In re Guardianship of Shell, — So.2d —-, 2008 WL 1757211 (Fla. 2d DCA Apr 18, 2008)
When it comes to guardianship cases the court is not simply adjudicating a dispute, it is the party with ultimate/primary authority to determine, in its discretion, what is in the "best interests" of the ward. I think this perspective is crucial to understanding the level of scrutiny courts give to guardianship fee petitions. It is this special role of the court in guardianship matters that was also the basis of the 2d DCA’s grandparent-visitation-rights opinion in 2005 [click here].
Competent Substantial Evidence: Litigation of Guardian’s and attorney’s fees and expenses.
The statute governing contested guardian fee petitions is F.S. 744.108. In this case the court-appointed guardian was Lutheran Services Florida, Inc. In a contested hearing on its fees the only evidence was the testimony of Lutheran Services’ representative, Sharon Van Wart. She, of course, testified that the fee was appropriate. The trial court disagreed and Lutheran Services appealed. The issue on appeal was whether your own witness’s testimony can constitute "competent, substantial evidence" to rule against you. The answer: of course! For me, the big lesson from this case is that fee disputes are always bad news.
Here are the key excerpts from the linked-to opinion:
In this appeal, Lutheran Services relies on Sitter for the proposition that a probate court’s decision to reduce a guardian’s fee must be based on competent, substantial evidence. 779 So.2d at 348. We do not disagree with this general statement. However, we note that no presumption of reasonableness attaches to a guardian’s petition for fees, and no statute or case law requires the probate court to simply accept the guardian’s fee petition at face value and rubberstamp it. Nor is the probate court required to accept a guardian’s personal assertion of the time he or she spent performing a common task as dispositive of the issue of reasonableness. Indeed, such would be an abdication of the probate court’s responsibilities to the ward. Instead, the probate court may question the guardian concerning the tasks performed and the time spent performing those tasks, and the guardian’s responses to those questions constitute competent evidence upon which the probate court may rely when determining whether the fee requested is reasonable. Moreover, when the probate court accepts such testimony from the guardian, it may assess the credibility of that testimony in light of the court’s experience and common sense, and this court must defer to the probate court’s credibility assessment.
. . . . .
Here, the probate court elicited, or attempted to elicit, evidence from Van Wart to support the disputed fee entries. Had Van Wart provided a reasonable explanation for why the claimed time was necessary to accomplish the disputed tasks in this case, we might have had some basis to find that the probate court abused its discretion in rejecting that testimony and reducing the fee. However, when Van Wart failed to provide any testimony, reasonable or not, to support the time claimed for the specific tasks at issue, the probate court was within its authority to reduce the fees accordingly. Therefore, we hold that the probate court did not abuse its discretion in reducing the fees claimed by Lutheran Services in this case and in denying the objections raised by Lutheran Services to the reduced fee.
SOAPBOX SOUND OFF:
Are courts really helping wards by forcing top-tier providers, like Lutheran Services, out of the guardianship business?
In the linked-to opinion the court alludes to its special role in contested guardianship proceedings – especially when the guardian is litigating its own fees – in the following footnote:
[FN1.] At the start of the hearing, the probate court expressed its concerns that no one at the hearing was representing the ward, whose interests on the fee reduction issue might well conflict with the guardian’s interests since the guardian’s fees were being paid from the ward’s assets. We share the probate court’s concern that no one is truly representing the ward’s interests when objections to fee reductions are filed and brought to hearing by the guardian. We also note that section 744.391, Florida Statutes (2005), requires the probate court to appoint a guardian ad litem to represent the interests of the ward “if the interest of the guardian is adverse to that of his or her ward.” However, we recognize that appointing a guardian ad litem for the ward each time the guardian petitions for an award of fees is impractical. Therefore, we must rely on the probate court to exercise its authority responsibly to protect the interests of the ward in these situations.
Based on their role in guardianship cases and the perceived conflict of interest noted above, courts feel authorized – perhaps even compelled – to micromanage guardians to an extent other fiduciaries commonly before probate courts – personal representatives/ trustees – are never subjected to. However, enforcing a "managed care" pricing structure on fees in guardianship proceedings could ultimately hurt, rather than help, wards because well-meaning, well-managed, professional organizations such as Lutheran Services will inevitably get priced out of the market. Here’s a revealing quote from the linked-to opinion:
Lutheran Services’ counsel responded that Lutheran Services was feeling “micromanaged” and that this type of micromanagement would force it out of business.
Managed-care pricing only works if service providers are guaranteed a sufficient volume of patients/wards to produce the economies of scale that make managed care economically viable. Insurance companies make this model work because they have the power to steer patients to their network of doctors in sufficient numbers to make it economically feasible for those doctors to stay in business billing at very low per-patient rates. Probate courts have the authority to steer wards to particular service providers/guardians in only very limited circumstances. Probate courts simply cannot create the economies of scale that are needed to sustain guardians providing top-quality service at the very low fees some courts demand. Bottom line, managed-care pricing without managed care economies of scale will inevitably lead to lower quality care for wards. I don’t think this outcome is in the "best interest" of wards.
Having diagnosed the problem, I don’t think a courtroom is the cure for the public policy problem I’ve described above. Courts are good at adjudicating discreet disputes, they’re institutionally incapable of collecting and analyzing the data needed to craft broadly applicable public policy solutions of the type needed to deliver top quality care to minors and incapacitated adult wards subject to guardianship proceedings. An organization like Lutheran Services is ideally positioned to play a role in crafting good public policy, and perhaps the organization would have been better off going that route vs. the litigation route? The 2d DCA made this point at the conclusion of its opinion:
Lutheran Services is a renowned nonprofit organization with impeccable credentials for providing guardianship services. Certainly it would be in Lutheran Services’ best interest to work with the court system to improve this system rather than seeking to end it.