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S.T. v. 1515 Broad Street, LLC (081916) (Essex County & Statewide)
Citation: Not availableDocket: A-87-18
Court: Supreme Court of New Jersey; March 9, 2020; New Jersey; State Supreme Court
Original Court Document: View Document
The syllabus clarifies that it is not part of the Court's opinion and serves solely for reader convenience, having not been reviewed or approved by the Court. The case S.T. v. 1515 Broad Street, LLC, concerns the proper legal procedures for determining a litigant's mental capacity before appointing a guardian ad litem to make decisions on their behalf. The Court examines whether the trial court followed these procedures when it empowered a guardian ad litem to manage S.T.'s case without conducting a guardianship hearing. S.T., a 44-year-old chemical engineer, suffered a head injury from a falling metal plate on March 11, 2008, leading to a diagnosis of concussion and extensive medical treatment for related conditions, including a traumatic brain injury. She was later declared permanently disabled by the Social Security Administration and diagnosed with various cognitive and psychological disorders linked to the accident, with a clinical psychologist indicating her cognitive impairment was likely chronic. S.T. filed a civil suit in February 2010 against the building owner for serious injuries. She rejected a $475,000 settlement offer in July 2013, despite her attorney's advice, leading the attorney to seek the appointment of a guardian ad litem due to concerns over her mental capacity. Following a forensic psychologist's examination, which suggested S.T. had diminished capacity in decision-making, the court appointed attorney Frederick Miceli as the guardian ad litem. Miceli reviewed extensive case materials and consulted with S.T. before recommending that a guardian ad litem should have the authority to decide whether to pursue a trial or settle the case. The court issued an order allowing Miceli to make all decisions regarding a case's disposition without a guardianship hearing, acting under the powers of a Guardian Ad Litem. An agreement was reached to settle the lawsuit for $625,000 without S.T.’s consent. A subsequent 'friendly hearing' assessed the fairness of the settlement, which was approved despite S.T.’s objections, leading to affirmation by the Appellate Division. The Supreme Court later granted S.T.’s certification petition. The court held that before appointing a guardian and depriving S.T. of control over her case, a hearing was necessary to determine her mental capacity per N.J.S.A. 3B:1-2 and N.J.S.A. 3B:12-24. At this hearing, S.T. was entitled to independent counsel. The absence of such a hearing meant the court lacked authority to accept the settlement against her wishes. While acknowledging S.T.’s attorney acted in good faith in seeking a guardian, the court criticized the lack of notice to S.T. regarding the motion. The court affirmed the trial court's discretion in appointing a guardian ad litem but noted the need for clearer documentation of authority and role. The court elaborated on the procedural differences between guardians and guardians ad litem, highlighting ambiguities in Rule 4:26-2. It urged the Supreme Court Civil Practice Committee to review this rule for clarity. After the guardian ad litem conducts an inquiry as per Rule 4:26-2(b), they submit a report to the court, recommending whether a formal hearing should occur under Rule 4:86. However, these recommendations are not binding; the court retains the responsibility to make independent findings. In this case, the guardian ad litem, Miceli, sought authority to decide if S.T.’s case should be settled or go to trial without first providing notice or holding a hearing to determine S.T.'s mental capacity. The court improperly delegated its decision-making authority to Miceli, failing to follow required procedures outlined in New Jersey court rules and statutes, which are designed to protect individuals facing guardianship actions due to potential incapacity. Specifically, essential procedural steps were overlooked: no guardianship complaint was filed with notice to S.T.; no hearing was held with testimony and representation by independent counsel; the court did not make fact-findings based on clear and convincing evidence; and S.T. was not formally adjudicated as mentally incapacitated. The trial court effectively outsourced its judicial role to the guardian ad litem, neglecting due process safeguards. Rule 4:44-3 mandates that any settlement involving mentally incapacitated persons must be validated by a court without a jury, ensuring the settlement's fairness. However, since the court failed to establish S.T.’s mental incapacity, it lacked the authority to conduct a friendly hearing or deny S.T. the right to accept or reject the settlement offer. Additionally, a statute of limitations issue was raised by one defendant, but the court chose not to address it or remand the matter. Consequently, the Appellate Division's judgment was reversed, the trial court's settlement approval was vacated, and the case was remanded for further proceedings. Chief Justice Rabner and Justices LaVecchia, Fernandez-Vina, and Solomon concurred with Justice Albin's opinion, while Justices Patterson and Timpone did not participate. An individual's right to manage personal and financial affairs, including decisions related to lawsuits, is fundamental and protected by both the New Jersey Constitution and the Rules of Professional Conduct. In the case involving plaintiff S.T., who suffered serious injuries from a falling object, she filed a personal injury lawsuit but rejected a settlement offer against her attorney's advice. The attorney, believing S.T. lacked mental capacity, sought a guardian ad litem to make decisions on her behalf. The court appointed the guardian and allowed them to control the case's outcome, ultimately approving a settlement despite S.T.'s strong objections. The Appellate Division upheld this decision. However, the Supreme Court of New Jersey reversed the ruling, stating that the trial court improperly granted the guardian decision-making authority without conducting a necessary guardianship hearing to assess S.T.'s mental capacity, as required by law. S.T. had a right to independent counsel during her guardianship hearing, as stipulated by R. 4:86-4(a)(7). Without such a hearing and a judicial determination that S.T. lacked the mental capacity to proceed with her lawsuit, the court could not approve a settlement against her wishes. Consequently, the settlement is vacated, and the case is remanded to the trial court for further proceedings. The case record includes S.T.'s personal injury lawsuit documents, medical reports, and guardian appointment proceedings. S.T., a forty-four-year-old chemical engineer with advanced degrees and military service, suffered a head injury from a falling metal plate on March 11, 2008, while working. Although she initially declined medical assistance, she later experienced severe symptoms and was diagnosed with a concussion the following day. This incident led to over 500 healthcare visits for conditions related to what she claims is a traumatic brain injury. A year post-accident, the Social Security Administration deemed her permanently disabled. S.T. has undergone ongoing speech and cognitive therapy. In November 2010, Dr. Paula Reid conducted a neuropsychological evaluation, revealing significant cognitive impairments and associated depressive and anxiety disorders. Dr. Reid indicated these impairments would likely be chronic and permanent. Between June 2011 and August 2012, Dr. Peter Crain diagnosed S.T. with various conditions stemming from the accident, including post-concussion syndrome and major depressive disorder, all deemed permanent. A 2013 psychological report from the Veterans Administration noted mixed cognitive assessment results, indicating superior verbal comprehension and above-average nonverbal reasoning, but persistent processing speed issues. Recommendations included allowing S.T. extended time for tasks, recording job assignments, and providing frequent breaks to alleviate fatigue and headaches. S.T. was prescribed multiple medications for anxiety, depression, chronic headaches, facial pain, and cognitive impairment. In February 2010, she filed a civil complaint alleging serious injuries due to the negligence of defendants related to the construction and maintenance of a building, specifically naming 1515 Broad Street, LLC, Walsh Company, LLC, County Glass, Metal Installers, Inc., and other fictitious defendants. County Glass filed a third-party complaint against Virginia Glass Products Corp. and Idesco Corp. In an amended complaint filed two and a half years post-injury, S.T. alleged negligence against Idesco and product liability against Virginia Glass, claiming their negligence in the doorway header's manufacture and maintenance caused her injuries. Idesco and Virginia Glass moved for summary judgment, citing a two-year statute of limitations; the trial court denied Idesco’s motion under the fictitious-practice rule but dismissed claims against Virginia Glass for asserting new causes of action outside the statute of limitations. Over two years of discovery revealed disputes regarding the object that struck S.T., the liable parties, and the causal link between her medical conditions and the accident. The defense argued that S.T.'s injuries were unrelated to the incident and provided biomechanical analyses suggesting the object was a light cladding surface layer rather than a metal plate, with no objective evidence of an organic brain injury. In July 2013, defendants offered $475,000 to settle, which S.T. rejected against her attorney’s advice. Subsequently, S.T.'s attorney sought the appointment of a guardian ad litem to assess her ability to consider the settlement offer, citing concerns about her diminished capacity impacting her decision-making. Notably, S.T. was not informed about the motion for a guardian ad litem. Dr. Crain later examined S.T. and reported her diminished capacity to comprehend the risks related to her case. S.T. claimed she was not informed about the purpose of her examination prior to the court's in-camera conference. On September 27, 2013, the court appointed attorney Frederick Miceli as guardian ad litem for S.T., finding 'good cause' for this decision and postponing the trial date without S.T. being aware of the conference or the guardian's implications. Miceli reviewed case materials and interviewed S.T. multiple times. In a March 17, 2014 report, he concluded that S.T. lacked the understanding to make rational decisions regarding her case or was unwilling to confront trial realities. S.T. expressed a belief she had nothing to lose due to her situation, struggled to accept her physician's refusal to testify, and could still depose Dr. Reid for trial despite his unwillingness to testify. Miceli recommended that he, as guardian ad litem, should have the authority to decide on trial or settlement. On April 22, 2014, the court granted Miceli this power without a guardianship hearing. Subsequently, on May 6, 2014, an agreement was reached to settle the lawsuit for $625,000, yielding S.T. $254,322.65 after deductions. In a June 17, 2014 letter, Miceli reiterated concerns about S.T.'s impaired judgment and deemed the settlement 'fair and reasonable.' A 'friendly hearing' on July 1, 2014, assessed the settlement's fairness; S.T.’s attorney clarified that S.T. was not deemed incompetent but had limited capacity for decision-making. Miceli supported the settlement based on risks associated with trial, including proving liability and damages, asserting it was in S.T.'s best interests and urging the court to approve it. Counsel for the defendants sought approval for a settlement at a hearing where S.T. expressed her desire to go to trial, having already incurred $30,000 in expenses. Although satisfied with her attorney's representation, she deemed the settlement offer insufficient to cover her injuries, emphasizing that accepting '30 cents to a dollar' would not adequately address her medical debts and support from others during her disability. S.T. likened the settlement to a 'lifetime jail sentence' and stated, 'it’s just not fair.' Despite her objections, the court approved the settlement for a total of $625,000, allocated as follows: $254,322.65 to S.T. for damages; $190,998.75 for legal fees to her counsel; $22,720.50 in fees to Miceli; and $156,958.10 for medical and workers' compensation liens. The court justified its decision by praising Miceli's expertise, advising S.T. to trust his judgment, and highlighting the unpredictability of jury outcomes. While acknowledging S.T.'s intelligence and understanding of her situation, the court cautioned that her knowledge might have led her to underestimate the complexities of the case. After the ruling, S.T. expressed disagreement, stating, 'you’re making a wrong decision.' She subsequently appealed the trial court's appointment of a guardian ad litem and the settlement approval. Idesco filed a protective cross-appeal, urging that if the appellate court vacated the settlement, it should also reverse the trial court's denial of its summary judgment motion based on the statute of limitations. The Appellate Division affirmed the trial court's actions, explaining that a guardian ad litem may be appointed if there is good cause to believe a party lacks the mental capacity to make litigation decisions. The guardian's role is to assess the party’s mental capacity and provide necessary information to protect their best interests. If the court finds clear and convincing evidence of mental incapacity, it may empower the guardian ad litem to make decisions regarding the case, including whether to settle. The Appellate Division upheld the appointment of Miceli as a guardian ad litem for S.T., citing 'good cause' based on counsel's certification. The guardian's investigation revealed convincing evidence of S.T.'s mental incapacity to make decisions regarding trial or settlement. The trial court's finding of S.T.'s lack of mental capacity was deemed proper, and the court's authorization for the guardian to make decisions on S.T.'s behalf was also upheld. Furthermore, the Appellate Division found sufficient evidence supporting the trial court's approval of the settlement, which included S.T.'s testimony during a friendly hearing. Idesco's cross-appeal on the settlement's validity was rendered moot as it was contingent upon the settlement being vacated. S.T. challenged the guardian's appointment, arguing it deprived her of her rights without the due process of a guardianship hearing to assess her mental capacity. She contended that the trial court should have determined her mental capacity before approving the settlement. Defendants, including 1515 Broad Street, County Glass, Walsh, and Idesco, defended the trial court's actions, asserting it acted within its authority under Rule 4:26-2 to appoint a guardian without a full guardianship hearing. They argued that even if such a hearing was warranted, S.T. did not demonstrate that the appointment lacked justification. Additionally, they maintained the trial court's approval of the settlement was appropriate, emphasizing that it protected S.T. from significant financial risk and that vacating the settlement would be unproductive given the evidence of her incompetence. Idesco requested the court, if the settlement was vacated, to dismiss S.T.'s claim on statute-of-limitations grounds or to remand the matter to the Appellate Division. The appeal encompasses four key issues. The document addresses several legal issues regarding S.T.'s capacity to make litigation decisions and the role of her attorney and the court. Key points include: 1. **Attorney's Responsibility**: It questions whether S.T.'s attorney met his obligations under RPC 1.14(b) by seeking a guardian ad litem due to a reasonable belief that S.T. had diminished capacity. 2. **Court's Appointment of Guardian**: It examines whether the appointment of a guardian ad litem was appropriate under Rule 4:26-2 to assess S.T.'s mental capacity concerning a $475,000 settlement offer. 3. **Delegation of Authority**: The excerpt considers whether the court correctly assigned the guardian ad litem the power to determine S.T.'s mental capacity and to settle the case without conducting a guardianship hearing in compliance with Rule 4:86. 4. **Settlement Approval**: It evaluates whether the court erred in approving the settlement against S.T.'s explicit opposition. The issues are fundamentally legal, focused on interpreting court rules and statutes, warranting a de novo standard of review. The analysis reinforces the principle that individuals who are competent have the right to manage their affairs and make decisions, even if those decisions may not be in their best interest. New Jersey law, as well as constitutional guarantees, underscore the importance of respecting an individual's self-determination and property rights, particularly in the context of controlling one's lawsuit. The conclusion asserts that S.T. was unjustly deprived of her ability to direct her legal proceedings in accordance with her wishes. The court failed to properly follow procedures when denying S.T. the ability to accept or reject a settlement offer. The guardian ad litem was given sole authority to settle the case without a hearing to assess S.T.'s mental capacity, violating legal requirements outlined in R. 4:86-1 to -8 and N.J.S.A. 3B:12-24 to -35. While S.T.’s attorney acted in good faith in seeking a guardian ad litem under RPC 1.14(b), based on concerns about her diminished capacity, he erred by not informing S.T. of the motion, which was critical given its implications. The Appellate Division agreed that such motions must be served on the alleged incapacitated person. The trial court, while properly appointing a guardian ad litem based on counsel's certification and medical reports, neglected to cite the authority for its action (Rule 4:26-2) or clarify the guardian's role. Instructions should have directed the guardian to investigate S.T.'s mental capacity and recommend whether a limited or general guardianship was needed, aligning with Rule 4:86. The relationship between Rules 4:26-2 and 4:86 is essential for understanding the necessary legal processes in this case. A court can appoint a guardian ad litem for a "mentally incapacitated person" only after a judicial determination of mental incapacity. This appointment can occur either at the court's own initiative or upon motion by others when there is an allegation of mental incapacity. The term "alleged" is significant, as it indicates that the guardian ad litem's role is limited to assessing the claim of mental incapacity, unlike a guardian who acts after such incapacity is formally established. The guardian ad litem is responsible for investigating the individual's mental capacity and advising the court if a formal competency hearing is warranted. After the inquiry, the guardian ad litem submits a report to the court with findings and recommendations regarding the necessity of a hearing under Rule 4:86. There is a noted lack of clarity in the rule, which has led to interpretive errors by lower courts, prompting a request for a review by the Supreme Court Civil Practice Committee. The guardian ad litem acts as an independent investigator and serves the best interests of the alleged mentally incapacitated person, functioning as "the eyes of the court" in this process. The guardian ad litem’s recommendations do not bind the court, which must make independent factfindings. The court is required to retain its authority as the decisionmaker and cannot delegate this responsibility to the guardian ad litem. There is no provision in court rules or case law allowing a guardian ad litem, appointed to assess a client's alleged mental incapacity, to make legal decisions on the client's behalf prior to a judicial determination of mental capacity. The case of In re S.W. illustrates this principle; a hospital sought a guardian ad litem to sign Medicaid forms for S.W., who refused to comply, without claiming she was mentally incompetent. The court appointed a guardian ad litem without a finding of incompetency, which was reversed by the Appellate Division. The court held that appointing someone to sign documents on behalf of an adult deprives that individual of control over personal affairs and cannot occur without an action under Rule 4:83, which provides for a judicial hearing to assess an alleged incompetent's fitness to manage their affairs. The Appellate Division reiterated that any deprivation of liberty or control over property must follow constitutional procedures. In the current case, the guardian ad litem conducted an investigation into S.T.'s mental capacity and recommended that he be granted authority to decide on trial or settlement for S.T.’s case. However, the court allowed this without notifying S.T. or holding a hearing, thereby improperly delegating its oversight and factfinding responsibilities and failing to follow the constitutional requirements of Rule 4:86-1 to -8 and relevant statutes. The document outlines the legal framework for appointing a guardian for an allegedly mentally incapacitated person, governed by specific New Jersey statutes and court rules. It defines an "incapacitated individual" as someone impaired by mental illness or intellectual disability to the extent they cannot manage their affairs. The initiation of guardianship proceedings requires compliance with court rules, including submitting a guardianship complaint supported by two affidavits from qualified medical professionals assessing the individual’s capacity. If the complaint meets the requirements, the court must schedule a hearing, provide at least 20 days’ notice to the alleged incapacitated person, and inform them of their rights to oppose the action and request a jury trial. The trial can proceed without a jury unless demanded, and if the individual lacks legal representation, the court is obligated to appoint counsel. The burden of proof for incapacity rests on the petitioner, requiring clear and convincing evidence. The court may appoint either a general or limited guardian based on the individual's capacity. However, in the specific case referenced, none of these procedural requirements were followed; no proper guardianship complaint or affidavits were filed, no hearing or testimony was conducted, and no legal adjudication of incapacity occurred, as the trial court improperly delegated its decision-making authority to the guardian ad litem. The trial court erred by not conducting a proper hearing to determine S.T.'s mental capacity before approving a settlement, which violates due process as outlined in court rules and statutes. Rule 4:44-3 mandates that cases involving mentally incapacitated persons require court hearings to assess the fairness of settlements, and without a judicial finding of incapacity, S.T. retained the right to reject the settlement. Despite views from the trial court and counsel suggesting that rejecting the settlement was unwise, the absence of a formal incapacity ruling rendered their opinions irrelevant. S.T.'s attorney had previously recommended appointing a guardian ad litem after S.T. declined a $475,000 settlement offer, which was later increased to $625,000 following the appointment. The court emphasized the importance of S.T.'s autonomy in making decisions regarding her case, regardless of the potential consequences. The judgment of the Appellate Division is reversed, the settlement is vacated, and the case is remanded for further proceedings that comply with legal standards. Idesco's request to address a cross-appeal related to the statute of limitations is not considered due to procedural issues, and the court advises that any guardianship action must conform to applicable rules and statutes. The opinion is joined by several justices, while two justices did not participate.