Papers Considered:

Upon the foregoing papers, and after a hearing, the report by the referee on the final account in this proceeding pursuant to Article 81 of the Mental Hygiene Law is deemed to be a motion to confirm the report of the referee and as such is granted to the extent indicated below.

This is a cautionary tale about a guardian, who at the very least breached the fiduciary responsibilities she owed to the person she was appointed to protect, and the guardian's experienced guardianship attorney an official court examiner designated by the Appellate Division Second Department who, it appears, breached his ethical obligations to the guardian and her ward.

After reviewing the referee report submitted by Peter H. Levy, Esq., this Court directed a hearing on the final account regarding questionable expenditures and possible self-dealing which occurred during the guardianship over Carol Sharrocks and after her passing. Maria Vespe, the guardian of Carol Sharrocks' personal needs and property management, was "represented" at the hearing by her alleged counsel Anthony DeCarolis, Esq., despite Ms. Vespe stating that DeCarolis did not formally represent her (tr at 3 line 10-25).

The factual and procedural history of this proceeding is as follows:

On December 6, 2028, a guardianship petition was filed by Maria Vespe pursuant to Article 81 of the Mental Hygiene Law for an order and judgment appointing a guardian for the personal and property management needs of Carol Sharrocks, an alleged incapacitated person. Anthony DeCarolis, Esq. represented Ms. Vespe at the time of the filing of the initial petition and appeared on her behalf at the January 25, 2019, hearing for the appointment of a guardian. At the January 25, 2029, hearing Carol was adjudicated a person in need of a guardian. The order and judgment was signed on March 11, 2019 (Anzalone, J.), appointing Ms. Vespe as the personal needs and property management guardian. A bond was obtained in the amount of $250,000.00 and Ms. Vespe received her commission on May 6, 2019.On May 30, 2019, Ms. Vespe submitted a letter to the Court stating in pertinent part: "Carol suffers from various cognitive problems and has experienced periods of confusion and acted erratically in the last few years" and "The Nassau District Attorney's Office, the Nassau Police Department, three bank managers, Carol's brother, and Carol's friends and neighbors all believe Carol is a victim of abuse and financial crimes. She suffers from some cognitive disabilities and has limited resources. While I am her guardian and have done much to pursue and investigate the matter, I do not have the authority to conduct the appropriate investigation nor does Carol have the resources to do so" (May 30, 2019, letter to Court, pg. 1-2; pg. 8).

On August 2, 2019, Ms. Vespe filed her Initial Report as the guardian. In said report Ms. Vespe stated that Ms. Sharrocks had liquid assets in the amount of $274,655.82, a monthly income of $2,925.36, a family home located at 4 Laurel Court, East Norwich, NY 11732, and a 2007 Honda Fit in poor condition. A real property bond was never filed, which was required by the order and judgment dated March 11, 2019. It is important to note that Ms. Vespe indicated that there was "no need to modify the powers" and that "personal needs on a daily basis are substantially provided for by 24-hours a day aides" (see Initial Report, August 2, 2019 [emphasis added]).

No annual accounting was ever filed after the filing of the initial report.

On August 29, 2019, Ms. Vespe brought Ms. Sharrocks to Mr. DeCarolis' office to execute a Last Will and Testament. The order and judgment does not authorize the execution of a will, no application was ever made to allow Ms. Sharrocks' to execute a will and the Court was never notified about the execution of the will dated August 29, 2019. The Court notes that Ms. [*2]Sharrocks had previously executed a will in 2003, which contains separate beneficiaries from the 2019 will.

Carol Sharrocks passed away on March 8, 2021. The Court was not alerted of Ms. Sharrocks' death until May 30, 2024, when Mr. DeCarolis filed a final account on behalf of Ms. Vespe as the purported 'counsel to the guardian'.^[FN1] The filing prompted the appointment of a referee to state and settle the final accounting. On November 4, 2024, Mr. Levy submitted his report and final account on behalf of Ms. Vespe.

During the hearing before the undersigned, Ms. Vespe testified that Mr. DeCarolis, as her counsel, attempted to probate the 2019 will, but did not inform the Surrogate's Court about this ongoing guardianship proceeding. The Surrogate subsequently appointed Ms. Vespe as the fiduciary for the estate of Carol Sharrocks.

Thereafter, without informing the guardianship Justice assigned to this proceeding, Ms. Vespe sold Carol Sharrocks' East Norwich home on May 18, 2023, for $605,000; the sale netted $471,132.80 after the mortgage was satisfied.

Mr. DeCarolis represented Ms. Vespe for the sale of the East Norwich home (tr. 25-26).

Mental Hygiene Law Article 81 requires that "a guardian shall exercise the utmost care and diligence, exhibit the utmost degree of trust, loyalty and fidelity, and "use the property and financial resources and income available therefrom to maintain and support the incapacitated person, and to maintain and support those persons dependent upon the incapacitated person" (Mental Hygiene Law § 81.20). Further, if the court finds that the guardian has failed to discharge his or her duties in any respect the court may deny or reduce the compensation which would otherwise be allowed (Mental Hygiene Law § 81.28[b]). It is within the discretion of the guardianship court to determine compensation due to a fiduciary of an incapacitated person and the appropriateness of surcharging a fiduciary (Matter of Joshua H. v. Grace N., 80 AD3d 698, 699 [2d Dep't 2011] citing Mental Hygiene Law §81.28[b]; see generally Matter of Irene A., 214 AD3d 790 [2d Dep't 2023]; Matter of Rose V. (Scali), 171 AD3d, 1077 [2nd Dept. 2019]).

The Court of Appeals has severely limited a guardian's ability to utilize guardianship assets post death of an incapacitated person. In Matter of Shannon, the Court is explicit that a guardian is unable to retain funds following the death of the incapacitated person, except for a claim related to the administration of the guardianship (Matter of Shannon, 25 NY3d 345, 353 [2015]).

The movant in a proceeding seeking to surcharge a fiduciary is tasked with the initial burden of coming forward with evidence to establish that the amounts set forth are inaccurate or incomplete so as to raise an issue of fact as to whether the charges were reasonable and proper; if done, the respondent must demonstrate that the expenses were reasonable and proper (Matter of Albert K. [D'Angelo], 96 AD3d 750, 752-753 [2d Dep't 2012]). When a Court determines impropriety and that a surcharge should be issued, the legal fees incurred as a result of that proceeding can be born by the fiduciary (id. at 753). The Court notes that a New York State judge is mandated to report possible misconduct pursuant to the Professional Rules of Conduct 8.3 (22 NYCRR § 1200.0).

During the hearing herein, Ms. Vespe admitted that she incurred numerous post-death [*3]expenses, which Ms. Vespe conceded, she did not have the authority to do or pay for(tr 19-21) ; Shannon, supra). Ms. Vespe revealed that she was using guardianship funds to pay for cable, phones, and repairs in the house between 2021 and 2024. There were also expenses paid from the guardianship account between 2021-2024 which were impermissible post-death, such as CVS Pharmacy, Home Depot, holiday photos, house sitting and the cleanout of the residence to prepare for its sale (Referee Report pg. 11-15). The post-death expenses for each year which were paid from the guardianship funds are as follows: (1) $27,719.86 in 2021; (2) $4,122.60 in 2022; (3) $21905.26 in 2023; and (4) 934.39 in 2024, for a total of $54,682.11. Even if the Court was to accept the justification for the money spent in 2021, for the unauthorized alleged household related expenses, $36,531.88 remains as unjustifiable expenses.

As noted earlier, Carol Sharrocks died in early 2021 and Ms. Vespe should have promptly notified the Court of her passing, especially since she was working with Mr. DeCarolis, and she should have filed the final account within the statutory one-hundred and fifty days (Mental Hygiene Law § 81.44). Vespe's excuse for failing to uphold her fiduciary obligations are that she is a "lay guardian" and followed "common sense."

The Court does not accept this as a reasonable explanation for her actions. Ms. Vespe is a licensed social worker with over 30 years of experience currently working in the Nassau University Medical Center dealing with psychiatric patients (tr 39-40). Even though Ms. Vespe had no authority under Article 81 of the Mental Hygiene Law to sell the house post-death, it defies credulity that the house was in such poor condition, as testified to by Ms. Vespe, that it took over two years to clean out Ms. Sharrocks' residence after she passed with guardianship funds, which she was not allowed to do (Matter of Shannon, supra). Moreover, it is baffling to this Court that Carol Sharrocks was allowed to reside in the home while she was alive even though it allegedly took Ms. Vespe over two years to clean out the home. It is hard to believe that a three-decade long licensed social worker would allow a person to live in such squaller; it defies "common sense," which she repeatedly testified she followed instead of court orders.

Ms. Vespe clearly understood what she was empowered to do, and not to do, when she submitted the May 30, 2019, letter and expressed that she was not empowered to pursue such an investigation. Furthermore, her egregious actions are compounded by her purported representation by counsel, Mr. DeCarolis, and that they had the wherewithal to commence a Surrogate's Court action to probate a will. Mr. DeCarolis testified that there is now about $60,000 left from the sale of the home because of closing related expenses, including tax arrears!

Mr. DeCarolis' actions, and inaction, are also critical in evaluating the final account and the referee's report. Mr. DeCarolis has been involved in this proceeding since its inception in 2018. He had access to the Court Evaluator's report, he heard the testimony, he heard all the issues surrounding Ms. Sharrocks, that she did not appreciate her functional limitations and that she was susceptible to financial abuse.

The preparation and execution of the August 29, 2019, will with Mr. DeCarolis' assistance is disturbing to this Court. Nothing in the order and judgment permitted the guardian to execute a new will for Ms. Sharrocks. This Court will leave the validity of that will, its bequests, and any conflict of interest or overreaching contained therein, for the Surrogate to determine. As stated above, Ms. Vespe was represented, or at the very least was assisted by Mr. DeCarolis, and clearly knew what she was empowered to do and not to do.

What is shocking to this Court is Mr. DeCarolis' involvement in the preparation and execution of the subject will. Not only is he an expert on Article 81 of the Mental Hygiene Law [*4]and an experienced guardianship attorney, he has been appointed for many years by the Appellate Division Second Judicial Department as a Court Examiner overseeing guardianship estates and reviewing thousands of financial documents submitted by guardians.

In his defense, Mr. DeCarolis testified that he is also a paramedic and as such was qualified to determine whether Ms. Sharrocks was experiencing a "lucid interval" so that she was aware of the natural objects of her bounty (tr. 54-55). However, no independent witness was produced to verify whether Ms. Sharrocks was "lucid" when she executed the will. Ms. Vespe and Mr. DeCarolis both testified that Ms. Sharrocks suffered from a urinary tract infection in December of 2018, which allegedly caused her to suffer cognitive issues, and once she treated she was better.

Mr. DeCarolis' claims are contradicted by the actions that occurred contemporaneously with, and after, the execution of the 2019 will. If Ms. Sharrocks had recovered from her urinary tract infection, why was there no indication in the May 30, 2019, letter? Why was there no indication of her a change in her condition in the August 2, 2019, initial report? Why did Ms. Vespe permit Carol to continue to be a hoarder, which is why the home allegedly took three years to clean out? All of these actions contradict the explanation provided by both Mr. DeCarolis and Ms. Vespe. Mr. DeCarolis certainly knew better. One of the guiding principles of Article 81 is that as a matter of public policy is for the Court to impose the least restrictive form of intervention. If Ms. Sharrocks was lucid and was recovered, there should have been an application to terminate the guardianship pursuant to Mental Hygiene Law § 81.36(a)(1) and/or an application to have Ms. Sharrocks execute a Power of Attorney and Health Care Proxy which would remove the necessity of a guardianship and save Ms. Sharrocks the expenses of being subject to an Article 81 guardianship.

The figurative "Hail Mary" verbal toss Mr. DeCarolis attempted during the hearing to excuse the actions of Ms. Vespe and himself was that if this Court was to surcharge Ms. Vespe, if lay persons or attorneys become aware of what happened here when you are "really, really bad at accounting" no one would want to serve as guardian (tr 66-67). However, these actions are so egregious, that Referee Levy stated at the hearing that although he has seen throughout his tenure as a guardian, court examiner, and referee "[post death expenses], but never to this extent. Never to three years later, guardianship accounts are still being used for purposes" (tr 68). These are not expenses the Court can ratify; they are expenses incurred which are the sole result of not following the order and judgment, not following Mental Hygiene Law Article 81, which has resulted in waste. If this matter was handled appropriately, the assets would have been turned over to the estate and these expenses would have been avoided. The only explanation for the waste of estate assets was Ms. Vespe's failure to follow her fiduciary duties for over three years.

In sum, a guardianship account is not the personal piggy bank of the guardian.

All of the actions which have occurred from 2019 through the present have greatly disturbed the Court. The shadow of impropriety which has tainted Ms. Vespe and Mr. DeCarolis necessitates further review and investigation by the appropriate investigatory governmental bodies.

Based on the foregoing, it is hereby

ORDERED, that the motion by the referee for an order confirming the final account is granted to the extent indicated below, and it is further

ORDERED, the applications by the guardian, Maria Vespe, and counsel to the guardian, Anthony DeCarolis, Esq. for an award of reasonable compensation for the services they [*5]rendered, are denied in their entirety; and it is further

ORDERED, that Joshua Liebman, Esq. (FID#107663), 400 Garden City Plz, Ste 403, Garden City, NY 1530, (516) 747-7400, is appointed as Receiver in this matter to marshall all the assets of Carol Sharrocks, including but not limited to those held in any escrow accounts, and investigate the funds from the sale of the East Norwich Home and report the findings to the Surrogate's Court, which shall determine the compensation of said receiver; and it is further

ORDERED, that Maria Vespe is surcharged in the amount of $54,682.11, which shall be paid to Joshua Liebman, the Receiver, within thirty (30) days of this order.^[FN2]

This Court urges the Nassau County Surrogate to appoint Counsel for the Estate of Carrol Sharrocks to investigate the 2019 Will and 2003 Will for which should be probated, if any. The Court is required to furnish this decision and order to the State of New York Grievance Committee for the 10th Judicial District.

Referee Levy shall submit an order confirming the final account to the extent indicated above and serve said order after it is entered by the County Clerk, upon all parties and the Surrogate of Nassau County.

The foregoing constitutes the decision and order of this Court.