Supreme Court, Nassau County, January 12, 2023

Steve Zalewski, Huntington Station, for petitioner.

Zelenitz, Shapiro & D'Agostino, P.C., Forest Hills (Brittany Froning of counsel), petitioner's former counsel.

Akiva Shapiro, Old Bethpage, for the alleged incapacitated person.

John Newman, Commack, Court Evaluator.

The motion by the petitioner to discontinue this Mental Hygiene Law article 81 [*2]guardianship proceeding, and the motions by the respondent for an order inter alia imposing sanctions upon the petitioner and her former law firm are granted to the extent indicated below.

The motions at bar have presented the court with issues of apparent first impression in guardianship cases pertaining to the handling of a court evaluator's report which is not in evidence, and the discontinuance of a guardianship proceeding, pursuant to CPLR 3217, after the hearing has commenced but before the court evaluator has testified.

This has been a contentious guardianship proceeding commenced by the petitioner Nicole L. against her mother Eleanor D., an alleged incapacitated person, for the appointment of Nicole L. as the guardian for Eleanor's personal and property needs based primarily upon events prior to the commencement of this proceeding which allegedly left her incapacitated. Her counsel at the time was the law firm of Zelenitz, Shapiro & D'Agostino, P.C. The court appointed John Newman, Esq., as the court evaluator and counsel for Eleanor D. After a brief hearing by this court on the issue of whether Eleanor D. independently retained her counsel, Akiva Shapiro, this court found that the respondent could be represented by private counsel of her own choosing. Eleanor D. has vigorously opposed this guardianship proceeding from its inception. At one point there were two proceedings and one action taking place simultaneously: one in Family Court commenced by the petitioner against her mother, this article 81 proceeding, and an action by Eleanor D. in Supreme Court (eventually determined by a jury in favor of Eleanor) to set aside the transfer of real property and Eleanor's investment account based on the alleged undue influence by Nicole L.

Numerous filings and supplemental filings have been made regarding the instant matter. The issues before the court can be summarized as: (1) whether to permit discontinuance of the action; (2) the awarding of fees; and (3) what, if any, sanctions or actions should be taken for the disclosure of the court evaluator's report to the judge presiding over the Family Court proceeding.{**78 Misc 3d at 392}

Discontinuance

Turning first to the issue of whether this article 81 proceeding should be discontinued pursuant to CPLR 3217 (b), this court, in Matter of Lane (Michelle R.) (78 Misc 3d 268 [Sup Ct, Nassau County 2022, Knobel, J.]), recently reviewed the Appellate Division Second Department's analysis of CPLR 3217 in Emigrant Bank v Solimano (209 AD3d 153, 159 [2d Dept 2022]) and applied it to a motion to discontinue an article 81 proceeding after the court evaluator testified, but before the court made a determination to appoint a guardian for the alleged incapacitated person. Here the issue is whether this court can, or should, permit an article 81 guardianship proceeding to be discontinued in the middle of petitioner's cross-examination and before the court evaluator has testified.

The quandary is that CPLR 3217 has not been amended to reflect the enactment of article 81 30 years ago, and that there is no provision in the Mental Hygiene Law governing the discontinuance of a guardianship proceeding.

In Emigrant Bank the Court stated that CPLR 3217 applies to special proceedings as well as actions, and permits a discontinuance at three separate stages of the proceeding. The first time period is prior to the time a responsive pleading is served, or if no responsive is required, within 20 days after the service of process and the filing of proof of service with the court clerk (see CPLR 3217 [a] [1]). The second stage is the broad time period between the responsive pleading and before the case is submitted to a court or jury for determination of the [*3]facts; this period requires the filing of a written stipulation executed by all parties (see Emigrant Bank v Solimano, 209 AD3d 153, 159 [2d Dept 2022]; CPLR 3217 [a] [2]). However, the court can also grant a discontinuance of the action during this time period by court order upon terms and conditions the court deems proper (id.; CPLR 3217 [b]). The final stage is after the case has been submitted to the court or jury, the court can order a discontinuance of the action pursuant to a stipulation of all parties and upon terms and conditions the court deems proper (id.). "Thus, CPLR 3217, viewed in its entirety, operates like a seesaw, allowing for discontinuances by mere unilateral notice at the earliest stage of a litigation, while imposing incrementally greater requirements upon the party seeking the discontinuance the farther the litigation progresses" (Emigrant Bank v Solimano, 209 AD3d 153, 159 [2d Dept 2022]).

"CPLR 3217 (a) (2) does not contemplate the discontinuance{**78 Misc 3d at 393} by the petitioner of a guardianship proceeding before a guardian has been appointed for the alleged incapacitated person; it does however 'explicitly bar[ ] discontinuance by stipulation where an infant, conservatee, or incompetent for whom a committee has been appointed is a party' (7 Weinstein, Korn & Miller, New York Civil Practice: CPLR ¶ 3217.05 [2d ed, Dec. 2022 update]). It is clear to this court that the legislative intent of CPLR 3217 (a) (2) was to limit the right to discontinue a conservatorship/guardianship proceeding as a means of protecting 'conservatees,' 'incompetents'/alleged incapacitated individuals 'from the collusive termination of actions . . . when the true parties' best interests . . . would be better served by continuing the action' (id.). In other words, an application by the petitioner to discontinue a guardianship proceeding, other than due to the death of the alleged incapacitated person, should only be granted by court order, regardless of whether the petitioner, or the alleged incapacitated person and the court evaluator (who in the view of this court are deemed to be parties to the proceeding), stipulate to that relief. Contrary to CPLR 3217 as presently cast, and the clear explanation of the statute in Emigrant Bank, a guardianship proceeding 'crosse[s] the rubicon from its pre-deliberative stage . . . [of] CPLR 3217 (a) (1),' and cannot be voluntarily discontinued, in the opinion of this court, when the court evaluator issues a report . . . thus 'triggering the statutory condition that a discontinuance, at that juncture, requires both leave of court and a stipulation of all parties' (Emigrant Bank v Solimano at 162)" (Matter of Lane [Michelle R.], 78 Misc 3d 268, 276 [Sup Ct, Nassau County 2022, Knobel, J.]).

[1] Based upon the foregoing principles, this court permits the discontinuance of this article 81 guardianship proceeding pursuant to CPLR 3217 (b), even though the court evaluator never testified about his report. The petitioner has not completed her presentation of proof in support of her petition to become her mother's guardian, the court evaluator has no formal opposition to the discontinuance, and both the petitioner and the respondent are in rare agreement to discontinue the proceeding. The court notes that the Mental Hygiene Law does{**78 Misc 3d at 394} not specifically grant to the court evaluator the power to consent to a discontinuance (see Matter of Chachkers [Shirley W.], 159 Misc 2d 912, 913-914 [Sup Ct, NY County 1993]).

Payment of Legal Fees

When a party moves to discontinue the article 81 guardianship proceeding, and the discontinuance is stipulated to by the parties, this court has held that it is the functional equivalent of a dismissal (Matter of Laurence H. [Madeline H.], 51 Misc 3d 834, 836 [Nassau County Ct 2016], citing Matter of Petty, 256 AD2d 281, 282-284 [1st Dept 1998]; see Matter of Samuel S. [Helene S.], 96 AD3d 954, 958 [2d Dept 2012]; Matter of Kurt T., 64 AD3d 819, 824 [3d Dept 2009]). When a petition to appoint a guardian is denied or dismissed, Mental Hygiene Law § 81.09 (f) grants discretion to the court to award "reasonable allowance to [the] court evaluator . . . payable by the petitioner or by the person alleged to be incapacitated, or both in such proportions as the court may deem just" (Petty at 282-283; see also Matter of Fairley v Fairley, 136 AD3d 432 [1st Dept 2016]; Matter of James A. McG. [Robinson], 68 AD3d 1118 [2d Dept 2009]; Matter of Kurt T. at 823-824).

When a petition is dismissed the court may direct the petitioner to pay the reasonable compensation for counsel for the alleged incapacitated person (Mental Hygiene Law § 81.10 [f]). Furthermore, the court has broad discretion in determining what constitutes reasonable compensation to the court evaluator or to counsel for the alleged incapacitated person (see Matter of Zofia L. [Jolanta S.—Bogdan L.], 136 AD3d 818 [2d Dept 2016]; Matter of Annette B., 56 AD3d 551 [2d Dept 2008]; Matter of Theodore T. [Charles T.], 78 AD3d 955, 957 [2d Dept 2010]). When awarding compensation, the court is required to explain and base its decision on the following factors:

"(1) the time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented, (2) the attorney's experience, ability, and reputation, (3) the amount involved and the benefit flowing to the ward as a result of the attorney's services, (4) the fees awarded in similar cases, (5) the contingency or certainty of compensation, (6) the results obtained, and (7) the responsibility involved" (Matter of Alice D. [Lupoli], 113 AD3d 609, 613-614 [2d Dept 2014]; see Matter of Freeman, 34 NY2d 1 [1974]).

[2] In the instant matter, the petitioner's motives were at the very least questionable when commencing this guardianship{**78 Misc 3d at 395} proceeding. While it may not have been frivolous, the contentiousness between mother and daughter cast a giant shadow over this proceeding, most telling being the jury verdict in favor of the respondent mother, the extensive cross-examination by respondent's counsel of the petitioner, and the extensive motion practice.

As to the court evaluator's fee, the court directs both parties to immediately pay 50% of his fee, which the court deems to be the reasonable total sum of $17,812.50 for 37.75 hours of professional services provided, in view of the fact that inter alia the court evaluator is one of the leading guardianship practitioners in Nassau County (see Matter of Petty at 282-284; Matter of Samuel S. [Helene S.], 96 AD3d 954, 958 [2d Dept 2012]; Matter of Kurt T. at 824). Counsel for Eleanor D. claims that his client has incurred legal fees in the sum of $104,715 at a rate of $650 per hour for this proceeding alone. The court has reviewed counsel to the alleged incapacitated person's affirmation of legal services and hereby awards $56,385 for 161.1 hours of legal services rendered 50% to be paid by the petitioner and 50% to be paid by the alleged incapacitated person. Petitioner is directed to pay the 50% awarded within 10 days of receipt of this decision and order.

Sanctions and Confidentiality of Court Evaluator Report

This is a case of first impression regarding the unilateral decision by a party to disseminate, and even introduce, a court evaluator report in a separate judicial proceeding without permission from the guardianship justice presiding over the guardianship proceeding.

CPLR 4504 (a) details a variety of information that is deemed confidential and privileged. The Legislature has enacted several narrow exceptions to this rule for various reasons, one of which being Mental Hygiene Law § 81.09.^[FN1] Mental Hygiene Law § 81.09 details the responsibilities of the court evaluator and details what said report will contain. While Mental Hygiene Law § 81.09 on its face does not explicitly state the confidentiality of the court evaluator report, it is clear that this report should not be disseminated without court approval. The court evaluator report necessitates the compilation of information regarding physical and mental prognosis, substance dependency, financial analysis, and other sensitive information.{**78 Misc 3d at 396} The information sought by a court evaluator may be so deeply privileged that even the court evaluator would need a court order to access that information (Mental Hygiene Law § 81.09 [d]).

The Second Department's Guardianship Task Force Report states that the Court Evaluator's "Report always contains confidential and personal medical and financial information pertaining to the AIP" (Supreme Court of the State of New York, Appellate Division: Second Judicial Department, Hon. Hector LaSalle, Presiding Justice, Best Practices, Guardianship Proceedings, Second Judicial Department Guardianship Task Force Report at 21 [May 2022], https://www.nycourts.gov/ip/gfs/pdfs/best-practices-guardianship-proceedings-handbook-ad2-may-2022.pdf [accessed Jan. 4, 2023]). The Task Force Report goes on to state that "[a]rticle 81 vests the Guardianship Court with the discretion to determine if any portion of the Court Evaluator's Report should even be disclosed to any parties/counsel in the proceeding" (id.). The Law Revision Commission Commentary for Mental Hygiene Law § 81.09 elaborates that "section 81.09 should alert the court evaluator to the need to consult other laws. It should be noted that neither Article 77 nor 78 addressed the issue of confidentiality of patient records and the study of the practice under the statutes indicated that the medical records were routinely made available" (Law Rev Commn Commentary, NY CLS, Mental Hygiene Law § 81.09 [1993]).

The court evaluator 's report can be analogized to grand jury minutes. When the Legislature enacted CPL 245.20 they allowed for automatic dissemination to defense, but it did nothing to abrogate the secrecy of a grand jury proceeding (see CPL 245.20 [1] [b]; 190.25 [4] [a]). The intention is to allow individuals involved in the pending action access to information that is necessary to continue forward with the proceeding. The court allows the parties access to the court evaluator's report under the same premise.

[3] There is no case, court rule, or statute which would let a reasonable attorney believe that a court evaluator's report can be freely used in any other legal proceeding, especially a contested proceeding where the report would be used against the alleged incapacitated person. Clearly, the Legislature intended the court evaluator's report as confidential and not freely disbursed when they granted the court evaluator access to confidential information and required its memorialization.{**78 Misc 3d at 397}

This court must determine whether it is appropriate to issue sanctions or refer this matter to the Grievance Committee. This was not an inadvertent disclosure by petitioner's prior counsel. This was a strategic disclosure of personal medical information to gain advantage in a contentious Family Court proceeding. Regardless of the intent for disseminating the court evaluator's report, an ethical and professional violation appears to have occurred when the court evaluator's report was submitted as an exhibit in a Family Court proceeding. This is [*5]especially troubling since the court evaluator's report cannot be admitted into evidence unless the evaluator testifies and is subject to cross-examination (Matter of Maher, 207 AD2d 133 [2d Dept 1994], lv denied 86 NY2d 703 [1995]).^[FN2]

In view of the fact that this is a case of first impression, the court has determined that the appropriate action to take is to refer this matter to the Grievance Committee.