IN THE MATTER OF B.M An Incapacitated Person

RECORD IMPOUNDED

                               NOT FOR PUBLICATION WITHOUT THE
                              APPROVAL OF THE APPELLATE DIVISION
       This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
    internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1102-18T1

IN THE MATTER OF B.M.,
An Incapacitated Person.
_________________________

                   Submitted December 5, 2019 – Decided May 6, 2020

                   Before Judges Nugent, Suter and DeAlmeida.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Morris County, Docket No. F-5-
                   9849.

                   Theodore P. Sliwinski, attorney for appellant E.M.

                   Porro Law Group, LLC, attorneys for respondent L.M.
                   (Janet L. Porro, on the brief).

PER CURIAM

         Defendant E.M.1 appeals from the October 22, 2018 judgment of the

Chancery Division finding he violated his fiduciary duties as guardian of his

incapacitated sister, B.M., directing him to disgorge $121,000 he withdrew from



1
  The parties are identified by initials to protect the confidentiality of the court's
guardianship records. R. 1:38-3(e).
B.M.'s accounts for his personal use, and awarding B.M. $52,438.68 in

attorney's fees and costs. We affirm the October 22, 2018 judgment in all

respects except the award of attorney's fees and costs, which we vacate. We

remand for a new determination of B.M.'s application for attorney's fees and

costs.

                                        I.

         The following facts are derived from the record.        B.M. has been

incapacitated since birth. E.M. and plaintiff L.M. are her siblings. B.M. has

lived with L.M., who provides for all aspects of B.M.'s care, for approximately

twenty-seven years.

         After her mother's death, B.M. was declared mentally incompetent, and

guardians were appointed for her person and property.             At that time,

guardianship accounts were established for B.M.'s benefit, including a checking

account, a money market savings account, and a certificate of deposit. She also

possessed a life insurance policy. B.M.'s income consists solely of payments

from her father's pension and periodic social security disability benefits, all of

which are deposited into her checking account. Also upon her mother's death,

B.M. inherited a one-half interest in the home in which she resides with L.M.




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      As of June 1, 2005, L.M. was the appointed guardian of B.M.'s person,

and E.M. was the appointed guardian of B.M.'s property. The two guardians

established a practice through which L.M. would pay for B.M.'s daily expenses

and submit a monthly request to E.M. for reimbursement from B.M.'s accounts

by check. E.M. also paid some of B.M.'s recurring bills directly from her

accounts, including premiums on B.M.'s supplemental health insurance and a

one-half contribution towards the local property taxes on her residence.

      While L.M. acknowledges she was reimbursed by E.M. for all of the

expenses she paid on behalf of B.M., a number of the reimbursement checks

initially were rejected for insufficient funds. In addition, L.M. was notified that

E.M. had not paid some of B.M.'s medical bills, including her health insurance

premiums, which caused her coverage to lapse.          E.M. also never filed an

accounting during his guardianship.

      As a result, L.M. filed a verified complaint and order to show cause in the

Chancery Division seeking the removal of E.M. as guardian of B.M.'s property.

After a plenary hearing, the court removed E.M. as the guardian of B.M.'s

property because he: (1) failed to file guardianship accountings; (2) mishandled

guardianship assets; and (3) was not a resident of New Jersey. On January 13,




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2017, the court entered an order removing E.M. and appointing L.M. as guardian

of B.M.'s property.

      Having gained access to B.M.'s bank records, which had been withheld by

E.M. during the first proceeding, L.M. came to believe E.M. misappropriated

$99,815.47 from B.M.'s accounts during his guardianship. As a result, L.M.

filed a second verified complaint and order to show cause in the Chancery

Division alleging E.M.: (1) misappropriated B.M.'s funds; (2) allowed B.M.'s

secondary health insurance to lapse for failure to pay premiums; and (3) cashed

in B.M.'s life insurance policy for his personal use.

      The court held a two-day proof hearing on the second verified complaint.

Both L.M. and E.M. testified.      L.M. presented as evidence summaries she

created from the records of B.M.'s bank accounts for the period 2005 to 2017.

In the summaries, she totaled checks E.M. wrote to himself and all cash

withdrawals, which she attributed to E.M. because B.M. is unable to make cash

withdrawals. To that figure, L.M. added bank fees assessed for insufficient

funds and overdrafts caused by E.M. In addition, L.M. testified she reviewed

records of deposits to B.M.'s checking account, and either could not determine

the source of the deposits or found that they were, in effect, transfers from B.M.'s




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other accounts. She concluded E.M. misappropriated $121,075.75 from B.M.

and depleted her money market account and certificate of deposit.

      E.M. admitted that beginning in 2007, he removed money from B.M.'s

accounts for his personal use due to his addiction to opioids. He claimed,

however, to have replaced all of the money he misappropriated from B.M.'s

accounts through deposits from his own funds. E.M. admitted he cashed in

B.M.'s life insurance policy, but testified he deposited the proceeds into her

account. He claimed he ultimately overpaid B.M.'s accounts by approximately

$36,000 because he felt it was his moral obligation to contribute to the cost of

her care.

      At the conclusion of the hearing, the trial court found L.M.'s testimony

was "entirely credible[,]" given that she "meticulously detailed every deposit

and withdrawal from the account" and "testified directly . . . without any

hesitation . . . [and] was absolutely candid." On the other hand, the court found

E.M. "took opportunities . . . to deflect from his own responsibility as much as

he possibly could" and was "entirely incredible as . . . a result of his demeanor,

[and] not just the fact that all the documentation disputes almost everything he

testified to."

      The court found that


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                                        5
            [h]aving heard [L.M.'s] testimony and seeing the
            documents she submitted[,] it does clearly show that
            there were repeated withdrawals and checks written on
            the ward's account that went directly to [E.M.]
            Moreover, there were cash withdrawals with no
            indication whatsoever where they went. There are clear
            indications that there were constant and continuous
            overdrafts on the account and that the account went into
            negative territory, again, time after time after time,
            incurring additional fees.

In addition, the court noted that

            the vast majority of the deposits [E.M.] made, and I'm
            not going to go . . . into each individual one. But the
            vast majority . . . there was either a contemporaneous
            withdrawal for the exact same amount of funds that he
            supposedly deposited or . . . he actually cashed the
            check. He would deposit the funds, write a check out
            from the same account, and then cash the check so it
            wasn't a deposit at all. At best[,] he was using the
            account for laundering the money. At worst, it is more
            likely, as [L.M.] indicates, that he was taking it from
            one of the ward's other accounts, depositing into her
            checking account and then withdrawing cash for
            himself or writing a check for himself and cashing it on
            the spot.

      On October 22, 2018, the trial court entered a judgment finding E.M.

"committed acts of malfeasance and misfeasance during the course of his

[g]uardianship of the property of [B.M.]" and had caused a loss to B.M. of

$121,000 through misappropriation of her funds for his personal use. The court

ordered E.M. to repay that sum to B.M. through L.M.


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      After the proof hearing and prior to entry of judgment, L.M. submitted a

request on behalf of B.M. for an award of $52,438.68 in attorney's fees and costs.

The court granted the application in its entirety, as reflected in the October 22,

2018 judgment. The record contains no indication the court made findings of

fact and conclusions of law with respect to the award of attorney's fees and costs.

      This appeal followed.      E.M. raises the following arguments for our

consideration:

            POINT ONE

            THE TRIAL COURT FAILED TO GIVE THE
            DEFENDANT ADEQUATE CREDIT FOR ALL OF
            HIS FUNDS THAT HE DEPOSITED INTO THE
            GUARDIANSHIP ACCOUNT.

            POINT TWO

            THE TRIAL COURT COMMITTED SEVERAL
            ERRORS IN THEIR [SIC] FACT-FINDING DUTIES.

            POINT THREE

            THE TRIAL COURT COMMITTED A REVERSIBLE
            ERROR BY NOT GRANTING THE MOTION TO
            VACATE THE DEFAULT.

            POINT FOUR

            THE TRIAL COURT COMMITTED A REVERSIBLE
            ERROR BY GRANTING THE PLAINTIFF'S [SIC]
            COUNSEL FEES.


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                                        II.

      Our scope of review of the judge's findings in this nonjury trial is limited.

We must defer to the judge's factual determinations, so long as they are

supported by substantial credible evidence in the record. Rova Farms Resort,

Inc. v. Inv'rs Ins. Co.,  65 N.J. 474, 483-84 (1974). "Appellate review does not

consist of weighing evidence anew and making independent factual findings;

rather, [this court's] function is to determine whether there is adequate evidence

to support the judgment rendered at trial." Cannuscio v. Claridge Hotel &

Casino,  319 N.J. Super. 342, 347 (App. Div. 1999). "Deference to a trial court's

fact-findings is especially appropriate when the evidence is largely testimonial

and involves questions of credibility." In re Return of Weapons to J.W.D.,  149 N.J. 108, 117 (1997). Since the trial court "'hears the case, sees and observes

the witnesses, [and] hears them testify,' it has a better perspective than a

reviewing court in evaluating the veracity of witnesses." Pascale v. Pascale,  113 N.J. 20, 33 (1988) (alteration in original) (quoting Gallo v. Gallo,  66 N.J. Super.
 1, 5 (App. Div. 1961)). However, "[a] trial court's interpretation of the law and

the legal consequences that flow from established facts are not entitled to any

special deference." Manalapan Realty, L.P. v. Twp. Comm.,  140 N.J. 366, 378

(1995).


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                                        8
      After carefully reviewing E.M.'s arguments in light of the record and

applicable legal principles, we conclude the record contains substantial, credible

evidence supporting the trial court's findings of fact. L.M., who the trial court

found to be credible, provided a detailed account of the withdrawals E.M. made

from B.M.'s accounts, as well as the various bank fees incurred as a result of his

mismanagement of those accounts. E.M. admitted he violated his fiduciary

duties by repeatedly withdrawing B.M.'s funds to finance his addiction.

Although E.M. testified that he reimbursed B.M.'s accounts for the full amount

he withdrew, the trial court found his testimony, which was unsupported by bank

records, to lack credibility. The trial court's finding that E.M. misappropriated

$121,000 is well supported.

      We also find no error in the trial court's conclusion E.M. violated his

fiduciary duties to B.M. The role of a guardian of an incapacitated person's

estate is largely statutory. In re Guardianship of A.D.L.,  208 N.J. Super. 618,

623 (App. Div. 1986). A guardian is authorized to "expend or distribute so much

or all of the income or principle of his ward for the support, maintenance,

education, general use and benefit of the ward . . . ."  N.J.S.A. 3B:12-43

(emphasis added). A guardian must exercise reasonable care, skill, and caution

when handling the assets of his ward. In re Keri,  181 N.J. 50, 57 (2004).


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      As the guardian of B.M.'s property, E.M. had a duty not to withdraw her

funds for his own use. It is self-evident that E.M.'s repeated misappropriation

of B.M.'s funds to support his addiction was a violation of his duty to protect his

ward's finances and preserve the funds needed for her care and support.

      In addition, E.M.'s argument the trial court erred by not vacating default

entered against him is meritless. As the court noted after E.M. moved to vacate

default, "[t]here really is not default. The fact of the matter is [E.M.] just did

not comply with the court orders to provide the necessary discovery and the

accounting." The court did not limit in a meaningful way E.M.'s ability to

present evidence at the proof hearing. To the contrary, the court admitted a large

number of documents offered as evidence by E.M., who was permitted to testify,

cross-examine L.M., and offer a defense to her allegations.

      Nor do we find the trial court erred when it denied E.M.'s request, made

on the first day of the proof hearing, to adjourn the proceedings and extend

discovery to permit him to retain an expert to create a forensic analysis of B.M.'s

bank records. We review the trial court's decision with respect to an extension

of discovery for an abuse of discretion. Huszar v. Greate Bay Hotel & Casino,

Inc.,  375 N.J. Super. 463, 471-72 (App. Div. 2005). The trial court acted well




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within its discretion in denying E.M.'s request, given its lateness and his

persistent failure to produce B.M.'s bank records during discovery.

      Finally, the decision to award attorney's fees rests "within the sound

discretion of the trial court." Maudsley v. State,  357 N.J. Super. 560, 590 (App.

Div. 2003). "[F]ee determinations by trial courts will be disturbed only on the

rarest of occasions, and then only because of a clear abuse of discretion."

Packard-Bamberger & Co. v. Collier,  167 N.J. 427, 444 (2001) (quoting Rendine

v. Pantzer,  141 N.J. 292, 317 (1995)). An abuse of discretion occurs "when a

decision is 'made without a rational explanation, inexplicably departed from

established policies, or rested on an impermissible basis.'" Flagg v. Essex Cty.

Prosecutor,  171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v.

Immigration and Naturalization Serv.,  779 F.2d 1260, 1265 (7th Cir. 1985)).

      Although New Jersey generally disfavors the shifting of attorney's fees, a

prevailing party may recover attorney's fees if expressly provided by statute,

court rule, or contract. Collier,  167 N.J. at 440 (citing North Bergen Rex

Transp., Inc. v. Trailer Leasing Co.,  158 N.J. 561, 569 (1999) and Dep't of Envtl.

Prot. v. Ventron Corp.,  94 N.J. 473, 504 (1983)). Rule 4:42-9(a)(8) permits the

award of attorney's fees "[i]n all cases where attorney's fees are permitted by

statute."


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      In calculating the amount of reasonable attorney's fees, "an affidavit of

services addressing the factors enumerated by RPC 1.5(a)" is required. R. 4:42-

9(b); Twp. of W. Orange v. 769 Assocs., LLC,  198 N.J. 529, 542 (2009). RPC

1.5(a) sets forth the factors to be considered:

            (a) A lawyer's fee shall be reasonable. The factors
            to be considered in determining the reasonableness of a
            fee include the following:

            (1) the time and labor required, the novelty and
            difficulty of the questions involved, and the skill
            requisite to perform the legal service properly;

            (2) the likelihood, if apparent to the client, that the
            acceptance of the particular employment will preclude
            other employment by the lawyer;

            (3) the fee customarily charged in the locality for
            similar legal services;

            (4)    the amount involved and the results obtained;

            (5) the time limitations imposed by the client or by
            the circumstances;

            (6) the nature and length of the professional
            relationship with the client;

            (7) the experience, reputation, and ability of the
            lawyer or lawyers performing the services;

            (8)    whether the fee is fixed or contingent.




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                                       12
      Courts determine the "lodestar," defined as the "number of hours

reasonably expended" by the attorney, "multiplied by a reasonable hourly rate."

Litton Indus., Inc. v. IMO Indus., Inc.,  200 N.J. 372, 386 (2009) (citing Furst v.

Einstein Moomjy, Inc.,  182 N.J. 1, 21 (2004)). "The court must not include

excessive and unnecessary hours spent on the case in calculating the lodestar."

Furst,  182 N.J. at 22 (citing Rendine,  141 N.J. at 335-36).

      "The amount of attorney fees usually rests within the discretion of the trial

judge, but the reasons for the exercising of that discretion should be clearly

stated." Khoudary v. Salem Cty. Bd. of Soc. Servs.,  281 N.J. Super. 571, 578

(App. Div. 1995) (citations omitted); see also R. 1:7-4(a) (requiring a court to

"find the facts and state its conclusions of law thereon in all actions tried without

a jury, on every motion decided by a written order that is appealable as of right,

and also as required by R. 3:29").        "[T]he court must specifically review

counsel's affidavit of services under R. 4:42-9, and make specific findings

regarding the reasonableness of the legal services performed . . . ." F.S. v. L.D.,

 362 N.J. Super. 161, 170 (App. Div. 2003).           "Without such findings it is

impossible for an appellate court to perform its function of deciding whether the

determination below is supported by substantial credible proof on the whole

record." Monte v. Monte,  212 N.J. Super. 557, 565 (App. Div. 1986). "The trial


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                                        13
judge may satisfy the court rules by relying on the facts or reasons advanced by

a party; however, the court is obligated to make the fact of such reliance

'explicit.'" Allstate Ins. Co. v. Fisher,  408 N.J. Super. 289, 301 (App. Div. 2009)

(quoting Pressler, Current N.J. Court Rules, cmt. 1 on R. 1:7-4 (2009)).

      The record contains no findings of fact or conclusions of law supporting

the trial court's award of attorney's fees and costs to B.M. As a result, we cannot

meaningfully review the trial court's decision. We are, therefore, constrained to

vacate the award of attorney's fees and costs to B.M. and remand for a new

determination of her application.

      The October 22, 2018 judgment is affirmed in all respects except the

award of attorney's fees and costs to B.M., which we vacate. We remand for a

new determination of B.M.'s application for attorney's fees and costs. We do

not retain jurisdiction.




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