By Order to Show Cause (McGrath, J. ) dated November 16, 2006, petitioner Mental Hygiene Legal Service petititioned for an order appointing a guardian of the property pursuant to Article 81 of the Mental Hygiene Law on behalf of Sally

A. M (MHL §81. 06[a][6]). As set forth in the petition, Ms. M is a resident of a community residence operated by the Rensselaer County ARC. She is now 56 years old and developmentally disabled. Ms. M previously resided with her mother, Carmella M, who passed away on July 7, 2005, in their home located at 3103 New York Route 2 in Cropseyville, New York. During the Spring of 2005, Carmella M deeded the residence to Ms. M while reserving a life estate. On or about July 25, 2005, Ms. M, as grantor, executed a "Declaration of Trust", identified as the "Sally [*2]Ann M "Irrevocable Living Trust", intending same to establish a supplemental needs trust pursuant to EPTL §7-1. 12 (see Exhibit "2" annexed to petition; Petitioner's Exhibit "4"). ^[FN1] The trust was initially funded with approximately $86, 000, and Victoria (Laurie) M was named "trustee". Ms. M also designated Victoria M as attorney-in-fact. At about this time Victoria M and her husband Richard M moved into the Cropseyville residence with Ms. M. Petitioner maintains that Victoria M has effectively depleted the trust on expenditures for herself and her husband. During September, 2006, Rensselaer County Adult Protective Services relocated Ms.M from the Cropseyville residence to her current residence and Ms. M revoked the power of attorney provided to Victoria M (see Exhibit "3" annexed to Petition). It appears the M s continued to reside in the Cropseyville residence at the time this proceeding was commenced. To be noted is that Ms. M has consented to the appointment of a guardian of her property by affidavit dated November 13, 2006 (see Exhibit "7" annexed to Petition).

Pursuant to the November 16, 2006 Order to Show Cause, Victoria M was temporarily suspended as trustee and both Victoria and Richard M were enjoined from disposing of any property purchased with trust funds.

By Verified Answer dated December 21, 2006, Richard and Victoria M (hereinafter respondents) denied the various allegations of wrongdoing in the petition and raised as an affirmative defense that the Court lacked subject matter jurisdiction.^[FN2]

By Order Appointing Temporary Guardian (Lynch, J.) dated December 14, 2006, the Court appointed Jennifer Corcoran, Esq. as temporary guardian to essentially marshal Ms. M s assets and investigate whether Victoria M. should be removed and/or surcharged as trustee. This Court continued the injunction precluding the disposition of Ms. M's property and ordered Victoria M to provide an accounting as to her management and disposition of Ms. M's funds.

Thereafter, by Order (Lynch, J.) dated March 27,2007, the Court directed respondents to turn over to the Temporary Guardian the keys and title documents for two motor vehicles and a snowmobile purchased with trust funds. The Court further directed respondents to file an accounting on or before April 30,2007, with a hearing on the petition scheduled for May 18,2007.

On May 18,2007, respondents failed to appear. As noted above, the Court granted Attorney Fryer's motion to withdraw as counsel for respondents. In addition, the Court granted the petition on consent and appointed Jennifer Corcoran as guardian of the property. The Court continued the directive requiring respondents to account for the receipt and disbursement of Ms. M's funds and scheduled a hearing on the accounting for June 22,2007.

On June 22, 2007, with respondents in attendance, an accounting hearing was conducted. Both Victoria M and Ms. M testified, as did Michele Blais, who coordinated Ms. M's receipt of medicaid benefits (see 6/22/07 Hearing Transcript, p. 111). The hearing was adjourned for a [*3]continuance to July 13,2007, in view of Victoria M's testimony that she had documentation at home to support her testimony (see June 22,2007 Hearing Transcript at pp. 78-79; 143-145).

At the continuation of the hearing on July 13, 2007 respondents failed to appear and the proof was closed.^[FN3] Notably, the guardian informed the Court that respondents failed to turn over the motor vehicles to the guardian as directed by the Court (see June 22, 2007 Hearing Transcript, pp. 145-150). As a result, the Court conducted a contempt hearing on August 3, 2007, at which respondents did appear and documented their surrender of the license plates for each vehicle to the NYS Dept. of Motor Vehicles. By Order dated August 21,2007, respondents were held in contempt and directed to pay to the guardian of the sum of $916, representing the additional costs in having the Rensselaer County Sheriff seize the vehicles, and attorneys fees in the amount of $922.50 for services rendered on the contempt proceeding.

With the appointment of a guardian for Ms. M, the essence of this proceeding is to compel an accounting by respondents for the use of Ms. M's funds. Contrary to respondents threshold jurisdictional argument, this Court has jurisdiction to compel an accounting where, as here, four factors exist, to wit: "(1) a fiduciary relationship; (2) entrustment of money or property, (3) no other remedy, and (4) a demand and refusal of an accounting" (citations omitted) (Matter of Marv XX. 33 AD3d 1066, 1068; see Mental Hygiene Law §81.43).

The record confirms that respondent Victoria M egregiously breached her fiduciary duty as trustee and attorney-in-fact in utilizing Ms. M's funds for the benefit of herself and her husband. The purchase of two motor vehicles and a snowmobile are glaring examples of the flagrant misuse of Ms. M's funds. Respondents' bold misuse of Ms. M's funds is perhaps best illustrated by the payment of $2,568 toward Richard M's child support obligations. While Victoria testified all funds were expended on Ms. M's behalf, this glaring abuse of trust funds documents Victoria M's complete lack of credibility. Moreover, Victoria M openly acknowledged removing all the furnishings from the Cropseyville residence, including the new snow blower, lawnmower, tools and gas grill (6.22.07 Hearing Transcript pp. 81-83). Also of significance is the fact respondents allegedly spent more than $30,000 in home improvements at the Cropseyville residence, and yet the guardian was only able to sell the residence for $52,000.00 (6/22/07 Hearing Transcript, p. 47). These numbers do not square and significantly refute respondents' credibility. A detailed review of the funds withdrawn by respondents from the Special Needs Trust and Ms. Martin's checking account from July, 2005 through October, 2006 shows that respondents inappropriately expended $70,944.04 of Ms. Martin's funds for their own benefit.

Accordingly, the court hereby imposes a surcharge against respondents in the amount of $70,944.04 (subject to a credit for funds received by the guardian upon the sale of the motor vehicles and snowmobile) and orders respondents to directly refund this amount to the guardian for placement in the trust. At the request of the MHLS, as counsel for Ms. M, the Court also determines that the funds misspent by respondents are not "available resources" in determining [*4]Ms. M's eligibility for governmental benefits, including medicaid or SSI. Any funds recovered from respondents and utilized for the payment of attorneys fees in the proceeding should also not be considered "available resources". With respect to attorneys fees, it is manifest that respondents not only flagrantly misused Ms. M's funds but also failed to make any genuine effort to account for the funds utilized, thereby necessitating this proceeding.

Accordingly, the Court hereby grants petitioner's request for attorneys fees, and on the basis of the guardian's July 19,2007 and November 27,2007 affidavit of services, hereby awards petitioner the sum of $4,115 in attorneys fees chargeable against respondents.^[FN4]

This Memorandum constitutes the Decision and Order of the Court. All papers including this Decision and Order are returned to the Guardian Jennifer Corcoran, Esq. The signing of this Decision and Order shall not constitute entry or filing under CPLR Rule 2220. Counsel is not relieved from the applicable provisions of that Rule respecting filing, entry and Notice of Entry. The Guardian s hereby directed to submit a proposed Judgment on notice consistent with this Decision and Order.

SO ORDERED ENTER

Dated:Albany, New York

February25, 2008Michael C. Lynch

Justice of the Supreme Court