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.


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.

  • Richard L Pearse Jr

    This case is a poignant illustration of what happens when the determination of the reasonableness of guardian fees is delegated to a bureaucracy comprised of people who have never been guardians or represented guardians in the real world. There seems to be a growing attitude among judges and others when determining fees of guardians and lawyers representing guardians that “cheapest is best,” but the truth is that generally you get what you pay for. It is all well and good to criticize a guardian for failing to delegate non-core guardianship functions to clerical personnel, but no one ever wants to consider the problems with that model of providing services. In the first place, it’s not that easy to find reliable help. Even if you find it, there is overhead attached. A guardian who employs others must deal with payroll and tax issues, not to mention oversight of employee activities. If, God forbid, an employee should fail in some duty resulting in harm or damage to the ward, is there any doubt that the guardian, not the employee, will be taken to task? It is a classic whipsaw, with the result that the guardian is damned for personal involvement in seeing to the ward’s care when it could possibly be handled less expensively, and also damned when the less expensive method fails (as it almost inevitably does) and somebody has to clean up the mess. In my humble (and admittedly cynical) opinion, the real problem is politics. It’s good politics for elected judges to give the impression that they are fighting to prevent financial exploitation of wards, yet nobody seems to grasp the hidden costs which attend that approach. The other thing that nobody mentions is that (at least in my experience) guardians (as well as their lawyers) don’t abandon their wards when the money runs out; in most cases, they continue to provide service without pay.
    The solution here is to appoint good and qualified guardians and let them do the job they have been given to do without the micromanagment. If an appointed guardian is shown to have taken financial advantage, then by all means remove and surcharge him, but don’t assume, as seems to be the prevalent approach to judging guardian’s fees, that all guardians are predisposed to doing exactly that. Being a guardian is a very demanding and often burdensome task. Let us not, through overly zealous management of guardians fees, drive away those who are primarily motivated to care for our disadvantaged wards and replace them with those whose chief talent is counting nickels and dimes.

  • Anne Douglass

    Guardian filed bankruptcy to avoid court approved attorney’s fees in guardianship. Do you know any cases that may help argue why guardian should not be allowed to do this?

  • Juan Antunez

    Hi Anne –

    I’m not sure if I understand your question, but you may find the information you’re looking for in my 2/29/09 blog post entitled:

    Regards. Juan