Matter of Adelson

[*1] Matter of Adelson 2009 NY Slip Op 52136(U) [25 Misc 3d 1215(A)] Decided on October 21, 2009 Sur Ct, Kings County Johnson, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 21, 2009
Sur Ct, Kings County

In the Matter of the Accounting of the Public Administrator as Administrator of the Estate of Marvin Adelson, et al., Deceased.



2765/98



For the Movant: Carl L.Distefano, Esq.,Andrew M. Cuomo, Attorney General of the State of New York, Charities Bureau, 120 Broadway, 3rd Floor New York, NY 10271, (212) 416-6349

For Louis Rosenthal: Alexander M. Dudelson, Esq. 26 Court Street- Suite 2306, New York, NY 11242 (718) 855-5100

Diana A. Johnson, J.

Upon the foregoing papers, the Office of the Attorney General of the State of New York ("Attorney General") moves for an order in the above listed estates pursuant to SCPA 1108; the court's inherent power to vacate its decrees in the interests of substantial justice; and CPLR 5015(a)(3) to:

1. Vacate that portion of the decree which approved and awarded attorneys' fees to Louis Rosenthal as counsel for the Kings County Public Administrator;

2. Direct an amended decree approving attorneys' fees for Rosenthal consistent with the criteria set forth in SCPA 1108(2)(c); and

3. Direct Rosenthal to refund any excess legal fees received plus interest from the date of the original decree to date of repayment to the Kings County Public Administrator.

These motions are part of a series of motions by the Attorney General to vacate [*2]that portion of the decrees awarding attorneys' fees to Rosenthal, entered during the period January 1, 1997 through May 31, 2002 in estates administered by the Kings County Public Administrator. The motions are predicated upon, inter alia, Rosenthal's failure to timely file affidavits of legal services supporting his fee requests, former Surrogate Michael Feinberg's failure to follow statutory procedures for approval of fees, and the determination of the Appellate Division, Third Department that Rosenthal charged and collected excessive fees as counsel to the Public Administrator.

In opposition to the motions Rosenthal argues:

1. The Attorney General has not established that the fees awarded were excessive, and in those estates where kinship was established the Attorney General lacks standing to bring motions;

2. The Attorney General has unclean hands with respect to the relief requested having had several opportunities to object to every fee award, but failed to do so. This failure renders untenable movant's claim that the fee awards be vacated in the interest of substantial justice; and

3. The findings of the Commission on Judicial Conduct and the Court of Appeals regarding Feinberg's removal does not preclude Rosenthal from re-litigating the issues under res judicata or collateral estoppel as Rosenthal was not a party in those proceedings.

The facts as found by the Court of Appeals in Matter of Feinberg,5 NY3d 206 [ 2005], as are pertinent to the resolution of these motions are the following. From January 1997 to mid-May 2002, Rosenthal did not submit affidavits of legal services for his services as counsel to the Public Administrator. In Spring 2002, Feinberg learning that the New York Daily News was about to run an exposé revealing his practice of approving counsel's fee requests without affidavits or individualized review, asked Rosenthal to submit affidavits of legal services retrospectively detailing the work done on each estate. After receiving these affidavits not a single fee was adjusted by Feinberg.

The Surrogate's Court Procedure Act ("SCPA") 1108 (2)(c) provides that any legal fees allowed by the court as compensation to counsel for the public administrator, "shall be supported by an affidavit of legal services setting forth in detail the services rendered, the time spent, and the method or basis by which the requested compensation was determined".

The Court of Appeals in Matter of Feinberg, specifically found that Feinberg neither required Rosenthal to submit affidavits of legal services, nor determined his fees based on consideration of the statutory factors specified in SCPA 1108 (2)(c). The Court pointed out that it was due to concern over questionable fees awarded counsel to public administrators that the Legislature in 1993 amended SCPA 1108(2), requiring in each case documentation establishing that fees were commensurate with the legal services provided. This was done, in part, to ensure that beneficiaries were being charged appropriately for work actually done on the estates.

The Court of Appeals in Matter of Feinberg made clear that the office and duties of the surrogate are governed by the SCPA, the law which imbues the surrogate with judicial authority. The Court concluded that by awarding legal fees without affidavits of legal services and without the attendant statutorily required individualized consideration of each case required by the SCPA, Feinberg had disregarded the fundamental, clear [*3]statutory mandates of his office.

A court has the power to vacate its own judgments for sufficient reason and in the interests of substantial justice (Woodson v Mendon Leasing Corp., 100 NY2d 62 [2003]). It has long been acknowledged that this power is inherent and not dependent on any statute, which the court may exercise upon the application of anyone for sufficient reason in the furtherance of justice (Ladd v Stevenson, 112 NY 325 [1889]). Clearly the award of attorney fees to counsel for the Public Administrator in disregard for, and in derogation of, the mandatory requirements of SPCA 1108, give rise to and constitutes sufficient reason to vacate the decrees [FN1] in the interests of, and in furtherance of, substantial justice.

All the decrees involved herein are compromised based on the failure of Feinberg to comply with his statutory duties in determining the legal fees awarded. In consequence thereof, this Court now has the obligation to do that which was not done by Feinberg to become independently satisfied as to the propriety and reasonableness of the fees. The Court's obligation to be independently satisfied as to the propriety of the legal fees is independent of whether or not anyone else found the fees to be objectionable, ( see Matter of Stortecky v Mazzone, 85 NY2d 518 [1995]), and is not vitiated by the claims asserted by Rosenthal that the Attorney General previously failed to object to the legal fees, or that the Attorney General lacks standing in those estates where kinship had been established. In the end the ultimate responsibility for determining what constitute reasonable fees for counsel to the public administrator falls on the court, (see Matter of Mero, 62 AD3d 1003 [2009]). This can only be determined if the Court now performs the statutorily required review of the fees requested in each estate. Whether the Attorney General who had not previously objected to the fees would be estopped from bringing these applications if Feinberg had complied with his statutory duties is not the issue before the Court [FN2].

The argument that the findings of the Commission on Judicial Conduct and the Court of Appeals regarding Feinberg's removal does not preclude Rosenthal from re-litigating the issues under res judicata or collateral estoppel is specious. Feinberg was a party therein, and was found not to have performed his statutory duty, the determination of which cannot be re-litigated here. This Court's obligation to vacate and review these decrees emanates from nothing more than the failure by the former surrogate to comply with the statutory requirements of his office in awarding legal fees to counsel to the Public Administrator.

Accordingly, the motions are granted and the Court vacates that portion of the decrees which approved and awarded attorneys' fees to Louis Rosenthal as counsel for the Kings County Public Administrator. Rosenthal is ordered to, within sixty days of service by regular mail of a copy of this Order with notice of entry, to submit affidavits of legal services in each of the estates herein conforming to the requirements of SCPA 1108 [*4](2)(c). Specifically the affidavits shall provide and set forth in detail the services rendered, the time spent on each task, and the method or basis used for determining the legal fees assessed. After review, the Court shall issue an amended decree in each estate approving attorneys' fees for Rosenthal consistent with the criteria set forth in SCPA 1108(2)(c). If Rosenthal fails to submit the affidavits as provided herein, movant may move for appropriate relief.

The portion of the motion seeking an order requiring Rosenthal to refund any excess legal fees received in each estate with interest from the date of the original decree to date of repayment to the Kings County Public Administrator, is held in abeyance pending the Court's determination of the amount of reasonable attorneys' fees to be awarded in each of the above estates.

The foregoing constitutes the decision and order of the court.

____________________

Dated: Brooklyn, New YorkHON. DIANA A. JOHNSON

October 21, 2009Surrogate Footnotes

Footnote 1:See Siegel, NY Prac § 409, at 692 n 3 [4th ed], a decree in surrogate's court is nothing more than a judgment.

Footnote 2: See, Matter of New York State Med. Transporters Assn. v Perales, 77 NY2d 126 [1990]), holding that while it is generally held that estoppel cannot be invoked against a governmental agency to prevent it from discharging its statutory duties, such a finding is not absolutely precluded.