Recent Amendments to the Rules on Fiduciary Appointments

Part 36 of the Rules of the Chief Judge governs certain fiduciary appointments, such as a guardian or receiver. Among other things, Part 36 limits the number of appointments that any individual may receive in a 12-month period, and it requires the judge to make secondary appointments, such as counsel, rather than delegate such authority to the receiver.

In the wake of a December 2001 report to the Chief Judge by the court system’s Special Inspector General for Fiduciary Appointments, and a report by the Chief Judge’s Commission on Fiduciary Appointments, Part 36 was recently amended to make the appointment constraints more stringent.

The new provisions, which were approved by the Court of Appeals and supported by the Presiding Justices of the four Appellate Divisions, inter alia disqualify former judges from receiving appointments within their former jurisdictions for two years after leaving the bench. They also disqualify any lawyer who earned more than $50,000 from court appointments in a single year from receiving any new appointments in the following year.

The new provisions include a requirement that a law firm whose members, associates and employees have had a total of $50,000 or more in compensation approved in a single calendar year, report such amounts to the Chief Administrator of the Courts.

The new provisions also specify a range of individuals who would be disqualified from fiduciary appointments, as follows:

  • A judge or the relative of a judge within six degrees of relation by blood or marriage (e.g. a judge’s mother or brother-in-law, son or daughter-in-law) shall not be appointed.

  • A judicial hearing officer shall not be appointed in a county where he or she serves.

  • A full-time court employee at salary grade JG24 or above shall not be appointed. The spouse, sibling, parent of child of such employee shall not be appointed.

  • A chair or executive director (or the equivalent) of a state or county political party shall not be appointed. The spouse, sibling, parent or child of such official, or members, associates, counsel and employees of such official’s law firm, shall not be appointed. The prohibition would run while the individual holds such position and for two years after vacating such position.

  • A person who served as campaign chair, coordinator, manager, treasurer or finance chair for a candidate for judicial office, shall not be appointed by the judge for whom that service was performed. The spouse, sibling, parent or child of that person, or anyone associated with the law firm of that person, shall not be appointed. The prohibition would run for two years following the judicial election.

  • A disbarred or suspended attorney shall not be appointed.

  • A convicted felon shall not be appointed, and a person sentenced for a misdemeanor within five years may not be appointed, unless the Chief Administrator has issued a waiver upon application, or the person has received a certificate of relief from disabilities.

  • No receiver or guardian shall be appointed as his or her own counsel, and no person associated with that receiver’s or guardian’s law firm may be appointed as counsel to that receiver, unless there is a compelling reason to do so.

  • No attorney for an alleged incapacitated person shall be appointed as guardian to that person, or as counsel to the guardian of that person.

  • No person serving as a court evaluator shall be appointed as guardian to the incapacitated person except under extenuating circumstances that are set forth in writing and filed with the fiduciary clerk as the time of the appointment.

From the 2003 Annual Report, pages 27-28.

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Favoritism and the Appearance of Favoritism in Fiduciary Appointments

The Commission’s 2001 Annual Report reminded judges that Part 36 of the Rules of the Chief Judge, governing certain fiduciary appointments, provides that the judge must appoint “persons designated to perform services for a receiver … upon evaluation by that judge of the qualifications of candidates for appointment.” The purpose of this rule is to establish appropriate controls that would not otherwise exist with respect to lucrative designations of secondary appointments.

Apparently, some judges had not accepted this message and responsibility under Part 36, notwithstanding an explicit memorandum from Chief Administrative Judge Jonathan Lippman in March 2000, and follow-up memoranda from and meetings with other administrative judges. Judges, for example, had signed orders to appoint a receiver in which the receiver is explicitly authorized to make such secondary appointments as a managing agent or attorney. Such delegations to the receiver are contrary to Part 36.

Until a court rules otherwise, Part 36 represents the law, and judges are expected to honor the spirit and letter of that provision of law. To avoid even a mistaken delegation to a receiver of the court’s duty to make such secondary appointments, judges must pay close attention to the designation-of-receiver orders presented for their approval.

The Commission investigated several judges who did not appear to be abiding by Part 36, even after the March 2000 memorandum from the Chief Administrative Judge. Each of the investigated judges had given the court-appointed primary fiduciary the discretion to make secondary appointments in one or two cases. All but one of the judges explained that they did not intentionally violate Part 36, that their delegation of the secondary appointment power was inadvertent, and that they agreed to abide by Part 36 in the future. The remaining judge expressed the view that Part 36 is inconsistent with state law, but that he would abide by Part 36 in the future, pending resolution in the courts of the issue of the validity of Part 36. Thus, all of the judges recognize that Part 36 is the law in New York State.

Adherence to this particular provision of Part 36 should eliminate some of the shocking disclosures made in a December 2001 report to the Chief Judge by the court system’s Special Inspector General for Fiduciary Appointments, including the relatives of judges in one county getting a majority of highly lucrative secondary fiduciary appointments, e.g. as counsel to a receiver.

The Commission expects all judges to comply with Part 36 in the future.

From the 2002 Annual Report, pages 26-27.