Matter of Heitner

[*1] Matter of Heitner 2006 NY Slip Op 51454(U) [12 Misc 3d 1185(A)] Decided on July 19, 2006 Supreme Court, Nassau County Phelan, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 19, 2006
Supreme Court, Nassau County

In the Matter of the Application for a Decree Releasing and Discharging Joel S. Kaplan, Esq. as Guardian of the Person/Property of Aurelia Heitner, an Incapacitated Person.



24754-I-95

Thomas P. Phelan, J.

Application by Joel S. Kaplan, Esq., as Guardian of the person and property of Aurelia Heitner, for an order pursuant to Mental Hygiene Law §81.33 judicially settling the final account as submitted by him and fixing his fee is determined in accordance herewith.

By order and judgment dated January 15, 1996 [Rossetti, J.], Mr. Kaplan was appointed Guardian of Aurelia Heitner. Thereafter in his capacity as Guardian and co-counsel, a medical malpractice action was brought against the State of New York and the University of Stony Brook Medical Center on behalf of both Aurelia Heitner and Brian Heitner, Aurelia's then husband.

In or about April, 1999, the medical malpractice action was settled on behalf of Aurelia Heitner for the total sum of $1,750,000.00 with a net recovery of $1,297,591.71 after payment of legal fees totaling $324,791.00, a $125,611.00 social services lien and other ancillary expenses. Settlement of the action on behalf of Brian Heitner yielded a net recovery of $175,000.00 after payment of $75,000.00 in attorney's fees.

By order dated June 8, 2000 [Rossetti, J.], the Guardian's application to create and fund a Supplemental Needs Trust (SNT) for Aurelia Heitner with the $1,297,591.71 in settlement proceeds was approved in accordance with a SNT Agreement dated June 22, 2000. The Guardian was made Trustee of the SNT.

In relevant part, the SNT Agreement provides that "Upon Aurelia's death, the Trustee shall promptly obtain an accounting from the New York State Department of Social Services of Medicaid payment if any, made on behalf of Aurelia [*2]for services that have been provided to Aurelia during her lifetime. Upon receipt of such accounting, the Trustee shall pay to the NYS Department of Health, Suffolk County Department of Social Services' from the Trust Estate the lesser of (1) the total amount of medical assistance provided to Aurelia during her lifetime; or (2) the entire balance of the Trust Estate, as consistent with Federal and State law.Any Trust Estate balance remaining after reimbursement of Medicaid payments as set forth in the preceding sub-paragraphs shall be distributed to Aurelia's distributees in accordance with the Laws of the State of New York."

Aurelia Heitner died on August 17, 2005 after which the Guardian, in accordance with Mental Hygiene Law §§81.33 and 81.44 was directed to file his final account and seek an order approving same as well as a decree of discharge (Order Directing Final Account dated January 23, 2006 [Asarch, J.]).

The within application followed.

Review of the final account reveals that despite payment of $144,386.15 in various expenses of and in furtherance of the SNT, its principal has grown to $1,455,454.00.

In his Affirmation of Services submitted in support of the fixing of the Guardian's compensation (M.H.L. §81.33(e)), the Guardian relates the various tasks and proceedings in which he was involved on behalf of Aurelia Heitner noting, inter alia, that he participated in the divorce proceeding brought by Brian Heitner against Aurelia Heitner, including negotiation of its settlement in 1996.

The Guardian concludes his Affirmation of Services as follows: "I would estimate that over a period of 9 3/4 years including visits to the nursing home, supervision of the expenditures made on behalf of the incapacitated persons, discussions with counsel for various matters as set forth in this affirmation, discussion with my financial manager and discussions with the accountants Samuel Richman, C.P.A., the accountant who provided tax reporting services on an annual basis and who aided in the preparation of the annual accountings that I have devoted a minimum of 39 to 52 hours per year for 9 3/4 years, I allot an average of 45 minutes to 1 hour per week for all of the aforementioned services. Those hours total 375 to 520 hours.When all of the aspects of my caring for the incapacitated person are considered and the results achieved are studied, I believe that compensation at the rate of $400.00 per hour is fair and reasonable, but understand that the services should be paid at a lower rate because of the fee earned by affirmant in effectuating the malpractice settlement on behalf of Aurelia Heitner. While the fee authorized by the court in the malpractice action was earned to the extent of every penny, nevertheless it appears just to affirmant that a substantial reduction of affirmant's hourly rate be effectuated.[*3]I therefore request that this Court award a fee in the amount it deems reasonable and fair."

As duly reflected by the Guardian's application, the Suffolk County Department of Social Services (SCDSS), following Aurelia Heitner's death, claims entitlement to reimbursement of $1,218,726.74 ($1,346,963.71 less $128,236.97 previously paid) for medical services rendered. The Guardian, however, disputes the $1,218,726.74 figure as explanatory details of the computer printout provided by SCDSS in support of its calculation of this sum were not provided to the Guardian despite request.

SCDSS, in turn, cross-moves for an order directing the payment of $1,218,726.74 but offers nothing beyond another copy of the print-out together with the conclusory affidavit of Denise D. Cafaro as Supervisor of the Assets & Resources Section of SCDSS. In her affidavit, Ms. Cafaro states that SCDSS "maintains its records of Medicaid benefits in electronic record form and such records are made in the regular course of business" and the subject computer printout "is a true and complete record of the relevant Medicaid payments".

The Court Examiner submits no papers regarding the pending motion and cross-motion.

Objection to the Guardian's application and SCDSS' cross-motion is, however, made by the adult and minor incapacitated children of Aurelia Heitner principally seeking disclosure relating to both the Guardian's compensation request and SCDSS' Medicaid recovery request.

The de minimus procedural objections raised by the heirs of Aurelia Heitner are summarily rejected.

Insofar as decedent's heirs also question the Guardian's final accounting, they offer nothing but speculation and surmise regarding the manner in which the Guardian performed his duties for the nearly 10-year period since his appointment.

On the issue of the Guardian's compensation, the court finds it reasonable to ascribe to the within matter the Guardian's minimum estimate of time allotted 39 hours annually (45 minutes per week) for the period between date of appointment on January 15, 1996 to date of Aurelia Heitner's death on August 17, 2005 9 years 30 weeks or a total of 373.5 hours.

Recognizing that the Guardian has served over nearly a ten-year period, the court will not adopt a single hourly rate. Rather, the court fixes the following hourly rates:

$150.00/hour for the first three (3) years, ten (10) week period for a total of $18,675.00;

$175.00/hour for the second three (3) years, ten (10) week period for a total of $21,787.50; and

$200.00/hour for the third and final three (3) years, ten (10) week period for a total of $24,900.00.

The Guardian's fee is accordingly fixed at $65,362.50. [*4]

In making the foregoing award, the court notes that the Guardian, by deferring application for any fee until the present time has, in effect, permitted the Guardian's estate to benefit financially in the interim by retaining full use of these funds.

The Order Settling Final Account shall provide for payment of the Guardian's fee of $65,362.50 out of the SNT of Aurielia Heitner.

Ordinarily the Order Settling Final Account would thereafter direct payment of the amount due SCDSS and provide that the balance remaining be paid to the official representative of the estate of decedent Aurielia Heitner.

However, it appears that there is not yet any estate proceeding and that a dispute exists between SCDSS and the heirs of Aurielia Heitner regarding the amount due SCDSS. Moreover, despite attempting to do so, the Guardian has been unable to confirm that the amount sought by SCDSS [$1,218,726.74] is an appropriate amount.

"'[W]henever possible, all litigation involving the property and funds of a decedent's estate should be disposed of in the Surrogate's Court' (citations omitted)" (Cipo v. Van Blerkom, AD3d , 813 NYS2d 532; see also, Goldrich v. Central Trust Co., 128 AD2d 615).

In view of same, the dispute regarding the amount of funds which properly form the estate of decedent Aurielia Heitner is severed and shall be resolved in the Surrogate's Court.

The Order Settling Final Account shall therefore provide that the remaining funds of the SNT be turned over to the official representative of the estate of decedent Aurielia Heitner for disposition in accordance with the directives of the Surrogate's Court, or, if no official representative has been appointed within 60 days, then the remaining funds of the SNT shall be paid to the Nassau County Treasurer.

The Order Settling Final Account shall further provide that upon filing sufficient proof of compliance with the provisions of the Order, an ex parte order shall thereafter be issued discharging the Guardian/Trustee and canceling his bond.

Settle order on notice.

JULY 19, 2006 Thomas P. Phelan

Date J.S.C.

Kaplan Belsky Ross, LLP

Attn: Joel S. Kaplan, Esq.

Attorney for Guardian

666 Old Country Road

Garden City, NY 11530

Christine Malafi, Suffolk County Attorney

Attn: William G. Holst, Assistant County Attorney

Suffolk County Department of Law

Family Court/SS Bureau

Cohalan Court Complex

400 Carleton Avenue

Central Islip, NY 11722

Suffolk County DDS

Medicaid Chronic Care

3085 Veterans Highway

Ronkonkoma, NY 11779

Case No.M00946615

Suffolk County DDS

Medicaid Chronic Care

Box 18100

Hauppauge, NY 11788

Case #

M00946615

Harding & Moore, Esqs.

Attn: A. Patricia Moore, Esq.

Court Examiner

80-59 Lefferts Boulevard

Kew Gardens, NY 11415

Mental Hygiene Legal Services

County of Nassau

170 Old Country Road Room 500

Mineola, NY 11501

Sharon Cerelle Konits, Esq.

Attn: Dennis A. Bengels, Esq.

Attorney for Brian Heitner, Jonathan Heitner,

and Gary Heitner

998C Old Country Road, # [*5]

333

Plainview, NY 11803

Mr. Stephen Heitner, Parent of

Jonathan Heitner

11 Cottonwood Avenue

Port Jefferson Station, NY 11776