On December 11, 2024, the New Jersey Supreme Court issued its opinion for In the Matter of A.D., (A-30/31-23) (088942) addressing whether court-appointed attorneys and temporary guardians are entitled to fee awards from Adult Protective Services (APS) when an incapacitated person’s estate lacks sufficient funds. The Court held that fee awards are not available.
Case Overview
The case originated in June 2020, when the Sussex County Division of Social Services, Office of Adult Protective Services (APS), sought a plenary guardianship for “Hank,” an alleged incapacitated person. The court appointed Steven J. Kossup, Esq. to represent Hank and Brian C. Lundquist, Esq. as temporary guardian. Both attorneys took significant steps to stabilize Hank’s life, ensuring he had stable housing, financial aid, and medical care. Despite APS’s recommendation for a permanent plenary guardian, Kossup and Lundquist advocated for a limited guardianship. Their position was supported by an expert psychologist, retained at Lundquist’s expense, who opined that Hank required only a limited guardianship. The trial court ultimately agreed. Kossup and Lundquist then applied for compensation for their services, seeking to have their fees paid by APS, as Hank’s estate lacked sufficient funds. While APS did not contest the amount of the fees, it argued that paying such fees would compromise its ability to serve its clients. The trial court and the Appellate Division denied the fee applications, prompting an appeal to the New Jersey Supreme Court.
Supreme Court’s Analysis
In a unanimous opinion, the New Jersey Supreme Court affirmed the denial of the fee applications. The decision emphasized the following key points:
1. The American Rule and Limited Exceptions
New Jersey adheres to the “American Rule,” which requires litigants to bear their own legal costs unless explicitly authorized by statute or court rule. New Jersey Court Rule 4:42-9(a) provides eight exceptions to the rule, two of which were invoked in this case:
- Statutory Authorization: The Court found that neither the Adult Protective Services Act (APS Act) nor the statutes governing guardianships authorize fee awards against APS. Both statutes limit fee awards to the estate of the incapacitated person.
- Guardianship Rules: Rule 4:42-9(a)(3) and Rule 4:86-4(e) permit fees to be paid from the incapacitated person’s estate or “in such other manner as the court shall direct.” However, the Court clarified that this language does not authorize fee awards against APS.
2. Rejection of the DiNoia Precedent
The Court explicitly declined to adopt the holding in In re Guardianship of DiNoia (2019), where the Appellate Division upheld a fee award against APS. The court in DiNoia ordered APS to pay counsel fees because APS had “protracted the litigation” by failing to provide information in a timely manner, and court-appointed attorney made exceptional efforts on behalf of his client. The Supreme Court held that such reasoning does not align with the American Rule or the governing statutes and rules, and ruled that there is no basis to authorize fee awards against APS under any circumstances, even if it protracted litigation.
3. Pro Bono Service
The Court highlighted the longstanding tradition of pro bono service in guardianship matters, particularly when the incapacitated person’s estate lacks resources. It acknowledged the substantial burden this places on attorneys and urged trial courts to consider the equitable distribution of these assignments.
Practical Guidance for Future Cases
The Court offered several recommendations for handling guardianship matters:
- Clear Communication: Judges should inform attorneys and guardians at the outset if their service is expected to be pro bono.
- Court Oversight: Judges, not Surrogates, are responsible for appointing counsel, determining the need for temporary guardians, and addressing compensation.
- Expert Fees: Temporary guardians serving pro bono should consult the court before retaining experts, ensuring funds are available to cover fees.
Broader Implications
The ruling in In the Matter of A.D. establishes that APS providers cannot be held financially responsible for court-appointed attorney fees, even if APS causes delay and the need for the attorney to perform extraordinary work on the case. While this reinforces the American Rule, it raises questions about the sustainability of pro bono service in guardianship cases, especially given the increasing demand for such legal representation. The Court expressed gratitude for the exemplary work of Kossup and Lundquist but acknowledged the need for systemic changes to address the burdens of pro bono service. This may include increased funding for legal aid programs or other measures to ensure fair allocation of responsibilities. As the population continues to age and demand for guardianship services grow, the legal community and policymakers must work together to ensure equitable and sustainable solutions.