MHL ARTICLE 81 - New York State Unified Court System

upon the movant’s conclusory allegations of misconduct.
Matter of Jones (Josephine R.), 31 Misc3d 1239A; 930 N.Y.S. 2d 175 (Sup. Ct., Kings Cty.,
2011) (Spodek, J.)
The guardian for an incapacitated woman who received ongoing proceeds from a sizeable medical
malpractice settlement entered into two self serving mortgage agreements; one to a borrower whose
poor credit rating and substantial personal debt prevented her from obtaining conventional financing
at a standard rate and another to someone who had a business relationship with the guardian’s wife
which enabled the guardian’s wife to pay off their personal home equity line of credit. For over a
year thereafter, the guardian repeatedly failed to collect the payments due to the AIP on one of the
mortgages. Following the Court’s suspension of the guardian, and the removal of the Court
Examiner, the Court held a hearing to determine the propriety of the guardian’s investment decisions
for the two mortgages. At the conclusion thereof, the Court rebuked the guardian for his decision
to invoke his right against self incrimination in order to avoid answering the Court’s questions, and
criticized the guardian for failing to first obtain court authorization for each transaction, and for
failing to using the services of a Court ordered appraiser. The Court rejected the guardian’s claim
that his “investments” were justified under the prudent investor standard, citing, inter alia, the
guardian’s failure to diversify the guardianship assets, his decision to make the investment in the first
place under all the circumstances, his subsequent failures to collect the payments due to the IP, to
impose penalty fees, to accelerate the loan, or to foreclose on the property, and his decision to lower
the applicable interest rates for no consideration, thereby depriving the IP of guaranteed income at
the higher contractually obligated rate. In light of the guardian’s “pattern of unconscionable conduct
and self-dealing to advance his own financial interests and personal profit” the Court surcharged him
$650,000 at 9% interest.
Matter of Jones (Lantigua), 31 Misc. 3d 1205A; 929 N.Y.S. 2d 200 (Sup. Ct., Kings Cty., 2011)
(Barros, J.)
The co-guardian and trustee for a severely disabled child who had received at $684,700 lump sum
net settlement of his wrongful life action was denied commissions and surcharged $501,425.67 for
breach of his fiduciary duty to the child by, inter alia: (1) deliberately purchasing a dilapidated home
for the child, from the estate of one of his former wards (for whom he also served as closing
attorney), for significantly more than what he had affirmed the house was worth; (2) entering into
a contract, without prior court approval, with his business associate, to renovate the home; (3)
renting from this same business associate, for the child’s use during construction, a $1,200 a month
dilapidated, vermin-infested apartment that was not handicapped-accessible (in violation of the
guardianship order and judgment which limited the child’s rent obligation to $300 a month); (4)
failing to call this business associate to task when he proved utterly incapable of creating a
handicapped-accessible home; and (5) failing to create a supplemental needs trust for the child,
which resulted in the child’s loss of his medicaid and SSI income.
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