RECORD IMPOUNDED
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5525-13T2
S.T.,
Plaintiff-Appellant/
Cross-Respondent,
v. APPROVED FOR PUBLICATION
1515 BROAD STREET, LLC, August 6, 2018
THE WALSH COMPANY, LLC,
APPELLATE DIVISION
and COUNTY GLASS & METAL
INSTALLERS, INC.,
Defendants-Respondents,
and
COUNTY GLASS & METAL INSTALLERS, INC.,
Third-Party Plaintiff-Respondent,
v.
VIRGINIA GLASS PRODUCTS,
Third-Party Defendant,
and
IDESCO CORP.,
Third-Party Defendant-
Respondent/Cross-Appellant.
_______________________________________
Argued September 26, 2017 – Decided August 6, 2018
Before Judges Carroll, Leone, and Mawla.
On appeal from Superior Court of New Jersey,
Law Division, Essex County, Docket No. L-
1651-10.
Stephen R. Bosin argued the cause for
appellant/cross-respondent (Stephen R.
Bosin, attorney; Robert A. Vort, on the
briefs).
Gerard H. Hanson argued the cause for
respondent/cross-appellant Idesco Corp. (Hill
Wallack, LLP, attorneys; Gerard H. Hanson,
of counsel and on the brief; James Harry
Oliverio, on the briefs).
Peter A. Gaudioso argued the cause for
respondent County Glass & Metal Installers,
Inc. (McElroy, Deutsch, Mulvaney &
Carpenter, LLP, attorneys; Peter A.
Gaudioso, of counsel and on the brief).
Matthew S. Mahoney argued the cause for
respondent 1515 Broad Street, LLC (Linda
Baumann, of counsel; Matthew S. Mahoney, on
the brief).
Michael C. Urciuoli argued the cause for
respondent The Walsh Company, LLC.
The opinion of the court was delivered by
LEONE, J.A.D.
Plaintiff S.T. appeals from a July 1, 2014 order approving
a settlement in this litigation and directing the distribution
of settlement proceeds. She argues the settlement was
improperly approved on her behalf by a guardian ad litem (GAL)
appointed under Rule 4:26-2.
We hold that under Rule 4:26-2(a)(4), a trial court may
appoint a GAL if there is good cause to believe that a party
2 A-5525-13T2
lacks the mental capacity needed to participate in the
litigation. We also hold that, based upon the GAL's
investigation or other information, the court may give the GAL
the power to make decision(s) needed in the case, including the
decision to try or settle the case, if it finds clear and
convincing evidence that the party is mentally incapable of
making the decision(s). Because the trial court properly found
that plaintiff lacked the mental capacity to decide whether to
try or settle the case, we affirm.
I.
Plaintiff's complaint alleged as follows. On March 11,
2008, she was a business invitee on the premises at 1515 Broad
Street in Bloomfield. When exiting the building, she was struck
on the head by a falling object and sustained severe and
traumatic injuries. As a result, she suffered and continued to
suffer great pain and anguish, confinement, and incapacitation
for her usual course of conduct and employment.
Plaintiff, represented by trial counsel, filed a complaint
alleging negligence by defendants 1515 Broad Street, LLC (1515
Broad), The Walsh Company, LLC (Walsh), and County Glass & Metal
Installers, Inc. (County Glass). County Glass filed a third-
party complaint against Virginia Glass Products Corp. (Virginia
3 A-5525-13T2
Glass) and Idesco Corp. (Idesco). Plaintiff amended her
complaint to add Virginia Glass and Idesco as defendants.
A Law Division judge denied Idesco's motion for summary
judgment, and its motion for reconsideration. We denied its
motion for leave to appeal.
The judge dismissed plaintiff's claims against Virginia
Glass. The remaining defendants filed a joint offer of judgment
for $475,000. They gave plaintiff until ten days before trial
to accept, or they would seek costs and fees under Rule 4:58-3.
As the trial date approached, plaintiff's trial counsel
filed a motion and certification seeking the appointment of a
GAL for plaintiff. On September 27, 2013, the trial court
entered an order appointing Frederick D. Miceli, Esq. as GAL,
and staying the trial pending the GAL's review of the matter.
On March 17, 2014, the GAL issued his report. In light of
the findings in the GAL's report, the trial court's April 22,
2014 order ruled the GAL should remain, and "empowered and
entrusted [the GAL] with any and all decisions regarding the
ultimate disposition of this case, whether by trial or
settlement."
At a July 1, 2014 hearing, plaintiff's trial counsel, the
GAL, and defendants reported they had arrived at a $625,000
settlement. The trial court approved the settlement as fair,
4 A-5525-13T2
reasonable, and in plaintiff's best interests. Plaintiff
appeals, represented by new counsel. Idesco filed a contingent
cross-appeal of the denial of summary judgment and
reconsideration.
II.
The first issue is what rule governs the appointment of a
GAL under these circumstances. Plaintiff's counsel moved for
appointment of a GAL, invoking Rule 4:26-2(b)(3). However, Rule
4:26-2(b)(3) applies after a default or in a summary action:
On motion by a party to the action, the
court may appoint a guardian ad litem for a
minor or alleged mentally incapacitated
person if no petition has been filed [under
Rule 4:26-2(b)(2)] and either default has
been entered by the clerk or, in a summary
action brought pursuant to R. 4:67 or in a
probate action, 10 days have elapsed after
service of the order.
Neither circumstance was present here.
Nonetheless, plaintiff's counsel could properly bring
concerns to the trial court's attention. The Rules of
Professional Conduct (RPC) permitted plaintiff's counsel to seek
appointment of a GAL. See M.R., 135 N.J. at 175, 178. RPC 1.14
addresses "[w]hen a client's capacity to make adequately
considered decisions in connection with the representation is
diminished, whether because of minority, mental impairment or
for some other reason." RPC 1.14(a). It provides:
5 A-5525-13T2
When the lawyer reasonably believes that the
client has diminished capacity, is at risk
of substantial physical, financial or other
harm unless action is taken and cannot
adequately act in the client's own interest,
the lawyer may take reasonably necessary
protective action, including consulting with
individuals or entities that have the
ability to take action to protect the client
and, in appropriate cases, seeking the
appointment of a guardian ad litem,
conservator, or guardian.
[RPC 1.14(b) (emphasis added).]
Because RPC 1.14 uses the phrase "diminished capacity,"
plaintiff is incorrect in arguing that phrase may not be used in
this context.
The trial court granted the motion without specifying the
subsection it relied upon. The court later ordered the GAL to
remain pursuant to Rule 4:26-2(b)(4), which provides that a
"court may appoint a guardian ad litem for a minor or alleged
mentally incapacitated person on its own motion." Because the
court ultimately ruled on its own motion under Rule 4:26-
2(b)(4), we examine the propriety of its action under that
subsection.
However, plaintiff contends that the trial court had to
follow the procedures in Rule 4:86 before it could hold she
lacked the capacity to handle her own affairs. Thus, she
essentially challenges whether the GAL was properly appointed.
6 A-5525-13T2
Plaintiff misapprehends the differences between appointment
of a guardian of the person or property, versus appointment of a
GAL. Those differing appointments are governed by different
rules, which themselves recognize the distinction. See R. 4:26-
2(a) (permitting the appointment of a GAL if no "guardian of
either the person or the property" has not been appointed); R.
4:86-4(d) (allowing the appointment of a GAL to assist in the
litigation for appointment of a guardian for person or
property).
The appointment of a guardian over the person or property
of an incapacitated person is governed by Rule 4:86 (formerly
Rule 4:83) and N.J.S.A. 3B:12-24 to -35. Appointment of a
general guardian under that rule gives the general guardian the
authority to "exercise all the rights and powers of the
incapacitated person" over their person, property, or both.
N.J.S.A. 3B:12-24.1(a). It also gives the general guardian "all
of the powers conferred upon the guardian by law and the
provisions of this chapter." N.J.S.A. 3B:12-48. Those may
include: title in the person's property; control over
expenditures for the person; custody of the person; power over
the person's property, place of abode, care, and medical care;
and the ability to seek the person's admission to a psychiatric
facility. E.g., N.J.S.A. 3B:12-38, -43, -56(d), -57(f), -59.
7 A-5525-13T2
The authority of the guardian lasts until the person's death
unless the guardian is removed or the person is restored to
competency. N.J.S.A. 3B:12-64.
Because the appointment of such a general guardian has the
effect "to restrain an allegedly incompetent person of his
liberty or deprive him of the control of his property and the
management of his personal affairs, '[s]uch an adjudication must
be sought in a constitutional manner in a proceeding instituted
for that purpose.'" In re S.W., 158 N.J. Super. 22, 26 (App.
Div. 1978) (citation omitted).
This cannot be done without the institution
of an action in accordance with R. 4:83 for
the determination of his or her mental
incompetency and the appointment of a
general guardian for that person, the
submission of medical proof that the alleged
incompetent is unfit and unable to govern
himself or herself and to manage his or her
affairs, and an adjudication by the court of
such incompetency after a hearing.
[Ibid.]
Thus, Rule 4:86 requires the filing of a complaint alleging
incapacity, supported by affidavits or certifications by two
physicians, or one physician and a psychologist, giving a
"diagnosis and prognosis," opining on the extent to which the
person "is unfit and unable to govern himself or herself and to
manage his or her affairs," and "setting forth with
particularity the circumstances and conduct of the alleged
8 A-5525-13T2
incapacitated person upon which this opinion is based." R.
4:86-2(a), (b)(2), (b)(2)(D), (F). The court must "determine
the issue of incapacity," and if it reaches a "judgment of legal
incapacity," shall appoint a guardian over the person or
property who must report to the court periodically and "take
such steps as are necessary to protect the interest of the
incapacitated person" until the person's death or return to
capacity. R. 4:86-5(a), (d), (e), (f). The court "must make
findings by clear and convincing evidence as to whether the
person is incapacitated." In re Guardianship of Macak, 377 N.J.
Super. 167, 176 (App. Div. 2005) (citing In re M.R., 135 N.J.
155, 169 (1994)).1
The procedures in Rule 4:86 are not required for the
appointment of a GAL because it has far fewer consequences and
can result in the grant of authority only over the litigation in
which the GAL is appointed. "An adjudication of incompetency"
does not result from and "is not necessary" for the appointment
of a GAL. S.W., 158 N.J. Super. at 26.
1
Because of the breadth of the powers of a general guardian,
courts must also consider "the extent to which the alleged
incapacitated person retains sufficient capacity to retain the
right to manage specific areas, such as residential,
educational, medical, legal, vocational or financial decisions."
R. 4:86-2(b)(2)(G). If so, the court may grant the guardian
more limited powers. See, e.g., N.J.S.A. 3B:12-24.1(b); R.
4:86-1(a).
9 A-5525-13T2
The use of the qualifier "alleged" to the
use of the term "mentally incapacitated
person" in [Rule 4:26-2](b)(2), (b)(3) and
(b)(4) is to make clear that in
contradistinction to the appointment of a
guardian, which requires an adjudication of
mental incapacitation, a guardian ad litem's
appointment is dependent only upon the
allegation of mental incapacitation.
[Pressler & Verniero, Current N.J. Court
Rules, cmt. 3 on R. 4:26-2 (2018).]
Moreover, a GAL does not have the same general power over
person or property. "[Rule] 4:26-2 governs the appointment of a
guardian to represent the interest of an infant or incompetent
person in the context of a particular litigation, while [Rule]
4:83-1 et seq. governs the appointment of general or special
guardians, not necessarily in a litigation context." In re
Clark, 212 N.J. Super. 408, 412 (Ch. Div. 1986), aff'd o.b., 216
N.J. Super. 497, 499 (App. Div. 1987). "[T]he function of a
guardian ad litem is only to protect the interests of the ward
in respect of the litigation, while taking substantive actions
on behalf of the ward is the proper function of his guardian of
person or property." Julius v. Julius, 320 N.J. Super. 297, 309
(App. Div. 1999) (citing Pressler, Current N.J. Court Rules,
cmt. on R. 4:26-2 (1999)). "The function of" a GAL is merely
"to insure the protection of the rights and interests of a
litigant who is apparently incompetent to prosecute or defend
the lawsuit." S.W., 158 N.J. Super. at 25-26.
10 A-5525-13T2
Accordingly, the procedures for appointing a general
guardian over person or property do not apply to the appointment
of a GAL to assist in a particular litigation. Because Rule
4:26-2 is intended to provide a GAL to assist in an already-
existing lawsuit, and no finding of general mental incapacity
results, no separate complaint need be filed seeking such a
finding. Moreover, Rule 4:26-2(b) does not require particular
medical proofs. Further, as the powers of a GAL are limited to
the litigation, there is no need to consider if the person
retains capacity in the other areas listed in Rule 4:86-
2(b)(2)(G). Thus, those requirements of Rule 4:86 are
inapplicable, and we must instead consider whether the
procedures for appointing a GAL under Rule 4:26-2 were
satisfied.
III.
The next issue is the appropriate standard to apply under
Rule 4:26-2(b)(4). Generally, Rule 4:26-2(a) provides that
a minor or mentally incapacitated person
shall be represented in an action by the
guardian of either the person or the
property, appointed in this State, or if no
such guardian has been appointed or a
conflict of interest exists between guardian
and ward or for other good cause, by a
guardian ad litem appointed by the court in
accordance with paragraph (b) of this rule.
11 A-5525-13T2
Thus, in the absence of a contravening standard in Rule
4:26-2(b), the trial court may appoint a GAL for an allegedly
mentally incapable adult for "good cause." Ibid.; see Zukerman
by Zukerman v. Piper Pools, Inc., 232 N.J. Super. 74, 88-89 &
n.12 (App. Div. 1989); see also N.J.S.A. 9:2-4 ("The court, for
good cause and upon its own motion, may appoint a guardian ad
litem or an attorney or both to represent the minor child's
interests.").2
What constitutes good cause for appointing a GAL for an
allegedly mentally incapable adult under Rule 4:26-2(b)(4) has
not been recently considered. More than seventy years ago,
before the rule was promulgated, the Chancery Court stated that
"[i]t is sufficient if the proof makes it evident that the party
from any cause, whether by age, disease, affliction, or extreme
intemperance, has become incapable and unfit for the government
of himself and his property." Borough of E. Paterson v. Karkus,
136 N.J. Eq. 286, 288-89 (Ch. 1945). However, that was the
standard for the declaration of lunacy and the appointment of a
general guardian. See id. at 289 (citing lunacy cases, e.g., In
2
Rule 4:26-2(b)(2), addressing the appointment of a GAL "upon
the verified petition of a friend on his or her behalf,"
provides that "[t]he court shall appoint the guardian ad litem
so proposed unless it finds good cause for not doing so." As no
such burden-shifting language appears in Rule 4:26-2(b)(4), the
court must find good cause for appointing a GAL under that
provision. Cf. Clark, 212 N.J. Super. at 412.
12 A-5525-13T2
re Alleged Lunacy of Lindsley, 43 N.J. Eq. 9, 10 (Ch. 1887),
aff'd, 44 N.J. Eq. 564, 568 (E. & A. 1888)).
The Chancery Court extended that standard to the
appointment of a GAL. Ibid. (citing Webb v. Webb, 96 N.J. Eq. 1
(Ch. 1924)). We quoted that standard in S.W., 158 N.J. Super.
at 26, and said "[t]he procedure is set forth in [Rule] 4:26-2,"
but did not consider whether the old standard was compatible
with the new rule. Now considering that issue, we conclude that
standard for appointing a general guardian is too high for the
more limited role of a GAL in a particular litigation. It puts
the cart before the horse to require it to be proven that a
person lacks mental capacity before appointing a GAL to
investigate whether a person lacks mental capacity.
We find guidance in our Supreme Court's more recent cases
discussing the role of a GAL. "[T]he basic role of the guardian
ad litem is to assist the court in its determination of the
incompetent's or minor's best interest." J.B. v. W.B., 215 N.J.
305, 332 (2013) (quoting In re Adoption of A Child by E.T., 302
N.J. Super. 533, 539 (App. Div. 1997), and citing M.R., 135 N.J.
at 175). In M.R., the Court noted that GALs assist in two ways.
First, "[t]he GAL acts as an independent fact finder,
investigator and evaluator as to what furthers the best
interests of the child. The GAL submits a written report to the
13 A-5525-13T2
court and is available to testify." Id. at 173 (citing
Pressler, Current N.J. Court Rules, official cmt. to R. 5:8A &
R. 5:8B (1994)). A GAL serves the same function for the alleged
mentally incapable person, including investigating the person's
mental capacity. Id. at 175. The commentary to Rule 4:26-2
also notes that "[t]he guardian ad litem's responsibility is to
advise the court as to whether a formal competency hearing may
be necessary and if so, to represent the alleged mentally
incapacitated person at that hearing." Pressler & Verniero,
Current N.J. Court Rules, cmt. 3 on R. 4:26-2 (2018).
Second, if, after receiving the GAL's report or other
information, the trial court agrees the alleged mentally
incapacitated person is not capable of making the decision(s)
needed in the litigation, the court may grant the GAL the power
to make the decision(s). The Court in M.R. noted that, unlike
the attorney for the person, "'[t]he guardian ad litem evaluates
for himself or herself what is in the best interests of his or
her client-ward and then represent[s] the client-ward in
accordance with that judgment.'" Id. at 174 (citation omitted).
Thus, "the attorney and guardian ad litem may take different
positions, with the attorney advocating a result consistent with
the incompetent's preferences and the guardian urging a result
that is different but in the incompetent's best interests." Id.
14 A-5525-13T2
at 175; see Village Apartments of Cherry Hill v. Novack, 383
N.J. Super. 574, 579 (App. Div. 2006).
In deciding the appropriate standards to govern these two
very different ways in which a GAL assists the court, we must
bear in mind the differing rights at issue. Our Supreme Court
in M.R. emphasized that "[t]he clear public policy of this State
. . . is to respect the right of self-determination of all
people, including the developmentally disabled." 135 N.J. at
166 (quoting N.J. Const. art. I, para. 1). Similarly, our
Legislature has provided that "[e]very person who has reached
the age of majority . . . and has the mental capacity may
prosecute or defend any action in any court[.]" N.J.S.A. 2A:15-
1.
The "courts have a special responsibility to protect the
right of self-determination." M.R., 135 N.J. at 166 (citation
omitted). "Traditionally, however, courts have tempered the
right of self-determination of incompetent people with concerns
for their best interests." Id. at 167; see Novack, 383 N.J.
Super. at 578 ("Our courts zealously protect the personal and
property rights of incompetent parties."). "The paradox with
incompetent people is to preserve as much as possible their
right of self-determination while discharging the judicial
15 A-5525-13T2
responsibility to protect their best interests." M.R., 135 N.J.
at 167.
Appointing a GAL to investigate a person's mental capacity
does not deprive the person of the right of self-determination.
In order to provide the court with any information necessary to
protect the person's best interests, the burden to trigger such
an investigation should not be onerous. Such an appointment may
delay proceedings while the GAL performs the investigation, but
the appointment does not empower the GAL to take over the
person's decision-making in the litigation. By contrast,
empowering a GAL to make decision(s) for the person in the
litigation does deprive the person of the right of self-
determination. Therefore, it should be governed by the "heavy
burden on anyone seeking to overcome the right of self-
determination." Id. at 168.
The final lesson we draw from our Supreme Court's decision
in M.R. is that the court must specifically determine which if
any decisions the person lacks the mental capacity to make, and
empower the GAL to make only those decisions. M.R. addressed
whether, during a guardianship proceeding under Rule 4:86 for an
adult who it was agreed was "'incapable of governing herself and
managing her affairs,'" a GAL should be appointed regarding
whether she "had the specific capacity to express a preference
16 A-5525-13T2
to reside with her father." Id. at 159-60, 173-77. The Court
emphasized that "the mere fact that a person is generally
incompetent does not mean that person is incompetent for all
purposes. A person who is generally incompetent can still make
choices about specific matters." Id. at 169. Thus, in M.R.,
the Court ruled that "[i]f the court concludes that M.R. is
incapable of deciding where to live, it may appoint a guardian
ad litem to represent her best interests." Id. at 178. The
Court held that "specific incapacity" to make a particular
decision must be shown "by clear and convincing evidence." Id.
at 169.
Based on the guidance provided by our Supreme Court in
M.R., the ruling on whether to appoint a GAL to investigate a
person's mental capacity to make the decision(s) needed in the
litigation, and the ruling on whether to empower a GAL to make
the decision(s) for the person, should be governed by different
standards.
A trial court's ruling on its own motion to appoint a GAL
to investigate whether a person is mentally incapacitated under
Rule 4:26-2(b)(4) is governed by the "good cause" standard in
Rule 4:26-2(a). If there is good cause to believe that the
person lacks sufficient mental capacity to make the decision(s)
needed to conduct the litigation, the court may appoint a GAL to
17 A-5525-13T2
serve as an independent investigator, fact finder, and evaluator
to report back to the trial court whether the person has
sufficient mental capacity. No higher standard should be
imposed because such an investigation aids the court in
determining if its intervention is needed to protect the rights
of the alleged mentally incapacitated person, but does not
itself deprive the person of the right of self-determination.
Thus, we disagree with our 1978 decision in S.W., and disapprove
the Chancery Court's pre-1946 decisions in Karkus and Webb, to
the extent they suggest that the standard for lunacy must be met
before a GAL may be appointed to investigate whether a person
lacks mental capacity.
By contrast, a trial court's ruling whether to empower the
GAL to make the decision(s) needed in the litigation for an
allegedly mentally incapacitated person must be governed by a
higher standard because the ruling deprives the person of the
right of self-determination. Unlike the standard for appointing
a general guardian - that the person "has become incapable and
unfit for the government of himself and his property," S.W., 158
N.J. Super. at 26 (quoting Karkus, 136 N.J. Eq. at 288-89); see
Webb, 96 N.J. Eq. at 5 - the standard for empowering a GAL
should reflect the person's mental capacity to make the specific
decision(s) needed in the litigation. Accordingly, the court
18 A-5525-13T2
must determine that the person is mentally incapable of making
the decision(s) needed in the litigation before the court can
entrust the GAL to make the decision(s). To ensure that the
person's right of self-determination is not improperly
overridden, the court must make that ruling by clear and
convincing evidence. See M.R., 135 N.J. at 168-69, 171; see
also In re Jobes, 108 N.J. 394, 407 (1987).
In deciding whether to appoint a GAL or to empower the GAL
to make specified decision(s) needed in the particular
litigation which the alleged mentally incapacitated person is
not mentally capable of making, the trial court need not and
should not determine whether the person is incapable of
governing his or her person or property generally. Such a
determination would call for the appointment of a general
guardian, and should be made in a proceeding under Rule 4:86.
Moreover, in determining whether the person is mentally
incapable of making the particular decision(s) needed in the
litigation, the court should not empower the GAL to make other
decisions in the litigation which the person is mentally capable
of making. See In re Conroy, 98 N.J. 321, 381 (1985).
IV.
The trial court here issued two separate orders, the first
appointing the GAL to investigate, and the second empowering the
19 A-5525-13T2
GAL to make the decision whether to try or settle the case. In
considering those rulings, we must hew to our standards of
review.3
"The decision to appoint a guardian ad litem is reposed in
the discretion of the trial judge, and rightly so because the
decision is informed by the experience the judge gains as the
judge sifts through a daily docket of contested matters." J.B.,
215 N.J. at 333 (citing M.R., 135 N.J. at 179). The decision to
empower the GAL to make the decision(s) for the party similarly
is reviewed for an abuse of discretion. Those decisions will
not be reversed absent an abuse of discretion. See In re
Adoption of a Child by J.D.S., 353 N.J. Super. 378, 402 (App.
Div. 2002).
As noted above, by a ruling that empowers the GAL to make
the decision(s), it must be established by clear and convincing
evidence that the person is mentally incapable of making the
decision(s) needed in the litigation. We must review any
factual findings made by the trial court under the traditional
standard used to review factual determinations made by our trial
3
County Glass argues a plain-error standard of review applies
because plaintiff failed to object to the motion to appoint the
GAL. However, we will not apply that standard because there is
no evidence plaintiff's counsel copied her on the motion. In
future cases, if counsel for an alleged mentally incapacitated
person makes a motion to appoint a GAL, the motion should be
served on that person.
20 A-5525-13T2
courts. Factual "[f]indings by the trial judge are considered
binding on appeal when supported by adequate, substantial and
credible evidence." Rova Farms Resort, Inc. v. Inv'rs Ins. Co.,
65 N.J. 474, 484 (1974). Appellate courts "'do not disturb the
factual findings and legal conclusions of the trial judge unless
we are convinced that they are so manifestly unsupported by or
inconsistent with the competent, relevant and reasonably
credible evidence as to offend the interests of justice.'"
Ibid. (citation omitted).4 We must hew to those standards of
review.
A.
In support of the motion for appointment of a GAL,
plaintiff's counsel certified:
We reasonably believe that [plaintiff] has
exhibited a diminished capacity and is at
risk of substantial financial and
psychological/physical harm. We are
seriously concerned about [plaintiff's]
physical and emotional ability to
participate in the prosecution of her case
and her ability to attend a lengthy trial.
We are also concerned that her capacity to
make adequately considered decisions
4
We note that we review for abuse of discretion other procedural
decisions which must be supported by clear and convincing
evidence. See, e.g., State v. S.N., 231 N.J. 497, 515-16 (2018)
(reviewing for "abuse of discretion" the decision whether to
detain a defendant pretrial, which must be supported "by clear
and convincing evidence that a defendant's danger, risk of
flight, and risk of obstruction overcomes the presumption of
release").
21 A-5525-13T2
regarding her case is diminished. Also our
ability to communicate with our client . . .
and fully explain issues relating to her
case is hindered because of her diminished
capacity.
Counsel's certification made clear that "[w]e are not
suggesting that [plaintiff] is incompetent or that she need a
full time guardian appointed to manage her affairs." However,
"because of her diminished capacity to understand the issues
relating to her case," plaintiff's counsel sought the
appointment of a GAL to protect plaintiff's interests in the
litigation.
Counsel's certification attached three reports from Dr.
Peter M. Crain, plaintiff's psychiatrist who performed a
neuropsychiatric evaluation. Dr. Crain found the accident
caused "cognitive decline, complicated by the onset of
depression." That resulted in her having impaired focus and
difficulties with comprehending, retention, and keeping up with
verbal information, as well as being "severely impaired
emotionally and physically."
Counsel's certification also attached the report of Dr.
Paula P. Reid, plaintiff's treating psychologist who performed a
neuropsychological evaluation. Dr. Reid found "[a] significant
reduction in the predicted intellectual performance on verbal
comprehension and processing speed," with "cognitive impairment"
22 A-5525-13T2
affecting her ability to pay attention and understand complex
material, and significant depression which could affect her
ability to think clearly. Additionally, counsel's certification
attached a more recent neuropsychological report confirming
plaintiff's attentional deficits and difficulty in integrating
complex materials.
Plaintiff's counsel certified that defendants had retained
numerous experts who refuted plaintiff's theory that the
accident caused injury, and who concluded any difficulties
plaintiff was experiencing were not related to the accident.
Plaintiff's counsel certified that counsel had explained the
$475,000 offer of judgment, but that "[w]e have grave doubts
that [plaintiff] is able to fully grasp and understand the offer
itself and/or the potential financial consequences of refusing
the Offer of Judgment."5
Plaintiff's counsel subsequently provided a new report from
Dr. Crain. After a two-hour psychiatric examination of
plaintiff on September 13, 2013, Dr. Crain concluded plaintiff
had "a diminished capacity to fully consider the risks of her
decision making in regard with how to proceed with the case."
5
Under the offer of judgment rules, if plaintiff obtained a
money judgment of "80% of the offer or less," plaintiff would
have to pay defendants the costs of suit, "all reasonable
litigation expenses incurred following non-acceptance," and
prejudgment interest. R. 4:58-2, -3.
23 A-5525-13T2
Counsel's certification and supporting psychiatric and
psychological reports provided good cause for the trial court's
September 27, 2013 order to appoint a GAL to investigate
plaintiff's mental capacity and report to the court.
B.
The GAL's subsequent investigation provided clear and
convincing evidence that plaintiff was mentally incapable of
deciding whether to try or settle the case. The GAL reviewed
extensive case materials, including the reports of the treating
physicians and experts on both sides, and the depositions of
plaintiff, fact witnesses, and others. The GAL conducted two
interviews with plaintiff in the presence of her trial counsel.
The GAL researched the applicable law. On March 17, 2014, the
GAL issued his report, which stated as follows.
Plaintiff contended she sustained a traumatic brain injury,
and had elevated cerebrospinal fluid, intracranial hypertension,
and major depressive disorder. She made over 500 visits to
health care providers, was still receiving speech and cognitive
therapy, was taking several prescription medications daily, and
was awarded permanent disability benefits from the Social
Security Administration. The GAL cited the psychiatric reports
from Dr. Crain that plaintiff had diminished capacity to
consider the risks of litigation, and the psychological reports
24 A-5525-13T2
from Dr. Reid and others who had found a significant reduction
in plaintiff's intellectual performance.
The GAL noted Dr. Reid had engaged counsel and refused to
testify on plaintiff's behalf. In her interviews with the GAL,
plaintiff could not accept that Dr. Reid would not testify. She
could not understand the types of proofs her case required from
medical experts. After the second interview, it remained
unclear that plaintiff understood what was being explained by
the GAL and her trial counsel.
The GAL found plaintiff still refused to accept the doctors
who would be testifying, despite an explanation of the discovery
rules, the deadlines involved, and the court's orders barring
plaintiff from submitting additional experts. The GAL concluded
plaintiff did not "have sufficient mental capacity" either to
have "the requisite understanding and ability" to make "an
informed and a rational decision regarding her case," or to
overcome her "intransigent unwillingness to confront the
realities of her case." The GAL recommended that he should be
entrusted with the decision whether to try or settle the case.
Subsequently, plaintiff had a phone conversation with the
GAL asking that he speak to Dr. Reid in another attempt to get
her to testify, which proved futile. On June 17, 2014, the GAL
issued a supplemental report stating plaintiff continued to
25 A-5525-13T2
exhibit an inability to accept who would provide expert
testimony for her, or understand the factors necessary to weigh
the risks and make a decision. The GAL reiterated his
conclusion that due to plaintiff's diminished capacity, she "was
incapable of making an informed, rational and prudent decision
regarding her case."
A party "may be incompetent because [s]he lacks the ability
to understand the information conveyed, to evaluate the options,
or to communicate a decision." See Conroy, 98 N.J. at 382.
Here, the GAL's investigation, findings, and recommendations,
coupled with the materials submitted to the trial court by the
GAL and plaintiff's counsel, provided clear and convincing
evidence that plaintiff was not mentally capable of making an
informed decision on whether to try or settle the case. Thus,
the trial court did not err in its April 22, 2014 order
empowering the GAL to make that decision.
Plaintiff notes that "[m]erely because a settlement is
rejected by a [GAL] is not in and of itself a sufficient basis
to warrant removal" of the GAL. Zukerman, 232 N.J. Super. at
90. Likewise, merely because a settlement is rejected by a
party is not a sufficient basis to warrant appointing a GAL or
empowering the GAL to decide whether to settle. It is similarly
inadequate to show "a mere difference of opinion [between the
26 A-5525-13T2
party's counsel and the party] . . . as to whether or not a
proposed settlement offer was sufficient, or should be accepted
because of the inherent risks of a trial on liability or
damages, or both." See id. at 95-96, 98. However, the court
properly found that plaintiff lacked the mental capacity to make
that decision.
V.
Nonetheless, plaintiff contests the power of the GAL to
agree to settle the case. Plaintiff argues that there can be no
settlement she did not agree to because "[a] settlement
agreement between parties to a lawsuit is a contract," Nolan v.
Lee Ho, 120 N.J. 465, 472 (1990), which requires "a 'meeting of
the minds' between the parties," Morton v. 4 Orchard Land Tr.,
180 N.J. 118, 129 (2004) (citation omitted). She notes that an
attorney cannot force a client to accept a settlement.
Those propositions hold true when the party is competent to
make the decision whether to settle. However, because the trial
court found plaintiff was not mentally capable of deciding
whether to try or settle the case, and appointed the GAL to make
that decision, the GAL "must of necessity have the sole right to
accept or reject a settlement offer." Zukerman, 232 N.J. Super.
at 99. Once appointed to make a decision, the GAL "steps into
the shoes of the minor" or mentally incapacitated person, Kubiak
27 A-5525-13T2
v. Robert Wood Johnson Univ. Hosp., 332 N.J. Super. 230, 238
(App. Div. 2000), and makes the decision on behalf of that
person, E.B. v. Div. of Med. Assistance & Health Servs., 431
N.J. Super. 183, 209 (App. Div. 2013).
This accords with the law in other jurisdictions. "A
guardian ad litem is authorized to act on behalf of his ward and
may make all appropriate decisions in the course of specific
litigation. For example, notwithstanding the incompetency of a
party, the guardian . . . may settle the claim on behalf of his
ward." United States v. 30.64 Acres of Land, 795 F.2d 796, 805
(9th Cir. 1986); accord Thomas v. Humfield, 916 F.2d 1032, 1033
(5th Cir. 1990). "[T]o protect the rights of the incompetent
person," the GAL may properly "compromise or settle the action."
43 C.J.S. Infants § 426.
Moreover, plaintiff was protected "'against an improvident
compromise'" by Rule 4:44. Hojnowski v. Vans Skate Park, 187
N.J. 323, 334 (2006) (citation omitted); see Colfer v. Royal
Globe Ins. Co., 214 N.J. Super. 374, 377 (App. Div. 1986). "[A]
guardian ad litem may not enter into a binding settlement of an
infant's claim without court approval." Wilkins v. Smith, 181
N.J. Super. 121, 126 (App. Div. 1981) (citing R. 4:44). The
same was true here.
28 A-5525-13T2
Under Rule 4:44, in "[a]ll proceedings to enter a judgment
to consummate a settlement in matters involving minors and
mentally incapacitated persons," the trial "court shall
determine whether the settlement is fair and reasonable as to
its amount and terms." R. 4:44-3. "This rule codifies the
requirement that all settlements in favor of minors and mentally
incapacitated persons be reviewed for fairness and
reasonableness" in a "'friendly' hearing" to review the proposed
"'friendly' judgment." Pressler & Verniero, Current N.J. Court
Rules, cmt. 1 on R. 4:44 (2018).
Plaintiff contends the settlement could not be approved
under Rule 4:44 because the rule addresses settlements "on
behalf of a minor or mentally incapacitated person." However,
the trial court found that plaintiff was mentally incapable of
making the decision whether to settle the case. Accordingly,
she was a "mentally incapacitated person" for the purpose of
settlement, and Rule 4:44 applied. Rule 4:44 contemplates
approval of settlements negotiated by a "guardian ad litem," and
provides for their fees. R. 4:44-3. Indeed, "[t]he purpose of
a [GAL] under R. 4:26-2 is clearly to protect the infant's or
the incompetent person's interests in the course of litigation
and 'friendly' judgments." Clark, 212 N.J. Super. at 413.
29 A-5525-13T2
Thus, the trial court properly reviewed the proposed settlement
under Rule 4:44.
VI.
Finally, plaintiff appeals the July 1, 2014 order approving
the settlement. "[T]he calculation of a fair amount of damages
is a matter well within the ken of trial judges and is a
function routinely performed by them" in Rule 4:44 hearings and
other proceedings. Werner v. Latham, 332 N.J. Super. 76, 85
(App. Div. 2000). Therefore, "the question or whether the
settlement proceeds are adequate" is left to the discretion of
the trial court. Ibid. We find no abuse of discretion here.
See Suarez v. Berg, 117 N.J. Super. 456, 464 (App. Div. 1971).
The trial court reviewed the experts' reports and the
evidence of plaintiff's injuries. Plaintiff's trial counsel
noted the proposed $625,000 settlement was $150,000 higher than
defendants' offer of judgment. Moreover, the GAL convinced
plaintiff's trial counsel to reduce its agreed-upon contingency
fee by $27,500, and the federal Department of Veterans Affairs
(VA) to reduce its lien by $27,500 and to cap its lien at the
level of plaintiff's medical expenses at the time of the
settlement.
The trial court also found that plaintiff would face extra
burdens if she went to trial. The eight MRIs before and after
30 A-5525-13T2
the accident did not provide objective medical evidence of an
organic brain injury, let alone the brain injuries she claimed
from the accident. Some of the doctors who treated her were
unwilling to testify on her behalf. The GAL added that there
was an issue of what type of object had struck plaintiff, that
there were major issues concerning the extent of her injuries
and causation, and that "the downside risk of this case is
tremendous." The court also heard testimony from plaintiff
about why the court should reject the settlement.
The trial court found that the settlement was in
plaintiff's best interest and that the amount was fair and
reasonable. Indeed, the court found it was "the best possible
settlement that [she] could get," and "the best thing for
[her]." The court instructed County Glass and Walsh to pay
$550,000 and Idesco to pay $75,000. It ordered the deduction
of: $190,998.75 to plaintiff's counsel, representing $30,211.78
for actual costs and $160,786.97 for the reduced contingency
fee; $22,720.50 to the GAL for his services; and $156,958.10 for
the VA and workers' compensation liens. It ordered the balance
of $254,322.65 to be paid to plaintiff.
We have reviewed the appendices supplied by all parties,
including the material in the sealed appendices submitted by
31 A-5525-13T2
plaintiff. We find ample evidence to support the trial court's
decision to approve the settlement.
Moreover, plaintiff's testimony confirmed that she had
diminished mental capacity and was not mentally capable of
deciding whether to settle. When asked if she was satisfied
with trial counsel's services, she spoke at length about her
medical treatment. When the question was repeated, she
initially discussed counsel but went on to relate her life
history at great length. Plaintiff admitted that when she went
to lectures "I can only process a third to a half of what is
said." The court found that plaintiff did not understand the
risks she would run by going to trial, and that she was "not
understanding everything that's happening here."
Plaintiff notes that the trial court stated she is "a very
intelligent" person who has "a very good grasp" of her medical
situation. In Julius, the defendant similarly was "an
apparently intelligent party, [but he] exhibited patterns of
behavior . . . which were reasonably interpreted by the trial
judge as either deliberately obstructive or the result of
psychological stress or disease. . . . The circumstances
clearly warranted appointment of someone who would enable the
litigation to move forward while protecting defendant's
interests." 320 N.J. Super. at 309. Similarly, plaintiff's
32 A-5525-13T2
intelligence in other areas did not make up for her lack of
mental capacity to decide whether to try or settle the case.
Plaintiff notes that the settlement will result in the
payment of money directly to her, after the GAL's appointment
terminates. However, it is not contended that plaintiff is
incapable of managing money once received. The trial court
simply found she was mentally incapable of deciding to try or
settle the case, and appointed and empowered the GAL to protect
her interests.
Plaintiff notes that "courts should never work to coerce or
compel a litigant to make a settlement," and that "courts must
'avoid the appearance (as well as the reality) of coercion' of
settlements from 'unwilling litigants.'" Peskin v. Peskin, 271
N.J. Super. 261, 275-76 (App. Div. 1994) (citation omitted).
This case bears no resemblance to Peskin.
In Peskin, in trying to get a defendant to decide whether
to settle, the trial court threatened him with contempt, refused
to allow him to ask questions or explain, gave him thirty
seconds to answer, warned he would not get another opportunity
to settle, and said it would consider a refusal to settle in any
fee application. Id. at 266-69. We held that "[t]he
threatening nature of these remarks imposed impermissible
pressure on defendant to settle." Id. at 278. "Courts should
33 A-5525-13T2
not use the threat of sanctions to force the settlement of a
case." Id. at 276. Here, the trial court did not do anything
threatening or inappropriate.
Moreover, in Peskin we did not consider the "defendant's
claim of lack of capacity to consent to the settlement." Id. at
279. We noted that "if one party was not competent to
voluntarily consent thereto," that party could not decide
whether to settle. Id. at 276; accord Brundage v. Estate of
Carambio, 195 N.J. 575, 601 (2008). In that situation, "a
guardian ad litem will have to be appointed." Wolkoff v.
Villane, 288 N.J. Super. 282, 292 (App. Div. 1996). That was
the situation here.
VII.
We need not consider Idesco's contingent cross-appeal of
the denial of summary judgment and reconsideration. Idesco asks
us to consider its cross-appeal only if this court vacates the
July 1, 2014 order approving the settlement, but we have
affirmed it.
Affirmed.
34 A-5525-13T2
S.T. VS. 1515 BROAD STREET, LLC VS. VIRGINIA GLASS PRODUCTS (L-1651-10, ESSEX COUNTY AND STATEWIDE)(RECORD IMPOUNDED)
Court: New Jersey Superior Court Appellate Division
Date filed: 2018-08-06
Citations: 190 A.3d 1073, 455 N.J. Super. 538
Copy CitationsCombined Opinion