Custody Lawyer said that, on July 23, 2004, the attorney (hereinafter the appellant) was appointed the successor guardian of the person and property of the who was then a 76-year-old incapacitated person. In April 2007, the appellant appointed his wife, as the incapacitated person’s “nurse geriatric care manager.” The appellant’s wife provided geriatric care management services to the former through a solely-owned company named Family Care Connections, LLC (hereinafter Family Care), which she formed in 2007. Family Care received total payments from the appellant, as Albert K.’s successor guardian, in the aggregate sum of $111,881.98.

A Queens Full Custody Lawyer said that, in an order dated October 13, 2009, the Supreme Court confirmed a report of the appointed court examiner regarding the appellant’s accounts, and directed the appellant to appear at a hearing to address the payments made to Family Care on the incapacitated person’s behalf and, inter alia, whether the appellant should be surcharged for such payments. At the hearing, the appellant’s wife testified about her credentials and experience, and described the services she provided to the incapacitated person. At his home in April 2007, this included managing and training full-time health care aides, until he was hospitalized in October 2007. Although the incapacitated person never returned home after his initial hospitalization in October 2007, and received full-time care at the various facilities where he subsequently resided, the appellant’s continued to provide him with, among other things, full-time health care aides until he died in a nursing home on July 29, 2009.

A Queens Family Lawyer said that, in testifying about his duties as guardian, the appellant conceded that the prudent course would have been to obtain the court’s approval before retaining his wife to render geriatric care services to the incapacitated person when his condition deteriorated. On cross-examination, the appellant testified that he had submitted a final accounting with respect to another guardianship in which he included various payments to Family Care, and that he had engaged in the sale of another ward’s property to his tennis partner and fellow yacht club member. Furthermore, the court examiner elicited testimony that the appellant had prepared a will for the incapacitated person on May 8, 2009, which was witnessed by the appellant’s wife and the appellant’s mother. This will appointed the appellant as executor, and bequeathed the incapacitated person’s entire estate, worth in excess of $3 million, to a trust. The will specified that the appellant would serve as the trustee.

A Queens Child Custody Lawyer said that, after the hearing was concluded, the Supreme Court informed the appellant that it would permit him to submit written materials to explain the alleged instances of self-dealing elicited by the court examiner on cross-examination. There is no indication that the appellant availed himself of this opportunity or sought to present additional evidence at the conclusion of the hearing as to other matters. The parties thereafter appeared before the Supreme Court on the appellant’s motion to settle the final account. Although not personally present, the appellant was represented by counsel. The appellant’s counsel sought, in effect, to reopen the hearing with respect to the fees that the appellant paid to the appellant’s wife and Family Care. The Supreme Court declined to reopen the hearing.

A Queens Residential Custody Lawyer said that, in a decision dated December 8, 2010, the Supreme Court explained that it was approving the final account, except for the sum of $108,881.59, which it deemed to be excessive fees paid to Family Care and the appellant’s wife. The Supreme Court indicated that it was approving the sum of $3,000 for services provided to the incapacitated person prior to his hospitalization in 2007. The Supreme Court also stated that the appellant was to be denied commissions and an attorney’s fee, “as his actions were in the best interests of him and his family rather than his ward,” concluded that the appellant was personally liable to pay the court examiner’s legal fees in the sum of $14,625 for asserting the objections to the account, and concluded that the appellant was to be surcharged for the foregoing items in the total sum of $123,506.59, without interest, although the Public Administrator of Queens County (hereinafter the Public Administrator), had requested that interest be included. In an order entered January 4, 2011, the Supreme Court, consistent with the decision, judicially settled the final account.

The issue in this case is whether the appellant’s motion to settle his final account should be granted.

The court in deciding the case said that, contrary to the appellant’s contention, he was not denied his right to a hearing or the right to present evidence, call witnesses, or cross-examine adverse witnesses. Furthermore, under the circumstances, the Supreme Court did not improvidently exercise its discretion in declining to reopen the hearing.

In addition, the Supreme Court properly determined that the court examiner and the Public Administrator satisfied their initial burden of coming forward with evidence to establish that the amounts set forth are inaccurate or incomplete so as to raise an issue of fact as to whether the charges paid from the incapacitated person’s estate for Family Care’s services were reasonable and proper. In response to the foregoing, the appellant failed to meet his burden of demonstrating that the fees paid from his estate were reasonable or proper. Accordingly, the surcharge of $108,881.59 for those fees was proper.

In addition, the Supreme Court properly directed, as part of the surcharge, that the appellant personally pay the court examiner’s legal fees in the sum of $14,625. The court examiner was appointed to examine the appellant’s accounts pursuant to Mental Hygiene Law § 81.32. The court examiner’s fees were incurred to inquire into the propriety of the appellant’s conduct in retaining appellant’s o wife render services to the incapacitated person. Accordingly, the appellant should bear the burden of the fees because they were incurred to examine his conduct in the context of this and other guardianships which involved similar acts of self-dealing by the appellant. To the extent that the court examiner’s fees exceeded the statutory guidelines set forth in 22 NYCRR 806.17(c), the appellant’s covert self-dealing demonstrates the requisite “extraordinary circumstances” which entitle a court to depart from the statutory schedule.

The court rejects the appellant’s contention that the Supreme Court improperly denied him commissions allegedly earned on the sale of the incapacitated person’s property and an attorney’s fee. Pursuant to Mental Hygiene Law § 81.28, the court shall establish a plan for the reasonable compensation of a guardian, which may be denied or reduced if the court finds that the guardian failed to discharge his or her duties “satisfactorily in any respect”. In light of the appellant’s conduct, we decline to disturb the Supreme Court’s determination that the appellant failed to discharge his duties satisfactorily, and conclude that the Supreme Court properly denied him the requested commissions and an attorney’s fee.

Finally, with respect to the cross appeal, we determine that the Supreme Court improvidently exercised its discretion in denying the Public Administrator’s request to include 9% interest on the sum surcharged.

Accordingly, the court held that the order is affirmed insofar as appealed from; and it is further, ordered that the order is reversed insofar as cross-appealed from, on the facts and in the exercise of discretion, and the request to include 9% interest on the sum surcharged is granted; and it is further, ordered that one bill of costs is awarded to the Public Administrator of Queens County, payable by the incapacitated person personally.

If you are having issues with your guardian with regard to the settlement of your estate, seek the help of a Queens Order of Protection Attorney and Queens Custody Attorney at Stephen Bilkis and Associates. Call us.

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