In re Dory

244 Md.App. 177

222 A.3d 286

In the MATTER OF Gerald S. DORY

No. 1084, Sept. Term, 2018

Court of Special Appeals of Maryland.

December 23, 2019

Argued by: Frank J , Mastro (Schlossberg, Mastro & Scanlan, Hagerstown, MD), on the brief, for Appellant.

Argued by: No attorney entered/argued for appellee.

Panel: Leahy, Shaw Geter, Gould, JJ.

Leahy, J.

In this appeal, we examine the statutory right of a guardian of property to a commission for the sale of real property and the scope of a trial court's authority to deny or alter a guardian's commission.

By order of the Circuit Court for Prince George's County, Terry Sullivan was appointed guardian of the property of Mr. Gerald S. Dory, an elderly widower, who was admitted to Prince George's County Hospital Center in 2013. There, he was diagnosed with dementia and an altered mental state after he was found living in a house in Capitol Heights without electricity, heat, or running water.

Sullivan's authority as guardian was limited by the Letters of Guardianship of Property (the "Letters"), which required her to obtain a court order before selling or otherwise encumbering Mr. Dory's real property. Accordingly, when Mr. Dory's property located at 1520 Monroe Street, N.W., Washington, D.C. 20010 (the "Property") went into foreclosure in 2016, Sullivan filed a petition requesting the court's permission to conduct a private sale. The court authorized Sullivan to list the Property and subsequently ratified the contract of sale at a price above the Property's appraised value. Sullivan then petitioned the court for a commission on the sale pursuant to the rate of commissions authorized under the Seventh Judicial Circuit,¹ Local Rule BR7. On June 25, 2018, the court denied the petition, without a hearing, after determining that the commission was not in Mr. Dory's best interest and that it was wholly inequitable when considering the time and labor expended by Sullivan.

Sullivan timely noted her appeal from the court's denial of her petition and presents two questions for our review,² from which we extract one question that is dispositive: Did the circuit court apply an incorrect legal standard in denying Sullivan a commission on the sale of Mr. Dory's real property?

For the reasons that follow, we hold that the circuit court applied the wrong standard. Accordingly, we remand to the circuit court with instruction to consider Sullivan's entitlement to her commission applying the correct legal standard.

BACKGROUND

On February 21, 2013, Dimensions Healthcare System ("Dimensions"), doing business as Prince George's Hospital Center, filed a petition seeking the appointment of guardians of the person and property of Gerald S. Dory in the Circuit Court for Prince George's County. As set forth in the petition, Mr. Dory, a widower with two children, had been a patient of Prince George's Hospital Center in Cheverly, Maryland since his admission on January 25, 2013. An Adult Protective Services investigation was ongoing because Mr. Dory had been found in his Capitol Heights home without utilities or running water. Physician's certificates attached to the petition indicated that Mr. Dory, then 80 years of age, suffered from dementia and was unable to manage his property and affairs. The petition stated that Mr. Dory was a disabled person as defined within the Maryland Code (1974, 2017 Repl. Vol.), Estates and Trusts Article ("ET"), §§ 13-201(c) and 13-705(b),³ and requested that the court appoint (1) a Guardian of the Person of Mr. Dory, (2) a Guardian of the Property of Mr. Dory, and (3) an attorney to represent Mr. Dory. Along with the petition, Dimensions filed a motion requesting an expedited hearing on the basis that Mr. Dory was ready to be discharged from the hospital but unable to consent to discharge and placement.

A hearing for the appointment of temporary guardians and counsel for Mr. Dory took place in the circuit court on March 5, 2013. The court, on March 7, 2013, entered orders: (1) appointing Theresa Grant, Director for the Prince George's County Office of Aging, as temporary guardian of the person of Mr. Dory;⁴ (2) appointing Sullivan as temporary guardian of the property of Mr. Dory; and (3) appointing Shelton Skolnick to represent Mr. Dory in the guardianship proceedings. That same day, Mr. Dory was moved to Cherry Lane Nursing Center in Laurel and became a resident there.

A full guardianship hearing was held on May 17, 2013. Mr. Skolnick represented Mr. Dory. The court found that Mr. Dory was disabled and unable to care for his person and property, and that guardianship was appropriate because "no less restrictive form of intervention [was] available consistent with [Mr. Dory's] welfare and safety." The court appointed Ms. Grant as guardian of the person of Mr. Dory and Sullivan as guardian of the property of Mr. Dory. The Letters of Guardianship of Property, entered on May 21, 2013, required Sullivan to seek the court's permission to sell any real property or pay any commissions or attorney's fees. The Letters ordered:

[T]hat Terry K. Sullivan, Esq. be and hereby is appointed guardian of the property of GERALD S. DORY, with all the rights, duties, and powers as set forth in Estates and Trusts Article, Section 13, Subtitle 2, of the Annotated Code of Maryland, EXCEPT:

(1) The guardian may not sell, invest in, mortgage or otherwise encumber any real property without further order of this Court;

(2) All investments shall be federal insured investments, unless otherwise ordered by the Court; and

(3) The guardian may not pay commissions or attorney's fees without order of court[.]

On November 14, 2016, Sullivan filed a petition requesting permission to sell real property owned by Mr. Dory located at 1520 Monroe Street, N.W., Washington, D.C. 20010. Sullivan noted that the Property was in foreclosure after the D.C. Superior Court entered an order granting a default judgment and decree of sale against Mr. Dory.⁵ In further support of the petition to sell the Property through a private sale, Sullivan indicated: (a) Mr. Dory's "medical condition [was] anticipated to be life long and require[ ] care in a long term care facility[;]"(b) the Property was "vacant and in poor condition[;]" and (c) Mr. Dory "lack[ed] sufficient monthly income to adequately maintain the [P]roperty ... and meet his personal and medical needs." Sullivan had already contacted a licensed realtor and attached to the petition a proposed listing agreement that included an initial listing price of $700,000.⁶

The court entered an order on December 12, 2016, authorizing Sullivan to list the Property for sale for at least the appraised value and instructing Sullivan to present to the court for ratification any contract that she intended to accept.

Sullivan presented an appraisal of the Property and an offer from Dilan Investment LLC ("Purchaser") to the court for ratification on January 25, 2017. Though the Property was appraised at $575,000, the sales price in the offer from the Purchaser had a cap of $706,100. The court entered an order ratifying the contract of sale between the Purchaser and Sullivan (as Guardian of the Property of Mr. Dory), finding that the sale price was "fair and equitable" based on the appraisal. As a result of the sale, the guardianship estate satisfied the outstanding mortgage on the Property and realized net proceeds of $180,510.87. Sullivan resolved the pending foreclosure action, which was dismissed by the lender on May 23, 2017.

On July 5, 2017, Sullivan filed a "Petition for Approval of Commissions on Sale of Real Property." Citing to ET § 13-218, Sullivan averred "a guardian of the property is entitled to the same compensation as the trustee of a trust." As required by ET § 14.5-708(d), which governs commissions available to trustees, Sullivan calculated the total commission—amounting to $9,331—pursuant to the rate of commissions specified in Local Rule BR7.⁷ Sullivan sent notice of the petition to all interested parties, including Theresa Grant, guardian of the person of Mr. Dory.

In her memorandum and order denying Sullivan's petition, the circuit court judge relied on Sokol v. Nattans , 26 Md. App. 65, 337 A.2d 460 (1975), for the proposition that "a trustee does not automatically get the commissions and allowances authorized by statutes." The court opined that "[t]he statutes and the local rule make it clear that commissions are not automatic and that the Court has discretion in awarding them." The court interpreted Bunn v. Kuta , 109 Md. App. 53, 674 A.2d 26 (1996), to support the trial court's "discretion to diminish commissions for just cause" "notwithstanding the language in [Local Rule] BR7 limiting the Court's authority to diminish commissions in the event of neglect or other fault on the part of the trustee or other fiduciary[.]"

The court looked "to the totality of the circumstances" and observed that Sullivan enlisted the services of a realtor who already received $21,183 in commissions for selling the Property. From the court's perspective, Sullivan "[sought] a commission simply by virtue that she is the guardian." According to the court, Sullivan did not earn any "special commission" as she "did not provide unusual services nor d[id] any unusual circumstance exist"; rather, in the court's view, the sale of the Property was "consistent with the general duties and responsibilities of a guardian." The court noted its role as "the ultimate guardian of the ward," and found that "[a]ll of [Mr. Dory's] income, with the exception of his personal needs allowance[,] is required for his care." Consequently, the court found that the "commission requested based on the sale of the ward's real property is not in the best interest of the ward and is wholly inequitable when considering the time and labor expended by the guardian." Sullivan timely noted an appeal.

DISCUSSION

Sullivan argues, "[a]s a threshold matter," that "the Circuit Court misconstrued applicable Maryland law regarding the...