PAPERS CONSIDERED: Cross Petitioner Shelly S.F.’s CPLR §4519 Memorandum of Law 1 Cross Petitioner Wysocki’s CPLR §4519 Memorandum of Law 2 Petitioner’s CPLR §4519 Memorandum of Law 3 Counsel for Steven S. CPLR §4519 Memorandum of Law w 4 Temporary Guardian’s CPLR §4519 Memorandum of Law 5 Cross Petitioner Wysocki’s Reply CPLR §4519 Memorandum of Law 6 Counsel to Steven S. Reply Memorandum of Law 7 Temporary Guardian’s Reply Memorandum of Law 9 Counsel for Temporary Receiver’s Reply Memorandum of Law 10 Counsel for Steven S. Second Reply Memorandum of Law 11 This Court has been presented with an evidentiary issue of first impression during the ongoing trial of this contested Mental Hygiene Law Article 81 proceeding for the appointment of a guardian for the personal and extensive property management needs of Steven S., an alleged incapacitated person, due to inter alia the purported financial improprieties, exploitation and undue influence perpetrated by cross-petitioner1 Wysocki: whether Wysocki, who has had extensive business transactions and conversations with his employer, friend and business associate, Steven S., should be barred from testifying about those transactions (e.g., allegedly transferring 15 per cent of Steven S.’s business interests to himself) pursuant to CPLR 4519, proverbially known as the Dead Man’s statute. CPLR 4519 has not been amended to include or exclude the concepts of incapacity, dignity, due process and individual liberty embodied in the reformation of conservatorships in New York since Article 81′s enactment over 30 years ago. Thus Article 81 was designed to be primarily an adversarial, not a collaborative process, to protect the rights of individuals who are alleged to be incapacitated or in need of guardian by following the rules of evidence unless good cause (e.g., uncontested proceedings, the court evaluator’s report) can be shown as to why the rules of evidence should be waived (Mental Hygiene Law §81.12[b]; In re Rosa B.-S., 1 AD3d 355, 355-356 [2nd Dept. 2003]). The objectors to Wysocki’s possible testimony about the critical business and personal transactions between Steven S. and Wysocki (petitioner/daughter Corrine S., cross-petitioner/daughter Shelly S.F., cross-petitioner/ wife Grace. S., Steven S.’s counsel, the temporary personal needs and property guardian for Steven S,. and the temporary receiver in charge of Steven S.’s business interests and assets) all argue that CPLR 4519 must be invoked against Wysocki since: “CPLR 4519 disqualifies parties interested in litigation from testifying about personal transactions or communications with deceased or mentally ill persons (Prince, Richardson on Evidence §6-121, at 325 [Farrell 11th ed 1995]).” (Poslock v. Teachers’ Retirement Bd., 88 NY2d 146, 150, 643 N.Y.S.2d 935, 666 N.E.2d 528 [1996] [emphasis added]). The underlying purpose of the rule is “to protect the estate of the deceased [or mentally ill person] from claims of the living who, through their own perjury, could make factual assertions which the decedent could not refute in court” (Matter of Wood, 52 NY2d 139, 144, 418 N.E.2d 365, 436 N.Y.S.2d 850 [1981]). “The statute prevents any person ‘interested in the event’ from testifying to a ‘personal transaction’ with the deceased unless the representative of the deceased [or mentally ill person] has waived the protection of the statute by testifying himself or introducing the testimony of the decedent [or mentally ill person] into evidence at trial (id.)[emphasis added].” (Sepulveda v. Aviles, 308 AD2d 1, 10 [1st Dept. 2003]). However, Steven S. is alive and has appeared in the trial of this proceeding, and this Court has not found Steven S. to be mentally ill as defined under the Mental Hygiene Law §1.03 [20]). In essence, the objectors are attempting to use the petitions as a sword against Wysocki, and CPLR 4519 as a shield and a bright line to prevent Wysocki and other possible witnesses from testifying about conversations with Steven S. pertaining to transactions purportedly entered into by Steven S. Moreover, the objectors are asking this Court to take a very expansive interpretation of CPLR 4519 and now judicially legislate Article 81 into CPLR 4519. For the reasons set forth below, this Court concludes that CPLR 4519 is not applicable to the possible testimony by cross-petitioner Wysocki and his witnesses. Procedural History The very serious allegations made by the petitioner and cross-petitioners against cross-petitioner Wysocki, as well as the physical and cognitive problems Steven S. has allegedly been suffering since sustaining two separate strokes and an automobile accident, resulted in the appointment of (1) a temporary guardian for his personal property management needs, (2) an attorney to represent Steven S., and (3) a temporary receiver to protect Steven S.’s business assets. counsel, has objected to this proceeding and the appointment of a guardian for him. This Court in an order dated February 21, 2023 (Knobel, J.) directed that this Article 81 guardianship proceeding would be conducted in four phases: (1) whether Steven S. is incapacitated now and whether a guardian should be appointed for him; (2) whether Steven S. had capacity when he executed documents giving cross-petitioner Wysocki a power of attorney in May of 2020 and allegedly transferred to Wysocki fifteen percent of Steven S.’s “business,” whether Steven S. had capacity when a certain Florida property was sold in 2021, and whether Steven S.. had capacity when the corporation he controlled, 52 West Associates LLC, sold its New York county property (see, Mental Hygiene Law §81.29 [d]); (3) whether cross-petitioner Wysocki breached his fiduciary duty on behalf of Steven S. (see, Mental Hygiene Law §81.29 [d]); and (4) if Steven S. is deemed to be incapacitated or a person in need of a guardian, whether the petitioner or cross-petitioners or an independent person should be appointed guardian for the personal needs and / or property management needs of Steven S. Phase 1 has been completed, with this Court orally finding that Steven S. is incapacitated as defined by Mental Hygiene Law 81.02. There was no evidence proffered nor was there a finding that the alleged incapacitated person suffered from a mental illness. Instead, there was circumstantial evidence testified to by several witnesses that Steven S. has cognitive problems; there was no testimony that Steven S. suffers from dementia or Alzheimer’s disease. The Court has now begun phase 2. Counsel for Steven S. subpoenaed certain witnesses and asked the Court’s indulgence to take them “out of turn” prior to the cross-petitioners’ testimony in phase 2; the court heard testimony from those witnesses. The three witnesses called by counsel for Steven S. were Raul Reyes, Maritza Miller, and Martin Olsen. Reyes and Miller, both present/former employees of Steven S., testified about the validity of the power of attorney, health care proxy, and a document that transferred fifteen percent (15 percent) ownership interest in the company from Steven S. to Wysocki. Both Reyes and Miller’s testimony called into question the validity of these documents, stating that they were fraudulently executed. Martin Olsen was the notary for some of the documents in question. His notarizations had numerous mistakes and testified that he had no independent recollection of notarizing these documents. The only fact Martin Olsen could definitively testify to was that his signature appeared on the documents in his capacity as a notary public. CPLR §4519, Mental Illness, and Incapacity A. Steven S. is not suffering from a “Mental Illness” CPLR §4519 provides that: Upon the trial of an action or the hearing upon the merits of a special proceeding, a party or a person interested in the event, or a person from, through or under whom such a party or interested person derives his interest or title by assignment or otherwise, shall not be examined as a witness in his own behalf or interest, or in behalf of the party succeeding to his title or interest against the executor, administrator or survivor of a deceased person or the committee of a person with a mental illness, or a person deriving his title or interest from, through or under a deceased person or person with a mental illness, by assignment or otherwise, concerning a personal transaction or communication between the witness and the deceased person or person with a mental illness, except where the executor, administrator, survivor, committee or person so deriving title or interest is examined in his own behalf, or the testimony of the person with a mental illness or deceased person is given in evidence, concerning the same transaction or communication (emphasis added). The Legislature’s use of the term “mental illness” is important when determining the applicability of CPLR 4519 to an Article 81 guardianship proceeding. Mental Hygiene Law §1.03[20] defines mental illness as “an affliction with a mental disease or mental condition which is manifested by a disorder or disturbance in behavior, feeling, thinking, or judgment to such an extent that the person afflicted requires care, treatment and rehabilitation” (Mental Hygiene Law §1.03[20] [emphasis added]). Article 81 guardianship proceedings involve individuals who may be suffering from a wide spectrum of severe or mild physical and cognitive maladies; some are unable to manage any of their personal or financial matters, while others may only require minimal assistance (see Mental Hygiene Law §81.01). Individuals who are subject to an Article 81 guardianship are deemed to be “incapacitated”, or if consented to, “a person in need of a guardian” (see Mental Hygiene Law §81.02; Matter of Daniel TT, 33 AD3d 94 [3rd Dep't 2007]; Matter of Crump, 230 AD2d 850 [2nd Dep't 1996]; Matter of O’Hear, 219 AD2d 720 [2nd Dep't 1995]; Matter of Maher, 207 AD2d 133 [2nd Dep't 1994]). An individual may be deemed incapacitated when a person is likely to suffer harm because the person is unable to provide for their personal needs and/or property management and the person cannot adequately understand and appreciate the nature and consequences of such inability (Mental Hygiene Law §81.02[b]). While someone afflicted with a mental illness may also be deemed incapacitated, not all individuals who are subject to an Article 81 guardianship proceeding qualify as having a mental illness. Thus, for CPLR §4519 to apply here this Court would have to make a determination that Steven S. is mentally ill. Steven S. is not mentally ill as defined by the Mental Hygiene Law. Although the testimony is clear that Steven S. is incapacitated based on the factors enumerated in Mental Hygiene Law §81.02, there is insufficient evidence for this Court to make a determination that Steven S. suffers from a mental disease or mental condition which is manifested by a disorder or disturbance in behavior, feeling, thinking, or judgment to such an extent that the person afflicted requires care, treatment and rehabilitation. There has been no testimony by any doctors, psychiatrists, physicians, nor has any medical record or testimony been submitted into evidence, which would suggest Steven S. suffers from a mental illness. The testimony and evidence from phase one of this trial support the conclusion that Steven S. is likely to suffer harm because he cannot sufficiently provide for his personal needs and property management and he does not adequately understand and appreciate the nature and consequences of his functional limitations. If the objectors’ objection to Wysocki’s testimony is sustained by this Court based on the evidence presented at this trial it would create a blanket acceptance that all individuals who are incapacitated due to cognitive deficits pursuant to Article 81 are suffering from a “mental illness.” B. The Protection of CPLR 4519 has been waived Assuming arguendo that Steven S. suffered from a mental illness, the protections afforded by CPLR §4519 have been waived by Steven S.’s counsel. Counsel to Steven S. called nonparty Raul Reyes to testify, and questioned Reyes in detail about one of the critical issues in phase two of this trial, the business transactions between Wysocki and Steven S. Reyes has worked for Steven S. since 2006 in various capacities — gardener, home maintenance, property repair, a business confidant and personal assistant. Counsel to Steven S. elicited an in-depth and thorough analysis of the business dealings and their possible legitimacy. The attorneys for the petitioner, cross-petitioner Shelly S.F., and cross-petitioner Wysocki cross-examined Reyes on all of these topics. Not a single party or court appointee made any objection pursuant to CPLR 4519 during the entirety of Reyes’s testimony. It would be unfair and unjust to allow other witnesses to be able to go into detail about the these business transactions but now prevent Wysocki from testifying after it has been argued and claimed that he engaged in potentially fraudulent conduct regarding these business dealings. This objection, while clever, is gamesmanship and seeking to tailor evidence to only allow one side in, rather than the ultimate function of this legal proceeding, to seek the truth and act in the best interest of Steven S. Accordingly, the objectants’ oral and written applications objecting to the probable testimony by cross-petitioner Wysocki regarding his business transactions with Steven S. are each overruled and denied in their entirety. Out of Court Statements made by Steven S. As stated earlier in this decision, the rules of evidence apply in guardianship proceedings, but “[a] court may, for good cause shown, waive the rules of evidence” (Mental Hygiene Law §81.12 [b]; see Matter of Janczak, 167 Misc 2d 766, 770 [1995]). However, the waiver provision set forth in Mental Hygiene Law §81.12 (b) is applicable only in uncontested proceedings where there is in essence consent to the appointment of a guardian (see Matter of Janczak, supra at 771). Thus, the Court cannot waive the rules of evidence in this proceeding. Consequently, the attorneys in the instant matter must be aware of the rules regarding hearsay. Hearsay is defined as: (1)…an out of court statement of a declarant offered in evidence to prove the truth of the matter asserted in the statement. (2) the declarant of the statement who is not a witness at the proceeding, or if the declarant is a witness, the witness uttered the statement when the witness was not testifying in the proceeding. (3) a statement of the declarant may be written or oral, or non-verbal, provided the verbal or non-verbal conduct is intended as an assertion The Guide to New York Evidence, (rule 8.00, Definition of Hearsay, https:// www.nycourts.gov/judges/evidence/8-hearsay/article-8-rules.pdf [last accessed May 4, 2023]). Hearsay is only admissible if there is an exception to hearsay or the Federal and New York State Constitutions require it (The Guide to New York Evidence, rule 8.01, Admissibility of Hearsay, https://www.nycourts.gov/ judges/evidence/8-hearsay/article-8-rules.pdf [last accessed May 4, 2023]). If the statement is not offered for its truth than it is not considered hearsay (id.). New York rules of evidence are more restrictive than the Federal Rules of Evidence. The Federal Rules of Evidence consider a statement made by a witness not hearsay if it is being offered against an opposing party and: (1) was made by the party in an individual or representative capacity; (2) is one the party manifested that it adopted or believed to be true; (3) was made by a person whom the party authorized to make a statement on the subject; (4) was made by the party’s agent or employee on a matter within the scope of that relationship and while it existed; or (5) was made by the party’s co-conspirator during and in furtherance of the conspiracy (USCS Fed Rules Evid. R. 801[d][2]). New York also has party admission/statement exceptions to hearsay. Rule 8.03 states that an Admission by a Party is: (1) A statement of a party which is inconsistent with the party’s position in the proceeding is admissible against that party, if the statement is one of the following: (a) made by a party in an individual or representative capacity and offered against the party in that capacity, irrespective of the party’s lack of personal knowledge of the facts asserted by the party. (b) made by a person in a relationship of privity with the party and the statement concerns the party’s and the person’s joint interest. (2) A statement offered against an opposing party shall not be excluded from evidence as hearsay if made by [a] a person whom the opposing party authorized to make a statement on the subject or [b] by the opposing party’s agent or employee on a matter within the scope of that relationship and during the existence of that relationship. The required authorization may be expressly given by the party or implied from the scope of the agent’s or employee’s duties or employment. The statement cannot be used as proof of the agency or employment relationship, or the claimed authority to make the statement, or the scope of the agency or employment relationship, unless it is admissible under another exception. Unlike the Federal Rules of Evidence, New York requires the statement to be against the individual’s present position in the current proceeding, not just any statement made by the individual regardless of if the witness is available to testify. Rule 8.11 defines a Statement Against Penal or Pecuniary Interest as: (1) A statement made by a declarant based upon personal knowledge which at the time of its making the declarant knew was contrary to the declarant’s pecuniary or proprietary interest, or tended to subject the declarant to criminal liability, is admissible, provided the declarant is unavailable as a witness. Rule 8.11 is very similar to the Federal Rules of Evidence but is still slightly more restrictive as it does not have the additional exception that permits statements that have a tendency to invalidate the declarant’s claim against someone else (USCS Fed Rules Evid. R. 804[b][3]). If the statements sought to be introduced by the witnesses do not fall into these two categories, another exception to hearsay, and are being offered for the truth of the matter asserted they cannot be elicited, and the Court will sustain objections made. Given this clarification the Court modifies its previous oral decision regarding the testimony of Steven S.’s former accountant, Mr. Glass, to the extent that statements made by Steven S. can be elicited if they are fall within an exception or exemption to hearsay. If any party believes that he or she was unable to elicit certain information based on this clarification the Court will allow the witness to be re-examined since Mr. Glass is technically still on the witness stand. Cross-Petitioner Wysocki’s Demand for “Lead Counsel” Cross-petitioner Wysocki’s attorney has submitted in his reply memorandum of law argument seeking an order “prohibiting the representation of the IP’s interest by three separate law firms each appearing individually and not as co-counsel.” This request is denied as absurd, a mischaracterization of the parties’ and attorneys’ interests, and as totally lacking merit since there is no basis in the law for the relief requested. The foregoing constitutes the decision and order of this Court. Dated: May 5, 2023
