Black v. Natko (In re Guardianship of Mencarelli)

IN THE MATTER OF THE GUARDIANSHIP

OF DELFORD W. MENCARELLI, ADULT WARD.

TERRI BLACK, Appellant, v. HELEN NATKO, Respondent.

IN THE MATTER OF THE GUARDIANSHIP OF THE PERSON

AND ESTATE OF DELFORD W. MENCARELLI, AN ADULT WARD.

HELEN NATKO, Appellant/Cross-Respondent, v. TERRI BLACK, Respondent/Cross-Appellant.

No. 74219-COA

No. 74384-COA

COURT OF APPEALS OF THE STATE OF NEVADA

September 18, 2019

ORDER AFFIRMING IN PART, REVERSING IN PART AND REMANDING

These are consolidated appeals and a cross-appeal from district court orders in a guardianship matter. Eighth Judicial District Court, Family Court Division, Clark County; William S. Potter, Judge.

Delford Mencarelli was subject to an adult guardianship pursuant to NRS Chapter 159.¹ His daughter, Terri Black, commenced the underlying guardianship action in June 2013, and Helen Natko, Mencarelli's live-in companion, filed a competing petition in July 2013. The district court appointed Natko the guardian after a lengthy hearing before the guardianship commissioner in 2014. Mencarelli passed away in July 2015 and Natko then filed a petition to be discharged as guardian and have a final report and accounting approved pursuant to NRS 159.177(1)(d).²

Black objected in part to the petition primarily because Natko had been criminally charged with exploitation of Mencarelli and theft of his funds. The district court deferred a full ruling on the petition until after the criminal case was resolved. The guardianship case was later transferred to a different district judge before any ruling on the merits of the petition.

Natko was found guilty of exploitation of a vulnerable person and theft. She was sentenced in August 2017 to a suspended prison term with probation that included a condition that she either pay a $10,000 fine or perform 1,000 hours of community service. There was no restitution ordered as the one act of theft occurred in July 2013 and the funds were returned that same month. The judgment of conviction was later reversed by this court and remanded to the district court. See Natko v. State, 134 Nev., Adv. Op. 103, 435 P.3d 680 (Ct. App. 2018).

Natko resubmitted her petition for approval of her final report and discharge request in August 2017. Black objected again to the petition and filed a counterpetition seeking double damages, disgorgement of all previously ordered guardian fees and expenses, and attorney fees. At the hearing in August 2017, the district court partially approved Natko's petition for fees, but denied the request for all fees and expenses, including guardian compensation and attorney fees. The district court denied Black's counterpetition. The court took the request for full approval of the guardianship report and discharge of guardian under advisement. The court indicated it would be reviewing the pleadings and issuing an order. Black requested permission (1) to prepare her own proposed order following the hearing, and (2) to file further claims against the guardian. The court granted the request but said any further claims or objections would have to be filed "immediately."

The district court filed its order approving the guardian's report and accounting and discharging guardian on September 1, 2017. The court filed the alternative order prepared by Black on October 5, 2017, which also included the denial of Black's counterpetition. The second order allowed Black to pursue further claims against Natko up until the point she had been discharged as guardian, which had already occurred on September 1. The second order also denied the requests for attorney fees by both parties. The district court denied Black's petition for reconsideration. Black appeals from the September 2017 order and cross-appeals from the October 2017 order. Natko appeals from the October order, which denied all guardianship compensation and attorney expenses Natko claimed she was entitled to, and Black claims the two orders are inconsistent with each other.³

On appeal, Black argues that the September 2017 order discharging Natko was erroneous and not supported by substantial evidence or otherwise constituted an abuse of discretion. Black argues she objected to the guardian's report and had additional claims she wanted to pursue against Natko. She also contends that a stay had been entered by the district court at the 2015 hearing for approval of the guardian's report and for the discharge of Natko as guardian, and therefore, she should have been able to file additional claims. Finally, she argues that the district court abused its discretion by not allowing her sufficient time to file her additional claims before discharging Natko. Specifically, Black claims on cross-appeal that while the district court granted additional time at the August 2017 hearing, it then abused its discretion by entering an order of approval and discharge in less than ten days following the hearing, thereby preventing her from filing her claims. We disagree.

Natko argues on appeal that the district court abused its discretion by denying her petition for $45,738.50 in attorney fees and the $6,000 balance of the $10,847.40 in guardian fees and expenses, much of which had been preapproved by the court as part of the guardianship budget. She contends that the district court based its decision on its misapprehension that these fees and costs were related to or animated by the criminal prosecution, and not for Natko's work as the guardian of the person and the estate, and that there were no damages to the estate. She further contends the district court abused its discretion by not making findings regarding attorney fees. We agree.

"An abuse of discretion occurs when a district court's decision is not supported by substantial evidence or is clearly erroneous." Bautista v. Picone, 134 Nev. 334, 336, 419 P.3d 157, 159 (2018). "We further review a district court's factual findings for an abuse of discretion and will uphold them if they are supported by substantial evidence." In re Guardianship of N.M., 131 Nev. 751, 754, 358 P.3d 216, 218 (2015). Additionally, an abuse of discretion occurs when the district court bases its decision on a clearly erroneous factual determination, NOLM, LLC v. Cty. of Clark, 120 Nev. 736, 739, 100 P.3d 658, 660-61 (2004), or disregards controlling law, Bergmann v. Boyce, 109 Nev. 670, 674, 856 P.2d 560, 563 (1993), superseded by statute as stated in In re DISH Network Derivative Litig., 133 Nev. 438. 451 n.6, 401 P.3d 1081, 1093 n.6 (2017) (explaining that NRS 18.005(17), which is inapplicable to this analysis, was amended after Bergmann). Generally, when reviewing attorney fees orders, we review for an abuse of discretion. See Miller v. Wilfong, 121 Nev. 619, 622, 119 P.3d 727, 729 (2005); see also NRS 159.183(1) (noting that payment of attorney fees is "[s]ubject to the discretion and approval of the court").⁴

While it is within a trial court's discretion to determine a reasonable amount of attorney fees under a statute or rule, in exercising that discretion district courts must evaluate the Brunzell factors. See Miller, 121 Nev. at 623, 119 P.3d at 730; Brunzell v. Golden Gate Nat'l Bank, 85 Nev. 345, 349, 455 P.2d 31, 33 (1969). Although Nevada appellate courts do not require district courts to make explicit findings on each Brunzell factor, the record nonetheless must demonstrate that the court considered the factors and that the award is supported by substantial evidence. See Logan v. Abe, 131 Nev. 260, 266, 350 P.3d 1139, 1143 (2015); see also Lioce v. Cohen, 124 Nev. 1, 24-25, 174 P.3d 970, 985 (2008) (explaining that the supreme court was unable to determine whether the district court abused its discretion because the district court failed to make any findings in resolving the matter before it).

Guardians are required under NRS 159.177(1)(d) to file a verified accounting within 90 days of the death of the protected person. NHS 159.179 specifies the contents of the accounting and NRS 159.181(1) allows an objection to be filed by any interested person. NRS 159.181(2) authorizes the court to determine if the accounting should be approved, and if the objections are overruled, the court may enter an order confirming the accounting. Such an order is a final and conclusive order against all persons. See NRS 159.181(3).

Guardians are entitled to compensation for their services and "[r]easonable expenses incurred in retaining" certain professionals. NRS 159.183(1)(c). The statute lists several considerations for judging the reasonableness of compensation and services. See NRS 159.183(2) (listing the following as considerations for the reasonableness of compensation and services: "(a) The nature of the guardianship; (b) The type, duration and complexity of the services required; and (c) Any other relevant factors"); see also Brunzell, 85 Nev. at 349, 455 P.2d at 33 (listing "the qualities of the advocate," the character and difficulty of the work performed, "the work actually performed by" the attorney, and the result obtained as factors for determining reasonable attorney fees). The court must direct the expenses to be assessed against the estate unless it shifts the responsibility to the guardian if certain factors are met. See NRS 159.183(3). In determining whether a party or the estate of the protected person should pay, the court should consider, among other things, "[t]he nature, extent and liquidity of the" protected person's assets, as well as factors relevant to the duties of the guardian. Id.

Here, the district court failed to make any specific findings for denying all attorney fees as an unreasonable expense and for shifting the expense entirely onto the guardian. Moreover, there is nothing in the record before us to suggest that the district court considered the appropriate factors in making its decision. Indeed, based on the record, it appears the district court not only failed to consider the Brunzell factors, but failed to consider the factors outlined in NRS 159.183...