NY Lawyer Must Pay Back $403,000, Denied All of $853,000 Fee Request
The New York Law Journal by Daniel Wise - July 1, 2008
A Brooklyn judge yesterday assessed $403,000 in surcharges against a lawyer for mishandling the financial affairs of former Civil Court Judge John J. Phillips during the three years she served as his guardian. Acting Supreme Court Justice Michael A. Ambrosio also denied in toto the request of the lawyer, Emani P. Taylor, that she be paid $853,000 for her work as the former judge's guardian.
Justice Ambrosio lacerated Ms. Taylor's performance, calling her conduct "egregious" and reflecting "a fundamental lack of understanding of what her role as a guardian entailed." At one point, he called her explanation for not producing time sheets and other records a "dog ate my homework excuse." The judge, however, recognized that Ms. Taylor stepped into a difficult job when she became Mr. Phillips' interim successor guardian in September 2003. At that point, he noted, the former judge's finances were "in shambles" and, of his real estate holdings, which at one point had been estimated to be worth $10 million, "virtually no properties" were left in his name. "To her credit," Justice Ambrosio wrote, Ms. Taylor succeed in regaining control of some of the properties that had been transferred from his estate, particularly two theaters in Bedford-Stuyvesant, known as Slave I and II, that had been used by civil rights groups, including those led by the Reverend Al Sharpton, to stage rallies and press conferences. Slave II, also known as the Black Lady Theatre, was recently put on the auction block to satisfy tax liens, Justice Ambrosio wrote in Matter of Phillips, 108298/00, but no one put in a bid for the $1.6 million minimum. Ms. Taylor did not respond to a request for comment. Mr. Phillips sat on the Civil Court in Brooklyn for 13 years over two separate terms between 1976 and 1994. He suffered from Alzheimer's disease and died in February at 83.
'Self Dealing Conduct'
Nearly half of the $403,000 Justice Ambrosio ordered Ms. Taylor to pay to Mr. Phillips' estate stemmed from her handling of the $696,000 in net proceeds from a court-approved sale of one of Mr. Phillips' properties. Ms. Taylor acknowledged taking the funds from the proceeds to cover legal fees for work she performed for Mr. Phillips before she was appointed his guardian. The payments were made without court approval. Citing the difficulty of determining the "precise amount" Ms. Taylor had paid herself for legal work without court approval, Justice Ambrosio ordered her to repay the $197,000 she admitted taking from the proceeds. "What exactly she purports to have done to earn $2,500 a week in counsel fees from [Mr. Phillips'] funds for seventy-four straight weeks remains a mystery," the judge wrote. "In paying herself counsel fees without any prior court approval, Taylor made herself final arbiter of the reasonableness of her fees. This self-dealing conduct clearly conflicted with her obligation as guardian." Ms. Taylor was suspended late last year from the practice of law by the Appellate Division, First Department. Justice Ambrosio wrote that she was suspended for "at best, withdrawing funds from the guardianship account for legal fees without court permission, or, at worst, intentionally converting guardianship funds."
Also in December, Justice Michael L. Pesce, who subsequently recused himself, held Ms. Taylor in contempt of court for failing to comply with an order to submit contemporaneous records and supporting papers relevant to her work for the estate. Though he initially fined Ms. Taylor $1,000 for each day she delayed in filing the records, Justice Pesce subsequently reduced the contempt penalty to $250. Justice Ambrosio also ordered Ms. Taylor to return $120,000 she spent to repair an apartment for Mr. Phillips in one of his buildings that had been sold at a mortgage foreclosure action approximately 11 months earlier. Ms. Taylor failed to "exercise due diligence," Justice Ambrosio wrote, by conducting "a simple" computerized search which would have shown that she spent $120,000 in repairs in November, 2005 on a building that had been sold in December, 2004. Justice Ambrosio also ordered Ms. Taylor to repay the $52,500 commission she paid herself for selling the building that had brought $696,000 into the estate. Ms. Taylor was not entitled to a broker's fee, he wrote, because the building had been sold at a court-supervised auction. "You cannot pay yourself a broker's commission for property you did not sell," the judge said.
Fee Request Denied
A "laundry list" of Ms. Taylor's failings as a fiduciary justifies the denial of her request for $853,100 in fees in its entirety, Justice Ambrosio wrote. Among Ms. Taylor's missteps, he noted, were her failure to obtain a bond as required by a court order, the failure to file a closing statement from the sale of the property that yielded net proceeds of $696,000 (a building at 132-140 Herkimer St.) and the failure to maintain records of financial transactions utilizing guardianship funds. Ms. Taylor represented herself during the fact-finding hearing, which spanned seven days in February and March. Summations were delivered on May 7. Seth Coen, a court-appointed examiner, had brought a motion to settle a final account based on his report of the handling of Mr. Phillips' finances while Ms. Taylor was guardian, which concluded she owed the estate $397,000. James H. Cahill Jr. of Cahill & Cahill, who took over after Ms. Taylor resigned in September 2006 as the guardian of Mr. Phillips' property, filed objections. He claimed Ms. Taylor owed the estate $500,000. Mr. Cahill also asked that Ms. Taylor's fee request be denied.
Judge John L. Philips where are you? These blodd sucking bastards never stop, they have no respect.
ReplyDeletethis is the way these lawyers game the system, they rip everyone off, so too many people are watching them on Judge Phillips, so someone has to take the fall, is there an island in the middle of the ocean that we could take all these lawyers and put them on it, just to get rid of them
ReplyDeleteI have read about this case here and other sites. What happened is a crime and these people should be jailed.
ReplyDeleteFresh Out of Orange County New York
ReplyDeleteTimes Herald-Record
June 30, 2008
GOSHEN — Mabel Waingrow outlived her husband, her only son, all five of her brothers and her sister. She closed up her coffee shop out on Route 94 in Blooming Grove and lived alone as she entered her 90s, bedeviled by loneliness and convinced that someone was stealing from her.
Ten years ago, her complaints about the thievery fell upon the ears of Nick Stagliano Jr., a veteran criminal investigator for the Orange County District Attorney's Office.
Stagliano investigated the complaints and determined that they were unfounded. But he remained friendly with Waingrow after the investigation ended. He started running errands for her, cut her grass and helped her around the house, changing her sheets and assisting her in the bathroom.
Waingrow became close to him. She told a judge, "He is wonderful. He does everything for me. I feel he is like my big brother.'"
In 2001, she wrote a will that made Stagliano the sole beneficiary of her $990,000 estate. Shortly afterward, a court named Stagliano as Waingrow's legal guardian because she couldn't take of her own affairs.
In 2003, she died. She was 99. That year, Stagliano was the only one who showed up to celebrate her birthday.
Five years after Waingrow's death, Stagliano's motives and his right to inherit her estate are being challenged in Orange County Surrogate Court. Waingrow's will is being contested by her five great-nieces and -nephews. A trial began last month.
Bruce Dunn, Stagliano's lawyer, says it's a routine case, the kind of thing that happens any time people go to Surrogate Court, where a judge sorts out conflicting claims about the intentions of a dead person.
A lawyer representing four of Waingrow's relatives says that the case of Mabel Waingrow's contested will is anything but routine.
"This is a very sad story, and I suspect that by the time this case is over, it's going to be one of the saddest days for the Orange County District Attorney's Office," the lawyer, Mark Stern, told Judge Jeffrey G. Berry during opening statements in the trial on May 27.
"What this case involves is not simply a probate proceeding, but an abuse of trust of the highest order."
The trial's on hold now. Berry, who was the county's acting surrogate judge, recused himself because he has ties to some of the people involved in the case.
Orange County's newly-appointed surrogate judge, Stephen Hunter, also can't hear the case. That's because when the trial resumes, Hunter is going to be called as a witness against Stagliano. He's expected to testify that in 2001, when he was practicing law, Waingrow asked him to write her a new will after she'd already left everything to Stagliano. This time, she offered to leave everything to Hunter.
He told her he couldn't, that it would be improper.
The man they call 'Stags'
If Nick Stagliano hadn't been born 71 years ago, Damon Runyon would have had to invent him. To people who know him, including virtually every cop, defense lawyer and prosecutor in Orange County, he's "Stags," the streetwise, mustachioed, smooth talker from Newburgh. People talk about his encyclopedic knowledge of the region's bad guys, his skill at unraveling paper trails and talking with people and his gregarious personality. Add that all up, say friends and colleagues, and you've got the embodiment of an old-school, straight-arrow lawman.
"He can go to downtown Middletown, he can go to Newburgh, he can go to midtown Manhattan and out to the country, serve subpoenas and everyone leaves with a smile on their face," Dunn says. "He can calm any situation."
Stagliano also had the requisite thick skin for being Waingrow's companion. Describing her as "feisty" was an understatement.
In 2000, the Orange County Department of Social Services asked a judge to appoint a legal guardian for Waingrow. During a hearing on the guardianship, Waingrow called her former caretaker a liar and said, "God should punish her." Waingrow was 97 at the time, but still, Judge Nicholas DeRosa felt compelled to remove her from the courtroom while the caretaker finished testifying.
In Dunn's opening statement last month, he predicted that the lawyers for Waingrow's relatives will argue that she was a prolific will-maker, and she'd make a new will to benefit "anybody who treated her nice at the time.
"For the life of us, we can't think of anybody who that would be, other than Nick, since nobody could last with her for any period of time," Dunn said. "And while she might have been a prolific will-maker, not one, not one that we know of, ever mentions the fact that she had grand-nieces or left anything to any family member."
A woman's wishes or undue influence?
Leilani Zutrau, 46, a great-niece of Waingrow, says that she and her four siblings never knew their great-aunt because they lived abroad as they were growing up. Zutrau says she only became aware of Waingrow's existence when a lawyer who was preparing a will for her in 2000 came across her great-nieces and -nephews, who are scattered from Massachusetts to Long Island. Zutrau, who lives in Mineola, says that she never received notice of the court proceeding in 2001 that resulted in Stagliano being named Waingrow's guardian.
By 2002, Waingrow had been admitted to Campbell Hall Rehabilitation Center after a stay at The Cornwall Hospital. By 2003, Zutrau was trying to get her into a less-restrictive environment; it was only then that she found out the value of Waingrow's estate.
Stern, the lawyer for Zutrau and three of her siblings, contends that the will naming Stagliano as sole heir is the product of "undue influence." When the trial resumes, Stern plans to introduce a 2003 lawsuit that accused Stagliano and a now-disbarred lawyer, Michelle Okin, of misusing power of attorney to make Stagliano the sole trustee and beneficiary of the $150,000 estate of his aunt, Anna Kenny, who died in 1995. Stagliano and Okin, who did some personal legal work for him, were sued by Stagliano's mother, sisters and brothers.
Court papers indicate that the suit was eventually settled. But the papers don't contain specifics of how that was done, and Dunn says that the settlement is sealed and confidential.
Leilani Zutrau says that if she'd been motivated by greed, "I would have gone upstate as soon as I found out about Mabel in 2000. Nearly two years passed before I did, and I was prompted only because DSS became involved. The same cannot be said for Nick Stagliano. He demonstrated through his actions that he had motive. He had motive with his own aunt, and he had motive with Mabel."
Charles Judelson, who represents Waingrow's oldest great-niece, Namiko Hart, said during last month's opening arguments that Okin and Stagliano should be considered "as one operative team," because Okin drew up Waingrow's will in 2001. She had also done estate planning for Stagliano and his wife in 1999.
In October 2003, about two months after she and Stagliano were sued by his relatives, Okin pleaded guilty in Orange County Court to misdemeanor charges of petty larceny and scheme to defraud. She admitted that she took $76,000 worth of legal fees from the elderly clients of her wills-and-trusts law practice, and didn't do the work she was supposed to do. She spent eight weekends in jail and served three years on probation.
Last year, a Surrogate Court judge threw out the will that Okin had prepared for Pat Coviello, a wealthy Highland Mills developer who became her lover while she was his lawyer. Coviello wrote Okin into his will, putting her in line to inherit an $8 million estate while leaving the estate taxes to his estranged wife and children. In her decision, Judge Elaine Slobod sided with Coviello's outraged relatives, who contended that the will was illegitimate.
Dunn made it clear that when the Waingrow trial resumes, he'll object to any mention of Okin's conduct in the Coviello case, or any other case. It's irrelevant to the matter of Waingrow's will, he says. Dunn also scoffs at the suggestion that the will was the product of "undue influence."
"I don't think Mabel was vulnerable to a suggestion from anyone," Dunn said during an interview last week. "This is a woman who, without exception, was described by people who knew her as the feistiest person they ever met."
When the trial ends and the judge decides whether Waingrow's will should stand, the decision will likely get a careful reading from Stagliano's boss, District Attorney Frank Phillips. During the opening statements, Stern suggested that Stagliano's conduct with Waingrow was far from routine for investigators in the district attorney's office.
"She has a history of paranoia, and beyond the history of paranoia, she suffered from Alzheimer's, senility, short-term memory, long-term memory loss," Stern said. "She was old. She was lonely. She wanted someone to talk to. Nick Stagliano fulfilled that role. Why? Nine hundred and ninety thousand reasons. That's how much money she had when he first took control of her assets."
Phillips won't discuss the allegations about Stagliano while the case is pending.
Stagliano's role — conducting investigations, tracking down witnesses, helping prosecutors prepare cases for trial — remains unchanged while he and Mabel Waingrow's relatives await their day in court.
And why hasn't this lawyer been disbarred?
ReplyDeleteBruce Dunn is being paid out of the old woman's funds, from Stag. How convenient. Dunn does not even service his own clients! Looks like Attorney Taylor was set up to get the case to another firm so they could make money off of it. Usual game.
ReplyDelete