"They (state court judges) are constrained as to what they can do. They can't leave a vulnerable adult with no assistance or help," said Sally Holewa, North Dakota state court administrator.
By David Olson
JAMESTOWN, N.D. — A North Dakota guardianship service tied to a couple who were convicted of misusing a client's financial card and who were found in a civil case to have mishandled a family trust is still handling guardianship cases.
That is largely because when it comes to finding guardians, judges in North Dakota have few options to choose from, according to a high-ranking official in the state court system.
Guardians serve a critical role in making financial and medical decisions for people who judges have found cannot make such decisions for themselves.
"They (state court judges) are constrained as to what they can do. They can't leave a vulnerable adult with no assistance or help," said Sally Holewa, North Dakota state court administrator.
Holewa said a federal criminal case and recent civil case in state court underscore the challenges judges face.
In the federal case, Tim and Delyte Koropatnicki, who are husband and wife and live in the Pingree area, were convicted in 2015 of charges relating to the misuse of a client's electronic benefit transfer card through a Jamestown-area company that Delyte Koropatnicki founded called DKK Guardianship and Conservatorship Services.
In that case, Tim Koropatnicki pleaded guilty to one felony count of unauthorized use of benefits and Delyte Koropatnicki pleaded guilty to one misdemeanor count of conversion of public money, property or records.
In the civil case in state court, the pair are in the process of appealing a civil judgment of more than $800,000 after a judge ruled the couple and other defendants named in the case, including DKK Guardianship and Conservatorship Services, committed a breach of trust and behaved fraudulently in the handling of a family trust.
After the Koropatnickis were charged in federal court in 2014, state judges removed DKK Guardianship and Conservatorship Services from a number of guardianship cases, court records show.
However, because of a shortage of private guardianship services, many guardianship cases were given back to DKK, Holewa said.
She added that even if the civil judgment against the Koropatnickis and DKK is upheld on appeal, it's likely judges will continue to allow the company to handle guardianship cases, simply because there are no alternatives.
Contacted by phone and asked whether she or her husband had any comment, Delyte Koropatnicki declined to comment on the federal criminal case, or the civil case now before the North Dakota Supreme Court.
However, she told The Forum she can confirm there is a shortage of businesses willing to take on guardianship cases in the state and she said filling that need is the aim of the business she founded and co-owns.
"There is a definite need and you try to do your job. That's what we were trying to do," Delyte Koropatnicki said.
'Serious improprieties'
After Tim and Delyte Koropatnicki were convicted in U.S. District Court in 2015 of knowingly converting a client's benefit transfer card for their own use they were sentenced in April of 2015 to 18 months probation and ordered to perform 100 hours of community service.
They were also ordered to pay $6,630 in restitution to the federal government.
As a condition of probation, the Koropatnickis were prohibited from serving in any capacity over the financial affairs of any person for the duration of their probation, though Delyte Koropatnicki was allowed during that probation period to continue guardianship of people she had maintained a longstanding fiduciary relationship with.
In March of 2018, Lana Hylden of Park River, filed a civil suit in Stutsman County District Court alleging the Koropatnickis and DKK Guardianship and Conservatorship Services caused damages in the hundreds of thousands of dollars by mishandling the administration of a trust established by Hylden's mother, the late Janice Hofmann.
The suit also claimed the couple charged dubious fees to the trust, which the suit claimed the Koropatnickis did nothing to earn.
The Koropatnickis filed papers in court denying the claims and asked that the suit be dismissed.
In November 2021, state District Judge Tristan Van de Streek found that the Koropatnickis had violated their federal probation by continuing to engage in transactions involving the Hofmann family's trust and that the Hofmann family lost $150,000 in rental income on land the family owned because of how the Koropatnickis administered the trust.
In his findings and order of judgment, Judge Van de Streek wrote:
"The court concludes there were serious improprieties by defendants which not only bolster the conclusion that they committed a breach of trust, but also behaved fraudulently."
The judge also noted that Tim Koropatnicki rented the Hofmann family's land for below-market prices to a man Tim Koropatnicki did personal business with.
In his judgement, Judge Van de Streek awarded Hylden $264,957 in damages. He also ordered the reimbursement and trebling of $86,450 in fees the defendants had collected from the Hofmann family trust, for a total additional award of $259,350.
The judge also directed that $155,325 be set aside and that it ultimately be awarded to Hylden, or returned to the defendants, depending on the outcome of efforts to mitigate tax issues arising from the defendants' handling of the financial affairs of Janice Hofmann, who died in 2017.
The total dollar amount defendants are responsible for stands at more than $843,000, according to court records.
The civil judgment has been appealed to the North Dakota Supreme Court.
'Only game in town'
DKK Guardianship and Conservatorship Services has about 180 open guardianship cases and two conservatorship cases under its purview, according to Holewa.
What state officials don't know is how many individuals have DKK as their representative payee for things like Social Security checks, or veterans benefits, she said.
One reason judges returned guardianship cases to DKK after taking them away was because replacement guardians had a hard time performing their duties due to the fact DKK remained the ward's representative payee for things like Social Security, according to Holewa.
"It's a total disconnect," she said. "For the most part, they (federal agencies) operate by their rules and we operate under ours. DKK was able to rebuild their clientele because there were no other options in the guardianship area."
"In many instances, they (DKK) ended up getting cases back at some point, or new cases, because they are the only game in town," Holewa said. "If there is no other viable option brought forth, judges are limited. They have to rule on what is in front of them, so even though they have concerns about the agency, if the petitioner isn't bringing forth anyone and they know there are no other entities in the state willing to take the case, then they're caught in this bind where the ward is in desperate need of help and can't go without a guardian. It's a real dilemma."
A message left with the Social Security Administration seeking comment for this story was not returned.
Historical perspective
Until the 1980s, every county in North Dakota had a public administrator who was elected and whose job was to be the guardian of last resort for adult wards who had no one to turn to for guardianship services.
That system has since unraveled and North Dakota judges now often turn to private guardianship services when a relative cannot be found who is willing to take on the job.
Around the year 2013, North Dakota officials talked about setting up a guardianship division in state government, but opted instead to establish something called PASS funding, which provides limited funding to pay professional guardians, Holewa said.
Funding for PASS is capped at 120 cases, though Holewa said the program has helped to attract a new professional guardianship services company to North Dakota and she said Lutheran Social Services of Minnesota has picked up a few guardianship cases as well.
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| Sally Holewa, North Dakota state court administrator Forum file photo |
At the start of the year, North Dakota had about 3,300 active adult guardianship cases and of those about 1,053 were managed by professional guardians.
The rest, or about 2,000 cases, involved a family member who is a guardian.
Still, the demand for professional guardianship services remains greater than the supply, according to Holewa, who said North Dakota lawmakers are continuing to look for ways to close the gap.
Since 2013, that effort has received guidance from a guardianship work group established by North Dakota Supreme Court Justice Gerald VandeWalle.
The work group includes judicial officials as well as representatives from the state Department of Human Services, the Association of Counties, the North Dakota Guardianship Association and attorneys who practice in the area of guardianships and conservatorships.
The group has been working to strengthen the protections afforded to wards and to clarify aspects of the guardianship and conservatorship statutes, said Holewa who is a member of the work group.
In the North Dakota Legislature's 2021 session, a bill was introduced in the House that would have established an independent commission on guardianships. However, that bill was defeated in the House.
Tim Mathern, a longtime Democratic state senator, is an advocate for establishing a single state entity dedicated to improving the delivery of guardianship services, asserting it would help legislators make better decisions in that area.
"Right now, five different entities come to the Legislature and they all have a different slant on the need and a different slant on who should be funded," he said, adding that he believes that "kind of mix of testimony" leads to underfunding.
Mathern, of Fargo, called the situation a triple problem that involves a complex mix of guardianship types, finding individuals willing to become guardians and the legal cost of getting a guardianship established.
"It is the responsibility of the Legislature to pay these costs in many of these cases. So, that's the struggle before us," said Mathern, who added that establishing an independent state office to deal with guardianship issues would be advantageous in the same way it was helpful to establish a public defender system to provide legal representation for indigent defendants.
'Short of people everywhere'
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Submitted photo |
Sen. Judy Lee, R-West Fargo, another long-serving legislator, said the issue of meeting North Dakota's guardianship needs is a longstanding one with no clear solutions.
"The problem right now isn't even finding money, it's finding people to do it," Lee said.
"Compensation can be increased and people might still not want to deal with this," Lee said, likening the dearth of people willing to handle guardianship services to the general workforce shortage facing businesses and community organizations across the country.
"We're short of people everywhere," Lee said.
Cynthia Feland, a state district court judge and chair of the guardianship work group, provided testimony to the Legislature in 2021, before House members voted to nix the idea of creating an independent state office to address guardianship needs.
In her testimony, Feland noted that over the past several legislative sessions lawmakers passed significant statutory amendments to improve and strengthen procedures in guardianship and conservatorship cases.
She stressed, however, that the need for guardianship services continues to outpace the supply and Feland said a subgroup of the guardianship work group came to the conclusion that an independent state agency was the best option among several outlined in a 2012 report that emerged from a legislative study on guardianship needs.
Feland told lawmakers that professionals in both the medical and long-term care fields have expressed shock over how many individuals have no one in their life to turn to for assistance.
She said a survey of care facilities found that about 124 individuals were in need of a guardian, but no one was available to serve in the role.
"Most difficult are those situations where a guardian has been removed due to exploitation issues, or in some instances death, with no mechanism for identifying a replacement," Feland said.
"In the direst situations," she added, "professional guardians have stepped up and agreed to take on the case without being provided any additional compensation."
In North Dakota, the word "ward," as it applies to an adult, is someone who the court has found incompetent, a legal term that means a person is not able to make normal adult decisions in a rational manner.
Someone can only be declared incompetent and in need of a guardian through a court process.
Adults who have no one willing or able to be their guardian generally have a professional guardian appointed to assist them.
Decades ago, that would have been the county public administrator in North Dakota.
Today, it is usually a private guardianship service, which may be partly paid for through a combination of PASS funds, money the ward has, and dollars from veterans funds or Social Security funds, if the ward is eligible for such payments.
If a ward is developmentally disabled, Catholic Charities becomes their guardian and the funding comes from a contract that agency has with the state.
However, there is a waiting list for both Catholic Charities and private guardianship services, because there isn't enough funding for either system, Holewa said.
Judge Feland said the importance of fixing the guardianship shortage cannot be overstated and she said even though the Legislature declined to establish a guardianship commission in its last session she is hopeful the idea will eventually catch on with lawmakers.
"I was very disappointed that the legislation did not pass, because while it would not have fixed the problem overnight, it definitely would have put us on that track to be able to address this issue in a meaningful fashion," Feland told The Forum.
She added that when it comes to fighting for a guardianship commission, she's not admitting defeat.
"I'm trying to figure out if I need to tweak it somehow," Feland said.
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