IN RE: the Application of Michael N. CONNORS (2009)

The guardian herein has moved to judicially settle his final account and seeks an order that would approve all his schedules of assets and disbursements and income and grant his request for commissions pursuant, to SCPA § 2307, and attorneys fees for his lawyer ¹ .

 In a guardianship proceeding, when an application to judicially settle a final account is made, the clerks in the court's guardianship department first review the final account, the entire file, as well as the report of the court-appointed counsel to review, and endeavor to reconcile any outstanding questions prior to forwarding it to the court for approval.²  In this particular matter, following said review, the clerks made some corrections to the accounting on their own.³  However, the clerks found that the guardian's final account required augmentation and requested further explanation of the schedules submitted by the guardian, Michael N. Connors, Esq.   In response, an associate in the guardian's law firm provided supplemental information, and filed an amended final accounting.   Still not satisfied, the clerk's office brought to the Court's attention the following issues that yet needed to be addressed and resolved:  1) Was the newly formed revocable trust properly revoked?, had the guardian exceeded his authority when he revoked the trust?, had he acted improvidently in marshaling the trust assets into the guardianship account?   2) Were there possible overreaching and excessive fees taken by the guardian in the various fiduciary capacities?   3) Did the guardian act improperly by mislabeling the trustee commissions he took as court ordered, when they were in fact not court ordered?

This Court reviewed the entire guardianship file as well as the Surrogate's Court file, and because said reviews did not resolve the issues raised, a conference was held which was attended by the initial petitioner, by an associate of the guardian's law firm, and by counsel to review.   Following the conference, the Court posed several pointed questions to the guardian and court-appointed counsel to review, and requested the submission of original documents as discussed more fully below herein.

PROCEDURAL HISTORY OF THE CASE

Petitioner's position, gravamen of the petition, and supporting papers

On August 13, 2002, the petitioner filed an order to show cause and petition for the appointment of a MHL Art. 81 guardian for CLARA JOOS (hereinafter Ms. Joos or the IP), a frail, wheelchair-bound ninety-two (92) year old woman, whose husband and whose only child had predeceased her.   Her only blood relations, a niece and nephew, resided in Europe.   The petitioner was MS JOOS' former son-in law, John Lilley, who was divorced from CLARA JOOS' only child.   Despite the divorce, Mr. Lilley apparently remained close to MS JOOS, having known her for more than thirty (30) years.   He had become concerned about her physical and financial well-being.

Mr. Lilley alleged that MS JOOS had been financially exploited by a neighbor, Louise Weiss.   According to the petition, Ms. Weiss had discovered some $177,542.80 in bonds in MS JOOS' home, had taken her to a bank to cash said bonds, and then had retained $17,754.28 as a 10 percent “commission”.   Mr. Lilley was alerted about these bonds and this “commission” not by MS JOOS, but by MS JOOS' neighbor, Walter Schmand, and by a bank employee, Mr. Dank, both of whom found the transaction suspicious.

The petitioner further alleged that it was unsafe for MS JOOS to remain alone in her home because of the home's run-down condition coupled with her frailty, posed a chronic risk of injuries due to falls.

In March of 2002, Mr. Lilley who had apparently been her attorney-in-fact ⁴ , concerned about her financial and physical safety, telephoned the law firm of Connors and Sullivan.   According to the Lilley petition, this law firm had represented MS JOOS for several years and had been working with Louise Weiss and her husband in managing MS JOOS' affairs.

Mr. Lilley alleged that during said telephone call he cautioned Connors and Sullivan that MS JOOS could not remain safely alone in her home because she was at risk of falling unless she received twenty-four (24) hour seven (7) day a week home-care.   Arguing that he was not a blood relative, Connors and Sullivan would not provide him with information about MS JOOS, even though they admitted that she had wanted Mr. Lilley to be her health care proxy.   Mr. Lilley, was never presented with the document despite his request for same.  (See petition in support of at ¶ 4.)

The petition suggests that the failure of Connors and Sullivan to speak with Mr. Lilley amounted to a form of isolation of MS JOOS and that his inability to obtain information about her forced him to file a guardianship petition.⁵  Connors and Sullivan never explains its refusal to ask their client for permission to speak to Mr. Lilley, or to offer to meet Mr. Lilley in her home, or why the firm failed to present Mr. Lilley with a document appointing him her health care proxy in accordance with her expressed wishes.

Mr. Lilley also alleged that Connors and Sullivan did not represent MS JOOS with undivided loyalty.   In the estate proceeding of her daughter, Connors and Sullivan had sold her home for some $48,000.00 less than its assessed value.

Dr. James Lynch's Report

Annexed to the petition was a report from Dr. James Lynch ⁶ dated May 21, 2002, which reflected his findings and diagnosis based on a psychiatric evaluation of MS JOOS.   The psychiatric evaluation was conducted on May 9, 2002, in her home.   Both Mr. Lilley and her home attendant were present and interviewed.   Dr. Lynch also conferred with MS JOOS' internist, Dr. John J. DeLuca.

On the mental status exam, MS JOOS demonstrated significant impairments in the performance of simple calculations, and showed signs of visual and spatial disorientation.   Her judgment and insight were limited by her cognitive losses, which included significant impairment of the long and short term memory.

Physically, MS JOOS' was frail, required twenty-four hour home care, and had fallen in her home several times, which required hospitalizations, and had, on one occasion, possibly suffered a transient ischemic attack.

With regard to her property, MS JOOS knew she owned her home, received social security, and had savings, but did not know the amount of money she received from social security, the amount of money she had in savings, or in what form her assets were held.⁷

Dr. Lynch's diagnosis was senile dementia of mild to moderate severity, most likely of the Alzheimer's type, and he concluded that MS JOOS was unable to advocate for herself and was vulnerable to financial exploitation.   He also felt that she could not manage her personal needs without the intervention of others.

On September 3, 2002, the Honorable Muriel Hubsher signed the order to show cause, appointed a court evaluator pursuant to MHL § 81.09, and ordered service on MS JOOS, on the court evaluator, on the law firm of Connors and Sullivan, on HRA'S Office of Revenue and Investigations, and on Mental Hygiene Legal Services.

Affirmation in opposition filed on behalf of MS JOOS

No verified answer to the petition was interposed on behalf of MS JOOS.⁸  Instead, the law firm of Connors and Sullivan filed, not an affidavit by MS JOOS, but an associate attorney's affirmation in opposition to the petition.   The affirmation is short, vague, and threadbare.   The attorney affirmation alleged Connors and Sullivan had been representing MS JOOS for the past eleven (11) years, and that MS JOOS had been cared for by Louise Weiss for many years.   Louise Weiss provided transportation for MS JOOS and had assisted her with activities of daily living, such as going to the supermarket, conducting banking transactions, appearing for doctor appointments, and had for the previous three years also been her health care proxy and attorney-in-fact.⁹  (See Affirmation of Connors and Sullivan associate dated October 10, 2002, hereinafter referred to as affirmation at ¶ 3.)

According to the associate's affirmation, on or around March 2002, MS JOOS contacted Connors and Sullivan and expressed dissatisfaction with the way Louise Weiss was exercising the power of attorney by taking questionable gifts and establishing joints accounts with MS JOOS and requested that Michael N. Connors of the law firm of Connors and Sullivan manage her finances and health care decisions.  (See affirmation at ¶ 4.)   The affirmation does not mention Mr. Lilley's telephone calls to Connors and Sullivan and his complaints about Ms. Weiss.   MS JOOS established a revocable trust, nominating Mr. Connors as trustee.   Mr. Connors then placed MS JOOS' assets in a trust to protect said assets and to use them to pay MS JOOS' bills.   On April 1, 2002, MS JOOS executed a power of attorney appointing Michael N. Connors as her attorney-in-fact and his wife Elizabeth Connors as her successor attorney-in-fact.   On the same date, MS JOOS also executed a health care proxy nominating a Connors and Sullivan associate as her health care proxy and Michael N. Connors as the alternate agent.  (See affirmation at ¶ 7-9).

In the summer of 2002, MS JOOS suffered a stroke, which the affirmation characterizes as minor and having had little impact on her health and memory because MS JOOS could recognize people whom she saw regularly.  (See affirmation at ¶ 12).

Connors and Sullivan charged MS JOOS $600.00 a month for visits from a paralegal and for bill-paying services.   The firm arranged twenty-four (24) hour seven (7) day a week home care through an agency.   Mr. Connors, his wife and a number of other employees of his firm were monitoring her well-being and ensuring that her bills were paid.

The remainder of the affirmation asserts that a guardian is inappropriate because all of MS JOOS' pre-directives, i.e., the powers of attorney, the health care proxy, and the revocable trust secured MS JOOS in her property and person and therefore the appointment of an MHL Art. 81 guardian would undermine MS JOOS' right to select her own fiduciaries.  (See MHL § 81.02(a)2.)   The affirmation is silent about the following:  the date the trust was established, the fees MS JOOS paid for the trust, the estate savings envisioned by the creation of the trust, and the concomitant cost to MS JOOS if the trust were revoked

The Court Evaluator's Report

The court evaluator, submitted a seven-page report to the Court with an annexed copy of the CLARA JOOS REVOCABLE TRUST (hereinafter trust), dated March 22, 2002, which appointed Michael Connors as trustee, a list of MS JOOS' trust and non-trust assets and cancelled checks signed by the trustee.   According to the report, MS JOOS was very comfortable in her home and received care from her attendant/companion, Elizabeth Jakuzko.  (See Ct. Evaluator's report dated October 21, 2002 at pp. 2-3.) ¹⁰

The court evaluator concurred that MS JOOS was suffering from senile dementia, was permanently unable to manage her person and property and noted that she had formed a significant bond with Michael N. Connors and members of his firm.   The court evaluator made recommendations in the alternative:  that the Court could appoint Michael N. Connors, Esq. as MS JOOS' guardian with a full array of property powers and personal powers, or that the revocable trust could continue and no guardian need be appointed.  (See ct. evaluator's report at pgs. 5-7.)

MS JOOS' treating doctor's affidavit

Per the affidavit of her internist, John J. DeLuca, M.D., MS JOOS was confined to a wheelchair as a result of falls that caused multiple fractures.   She needed a great deal of assistance in taking even a few steps, and excursions from her home entailed considerable and taxing effort.   The affidavit was submitted in support for a home hearing to accommodate MS JOOS multiple physical disabilities.

The Hearing and Settlement Negotiations

The hearing and settlement negotiations were held at the courthouse on two days, October 21, 2002 and December 4, 2002.   The court evaluator's report was entered into evidence.   The brief testimony of Dr. Lynch, the only witness, revealed that MS JOOS had suffered two strokes prior to the hearing dates.   One stroke occurred in January 2002 some four (4) months before Dr. Lynch examined her, and another stroke occurred in May 2002, a short time after Dr. Lynch's visit.   Mr. Connors when discussing MS JOOS' strokes stated that she had “One in May [sic] your Honor, which I notice has decreased her capacity.”  (See transcript of October 21, 2002 p. 12 ln. 24-25.) ¹¹  As per the affirmation by Connors and Sullivan, MS JOOS had suffered a third stroke in July, three months prior to the hearing.

During the limited colloquy between the Court and MS JOOS, the Court asked her if she had wanted to give Ms. Weiss money after the latter's discovery of some bonds in MS JOOS' home.   MS JOOS responded, “Don't remember that.   I don't remember it too good, but it's a while ago.”  (See transcript of October 21, 2002, p. 12 ln. 15-16.)   The transfer had occurred just seven months earlier.

The hearing was not concluded, but rather cut short by a negotiated settlement wherein the objection to the guardianship was withdrawn on condition that there would be no finding of incapacity and that Michael N. Connors would be appointed guardian of the person and property.¹²  In her oral decision, Justice Hubsher granted Mr. Connors full powers as guardian and ordered that he consult with MS JOOS' doctor and with Mr. Lilley about decisions for MS JOOS.   The fees for the proceeding were to be borne by MS JOOS.   At the conclusion of the matter, Justice Hubsher requested updates on the matter and indicated that these updates could be by letter.  (See Transcript of December 4, 2002 pg. 21 lines 16-21).   At no point during the pendency of the matter did Connors and Sullivan ever mention the estate savings to be generated by the trust or the detrimental financial consequences of undoing the trust.   In the negotiated settlement, Connors and Sullivan never addressed the need for specific provisions to preserve the trust and insure its attendant financial benefits to MS JOOS' estate.

Post Hearing Filings and Proceedings

The order and judgment was noticed for settlement by Connors and Sullivan, the firm in which MS JOOS' guardian, lawyer, trustee, executor, alternate health care proxy, and attorney-in-fact was a partner and in which her health care proxy was an employee.

The petitioner annexed a schedule of the assets to the settled order and judgment as per the request of a court clerk.   The schedule of assets dated April 2, 2002 was the same schedule of assets attached to the Court Evaluator's report.   After the petitioner's attorney, Ms. Reitano, Esq., received Connors and Sullivan's notice of settlement, she wrote to the Court to suggest that the guardian have jurisdiction over the revocable trust.   Mr. Connors, Esq. never responded to Ms. Reitano's letter.

On January 31, 2003, Justice Hubsher signed the order and judgment, which granted the guardian property powers over MS JOOS' “property listed in Exhibit “A” annexed thereto.”  (See order and judgment at p. 3.)   The asset schedule is typically included in the order and judgment appointing a guardian to provide guidance in setting the bond, and to inform the assigned court examiner of the nature, source, extent, and location of the ward's assets.

The order and judgment was entered by the clerk on February 13, 2003 and on July 10, 2003, some five (5) months after entry of the order and judgment, the guardian filed his bond and oath and designation.   The guardian never obtained his commission.¹³

By notice of motion dated June 12, 2003, the petitioner, Mr. Lilley moved for an order to be reimbursed $1,415.00 by MS JOOS' guardianship estate for his attorneys' fees and court costs.   The guardian's law firm opposed the motion by written affirmation.   On September 22, 2003, during oral argument, the Court began to question whether it had erred in appointing Mr. Connors as guardian and made inquiry as to whether the estate plan he designed for MS JOOS inappropriately benefitted himself or his law firm.   The Court directed Mr. Connors to file an affidavit to assuage its concerns that his extensive involvement with MS JOOS in the months prior to the guardianship had been motivated solely by pecuniary self interest and not by filial-like concern as claimed.  (See entire transcript of oral argument dated September 22, 2003.)

On or about October 6, 2003, as per the Court's direction, Mr. Connors submitted an affirmation stating neither he nor anyone related or affiliated with him was a beneficiary of the trust.   Despite being a court-appointee, obligated to be transparent in answering the Court's concerns about his ward's finances and estate planning, Mr. Connors failed to disabuse the Court of its notion that the trust still existed.   The Court remained unaware of the financial rewards Mr. Connors and his law firm would reap from revocation of the trust in the form of executor commissions and legal fees in the Surrogate's proceeding.

MS JOOS passed away on December 31, 2003, and the guardian moved for judicial settlement of his final account.

The Court's Concerns about the Guardian's Actions.

Given that a guardian must act with the utmost propriety toward his ward's estate, this Court asked the guardian's lawyer and counsel to review to specifically respond to the following pointed questions:  1) Given the multiple roles played by the guardian in the life of MS JOOS and the fees and commissions he has already taken as her attorney, as her trustee, and as her executor, what is counsel to review's recommendation about awarding additional commissions to the guardian?   2) Was the trust revoked and if so, under what authority?   Did the trust allow for revocation by anyone other than MS JOOS?   3) Was there any advantage to revoking her trust?   If the trust had been maintained would MS JOOS' estate have saved money by avoiding Surrogate's Court?   4) What are the fees and commissions, received, awarded, and requested by the guardian in his various fiduciary capacities?

This Court requested that the guardian/trustee/executor provide it with the following original documents:  the trust, the revocation of the trust, the health care proxy, and the power of attorney.   Said original documents were never provided.   The Court has copies only of the trust and the revocation of trust-not originals.

The Guardian's Responses to this Court's Questions and Court's Concerns

The Court granted wide latitude to the guardian to amend or supplement his responses and filings.   The guardian declined an opportunity for a hearing or oral argument on the matter, and the matter was marked on submission.

Revocation of the trust and actions toward trust assets and guardianship obligations

The guardian maintained that MS JOOS of her own volition had revoked her trust and provided the Court with a copy of the purported revocation.   Review of the transactions after the issuance of the order and judgment raised several concerns regarding the manner in which the guardian/trustee executed his obligations.

 The trustee repeatedly disregarded the strict formalities required in the administration of a trust.   For example, the acknowledgment of the revocation originally dated March 28, 2003 was crossed out to read February 18, 2003.   Improperly, the trustee/guardian withdrew trust assets on February 13, 2003 and February 16, 2003, that is, before February 18, 2003, the date the revocation document is signed and acknowledged.   The trustee/guardian on February 6, 2003, paid himself $12,431.89 in trustee commissions, well before either the trust's one year anniversary which would have been March 22, 2003, or the date the trust was purportedly revoked February 18, 2003.   Taking exiting trustee commissions before the revocation of a trust is improper and taking annual commissions before the anniversary of the trust is also improper.   In addition to the commissions as trustee, the trust paid the trustee's law firm $600.00 per month to pay MS JOOS' bills and to supervise her agency-provided home care.   Any portion of the $600.00 per month allocated to bill paying services appears to be double billing.¹⁴  MOREOVER, THE TRUSTee/guardian's assertion that the trust was revoked, is belied by the fact that MS JOOS' house remained a trust asset until it was sold by Mr. Connors in his capacity as trustee/executor approximately a year after her death.

Mr. Connors likewise disregarded requirements contained in the order and judgment appointing him guardian.   For instance Mr. Connors marshaled all of MS JOOS' liquid assets into a guardianship account(s) several months prior to obtaining his bond and without ever receiving his commission to act.

The guardian's counsel admits that, had the trust not been revoked MS JOOS' estate would have avoided nearly all of the $74,000.00 in executor's commissions and legal fees in the probate proceeding.   The acknowledged estate plan was to have the trust hold nearly all her assets, leaving only a small estate for probate.  (See affirmation In Support of Attorney Fees and Full Statutory Commissions dated July 1, 2008 at ¶ 31-32.)

Of greatest concern to the Court is that MS JOOS' attorney/ guardian ¹⁵ never attempted to prevent the estate planning fiasco that occurred when the trust was revoked, and in fact began to undo his client's estate plan even before the trust revocation was signed.   Despite the consequences of his failure to preserve the trust, Mr. Connors still maintains he is entitled to full guardian commissions, as well as legal fees for his final account.

Guardian's justification for revocation of the trust

The guardian has advanced two arguments to justify the revocation of the trust:  first, that the guardianship court declared MS JOOS in need of assistance, and never deemed her incapacitated;  therefore she was free to revoke her trust and should be allowed to do with her assets as she wishes;  and second, that the order and judgment directed the revocation of the trust.   Neither argument is persuasive.

The guardian's argument that MS JOOS freely and voluntarily revoked her own trust.

 Any contention by the guardian that MS JOOS made an independent, knowing, and informed decision to revoke her trust is incredible.   When the trust was revoked MS JOOS was in the final months of her life and utterly dependent on others, most especially Mr. Connors, a person who had established multiple fiduciary relationships with her.   There is sufficient support in the record to conclude that MS JOOS neither sought to revoke the trust, nor had the requisite understanding of the financial consequences triggered by executing the revocation.

Assuming, MS JOOS had wanted to revoke her trust, the guardian's argument that he was powerless to prevent the revocation is disingenuous.   Under the explicit provisions of the trust, the trustee is vested with the authority to retain a psychiatrist to evaluate whether the grantor is competent to revoke the trust.  (See Trust dated March 21, 2002, cl. 7(c) at p. 6.)   Mr. Connors could have easily relied on Dr. Lynch's finding of senile dementia.   Under such circumstances, Mr. Connors, as her trustee, would have been obligated to question her capacity and challenge a decision so adverse to her self interest.

The guardian's argument that the order and judgment compelled trust revocation.

 The guardian maintains that the trust revocation was compelled by the order and judgment.   In support of this argument the guardian points to the language in the order and judgment granting him as guardian, “The power to manage the property and financial affairs, including but not limited to the property listed in exhibit “A” annexed hereto ․” ¹⁶ and further relies on the fact that the bond amount set by the Court equals MS JOOS' trust and non-trust liquid assets.

The guardian's contention that the order and judgment required revocation of the trust is baseless.   The order and judgment neither explicitly orders MS JOOS to revoke her trust nor does it invalidate the trust.

Moreover, the record clearly demonstrates that Justice Hubsher never countenanced the revocation of the trust with its attendant windfall to the guardian and financial detriment to the ward Nor did she view the existence of a trust and guardianship as mutually exclusive.   In fact, during the hearing she described guardianship as a protection “beyond just the trust and beyond the position as a lawyer ․”  (See Transcript of October 12, 2002, p. 13 lines 17-23).   On September 22, 2003, some seven (7) months after the trust revocation, Justice Hubsher directly asked an associate of Connors and Sullivan on the record, “What is the amount of money she has in that revokable [sic] trust?”  (See transcript dated September 22, 2003 at p. 7 ln. 8-9.)   Clearly the Court's inquiry about the trust corpus presupposes the trust's existence.   The associate rather than inform Justice Hubsher that the trust has been revoked, leaves the question unanswered and responds that the question is immaterial.  (See Transcript dated September 22, 2003 at p. 7 Ln. 10-14)

Assuming that the guardian interpreted the order and judgment as directing revocation of the trust begs the question:  Why did this guardian, an expert in estate planning, passively follow a questionable interpretation of the order and judgment that would cost his ward tens of thousands of dollars?

The guardian cannot credibly argue he had no choice but to passively follow the Court's direction.   The record reflects that the guardian is a capable advocate, unafraid to challenge the Court or his adversaries.   The guardian was free to make a motion for re-argument or appeal the order and judgment.   A simple request by Mr. Connors to conference the matter to explain why the trust should be preserved would have undoubtedly resulted in estate savings of tens of thousands of dollars ¹⁷ .

Fees and commissions incurred by the estate

 The guardian never tabulated the exact expenses incurred as a result of the trust revocation, but from the documents submitted to the Court, executor commissions combined with legal fees to Mr. Connors and his firm, are in excess seventy four thousand dollars ($74,000.00).

In less than a year the trust generated a twelve thousand four hundred thirty one dollars and eighty nine cent ($12,431.89) commission, and ten thousand nine hundred dollars ($10,900.00) in legal and book keeping fees.

Mr. Connors now seeks an additional twenty two thousand three hundred twenty seven dollars and fifty cents ($22,327.50) in guardianship commissions calculated under SCPA § 2307, and legal fees to his firm of five thousand seventy two dollars ($5,072.00) for its representation of him in his final accounting.

Standard for the Award of Commissions.

Pursuant to the order and judgment, “․ the compensation of the Guardian shall be fixed by the Court in accordance to the services actually rendered pursuant to MHL 81.28.”  (See order and judgment, dated January 31, 2003.)

MHL § 81.28 refers to no specific formula to calculate compensation and never uses the term commissions:

§ 81.28 Compensation to guardian

(a) The court shall establish, and may from time to time modify a plan for the reasonable compensation for the guardian or guardians.   The plan for compensation of such guardian must take into account the specific authority of the guardian or guardians to provide for the personal needs and/or property management for the incapacitated person, and the services provided to the incapacitated person by such guardian.

It has been held that under MHL § 81.28, the Court is to use its discretion to award compensation to guardians “․ it is clear that the compensation of guardians must be determined case by case, based upon the responsibilities of the guardian, the nature and extent of the assets and the anticipated duration of the guardianship.”   Moreover, the specific language of the statute leaves to the Court's discretion the formulation of a compensation plan for an Article 81 guardian.  In the Matter of Lya Sher, N.Y.L.J. July 22, 1996 p. 26.

Courts have typically looked to SCPA 2309 to calculate compensation when the guardian has acted like a trustee, and SCPA 2307 to calculate compensation when the guardian has acted like an executor or an administrator.   Sher, supra.

The award of compensation is not a given.   Compensation is awarded for services rendered and the benefit the ward received.   If the Court finds that the guardian has failed to satisfactorily discharge his duties the Court may in its discretion reduce or deny compensation to the guardian.  § 81.28 Compensation to guardian

(b) 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.

A guardian's duty to his ward is that of a fiduciary.   As a fiduciary, the guardian must exercise the utmost fidelity in dealing with his ward's person and property.   The guardian is statutorily mandated to use the utmost loyalty in relation to his ward.  (See MHL § 81.20[a][6][ii].)   The inviolate standard of behavior to which a fiduciary must comply was most eloquently expressed by Justice Benjamin Cardozo:

A trustee is held to something stricter than the morals of the market place.   Not honesty alone, but the punctilio of honor the most sensitive, is then the standard of behavior.   As to this there has developed a tradition that is unbending and inveterate.   Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the “disintegrating erosion” of particular exceptions (Wendt v. Fischer, 243 N.Y. 439, 444, 154 N.E. 303).   Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd.   It will not be consciously lowered by any judgment of this court.

Meinhard v. Salmon, 249 N.Y. 458 at 464, 164 N.E. 545 (1928).

Guardianship matters occupy a unique niche in civil litigation.   The impaired ward's dependence upon her fiduciary, a court-appointee, requires this Court to be vigilant that there be no disintegrating erosion in the standard of undivided loyalty and fidelity a guardian employs in his dealings with his ward's person and property.   The relationship herein was one marked by susceptibility to allegations of excessive billing, failure to pursue remedies ¹⁸ , failure to preserve the ward's estate, and apparent conflicts of interest with no proffering of proof that MS JOOS waived the conflicts of interest.¹⁹  This Court cannot avoid the conclusion that the guardian herein failed to operate under the applicable standard and failed to this Court's satisfaction to adequately discharge his duty as guardian.

The guardian has asserted that this Court must grant him full commissions because no one has filed objections to his request for commissions.   While it is true that no distributee under MS JOOS' will or trust has objected to the guardian's request for commissions, this Court is not a rubber stamp mechanically approving the computation of commissions based upon SCPA § 2307 or any other statute regardless of guardian's performance of his duties.²⁰  MHL § 81.28 requires this Court to use its sound discretion given the totality of the circumstances when awarding commissions.

Receipt of full statutory commissions in each of several fiduciary capacities, may be justified in some circumstances.   In this case, however, the guardian's voluntary actions created a situation where the fiduciary commissions he asks this Court to award would result in a windfall to him at the direct dollar for dollar expense of his ward's estate.   This Court will not award further compensation for such machinations.

Guidance in commissions from the Best Practices publications.

The Appellate Division for the Second Department has provided guidance for trial courts in awarding commissions.  “Where a Guardianship involves substantial assets and strict adherence to a statutory formula (be it either Section 2307 or Section 2309) would result in a windfall to the Guardian, the compensation awarded should be commensurate with the services actually rendered.”  (Emphasis added).  (Supreme Court of the State of New York Appellate Division:  Second Judicial Department Best Practices Guardianship Proceedings, April 1, 2005 at pg. 5;  http:/​courts.​state.​ny.​us/​courts/​ad ​2/​pdf.​Best​Practices​Handbook_​1.​pdf [last accessed 4/20/2009].)

Given the fact that the guardian has already obtained trustee fees of $12,431.89, estate planning and booking fees of approximately $10,900.00, obtained full executors' commissions of $37,339.26 ²¹ , and has requested some $36, 000.00 in legal fees in the Surrogate's Court, this Court finds that any further commissions for the ten-month period that lapsed between the trust revocation and MS JOOS' death would be a windfall-the precise result that the best practices manual cautions should be avoided.   In this matter, the guardian failed to preserve his ward's assets, failed to preserve her trust, failed to file an initial report, filed his bond some five months after the order and judgment was entered, and failed to obtain his commission.   When the windfall of executor commissions resulting from the guardian/trustee/attorney's failure to preserve his ward's trust, is coupled with the trustee commissions already obtained, this Court finds that yet a third commission to Mr. Connors would be an unjustified reward for his services as guardian.

An award of commissions under quantum meruit is likewise precluded.

Any potential claim by Mr. Connors for compensation under quantum meruit as MS JOOS' un-commissioned guardian or as her “agent” is likewise unsubstantiated by the record.   In light of his failings in his various fiduciary capacities, the commissions he has already received and may yet receive as executor more than amply compensate Mr. Connors for “managing” his ward's agency managed home care and paying her bills for ten (10) months.²²

Lawyers fees.

 The request for legal fees to the guardian's counsel is also denied.   The guardian is a lawyer and should not have to hire counsel to do his accounting as accounting is a duty that a guardian must discharge (see In re Osgood's Committee, 119 Misc. 251, 196 N.Y.S. 270, In re Williams' Estate, 245, A.D. 505, 283 N.Y.S. 279 (1st Dept.1935)).   The period of the accounting was less than a year and Mr. Connors, an experienced elder law attorney, should not have had to retain counsel to handle this matter.   Moreover, what should have been a simple final accounting was complicated by Mr. Connor's failure to be transparent and forthright in his accounting.

In Conclusion.

This Court has labored with the facts of this case.   The attorney/guardian herein enmeshed himself in the affairs of his client and ward, blocked the attempts of a concerned former son-in-law from obtaining information, collected nearly every conceivable fee, and occupied so many fiduciary relationships that conflicts of interest questions were inevitable.   This Court is keenly aware that guardianship and trustee commissions are often the price to be paid to protect vulnerable, isolated, and impaired people from exploitation during the period of their lives when they are easy prey to the unscrupulous, but that regrettable fact does not lessen the Court's statutory obligation to exercise its discretion and reduce or deny commissions if a guardian's performance is unsatisfactory;  it is hereby

ORDERED, there will be no compensation to the guardian, and it further

ORDERED, that there will be no legal fee to the guardian's attorney, and it is further

ORDERED, that the final account of the guardian be and the same here is judicially settled and allowed in accordance with the following summary statement:

ORDERED, counsel to review shall be compensated in the amount of $4,000.00 for services rendered herein;  and it is further

ORDERED, that the guardian shall, if not having already done so, turn over the balance of funds remaining to the Estate of CLARA JOOS;  and it is further

ORDERED, that upon the guardian's complying with the provisions of this order and decision and filing proof thereof, he and the surety may be discharged as to all matters embraced in the account herein by an appropriate ex-parte order.

FOOTNOTES

1.   The guardian herein is a named partner in the law firm representing him in this action.

2.   This matter was reassigned from Justice Muriel Hubsher to this Court in 2004.   The guardianship clerk's office completed their review of the final account in 2007.

3.   For instance the guardian's inclusion, as part of the guardianship estate, of the proceeds of the sale of the ward's home after her death inflated the calculation of commissions and the clerks recalculated the commissions without the inclusion of said proceeds.  In re Lindsay, 276 A.D.2d 451, 715 N.Y.S.2d 395, Matter of Merritt, 278 N.Y. 74, 77, 15 N.E.2d 404, Matter of Luka, 23 A.D.2d 46, 48, 258 N.Y.S.2d 123.

4.   A revocation of a power of attorney held by Mr Lilley was filed by Connors and Sullivan on or about April 2, 2002.   Mr. Lilley, however, in his petition does not indicate whether he was MS JOOS' power of attorney.

5.   Petitioner's attorney informed Justice Hubsher, “He [Mr. Lilley] commenced the application by order to show cause based upon his inability to obtain any information regarding MS JOOS ․” (See transcript dated September 22, 2003 at p. 3 lines 16-18).

6.   Dr. Lynch is and has been deemed an expert witness adult psychiatry innumerable times in guardianship proceedings by this and other courts and has been board certified by the American Academy of Psychiatry and Neurology since 1996.

7.   At the time of the guardianship, MS JOOS' assets, excluding her real property, were in excess of $800,000.00, most of which were held in a trust.

8.   Proceedings under MHL Art. 81 are special proceedings and the pleading requirements are governed by CPLR § 402.   The use of an order to show cause as an alternative to the notice of petition is allowed under CPLR § 402(d) and is mandated and codified in MHL § 81.07(b).  A petition for a MHL Art. 81 guardian properly requires a responsive pleading-an answer, which was not filed in this matter.

9.   The affirmation is silent about whether or not Ms. Weiss' services were gratis or were compensated, and how involved the law firm of Connors and Sullivan was in establishing and maintaining the relationship between Ms. Weiss and MS JOOS.

10.   From the checks attached to the court evaluator's report the trust paid The Alcott Group $1,317.53 weekly.   The Alcott Group, is the agency that handled the human resources aspects of Ms. Jakuzko's employment.   Ms. Jakuzko received $800.00 per week for her services.   The trust therefore was paying a $517.53 weekly premium to the agency, in part, for its oversight of the home care.

11.   This Court takes judicial notice that although the transcript is dated October 2, 2002, the hearing was actually held on Oct 21, 2002.

12.   A finding of incapacity would have made the Connors and Sullivan estate plan, to wit:  the three wills executed since her daughters death, the recently executed trust, powers of attorney and health care proxy, as well as the selection of appointees and agents, and legal fees charged, susceptible to challenge on the ground that MS JOOS was incapacitated at the time her estate plan was established.

13.   A search of the court file and a review of the county clerk's minutes by this part revealed no commission and when chambers requested that the guardian produce a copy of a duly executed commission, a member of the law firm of Connors and Sullivan stated that the firm lacked a copy of a commission.

14.   Mr. Connors in his October 6, 2003 affirmation states that his firm was paid $650 a month for bill paying services and supervising the professional home care.

15.   According to the report of counsel to review, on his firm's web site, Michael N. Connors Esq. claims expertise in elder law and estate planning.

16.   Schedule A lists trust and non-trust assets.

17.   The guardian could have requested that the bond be denominated as a trustee/guardian bond, a common practice.

18.   For instance, no turnover was commenced against Ms. Weiss for the $17,000.00 she took from MS JOOS, nor did the guardian ever demand Ms. Weiss for an accounting of her activities as attorney-in-fact.

19.   DR 5-101 Conflicts of interest;  Lawyers own interests “(a) [a] lawyer shall not accept or continue employment if the exercise of professional judgment on behalf of the client will be or reasonably may be affected by the lawyer's own financial ․ interests, unless a disinterested lawyer would believe that the representation of the client will not be adversely affected thereby and the client consents to the representation after full disclosure of the implications of the lawyer's interest.”, (emphasis added)  Also see DR 5-102(a) Conflict of interest if a lawyer is to be a witness if a turnover had been brought against Ms. Weiss.

20.   Mr. Connors failed to notice MS JOOS' heirs on the guardianship order and judgment.   On his motion to settle final account, Mr. Connors only served the petitioner's attorney, and one other heir, Klara Seitz.   Five heirs, three of which were charitable organizations, were not noticed on the motion to settle final account.

21.   See affirmation of counsel to review dated September 26, 2008 at ¶ 9.

22.   There is no affirmation of services by Mr. Connors recounting the hours of service he, and not an office employee, provided.

BETSY BARROS, J.