Opinion
xxxxxx
08-23-2019
E.E., Plaintiff, v. F.E., Defendant.
This is not a matrimonial divorce action, but rather a contract action filed by Plaintiff Wife E.E. ("Wife" or "Plaintiff"), while she continues to live with Defendant Husband F.E., ("Husband" or "Defendant") as spouses of almost twenty years. Wife seeks various relief in her action, including the enforcement of certain post-nuptial agreements. In the instant motion, Wife moves for an order (a) directing Husband to pay Wife "pendente lite her monthly stipend in the amount of $35,000 as provided in the parties' Post-Nuptial Agreements"; (b) pursuant to CPLR § 1201 and § 1202, "appointing a guardian ad litem to represent Defendant and his interests in the instant action"; (c) pursuant to CPLR § 2218, "directing an evidentiary hearing with respect to any issue of fact raised on the instant motion"; and (d) requiring Husband to pay Wife's attorneys $75,000 "incurred in connection with the instant application and as required by the parties' [redacted by court], 2009 Post-Nuptial Agreement." Wife alleges that Husband, who is 90 years old, does not pay his expenses himself, but rather, "they are paid by his office and approved by his [adult] children." Wife raises serious issues of whether her needs and her Husband's needs are being properly met.
Husband, by his attorneys, and by an affidavit signed by Husband, opposes the relief sought, at least in part. Defense alleges that the payment requests in this contract action are premature, and that extensive payments have been made on Wife's behalf in the last two years. Defense also asks that "the holder of [Husband's] Power of Attorney, [his] friend [J.K.] ," instead of a new guardian ad litem , provide the role of "effective assistance" in this litigation. After the receipt of a court-ordered evaluation report by Dr. Adam Bloom (discussed below), Husband's attorneys consented on the record that Husband would benefit from assistance in this litigation, but argue that the assistance should be provided by Mr. J.K. as the alleged Power of Attorney, not by any newly appointed guardian ad litem .
Names of the parties and other individuals have been anonymized.
Wife, in turn, alleges that Mr. J.K. has conflicts that would prevent him from representing Husband's interests in this action: (i) Mr. J.K. is allegedly a partner in an approximately [over $100 million holding] with either Mr. E. and his adult children from a prior relationship ("A.E. and B.E.") or just with A.E. and B.E. if Mr. E. has already transferred his interest in [holding] to his children; and (ii) Mr. J.K.'s attorney, * * *, is married to Mr. E.'s attorney, * * *. [15/11/19 Wife Aff. at ¶4].
The parties have been married for almost twenty years, Wife is in her early seventies and Husband is ninety years old. Neither spouse is seeking a divorce or any form of dissolution of the marriage, and they continue to live together as spouses. Each spouse has adult children from previous relationships, and there are no children of this marriage. Allegedly, Husband transferred his [holding] ownership interests to his children some years back. Wife alleges that the parties have apparently signed pre- and post-nuptial agreements concerning their extensive marital and separate assets [Ex. I, * * * 2009 Amendment and Restatement of Prenuptial Agreement, the "2009 Agreement"]. For example, the 2009 Agreement, which is attached to the motion, lists various separate or marital real estate properties, some owned directly and some indirectly, including a house in * * *, an apartment in * * *, an apartment in New York City, a building in New York City, plus various bank accounts and business holdings. The 2009 Agreement also provides for Husband's "support obligations" to Wife during the marriage "provided a [defined] Dissolution of the Marriage shall not have occurred," including $25,000 per month plus "all of [Wife's] care, health, and support and maintenance expenses to maintain her in her accustomed standard of living, including without limitation, the expenses associated with the employment of domestic help ... all maintenance and building charges, common charges, utilities, taxes, repairs mortgage payments." 2009 Agreement at 19-20. The 2009 Agreement also provides for payments, including for health and care, in case either spouse becomes incapacitated, although if Husband becomes incapacitated while Wife is not incapacitated, her $25,000 monthly support payments would double, to $600,000 per year, paid in quarterly installments by Husband's then guardian or attorney in fact. (Id. at 21). "Incapacitated" under that 2009 agreement is defined as "the condition of F.E. [or E.E.], as determined by two Qualified Examining Physicians selected by a Designated Person, that F.E. [or E.E.] shall not be able to act prudently or effectively because of accident, physical or mental deterioration or other similar cause, and shall not be able to write or dictate a clear and sensible paragraph, or paragraphs, of one hundred words of more; and any Incapacity shall be deemed to continue until two Qualified Examining Physicians selected by a Designated Person shall determine that F.E. [or E.E.] is able to act prudently and effectively and F.E. [or E.E.] shall be able to write or dictate a clear and sensible paragraph, or paragraphs, of one hundred words of more." [Id. at 3]. E.E. designated * * * as her Designated Person, and F.E. designated * * *, and each spouse retained the right to change the designated person by a signed written instrument. [Id. ] The court notes that even if a CPLR Article 12 guardian ad litem is appointed in this action, that would not be akin to a finding of incapacity pursuant to Mental Hygiene Law Article 81, and the court does not decide this issue herein. The motion requests the appointment of an Article 12 guardian ad litem , not a finding of incapacity, and the court does not read it otherwise. The court also does not find, and it was not asked to find, incapacity as defined in the 2009 Agreement. The 2009 Agreement also provides for division of property in case of dissolution (not relevant here), or after the passing of either spouse, while also meaningfully providing for each spouse's adult children from prior relationships.
Defense stated that Husband signed a Power of Attorney in July 2017 to J.K., and Husband then also signed a May 2018 amendment, which states, in relevant part, that Husband may only remove Mr. J.K. as his Power of Attorney in writing, and in Mr. J.K.'s presence. Defense has also stated that there may be another, September 2014 power of attorney, allegedly provided to another individual, described in that brief as "an employee and close friend," and to an attorney (although not explained whose attorney; 2014 Power of Attorney not attached). [July 2019 brief at 2-3].
Defendant's Verified Answer and Counterclaim, signed by both Husband and his then-attorney, requested that the court set aside the four post-nuptial agreements (entered into in 2005, 2009, and two in 2013) between the parties in favor of their 2001 prenuptial agreement, apparently because of both Wife's undue influence and Husband's failing health since at least 2005, which allegedly rendered him unable to resist her:
[Husband's] failing physical, mental and emotional well-being to render him increasingly dependent upon plaintiff, apprehensive of being left by himself in his declining years and incapable of withstanding the undue influence and overreaching pressures exerted upon him by plaintiff, so that the four unfair, unreasonable "postnuptial agreements" [June 2005, November 2009, two from November 2013] should be declared invalid and unenforceable.... plaintiff's overreaching behavior towards defendant (who is now almost 90 years of age and in declining health), including presently suffering from diabetes type two, kidney dysfunction, sequelliae [sic] of a recent neck fracture due to a fall when ... with plaintiff, balance problems and failing memory issues, rendered defendant increasingly unable since at least June of 2005 to successfully resist and to cope with plaintiff's overreaching and undue influence upon him, such that defendant is entitled to a Declaratory Judgment setting aside the said four purported postnuptial agreements. (September 2018 Verified Answer and Counterclaim.)
Husband's counsel thus states that documents signed by Husband since "at least June of 2005" that allegedly benefit Wife should be set aside due to Husband's failing health and "failing memory issues." Husband's counsel, however, relies on documents signed by Husband in 2017, 2018, and 2019.
Defendant Husband has appeared at numerous court dates, with his attorneys, and he has filed affidavits in this case. J.K., who has Husband's Power of Attorney, has also appeared, along with Mr. J.K.'s counsel. Plaintiff and Defendant have also filed lengthy affidavits and affirmations in a lawsuit before another Justice of this Court, captioned * * * * , where either Wife, Husband, or Husband's children, and these individuals' various businesses may have had opposing or different interests. There was also a lawsuit captioned F.E. v. E.E. , which was previously filed in this Court, possibly by or on behalf of Husband, although he appears to have denied ever authorizing that lawsuit, which was subsequently withdrawn by his attorneys without prejudice. [10/15/18 Wife Aff. at 5; 11/12/18 Affir. of Husband's counsel at 4].
The court also notes that in late 2018, after the start of this case, Husband was protected from Wife by a Criminal Court Temporary Order of Protection, which allowed daytime visits if Husband initiated them, but not overnights. The Criminal Court subsequently modified the order to direct that Wife refrain from committing certain criminal acts against Husband, but removed any stay-away or no-contact provisions, apparently as part of a one-year Adjournment in Contemplation of a Dismissal in connection with allegations of harassment. The parties are living together. Wife alleges that the 2018 criminal complaint, much like Husband's 2017 withdrawn lawsuit, was orchestrated by Husband's children, and not by Husband, apparently in an attempt to separate Husband from Wife, allegedly so that the children could obtain greater financial benefits for themselves. Wife cites the District Attorney's dismissal of certain charges because Husband was not afraid of Wife (necessary element of those charges) as support for her position that Husband did not initiate or support the criminal case. The criminal case was adjourned in contemplation of a dismissal until * * *, and there is no finding. [redacted by court].
Counsel for Defendant Husband in this action has raised the possibility that Defendant may have been unduly influenced, coerced or had his will otherwise overcome by Plaintiff into signing certain agreements at issue in this action, in part due to his "failing memory issues." [Verified Answer and Counterclaims; 11/12/18 Affir. at 1-2]. And although Defendant has appeared in this action and has participated in court conferences, it was not clear to the undersigned whether Defendant could adequately protect his interests in this proceeding. For example, Defendant has sometimes been unable to answer simple questions, such as his home address, and at other times, he has interrupted his attorneys to make forceful statements in open court about his financial abilities and desires to pay certain bills, which seemed to be different than the positions taken in his affidavits.
Under these circumstances, in April 2019, the court ordered an evaluation by a court-appointed neutral, Dr. Adam Bloom, Psy.D. ABPP, to assist the court in assessing whether Defendant needs a CPLR Article 12 guardian ad litem in this action. Courts cannot "shut their eyes to the special need of protection of a litigant actually incompetent but not yet judicially declared such. There is a duty on the courts to protect such litigants." Sengstack v. Sengstack , 4 NY2d 502, 509, 176 N.Y.S.2d 337, 151 N.E.2d 887 (1958) (answering certified questions in the affirmative that the trial court properly appointed a special guardian, in a matrimonial action, for a person with admitted severe mental impairments but who had not been judicially declared incompetent); In re Mary H. , 126 AD3d 794, 795, 5 N.Y.S.3d 270, 271 (2d Dept. 2015) ("It is often said that courts should not ‘shut their eyes to the special need of protection of a litigant actually incompetent but not yet judicially declared as such’ as ‘[t]here is a duty on the courts to protect such litigants’ ") (quoting Sengstack , 4 NY2d at 509 and Shad v. Shad , 167 AD2d 532, 533, 562 N.Y.S.2d 202 (2d Dept. 1990) ; C.P.L.R. §§ 1201, 1202 ). See also Tudorov v. Collazo , 215 AD2d 750, 627 N.Y.S.2d 419 (2d Dept. 1995) ("it is well settled that a guardian ad litem may be appointed by a court at any stage of an action in which an adult is incapable of adequately prosecuting or defending his or her rights[; a] guardian ad litem may be appointed to represent such a party even when no formal adjudication of incompetence has been made"); see also Matter of Jesten J.F. , 167 AD3d 1527, 1528, 89 N.Y.S.3d 815, 816 (4th Dept. 2018) (vacating termination of parental rights and remanding to the trial court for a determination whether the court should have appointed a guardian ad litem to the mother, who was represented by counsel, who did not move for appointment of a guardian but did move to strike mother's "incoherent testimony," which the Appellate Division described as "sufficient [action] to alert the court to the issue of the mother's competence").
There was no objection to the evaluation order or the appointment of Dr. Bloom, and all parties cooperated with the order. The court notes that the appointment was also within the court's inherent powers, CPLR §§ 1201, 1202, and powers to control discovery, as explained in another case where defendant acted in a manner that raised the question of whether she required a guardian ad litem:
the Court may be required to impose a remedy under [the] doctrine of Parens Patriae, [a] venerable principle [that] finds modern voice in statutes such as those contained in Mental Hygiene Law Article 81 as well as CPLR §§ 1201, 1202 which allow a Court to appoint a Guardian Ad Litem, on its own initiative for an "adult incapable of adequately prosecuting or defending his rights." If [defendant] has deteriorated into a "chronic irrational and agitated state" demonstrating a "manifest inability to assist" her attorneys in her defense, it would be the Court's somber duty to appoint a Guardian Ad Litem to represent her interests.... To assist the Court in making the determination of [defendant's] fitness to proceed, as well as the wilful or non wilful nature of her prior behavior, Plaintiff is to be afforded the opportunity to engage the services of a Psychiatrist to examine [defendant] concerning her mental capacity and capability to testify. In turn [defendant] is directed to submit to an examination by a Psychiatrist of Plaintiff's choosing within forty-five days from the entry date of this decision. The contempt hearing will follow [defendant's] examination by Plaintiff's physician. Although a psychiatric examination of [defendant] was not requested by the Plaintiff, the Court has a recognized power to regulate discovery to prevent abuse and it is our opinion that ordering an examination of the Judgment/ Debtor under these circumstances comes within the Court's prerogative. ( Douglas Elliman LLC v. Silver , 49 Misc 3d 1211(A), 26 N.Y.S.3d 724 (Sup. Ct., Suffolk Co. 2015) citing Anonymous v. Anonymous , 256 AD2d 90, 91, 681 N.Y.S.2d 494 (1st Dep't 1998), leave to appeal denied , 99 NY2d 509, 790 N.E.2d 275 (2003), Ramirez v. New York City Transit Auth. , 132 AD3d 653, 654, 17 N.Y.S.3d 176, 178 (2d Dept. 2015), CPLR §§ 1201, 1202, 5240.)
Here, the court issued the order for Dr. Bloom's evaluation of Husband on April 5, 2019. After attorneys' discussions about whether Husband would use a * * *-language interpreter, and who would be that interpreter, Dr. Bloom retained the services of a neutral * * *-language interpreter. Specifically, in April, counsel for Husband requested that Dr. Bloom utilize the services of a * * *-language interpreter: "we propose either a formal * * * interpreter, or, if that is not possible, that [Husband] be accompanied by his Executive Assistant, A.A., who communicates with [Husband] daily, and entirely in * * * [language]." (April 15, 2019 4:17 pm email from Husband's counsel to the court, copying all counsel). Attorneys for the wife objected to use of Ms. A.A., alleging that she is either employed by or has a personal relationship with Defendant's adult children, who "are interested parties in current litigations pending in the courthouse against the plaintiff wife." (April 15, 2019 4:33 pm email from Plaintiff's counsel to the court, copying all counsel). Husband's attorneys wrote to clarify Ms. A.A.'s relationship with Husband and his adult children: "[Defendant's] business interests, and, in particular, [E. company] where Ms. A.A. is employed, are not part of the litigation before the Court. Second, Ms. A.A.'s ‘relationship’ with [Defendant's] children, that is, as employee-employer, also have nothing to do with this litigation." (April 15, 2019 4:48 pm email from Defendant's counsel to the court, copying all counsel). Under the circumstances, Dr. Bloom utilized the services of a neutral agency that provided a * * *-language interpreter. A * * *-language interpreter has also been ordered for all future court appearances immediately after this first request for an interpreter. Ultimately, parties and counsel complied with the order, provided Dr. Bloom with documents and appeared for meetings and his evaluation.
Husband's counsel also notified the court that Husband has a heath care proxy, which apparently designates his adult child B.E., then his adult child A.E., and finally, Mr. J.K., "in that order," as his health care proxy. Counsel then requested that B.E. reach out to Dr. Bloom and sign the HIPAA releases necessary for Dr. Bloom to obtain Husband's medical records, which she did, and Dr. Bloom was able to review the received medical records. Dr. Bloom met with Husband on four separate occasions, assisted by the * * *-language interpreter, and at some, although not all, of these meetings (at Husband's request and apparent insistence) with Wife also present. Dr. Bloom also administered certain tests of cognitive ability. Dr. Bloom reviewed medical records from Husband's various doctors' appointments, including a neurologist, cardiologist, spine surgeon, orthopedic surgeon (related to a recent fall), and two collateral interviews: with B.E. for one hour "for the purpose of signing HIPAA consent forms" and for forty-five minutes with * * *, Husband's home healthcare aide. Dr. Bloom also reviewed legal documents and pleadings, including affidavits and affirmations, provided to him on consent from both sides. Dr. Bloom issued his report on July 20, 2019, describing the documents, meetings, and evaluations, and providing his concerns and findings. A copy of the report was provided to each counsel, upon submission of a confidentiality affirmation, which allowed counsel to read the report with their clients, but not make copies of the report.
Dr. Bloom's report provided details of Defendant as a caring, proud, and accomplished man, as well as of Defendant's extensive cognitive difficulties during the evaluation: he had extensive memory gaps and could not reconcile conflicting information (for example, stating that he immigrated to this country only ten years ago, then stating that his children were born in this country thereafter, but are now adults; he could state his year of birth but not the date or month; he insisted that he was not a part of any court proceedings and does not go to court). Dr. Bloom also noted that Husband was seen in May 2019 by a neurologist at the Weill Cornell Hospital in New York City due to hand numbness, and that the doctor apparently noted that Defendant had "multitask cognitive impairment.... The bedside neurological examination is remarkable for multitask, moderate to severe, cognitive impairment. Presumed diagnosis is Alzheimer disease. No further investigations were deemed necessary, as the child (healthcare proxy) did not want this issue further addressed." Dr. Bloom also details Mr. E.'s extensive daily struggles connected to his cognitive disconnects, from understanding his schedule, payments, credit cards, to his personal care. At the conclusion of his report, Dr. Bloom opined that his "Cognitive assessment" of Husband is "consistent" with the findings of the Weill Cornell neurologist, and that Husband's "adaptive functioning" is "also consistent with age related decline associated with Alzheimer's and/or Dementia."
There does not appear to have been a previous such evaluation. Wife's attorneys filed with the court a copy of a February 2019 fax to a [NYC hospital] neurologist from Husband's attorney, canceling Mr. E.'s neuropsychological testing as allegedly scheduled by his wife E.E. "improperly" and in furtherance of litigation against Husband, adding that "orders of protection have been entered against E.E. as a result of her repeated mistreatment and harassment of F.E.," and stating that "the only person authorized to make medical decisions for Mr. E. is his health care agent, B.E." [2/7/2019 fax to Dr. * *]. The letter adds that "This is not the first time that E.E. has improperly tried to schedule neuropsychological testing of Mr. E. as part of her litigation efforts against him." [Id. ] Lastly, the letter to the doctor states that "You are not authorized to conduct any neuropsychological testing of Mr. E. Moreover, please remember that Mr. E. has privacy rights under HIPAA, and you are not authorized to release any medical information about Mr. E. or speak to any third person about his medical condition without the express written consent of Mr. E.'s health care agent or his attorney. Please be further advised that any unauthorized neuropsychological testing by you of E.E. may expose you to legal liability." [Id. ] In Dr. * *'s reply to Husband's attorney, he states that although the neuropsychological evaluation "was requested by *, M.D., a neurologist here at [NYC hospital]," the evaluation is now canceled and "I will not try to re-schedule him for testing unless advised to do so by you, his attorney, or by B.E., his health care agent." The doctor goes on to add that he is "aware of the HIPAA regulations, and will most certainly not discuss anything about him with anyone else. However, I am not sure what to communicate to Dr. *, if anything, and will take your advice on responding to his referral. Moreover, because Mr. E. is not and never has been a patient at [NYC hospital] I am not entering anything in our Electronic Medical Record that could be discoverable. I will shred your fax and this letter (after being received by you) to further prevent any efforts at discovery. Should you or B.E. wish to have him tested in the future with respect to competency to make financial decisions or the litigation regarding such, please bear in mind that I have performed these evaluations in the past and would be pleased to do so if requested by a legal representative." [Dr. * * 2/8/2019]. Neither the attorney nor the doctor mention whether Mr. E. is actually receiving care of a doctor for memory or dementia issues, and, as quoted above from Dr. Bloom's report, it appears that Mr. E. is not.
An Article 12 guardian ad litem is appropriate when the litigant is an "adult incapable of adequately prosecuting or defending his rights." C.P.L.R. § 1201 "The court ... may appoint a guardian ad litem at any stage in the action upon its own initiative or upon the motion of ... (2) a relative, friend or a guardian, committee of the property, or conservator; or (3) any other party to the action...." C.P.L.R. § 1202(a). CPLR § 1201 provides three categories of persons who shall appear by a guardian ad litem : (1) certain infants, (2) certain individuals adjudicated incompetent or conservatees "(now, certain persons who have had guardians of their person and/or property appointed)," (3) or an individual who "is an adult incapable of adequately prosecuting or defending his [her] rights." The last category, where the court in a civil, housing, or other proceeding appoints guardians ad litem for the specific proceeding, "does not require Supreme Court [MHL 81] adjudication of competency/capacity and which properly gives Civil and Housing Court judges discretion to appoint guardians ad litem , solely in the specific proceeding before the Court, to appear for litigants who seem to the Court to be unable to understand the nature of the proceedings and adequately protect and assert their rights and interests in [that lawsuit] .... the reason why a judge can appoint a guardian ad litem under this third category is because it does not set a standard of incompetency, which must be decided by the Supreme Court, but rather sets forth a lesser standard of an individual who does not appear able to adequately defend or prosecute his/her rights in the individual proceeding." Kings 28 Assocs. v. Raff , 167 Misc 2d 351, 354, 636 N.Y.S.2d 257, 259 (Civ. Ct., Kings Co. 1995) (appointing guardian ad litem to a tenant in a housing proceeding based on tenant's in-court statements and actions).
For an adult who has not been judicially declared incapacitated, yet is not able to prosecute or defend his or her rights, CPLR § 1201 requires that an appearance for such person be made through a guardian ad litem . See, e.g. , Anonymous v. Anonymous , 256 AD2d 90, 681 N.Y.S.2d 494 (1st Dep't 1998) ("In light of the court's observation of defendant [in a matrimonial action] in an apparently chronic irrational and agitated state attributable to alcohol and substance abuse and defendant's consequent and manifest inability to assist his attorneys in his defense, the [trial] court properly concluded that appointment of a guardian ad litem for defendant pursuant to CPLR 1201 and 1202 was necessary to protect defendant's interests in the instant litigation"), leave to appeal denied , 99 NY2d 509, 790 N.E.2d 275 (2003).
After Dr. Bloom's report was provided to both sides, attorney for Husband initially raised concerns with the report, specifically that at least several meetings of Husband were with the Wife present (although not all). Husband's attorney, however, then declined the court's offer to reopen the report, to request additional collaterals, or any further information, and instead conceded that Mr. E. requires a representative (although requesting that Mr. J.K. as the power of attorney represent Husband and not a newly appointed guardian ad litem ):
ATTORNEY FOR DEFENDANT: That would not be necessary. If I understand your Honor's position that the identity of the guardian ad litem is not a function, the naming of the guardian ad litem is not a function of Dr. Bloom's report and the description that he gives of what the guardian ad litem should look like is not within his authority. If we start from the position that Mr. E. requires a representative, frankly, we can dispense with Dr. Bloom and move onto the next step , which your Honor said at the last hearing was part of a process of deciding, A, the identity of the guardian ad litem ; and, B, the validity of the power of attorney.
THE COURT: As applied to this action.
ATTORNEY FOR DEFENDANT: Yes
* */2019 Tr. 11:17-12:5 (emphasis added)
Accordingly, no hearing was necessary to determine whether Mr. E. would need the appointment of a representative (whether a guardian ad litem or another person), because of the information in Dr. Bloom's report, observations of Mr. E., and lack of objections from any side to this need for a representative (indeed, Wife requested the appointment of a guardian ad litem and Husband's counsel conceded the need for a representative). C.f. , In re Mary H. , 126 AD3d 794, 795, 5 N.Y.S.3d 270 (2d Dept. 2015) ("where there is a question of fact as to whether a guardian ad litem should be appointed, a hearing must be conducted"). Here, there is no question of fact that Husband "is incapable of adequately prosecuting or defending his or her rights" CPLR § 1201.
Subsequently, the court requested supplemental briefing on the issue of whether Mr. J.K. as the apparent Power of Attorney would be Husband's representative and "attorney in fact" in this action, or whether the Court should appoint a different individual as an Article 12 guardian ad litem . Wife's counsel submitted papers, requesting that a neutral attorney be appointed as a guardian ad litem , citing, at least in part, concerns about Mr. J.K.'s conflicts if he were to act as the power of attorney in this action. Wife's counsel also questioned the validity of Mr. J.K.'s July 2017 Power of Attorney, and stated that Husband was further manipulated into signing a 2018 amendment, which purports to prevent Husband from ever removing or replacing Mr. J.K. unless signed in the presence of Mr. J.K. — according to Wife, this 2018 amendment is further evidence of conflicting and inappropriate control of Husband.
Attorney for Husband in this action, personal attorney for Husband, and attorneys for Mr. J.K. submitted a joint brief, stating that the court cannot appoint a guardian ad litem without first invalidating the July 2017 and May 2018 appointment of Mr. J.K. (or, an alleged September 2014 other power of attorney, allegedly provided to another individual, described in that brief as "an employee and close friend," and to an attorney (although not explained whose attorney). [July 2019 brief at 2-3]. This brief argued that Dr. Bloom's report does not reach back in time, but rather, explains Husband's current cognitive abilities and needs, and therefore, cannot be used to invalidate a prior Power of Attorney. The court agrees, in part, with this characterization of Dr. Bloom's report as not providing a timeline of Husband's cognitive abilities, but rather, of his current extreme difficulties. Husband's current extreme cognitive difficulties, as detailed in Dr. Bloom's report, and not disputed by any side or counsel, necessitate the appointment of a representative to assist and protect Mr. E.'s interests in this litigation (and which need is not objected to by either side, and indeed, as quoted above, conceded by his attorneys). The need for such a special guardian or representative was again underlined at the July 2019 court appearance, when, during the guardian ad litem and Power of Attorney discussion on the record, Husband spoke out, making requests about the proceedings and about his Wife. [ * */19 Tr. 27:4-8]. The court agrees with Husband's and Mr. J.K.'s attorneys' briefing that the court does not at this time have sufficient information to either validate or invalidate the power of attorney allegedly granted to Mr. J.K. by Husband, and that question is not necessarily before the court at this time. Accordingly, nothing herein should be read to either validate or invalidate Mr. J.K.'s power of attorney.
The court is concerned, however, about the potential for a conflict in this litigation. Wife states that Mr. J.K. is allegedly a partner in an approximately [over $100 million holding] with either Mr. E. and his children A.E. and B.E., or just with his children if Mr. E. has already transferred his interest in [holding] to them. Regarding the alleged conflict due to co-ownership in [holding], Husband's affidavit explains the current ownership and contracts structure related to the building, apparently now 60% owned by A.E. and B.E. and 40% owned by the J.K. family:
Plaintiff's suggestion that [Mr. J.K.] should not represent me because we are allegedly "business partners" has not basis in fact, and is ridiculous. First of all, [Mr. J.K.] and I are not business partners. My children and [Mr. J.K.] and his family together own through different entities interests in [holding] (30% as to each of my children, A.E. and B.E.; and 40% as to [Mr. J.K.] and his family). My only "interest" in that property is not ownership, but a right to receive as salary or compensation, under my 2009 employment agreement with [E company], 18% of the cash distributions (if any)[fn1] from the operation of the building; that 18% number being reducible by a number of factors. What is more, the [holding] has nothing to do with this litigation, although I note that in her moving affidavit (at page 14), plaintiff bizarrely includes a "pie chart" showing the [holding] as being 54% of my alleged net worth, at what I believe is a ridiculously overstated value of [over $100 million]. I own no part of the [holding] , which I believe is not worth anywhere near [over $100 million], either net or gross of the debt thereon. In fact, I do not own the vast majority of the assets plaintiff falsely claims belong to me.
[fn1] It is "cash" distributions" not "profits distributions" as originally set forth in [Husband's attorney's] Affidavit of October 11, 2018, at par. 12, p.7.
11/13/18 Husband Aff. at ¶7 (emphasis in the original).
It is possible that Husband transferred his [holding] interest to his children some years back, although the court does not have specific information about this transfer. If in fact, Mr. J.K. is now a business partner with Husband's children (as alleged in Husband's papers), instead of Mr. J.K. being a business partner with Husband, his potential conflict is exacerbated. There is no dispute that Husband's children have a conflict vis-à-vis Wife in this litigation: the children will be the primary (if not sole) beneficiaries of any part of Husband's estate that is either not spent or transferred to Wife. [See, e.g. , 2001 Prenuptial Agreement, 2009 Postnuptial Agreement]. Wife has also alleged that the children (who apparently either work at [E company], own it, or control it) and other [E company] employees have canceled or greatly limited Husband's credit cards [10/15/19 Wife Aff. ¶9] and stopped other payments, including payments to certain doctors [Id. at ¶¶10-12]. Husband's attorneys, on the other hand, state that it was the Wife who wrongly tried to manipulate Husband into using the credit cards, checks, and doctors for her benefit, and it was the children or Mr. J.K. who were able to stop her. This court does not herein decide the contested factual disputes regarding canceled checks, canceled credit cards, or canceled doctors' appointments, other than to point out that there are these hotly contested disputes between Wife and Husband's children, and that nobody in this litigation disputes the financial conflict between them. There may also be other litigation between entities owned by the various actors here and the children, and although those disputes are not before this court, they are noted herein only to the extent that they may increase the conflict between Husband's children on the one hand and his Wife on the other.
To be clear, no finding is made that Mr. J.K. has acted in a conflicted manner. Indeed, Mr. J.K. has come to court on numerous occasions, with counsel, and has stated that he is happy to help his friend and he does not charge for his services. Rather, the business partnership creates the possibility of a legal conflict.
Courts may appoint an Article 12 guardian ad litem even when the individual already has a general committee or other representative, either because there is a conflict or "or for other cause." CPLR § 1201. For example, in von Bulow , the United States District Court, applying New York state law, allowed incapacitated wife's adult children to proceed as "next friends" (i.e., guardian ad litem for plaintiff) even though wife already had an appointed committee, where the committee might have had a conflict moving forward (which conflict was vigorously disputed by the other side) or "for other cause," stating that proceeding by next friend in that specific case was preferable to protect the wife's rights, especially because there was reason to think that certain members of the committee might have a difficult time "vigorously pursu[ing] their charge's cause of action":
Both federal and New York state courts have repeatedly affirmed the power of the court to determine that the interests of a child or incompetent would best be represented not by a general representative, such as parent or guardian, but by a guardian ad litem or "next friend." In Seide v. Prevost , 536 F.Supp. 1121 (S.D.N.Y.1982), and Child v. Beame , 412 F.Supp. 593 (S.D.N.Y.1976), courts in this district concluded that [Federal] Rule 17(c) permitted appointment of a guardian ad litem where parents were unable or refused to act or had abandoned interest. In Hoffert v. General Motors Corp. , 656 F.2d 161 (5th Cir.1981), cert. denied sub nom. Cochrane & Bresnahan v. Smith , 456 U.S. 961, 102 S.Ct. 2037, 72 L.Ed.2d 485 (1982), the appearance of a conflict of interest between a minor and his general representative justified the appointment of a guardian ad litem . See also Adelman v. Graves , 747 F.2d 986 (5th Cir.1983) ; Noe v. True , 507 F.2d 9 (6th Cir.1974) (where the interests of a child and her legal guardian were adverse, the child was "not otherwise represented" as stated in Rule 17(c) and thus appointment of a guardian ad litem was appropriate); cf. Developmental Disabilities Advocacy Center, Inc. v. Melton , 689 F.2d 281 (1st Cir.1982) (suit by a "next friend" not allowed where there was no discernible conflict in the general representative and the general representative opposed the suit as not being in the incompetent's best interest).
The New York rule is the same in substance as the federal rule. N.Y.Civ.Prac.Law & R. ("CPLR") § 1201 (McKinney supp.1986), like Fed.R.Civ.P. 17(c), authorizes courts to exercise broad discretion to direct representation of an incompetent by a guardian ad litem rather than by the committee of his property "because of a conflict of interest or for other cause." While CPLR § 1201 does not mention "next friend" representation, there is no substantial difference between a "guardian ad litem " and a "next friend." Historically, the "next friend" has represented the incompetent as plaintiff, the guardian ad litem as defendant. But, as Professor Moore has observed, despite any difference in terminology, "the functions of the two are precisely the same" 3A Moore's Federal Practice ¶ 17.26, at 17—281; see also 6 Wright and Miller, Federal Practice & Procedure: Civil § 1572.
Even prior to the enactment of CPLR § 1201 in 1962, New York law permitted courts to appoint a special representative in appropriate circumstances, notwithstanding the existence of a committee. Sengstack v. Sengstack , 4 NY2d 502, 151 N.E.2d 887, 176 N.Y.S.2d 337 (1958) ; Moore v. Flagg , 137 A.D. 338, 122 N.Y.S. 174 (1st Dept. 1910). Since the enactment of CPLR § 1201, New York law is settled that an adjudicated incompetent can be represented by a guardian ad litem because of a "conflict of interest or for other cause." In re Becan , 26 AD2d 44, 270 N.Y.S.2d 923 (1st Dept. 1966). Berman v. Grossman , 24 AD2d 432, 260 N.Y.S.2d 736 (1st Dept. 1965) ;
Thus, the New York and federal rules are in harmony. ( Von Bulow by Auersperg v. von Bulow , 634 F. Supp. 1284, 1293 (S.D.NY 1986), on reargument , 1986 WL 7781 (S.D.NY July 8, 1986).
Similarly, in Berman v. Grossman , 24 AD2d 432, 433, 260 N.Y.S.2d 736, 738 (1st Dept. 1965), the Appellate Division, First Department held that it was not abuse of discretion for the trial court to appoint a guardian ad litem for the particular litigation to represent a person previously adjudicated incompetent and who already had a committee, in order to assist that person in a proceeding that placed him possibly in conflict with the committee, and to adjudicate him competent and to discharge committee. The appellate court specifically noted that the appointment was not a reflection on the committee, which was of "exceptional character and ability":
[respondent] questions the propriety and necessity of the appointment of the guardian ad litem for the incompetent in this matter.... Upon entertaining the application, the court was vested with wide discretion in the matter of the proceedings to be taken thereon in the best interests of the incompetent, including the prudent and cautious exercise of the power to appoint a guardian ad litem to appear for him in the proceeding, to direct an investigation and obtain a report to the court as to the mental condition of the incompetent, and to direct a hearing. (See CPLR 1201 ; 17 Carmody—Wait, N.Y.Prac., ‘Termination of Committeeship’, § 129, p. 557.) The power to appoint a guardian ad litem to appear for and represent the incompetent in the proceeding, absent prohibitory legislation, is among the court's inherent powers in the matter of supervision over the person and property of the incompetent. It is true that in a proper case, the committee of the incompetent could be relied upon to protect ‘both the incompetent and his estate from the consequences of a [spurious] claim of competency’. But, where the proceeding is instituted at the instance of the incompetent and the court has found that there is reasonable basis for entertaining it, a guardian ad litem may properly be designated to appear for the incompetent. Such designation may be proper and advisable to afford the incompetent adequate representation independent of the influence of the committee. Notwithstanding that the committee here was of exceptional character and ability, we have concluded that under the special circumstances here, it was not an abuse of discretion for the court to appoint the guardian ad litem ( Berman v. Grossman , 24 AD2d at 433.)
Here, Wife also raised a second alleged (and more tenuous) conflict: that Mr. J.K.'s attorney is married to Mr. E.'s attorney. In support of this second conflict, Wife attaches an email from Mr. J.K.'s attorney to a Harvard neurologist, who was allegedly hired by Husband and Wife to evaluate Husband, which neurologist had previously treated Husband's [sibling], but who was asked by Mr. E.'s child as his healthcare proxy not to evaluate Husband (Ex. C). In the email (Ex. D), Mr. J.K.'s attorney states that "Mr. J.K. holds the full power of attorney for F.E. for all of F.E.'s financial, personal, business and/or legal affairs. Mr. J.K. has not authorized any expenditure of funds for the medical testing, interview, or other procedures related to F.E.'s visit to you, your colleagues, or your hospital. In fact, F.E. has made it clear that he did not want to go to Boston for medical testing, interviews, or other procedures by any Doctor or Hospital in Boston." [Id. ; see also Ex. E, the doctor describing a voicemail that the doctor understood to be describing or referencing a "cease and desist" order]. Again, no allegation is made that either attorney has acted in a conflicted manner, or that there is an actual current conflict. The court does not find this to be a conflict, and no part of this decision is based on any alleged legal conflict between two married attorneys (* * and * *) representing each of Mr. E. and Mr. J.K.
This court does not yet have a clear sense of either Mr. E.'s cognitive abilities, or his wishes in this litigation. It appears from Dr. Bloom's report, as well as statements made by both parties and all counsel, that Mr. E. may not always comprehend events around him, including certain legal and financial positions. Without making a finding about the full extent, frequency, or duration of Mr. E.'s cognitive difficulties, it appears that he may be, at least at times, severely confused about this litigation, not just specific provisions in lengthy contracts, but about the overall positions taken on his behalf, as well as his apparent ability to pay for either his needs or his Wife's needs, as he sees them, as opposed to how others (including either his Wife or any other individuals) represent those needs.
This case has had numerous appearances and motions in approximately one year since it was filed, and many millions of dollars could be at stake (if, for example, Husband's representatives move to invalidate the postnuptial agreement, as his attorney has stated they are likely to do; or if any future court finds not just that Husband is incapacitated, but questions his capacity going back to when he made valuable transfers to either Wife or his children). Nevertheless, even with the court's encouragement, the two sides were unable to work out even a monthly stipend settlement. As this case may require a trial, Mr. E. will need extensive assistance from his representative. Given the potential conflicts, especially at trial (that may include testimony about Husband's current income from the [holding]; which may create a conflict if Mr. J.K. has a 40% overall interest in this allegedly-[over $100 million] [holding] ), the court must, in its exercise of discretion, appoint a representative for Husband who is not connected to the [holding] or other similarly-crucial businesses owned by either Husband, Wife, or Husband's children.
The court notes cases cited in the July 2019 joint brief filed by Husband's and Mr. J.K.'s attorneys, arguing that a court cannot appoint a guardian ad litem when the "allegedly incapacitated person made alternate plans for his or her protection, including the appointment of an Attorney in Fact." [July 2019 brief at 6]. They are not, however, relevant here. For example, the Joint Brief cited In New York City Transit Authority v. Kenet , 2018 WL 3056918 (Sup Ct, NY Co. 2018), as finding that a "power of attorney designating the defendant's wife as Attorney in Fact obviated the need to appoint a guardian ad litem [and] accepting the argument that the guardian ad litem was not the least restrictive means of protecting defendant." The court in Kenet , however, considered the appointment of a MHL Article 81 guardian (which involves significantly broader powers than an Article 12 guardian at issue here) and did not concern any relevant conflict between the interests of the defendant in that case and his designated power of attorney (unlike here, where in this specific litigation, there is at least potential conflict). Other cited cases also involve the potential appointment of an Article 81 guardian and no allegations of potential conflict in a specific litigation.
The July 2019 Joint Brief describes the potential conflict as not disqualifying, but rather, that the "most that can be said is that Mr. J.K. is a long-time friend of defendant, his family, and that he owns property with defendant's children. That is not a conflict, but rather a commonality of interests between defendant, his family and his appointed agent." [July 2019 Brief at 10-11]. Thus, there is an admission of a "commonality of interests," except, not just between Husband and his agent, but now that the children apparently own 60% of the [holding], between the children and Husband's agent. This admission of "commonality of interests" concedes the very conflict point that Wife alleged in her papers.
The Court is hereby appointing Ms. * * * as Mr. E.'s guardian ad litem in this litigation pursuant to Article 12, by separate order issued today. The court has thoroughly considered this appointment. Ms. * * * is a partner in * * LLP, a well-respected matrimonial firm in this state and county. Ms. * * * was also a corporate and private equity attorney at [firm] LLP and [firm] LLP. According to her biography, Ms. * * * also provided volunteer pro bono efforts on behalf of Her Justice, and serves on the Adoption, Child Custody and Legislation Committees of the Family Law Section of the New York State Bar Association and is a member of the New York City and County Bar Associations. Although not crucial to her appointment, Ms. * * * is also fluent in the * * language, which may facilitate her ability to communicate with Mr. E. in both English and in his native language, as well as reduce financial and logistical costs if an interpreter were necessary. Ms. * * * also performed a conflicts check against any prior or current representation either of or against the parties, Mr. J.K., or Husband's children, and Ms. * * * does not have a conflict or any prior or current relevant representation. Lastly, to the extent that Ms. * * * may find it helpful in communicating with Mr. E., given Husband's extensive cognitive difficulties as described by Dr. Bloom, and at least partly acknowledged by other participants in this litigation, the order for Ms. * * *'s appointment will also allow her to utilize the services of a memory specialist (not as a treating physician, but as part of Ms. * * *'s representation). The court expects that the appointment will assist Mr. E. in this litigation. The court is also cognizant of the limitations of an Article 12 guardian ad litem , including great questions about whether the guardian may ever approve or submit a settlement to the court (compare New York Found. for Senior Citizens v. Hamilton , 170 AD3d 543, 544, 96 N.Y.S.3d 52 (1st Dept. 2019) ("GAL is not a decision-making position; it is an appointment of assistance") with Prospect Union Assocs. v. DeJesus , 167 AD3d 540, 542, 91 N.Y.S.3d 36 (1st Dept. 2018) (affirming a denial of tenants' motion to vacate stipulations that an Article 12 guardian ad litem signed on their behalf: "GAL is not a decision-making position; it is an appointment of assistance. The GAL provides invaluable service to the ward.... As opposed to a guardian under article 81 of the Mental Hygiene Law, the GAL is required to appear and adequately assert and protect the rights of his or her ward. The record, viewed as a whole, shows that the GAL attempted to help her wards protect their rights during the proceeding by obtaining extensions of time for them to comply with landlord's demand for access to their apartment. There is no evidence that she forced a settlement or that tenants would have fared any better by going to trial. Tenants failed to meet their burden of showing that the GAL either inadvisedly entered into those stipulations or failed to look out for their best interests."). At this point, however, that issue is not before the court, or even before the guardian ad litem .
Monthly Stipend and Attorney's Fees
Wife also moves for an order directing Husband to pay Wife "pendente lite her monthly stipend in the amount of $35,000 as provided in the parties' Post-Nuptial Agreements; and ordering Husband to pay Wife's attorneys $75,000 "incurred in connection with the instant application and as required by the parties' November 18, 2009 Post-Nuptial Agreement." Wife seeks support and attorneys' fees as a contractual right, she does not seek spousal support or attorneys' fees pursuant to DRL § 237. In essence, Wife is seeking summary judgement on her "breach of contract" claim, alleging that she is owed $35,000 in monthly support, plus payment of certain specific expenses she would be entitled to under the post-nuptial agreements, which have all been apparently not been paid since February 2018, plus attorneys' fees (which are payable under that agreement's Default provision to the prevailing party). Husband's affidavit, on the other hand, states that Wife has received or spent $1,512,286 during this time period, citing Exhibit J, "a chart produced by [Husband's then attorney], the figures for which were, to my knowledge, provided from my corporate Amex credit card records and my personal Visa card records, and my canceled checks and receipts by Ms. A.A., my assistant at [E company] for the last 30 years." [11/13/18 Husband Aff. at ¶16., Ex. J]. Husband, by Verified Answer and Counterclaim, also purports to challenge the post-nuptial agreements as void due to overreaching or unconscionability.
A motion for summary judgment "shall be granted if, upon all of papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party." C.P.L.R. § 3212(b). The proponent of summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact. Zuckerman v. City of New York , 49 NY2d 557, 562, 404 N.E.2d 718, 427 N.Y.S.2d 595 (1980) ; see also Winegrad v. New York Univ. Med. Center , 64 NY2d 851, 853, 476 N.E.2d 642, 487 N.Y.S.2d 316 (1985) ("The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case... Failure to make such a showing requires the denial of the motion, regardless of the sufficiency of the opposing papers"); Ayotte v. Gervasio , 81 NY2d 1062, 1063, 619 N.E.2d 400, 601 N.Y.S.2d 463 (1993) ; Finklestein v. Cornell Univ. Med. Coll. , 269 AD2d 114, 117, 702 N.Y.S.2d 285 (1st Dept. 2000).
Here, there are sufficiently alleged factual disputes about the validity of the contracts and regarding the extent of any payments made, or not made, pursuant to them, which prevents the grant of summary judgment to Wife. The court notes that although in a matrimonial action, a spouse may seek pendente lite maintenance and attorney's fees (see, e.g. , DRL § 237(a), Prichep v. Prichep , 52 AD3d 61, 64, 858 N.Y.S.2d 667 (2d Dept. 2008) ), this is a contract action and not a matrimonial action. Additionally, even if this were a matrimonial action, Wife's motion for monthly support and attorney's fees would not comply with filing requirements for pendente lite maintenance and fees. 22 NYCRR 202.16.
Although the court notes that Wife has raised serious issues of whether her needs and her Husband's needs are being properly met, at this time, the court can only encourage all sides to move forward expeditiously, and to the extent possible, to use this family's great resources to meet any necessary, reasonable, and appropriate needs in a timely manner.
Accordingly, for the reasons stated herein, it is hereby
ORDERED that branch (a) of the motion, which requested an order requiring Defendant to pay Wife "pendente lite her monthly stipend in the amount of $35,000 as provided in the parties' Post-Nuptial Agreements is DENIED without prejudice, as premature; it is further
ORDERED that branch (b) of the motion, which requested an order pursuant to CPLR § 1201 and § 1202, "appointing a guardian ad litem to represent Defendant and his interests in the instant action" is GRANTED and Ms. * * * is appointed as Mr. E.'s guardian ad litem in this litigation pursuant to Article 12, by separate order issued today; it is further
ORDERED that branch (c) of the motion, which requested an order pursuant to CPLR § 2218, "directing an evidentiary hearing with respect to any issue of fact raised on the instant motion" is DENIED; it is further
ORDERED that branch (d) of the motion, which requested an order requiring Defendant to pay Wife's attorneys $75,000 "incurred in connection with the instant application and as required by the parties' November 18, 2009 Post-Nuptial Agreement" is DENIED without prejudice, as premature.