New York Miscellaneous Reports
Unpublished
MATTER OF ASTOR, 500095/2006 (12-4-2006) 2006 NY Slip Op
52365(U) In the Matter of the Application of Phillip
Marshall for the appointment of a Guardian for the Person
and Property of Brooke Astor An Alleged Incapacitated
Person. 500095/2006. Supreme Court of the State of New
York, New York County. Decided on December 4, 2006.
[EDITOR’S NOTE: This case is unpublished as indicated by the
issuing court.] John E. H. Stackhouse, J.
In this hotly-contested Article 81 proceeding concerning
the health, care and finances of society icon Brooke Astor,
which commenced in late July of this year and settled on
October 13, 2006, there are now before the court numerous
fee applications, encompassing the services of 56 lawyers,
65 legal assistants, six accountants, five bankers, six
doctors, a law school professor, and two public relations’
firms.
The total amount of the fees and expenses this court is
asked to approve for a three-month period of time is a
staggering $3,044,055.71, broken down as follows: (I)
Annette de la Renta, temporary guardian of the person:
$0.00 (at her request); (II) JPMorgan Chase Bank, N.A.
(“JPMorgan”), temporary guardian of the property:
$1,241,140.15; (III) Samuel Leibowitz, Esq., court
evaluator: $181,852.25; (IV) Susan I. Robbins, Esq.,
court-appointed counsel to Brooke Astor: $123,841.34; (V)
petitioner Phillip Marshall: $518,411.72; (VI)
respondent/cross-petitioner Anthony Marshall: $952,983.11;
(VII) Charlene Marshall: $19,427.14; and (VIII) medical
experts: $6,400. Notwithstanding that no objection to any
of the fee requests has been forthcoming, the court has
carefully reviewed each and every fee application, and
makes the following legal and factual findings.
BACKGROUND
On July 20, 2006, Philip Marshall filed, by order to show
cause, a petition seeking to remove his father (and Mrs.
Astor’s son), Anthony Marshall, as primary care giver of
Mrs. Astor, and to void the powers of attorney over her
finances and health care proxy he held. Petitioner sought
to name a long-time friend of Mrs. Astor, Annette de la
Renta, as guardian of her person, and JPMorgan as guardian
of her property. The petition contained serious and
disturbing allegations of a pattern of neglect and
mistreatment of Mrs. Astor over the last several years. The
petition alleged that Anthony Marshall had not provided for
his elderly mother and, instead, had allowed her to live in
less than adequate living conditions in her Manhattan
apartment and had cut back on necessary medication and
doctor’s visits, while enriching himself from her assets.
The court signed the order to show cause on July 21, 2006,
appointing the afore-mentioned persons as temporary
guardians. The order authorized JPMorgan to, inter alia,
pay for Mrs. Astor’s interim medical care, housing,
relocation to her home in Briarcliff Manor, and other
personal needs, as well as to marshal her income and assets
and sign and file income tax returns and other tax
documents. I am informed by Louise Milligan at JPMorgan
that Mrs. Astor’s assets exceed over $120 million. The July
21st order authorized compensation to JPMorgan for its
services at the hourly rate of $275 for senior staff, and
specifically authorized the bank to retain attorneys,
accountants and similar professionals with fees subject to
court approval.
The July 21st order also appointed Susan I. Robbins, Esq.
as court evaluator. Shortly thereafter, the court appointed
Ms. Robbins as counsel to Brooke Astor, and appointed
Samuel Leibowitz, Esq. as court evaluator.
Anthony Marshall vigorously contested the allegations of
the petition. By verified answer and cross-petition dated
September 18, 2006, Anthony Marshall sought to have the
court honor the powers of attorney given to him by Brooke
Astor in 1978, 1980, 2000 and 2004 and a 2001 health care
proxy.
In most guardianships, the main issue is whether or not a
person’s mental capacity is currently such that appointment
of a guardian is necessary. In this case, all parties
conceded that Brooke Astor is currently not able to manage
her personal and financial affairs. The case centered on
whether the powers of attorney and health care proxy that
Anthony Marshall had received from his mother should be
declared void by the court because he allegedly breached
his fiduciary responsibilities to his mother. Thus, it was
necessary for the parties to show what actions Anthony
Marshall had engaged in over the last several years and
Brooke Astor’s capacity to make decisions at the time her
son engaged in those actions. The legal issues were
numerous, complex and novel. A large number of witnesses
were contacted and interviewed, witnesses such as Mrs.
Astor’s family members, physicians, nurses, caretakers,
current and former staff, friends, former attorneys and
financial advisors.
The Mental Hygiene Law requires that guardianship hearings
be held expeditiously and take precedence over all other
matters before the court. Due to the complexity of this
matter and a motion by several news organizations to unseal
the record, the court extended the hearing date well past
the 28-day period contemplated by MHL § 81.07(b)(1),
and ultimately set a hearing date of October 19, 2006.
Thus, the parties were required to prepare for trial on a
relatively expedited basis. According to Harvey Corn, Esq.,
co-counsel for Anthony Marshall, more than eighty thousand
pages of documents were produced in discovery. These
included many thousands of pages of financial records,
estate documents and tax returns and over a thousand pages
of mostly handwritten nursing and medical records.
Ms. Milligan of JPMorgan advises that Mrs. Astor’s
financial holdings are extremely complex, and that her
investment portfolio contained non-traditional investments
in derivatives, private equity funds and hedge funds. In
addition to Mrs. Astor’s extensive real estate holdings,
she owns a considerable amount of tangible personal property
— over 1500 items having a value of more than $10
million. Ms. Milligan avers that her client’s financial
records were poorly maintained, and thus the task of
marshaling and taking control of her assets and income was
time-consuming and labor intensive. JPMorgan also
investigated transfers of Mrs. Astor’s assets made by
Anthony Marshall to himself and others while he was in
control of her affairs.
Unlike the typical Article 81 guardianship proceeding, this
matter had several interim applications for relief from the
court both by motion and letter, and several court
appearances. As stated above, shortly after the proceeding
was commenced, the publishers of three daily newspapers
(New York Post, Daily News and The New York Times), along
with the Associated Press, moved for leave to intervene in
this proceeding, and to vacate the interim order
temporarily sealing the file. By order dated August 29,
2006, the court partially sealed the court files and closed
the proceeding to the public, which further complicated and
added to the expense of the proceeding.
One of the most contentious applications involved a motion
by JPMorgan for expanded powers to conduct wide-reaching
discovery, with subpoena power. In response to this motion,
Anthony Marshall cross-moved to modify the July 21st order
to permit him to appear in this matter in his capacity as
attorney-in-fact for his mother (presumably to seek a jury
trial pursuant to MHL § 81.11) and various other
items of relief. By order dated September 18, 2006, the
court denied the bank’s motion as well-intentioned, but
overly-zealous and premature, as well as inconsistent with
the extremely short time frame in which a guardianship
proceeding is supposed to be conducted. The court denied
Anthony Marshall’s request to be recognized as the
attorney-in-fact for his mother, and granted and denied the
other aspects of his cross motion.
Thereafter, Susan I. Robbins, as court-appointed counsel to
Brooke Astor, moved for an order requiring the law firm of
Day, Berry & Howard to turn over Brooke Astor’s original
testamentary documents and to direct that firm and Francis
X. Morrissey, Esq. to each turn over all funds paid by or
on behalf of Mrs. Astor in connection with legal services
rendered to her in the past several years. That motion was
granted only to the extent of directing Day, Berry & Howard
to produce all original estate planning documents for
examination at their office by handwriting experts.
The proceeding was settled on October 13, 2006, only six
days before the scheduled trial date, requiring the parties
to prepare for trial. The attorneys met numerous times to
hammer out an agreement, and many of them worked long days
in the last several weeks leading up to the settlement.
Under the Settlement Agreement, the temporary guardians
were named permanent guardians. In addition, over $11
million in assets — consisting of cash, jewelry and
art — was returned to Mrs. Astor by Anthony Marshall
and his wife, Charlene Marshall. Collateral totaling over
$10 million has been pledged by the Marshalls to cover any
future claims brought on behalf of Mrs. Astor’s estate. In
addition, Anthony and Charlene Marshall, along with two of
Mrs. Astor’s former attorneys, Francis X. Morrissey, Esq.
and Henry Christensen, Esq., agreed to renounce any right
to be appointed a fiduciary under Mrs. Astor’s last will
and testament, codicils or other testamentary documents.
The settlement did not involve any admission of wrongdoing
by any party; it specifically provided that it could not be
construed and did not represent any finding against Anthony
Marshall and that it would not be admissible in any later
proceeding for any purpose. It was a settlement joined in
by all for the benefit of Mrs. Astor and her estate,
bringing this matter to a close in this court and preserving
for another day the issues concerning her testamentary
plan.
DISCUSSION
Section 81.28(a) of the Mental Hygiene Law requires the
court to establish a plan for the “reasonable compensation”
of the guardians. Section 81.09(f) provides that the court
may award “reasonable compensation” to a court evaluator
payable by the estate of the incapacitated person.
Likewise, Section 81.10(f) provides that the court shall
determine the “reasonable compensation” for the attorney it
appoints to represent the interests of the incapacitated
person, also payable by the estate of the incapacitated
person. Finally, Section 81.16(f) provides that when a
petition is granted, or where the court otherwise deems
appropriate, the court may award “reasonable compensation”
for the attorney for the petitioner, again, presumably from
the estate of the incapacitated person.
The Supreme Court has broad discretion in determining the
reasonable amount to award as an attorneys’ fee in a
guardianship proceeding. Matter of Martha O.J., 22 AD3d
756, 757 (2d Dept 2005). The factors the court must
consider are:
(1) the time and labor required, the difficulty of the
questions involved, and the skill required to handle the
problems presented, (2) the attorney’s experience,
ability, and reputation, (3) the amount involved and the
benefit flowing to the ward as a result of the attorney’s
services, (4) the fees awarded in similar cases, (5) the
contingency or certainty of compensation, (6) the results
obtained, and (7) the responsibility involved.
Id., citing Matter of Freeman, 34 NY2d 1, 9 (1974).
The Supreme Court has the inherent power to supervise the
fees charged by attorneys, even in the absence of any
party’s objection thereto. Stortecky v Mazzone, 85 NY2d
518, 525 (1995); Ricciuti v Lombardi, 256 AD2d 892, 893 (3d
Dept 1998). The court must ascertain the nature and extent
of the services supplied by the attorneys from billing
records indicating the date, number of hours, and tasks
performed. Rahmey v Blum, 95 AD2d 294, 300 (2d Dept 1983).
The court is not required to accept the attorney’s
representations of the time expended. Matter of Arnold O.,
256 AD2d 764, 765 (3d Dept 1998); Matter of Vitole, 215
AD2d 765 (2d Dept 1995); Rahmey v Blum, supra.
The first issue that must be addressed is who is entitled
to seek payment of their legal fees and expenses from Mrs.
Astor’s estate. As noted above, there is no question that
the guardians, the court evaluator, and her court-appointed
counsel are so entitled by statute.
Petitioner Phillip Marshall seeks payment of his legal
bills and expenses. As stated above, MHL § 81.16(f)
authorizes a court to award a petitioner reasonable legal
fees when their petition is granted or where the court
otherwise deems appropriate. Although this matter
voluntarily settled before the hearing, I find that the
petitioner Philip Marshall was the prevailing party, that
the efforts of his legal counsel benefitted Mrs. Astor, and
that he be awarded a reasonable fee from her estate.
Respondent/cross-petitioner Anthony Marshall also seeks
court approval of his attorneys’ fees and expenses. In
Matter of Ruth Q. (23 AD3d 479 [2d Dept 2005]), the court
ruled that Article 81 of the Mental Hygiene Law does not
authorize an award of attorneys’ fees to a respondent who
opposed a petition for the appointment of a guardian for an
alleged incapacitated person. Despite the fact that Anthony
Marshall opposed the petition and the settlement did not
include any of the relief sought in his cross-petition, I
find that he should be awarded half of his legal fees
(excluding disbursements and expenses), after adjustment for
hours the court finds objectionable, as further discussed
below. I make this ruling based on the conclusion of the
court evaluator that the allegations in the petition
regarding Mrs. Astor’s medical and dental care, and the
other allegations of intentional elder abuse by the
Marshalls, were not substantiated. I am further influenced
by the fact that the settlement did not involve any
admission of wrongdoing by any party, by the fact that
Anthony Marshall is still the sole presumptive distributee
of his mother’s estate and that the settlement to which he
voluntarily agreed was in his mother’s best interests.
Mrs. Charlene Marshall, however, is not named as a
cross-petitioner in this proceeding. The court can only
surmise that separate counsel was hired to represent Mrs.
Marshall in late September 2006 due to a potential conflict
of interest arising from the property transfers between Mr.
and Mrs. Marshall. Thus, any legal work performed on behalf
of Mrs. Marshall was solely for her own benefit, did not
inure to the benefit of Mrs. Astor, and is not recoverable
from her estate.
Susan I. Robbins, Esq. has submitted a bill totaling
$123,841.34 for her work, briefly as the court evaluator,
and then, from July 24th forward, as the court-appointed
counsel to the alleged incapacitated person. However, Ms.
Robbins is requesting reimbursement of time billed by three
other attorneys employed by the law firm with which she is
associated, Miller, Canfield, Paddock and Stone, P.L.L.C.
Although my July 24th order named only Ms. Robbins as
counsel to the alleged incapacitated person, and not her
law firm, I approve ex post facto the fees incurred by her
colleagues as reasonable and in accord with the complexity
of the case, the time frame and the excellent services
rendered on behalf of her client.
I must consider the attorneys’ experience, ability, and
reputation as well as the fees awarded in similar cases.
All parties agree that this was a unique guardianship
proceeding, and consequently the amount of fees awarded in
other cases is not particularly informative or helpful.
However, in assessing the reasonableness of the hourly rates
charged by various legal counsel, I find that all rates
should be comparable to the hourly rates charged by experts
in the field of elder law and guardianship proceedings.
Rahmey v Blum, 95 AD2d at 302. In setting a cap, I have
considered the fees charged by: (i) Samuel Leibowitz, Esq.,
whose rate is $325; (ii) David A. Smith, Esq., whose rate is
$350; (iii) the firm of Goldfarb, Abrandt, Salzman &
Kutzin, LLP, whose rates for partners with many years of
experience in this field do not exceed $375; (iv) Daniel G.
Fish, Esq., whose rate is $400; (v) Margaret Bomba, Esq.,
whose rate is $400; and (vi) Harvey E. Corn, Esq., whose
rate is $450. While I realize that this case involved other
areas of the law such as litigation, tax and real estate,
and that some of the other attorneys involved are highly
renowned, at the end of the day, this was still a
guardianship proceeding, and thus I find it appropriate to
cap the hourly rate at $450.
With the exception of Anthony Marshall, I find that the
time spent by the parties, their lawyers and non-legal
advisors, as demonstrated by the detailed billing records
supplied to the court, is commensurate with the complexity,
novelty and seriousness of the numerous issues raised by
this proceeding, as well as the value of Mrs. Astor’s estate
and the favorable results obtained by the settlement.
Nevertheless, I have identified several areas of time
expended that I find were not appropriate or in the best
interests of Mrs. Astor: (I) discussions with the media and
media strategy; (ii) a proposed motion by cross-petitioner
Anthony Marshall to disqualify Susan Robbins as appointed
counsel for Mrs. Astor; (iii) work by Paul, Weiss, Rifkind,
Wharton & Garrison LLP following my September 18th order
that I believe exceeds their role as legal counsel to the
temporary guardian of the property; (vi) petitioner’s legal
bills for opposing the motion to unseal the record; and (v)
the preparation of the fee requests themselves.
The media attention this proceeding engendered is
undeniable, and resulted in a contested motion by several
news organizations to unseal the record. However, I do not
find it appropriate to reimburse any of the parties for
“media strategy” or discussions between counsel and members
of the press. This proceeding was to be litigated in my
courtroom, not in the court of public opinion. Any
information imparted to the media was solely for the
benefits of parties other than the alleged incapacitated
person, and the costs incurred for such public relations
efforts have no place in these fee applications. I am,
therefore, declining to reimburse both the petitioner and
cross-petitioner for hiring public relations’ firms.
Wherever possible, I have attempted to identify and
disallow any time charges for communications with the
press. I have reduced the hours of Daniel G. Fish, Esq.,
co-counsel to JP Morgan, for 2.4 hours for calls with the
press on August 7th and September 1st. I am reducing Ira
Salzman, Esq.’s hours on July 27th by 2.5 hours for
“[p]hone conversations with various members of the press.”
I have reduced the hours expended by Kenneth E. Warner,
Esq. by 10% for numerous conversations and communications
with members of the press, particularly Serge F. Kovaleski
of The New York Times, and with the public relations firm
hired by Anthony Marshall.
Second, I am cutting all time charged by David A. Smith,
Esq. in mid-September (55.75 hours) for researching and
drafting a motion to disqualify Susan Robbins. I have no
reason to believe that this motion, which ultimately was
not filed, was related to the best interests of Mrs. Astor.
Third, JPMorgan hired both Daniel Fish, Esq. of Freedman
Fish & Grimaldi, LLP and the law firm of Paul, Weiss,
Rifkind, Wharton & Garrison LLP to represent its interests
in this proceeding. As stated above, on September 18, 2006,
the court denied the bank’s motion for expanded powers.
Specifically, I ruled that “[w]hile the propriety of the
transfers of money and property to Anthony and Charlene
Marshall is a key subject of the guardianship proceeding,
it is not the Bank’s role to prove or disprove any of the
allegations of the Petition . . .” Despite this ruling,
Paul Weiss spent a great deal of time starting on or about
October 7th engaged in trial strategy, trial preparation,
legal research on the authentication of documents, and the
creation of exhibits lists, demonstrative exhibits, witness
outlines, trial subpoenas and even notices to admit. There
can be no doubt that Paul Weiss should have been involved
in the preparation of any of JPMorgan’s employees and
agents for trial, particularly Louise Milligan and Joel
Barth of Eisner LLP. However, I find that the extent of Paul
Weiss’ trial preparation exceeded the scope of its
representation of JPMorgan as temporary guardian of the
property, and must be disallowed. Mr. Fagen’s recollection
that at the October 6th pre-trial conference, “the Court
instructed the Bank that it would be required to present
evidence at trial,” is incorrect. There was no transcript
that day, but I recall I said only that the guardians were
both “parties” and could participate in the hearing.
Accordingly, I am reducing the hours of Leslie G. Fagen,
Esq. by 7 hours; David Marcus Cave, Esq. by 50 hours, and
100 hours of paralegal time. I am also reducing the
$14,484.61 bill for duplicating expenses by 20%.
Fourth, the law firm of Millbank Tweed, Hadley & McCloy,
LLP (“Millbank”) had eight lawyers and three legal
assistants, billing at rates ranging from $825 to $170,
spend 233.2 hours and incur $14,738.29 in disbursements for
a total fee of $115,438.79, to basically assist Ira Salzman
in responding to the news organization’s motion to unseal
the record, a motion that involved a single, albeit
important, legal issue. Charging this kind of money for the
preparation of a four-page notice of cross motion, a
eleven-page memorandum of law and a seven-page reply
memorandum of law appears excessive to the court.
Accordingly, despite the fact that Mr. Sligar did not bill
for his time on the matter and I have capped the hourly
rate at $450, I find that Millbank’s hourly fee request
should be further reduced by 50%.
Fifth, I am disallowing any time charges after October 13,
2006 related to the preparation of these fee applications
since most of the firms did not charge for this activity.
Thus, with respect to the application of Goldfarb Abrandt
Salzman & Kutzin LLP, I have eliminated 11.1 hours from Ira
Salzman, 13 hours from Peter Aronson and 3.0 hours from
Danny Goldfarb. The .20 hours expended by Sander Bak of
Millbank on October 24th for work on the proposed order
approving the fee applications is likewise disallowed.
Finally, I am sua sponte sealing Exhibit B to Mr. Fish’s
affirmation of legal services (part of exhibit C to the
Louise Milligan affidavit) on the ground that it contains
confidential medical and nursing information about Mrs.
Astor.
At the hearing held on October 13, 2006, at which I
approved the settlement and found Mrs. Astor in need of
guardians by clear and convincing evidence, counsel for
several of the parties brought to my attention the
extraordinary efforts made by the court evaluator, Samuel
Leibowitz, in bringing about this settlement. Paul C.
Saunders, Esq. of Cravath Swaine & Moore LLP had this
comment for the record:
I think I speak on behalf of all of the parties to this
proceeding in reporting to the Court how much we
appreciate the very hard work, tireless work of the
Court’s appointed evaluator in this case, Mr. Sam
Leibowitz. We are very much in his debt.
(Tr. at 23). I commend Mr. Leibowitz for his efforts in
bringing about this settlement, and find that he has acted
in the highest traditions of the court and bar in this
proceeding.
Attached hereto as Appendix A is a chart outlining the fee
applications. The amounts awarded are listed in bold print
directly underneath the amounts sought. Separate orders
approving the fee applications, which I have reduced from
$3,044,055.71 to $2,223,284.42 in accordance with this
decision, are filed herewith.
APPENDIX A — ADJUSTED FEE APPLICATIONS
APPENDIX A