Matter of S.B. (E.K.)
Annotate this CaseDecided on November 27, 2019
Supreme Court, Chemung County
In the Matter of the Application of S.B., Petitioner, Pursuant to Article 81 of the Mental Hygiene Law for the Appointment of a Guardian of the Person and Property of E.K., an Alleged Incapacitated Person. In the Matter of the Petition of
S. B.,Petitioner,
against
E. I., Power of Attorney,Respondent.
2017-1474
Robert L. Halpin, Esq.
Counsel for E. K.
4588 Route 224
Montour Falls, NY 14865
Denice A. Hamm, Esq.
Counsel for E. I.
Hamm & Roe, LLP
311 Lake Street, Suite B
Elmira, NY 14901
Douglas Mahr, Esq.
Counsel for S. B.
Scolaro Fetter Grizanti & McGough, PC
Franklin Square
507 Plum Street, Suite 300 Syracuse, NY 13204
Kristin Snyder, Esq.
Court Evaluator
Mental Hygiene Legal Service (3rd Dept.)
State Office Building
44 Hawley Street
Binghamton, NY 13901
David H. Guy, J.
PROCEDURAL HISTORY
A petition was filed by S. B., pursuant to Mental Hygiene Law Article 81, on April 25, 2017, seeking visitation and the appointment of a guardian of the person and property of her mother, E. K., an Alleged Incapacitated Person. An Order to Show Cause was issued on May 4, 2017, appointing Mental Hygiene Legal Service (3rd Dept.) as Court Evaluator and Robert Halpin, Esq. as counsel to represent E. K. One of the factors considered by the Court in its decision to appoint Mr. Halpin as counsel for E. K. was his prior representation of her in estate planning matters.
A second petition was filed by S. B., pursuant to Mental Hygiene Law Article 81, seeking the appointment of a guardian of E. K. on January 26, 2018 (the two Article 81 petitions are collectively referred to herein as "the guardianship matters"). E. K.'s other daughter, E. I., was on notice of the guardianship matters pursuant to Mental Hygiene Law § 81.07(g) and appeared through counsel. By Decision and Order of this Court dated June 15, 2018, this Court dismissed both petitions. Matter of S.B. (E.K.), 60 Misc 3d 735, 741 (Sup Ct, Chemung County 2018). By Opinion and Order dated September 19, 2019, the Appellate Division reversed the Court's dismissal and remitted the guardianship matters to this Court for further proceedings. Matter of Elizabeth T.T., 177 AD3d 20 (3d Dept 2019).
On November 1, 2018, S. B. filed a related power of attorney accounting action against E. I., as power of attorney for E. K., in Chemung Supreme Court (Index No. 2018-2295). That petition is brought pursuant to General Obligations Law § 5-1505 and requests the issuance of an order determining the validity of the power of attorney executed by E. K. on July 6, 2016, appointing E. I. as her agent and attorney-in-fact; an accounting by E. I.; and removal of E. I. as the agent under the power of attorney, based on allegations that she violated her fiduciary duty to E. K., her principal, among other requested relief. The power of attorney which is the subject of this proceeding was prepared by Mr. Halpin. That matter is still pending to-date.
On October 9, 2019, the Court issued a Scheduling Order to set deadlines for motions, outstanding discovery, and the hearings in both these matters, which were to commence on December 17, 2019.
On November 13, 2019, Mr. Halpin filed an Order to Show Cause supported by an affidavit and a proposed petition. By his affidavit, Mr. Halpin requests an Order permitting him to personally intervene as a party in the power of attorney proceeding. The Court signed the Order to Show Cause on November 14, 2019, setting the motion down for oral argument on [*2]November 25, 2019.
On November 21, 2019, Douglas Mahr, Esq., as counsel for S. B., filed an attorney affirmation in opposition to the relief sought by Mr. Halpin. On November 24, 2019, Denice Hamm, Esq., counsel for E. I., submitted a letter indicating she supported the relief requested by Mr. Halpin and she would not be able to attend oral argument on the motion due to a family obligation.
The Court is also in receipt of a motion filed by Mr. Halpin on behalf of E. K. in the guardianship matters, asking for the hearings in the guardianship matters and the power of attorney action to be bifurcated, as well as motions in limine filed by Mr. Halpin and Ms. Hamm, on behalf of their respective clients. The bifurcation motion is currently scheduled for December 9, 2019, and the motions in limine are returnable December 17, 2019, before the trial in these matters commences.
The Court held oral argument on Mr. Halpin's motion to intervene in the power of attorney proceedings on November 25, 2019, at which Mr. Halpin appeared; Mr. Mahr appeared with E. B.; and Mental Hygiene Legal Service (3rd Dept.), Kristin Snyder, Esq., of counsel, the Court Evaluator in the guardianship matters, appeared. On the record, the Court denied Mr. Halpin's motion and found that Mr. Halpin must be disqualified as counsel to represent E. K. in the guardianship matters. This Decision and Order expounds on and further memorializes the findings made on the record on November 25, 2019.
PETITIONS AND OPPOSITIONS
In the affidavit supporting his Order to Show Cause, Mr. Halpin indicates that he wants to intervene as a party in the power of attorney action because he ultimately wants to request an order "declaring the power of attorney at issue in this proceeding is valid, and that pursuant to said power of attorney [E. K.] has validly authorized [E. I.] to take actions and make all decisions described in General Obligations Law section 5-1510H and/or otherwise permitted by law in connection with the Article 81 proceeding." He argues that as E. K.'s attorney in the guardianship matters, he is a "third party who may be required to accept" the power of attorney at issue in this proceeding, making him a proper party under GOL § 5-1510(3).
With the Order to Show Cause and affidavit requesting intervention, Mr. Halpin filed a petition, which he requested to be filed upon the granting of his request to be made a party in the power of attorney action. The proposed petition further elucidates the reasoning behind Mr. Halpin's request to intervene, as he asserts that the power of attorney naming E. I. as agent gives her the "authority to act on behalf of [E. K.] in connection with claims and litigation," including the "authority to prosecute [E. K.'s] defense in the Article 81 Proceeding." Mr. Halpin posits that if the power of attorney at issue were ultimately revoked and E. I. removed as agent, then Mr. Halpin's "reliance on the power of attorney at issue in this proceeding may subsequently called into question." Mr. Halpin affirms that he drafted the power of attorney at issue for E. K., aided her in executing it, and that he has no issues with its validity or E. I.'s compliance with her fiduciary obligations to E. K.
S. B. argues that the motion should be denied because Mr. Halpin is not a necessary party to the power of attorney action by statute, so his intervention would be granted only due to convenience. She argues that permissive intervention should only be allowed if Mr. Halpin's interests will be jeopardized by his absence as a party. According to S. B., it is the interest of
E. I., not Mr. Halpin, to have the power of attorney declared valid and E. I. authorized to defend the guardianship matters on E. K.'s behalf. She also submits that Mr. Halpin does not need to be [*3]a party for the ultimately determination to be made about the validity of the power of attorney, and that Mr. Halpin will not be aggrieved if the power of attorney is found to be invalid. Mr. Halpin has not refused to recognize or accept the power of attorney, and S. B. argues that as the drafter of the power of attorney, Mr. Halpin is very unlikely to refuse to accept the power of attorney from E. I.
In her opposition, S. B. directly disclosed that Mr. Halpin "may appropriately testify as a witness in this matter about the making of the POA and the agent's ability at that time. . .," suggesting, for the first time to the Court's knowledge, S. B.'s intention to challenge the validity of the power of attorney at the time of its execution.
ORAL ARGUMENT
At oral argument, Mr. Halpin rested on his papers and stressed that he was seeking this relief due to his belief that he is faced with a challenging ethical dilemma regarding how to represent his client, E. K., in the guardianship matters. He reiterated that in requesting intervention, he is ultimately seeking Court approval of his following direction from E. I. as
E. K.'s agent, regarding how he should proceed as counsel for E. K. in the guardianship matters. He stressed that he is not indicating E. K. was incapacitated in any way or that she would be unable to meaningfully participate in the hearing but that he wants guidance from the Court regarding how to best proceed in advocating for E. K.'s position in the guardianship matters. Mr. Halpin stated that if his motion to intervene were denied, he would consider making a motion to withdraw as counsel.
Mr. Mahr indicated that part of S. B.'s case he would be presenting in the guardianship matters and the power of attorney action will be that E. K. was unduly influenced in the creation of the 2016 power of attorney. Mr. Mahr confirmed that he plans to call Mr. Halpin as a witness in both proceedings, as Mr. Halpin was the attorney who drafted and oversaw the execution of
E. K.'s power of attorney.
LAW AND ANALYSIS
General Obligations Law § 5-1510(3) indicates that a "special proceeding may be commenced pursuant to subdivision two of this section by . . . any third party who may be required to accept a power of attorney." Pursuant to CPLR 1013, "any person may be permitted to intervene in any action . . . when the person's claim or defense and the main action have a common question of law or fact." If the threshold requirement of a common question of law or fact is met, the court may then exercise its discretion in deciding whether to permit intervention. Johnson v Summit Equities, Inc., 2007 NY Misc. LEXIS 8087, *14 (Sup Ct, New York County 2007). The Court of Appeals has stated that in exercising their discretion under this section, trial courts should consider whether the intervenor's claim would be adversely affected without intervention, whether there are common issues of law and fact, and the extent of prejudice to the existing parties if intervention is allowed. Id. (citing Teichman v Comm. Hosp. of West. Suffolk, 87 NY2d 514, 663 (1996).
The Court finds that Mr. Halpin's interests would not be jeopardized by his absence as a party in the power of attorney action. The relief he would ultimately seek — an order declaring the power of attorney valid in its execution — is an issue at the heart of both the power of attorney action and the guardianship matters. Mr. Halpin does not need to be a party for the Court to decide whether the power of attorney is valid, and so Mr. Halpin will ultimately not be aggrieved due to his absence as a party in the power of attorney proceeding.
Mr. Halpin also seeks intervention to also request a judicial declaration that he may [*4]properly rely on E. I. as E. K.'s agent to make decisions regarding and guide his strategy in defending the guardianship matters as counsel for E. K. The Court is concerned about this request and thus issues this Decision and Order to provide clarification on this issue, which appears to be one of first impression.
Mr. Halpin was appointed as counsel for E. K. in the guardianship matters pursuant to Mental Hygiene Law § 81.10(c)(2), which directs that the Court "shall appoint counsel" when "the person alleged to be incapacitated wishes to contest the petition." E. K. has consistently expressed her opposition to the appointment of a guardian, directly to the Court and through her counsel, since the filing of the original petition in April 2017. Such opposition by the alleged incapacitated person ("AIP") mandated the Court's appointment of counsel to represent her interest in the guardianship matters.
E. K. appeared at two appearances in the guardianship matters, and her appearance has not been waived in any manner. Mr. Halpin strenuously insists that he is not making any representations about E. K.'s current capacity or ability to participate in her own defense of the guardianship matters. Nonetheless, Mr. Halpin seeks a judicial determination that Ms. Ingeroll, as E. K.'s agent, can appropriately make decisions on E. K.'s behalf in the guardianship matters, and Mr. Halpin indicates he found himself in an ethical and practical dilemma regarding how to make decisions as counsel for an AIP who opposes the appointment of a guardian.
An attorney for an AIP in Article 81 case is guided in part by New York Rule of Professional Conduct Rule 1.14, which pertains to representing a client with diminished capacity. It states that "[w]hen a client's capacity to make adequately considered decisions in connection with a representation is diminished, whether because of minority, mental impairment or for some other reason, the lawyer shall, as far as reasonably possible, maintain a conventional relationship with the client." Rules of Professional Conduct (22 N.Y.C.R.R. 1200.00) rule 1.14(a). This Professional Conduct Rule does not provide specific guidance to an attorney for an AIP who is unclear whether his client has the capacity to direct the defense of the litigation or whether the counsel should rely on decisions to be made by the appointed agent under the AIP's power of attorney.
Additional guidance for how an attorney in such a position may choose to proceed is contained in the Law Revision Commission Commentary on Mental Hygiene Law § 81.10, which explains that the role of counsel, as governed by this section, is to represent the person alleged to be incapacitated and ensure that the point of view of the person alleged to be incapacitated is presented to the court. At a minimum that representation should include conducting personal interviews with the person; explaining to the person his or her rights and counseling the person regarding the nature and consequences of the proceeding; securing and presenting evidence and testimony; providing vigorous cross-examination; and offering arguments to protect the rights of the allegedly incapacitated person.
Under the rubric of the Commentary, to the extent an AIP has communicated a position relative to the request for the appointment of a guardian, as has E. K. in this case, the AIP's counsel can make decisions and pursue a litigation strategy that honor the AIP's perspective. This can be accomplished without reliance on decisions to be made by the AIP's agent appointed under a power of attorney.
Article 81 of the Mental Hygiene Law contains procedural due process safeguards, and it is incumbent upon the AIP's counsel to ensure strict adherence to such safeguards. The AIP is [*5]entitled to proper notice, legal representation, the right to demand a jury trial, the right to be present at any hearing, present evidence, and otherwise participate. MHL §§ 81.07; 81.10; 81.11. A determination of incapacity must be found by the Court based on clear and convincing evidence, the highest evidentiary standard in a civil matter. MHL § 81.12. The AIP enjoys the doctor-patient privilege that precludes admission of her medical records into evidence unless she has affirmatively placed her medical condition an issue, and counsel for the AIP can pursue strategies that ensures the exclusion of such medical records or testimony. Matter of S.B. (E.K.), 60 Misc 3d 735, 741 (Sup Ct, Chemung County 2018), rev'd on other grounds, Matter of Elizabeth T.T., 177 AD3d 20 (3d Dept 2019); see also In re Rosa B.-S., 1 AD3d 355, 356 (2d Dept 2003). The rules of evidence apply in contested guardianship proceedings, and the AIP's counsel is obligated to ensure such rules are adhered to in the hearing to appoint a guardian. MHL § 81.12(b); In re Rosa B.-S., supra. Counsel for an AIP can pursue these litigation strategies and ensure adherence to these procedural safeguards regardless of the capacity of the AIP or even whether the AIP is present at the hearing, and counsel may certainly do so without reliance on decision making by the AIP's agent under a power of attorney.
In circumstances where an agent is alleged to have breached her fiduciary duty or to hold the AIP in isolation, the Court has serious concerns about reliance by the AIP's counsel on the AIP's agent to make decisions on how to best defend against the Article 81 petition. The Court finds that such reliance on the agent by counsel to an AIP frustrates and contravenes the counsel's statutory obligation to "ensure that the point of view of the person alleged to be incapacitated is presented to the court." MHL § 81.10, Law Revision Commission Commentary.
The Court holds that it is improper for the AIP's counsel in an Article 81 proceeding to follow directions from or rely on the AIP's agent to make decisions on behalf of the AIP regarding how to proceed with defense of the Article 81 proceeding, despite the agent's general authority with respect to claims and litigations under GOL § 5-1502H, particularly when there are allegations that the agent is unduly influencing and isolating the AIP.
This circumstance is analogous to circumstances when the AIP retains her own counsel but it is unclear whether the AIP has the capacity to freely choose that counsel. Pursuant to Mental Hygiene Law § 81.10(a), the court must determine that counsel retained by the AIP was "chosen freely and independently by the alleged incapacitated person." In Matter of Caryl S.S. (Valerie L.S.), the court found the AIP's retained counsel had not been chosen freely by the AIP, disqualifying the attorney from continuing to represent the AIP. 45 Misc 3d 1223(A) (Sup Ct, Bronx County 2014). The court based this finding on the fact that the retained counsel was selected by the AIP's son, who was "alleged to have exerted undue and improper influence over the AIP and her financial affairs, transferring large amounts of property to himself without any authority to do so. While it may not be unusual for an attorney to be contacted or selected by a relative, it is unusual when that relative is a person charged with exerting undue influence, and with using his agency powers improperly for his own gain." Id. at p. 9.
It was troubling to the Caryl S.S. Court that the AIP's counsel was brought into the case by the AIP's son, who was alleged to have exerted undue and improper influence over the AIP. It is similarly troubling to this Court that either court-appointed counsel or the AIP's agent daughter would believe that the agent has the authority under GOL § 5-1502H to control the AIP's position in the guardianship matters, where allegations of undue and improper influence [*6]and actions by the agent are the basis for the guardianship matters.[FN1]
In this case, while Mr. Halpin was not retained by E. I. on behalf of E. K., Mr. Halpin has given the Court the impression that he either has relied or possibly planned to rely on E. I. to control his strategy and decision making in defending the guardianship matters as E. K.'s advocate. This would essentially allow E. I., who allegedly breached her fiduciary duty to E. K., exerted undue influence in the creation of the power of attorney, and isolated E. K. from S. B., to step into the shoes of E. K. to give directions to her counsel. Such a result would contravene the statute's requirement that counsel be appointed to advocate the AIP's position and that such counsel be either neutrally appointed by the Court or freely and independently retained to represent the AIP.
Ultimately, the Court is disqualifying Mr. Halpin from continuing to act as counsel for E. K. in the guardianship matters because he will be called as a witness to testify regarding the creation and execution of E. K.'s power of attorney. Disqualification is compelled by New York Rule of Professional Conduct Rule 3.7(a), as Mr. Halpin's testimony, as the drafting attorney for the document at issue, relates to a contested issue; does not relate to the value of his legal services; is not relating solely to a matter of formality; cannot be established from any other source; and his disqualification will not work a substantial hardship on his client, who will be appointed new counsel to represent her in the guardianship matters. Rules of Professional Conduct (22 N.Y.C.R.R. 1200.00) rule 3.7(a).
In furtherance of this Decision, it is hereby
ORDERED, that the motion to intervene filed by Robert Halpin, Esq. is denied; and it is further
ORDERED, that Robert Halpin, Esq. is relieved as appointed counsel for E. K. in the Article 81 matters (Index No. 2017-1474); and it is further
ORDERED, that Greg S. Catarella, Esq., Fiduciary ID No. 155595, with an office located at Levene Gouldin & Thompson, LLP, 450 Plaza Drive, Vestal, NY 13850-3657, is appointed as counsel to represent E. K. in the Article 81 matters; and it is further
ORDERED, that pursuant to 22 N.Y.C.R.R. §36.1, Greg S. Catarella, Esq. shall be subject to Part 36 of the Rules of the Chief Judge; and it is further
ORDERED, that by accepting this appointment, Greg S. Catarella, Esq. certifies that he is in compliance with Part 36 of the Rules of the Chief Judge (22 N.Y.C.R.R. 36), including but not limited to Section 36.2(d) ("Limitations on appointments based on compensation"), and if Greg S. Catarella, Esq. is disqualified from receiving an appointment pursuant to the provisions of Part 36, Greg S. Catarella, Esq. shall notify the appointing Judge forthwith; and it is further
ORDERED, that by accepting this appointment, Greg S. Catarella, Esq. certifies that he is familiar with the duties and responsibilities of acting as counsel for an Alleged Incapacitated Person and has experience in such area, and is fully capable and prepared to assume those duties and responsibilities which are commensurate with his abilities; and it is further
ORDERED, that the attorneys or support staff in Greg S. Catarella, Esq.'s office may [*7]perform tasks under the appointee's direct supervision, but all substantive appearances and reports must be performed and/or created by the appointee; and it is further
ORDERED, that the motion for bifurcation filed by E. K. on November 13, 2019, and the motions in limine filed by E. K. on November 13, 2019 and filed by E. I. on November 13, 2019 are held in abeyance and shall be rescheduled for deadlines for response and oral argument at a later date to be determined by the Court; and it is further
ORDERED, that the hearing in the guardianship matters and power of attorney action shall be held in abeyance pending new date(s) to be determined by the Court.
Date: November 27, 2019
_____________________________
Hon. David H. Guy
Acting Supreme Court Justice Footnotes
Footnote 1:The facts of the case presently before the Court do not present the question of whether counsel for the AIP can accept direction from an agent under a power of attorney where allegations of undue and improper influence are not made against that agent, though the Court views reliance on the agent by the AIP's counsel skeptically even under those circumstances.
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