Opinion
91927/05.
Decided September 27, 2005.
A petition has been filed for the appointment of a guardian of the person and property of Dr. B.P., an alleged incapacitated person (hereinafter known as "the person"). The Court, having been satisfied that the person was served with the order to show cause and petition by personal delivery at least fourteen days prior to the return date, and that all other persons required to be served under Mental Hygiene Law section 81.07 were timely served with the order to show cause and petition, appointed a court evaluator, Rudyard Whyte, Esq.
The application was contested and this court held a hearing that lasted several days beginning July 7, 2005 and concluding on August 11, 2005. The person was represented by counsel and twelve witnesses testified at the hearing. The person did not testify but was present on each day of the hearing.
ORDER TO SHOW CAUSE
The person is 93 years of age and presently resides at his home located at **** ****** Avenue, Riverdale, New York 10471. He is a retired psychiatrist and has four adult children: R.P., K.P.O., M.N., and B.P., Jr (hereinafter "B., Jr."). The person maintains an office on East 61st Street in New York but is not in active practice. The person's wife, T.P., passed away in February 2004 and a contest of her last will and testament is currently pending in Surrogate's Court of Bronx County.
The person's three eldest children filed the petition for the appointment of a guardian of the person and property of their father. Initially, they had requested that R.P. be appointed guardian of the person and property of his father but their counsel represented to this court that the request for his appointment has been withdrawn. However, they continue to seek the appointment of a guardian of their father's person and property. The allegation by the three eldest children is that the person has significant impairments in his memory and concentration.
The petitioners further allege that beginning in 2002, B., Jr. and his wife, Gina.P., began to isolate the person from the remainder of his family and friends and began misappropriating some of the person's funds for their personal use and enjoyment. The allegation is that either B., Jr. and/or his wife Gina have managed to completely influence the person to such a degree that the person is now estranged, unfriendly and hostile toward his eldest children and their families in favor of B., Jr. and Gina. The person executed a new will wherein his eldest children do not have an equal share in his estate and he established an irrevocable trust naming B., Jr. and Gina as trustees. Moreover, on October 29, 2003, the person executed a power of attorney and health care proxy in the name of B., Jr., with Gina acting as the alternate agent. The attorney with whom he engaged in these transactions was recommended by Gina.
The person, through his attorney, opposes the application for the appointment of a guardian over his person and property and avers that this guardianship proceeding is nothing more than a "back-door will contest." (Memorandum of Law, p. 1). The person's counsel asserts that while the person may have "memory loss and other trappings of one at the age of 93," his impairments are not so severe as to warrant the appointment of a guardian. (Memorandum of Law, p. 1). Counsel for the person further asserts that the person has made it clear that he wants B., Jr. and Gina to assist him with his affairs and that his eldest children have initiated the current proceeding because they were left out of his wife's will.
MEDICAL TESTIMONY FROM THE PERSON'S TREATING PSYCHIATRISTS DEEMED INADMISSIBLE
The memorandum of law submitted by counsel for petitioners makes reference to a Dr. Karen Marder and the order to show cause which initiated this proceeding contains information with respect to the person's medical condition submitted by his daughter K.O. and his son-in-law J.O., both of whom are doctors and have professionally treated the person over a period of time. However, since the person did not waive the physician/patient privilege, that information cannot properly be considered by this court.
GUARDIANSHIP OF THE PERSON
The testimony established that the person employs an individual by the name of Paula B. who cooks and cleans for the person and lives at his home. She works twenty-four hours a day, five days a week and has weekends off. She has worked for the person since July 4, 2005 and prior to her employment, the person had another live-in employee named Lisa B. who assisted him with his daily personal needs.
Much of the testimony provided by the witnesses involved whether or not the person could perform activities of daily living such as cooking, cleaning, bathing, and dressing himself. In addition, it was established that the person reads with the assistance of a machine or a magnifying glass. This court is satisfied, through the testimony and documentary evidence, that the person does not require a guardian over his person as he is able to conduct most of his activities of daily living on his own. Whatever activities he cannot or does not perform himself, like cooking and grocery shopping, are performed adequately with the assistance of his household employee. Accordingly, the petition for the appointment of a guardian over the person is denied.
GUARDIANSHIP OF THE PROPERTY
A guardianship of the property was also the subject of the current proceeding and several witnesses testified as to the person's ability to manage his finances and pay his bills or provided pertinent information regarding the person's finances. This court will only make reference to the pertinent testimony that involved the person's ability to manage his finances.
Lisa B., who for approximately five years was the housekeeper/home aid for the person and his wife, testified that prior to the death of the person's wife, the person had a good relationship with all of his children. (July 7, 2005 Transcript, p. 27). She testified that after Mrs. P.'s stroke, the person became more dependent on B., Jr. and Gina and the person expressed to Ms. B. that the other three children did not care about their mother. (July 7, 2005 Transcript, p. 53).
Ms. B. further testified that part of her responsibilities included paying the household bills. (July 7, 2005 Transcript, p. 20). She testified that the person would give her blank checks that he already signed and asked her to write out the checks for the household bills because he could not do it himself. She refused, however, to handle any of the bills involving the person's attorney. (July 7, 2005 Transcript, p. 20-21). Moreover, she testified that she once witnessed the person give to B., Jr. a blank check and she witnessed the person give to B.Jr.'s wife, Gina, several blank checks purportedly for bills he received at his office. (July 7, 2005 Transcript, p. 46-47). In addition, Ms. B. testified that there was a telephone line in the person's home where the person receives telephone calls exclusively from Gina P. (July 7, 2005 Transcript, p. 25-26).
Ms. B. testified that when the order to show cause in this proceeding was filed and the person receive a copy of it, Gina P. became angry with Ms. B. and accused her of giving information to the person's three eldest children. (July 7, 2005 Transcript, p. 31-32). In addition, Ms. B. testified that she was terminated from her employment as the person's home aid by B., Jr. and Gina because they said that they would be unable to pay her. (July 7, 2005 Transcript, p. 16).
The person's daughter, K.O., testified mostly as to the change in the nature of her relationship with her father. She did not testify as to any observations with respect to the person's capacity to handle his finances. However, she did testify that the person had a secretary who handled his financial affairs and when she left, Gina P. began to handle the person's office-related business. (July 7, 2005 Transcript, p. 131). Moreover, she testified that she was the person's attorney-in-fact but the power of attorney was revoked in 2003 by the person. Mrs. O. further testified that Gina P.'s relationship with her father was "pathological" in the sense that she has influenced the way he thinks about his other three children and she has attempted to "take over" the person's life. (July 7, 2005 Transcript, p. 156).
Both Mrs. O. and the person's eldest daughter, M.P.N., testified that the person treated all of the children fairly and gave to each of them equally, such as monetary distributions and equal shares they received in over 200 acres of land he owned in Berlin, New York. (July 7, 2005 Transcript, p. 137; July 15, 2005 Transcript, p. 41). However, Mrs. N. testified that the person requested that they deed their share of the property back to him in 2001 and he never redistributed the property to his three eldest children. (July 15 Transcript, p. 41). Mrs. N. testified as to what she perceived to be a loss in her father's memory when she stayed at his home in November 2004 to assist her aunt who was recuperating from surgery. She testified that she noticed his memory was deteriorating and gave specific instances. Mrs. N. also testified that the person informed her that Gina P. was "very nice" to him and was "soft spoken" with him because she wanted his money. (July 15 Transcript, p. 9).
The incident involved a picture in which the person believed that his wife was holding B., Jr. in her lap when in fact it was one of Mrs. N.'s sons.
Moreover, with respect to the person's finances, Mrs. N. testified as to an incident in the spring of 2004 where she was on the telephone with the person and he asked her if he gave her a check for $30,000. When Mrs. N. informed him that he never gave her a check for that amount and suggested that he look at his return checks to see if there was a check in that amount, the person informed her that he "doesn't look at those" and does not "bother with those" because "Gina does all of that." (July 15 Transcript, p. 10). When asked by Mrs. N. why he let Gina handle the finances, he stated, "Well I think I trust her." (July 15 Transcript. p. 10).
There was testimony from the person's sister-in-law A.D. who testified that she stayed at the person's home frequently on the weekends. None of her testimony related to the person's financial capabilities and mostly involved the person's vision and hearing and other ailments. She testified as to changes in his behavior after the death of his wife. In addition, she testified as to a leak in the roof of the person's home and the presence of mold in one of the rooms of the home.
J.O., the person's son-in-law, testified as to the change in the nature of his relationship with the person. He testified that he and the person were very close and, in 2002, a dispute arose as to the ownership of some paintings which the person believed were his but for which Mr. O. had receipts. (July 15, 2005 Transcript, p. 102-103). Mr. O. testified that in addition to the share of the land in Berlin, New York that all of the person's children owned, the person had given him and K.O. a separate parcel of land and they built a house on that parcel. The person requested that the separate parcel of land and the house Mr. O. and his wife owned, be transferred to B., Jr. (July 15 Transcript, p. 108). Mr. O. testified as to a trust that was part of a will that had been prepared for the person's wife prior to her death. The trust required Mr. O. and his wife to sell that separate parcel of land along with the house to B., Jr. for $30,000 or K.O. would be disinherited. (July 15 Transcript, p. 110). He and his wife refused to convey the property to B., Jr.
Mr. O. also testified that the three eldest siblings and their respective spouses and partners along with the person's sister-in-law, attempted to have a meeting with the person concerning revisions to his will. Specifically, he testified that the revisions that were made with the person's new lawyer would permit the person to live at his home in Riverdale but would give him no "power to negotiate any financial operation with regard to the home." (July 15 Transcript, p. 113). The previous will would permit the person to own his home outright and he had the authority to sell it if he needed the funds. (July 15 Transcript, p. 113). Mr. O. testified that the person seemed confused and simply continued to ask why the eldest children would not sign the waiver with respect to Mrs. P.'s will and Mr. O. suggested that the person speak to his previous attorney George Stone and seek his opinion about the revisions. (July 15 Transcript, p. 114).
R.P., the person's eldest son, who is an attorney, testified at length as to the person's finances. He testified that he brought the guardianship petition because of his father's "deteriorating condition" and because his father's "assets are being depleted." (August 9, 2005 Transcript, p. 431). R.P. testified that he had taken care of the person's legal and financial affairs for approximately twenty-five years. (August 9, 2005 Transcript, p. 434). He testified that he received discovery in the pending Surrogate Court case which included the person's bank statements and accounts. Through said discovery, R.P. informed the court that his father had an I.R.A. account and a regular account with "Janet Montgomery" where he "kept his trading stocks and bonds." (August 9, 2005 Transcript, p. 435). Both accounts were in the person's name and the "bulk" of the account, in the amount of approximately $800,000 was moved to an irrevocable trust established on May 11, 2004 naming B., Jr. and his wife Gina as the trustees. (August 9, 2005 Transcript, p. 435).
"Janet Montgomery" and "Fanny Montgomery" appear throughout the transcript. The court's recollection is that of Janney Montgomery.
R.P. further testified as to transfers from the distributions of the "Janet Montgomery" account into an account in the name of both the person and B., Jr. (August 9, 2005 Transcript, p. 436-438). R.P. testified that in May of 2005, the person received a distribution in the amount of $87,000 that went into the person's Chase checking account. After that money was "distributed out" of the person's checking account and into a separate account in the name of the person and B., Jr., the person was left with only $2,000 in his main account, which R.P. testified is the account from which the person writes his checks. (August 9, 2005 Transcript, p. 438).
R.P. then testified as to checks that he reviewed from January or February of 2003 to the end of 2004 and a "few month in 2005." (August 9, 2005 Transcript, p. 438). He found that payments were made to approximately five credit card accounts in excess of $54,000 and he testified that he found it "puzzling" that the person would use a credit card to such a degree. (August 9, 2005 Transcript, p. 439). Moreover, R.P. testified that during that same period of time, he observed several checks made out to "cash" totaling approximately $39,000. (August 9 Transcript, p. 438). Copies of several checks were admitted into evidence. R.P. testified that the checks written out to "cash" had different signatures and he did not know whose signatures they were but they were not his father's. (August 9, 2005 Transcript, p. 440-441).
B., Jr. was also called by the petitioners to testify at the hearing. He testified that he is "generally familiar" with his father's financial assets. (August 9, 2005 Transcript, p. 388). B., Jr. further testified that the irrevocable trust established by the person naming B., Jr. as trustee was discussed by the person with his new attorney John Garvey who was recommended to him by Gina P. (August 9, 2005 Transcript, p. 391-392).
B., Jr. also testified that while he holds a power of attorney for the person, he has never exercised his power nor has he signed his father's name to any instrument or any checks. (August 9, 2005 Transcript, p. 393). When asked if his wife Gina signed the person's name to any instruments, he stated, "I do not know. I don't believe she has." (August 9, 2005 Transcript, p. 393). B., Jr. testified that the person's maid helped him write most of his checks and Gina would help him write out the checks to pay the maintenance on the cooperative where the person has his office. (August 9, 2005 Transcript, p. 395). He also testified that the person filled out the checks and signed them and he identified the person's signature on three copies of checks moved into evidence as Petitioner's Exhibits 8, 9, and 10. (August 9, 2005 Transcript, p. 397-398).
B., Jr. then testified that he did not know if the person ever wrote out checks to "cash" and did not know if his wife Gina ever wrote out checks to "cash." (August 9, 2005 Transcript, p. 399). He testified that the person "delegated" to Gina the task of collecting the rent on the cooperatives which the person owns and the rental income is deposited into the person's "main checking account at Chase." (August 9, 2005 Transcript, p. 410). B., Jr. then testified as to several thousand dollars transferred to a trust appointing B., Jr. and Gina as trustees. (August 9, 2005 Transcript, p. 407).
Moreover, during cross-examination of B., Jr. by the court evaluator, B., Jr. testified that he did not think the person could "spontaneously" write checks. (August 9, 2005 Transcript, p. 428). When asked by the court evaluator if B., Jr. felt that the person needed supervision with respect to writing checks, B., Jr. replied, "That's the way we've been doing that. That happened to be him. I think it's good for him to have the supervision. I'm not saying he can't do it I think it will be good for him to have supervision." (August 9, 2005 Transcript, p. 428).
The person's three eldest children testified that they are not kept apprised by B., Jr. as to the person's medical conditions or any other information about the person. It was clear from the testimony of all of the person's children that the three eldest siblings and B., Jr. do not communicate with one another.
Two doctors also testified during the hearing. Steven Mattis, M.D. testified on behalf of the petitioner and Alan Steinberg, M.D., testified on behalf of the respondent. Dr. Mattis had never testified in competency proceedings in the past but opined that the person was mentally incapacitated. Dr. Steinberg, who had testified numerous times in guardianship proceedings, testified that the person did not lack capacity and did not require a guardian.
CONCLUSIONS OF LAW
At the outset, this court notes that while two of the reports of the court evaluator were marked in evidence as court exhibits and one report was not, neither the parties nor this court can appropriately rely on any of the reports as the court evaluator was not called by any of the parties to testify and he was not subject to cross-examination pursuant to Mental Hygiene Law § 81.12(b). The person, in the brief submitted by his counsel, states that the first and second reports of the court evaluator were properly admitted into evidence and can be relied on because "neither party objected thereto and, second, the Court Evaluator was present at the hearing and therefore was available for cross-examination, had either party wished to call him as a witness." (Respondent's Memorandum of Law, p. 10).
However, the statute is clear that the report of the court evaluator "may be admitted in evidence if the court evaluator testifies and is subject to cross examination . . ." (Mental Hygiene Law § 81.12(b)). The statute does not indicate that the court evaluator need only be "available" to testify and be cross-examined or that the report can properly be admitted into evidence if no party objects. In, Matter of Maher, 207 AD2d 133 (2nd Dept. 1994), the appellate court held that the hearing court ". . . erred in admitting into evidence the report of the court evaluator because, although present at the hearing, the court evaluator did not take the stand and submit to cross-examination . . ." (citations omitted). Accordingly, the court evaluator's reports are not evidence in the case at bar.
In a guardianship proceeding, the determination of incapacity "shall be based on clear and convincing evidence and shall consist of a determination that the person is likely to suffer harm because: 1. the person is unable to provide for personal needs and/or property management; and 2. the person cannot adequately understand and appreciate the nature and consequences of such inability." Mental Hygiene Law § 81.02(2)(b).
This court is satisfied that the person does not require the appointment of a guardian of his person because the management of his activities of daily living are being properly met through the home aide employed by the person and the health care proxy executed by the person. However, with respect to the appointment of a guardian over the property of the person, this court finds that the person is unable to provide for his property management and cannot adequately understand and appreciate the nature and consequences of his inability. The appointment of a guardian of the property is appropriate in this matter, notwithstanding the fact that the person's son, B., Jr. holds a power of attorney. B., Jr. testified that he has not used the power of attorney and a guardian of the property will assume the necessary duties to manage the person's finances and property.
Numerous cases involving guardianship proceedings hold that the appointment of a guardian should be a last resort and other alternatives should be explored. For instance, if a power of attorney and health care proxy have been executed on behalf of the person, there would be no need for the appointment of a guardian. See, Matter of Albert S., 286 AD2d 684 (2nd Dept. 2001). Counsel for the person cites to several cases where courts have held that where there is a valid durable power of attorney and health care proxy, a guardian should not be appointed. (Respondent's Memorandum of Law, p. 15). However, those cases can be distinguished from the case at bar.
This court notes that in cases such as Matter of Maher, 207 AD2d 133 at 141-142, cited in the person's memorandum of law, the alleged incapacitated person testified and the court was able to "observe the respondent throughout the hearing [and] remarked that he reacted fittingly to the proceedings . . ." Id.. In the case at bar, the person did not testify. Thus, this court could not make its own personal assessment of the person's capacity or determine whether or not the person's finances and property were being managed in a manner the person was aware of and with his approval.
Most glaringly, however, is the fact that Gina P., the one person who is clearly handling most of the person's finances, was not called to testify. The person who is responsible for assisting the person with his activities of daily living, Paula B., testified, thus making it evident to this court that the person's personal needs are being met and obviating the need for a guardian of the person. However, the person responsible for managing or assisting the person with his finances, particularly his office finances, Gina P., did not testify.
Accordingly, this court finds that the person is unable to manage his property and finances on his own and Gina P. is not appropriately managing the person's finances. Thus, the appointment of a guardian of the property is required.
A review of the copies of different checks from the person's accounts that were admitted into evidence demonstrates that the signatures on some of the checks are obviously different. There was no testimony or documentary evidence explaining the numerous checks made out to "cash" totaling $39,000 nor was there any testimony or documentary evidence explaining how the person — who is 93 years of age and according to testimony from R.P. and B., Jr., uses his credit cards for shopping at the supermarket — could have credit card payments in excess of $54,000.
The person has transferred his home and large sums of money into an irrevocable trust naming B., Jr. and Gina P. as trustees. In addition, the testimony established that the person has given blank checks to individuals, including B., Jr. and Gina, and there was no testimony or documentary evidence demonstrating that the person reviews the checks after they are written or reviews his monthly bank statements. Moreover, this court was not able to determine through the evidence adduced at the hearing, that the person is knowingly and voluntarily choosing to transfer assets out of his name and placing them in trust for the benefit of his youngest son and daughter-in-law.
Although B., Jr. and Gina P. hold a power of attorney for the person, the power of attorney is not appropriately addressing the needs of the person at the present time. B., Jr. testified that he did not know whether or not any checks were ever written out to "cash" by his wife Gina and he testified that the person should have supervision when writing out checks. It is apparent that there are other individuals writing out and signing checks from the person's account with or without his knowledge. The person is possessed of very substantial assets and it was readily apparent to this court from the evidence presented at the hearing that the person lacks the capacity to manage his own finances. His finances are not being properly managed and it is of concern to this court that his finances not be depleted without accountability especially under these mysterious and highly suspect circumstances. Assistance with writing out his checks and paying his bills on a daily basis are not properly met by the discharge of duties embraced by a mere power of attorney.
Under Mental Hygiene Law § 81.16(c)(2), upon a finding of incapacity, ". . . the order of the court shall be designed to accomplish the least restrictive form of intervention by appointing a guardian with powers limited to those which the court has found necessary to assist the incapacitated person in providing for personal needs and/or property management." This court hereby appoints Luis R. Sepulveda, Esq., to serve as guardian of the property.
The guardian's powers include all of the powers enumerated under Mental Hygiene Law § 81.21(a) including the power to:
a) make gifts;
b) enter into contracts;
c) create revocable or irrevocable trusts of property of the estate which may extend beyond the incapacity or life of the incapacitated person;
d) exercise options of the incapacitated person to purchase securities or other property;
e) exercise rights to elect options to change beneficiaries under insurance and annuity policies and to surrender the policies for their cash value;
f) marshall assets;
g) pay the funeral expenses of the incapacitated person;
h) pay such bills as may be reasonably necessary to maintain the incapacitated person, including all household bills and expenses related to the person's offices on East 61st Street, New York, New York;
i) invest funds of the incapacitated person as permitted by section 11-2.3 of the estates, powers and trusts law;
j) preserve, protect and account for such property faithfully; retain or employ attorneys, accountants or other professionals to assist in the performance of the duties of the guardian. However, payment of fees to such persons shall only be paid with prior approval of the Court;
k) the guardian of the property may not alienate, mortgage, lease or otherwise dispose of real property without the specific direction of the Court obtained upon proceedings taken for that purpose as prescribed in Article 17 of the Real Property Actions and Proceedings Law, provided however, that without instituting such proceedings, the guardian of the property may, without authorization of the Court, lease any real property for a term not exceeding five years.
The guardian shall afford the person the greatest amount of independence and self-determination with respect to his property management in light of the person's functional level, understanding and appreciation of his functional limitations. The aforementioned powers constitute the least restrictive form of intervention consistent with the person's functional limitations.
The guardian of the property shall, pursuant to Mental Hygiene Law § 81.25; file a bond with sufficient sureties, conditioned that said guardian will, in all things, faithfully discharge the trust imposed herein, obey all the directions of the Court in respect to the trust, make and render a true and just account of all monies and other properties received pursuant to the authority granted herein and the application thereof, and of all acts performed in the administration of the trust imposed herein whenever required to do so by the Court, and will file the designation required by § 81.25 of the Mental Hygiene Law. The amount of the bond shall be the total value of the person's assets.
The guardian shall receive as compensation for performing his duties that compensation as is provided under § 81.28 of the Mental Hygiene Law and as approved by the Court.
The guardian shall file an interim report and annual report, in accordance with Mental Hygiene Law §§ 81.30 and 81.31, with the Guardianship Department of Bronx County, 851 Grand Concourse, Bronx, New York.
The court evaluator may make application to this Court for his fee to be paid out of the proceeds of the person's assets. Mental Hygiene Law § 81.09 states, "When a judgment denies or dismisses a petition, the court may award a reasonable allowance to a court evaluator, including the mental hygiene legal service, payable by the petitioner or by the person alleged to be incapacitated, or both in such proportions as the court may deem just." See also, Matter of Petty, 256 AD2d 281 (1st Dept. 1998); Matter of Geer, 234 AD2d 939 (4th Dept. 1996).
The petitioners are directed to settle an order and judgment, with a copy of this decision in accordance with Mental Hygiene Law § 81.16(c) and the guardian is directed to file his designation in accordance with Mental Hygiene Law § 81.26.
This constitutes the decision and order of this court.