Guardianship and Conservatorship of Vincent M. Jones , 164 A.3d 969 ( 2017 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2017 ME 125 Docket: Wal-16-120
Submitted
On Briefs: November 29, 2016
Decided: June 20, 2017
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, JABAR, HJELM, and HUMPHREY, JJ.
GUARDIANSHIP AND CONSERVATORSHIP OF VINCENT M. JONES
HJELM, J.
[¶1] Kenneth E. Jones, conservator and guardian for his son Vincent M.
Jones, and Susan C. Thiem, Esq., Kenneth’s counsel, appeal from two orders
issued by the Waldo County Probate Court (Longley, J.).1 In the first of these
orders, the court dissolved and replaced a supplemental needs trust that had
been created for Vincent’s estate. Kenneth argues that, for several reasons,
the court was procedurally barred from creating a new trust for Vincent. In
the second order at issue on this appeal, the court directed Attorney Thiem,
who created the original trust, to disgorge legal fees paid to her by Vincent
and conditionally to pay additional amounts. Attorney Thiem argues on
appeal that this order deprived her of due process. We affirm the court’s
1 There is no appellee.
2
order creating the replacement supplemental needs trust, but we vacate the
payment order against Attorney Thiem and remand for further proceedings.
I. BACKGROUND
[¶2] In 2008, Kenneth E. Jones filed a petition in the Waldo County
Probate Court to be appointed guardian and conservator for his incapacitated
adult son, Vincent M. Jones, because of Vincent’s debilitating mental illness.
The court (Longley, J.) granted the petition in August 2008.
[¶3] Kenneth retained Attorney Thiem as counsel as early as
December 2008. In March 2013, Kenneth filed a petition with the Probate
Court for retroactive judicial approval of a supplemental needs trust
benefiting Vincent.2 In the petition, Kenneth stated that in August 2012,
Vincent had been moved from a psychiatric hospital to the Charlotte White
Center (CWC), a long-term care facility. Kenneth further stated that Vincent
was receiving Social Security and MaineCare benefits, and that because
Vincent was now a long-term care resident, he could continue to receive
MaineCare benefits if less than $10,000 were maintained in a trust. After a
telephonic hearing, the court issued an order in June 2013, concluding that the
2 A supplemental needs trust, or supplemental care trust, is “a type of trust that holds funds on
behalf of a disabled person . . . and that allows the beneficiary’s eligibility for certain Social Security
and state health benefits to remain unaffected by the funds held in trust.” DeCambre v. Brookline
Hous. Auth., 826 F.3d 1, 4 (1st Cir. 2016) (citing 42 U.S.C.S. § 1396p(d)(4)(A) (LEXIS through Pub. L.
No. 115-37)).
3
trust was in Vincent’s best interest and retroactively authorizing Kenneth to
create the trust.
[¶4] In October 2013, Kenneth filed the third account of his
guardianship detailing the assets and financial transactions of Vincent’s estate
from June 2012 to September 2013. See 18-A M.R.S. § 5-419 (2016). The
account indicated that in January 2013, the estate had made a $25,000
payment, plus additional payments totaling $5,292, to CWC. In response, the
court appointed a visitor to “scrutinize the billing, determine if the ward is
receiving services promised, [and] assess amounts charged to determine
reasonableness and appropriateness.” See id. § 5-419(c). The visitor
subsequently filed a letter with the court recommending that “a detailed
invoice be required from CWC to confirm the reasonableness of the $25,000
back payment.”
[¶5] After holding a telephonic status conference in January 2014, the
court appointed a second visitor to research the $25,000 payment. That
visitor filed a report in May 2014, along with copies of an invoice for more
than $62,000 arising from CWC’s care of Vincent from August through
November 2012; correspondence from Attorney Thiem to CWC accompanying
the $25,000 payment from Vincent’s trust account, in which Attorney Thiem
4
asserted that “Medicaid should have paid for the first 100 days of care” and
thus that $25,000 was an overpayment; and a response from CWC’s chief
financial officer. The CFO’s letter stated that Attorney Thiem had
misunderstood the funding sources and that CWC was owed for Vincent’s care
until Medicaid began covering the payments in December 2012, but that CWC
had agreed to discount the charges and accept $25,000 as full payment as an
accommodation to Vincent.
[¶6] In July 2014, Attorney Thiem filed a motion for recusal and
disqualification of Judge Longley, asserting that during the January 2014
conference,3 the court “proceeded to berate [Attorney Thiem], intimating that
[her] legal fees were excessive” and that her “procedural blunders” adversely
affected Vincent’s assets. Attorney Thiem subsequently moved to dismiss that
motion “in light of the [court’s] threat [allegedly made at another hearing that
is not noted in the docket], and to protect my client’s interest.”
[¶7] In orders issued on September 9, 2014, the court denied both
Attorney Thiem’s motion to dismiss the motion to recuse and the motion for
recusal itself, stating that the court had “acted even-handedly to date” and
could continue to do so. The court also issued an order noting that it had
3 The record does not indicate whether the hearing was recorded, but in any event a transcript
has not been included in the record.
5
found a “discrepancy” and a “dramatic change from the previous accounting”
in the third account—the $25,000 payment to CWC—which, according to the
court, the conservator, through Attorney Thiem, was unable to adequately
explain. In that order, the court concluded that an error by Attorney Thiem
had necessitated the $25,000 payment. In October, the court ordered Kenneth
to file an explanation for “the $25,000 loss of assets from [Vincent’s] estate”
and to address the issue of “[s]anctions for [Attorney Thiem] in light of delays
and mistakes resulting in the $25,000 loss of assets from [Vincent’s] estate.”
[¶8] On November 24, 2014, Attorney Thiem filed a renewed motion
for Judge Longley to recuse herself from the proceeding. Additionally,
Kenneth filed a petition for leave to resign as Vincent’s conservator based on
his stated belief that the court was dissatisfied with his actions. Kenneth
subsequently filed both an amended third account and a fourth account to
bring the accountings current through October 2014. Later in December, the
court appointed an attorney to represent Vincent’s interests in connection
with the third account and the $25,000 payment to CWC.
[¶9] In January 2015, Attorney Thiem filed a motion to withdraw as
counsel for Kenneth, asserting in part that her contentious relationship with
Judge Longley had made it difficult for Kenneth to carry out his
6
responsibilities as Vincent’s conservator and guardian. The court held a
telephonic conference, in which Attorney Thiem participated, on February 10,
2015. Judge Longley issued an order on March 24, 2015, denying the renewed
motion for recusal but granting Attorney Thiem’s motion to withdraw as
counsel.
[¶10] This left several matters pending, including a ruling on the third
and fourth accounts pursuant to 18-A M.R.S. § 5-419, and Kenneth’s petition
to withdraw as conservator. From June to December 2015, the court held five
telephonic conferences on these outstanding matters, ultimately holding a
hearing over two days in January and February 2016.4 Ten different notices of
conference and hearing dates were sent to Kenneth, Vincent’s appointed
counsel, and the visitor. None of the notices was sent to Attorney Thiem, who
had already been given leave to withdraw from the case. The last two notices
of hearing, which set out the two dates when the hearing was actually held,
referred to the “Court’s Motion to Reform the Trust.”
[¶11] On the second hearing day, the court stated its view that the
supplemental needs trust it had approved in 2013 was unnecessary because
the funds it was intended to protect were already exempt from MaineCare’s
4 The record on appeal includes a transcript of the second hearing day but not of the first.
7
eligibility calculations. The court implied that Attorney Thiem had conflated
Medicaid and Medicare in her analysis of Vincent’s situation, and stated that it
wanted to issue an order that would “recoup . . . the legal expenses paid to
date because of the situation that’s resulted, which has been the loss of
[Vincent’s] life savings.” The court further stated that reimbursement was
needed because “justice requires that something be put in the [supplemental]
needs trust” and that “a terrible legal mistake happened.”
[¶12] The court subsequently issued two orders on matters addressed
at the hearing. These orders are the subject of this appeal. In one, issued on
February 23, 2016, the court found that the conservator, represented by
Attorney Thiem, failed to create a trust in time to protect the $25,000 paid
from Vincent’s estate to CWC, and that Thiem’s legal fees of $3,638.35 were
“unreasonable and excessive.”5 The court ordered “recovery of legal fees paid
[Attorney] Thiem,” which the court directed her to pay by March 1, 2016. The
court further ordered that if Attorney Thiem did not disgorge her attorney
fees by that date, the amount due from her would “double[] for each day of
delay until recovery equals the $25,000 loss of the father’s savings for his
disabled son, plus court costs.” See infra n.8.
5 In the order, the court also accepted Kenneth’s resignation as conservator, and another person
was appointed to assume that responsibility. Kenneth continues to serve as Vincent’s guardian.
8
[¶13] In the second order, issued two days later, the court dissolved the
supplemental needs trust it had approved post hoc in June 2013. The court
further ordered the establishment of a replacement supplemental needs trust,
and, “[t]o save the time, money and energies of as many involved as possible,”
the court itself drafted and issued the instrument creating that replacement
trust. The court attached the new trust instrument to its order.
[¶14] Attorney Thiem entered a limited appearance on behalf of
Kenneth as guardian and filed a “motion to dismiss” the two February orders.
The court denied the motion, and Kenneth and Attorney Thiem timely
appealed.
II. DISCUSSION
[¶15] Kenneth asserts that the court erred by creating the second
supplemental needs trust for Vincent, and Attorney Thiem argues that the
court’s imposition of financial sanctions against her was an abuse of its
discretion. We consider these issues in turn.
A. Creation of a Replacement Supplemental Needs Trust
[¶16] Kenneth challenges the process by which, in February 2016, the
court dissolved the trust it had authorized in June 2013 and created another
to replace it. Without raising any issue about the substantive provisions of the
9
successor trust, Kenneth argues that 4 M.R.S. § 309 (2016) prohibited the
court from independently drafting the instrument that created the
replacement supplemental needs trust and then approving that trust.6
Because Kenneth did not present this argument to the Probate Court, he has
not preserved it for appellate review. See In re Christopher H., 2011 ME 13,
¶ 15, 12 A.3d 64. We consider the argument, however, to the extent that he
asserts the order is “void” for lack of statutory authority pursuant to section
309. See Estate of Reed, 2016 ME 90, ¶ 6, 142 A.3d 578 (“The Probate Court is
a statutory court of limited jurisdiction and its actions are void unless taken
pursuant to statutory authority.” (quotation marks omitted)); Laprel v. Going,
2014 ME 84, ¶ 15, 96 A.3d 67.
6 Kenneth also argues that the court was barred by principles of res judicata from creating the
successor supplemental needs trust because it had already approved the first trust. This argument
is without merit. Res judicata prevents the relitigation of identical factual issues that, under
particular circumstances, were already decided, and of entire claims that were or could have been
litigated in a prior action. See Portland Co. v. City of Portland, 2009 ME 98, ¶ 22, 979 A.2d 1279.
Here, concluding that the first trust did not accomplish its ostensible objective, the court created a
new trust that it determined could more effectively serve Vincent’s needs. The order establishing
the successor trust did not constitute the relitigation of a factual issue or cause of action, and
therefore was not barred by res judicata.
Additionally, Kenneth asserts that the court erred by issuing the supplemental needs trust
of its own accord, without a motion, notice, or hearing. The partial record that Kenneth has
provided shows that two notices of hearing sent by the clerk to Kenneth and other interested
parties in January 2016 expressly referred to the “Court’s Motion to Reform the Trust.” This was
sufficient to place Kenneth on notice that the court intended to take up that matter. Further, the
transcript that Kenneth did include in the record, which is limited to the second hearing date,
demonstrates that, contrary to Kenneth’s contention, a hearing was held on the issue of a
replacement trust.
10
[¶17] Section 309 provides in relevant part, “No judge of probate shall
draft or aid in drafting any document or paper which he is by law required to
pass upon.” The Probate Code authorizes the probate courts to manage the
affairs of a protected person and, as one aspect of that authority, expressly
allows the court to create a trust of property of the person’s estate.
See 18-A M.R.S. § 5-408(3) (2016). To interpret section 309 as Kenneth
argues would effectively prohibit a probate court from exercising its statutory
authority to create trusts designed to safeguard a protected person’s property.
To the extent that there is a conflict between the statutes, because section
5-408(3) is narrower than the more generally framed provision of section
309, the former controls. See Butler v. Killoran, 1998 ME 147, ¶ 11, 714 A.2d
129 (“[A] statute dealing with a subject specifically prevails over another
statute dealing with the same subject generally.”). Here, notwithstanding
section 309, the Probate Court judge drafted and issued the successor trust
instrument pursuant to the express authority vested in the probate courts by
the Legislature, and the order therefore is not void.
11
B. Order of Payment Issued Against Attorney Thiem
[¶18] Asserting that she was not given notice or an opportunity to be
heard, Attorney Thiem argues that the court erred when it issued the
following order:
[T]his [c]ourt orders . . . [b]y Mar. 1, 2016, recovery of legal fees
paid Ms. Thiem, then doubled for each day of delay until recovery
equals the $25,000 loss of the father’s savings for his disabled son,
plus court costs.[7]
Although the order does not explicitly identify the person who is required to
make the payment, it is apparent from the language—and from the court’s
comments in the order criticizing Attorney Thiem’s legal work in the case—
that this is an order requiring Attorney Thiem to disgorge her legal fees and
potentially pay the additional amount.8
7 The court relied on two statutes, 18-A M.R.S. §§ 5-414 and 3-721(a) (2016), as authority to
order disgorgement of attorney fees based on its conclusion that the fees were excessive. It may be
that neither of these provisions applies to the circumstances of this case. Section 5-414 provides
that a lawyer or other professional who is appointed to participate in a protective proceeding is
entitled to reasonable compensation paid by the estate. Here, Attorney Thiem was not appointed
by the court to represent the conservator. Section 3-721(a) authorizes a probate court to
determine the reasonableness of attorney fees paid by a decedent’s estate. See Estate of Robert E.
Sweetland, 2001 ME 21, ¶ 9, 770 A.2d 1017. There is no parallel statutory provision, however,
applicable to a protected person’s estate.
We do not address whether either of these statutes authorized the court to take the action
at issue here because Attorney Thiem has not raised such a challenge and because we are
remanding the matter for other reasons.
8 It is less clear to whom Attorney Thiem is to make the payment. The order states that the
$25,000 payment to CWC had been made from “the father’s savings.” On the other hand, evidence
in the record—the amended third account filed in December 2014 and the visitor’s report filed in
May 2014—indicates that the payment came out of Vincent’s trust account. Because the transcript
12
[¶19] “We review de novo whether an individual was afforded
procedural due process.” In re Adden B., 2016 ME 113, ¶ 7, 144 A.3d 1158.
“The essence of due process is notice and an opportunity to be heard.”
Michaud v. Mut. Fire, Marine & Inland Ins. Co., 505 A.2d 786, 789 (Me. 1986);
see Dowling v. Bangor Hous. Auth., 2006 ME 136, ¶ 12, 910 A.2d 376;
Int’l Union v. Bagwell, 512 U.S. 821, 832-33 (1994). Where procedural due
process rights are at issue, “the deprivation by state action of a
constitutionally protected interest in ‘life, liberty, or property’ is not in itself
unconstitutional; what is unconstitutional is the deprivation of such an
interest without due process of law.” Zinermon v. Burch, 494 U.S. 113, 125
(1990). This means that the state “must say what it intends to do and then
give affected persons the chance to speak out against it.” Rivera-Corraliza v.
Puig-Morales, 794 F.3d 208, 223 (1st Cir. 2015).
[¶20] The court’s payment order clearly implicates Attorney Thiem’s
property interests. See Town of Castle Rock v. Gonzales, 545 U.S. 748, 766
(2005) (noting that rights with an “ascertainable money value” fall within the
traditional concept of property (quotation marks omitted)). Accordingly, she
from the January 19, 2016, hearing date has not been provided to us, we cannot know whether the
court was presented with information different from the evidence presented in the record. On
remand, the court will have the opportunity to clarify this issue.
13
was entitled to process consisting of notice and an opportunity to be heard.
She was provided, however, with neither.
[¶21] According to the record on appeal, once the court granted
Attorney Thiem’s motion to withdraw as Kenneth’s attorney in late
March 2015, the court did not send her notices of any pre-hearing conferences
or of the hearing itself that resulted in the payment order. In the absence of
any notice whatever, the order that runs against Attorney Thiem personally
must be set aside.9 Cf. Linscott v. Foy, 1998 ME 206, ¶ 22 n.12, 716 A.2d 1017.
[¶22] In addition to ordering reimbursement of attorney fees actually
paid to Attorney Thiem, the court ordered her to pay additional amounts, up
to a total of $25,000—the amount that the court concluded was unnecessarily
paid to CWC—if Attorney Thiem did not disgorge the attorney fees themselves
by a date certain. As deficient as was the process resulting in the order
affecting attorney fees themselves, the portion of the order making Attorney
Thiem conditionally liable for amounts in excess of the attorney fees she was
paid is even more flawed.
9 Attorney Thiem, prior to her withdrawal, was on notice of the court’s concerns about both
whether she had made mistakes in her legal work as the conservator’s attorney and whether those
mistakes resulted in an unnecessary obligation for Vincent to pay $25,000 to CWC. Attorney
Thiem’s awareness of the court’s concerns prior to her withdrawal, however, is not a substitute for
the notice she was entitled to receive of the actual adjudication of the reasonableness of her legal
fees.
14
[¶23] The court’s order issued against Attorney Thiem does not explain
the nature and purpose of this conditional extended liability. Consequently, it
is impossible to determine prospectively the nature of the process that
Attorney Thiem will be due should the court seek to pursue imposition of
these additional fees. See Zinermon, 494 U.S. at 127 (stating that due process
is “a flexible concept that varies with the particular situation”); Splude v.
Dugan, 2003 ME 88, ¶ 6, 828 A.2d 772.
[¶24] For example, if the additional increasing payments constitute a
coercive sanction pursuant to M.R. Civ. P. 66,10 the court must follow the
process prescribed in that Rule. See Guardianship of Isabella Ard, 2017 ME 12,
¶¶ 22-24, 154 A.3d 609; Cayer v. Town of Madawaska, 2009 ME 122, ¶ 8,
984 A.2d 207 (explaining that for remedial contempt sanctions, Rule 66
“requires the court to order service of a contempt subpoena on the alleged
contemnor, and to conduct a hearing and take evidence by testimony,
depositions, or affidavits”). Or, if the order was an effort by the court to assess
compensatory damages to benefit Vincent’s estate for the amount the court
felt was lost due to Attorney Thiem’s allegedly deficient representation,
then—even aside from any questions concerning the court’s standing to do
10 Maine Rule of Civil Procedure 66 is applicable to the Probate Court. See M.R.
Civ. P. 66(a)(2)(F).
15
so11—the order may amount to a determination of legal malpractice and
damages, which might entitle Attorney Thiem to the process that accompanies
civil money damages claims, including the right to trial by jury. Cf. Garland v.
Roy, 2009 ME 86, 976 A.2d 940.
[¶25] Regardless of the nature and purpose of this additional layer of
potential personal liability, Attorney Thiem received no process, and we
vacate the order. See Soley v. Karll, 2004 ME 89, ¶ 15, 853 A.2d 755 (vacating
a court’s award of attorney fees as damages, and remanding for clarification,
where the award was not authorized by any contract or statute and the court
failed to explain the basis for its authority). Because we cannot glean the
character of this portion of the order, we do not reach the question of the
nature of the process that the court must provide on remand.
III. CONCLUSION
[¶26] We affirm the order creating a replacement supplemental needs
trust for Vincent’s estate. The order requiring Attorney Thiem to disgorge
attorney fees and exposing her to liability for even greater amounts, however,
was not predicated on minimum process requirements to which Attorney
11 The record before us contains no indication that Vincent, through his court-appointed counsel
or otherwise, took steps to pursue a claim against Attorney Thiem or to otherwise recover any sum
of money from her.
16
Thiem was entitled. Accordingly, we vacate the payment order and remand
for further proceedings.
The entry is:
Judgment entered February 25, 2016, affirmed.
Judgment entered February 23, 2016, vacated.
Remanded for further proceedings consistent
with this opinion.
Susan C. Thiem, Esq., Law Office of Susan C. Thiem, Lincolnville, pro se and for
appellant Kenneth Jones
Waldo County Probate Court docket number 2008-148-6
FOR CLERK REFERENCE ONLY