By: Kelly Caplan
In a published decision from October 2022, the Michigan Court of Appeals held that an insurer must pay for the legal and guardianship services provided by a court-appointed guardian for tasks delegated to staff members as long as the tasks do not alter the “rights, duties, liabilities or other legal relations” of the ward.
Judge James Robert Redford explained in In re Guardianship of Mary Ann Malloy (MiLW 07-106006, 11 pages) that a guardian is authorized and holds the legal right to alter the “rights, duties, liabilities, or other legal relations” of the ward when granted a power in accordance with the Estates and Protected Individuals Code by a court.
“Virtually every task delegated to staff members by plaintiff did not alter the ‘rights, duties, liabilities, or other legal relations’ of Malloy,” he noted. “Rather, these delegated tasks, such as telephone conferences … were merely ‘legal obligation[s] that [were] owed or due to Malloy and that [needed] to be satisfied.”
The justices directed the parties to address whether the appeals court correctly construed and applied the relevant provisions of the Estates and Protected Individuals Code in determining that there is a genuine issue of material fact whether the guardianship services provided by the appellee and the appellee firm were “lawfully rendered” so as to be payable under MCL 500.3107 of the no fault act.
The State Bar of Michigan’s Probate and Estate Planning Section was invited to file an amicus brief. Others interested in the determination of the issue presented may move the court for permission to file amicus briefs. The court said motions for permission regarding these cases should be filed in In re Guardianship of Mary Ann Malloy, Docket No. 165018, only.
Judges Brock A. Swartzle and Mark J. Cavanagh joined Redford’s published decision.
Two guardianships, one problem
The cases involved two different individuals subject to guardianship because of two different motor vehicle accidents.
Mary Anny Malloy suffered serious injuries on Aug. 10, 1979, including a traumatic brain injury from a motor vehicle accident. A legally incapacitated individual, Malloy’s mother served as her guardian for approximately 40 years until she suffered a fall.
Three new individuals were appointed as Malloy’s co-guardians and attorney Darren Findling was appointed by the court as her legal guardian.
Findling’s law firm provided legal and guardianship services for Malloy, and her estate incurred fees and costs totaling $8,040.45.
Malloy’s no-fault insurer, Auto-Owners Insurance Company, refused to pay for the services because Findling delegated various tasks to other members of the law firm.
The law firm and guardians filed suit in Oakland Probate Court, requesting payment of the costs, which they argued were allowable expenses and reasonably necessary for Malloy’s care, recovery, or rehabilitation pursuant to MCL 500.3107.
Similarly, Dana Jenkins suffered a traumatic brain injury as a pedestrian in a motor vehicle accident on Nov. 20, 2013. Findling again was appointed as legal guardian because Jenkins is a legally incapacitated individual.
The Jenkins estate incurred fees and costs totaling $28,853.59, which Auto-Owners again refused to pay, taking the position that the guardianship services were completed by someone other than Findling himself.
In a separate lawsuit, Findling and Jenkins filed suit in Oakland Probate Court, seeking payment of the costs.
The court sided with Findling and plaintiffs in both cases, agreeing that Findling delegated only duties and not his guardianship powers, and therefore was entitled to payment.
Auto-Owners appealed and the court consolidated the cases for review.
Intersection of EPIC, No-Fault
Redford addressed the powers and duties of a guardian under MCL 700.5314, and the distinction between the delegation of a duty and a power of a guardian under MCL 700.5103 and MCL 700.5106.
According to the insurer, because guardianship services were provided to Malloy and Jenkins by individuals other than Findling himself, it could refuse to pay and had no liability to pay no-fault benefits.
Redford disagreed, pointing out that the Estates and Protected Individuals Code, or EPIC, “plainly distinguishes” between a guardian’s powers and duties — and the two terms are not interchangeable.
Under the provisions of MCL 700.5314, a guardian’s powers granted by the court include in part the power to give consent or approval to enable the ward to receive medical care, mental health care, professional care, counseling, treatment or service; execute, reaffirm, revoke a ward’s do-not-resuscitate order with some requirements; execute, reaffirm, revoke a physician’s orders for scope of treatment for the ward; take action to compel persons responsible to support the ward, to pay money for the ward’s welfare, and apply money and property for the ward’s support, care and education.
A guardian’s duties generally cover responsibility for the ward’s care, custody and control and communicating and consulting with the ward if possible before making decisions.
The statute also governs a guardian’s delegation of powers, with MCL 700.5103 providing: “(1) By a properly executed power of attorney, … a guardian of a … legally incapacitated individual may delegate to another person, for a period not exceeding 180 days, any of the … guardian’s powers regarding care, custody, or property of the … ward … (4) If a guardian for a … legally incapacitated individual delegates any power under this section, the guardian shall notify the court within 7 days after execution of the power of attorney and provide the court the name, address, and telephone number of the attorney-in-fact.”
The insurer claimed that, since Findling failed to satisfy the statutory requirements by not executing and granting powers of attorney to his staff members to act as guardian or providing the probate court with names or contact information of his staff members, its services were not lawfully rendered.
But Redford said a guardian’s duties and power to act are divisible and the insurer’s “interpretation of EPIC overlooks the statutory language in which the legislature makes distinctions between ‘duties’ and powers.’”
When granted a power pursuant to EPIC by a court, “a guardian is authorized and holds the legal right to alter the ‘rights, duties, liabilities, or other legal relations’ of the ward,” the judge explained.
This conclusion was further supported by the language of MCL 700.5106(5) and (6), which demonstrate that the legislature anticipated that a guardian would employ or task other individuals with caring for a ward.
“The plain language of the statute demonstrates that the legislature contemplated that individuals other than the guardian would perform duties on behalf of a ward,” Redford said.
In the case of Malloy, Findling “largely delegated the performance of duties to other individuals to assist in his care of his wards,” the judge pointed out. “He did not delegate powers.”
Specifically, billing records indicated that the services performed by staff members included attending meetings with Malloy’s doctors, attending guardianship visits, attending team meetings with Malloy’s family, telephone conferences with the co-guardians and meeting at a Social Security Administration office.
“Virtually every task delegated to staff members by [Findling] did not alter the ‘rights, duties, liabilities, or other legal relations’ of Malloy,” Redford said. “Rather, these delegated tasks, such as telephone conferences with [the co-guardians], were merely ‘legal obligation[s] that [were] owed or due to [Malloy] and that [needed] to be satisfied.’”
However, the court found a genuine issue of material fact regarding other delegated tasks: preparing for a hearing to modify Malloy’s guardianship and attending the hearing regarding the petition to modify her guardianship.
Findling “appears to have assigned these two tasks to employees at his law firm but it is unclear whether and to what extent [he] engaged the services of the law firm or individuals and if he did so on behalf of the ward,” the judge said. “Because these hearings involved adding and removing Malloy’s coguardians, these tasks altered Malloy’s rights and legal relations — an act fitting the definition of a power.”
Therefore, the probate court erred in granting summary
disposition with regard to these two tasks, as a genuine issue of
material fact remained as to whether these services were “lawfully
rendered” and compensable within the meaning of the no-fault act.
Full Article & Source:
High court will tackle if guardian may delegate, get paid for tasks
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