In re Elizabeth A.

• Docket Number: A-1-CA-40419
• Decision Date: 21 January 2024
• Citation: In re Elizabeth A., 542 P.3d 793 (N.M. App. 2024)
• Parties: In the MATTER OF the Protective Proceedings for ELIZABETH A., an adult incapacitated person John E.A., Petitioner-Appellee, and Patricia A.V. Interested Party/Co-Conservator/ Co-Guardian-Appellant, and Jack D. A. Intervenor/Co-Conservator/Co-Guardian, and David McNeill, Jr., Guardian Ad Litem, and Matthew P. Holt, Counsel for Elizabeth A.
• Court: Court of Appeals of New Mexico

542 P.3d 793

2024-NMCA-017

In the MATTER OF the Protective Proceedings for ELIZABETH A., an adult incapacitated person

John E.A., Petitioner-Appellee,

and

Patricia A.V. Interested Party/Co-Conservator/ Co-Guardian-Appellant,

and

Jack D. A. Intervenor/Co-Conservator/Co-Guardian,

and

David McNeill, Jr., Guardian Ad Litem,

and

Matthew P. Holt, Counsel for Elizabeth A.

No. A-1-CA-40419

Court of Appeals of New Mexico.

Filing Date: October 10, 2023

Certiorari Denied, January 21, 2024, No. S-1-SC-40174

APPEAL FROM THE DISTRICT COURT OF DOÑA ANA COUNTY, James T. Martin, District Court Judge

Kemp Smith LLP, CaraLyn Banks, Las Cruces, NM, for Appellee

Lakins Law Firm, P.C., Charles N. Lakins, Albuquerque, NM, for Appellant

OPINION

WRAY, Judge.

{1} This case involves the payment of fees to the attorney of an interested party who petitioned for the appointment of a guardian or conservator. The petitioner in the present case (Petitioner), one of the children of Elizabeth A. (Mother), through Appellee CaraLyn Banks (Banks), an attorney, filed a petition for the appointment of a guardian and conservator for Mother under Article 5 of the New Mexico Uniform Probate Code, "Protection of Persons Under Disability and Their Property," NMSA 1978, §§ 45-5-101 to -436 (1975, as amended through 2022) (Article 5). Banks’ fees had been paid by the temporary conservator until interested parties objected. After protracted proceedings, the district court ordered Banks’ fees to be paid from funds from Mother’s estate (Mother’s Estate or the Estate). On appeal, Appellant Patricia Vandver (Current Guardian), whom the district court eventually appointed to be co-guardian and co-conservator, argues that the district court was without authority to order Mother’s Estate to pay Banks’ attorney fees. To the contrary, however, Article 5 conservators may expend reasonably necessary sums for the benefit of a protected person after considering the impact such expenditures would have on the protected person’s care and finances. See § 45-5-425(A)(2). The district court found, among other things, that Banks’ actions were necessary and taken for Mother’s benefit and that the bills were reasonable, and no party suggested that paying the bills would be detrimental to Mother. We therefore affirm, although on a different basis, the district court’s order to pay Banks’ bills. Because we affirm, Current Guardian’s motion in this Court to stay collection of the judgment is denied as moot.

BACKGROUND

{2} It is difficult to disagree with the assessment of the court-appointed guardian ad litem that the present case was "complex and time consuming." Mother had six children (collectively, Siblings), including Current Guardian and Petitioner. In 2017, Mother granted another son (Intervenor) a durable power of attorney. In the summer of 2020, Petitioner became concerned about Mother’s decline in health and capacity. Shortly thereafter, on Petitioner’s behalf, Banks filed a petition for the appointment of a temporary and permanent guardian and conservator.

{3} The district court granted the petition for a temporary guardian and conservator; ordered that "any [p]owers of [a]ttorney that [Mother] may have executed prior" were "[n]ull and [v]oid"; and appointed a temporary guardian and conservator, a visitor, a qualified healthcare provider, and a guardian ad litem. All six Siblings were involved in the proceedings, and four were individually represented by counsel at various points throughout. Additionally, counsel (Mother’s Attorney)—apart from the guardian ad litem—appeared on Mother’s behalf.

{4} In the first few months of the proceeding, Banks submitted to the temporary conservator at least one bill for legal services, which was paid from Mother’s Estate. Mother’s Attorney, however, filed a motion to protect the assets of the Estate. The district court reserved ruling on the motion but ordered the temporary conservator to refrain from paying Banks’ bills. The hearing on the petition for a permanent guardian and conservator was held over the course of nine months, and at its completion, the district court appointed Current Guardian and Intervenor as co-guardians and co-conservators. The district court reasoned that Mother had granted Intervenor a power of attorney to act on her behalf and that the Siblings’ recently deceased father had selected Current Guardian to act as power of attorney with regard to certain benefits he had received. At the same time, the district court "order[ed] payment of [Banks’] fees."

{5} After this determination, the parties litigated whether Mother’s Estate should pay Banks’ bills. The district court, in a letter decision, provided a summary of the parties’ arguments, including: (1) Banks’ contention that her work was for Mother’s benefit; (2) Mother’s Attorney’s position in the motion to protect assets that if Banks’ work was for Mother’s benefit, it was duplicative of the guardian ad litem’s work; and (3) Current Guardian’s argument that Banks provided no authority to support an award of attorney fees and did not satisfy procedural requirements. The district court concluded that (1) Banks had initiated and furthered the guardianship/conservatorship process; (2) Banks’ work was not duplicative of the guardian ad litem’s work; and (3) Banks had complied with the court’s orders regarding submission of a fee affidavit. The district court denied Mother’s Attorney’s motion to protect assets and concluded that "[t]he only issue remaining is the amount of attorney[ ] fees to be awarded." The district court followed the letter decision with an order, which further directed the parties to "outline any objections they have to specific itemized attorney fee entries" that were set forth in the fee affidavit that Banks had already submitted.

{6} Further disputes about the amounts to be paid ensued, after which the district court largely overruled objections to the amount of fees that Banks requested and entered an order to pay the fees from Mother’s Estate, finding that Banks’ services were "for the benefit of" Mother. The district court additionally granted both Current Guardian’s motion to stay pending appeal subject to obtaining an appeal bond and Banks’ motion for reimbursement of certain costs paid to the guardian ad litem. This appeal followed.

{7} While the record sheds further light on the context in which this appeal arises, we are mindful of the sequestered nature of the proceedings and therefore limit further discussion of the facts to those that are necessary to our analysis.

DISCUSSION

[1] {8} In general, New Mexico adheres to the American rule and holds parties responsible for their own attorney fees unless provided otherwise by statute, court rule, or contractual agreement. See N.M. Right to Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 9, 127 N.M. 654, 986 P.2d 450. Our Supreme Court has recognized some limited and narrow exceptions to this rule, including: "(1) exceptions arising from a court’s inherent powers to sanction the bad faith conduct of litigants and attorneys, (2) exceptions arising from certain exercises of a court’s equitable powers, and (3) exceptions arising simultaneously from judicial and legislative powers," Id. ¶ 15. Because New Mexico has "strictly adhered to th[e American] rule since our territorial days," id. ¶ 9, there is a "need for special justification before we depart from [that] precedent" and our Supreme Court has expressed a "reluctance to extend awards of attorney[ ] fees except in limited circumstances," id. ¶ 11 (alteration, internal quotation marks, and citation omitted). Current Guardian argues that the district court did not have contractual or statutory authority to award attorney fees and that even if an award of attorney fees was appropriate, Mother’s Estate should not be required to pay the amounts ordered. In relevant part, Banks responds that the fees were appropriately awarded as a sanction for Intervenor’s litigation behavior and that the Estate should pay the amounts ordered because Banks acted for the benefit of Mother’s Estate.

{9} To determine whether the district court had authority to order the payment of fees, however, we must account for the context in which this case arose—an Article 5 proceeding for guardianship and conservatorship. We therefore begin with a brief overview of the relevant statutes. See In re Guardianship of C.G., 2020-NMCA-023, ¶ 40, 463 P.3d 487 ("When construing statutes, our guiding principle is to determine and give effect to legislative intent, considering the language of the provisions at issue in the context of the statute as a whole, including the purposes and consequences of the Act." (alteration, internal quotation marks, and citation omitted)).

I. The Relevant Law of Conservatorships of Incapacitated/Protected Persons Under Article 5

[2] {10} Article 5 permits district courts to appoint a conservator to protect an adult person who "demonstrates over time either partial or complete functional impairment … to the extent that the person is unable to manage the person’s personal affairs or … financial affairs or both." Section 45-5-101(F) (defining incapacitated persons); see also § 45-5-102(A) (defining the applicability of Article 5). District courts are directed "to encourage the development of maximum self-reliance and independence of a protected person and make protective orders only to the extent necessitated by the protected person’s mental and adaptive limitations and other conditions warranting the procedure." Section 45-5-402.1(A). Overall, the legislative goal is "to preserve and protect the rights of incapacitated persons." In re Guardianship of C.G., 2020-NMCA-023, ¶¶ 42, 58, 463 P.3d 487 (construing Article 5 to define the district court’s duty to protect incapacitated persons while confining a conservator’s role to that "made necessary by the incapacitated person’s limitations").

{11} A "‘conservator’ means a person who is appointed by a court to manage the...