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In the Matter of S.H. (8/20/99) sp-5163
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Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
) Supreme Court No. S-8386/8395
In the Matter of )
) Superior Court No.
S.H. ) 3AN-96-1371 PC
______________________________)
O P I N I O N
[No. 5163 - August 20, 1999]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Karen L. Hunt, Judge.
Appearances: Phillip Paul Weidner, Weidner &
Associates, Inc., Anchorage, for S.H. Craig F. Stowers and Thomas
V. Van Flein, Clapp, Peterson & Stowers, Anchorage, for Clapp,
Peterson & Stowers.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
S.H. sued his former employer and others. His attorneys
in that action were Clapp, Peterson & Stowers (CPS). Asserting
that they believed S.H. to be incapable of making rational
decisions about settlement of that lawsuit, S.H.'s attorneys later
petitioned the superior court to appoint a conservator for S.H.
The court appointed a conservator, who settled S.H.'s claims
against his former employer. S.H. appeals from the decision to
appoint a conservator. We conclude that it was not error to
appoint a conservator under the circumstances of this case. In
affirming, we reject S.H.'s claims that the appointment was
inappropriate, infringed upon his jury trial rights, or was
unsupported by necessary factual findings, and that CPS violated
duties it owed S.H. But in CPS's cross-appeal, we vacate the award
of the conservatorship costs against CPS and remand, because we
conclude that S.H. should have borne those costs.
II. FACTS AND PROCEEDINGS
Anchorage Refuse, Inc. (ARI) employed S.H. from 1991 to
1993. In April 1995 S.H. sued ARI and individual ARI officers and
employees alleging that his fellow employees sadistically and
physically mistreated him. CPS represented S.H. on a contingent
fee basis in that lawsuit.
From May 1995 to December 1996 CPS pursued the case,
remaining in close and frequent contact with S.H. CPS attorneys
Marcus Clapp and Thomas Van Flein grew increasingly uneasy,
however, about S.H.'s growing obsession with the case. There was
evidence S.H. displayed various indicia of instability, including
irrational behavior, [Fn. 1] paranoia, [Fn. 2] inclinations toward
gratuitous dismissal of his personal injury suit, [Fn. 3] a
tendency to threaten his own witnesses, [Fn. 4] the desire to
initiate direct and inappropriate dealings with opposition counsel
and the judge, [Fn. 5] and a marked lack of confidentiality. [Fn.
6] In May 1996 Clapp wrote a letter to S.H. regarding S.H.'s
behavior in the case. Van Flein arranged for S.H. to visit Dr.
Marjorie Smith, a psychiatrist, for counseling in preparation for
trial.
Psychiatric experts examined S.H. in 1996 and 1997, in
connection with both the ARI litigation and the conservatorship
proceeding. The perception among the majority of these experts,
Drs. Aaron Wolf, Marjorie Smith, [Fn. 7] and Bruce Smith, [Fn. 8]
and the court visitor, Betty Wells, [Fn. 9] was that a mental
impairment made S.H. unable to think rationally at times. Only Dr.
Frank Gonzales, a clinical psychologist, found S.H. capable of
dealing rationally with the settlement proceedings. [Fn. 10]
In December 1996 mediation began between S.H. and ARI.
ARI offered to settle for $500,000. S.H. personally stated he
thought he could get $2 million. According to the mediator, S.H.
then made "accusations against lawyers and judges without any
foundation for them." S.H. refused to accept ARI's offer.
Believing S.H. to be incapable of handling his own
affairs, CPS commenced a new proceeding by filing a "Petition for
Appointment of Limited Conservator/Guardian Ad Litem of a Person."
On December 30 Superior Court Judge Karen L. Hunt appointed Ernest
Schlereth to act as S.H.'s attorney in the conservatorship/
guardianship proceeding.
In January 1997, when it appeared a settlement with ARI
might be reached, Schlereth and CPS agreed to dismiss the petition;
when S.H. refused to agree to the settlement, CPS and Schlereth
agreed to reinstate the petition.
In March Phillip Paul Weidner replaced Schlereth as
S.H.'s counsel in the conservatorship/guardianship proceeding.
When Master Andrew Brown commenced the hearing on the petition on
July 10, 1997, Weidner requested a jury trial on the petition; the
master denied the request.
The hearing lasted three days. The master issued his
report in August. [Fn. 11] He recommended that the superior court
appoint a special conservator to act on S.H.'s behalf for purposes
of the ARI litigation, and that the costs of conservatorship be
imposed on CPS. The superior court adopted the master's report,
[Fn. 12] and appointed Paul Cossman as the Special Conservator.
After reviewing the case, Cossman concluded: "I have no doubt that
it is in the best interests of [S.H.] to accept the settlement
offer of $500,000." Cossman expressed his opinion that "[S.H.'s]
chances of recovering a judgment in excess of the settlement offer
were basically nonexistent."
Cossman, CPS, and ARI then stipulated to interplead the
settlement funds. The $500,000 settlement proceeds were deposited
with the court registry and await distribution pending resolution
of this dispute.
S.H. appeals the decision to appoint a special
conservator. CPS cross-appeals the imposition of the
conservatorship costs on CPS.
III. DISCUSSION
A. Standard of Review
We review a special master's findings under the clearly
erroneous standard of review. [Fn. 13]
Issues of constitutional interpretation are questions of
law which we review de novo, [Fn. 14] applying our independent
judgment. [Fn. 15] In dealing with questions of law, we will adopt
those rules which are most persuasive in light of precedent,
reason, and policy. [Fn. 16]
B. Was It Appropriate to Appoint a Conservator for S.H.?
S.H. first argues that the master erroneously treated the
petition filed by CPS -- titled a "Petition for Appointment of
Limited Conservator/Guardian Ad Litem of a Person"-- as a petition
for conservatorship. Although CPS's petition originally referred
to the statutes governing guardianships, not the statutes governing
conservatorships, it appears that S.H. had notice that the
proceeding would be conducted under the conservatorship statutes.
When the parties briefly dismissed and then reinstated the
proceeding, they both treated it as a petition for conservatorship.
The court treated the proceeding from the beginning as one for
appointment of either a conservator or a guardian. The court's
appointment of a visitor under the guardianship statute presumably
covered all possible future options. It also appears that S.H. did
not raise this objection until after the master made his
recommendation on August 7, 1997, and that S.H.'s original attorney
acceded to the procedure the master and the superior court
followed. We conclude that S.H. did not preserve the issue.
Finally, it is not apparent that S.H. was materially prejudiced by
this alleged error. The superior court appointed counsel for S.H.,
appointed a court visitor, and concluded that CPS had demonstrated
incapacity by "clear and convincing evidence."
We next reject S.H.'s assertion that a conservatorship
did not appropriately deal with S.H.'s circumstances. S.H. argues
that settling a legal claim is outside the scope of conservatorship
powers, because it extends beyond the purely financial and touches
on questions of justice and emotional satisfaction. We conclude,
however, that AS 13.26.280(c)(19) gives a conservator authority to
settle a lawsuit. That statute grants a conservator the power to
act, without court authorization or confirmation, "to settle a
claim by or against the estate or the protected person by
compromise, arbitration or otherwise."[Fn. 17]
S.H. next argues that the superior court made
insufficient factual findings and applied the wrong standard for
appointment of a conservator. Alaska Statute 13.26.165 permits
appointment of a conservator only when the court determines:
(A) the person is unable to manage the
person's property and affairs effectively for reasons such as
mental illness, mental deficiency, physical illness or disability,
advanced age, chronic use of drugs, chronic intoxication,
confinement, detention by a foreign power, or disappearance; and
(B) the person has property which will
be wasted or dissipated unless proper management is provided, or
that funds are needed for the support, care and welfare of the
person or those entitled to be supported by the person and that
protection is necessary or desirable to obtain or provide funds.[[Fn. 18]]
The superior court made no finding satisfying subsection (2)(B).
The master's report addresses only subsection (2)(A). But any
error in failing to make the necessary findings was harmless, given
the evidence in this case that made it essentially undisputed that
S.H. had property (the lawsuit) which would be wasted or dissipated
unless proper management were provided. The evidence included
S.H.'s threats to deal independently with opposing counsel, his
talk of dismissing the case, and the opinions of the CPS attorneys
that S.H. had "deteriorated in the deposition"and that the
$500,000 offer was a "windfall."
S.H. further argues that the court erred in considering
his ability to make litigation-related decisions, as opposed to his
ability "to make a rational decision in general."
We disagree with S.H.'s interpretation of the standard
for appointing a conservator in Alaska. Alaska Statute 13.26.165
does not require that a person be altogether incompetent in all
aspects of life. And AS 13.26.205(c) states: "If only certain
powers need be given to the conservator or the services of a
conservator are needed only for a limited number of transactions,
a special conservator may be appointed." A special conservatorship
cannot be reconciled with a requirement that a conservatorship
candidate be found wholly incapable of making any rational
decision. And it is counter-intuitive to think that an ability to
function at some level, perhaps around the house, or while shopping
or driving, would require denial of a conservatorship for more
complex matters. We think the need for a conservator must be
assessed in context of the person's incapacity and the specific
matters for which management or protection may be required. The
superior court here applied the appropriate standard called for by
the issue at hand.
The final appointment question is whether there was
sufficient factual basis under AS 13.26.165 to find S.H. unable to
manage his property effectively. That statute required the court
to find that S.H. was "unable to manage [his] property and affairs
effectively"due to mental illness, mental deficiency, or some
other factor. [Fn. 19] The master's report, adopted by the
superior court, found that S.H. was "unable to reasonably and
meaningfully work with [CPS] on his very important property
interest in the ARI Case, and decide on whether the settlement
offer from ARI should be accepted or the matter should go to
trial." The master specifically cited the following findings:
(1) the extensive contact by [S.H.'s] ARI Case
attorneys with him; (2) their attempts to apprise him of the
problems he was causing; (3) their having [S.H.] go to Dr. Marjorie
Smith for psychiatric assistance in order to be more able to deal
with the ARI Case; (4) Dr. Smith's professional opinion after five
months of regular involvement with [S.H.] as to his having a mental
illness and his inability to work with his counsel and make a
decision; (5) Justice Moore's[ [Fn. 20]] opinion as to [S.H.]
becoming "irrational"in the mediation process; and (6) [S.H.'s]
post-mediation contact with opposing counsel against his attorney's
longstanding warnings.
S.H. argues that "none of these findings of fact supports
a conclusion that [he] is unable to effectively manage his property
and affairs on a long term basis, which is clearly the requirement
for appointment of a conservator contemplated by AS 13.26.165."
Because we have never before addressed AS 13.26.165, no
Alaska cases support S.H.'s view that the statute requires a "long
term"inability to manage one's property. We must look to the
statute to determine its requirements. It does not express or
imply a requirement of long term inability; it only specifies that
property be in danger of waste or dissipation. [Fn. 21] Under this
standard, inability to manage one's property and affairs need not
be long-term to justify a conservatorship. Even brief incapacity
could permit loss of property in a given case; invariably requiring
long-term incapacity would be at odds with the protection the
statute appears intended to provide.
S.H.'s doctors provided considerable evidence of his
inability. Dr. Marjorie Smith opined that she did not believe S.H.
could work with any attorney on the ARI case and come to a
reasonable decision. Dr. Bruce Smith opined that S.H. was
"functionally impaired"and disconnected from "others' reality."
Dr. Aaron Wolf stated that he agreed with Dr. Marjorie Smith's
diagnosis of S.H. "right down the line." And Betty Wells, the
court visitor, recommended that a guardian be appointed to make
litigation decisions for S.H.
The superior court did not commit clear error in
accepting the evidence as clear and convincing proof of S.H.'s
inability to manage his property and affairs effectively.
S.H. insists that AS 13.26.165 requires a finding of
mental illness. We conclude that, even assuming mental illness
does not describe S.H.'s condition, the incapacity documented here
satisfied the statute. [Fn. 22]
C. Did CPS Violate Professional Responsibilities or Duties
It Owed S.H.?
S.H. claims that CPS "ignored its fiduciary duty"to him,
and its duty to use reasonable care [Fn. 23] and to exercise "the
utmost good faith, integrity, fairness, and fidelity."[Fn. 24] He
implies that CPS decided to settle not because it held S.H.'s
interests to heart but because his case "required a lot of time,
and after a certain period it was apparent that it would not bring
in a large fee"for CPS.
Alaska Rule of Professional Conduct 1.14(b) permits a
lawyer to "seek the appointment of a guardian or take other
protective action with respect to a client only when the lawyer
reasonably believes that the client cannot adequately act in the
client's own interest." If the requirements of Rule 1.14 are met,
a lawyer may seek a guardian to protect the client's interests
despite the client's disapproval. Because we have concluded that
the superior court did not err in appointing a conservator, we
necessarily conclude that CPS acted reasonably in filing its
petition. We accordingly reject S.H.'s argument that CPS acted
disloyally or breached any duty by filing the petition.
D. Did Appointment of a Conservator Violate S.H.'s Jury
Trial Rights?
S.H. argues that appointing a conservator to deal with
S.H.'s claims against his former employer deprived him of jury
trial rights guaranteed him by the federal and Alaska
constitutions.
Although some courts have said that a guardian cannot
waive a ward's rights, they have done so largely in context of
waivers of substantive rights. [Fn. 25] Other courts have
expressly or impliedly affirmed the power of a guardian or
conservator to waive procedural rights in order to achieve a
benefit for the ward. [Fn. 26] We think that a conservator must
have this authority.
Policy militates in favor of giving the conservator this
power. If the conservator were unable to waive the ward's jury
trial rights, no case triable by a jury could ever be settled. The
ward -- already deemed incapable in the law's eyes -- would
effectively retain control of the case. The purpose of the
conservatorship, to protect the ward, [Fn. 27] would be thwarted.
[Fn. 28] We therefore affirm, holding that a conservator has the
power to waive the ward's jury trial rights. We note that the
conservator must still exercise the statutory standard of care,
which is equivalent to that of a trustee. [Fn. 29]
S.H. also argues that the master improperly denied his
request for a jury trial on the question of his need for a
conservator. He cites AS 13.26.113 in support. [Fn. 30] CPS
responds that S.H. did not timely request a jury trial.
Alaska Probate Rule 11 requires that a demand for jury
trial in this type of proceeding must be served "no later than 20
days after service of the first pleading directed to a triable
issue or five days before the scheduled hearing, whichever is
earlier."[Fn. 31] The first pleading here was filed in December
1996. S.H. first requested a jury when the hearing began, on July
10, 1997. The request was untimely.
S.H. asserts briefly that his constitutional jury trial
rights were infringed in the hearing on his need for a conservator.
Not only is this assertion insufficiently briefed, [Fn. 32] it does
not protect S.H. from the consequences of his own waiver. [Fn. 33]
We affirm the superior court's determination that S.H. waived his
right to jury trial of the conservatorship question.
E. Was It Error to Impose the Costs of Conservatorship on
CPS?
The superior court imposed the costs of the
conservatorship on CPS. CPS, arguing that it was error to do so,
cites a comment to Alaska Professional Conduct Rule 1.14 that
implicitly envisions the client bearing the cost of
conservatorship. [Fn. 34] S.H. argues that the judge had authority
to impose the costs on CPS.
Alaska Statute 13.26.230 states: "If not otherwise
compensated for services rendered, any . . . conservator or special
conservator . . . appointed in a protective proceeding is entitled
to reasonable compensation from the estate." Neither S.H. nor the
court nor the master has cited any statutory authority for imposing
this cost on the petitioner, and we are aware of none. Such a
practice also seems contrary to the implication inherent in the
comment to Rule 1.14. Where the purpose of the conservatorship is
to protect the client's property, it is not obvious why the
petitioner, even if it is the client's law firm, should bear the
cost of the conservatorship. It is logical that normally the cost
be charged against the estate thus preserved.
Concluding that it was error to impose the
conservatorship costs on CPS, we remand to the superior court with
directions to impose those costs in accordance with AS 13.26.230.
IV. CONCLUSION
We AFFIRM the order appointing the conservator. We
VACATE the order imposing the conservatorship costs on CPS, and
REMAND with directions that these costs be imposed on S.H.
FOOTNOTES
Footnote 1:
Mediator Daniel A. Moore, Jr. presided over the mediation
between S.H. and ARI. He described S.H. as becoming "irrational."
S.H. also apparently said at an Alaska Public Utilities Commission
meeting that he was a federal "confidential informer"and that
Clapp and Van Flein were under investigation.
Footnote 2:
S.H. accused his lawyers, the trial judge, and mediator Moore
of being bribed by the opposition to work against him. One doctor
also reported S.H.'s statement that
the Anchorage Police Department has attempted
a cover-up, as has the Executive Director of the Alaska Public
Utilities Commission, the State Troopers Criminal Investigation
Unit, the Attorney General's Office, and the U.S. Department of
Labor, Wage, and Hour, and the FBI. . . . [S.H.'s] perception is
that there was a large scale cover-up that included all the above-
mentioned, as well as the Anchorage news media.
Footnote 3:
CPS attorneys testified that S.H. "would just want to give up
on his lawsuit and [he'd] insist that we dismiss it for him for
nothing." According to one of S.H.'s doctors, this desire to
dismiss for nothing continued even after the $500,000 settlement
offer. S.H. vacillated between gratuitous dismissal and continued
prosecution of his claims throughout this period.
Footnote 4:
According to CPS, S.H. threatened one of his own witnesses,
Bob Lohr, at Mr. Lohr's office, and was "kicked out of"that
office.
Footnote 5:
S.H. appeared at ARI's counsel's offices unaccompanied by CPS
and against CPS's recommendation, and was nearly arrested. S.H.
also initiated direct contact with the opposition's private
investigator, with whom he discussed his legal strategy. He also
threatened to go to the assigned superior court judge's chambers to
demand a settlement.
Footnote 6:
CPS contended that S.H. faxed confidential documents to a
reporter, and, against counsel's advice, revealed confidential
information casually to fellow union members.
Footnote 7:
Dr. Marjorie Smith diagnosed S.H. as having "a paranoid
personality disorder and a post traumatic stress disorder." She
said he did not have an ability to make competent and reasonable
judgments regarding the ARI litigation.
Footnote 8:
Dr. Bruce Smith found that
[S.H.] appears at present [in September 1996]
to be functionally impaired, relative to his ability to work. His
singular focus is on the outcome of the current case, and he
maintains a hypervigilance, due to his expectation that there will
be retaliation. He is capable of self-absorbed thinking and
tangential thinking, in which others' reality is not necessarily
incorporated into his thinking process.
Footnote 9:
Ms. Wells stated that
[S.H.], while not in need of the services of a
full conservator for assistance in managing his day to day
finances, continues to require a special protective order with
respect to the lawsuit, its outcome and any settlements.
Footnote 10:
Dr. Gonzales testified that he had "no problem"as to S.H.'s
ability to take part in the ARI proceedings. But he also stated
that S.H. was depressed and paranoid.
Footnote 11:
Neither the master's report nor the superior court order was
included in the excerpt. See Alaska R. App. P. 210(c)(2) ("The
appellant's excerpt of record shall contain a true and correct copy
of . . . the judgment or interlocutory order from which the appeal
is taken [and] . . . supporting opinions, findings of fact,
conclusions of law or other statements showing the reasoning of the
trial court"). The cross-appellant's excerpt is equally deficient
for failing to remedy these omissions and for failing to include
the order imposing costs on CPS. See Alaska R. App. P. 210(c)(2)
("The appellee's excerpt of record shall contain a copy of those
parts of the record relied on by the appellee which were not
included in the appellant's excerpt.").
Footnote 12:
See Alaska R. Civ. P. 52(a) ("The findings of a master, to the
extent that the court adopts them, shall be considered as the
findings of the court.").
Footnote 13:
See Bowman v. Blair, 889 P.2d 1069, 1072 n.5 (Alaska 1995);
Matson v. Matson, 639 P.2d 298, 299 n.1 (Alaska 1982); Alaska R.
Civ. P. 53(d)(2).
Footnote 14:
See Agen v. State, Dep't of Revenue, Child Support Enforcement
Div., 945 P.2d 1215, 1219 n.6 (Alaska 1997).
Footnote 15:
See Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
Footnote 16:
See Langdon v. Champion, 752 P.2d 999, 1001 (Alaska 1988);
Guin, 591 P.2d at 1284 n.6.
Footnote 17:
AS 13.26.280(c)(19).
Footnote 18:
AS 13.26.165(2) (emphasis added).
Footnote 19:
AS 13.26.165(2)(A).
Footnote 20:
Mediator Moore is a former justice of this court.
Footnote 21:
See AS 13.26.165(2)(B).
Footnote 22:
See AS 13.26.165(2)(A).
Footnote 23:
See Alaska Rules of Professional Conduct 1.1-1.8.; cf. Van
Horn Lodge, Inc. v. White, 627 P.2d 641, 643 (Alaska 1981),
overruled on other grounds by Lee Houston & Assocs. v. Racine, 806
P.2d 848, 855 (Alaska 1991).
Footnote 24:
Palfy v. Rice, 473 P.2d 606, 608 (Alaska 1970).
Footnote 25:
See, e.g., Cloud v. Market St. Ry. Co., 168 P.2d 191, 198
(Cal. 1976) (affirming guardian's waiver of jury trial); In re
Guardianship of Mabry, 666 N.E.2d 16, 22 (Ill. App. 1996) (holding
guardian impermissibly waived objection to unreasonable damages
assessment) ("A conservator or guardian cannot waive any rights of
the ward."); Jeanblanc v. Mellott, 504 N.E.2d 990, 997 (Ill. App.
1987) (holding guardian impermissibly waived defense of usury in
debt litigation) ("[T]he rule that a conservator or guardian cannot
waive any rights of the ward is so well settled that it may be said
to be fundamental and elementary.").
Footnote 26:
See In re Christina B., 23 Cal. Rptr. 2d 918, 926 (Cal. App.
1993) ("[T]he guardian may not compromise fundamental rights,
including the right to trial, without some countervailing and
significant benefit."); In re Simons, 698 P.2d 850, 851 (Mont.
1985) (guardian impermissibly waived right to counsel) ("attorney
and guardian acting in concert, may waive the [ward]'s rights").
Footnote 27:
See AS 13.26.165, .245.
Footnote 28:
S.H. also argues that the court cannot take away his right to
jury trial by simply following some "benevolent social theory." He
cites R.L.R. v. State, 487 P.2d 27 (Alaska 1971), in which we
upheld a minor's right to demand a jury trial. See id. at 31.
That case does not support S.H. We there stated that the decision
to go to jury trial should be made by a guardian ad litem acting in
the child's best interest. See id. at 34.
Footnote 29:
See AS 13.26.245, which imposes the requirements of AS
13.36.075 ("the trustee shall observe the standards in dealing with
the trust assets that would be observed by a prudent man dealing
with the property of another . . . .").
Footnote 30:
AS 13.26.113(a)(6) states that a respondent in an incapacity
hearing under AS 13.26.106 has the right to have that issue tried
by jury.
Footnote 31:
S.H. argues that AS 13.26.113 trumps Probate Rule 11. S.H.'s
argument is incorrect; rules are not invalid when they regulate the
procedure used to exercise statutory rights. [Fn. 35] See Gieffels
v. State, 552 P.2d 661, 667-68 (Alaska 1976) (upholding a rule
because the rule regulated "only the procedural aspects"of the
statutory right and did not infringe on the substantive statutory
right).
Footnote 32:
"[W]here a point is given only a cursory statement in the
argument portion of a brief, the point will not be considered on
appeal." Adamson v. University of Alaska, 819 P.2d 886, 889 n.3
(Alaska 1991).
Footnote 33:
See, e.g., Kletzelman v. Capistrano Unified Sch. Dist., 91
F.3d 68, 71 (9th Cir. 1996) (litigant was not protected by
constitution when she filed after ten-day federal limit had
expired).
Footnote 34:
The comment to Rule 1.14 includes the following sentence: "In
many circumstances, however, appointment of a legal representative
may be expensive or traumatic for the client."
Footnote 35:
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