Opinion
No. 91809/14.
03-23-2015
In the Matter of the Application of CARYL S.S., Petitioner, For The Appointment of A Guardian For the Person and/or Property of Valerie L.S., An Alleged Incapacitated Person, Respondent.
Downey, Haab & Murphy, PLLC, by Hilarie L. Thomas, Esq., Millerton, attorneys for Petitioner Caryl S.S. Drinker Biddle & Reath LLP, by Andrew Egan, Esq., and Peter Strauss, Esq., Of Counsel Florham Park, and New York, attorneys for Co–Petitioner Kenneth S. Kramer & Dunleavy, by Lenore Kramer, Esq., New York, attorney for the Alleged Incapacitated Person Valerie L.S. Mark S. Goldstein, Esq., New York, Court Evaluator.
Downey, Haab & Murphy, PLLC, by Hilarie L. Thomas, Esq., Millerton, attorneys for Petitioner Caryl S.S.
Drinker Biddle & Reath LLP, by Andrew Egan, Esq., and Peter Strauss, Esq., Of Counsel Florham Park, and New York, attorneys for Co–Petitioner Kenneth S.
Kramer & Dunleavy, by Lenore Kramer, Esq., New York, attorney for the Alleged Incapacitated Person Valerie L.S.
Mark S. Goldstein, Esq., New York, Court Evaluator.
Opinion
SHARON A.M. AARONS, J.
A petition, returnable November 21, 2014, was filed for the appointment of a Guardian of the person and property of VALERIE L. S ., an alleged incapacitated person (“AIP”). The petitioner, Caryl S.S. (“the petitioner” or “the AIP's daughter”) alleges that the AIP, who is 93 years old, and who suffered a stroke on January 12, 2014, was improperly induced by the AIP's son, cross-petitioner Kenneth William S. (“cross-petitioner” or “the AIP's son”), to transfer her property to him.
Prior to the return date of the petition, the AIP allegedly retained Lorraine Coyle, Esq., as her counsel in this matter. After visiting the premises, examining the AIP, and considering the submissions of the parties, the Court determined pursuant to MHL 81.10(a) that Ms. Coyle had not “been chosen freely and independently by the alleged incapacitated person.” The Court disqualified Ms. Coyle from further representation of the AIP, and appointed Lenore Kramer, Esq., as counsel for the AIP. (Matter of Caryl S.S. [Valerie L.S.], 45 Misc.3d 1223[A], 2014 N.Y. Misc. LEXIS 5130, 2014 N.Y. Slip Op 51697 [U] [Sup.Ct., Bronx County 2014] ). In addition, the Court disqualified the petitioner's attorney, Bethany Ralph, Esq., who had represented the AIP in drafting two wills and a trust for her, from further representation of the petitioner, based upon her potential appearance as a witness in this case, as well as an inherent conflict of interest. (See Matter of Lichtenstein [Wogelt], 171 Misc.2d 29, 652 N.Y.S.2d 682 [Sup.Ct., Bronx County 1996] [disqualifying petitioner's counsel, who had previously prepared the AIP's will, and assisted in placing her in a nursing home] ).
A hearing commenced on November 21, 2014, and extended over a period of 15 days, concluding on February 10, 2015. At the inception of the hearing, the Court issued two orders—i.e., one regarding the procedure for paying the expenses of the AIP, and the other regarding visitation and communication with the AIP, both effective during the pendency of this proceeding. With respect to the first order, the cross-petitioner was in control of the AIP's liquid assets, and was receiving her mail and paying her bills. Based on the allegations of mismanagement and undue influence, the Court determined that an independent person should take control of the AIP's income (over $4,000 monthly) and liquid assets during the pendency of the proceeding. Toward that end, the parties did not desire to further delay the proceedings while a Part 36 temporary guardian was appointed and qualified. As the Court Evaluator was already well-versed in the pleadings, allegations and circumstances involved in this proceeding, the parties consented to the expansion of the Court Evaluator's duties to marshaling the AIP's income and paying her bills. As a result, on December 5, 2014, with the consent of the parties, the Court authorized the Court Evaluator to administer the AIP's assets and to pay the AIP's expenses during the pendency of the proceeding. (See Matter of Wingate [Longobardi], 166 Misc.2d 986, 637 N.Y.S.2d 1010 [Sup.Ct., Suffolk County 1996] ). The Court directed the cross-petitioner to turn over to the Court Evaluator the sum of $100,000, which the cross-petitioner asserted remained from the approximately $270,000 which he had taken from the AIP's account. However, only the sum of $98,000 was received by the Court Evaluator from the cross-petitioner.
The first two hearing dates of November 21, 2014 and November 24, 2014, primarily pertained to the issue of whether the AIP's retained counsel had been freely and independently retained. (See Matter of Caryl S.S. [Valerie L.S.], 45 Misc.3d at 1223[A] ). The thirteen subsequent hearing dates concerned the substance of the guardianship petition and cross-petition. Those hearing dates were as follows: December 9, 2014, December 15, 2014, December 16, 2014, January 8, 2015, January 15, 2015, January 20, 2015, January 23, 2015, January 26, 2015, January 30, 2015, February 3, 2015, February 5, 2015, February 6, 2015, and February 10, 2015.
The visitation order dated December 9, 2014, was necessary in view of the hostility between the AIP's two children, and the allegations of undue influence which permeated the proceedings.
The testimony of the various witnesses is summarized as follows:
Testimony of Caryl S. S.
The petitioner, a first-grade teacher at a public school in Manhattan, testified that she is 62 years old. Her husband is a retired book designer. Neither she nor her husband had ever been convicted of a crime, or filed for bankruptcy. They have one son. The petitioner is the daughter of the AIP, who is 93 years old. Both of her parents were school teachers. They owned a home in Riverdale, Bronx County. The AIP had inherited a large amount of land from the AIP's parents in Sharon, Connecticut, where the AIP's husband personally built a summer house.
The petitioner's father William Jacob S., the AIP's husband, died on October 11, 2012. The AIP was in relatively good health initially following the death of her husband, although she “had some issues” with her knee and her back, which affected her ability to walk. In the fall of 2013 the AIP's mobility declined substantially. Additionally, her mental acuity declined beginning in 2012, and became more severe in November and December, 2013. For example, if she were paying bills, she might write a check for $50 when the bill was for $125.
The petitioner's parents had drafted reciprocal wills, with the assistance of Bethany Ralph, Esq. The AIP and her husband had been referred to Bethany Ralph by a Connecticut attorney who handled sales of the Connecticut property for the AIP and her husband. However, William S. died before he was able to return to the office and execute his will. Petitioner's understanding of the wills drafted by Bethany Ralph for her parents was that she was to receive the home in Riverdale, and the cross-petitioner was to receive the home in Sharon, plus the land, excluding approximately 40 acres which was to be bequeathed to the petitioner. In any event, reciprocal wills had been prepared before William S. died, and after his death, in November, 2012, the petitioner, the cross-petitioner, and the AIP together came to Bethany Ralph's office so that the AIP could execute the will which had been prepared according to the instructions of the AIP and her husband.
Bethany Ralph, on the other hand, who later testified extensively in this proceeding, stated that she did not know how the AIP and her husband had come to consult with her, and she assumed that they had observed a large street sign for her office which was visible to travelers on the road which lead past her office on the way to Sharon, Connecticut. In any event, however, it appears that the attorney was selected by the AIP and her husband independently of their children.
As indicated above, the AIP had inherited property in Sharon, Connecticut. The AIP's husband built a summer home on part of that land. Various parcels of land were sold from time to time throughout the years, but the summer house and large amounts of property remained.
The will is dated November 17, 2012.
In December, 2012, the AIP executed a power of attorney in favor of the petitioner, prepared by Bethany Ralph, Esq. The petitioner stated that she was not involved in the decision to prepare the power of attorney, which was arranged by the AIP and her attorney, Bethany Ralph.
In stark contrast to this testimony, Bethany Ralph testified that when the petitioner, the cross-petitioner and the AIP were present in her office in November for the execution of the AIP's will, she (Bethany Ralph) had “pulled aside” the petitioner, out of the presence of the cross-petitioner, and that she (Bethany Ralph) suggested that a power of attorney be prepared in favor of the petitioner. The matter was not discussed at that time with her client, the AIP, nor with the cross-petitioner. Bethany Ralph testified that the power of attorney instrument was later sent to the AIP by mail to be executed by the AIP.
The petitioner indicated that “things really escalated” in the summer of 2013 with respect to the discord between the petitioner and the cross-petitioner. On August 23, 2013, the AIP transferred her interest in the Riverdale house to herself and the petitioner as joint tenants with right of survivorship. She did so “in response to my [petitioner's] fear that there would be a third will and in that third will I would be left no house.”
The petitioner's son and his girlfriend lived at the Riverdale home from July 2013 to April, 2014. In October, 2013, the cross-petitioner also moved into the Riverdale home with the AIP. Neither petitioner's son nor his girlfriend paid rent or contributed toward the AIP's expenses, although they allegedly paid some telephone and cable bills.
A second will was signed by the AIP on October 25, 2013. Petitioner testified that the will was changed to appease and to accommodate her brother, the cross-petitioner, who was unhappy with the distribution of assets pursuant to the first will. The cross-petitioner was dissatisfied in that he believed that the value of his inheritance was much less than the value of the Riverdale home alone. Because of the pressure he brought to bear on the AIP, the AIP and the petitioner decided that the will should be changed to give her brother additional property in Sharon. The wills are, in substance, identical, except that 26.3 acres of land in Sharon, which in the first will are devised to the petitioner, are, in the second will, devised to the cross-petitioner.
The petitioner discovered a copy of the original will during the summer of 2013 in the Sharon home, with “keyboarded” (typed) changes on it, although the AIP did not type or use a computer. She also discovered, at that time, numerous notes, lists and documents in the Sharon house containing “post-its” from the cross-petitioner indicating that the cross-petitioner was unhappy with the division of property set forth in the will.
In order to protect the AIP's property from the cross-petitioner, the AIP decided to place her property in a trust, to be managed by her attorney, Bethany Ralph. Sometime at the beginning of 2014, however, the petitioner discovered that funds of approximately $270,000 belonging to the AIP had been transferred by the cross-petitioner into a separate account. Accordingly, the plan to create a trust was temporarily suspended.
The evidence at the trial was that the trust was to include only liquid assets of the AIP, meaning cash in various bank accounts, and not any of her real property. The petitioner admitted on cross-examination that the purpose of the proposed trust was for distribution of the AIP's property, and to protect the petitioner's entitlements-not for Medicaid planning. She did not determine if the AIP was eligible for Medicaid, nor was she aware if the proposed trust was suitable for Medicaid planning purposes. The petitioner in fact never considered bringing a Medicaid application on her mother's behalf, as she did not believe that the AIP would be eligible for any Medicaid benefits in view of her assets.
On January 12, 2014, the AIP suffered a stroke, as a result of which she was in neurological intensive care. She was discharged from the hospital on January 16, 2014, and began a course of rehabilitation for six weeks. Subsequent to the stroke, she was “more fragile than she had been.”
On February 19, 2014, subsequent to the AIP's stroke, while she remained in rehabilitation at Hudson Point, the petitioner and Bethany Ralph brought to the AIP various legal documents to be executed. These included a deed and the trust instrument. This deed transferred the AIP's remaining interest in the Riverdale property as joint tenant to the petitioner, while the AIP retained a life estate. In addition, the AIP executed the documents creating a trust as had been earlier planned. Petitioner removed funds from various accounts (Educational Affiliates, Capital One, Bank of America, and Union Bank (now Salisbury Bank)), and transferred the funds into two bank accounts controlled by the trust, of which Bethany Ralph and the petitioner were trustees. The petitioner was the beneficiary of the remainder of the trust, and petitioner's son was the contingent beneficiary. The approximate value of the funds placed in the trust accounts was $450,000.
Neither the Riverdale property, nor any of the Sharon property, was made part of the trust. No real property was placed in the trust. As noted above, on August 23, 2013, the Riverdale property had been deeded by the AIP from her sole ownership to herself and the petitioner as joint tenants.
Petitioner testified based on account records that $128,825.62 remained in the account at Salisbury Bank, which had an opening balance of approximately $140,000, together with a Chase checking account with a balance of $846.43 and a Chase savings account of $321,900.
Petitioner admitted that she had not used the trust proceeds to pay any of the AIP's expenses. She testified that she could not, as the mail had been re-directed by the cross-petitioner. For a time, during February, March, and April, 2014, the AIP's monthly income of approximately $4,000 was paid into the trust. Commencing in April, 2014, the funds were directed to other bank accounts which were controlled by the cross-petitioner.
According to the petitioner, during March and April, 2014, the AIP became “more confused.” She repeatedly asked to examine the trust documents, bank books and statements, as if she had not seen these documents before.
The power of attorney issued by the AIP in favor of the petitioner was revoked in 2014. The petitioner first became aware of this when she received a phone call from an employee of TIAA–CREF in April, 2014. She received a printed copy of the revocation on September 10, 2014.
The petitioner stated that she did not visit the AIP in Sharon during the summer of 2014, and did not provide her meals or take her to physician's appointments. By that time, the petitioner was no longer speaking to the cross-petitioner. While it was the petitioner's custom to spend time with her mother in Sharon during the summer months, the tension and hostility between the petitioner and her brother had reached a point where the petitioner “did not feel comfortable” visiting her mother.
The petitioner testified to a history of continuing strife with her brother during 2013 and 2014, due to his dissatisfaction with the division of the AIP's property. As she stated in her testimony, “we weren't friends on Facebook....” She indicated that “Ken [the cross-petitioner] was, for lack of a better word, trying to poison my mother about my son, my husband, myself, everything about us.” Interwoven in her testimony were a series of accusations of inappropriate behavior, including: the cross-petitioner's use of on-line banking to transfer funds from one account belonging to the AIP to another, in a type of “cat-and-mouse” game; emails in which he told other family members that the petitioner was “trying to inherit [his] money and [his] children's money;” being rude and disrespectful to the petitioner's son, at a time when the petitioner's son was residing, together with his girlfriend, in the AIP's home in Riverdale; failing to invite the petitioner for Thanksgiving dinner with the AIP; monitoring the petitioner's visits with the AIP; disconnecting the AIP's car battery so that neither the petitioner nor the AIP could use the AIP's car; diverting the AIP's mail service following her stroke from Riverdale to a post office box in Southport, Connecticut; and calling the petitioner a thief.
I.e., rifling through their property, and bringing a dog into the home, knowing that the petitioner's son is allergic to dogs.
The petitioner testified that the cross-petitioner resides in Southport.
Testimony of Bethany A. Ralph, Esq.
Ms. Ralph testified that she met the S.s for the first time in late 2011 or early 2012, to discuss the preparation of wills. She was not aware of the reason why they selected her as their attorney. She testified that:
“[T]he first thing they said, and it came from Mr. S., was that our son Ken is a problem. We've given him a lot of money over the years, we've helped him with his divorces, we've helped him with child support, and now we're going to make it up to our daughter Caryl [the petitioner] in the will. And that was the first thing they said to me before I knew anything about any of this.”
The S.s indicated, at the initial meeting, that they owned a home in Riverdale, and another in Sharon, and that each was worth $1.5 million; further, that they had total cash assets of $455,000; a vacant lot worth $75,000; and other land in Sharon of unknown value.
Following their first meeting in February, 2012, the S.s visited the attorney on four subsequent occasions relative to their wills and the distribution of the property. Draft wills were sent out in July, 2012. Further revisions were made, and another draft was sent out on August 31, 2012. The attorney did not hear from the S.s again until November, 2012, when the cross-petitioner called, stated that Mr. S. had died, and indicated that his mother wanted to sign her will. The AIP came to her office soon afterwards, on November 17, 2012, accompanied by the petitioner and the cross-petitioner. The AIP executed her will, which was virtually unchanged, except for ministerial matters, with respect to the division of property from the estate plan that had been contemplated when Mr. S. was alive.
The witness further testified that at that time she discussed with the petitioner (but not the AIP) the idea that the AIP execute a power of attorney in favor of the petitioner. The power of attorney was prepared and forwarded to the AIP.
Subsequently, the cross-petitioner called the witness and asked if the will could be changed to correct a “mistake.” He indicated that he was having a survey conducted, and following its completion, he would contact her again. The petitioner contacted the attorney, indicating that, “Ken was making lists and adding things up and saying it [the division of property] wasn't even.” The petitioner advised the witness that in order to avoid distress to the AIP, the will should be changed to leave the additional acres to the cross-petitioner.
In August or September, 2013, the petitioner, the AIP and counsel met to discuss revising the will to leave additional property to the cross-petitioner. Over the course of the next several weeks, the will was revised, and in fact corrected, as originally a 6.6 acre parcel was duplicated in the bequest to each child. She met with the AIP alone in her office, showed her the various survey maps of the properties. The AIP decided that the 6.6 acre parcel would be divided, and indicated where the boundary line should be located.
The witness had also received, at that time, two different emails from the cross-petitioner containing “marked-up” copies of the original will, indicating what he conceived of as “mistakes,” and which contained his suggested revisions and re-writes (Petitioner's Ex. 15 and 16). According to the witness, it was understood by the AIP and counsel that although cross-petitioner desired an equal division of the property, in view of the greater share of financial assistance he had received in the past, this was not what the AIP desired. She showed cross-petitioner's “corrections” to the AIP while meeting with her alone, and the AIP “laughed it off.”
The AIP came to counsel's office by herself on October 25, 2013, at which time she signed the revised will. The will differed only in that the properties were defined more clearly, the 6.6 acre parcel was divided, and the additional acreage was bequeathed to the cross-petitioner.
Following the execution of the second will, the witness received a phone request from cross-petitioner asking that the witness prepare a will for him. The witness found the request to be odd, as the cross-petitioner lived in Connecticut, and she was admitted only in New York. Later, the AIP sent the witness a note requesting that she not do any work for her son. The AIP then called and reported to the attorney that her children were fighting over the will. The witness suggested that a trust be created.
In December, 2013, the AIP indicated that she wanted a trust created, and that counsel should act as the trustee. In the interim, while the trust instrument was being drafted, the AIP had a stroke and was hospitalized on January 12, 2014.
On January 15, 2014, the cross-petitioner, who was in the hospital with the AIP, called Bethany Ralph from the AIP's hospital room, in the presence of the AIP. He placed the AIP on the phone, and she indicated that she consented to a discussion of her affairs with her son. The cross-petitioner indicated that he discovered that the petitioner had been appointed as a attorney-in-fact under a power of attorney, and that “this can't be.” Further, he stated that he had obtained money from joint accounts, and he asked if he could be “liable,” and if the money could be recovered. He was advised that the witness could not counsel him on these matters.
The witness had been advised that the cross-petitioner removed approximately $270,000 from a joint account with the AIP. According to the witness, the AIP stated that “she [the AIP] didn't know how he [the cross-petitioner] had done that [i.e., removed the $270,000] and she didn't tell him he could do that.” Some of these funds ($135,000) had been generated by the sale of a parcel of the Sharon property, which was under contract at the time the second will was signed. It was counsel's understanding that the $135,000 was to be used to “improve Mrs. S.'s life ... putting a powder room on the first floor of the [Riverdale] house and possibly an elevator.”
The witness finalized two trust documents, one version being based on the possibility that those joint funds taken by the cross-petitioner might be restored to the account. The trust instruments were brought to the rehabilitation facility, where the AIP was recuperating subsequent to her stroke, on February 19, 2014. Although the AIP had suffered a stroke, she had “recovered amazingly.” Bethany Ralph and the AIP reviewed the trust documents at length, and discussed alternatives to protect the remaining funds, such as the commencement of an Mental Hygiene Law Article 81 proceeding, and her consent to the appointment of a guardian.
On that same February 19 visit, Ms. Ralph also brought a deed transferring the AIP's remaining interest in the Riverdale home to the petitioner. This was done to protect that asset in the event the cross-petitioner attempted to place a mortgage on the property-either by having the AIP sign documents unknowingly, or by assuming the AIP's identity.
The AIP executed the documents with the understanding that the trust funds were “to be dedicated to her needs, and then on her passing, it would go to Caryl [the petitioner] since Kenneth [the cross-petitioner] had already taken [his share].” The purpose of the trust, according to the witness, was to protect the AIP's assets, because the cross-petitioner had “been moving money around,” and had taken the $270,000 without permission.
Subsequent to the execution of these documents, the cross-petitioner contacted Louise Brown, a Connecticut attorney, to attempt to transfer parts of the Sharon property to himself. Ms. Brown confirmed that deeds had been prepared. The AIP allegedly decided that the Sharon properties would be deeded to the petitioner so that the cross-petitioner would not obtain them. When the witness went to visit the AIP in Riverdale in April, 2014, to effectuate the transfer of the property to the petitioner, “[s]he wasn't the same person that I hade seen in the rehabilitation center ... [s]he was confusing [cross-petitioner] with her husband.” Further, the documents she had agreed to sign the day before, she now “had to think about it,” because the Riverdale house was worth more than the house in Sharon—a sentiment that the cross-petitioner had voiced. She refused to sign the deeds, and that was the last contact the attorney had with her.
In other words, her testimony was that the AIP was competent on February 19, approximately five weeks after her stroke, but was confused and unfocused two months later, in April, 2014, which was three months after her stroke. Ms. Ralph did not state that the AIP was incapacitated in April—she did not reach that conclusion because the AIP refused to effectuate any transfers, and thus it was not necessary for her to form a judgment on the matter.
In September, 2014, the witness became the attorney for the petitioner, and drafted the petition in the instant proceeding.
Testimony of Kenneth S.
Mr. S., a 67–year–old high school technology teacher employed at a school in Connecticut, is married to his third wife, and resides with her and his 13–year–old son in Connecticut. He also has four adult children, from prior marriages, who do not reside in the home. He testified that neither he nor his wife were ever convicted of a crime or filed for bankruptcy.
This testimony was contradicted by the introduction of a certified copy of documents from the Bankruptcy Court of the Southern District of New York indicating that in fact the cross-petitioner had filed for bankruptcy.
The cross-petitioner testified that he and the AIP together called a school where the AIP had previously worked to find an attorney. He was directed to call Lorraine Coyle, Esq. He denied knowing Ms. Coyle prior to calling her on behalf of his mother. He also testified that despite having been advised that a Court Evaluator might be appointed, he did not know what a Court Evaluator was, yet he purported to believe that the Court Evaluator need not be permitted access to the home, or to speak with the AIP.
The facts concerning the retention of Ms. Coyle, and the cross-petitioner's role in selecting counsel and in attempting to prevent the Court Evaluator from speaking with the AIP, are fully set forth in this Court's prior published opinion in this case, which was previously cited. The cross-petitioner's testimony was a blatant attempt to mischaracterize his role in these events, and to undercut the factual findings of the Court. The Court lends no credence to this part of the cross-petitioner's testimony.
The cross-petitioner confirmed that he was not speaking to the petitioner, and indicated that they had not “communicated” for some twenty years, and indeed, that he sought treatment at a hospital after she slapped him in the face on one occasion. He indicated that it was his sister and her son who in fact were a financial burden to his mother and father, and were required to send the petitioner's son to camp, “and pay for a lot of things my sister couldn't afford. And so, it was always about money. It was always about needing more money.” He testified that his parents gave $30,000 to his sister's son. He later clarified that each of his five children also received $30,000 for their college education from his parents, but that the petitioner wanted $150,000 for her son so that the total payments would be equal.
The cross-petitioner testified that for two years prior to his father's death, he did most of the upkeep and repairs needed to maintain their Sharon property as well as the Riverdale home. He provided his labor for free, although the AIP paid for the materials.
According to the cross-petitioner, his parents wanted their property to be equally divided between his sister and himself, meaning that each would receive property of equal value. They were mistaken as to the value of the Sharon properties, which ultimately were worth much less than they had initially anticipated, and were certainly not worth the same as the Riverdale property. By way of example, the last sale of 36 acres only sold for $132,000.
According to his testimony, much of the Sharon property was still titled in the name of the estate of the AIP's mother. The AIP was the sole executrix of the estate and sole beneficiary.
The AIP was able to ambulate, drive a car, feed and dress herself, and take care of her activities of daily living after her husband died, although she used a cane more often. She uses an emergency device which alerts responders if the AIP falls or has some other emergency. The device works anywhere where cell phone coverage is available. As the house in Sharon has no cell phone coverage, she must carry a cordless phone at all times to summon help. In 2013, she in fact slipped off the bed and could not get up, and used the phone to call for help.
The cross-petitioner testified that his nephew and his nephew's girlfriend moved into the Riverdale house without notice and without permission. Later, the AIP agreed to let them stay a month, and they remained for approximately ten months. During that time, the utility bills doubled. His nephew did not pay any bills, had parties of which the neighbors complained, and announced that the house would eventually be his anyway. On numerous occasions he menaced or attempted to choke the cross-petitioner.
The cross-petitioner takes his mother to physicians appointments, and has her health care proxy. She has osteoarthritis of the left knee, which requires regular cortisone shots, and physical therapy. She is on a low-cholesterol diet.
The AIP did not want to remain in Riverdale—in fact, she desired to sell the Riverdale house, and indicated that to the cross-petitioner. In January and February, 2013, the AIP and the cross-petitioner in fact spoke with brokers with respect to selling the Riverdale house and purchasing a less expensive home. During this time they also discussed the AIP's options for paying for home care, and the availability of Medicaid for that purpose.
The AIP has monthly income of $1,360 in Social Security benefits, a monthly pension from her employment in the amount of $733, and a portion of her late husband's pension which is $2126 monthly.
The cross-petitioner admitted that he transferred $270,000 of the AIP's funds to a custodial savings account in his own name in trust for his son on January 13, 2014, the day after the AIP was taken to the hospital for her stroke. He testified that the funds were in an account held by the AIP and her husband. At some time prior to 2014, he had added his name to the account with the AIP's permission (Account 1701). In the Fall of 2013, his mother sold a property in Sharon for $132,000, and the proceeds of the sale were placed into Account 1701, bringing the total balance in Account 1701 to $270,000.
The cross-petitioner testified that the purpose of these transfers was to “balance out the will,” as the petitioner was receiving the Riverdale house, which was much greater in value than the Sharon house and properties which he was to inherit.
Further, the cross-petitioner also testified that he believed his mother needed to reduce her assets for the purpose of Medicaid planning. After consultation with numerous individuals, he came to believe that the AIP could only retain $14,500 in the bank, and that if she paid her bills through a pooled trust, she could also retain $829 per month. According to the cross-petitioner, his intention was to secure “community Medicaid” for the AIP, so that she could continue to reside in the community. To this end, he used the AIP's assets to purchase two CDs valued at $100,000 each. Originally, the CDs were to be held jointly, but for Medicaid purposes, they were placed in his name, in trust for the AIP. Eventually, these CDs were dissolved and the money deposited into an account for his business.
The cross-petitioner further testified that in order to receive Medicaid benefits, the AIP would need to maintain a residence in New York. As a result, there was discussion about the AIP moving to another property within the State. He purportedly went forward with plans to establish Medicaid for the AIP in New York so that the AIP could receive 24 hour home care. Nonetheless, he also used the AIP's funds to make improvements on his wife's home in Southport, Connecticut, ostensibly in preparation for the possibility of the AIP moving into that home.
On January 16, 2014 the cross-petitioner transferred $9,000 into his personal checking account from Account 1701. On February 3, 2014, the cross-petitioner transferred $12,734.37, funds from the AIP's monthly income, into his personal checking account. Although confronted with checks used to pay his wife's personal mortgage in January and February, 2014, with funds derived from his mother's accounts, the cross-petitioner flatly stated that “I never paid my mortgage with my mother's money”—even though he then admitted that he used $50,000 of the AIP's funds from Account 1701 to “pay down” his wife's mortgage. He later stated during cross-examination that he “would not be surprised” that a total of $81,661.58 derived from his mother's money was used to pay his wife's mortgage from February 1, 2014 to October 1, 2014.
As previously stated, $270,000 was taken from Account 1701 and placed in personal accounts controlled by the cross-petitioner, in which the AIP had not interest. For the sake of simplicity herein, the Court employs the language “from Account 1701” to mean that the funds were originally derived from that account, albeit placed in a different account by the cross-petitioner.
The Southport, Connecticut home the cross-petitioner resides in with his wife and son is titled in the name of his wife. Further, the mortgage is solely in his wife's name as mortgagor.
In other words, $50,000 was used from Account 1701 to make a one-time payment to “pay down” his wife's mortgage, and other payments were made for monthly payments, all of which in full totaled $81,661.58 in payments to the bank holding his wife's mortgage.
The cross-petitioner testified that none of the AIP's funds were used for his personal benefit. Nevertheless, he admitted that from the $270,000 in Account 1701, he spent $6,000 taking his wife and 13–year–old son on a trip to Disney World, because “my mother gave me [the money] to go.” He used an additional $4,000 for surveys of the Sharon property; $12,000 to build a road on Sharon property; $2,200 on grave sites; and $11,500 to a Connecticut attorney to “get the money back from Caryl [the petitioner] for my mother,” although no proceeding was commenced. He claimed that he paid $600 monthly on groceries for his mother, again, without submitting any proof other than his testimony. He claimed that he spent approximately $17,000 on repairs for the Riverdale house, which he personally performed, graciously only charging his mother for the materials. He produced no receipts, photographs, or documentation supporting any of the foregoing expenses, all of which he claimed were for the AIP's benefit. Pursuant to this Court's Order, he turned over $98,000 to the Court Evaluator at the commencement of the proceeding, and he paid $15,000 as a retainer to Lorraine Coyle, Esq., which was returned to the Court Evaluator. He pays for his mother's cellular phone on his own family plan cellular phone bill, and charges his mother back one-third of the bill.The cross-petitioner also testified that beginning in June, 2014, he used the AIP's funds to renovate his wife's home in Southport, Connecticut, claiming that he did so to prepare for the contingency that his mother might need to move in—despite her ownership of two homes. These improvements included landscaping and erecting a privacy fence. He denied that these improvements were for his benefit, or that they increased the value of his wife's property. He “guessed” that he spent $30,000, and that he was building a two-bedroom suite for his mother's benefit—again, without submitting any photographs, plans, documents, contractor's bills or other supporting evidence (other than bank statements and his own testimony). He admitted on cross-examination that in fact, at present, despite the payments from his mother's funds, there is no apartment in “his” home (i.e., the home owned by his wife in which he resides) in which his mother could reside.
A few minutes later during his testimony, he changed this figure to $10,000.
The cross-examination of the cross-petitioner is rife with his admissions that he used the AIP's funds to pay for his gas, car lease payments, a bed for the Riverdale home for his son to sleep on when he visited, Starbucks, McDonald's, and myriad other expenses, all of which he steadfastly maintained were for the AIP's benefit.
From December, 2013, to September, 2014, four deeds were executed by the AIP transferring property in Sharon to the cross-petitioner. Nevertheless, the cross-petitioner admitted that the property taxes on these four properties were paid from an account into which his mother's monthly income was deposited.
Testimony of the AIP
Valerie S. was present throughout the case in a wheelchair, assisted by an aide. She testified that she believed she still owned land in Sharon, Connecticut and a home in Riverdale. She testified that, “I know I'm giving my son the Connecticut property,” but that, “I don't want to do it right now.” She admitted that, “I need a guide or something like that.” She did not like the visitation schedule because it was “inventive” (meaning invasive), and she thought the children could settle “their own mechanical means.” She did not recall seeing the attorney who drafted her will (Bethany Ralph) in court. She signed the deed to Ken “to get the stuff out of my space, to get my space empty.”
The AIP testified that she “had some notes” about what she wanted to say in court, “because my son called me.” Her son had called her several times during the pendency of this proceeding to tell her what she had to say to the Court, and she had written down exactly what her son had told her to say on each occasion in her notebook.
The notebook pages were entered into evidence, showing that the AIP had written the same list of “things she wanted” a number of times in her notebook. One of these identical, numbered lists which the AIP wrote down based on her conversation with her son, for example, recited as follows:
The Court notes that the Order of December 9, 2014 provided that no party was to make phone calls to the AIP without prior Court approval.
1. Riverdale house returned to Valerie S..
2. I want Medicaid.
3. Caryl should return all the money.
4. Ken should pay the bills.
5. Ken should keep the money and assets transferred to him.
6. My will should equalize the value of inheritance for my children.
7. The Court should not give me a guardian. My son manages my care.
She stated that she had never signed a power of attorney. She did not know why a trust (which she defined as “a bunch of money that they keep separate”) was created for her, and denied asking anyone to do so. She did not want to reside with her son, and had never indicated that she would. She denied that she gave her son, the cross-petitioner, permission to use her money to “pay down” his wife's mortgage.
Court Evaluator's Testimony
The Court Evaluator testified that the AIP clearly requires the appointment of a guardian. He is an accountant, and has expertise in Medicaid planning, and he testified that the trust created by Bethany Ralph was not a “Medicaid trust,” and thus the corpus of the trust would be available to the AIP for Medicaid purposes. He was adamant in his opinion that the cross-petitioner, in view of his use of the AIP's assets for his own personal benefit, should not be appointed as guardian. Moreover, the petitioner could not serve as guardian of the property, as she would not have the ability to “stand up to her brother.” He suggested that she might be appointed as co-guardian of the person.
Mark Goldstein, Esq., testified that in conducting his investigation, he spoke with, inter alia, the petitioner; the cross-petitioner; the AIP; the AIP's home aide, Heddie Madden; and the AIP's estate planning attorney, Bethany Ralph, Esq. He also reviewed documents, including bank records, medical records, deeds, and trust instruments.
As more fully explicated below, during the pendency of this proceeding, Mr. Goldstein assumed the responsibility of, inter alia, paying the AIP's bills and hiring a 24–hour live in aide for the AIP. Mr. Goldstein retained the services of a 24–hour live-in aide, met with the aide, advised her of the visitation order in place, and instructed her to report to him.
The AIP is a former teacher, who resides in her home in Riverdale. She is widowed, and has two children-the petitioner and cross-petitioner herein. The AIP owned two homes-one in Riverdale and one in Connecticut-and numerous pieces of property in Connecticut. The AIP receives $726, $1,335, and $2,160 per month representing her pension benefits, Social Security benefits, and her husband's pension, respectively.
The petitioner provided Mr. Goldstein with many of the documents he reviewed in this matter. She also arranged for Mr. Goldstein to meet with the AIP at the AIP's home. Mr. Goldstein found the petitioner to be forthcoming, and opined that much of what she told him during their interviews, was supported by the evidence borne out during this proceeding. According to the petitioner, the AIP's husband died in October, 2012, and shortly thereafter, the cross-petitioner became heavily involved with the AIP's finances and assets. At this time, he also kept petitioner from spending substantial time alone with the AIP. In January, 2014, the AIP suffered a stroke, and thereafter, the cross-petitioner began to exert even more control over the AIP's life.
However, as is discussed in the Court's prior decision in this matter disqualifying AIP's original counsel, Lorraine Coyle, Esq. (see Matter of Caryl S.S. [Valerie L.S.], 45 Misc.3d 1223[A] at *5 n. 5 ), the cross-petitioner interfered with the Court Evaluator's ability to conduct his interview with the AIP on this pre-arranged visit.
Mr. Goldstein was only able to briefly speak with cross-petitioner, who did not make himself available for an interview with the Court Evaluator. Instead, any communication with him was limited, and was only conducted via his counsel. He not only found the cross-petitioner to be less available than the petitioner, but also less forthcoming. His investigation revealed that despite the cross-petitioner's testimony to the contrary, he had filed for bankruptcy in 1995.
Mr. Goldstein also stated that he was never told by cross-petitioner's counsel that he could not speak with him. He further stated that he never asked to speak with cross-petitioner, and that he believed he did not need to speak with him after he received the documents he subpoenaed.
The records obtained from the Bankruptcy Court, entered into evidence on consent of the parties indicate that cross-petitioner filed for bankruptcy in November, 1992, was discharged from bankruptcy in May, 1993, and the bankruptcy terminated in January, 1995.
As per the Court Evaluator's report, on November 14, 2014, Mr. Goldstein attempted to interview the AIP at her home in Riverdale. Upon his arrival, he was greeted at the door by the AIP's aide, who stated that she could not let him into the home. The aide further stated that although the petitioner had advised her of this meeting, the cross-petitioner had instructed her to not let Mr. Goldstein inside. Although he presented the aide with the Court Order permitting him to speak with the AIP, she still refused him entry because of cross-petitioner's directive. Mr. Goldstein went to the local police precinct, and returned to the AIP's residence with police officers. No one responded to the knocks on the doors, but the AIP answered the telephone. She initially stated that although she had expected Mr. Goldstein, she could not let him into the home because the cross-petitioner had told her not to. The AIP eventually instructed the aide to let him into the home. He attempted to discuss the petition with the AIP in her bedroom, however, their conversation was interrupted by several phone calls to the AIP. After one of the phone calls, the AIP indicated that her attorney instructed her to not speak to him, and to ask him to leave. She was unable to provide the name of her attorney. Subsequently, cross-petitioner called, and Mr. Goldstein spoke with him over the phone. The cross-petitioner stated that Mr. Goldstein could not speak to the AIP, and instructed him to leave the AIP's home.
Bethany Ralph, Esq., indicated to Mr. Goldstein that the AIP's original will that was drafted for both the AIP and her now-deceased husband, represented their true intent regarding the disposition of their assets. She also stated that when the first trust was drafted, it incorporated all of the AIP's assets. However, as a result of the cross-petitioner's transfers of certain of the AIP's assets, the trust was revised, and only the assets over which the petitioner had control went into that trust. According to Ms. Ralph, the impetus behind the drafting of the trust was that both she and the petitioner were concerned that there would be no assets available to the AIP, and secondly, that the AIP and her husband's distribution plan would never be effectuated because the cross-petitioner would have taken all of the assets.
Ms. Ralph provided Mr. Goldstein with a copy of the trust instrument, which he reviewed. The trust is an irrevocable trust which provides for the AIP to be taken care of during her lifetime, and upon her death, the remaining assets would go to the petitioner. Based on his investigation, the petitioner did not use any of those assets for her own benefit. Based on his experience and expertise in Medicaid planning law, and his qualification as a Certified Public Accountant (C.P.A.), the trust was not a Medicaid trust. He opined that where, as here, one of the beneficiaries had a life estate and there are discretionary powers to invade the trust corpus for that person's benefits, those funds would be available for Medicaid to go against.
As per this Court's orders, during the pendency of this proceeding, Mr. Goldstein also assumed the responsibility of paying the AIP's bills, and supervising the AIP's visitation. He testified that the order for alternate day visitation had been effective, and that it allowed for both the petitioner and cross-petitioner to visit the AIP. He recommended that the visitation order continue permanently, with the proviso that the cross-petitioner's visits be supervised. He recommended supervised visitation based on information garnered from the AIP's home aide, Heddie, which indicated that cross-petitioner was badgering the AIP and telling her what to do and say. This badgering, he opined, was further evidenced by the AIP's testimony concerning a list of what she should tell the Court her desires were. He further recommended that cross-petitioner, not the AIP, pay for the supervised visits.
Mr. Goldstein believed that the AIP was incapacitated and required a guardian to manage her personal needs and property. He recommended the Court appoint the petitioner as co-guardian of the AIP's person, and not appoint the cross-petitioner in any capacity. The cross-petitioner, he believed, exerted too much control over the AIP and influenced her to do things, and was thus not a suitable guardian. The petitioner was not suitable to serve as property guardian, solely because she would “not be strong enough to be able to deal with her brother.” Mr. Goldstein also recommended that the cross-petitioner be ordered to submit a full judicial accounting with 30 days of the issuance of the order and judgment, and that he be deposed within 30 days thereafter. In addition, he recommended that cross-petitioner be surcharged for any money which he took from the AIP and spent for his benefit, and that attorneys' fees and costs for this proceeding be assessed against him.
In his supplemental court evaluator's report, submitted after the conclusion of the hearing, Mr. Goldstein indicated that 36 acres of land in Connecticut, was sold for approximately $132,000. The hearing testimony and documentary evidence revealed that cross-petitioner had used those funds for the benefit of him and his wife. Approximately $60,000 was used to pay down the principal on a mortgage on the home occupied by cross-petitioner and his family, but owned by his wife; and an unspecified sum was used to make improvement's to his wife's home. $6,000 was used for a trip for him and his family to go to Disney World, and $26,000 was used to cover the cost of the expenses associated with other Connecticut properties formerly owned by the AIP, but which cross-petitioner had transferred to himself. Another $7,500 was used to pay an attorney to commence an action against the petitioner to compel her to return the assets placed in the trust. Approximately $150,000 was also transferred from the AIP's accounts into accounts solely controlled by the cross-petitioner. On one of those accounts, cross-petitioner was the guardian for his youngest son.
Mr. Goldstein's supplemental report also indicated that the petitioner had “transferred the [A]IP's Riverdale residence and certain bank accounts into an irrevocable trust under which the [A]IP was the [lifetime] beneficiary, and [petitioner was] the remainder beneficiary.” He opined that placing these assets in this trust “was a wise decision to protect those assets from [cross-petitioner] gaining control and using the assets for his family or his benefit.”
Mr. Goldstein further indicated that cross-petitioner had provided false testimony, including that he had not filed for bankruptcy. During the time that he was charged with paying the AIP's bills, Mr. Goldstein received numerous unreasonable requests from cross-petitioner, including requests that the AIP's assets be used to pay for Christmas meals, and to purchase Christmas gifts for certain family members.
Mr. Goldstein also interviewed the AIP, who informed him that she wished to reside in her Riverdale residence for most of the year, and in her Connecticut residence during the summer.
Based on the above, Mr. Goldstein further recommended, among other things, the institution of a proceeding to hold the cross-petitioner in contempt of court for his wilful failure to adhere to the court's visitation order, which indicated that no phone calls were to be placed to the AIP; and that the guardian of the property commence a proceeding under Mental Hygiene Law § 81.43, to discover and recover all property that was taken from the AIP by the cross-petitioner.
Appointment of Temporary Guardian
At the conclusion of the hearing, the Court determined that the appointment of a temporary guardian was required to oversee the visitation order issued by the Court, to receive the IP's monthly income and funds held by the Court Evaluator, and to pay the IP's expenses until the appointment and qualification of a permanent guardian.
In an Order dated February 10, 2015, the Court appointed Deidra Moore, Esq., as Temporary Guardian for the IP, Valerie L. S.. As per the Order, the Temporary Guardian was authorized to receive the funds held by the Court Evaluator, establish a guardian account for the payment of the AIP's necessary expenses, and enforce the December 9, 2014 visitation order. In addition, the cross-petitioner's visits were to be supervised visits, at his own expense. The temporary guardian was also given the power to determine the IP's social environment, and to make medical decisions on the IP's behalf.
Discussion
For the following reasons, the Court finds the AIP to be an incapacitated person (IP).
The testimony clearly showed that the cross-petitioner obtained $270,000 in the IP's funds after her stroke, and that he used the funds to benefit himself and his family. The Court does not credit any of the cross-petitioner's testimony that the IP benefitted from any of the funds. In particular, the use of the IP's funds to reduce the mortgage on the cross-petitioner's wife's home, and to pay for improvements, was and is of no benefit to the IP. She never resided in or even slept at his wife's home in Southport, Connecticut, and there was never a realistic plan for her to do so. The alleged “suite” being built for her never came into existence, and there was no proof by photographs or any other competent evidence that any actual plan to build her living quarters existed. Even if such a plan really existed, the use of the IP's funds for that purpose would have been exceedingly foolhardy, as the property is titled in the name of the cross-petitioner's wife, and the IP would have no legal basis to protect her ability to reside in the home. The Court finds, in accord with the credible testimony and evidence, that the cross-petitioner employed all of the funds for his own benefit, for trips and other personal expenses, and that specifically that $157,000 was improperly taken and used by the cross-petitioner for his own purposes (i.e., $270,000 diverted to Account 1701, less the $98,000 turned over to the Court Evaluator and the $15,000 used to retain Lorraine Coyle, Esq., which was refunded by her to the Court Evaluator).
These are not the only funds which are at issue. The Court notes that the cross-petitioner received the IP's monthly income of $4,000 for a substantial period of time. Commencing in April, 2014, the IP's monthly income was directed to bank accounts which were controlled by the cross-petitioner. The Court has not heard, in the course of these proceedings, a satisfactory explanation as to the disposition of these funds. The guardian appointed herein will be required to investigate and if necessary recover these funds and any other property of the IP from the petitioner or the cross-petitioner as the case may be following investigation.
From the outset of this litigation, the petitioner sought to show that her conduct was wholly justified by her attempt to avoid the predations of the cross-petitioner on the IP's assets. It is true that he has been relentless in his attempts to gain control over his mother's assets. Nevertheless, while the petitioner sought to portray the establishment of the trust as a benefit to the IP, it is clear that the purpose of the trust—as was admitted—was to protect the petitioner's “inheritance.” While the petitioner's attempt to “protect herself” is understandable, the fact remains that the trust was established for her benefit, not the IP's benefit. Moreover, the transfer of title of the Riverdale home was undertaken not as any part of a planned Medicaid transfer, but again, was motivated by the petitioner's efforts to save for herself the home she believed she had been promised. Tellingly, the trust established by the petitioner has not been used to benefit the IP, or to pay her expenses, and the trustees are in fact not legally obligated to pay the IP's expenses. The trust has been used to “park” assets and to protect them for the beneficiaries of the trust to whom the remainder will be paid when the IP dies—i.e, the petitioner and her son.
Petitioner and to some extent Bethany Ralph lost sight of the fact that even if it was intended by the IP and her husband that the petitioner would receive more than her brother in any bequest, that intent did not entitle the petitioner to effectuate the transfers of assets during the life of the IP, when the IP's own interests, health, and need for assistance were still paramount.
In short, the result of the conduct of both the petitioner and the cross-petitioner has been to leave the IP without assets, other than a life estate in her own home, while they transferred her property to themselves, or in the case of the trust, to a vehicle which would protect the IP's funds for themselves. In the process, the “collateral damage” has been the stress placed on the IP's mental and emotional health resulting from the continual strife and discord of the “war” waged by the petitioner and the cross-petitioner to obtain the IP's property before her death, and her loss of almost all of her assets.
Moreover, the record is rife with testimony that the parties were merely carrying out the wishes of the IP, when it was evident to the Court that the IP had no reasoned input in the particular transaction or event. In the case of the cross-petitioner, there are numerous examples of this, including his own testimony, which bordered on the absurd, that the IP wanted him to “spend down” his wife's mortgage, spend $6,000 on a family trip to Disney World, or reconfigure his wife's house to build the IP an apartment, when the IP owned two homes. But it was equally apparent to the Court that the petitioner also engaged in transactions for her own benefit, as to which the IP had not made any reasoned determination. This was exemplified by the testimony that Bethany Ralph took the petitioner to the side and suggested executing a power of attorney in her favor, outside of the presence of the IP or the cross-petitioner. Most tellingly, the transfers benefitting the petitioner were made during and following major stressful events for the IP, including the death of the IP's husband of sixty years, on whom she relied for both emotional support and financial decision-making, intense fighting over the will which necessitated executing a revised will, a stroke, and rehabilitation following the stroke. The result is that the record is replete with instances of transfers and transactions benefitting one party or the other, all of which were allegedly approved and sanctioned by the IP. It is clear that the IP was incapacitated and unable to resist the pressure brought to bear on her by both of her children, each of whom was acting primarily for his or her own self-interest.
Equally incredible was the cross-petitioner's testimony that the IP dictated the numerous notes and interlineations of the “marked up” copy of her will, and that the cross-petitioner merely assisted or transmitted the document from his own email account.
Bethany Ralph frankly admitted that she did not discuss the power of attorney with the IP at that time, but that she had generally described the use of a power of attorney during earlier discussions.
The Court finds that the IP and her husband initially determined to divide their property to “favor” the petitioner by leaving her a greater portion of the estate. The first will reflects this estate plan. The second will was changed due to the unbearable pressure imposed on the IP by the cross-petitioner. These matters, however, are entrusted to the Surrogate's Court. Under MHL 81.29(c), “[t]he court shall not ... invalidate or revoke a will or a codicil of an incapacitated person during the lifetime of such person.”
Indeed, the petitioner and the IP's counsel Bethany Ralph were primarily concerned with securing the petitioner's alleged entitlements by creating the trust, and they neglected to consider the Medicaid consequences of the transaction.
This Court has the authority to set aside legal instruments as well as any “contract, conveyance, or disposition” where the petition in an Article 81 proceeding alleges, and the proof establishes, that the instrument or transaction was made while the person was incapacitated. (Mental Hygiene Law § 81.29[d] ; see Matter of Daniel TT. [Diane UU.], 39 AD3d 94, 830 N.Y.S.2d 827 [3d Dept.2007] ). In Matter of Rita R., (26 AD3d 502, 503, 811 N.Y.S.2d 89 [2d Dept.2006] ), the court invalidated various legal instruments, including an amended and restated agreement of trust, where petitioner established by clear and convincing evidence that each of the legal instruments was executed while the IP was incapacitated.
Incapacity is not the same as incompetence. Incompetence exists when “the person's mind was ‘so affected as to render him [or her] wholly and absolutely incompetent to comprehend and understand the nature of the transaction.’ “ (Feiden v. Feiden, 151 A.D.2d 889, 890, 542 N.Y.S.2d 860 [3d Dept.1989], quoting Aldrich v. Bailey, 132 N.Y. 85, 89, 30 N.E. 264 [1892] ).
Further, where there is a confidential relationship between the beneficiary of the transaction and the AIP, the beneficiary has the burden of establishing that the transaction was fair and free from undue influence. (Matter of Mildred M.J., 43 AD3d 1391, 844 N.Y.S.2d 539 [4th Dept.2007] [undue influence was not established in MHL Article 81 proceeding] ). Undue influence is “the product of persistent and subtle suggestion imposed upon a weaker mind and calculated, by the exploitation of a relationship of trust and confidence, to overwhelm the victim's will to the point where it becomes the willing tool to be manipulated for the benefit of another.' “ (Id. at 1392, quoting Matter of Collins, 124 A.D.2d 48, 53, 510 N.Y.S.2d 940 [4th Dept.1987] ).
The petitioner and the cross-petitioner have both failed to adduce any medical evidence as to the IP's mental status during the events in question. Their collective failure to do so can be explained by the simple truth that both of them stand to gain by a finding that the IP was not incapacitated when the transfers which benefit each of them were made. The Court credits the testimony of Bethany Ralph that as of April, 2014, the IP “wasn't the same person,” and that she was incapacitated at that time. The testimony that she was confusing the cross-petitioner with her husband accords with the Court's own observations in November, 2014, during the hearing on the selection of Lorraine Coyle as counsel, when the IP exhibited the same confusion. The Court does not, however, credit Bethany Ralph's testimony that the IP was miraculously not incapacitated on February 19, 2014 (when she executed the trust instrument and deed), slightly more than a month after she suffered a stroke and while she was still in rehabilitation. It defies logic to believe that the IP was not incapacitated after her stroke. The Court finds that the IP was incapacitated when the trust instrument and deed were executed on February 19, 2014, and that this incapacity has continued to the present. She was incapacitated when she executed the four deeds in favor of the cross-petitioner. Further, the Court finds that she did not, in fact, authorize the taking of the $270,000 by the cross-petitioner, and that even if she did, she was incapacitated at that time.
With respect to the Riverdale property, the deed to the petitioner gifting her half of the property was made following a time period when “things really escalated” in the summer of 2013, according to the testimony of the petitioner. On August 23, 2013, the IP transferred her interest in the Riverdale house to herself and the petitioner as joint tenants with right of survivorship. She allegedly did so “in response to my [petitioner's] fear that there would be a third will and in that third will I would be left no house.” The Court finds that this transfer was also made at a time when the IP was incapacitated, and that it was a result of undue influence by the petitioner. Significantly, the petitioner herself testified that the IP's mental acuity declined beginning in 2012, and became more severe in November and December, 2013. It is apparent to the Court that the IP was compelled to make this transfer as a result of the pressure of the discord between her children, and the relentless pressure placed upon the IP by the petitioner that the petitioner might not receive the house which she felt would always be hers. The transfer was a result of the exploitation of a relationship of trust and confidence by the petitioner, to overwhelm the IP's will to the point where the IP could not resist.
The Court accordingly vacates and annuls the foregoing transactions. All health care proxies and powers of attorney are vacated. The petitioner is directed to settle an order, separate from the judgment to be settled herein, directing the New York City Registrar of deeds to vacate the transfers of the IP's Riverdale property to the petitioner.
The parties are directed to turn over to the Guardian appointed herein, the property taken from the IP in accordance with the foregoing, executing appropriate deeds or other instruments to do so. In the event the petitioner or the cross-petitioner fail to turn over any real properties (in Connecticut or New York) or liquid assets (funds) to the Guardian to be appointed herein, the guardian shall take the following steps to obtain the property of the IP, if not voluntarily surrendered:
1. Recover $157,000 improperly taken and used by the cross-petitioner Kenneth S. for his own purposes (i.e., $270,000 diverted from Account 1701, less the $98,000 turned over to the Court Evaluator and the $15,000 used to retain Lorraine Coyle, Esq., which was refunded by her to the Court Evaluator); and,
2. Seek an accounting from the cross-petitioner Kenneth S. under Mental Hygiene Law § 81.43, and recover funds diverted from the IP's monthly income; and,
3. Commence proceedings in Connecticut pursuant to this Court's rulings to vacate the deeds of the Connecticut properties transferred to the cross-petitioner Kenneth S.; and,
4. Retrieve the trust funds of approximately $450,000 from petitioner Caryl S. S..
There exists a preference for the appointment of family members as guardian, although that guiding principle can be overcome when the circumstances warrant. (See Matter of Gustafson, 308 A.D.2d 305, 307, 764 N.Y.S.2d 46 [1st Dept.2003] [“The established preference for a relative may be overridden by a showing that the proposed guardian-relative has rendered inadequate care to the IP, has interests adverse to the IP or otherwise is unsuitable to exercise the powers necessary to assist the IP.”] [Citations omitted.] ) The Court has weighed the various factors involved, and declines to appoint either child as guardian. It has been held that “bitter dissension between the incapacitated person's family members justifie[s] the appointment of a neutral third-party guardian.” (Matter of Ollie D., 30 AD3d 599, 600, 817 N.Y.S.2d 142, 143 [2d Dept.2006] ). The conduct of both the petitioner and the cross-petitioner in advancing their own interests, and in being guided by their overriding desires to secure their own inheritance, has been unacceptable. To be sure, the egregious and manipulative conduct of the cross-petitioner has been the more extreme, and given his overreaching behavior, his history of financial unreliability, and his extreme disregard of the rights of the IP and the abuse of his position of familial trust, he is clearly unfit to be appointed as guardian. With respect to the petitioner, her inability to reach a consensus with the cross-petitioner, and her own unrelenting efforts to obtain title to the Riverdale property and the trust assets, without taking into account the IP's needs or the potential effect on Medicaid eligibility, combined with the history of family discord, suggests that a third party be appointed so as to avoid continuing familial strife and disruption in the life of the IP.
As to the Court Evaluator's suggestion that petitioner might be appointed as co-guardian of the person, because, as the Court Evaluator suggested, she does not have the ability to “stand up to her brother,” she would not be a suitable co-guardian of the person. Moreover, even giving her a limited role would serve to exacerbate the existing family discord.
A guardianship of the person and property is required for an indefinite duration.
CONCLUSIONS
Upon the testimony taken at the hearing and the documents submitted, the Court will appoint Deidre Moore, Esq., the Temporary Guardian, as guardian of the IP's person and property.
The guardian of the person shall be granted the following powers:
a) to determine who should provide personal care or assistance;
b) to make decisions regarding the social environment and other social aspects of the life of the incapacitated person. In this regard, the Visitation Order dated December 9, 2014–as modified by the Order appointing a temporary guardian dated February 10, 2015–shall remain in full force and effect. The terms of said Order shall be incorporated into the final Order and Judgment to be entered herein;
c) to choose the place of abode for the incapacitated person, including, but not limited to a nursing home or community residence. However, all efforts should be made to maintain the IP in her current residence in the community, or in another residence in the community. Any decision to change the IP's place of abode to one other than her current residence, including placement in a nursing home, shall only be carried out upon further Order of the Court;
d) to authorize access to or release of confidential records;
e) to consent to or refuse generally accepted routine or major medical or dental treatment subject to the provisions of § 81.22(a)(8) of the Mental Hygiene Law dealing with life sustaining treatment; the guardian shall make treatment decisions consistent with the findings herein pursuant to Mental Hygiene Law § 81.15 and in accordance with the incapacitated person's wishes, including the incapacitated person's religious and moral beliefs, or if the incapacitated person's wishes are not known, and cannot be ascertained with reasonable diligence, in accordance with the incapacitated person's best interests, including a consideration of the dignity and uniqueness of every person, the possibility and extent of preserving the incapacitated person's life, the preservation, improvement or restoration of the incapacitated person's health or functioning, relief of the incapacitated person's suffering, the adverse side effects associated with the treatment, any less intrusive alternative treatments, and such other concerns and values as a reasonable person in the incapacitated person's circumstances would wish to consider; and
f) to determine whether the incapacitated person should travel.
The guardian of the property will be granted those powers listed under Mental Hygiene Law § 81.21 which are necessary and sufficient to provide for the management of the incapacitated person's assets. Those powers include as follows:
a) to make reasonable expenditures from the incapacitated person's assets, for the purpose of providing support of the incapacitated person in the event the annual income is insufficient to meet the incapacitated person's needs;
b) to marshal and invest the incapacitated person's assets in investments eligible by law for the investment of trust funds and to dispose of investments so made and reinvest the proceeds as so authorized;
c) to pay any existing debts or claims which have been proven to the satisfaction of the Guardian as being properly due and owing;
d) to preserve, protect and account for such property faithfully; to retain or employ attorneys, accountants or other professionals to assist in the performance of the duties of the Guardian;
e) 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 the 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 the authorization of the court, lease any real property for a term not exceeding five years;
f) to pay funeral expenses;
g) to engage in Medicaid planning, however any transfers of assets shall be effectuated only upon proper application to the Court;
h) to file tax returns and pay tax liabilities;
I) to defend or maintain any civil judicial proceeding. The guardian shall attempt to recover the IP's funds and real property including as follows:
1. Recover $157,000 improperly taken and used by the cross-petitioner Kenneth S. for his own purposes (i.e., $270,000 diverted from Account 1701, less the $98,000 turned over to the Court Evaluator and the $15,000 used to retain Lorraine Coyle, Esq., which was refunded by her to the Court Evaluator); and,
2. Seek an accounting from Kenneth S. under Mental Hygiene Law § 81.43, and recover funds diverted from the IP's monthly income; and,
3. Commence proceedings to recover title to the Connecticut properties transferred to the cross-petitioner Kenneth S.; and,
4. Recover the trust funds of approximately $450,000 from Caryl S. S.;
j) to apply for government and private benefits on behalf of the incapacitated person.
These powers constitute the least restrictive form of intervention consistent with the incapacitated person's functional limitations.
The compensation of the guardian shall be fixed pursuant to SCPA 2307.
A bond will be fixed in an appropriate amount in the Judgment to be settled herein.
The guardian shall file an initial report and annual report, in accordance with Mental Hygiene Law §§ 81.30 and 81.31 with the Guardianship Department of Bronx County, Room 6M–10, 851 Grand Concourse, Bronx, New York. Failure to file said reports may result in the removal of the Guardian.
The Guardian is directed upon the death of the IP to submit a copy of this Decision to any Court presiding over any probate proceeding concerning the distribution of the IP's assets.
The judgment to be entered herein shall contain appropriate language ordering that the conveyance of the Riverdale property be set aside, and directing that the City Register of the City of New York shall delete from its records the deeds conveying interests in the Riverdale property to the petitioner, and title to said property is reinstated in the name of IP Valerie L. S..
Petitioner is directed to file a copy of this Order, Notice of Settlement, Proposed Order and Judgment in accordance with Mental Hygiene Law § 81.16(c) within 30 days hereof with the Guardianship Clerk in Room 6M–10, Supreme Court, Bronx County, 851 Grand Concourse, Bronx, N.Y. 10451.
Settle Order and Judgment within 30 days after the date hereof.