The Rogak Report: 5 Jan 2012: ** Settlements - Infants **
- COURT DENIES DAD'S BID TO PREVENT CHILD FROM ACCESSING SETTLEMENT MONEYCan a parent whose child received settlement money in a trust account prevent her from receiving it upon her adulthood, because the parent has concerns that her bad-guy boyfriend will take the money? In this case, the court held 'No.' --- LNR
Alyssa H. v Robinson'S Ambulance & Oxygen Servs., Inc. 2011 NY Slip Op 52427(U) Decided on December 27, 2011 Supreme Court, Nassau County Asarch, J. Edited by Lawrence N. Rogak
This motion is brought by the parents of ALYSSA H. to restrain her from accessing funds which she received pursuant to a jury verdict in a personal injury action until she reaches her 25th birthday. The former infant opposes this motion.
On August 9, 2004, the Court (O'Connell, J.) issued an Order directing the disposition of the judgment proceeds. From the total sum received (to wit: $132,677.98), after payment of attorneys' fees and disbursements, the Court directed that the sum of $83,846.63 "shall be paid to WILLIAM G. H., as father and Natural Guardian of the infant ALYSSA H., jointly with an officer of Astoria Federal Savings Bank ... and shall be deposited ... in the name of the natural guardian, to the credit of the infant, and to be held in said account subject to the further order of this court or any other court of competent jurisdiction until said infant reaches the age of eighteen (18) years" (emphasis supplied). The Order continues " ... the depository shall pay over all monies held in the account upon presentation of proper proof to the said infant herein, upon demand and without further court order, when he [sic] reaches the age of eighteen (18) years".
After hearing from the parents and from the former infant on this motion, this Court granted a Temporary Restraining Order to maintain the status quo until the Court could consider the implications of this application.
The (now divorced) parents of the former infant argue that based upon a recent narcotics trafficking conviction in another state, their daughter will squander the funds (which were supposed to be used for her education and future well-being) or use the monies for illegal purposes. The parents are also concerned that they will be used by her "paramour", who had been incarcerated for a series of similar offenses. The parents want the Court to direct the depository to continue to hold the funds until their daughter reaches "at least" her twenty-fifth birthday, when she will be "more mature and eligible to use the funds for her benefit".
Needless to say, ALYSSA H. has a very different interpretation as to why this application was brought by her parents. She has stated that she was admitted into Parsons The New School of Design for the Fall 2010 semester. However, because of an alleged failure by her father to submit necessary documentation and pay tuition, she did not attend. She admits that she did a "rash and foolish" act resulting in her incarceration; however, she indicates that she has been living with her mother and supporting herself through a full-time job and putting aside a little money to help her pay future college tuition. It is clear that there is significant anger from the former infant towards her father.
Interestingly, the former infant states that while she understood that she could have withdrawn the funds when she turned eighteen, "I knew I wasn't ready to handle such a large sum of money." She is now "a year older, a year wiser".
In reply, WILLIAM H. takes issue with her daughter's characterization of him. He claims to have had an excellent relationship with his daughter prior to her involvement with her boyfriend, blames his daughter for not attending college, and expresses concern that the boyfriend is controlling his daughter's actions. Her father seems genuinely convinced that his daughter "is arguably under a malevolent and undue influence!"
CPLR 1206(c) provides, in part, that "[t]his money is subject to withdrawal only upon order of the court, except that no court order shall be required to pay over to the infant who has attained the age of eighteen years all moneys so held unless the depository is in receipt of an order from a court of competent jurisdiction directing it to withhold such payment beyond the infant's eighteenth birthday." This comports with the Court's role as parens patrie of infants.
"The most significant factor in the decision as to whether or not to restrict an infant's control over settlement proceeds after the age of 18 is whether there is a reasonable possibility that the infant will become a competent adult," Mills v. Durst, 156 Misc 2d 676, 681 (Sup. Ct. Onondaga Co. 1993). Here, several things should be considered. First, the Court directing the disposition of the proceeds did not require that the funds be used to purchase an annuity, which would have spread the payments over a period of time. Further, there is no reference in the Order that the Court was asked to consider such protection. Under the doctrine of law of the case, this Court of coordinate jurisdiction cannot sit in appellate review of such decision. See, e.g. Globe Indem. Co. v. Franklin Paving Co., 77 AD2d 581 (2nd Dept. 1980).
Nor is there any proof that the 19-old is an incapacitated person, wherein a guardianship may be appropriate. In requesting a hearing to determine the former infant's fitness to make decisions for herself or whether such decisions made by her were under undue influence, the movants attempt to do an end-run around Mental Hygiene Law Article 81 (guardianship). If the parents of ALYSSA H. believe that she is an incapacitated person, there are vehicles for appointing a guardian for her property management. However, the evidentiary burden on a Petitioner seeking such relief is high as it carries with it serious and far-reaching consequences. While this Court can appreciate a parent's desire to have funds set aside for a child utilized properly (hence, structured settlements and spendthrift provisions in testamentary documents), unless there is some reason to appoint a Guardian, a competent adult is free to use his or her funds as desired foolishly, capriciously, impulsively or otherwise.
With eyes from the family watching her, the former infant would be foolhardy to utilize the funds on deposit for a criminal purpose (in conjunction with "her convicted narcotics dealing boyfriend" [Reply Affidavit] or otherwise). Parental conjecture and supposition by the movants is insufficient to prove that Court action as parens patrie for a seemingly competent adult should ensue. The movant father asks, "[s]hould this Court not be concerned about her [his daughter's] future treatment or possible disability?" While this Court handles guardianship on a daily basis and is well familiar with the corresponding loss of liberty and self-determination, it also knows the protections that are statutorily afforded to people alleged to be incapacitated. To use the context of a C.P.L.R. Article 12 motion to, in effect, have the bank serve as a de facto Guardian for the Property Management of an presumptively capable and competent adult is not what the New York State Legislature envisioned and is not something that this Court is inclined to do.
Accordingly, after due deliberation, it is
ORDERED, that the motion by WILLIAM G. H. and RAINER  f/k/a RAINER H. to extend the time period preventing ALYSSA H. from accessing the funds set aside for her from a personal injury action is hereby denied. However, the Temporary Restraining Order contained in the Order to Show Cause granted on August 11, 2011 shall remain in effect for a period of FIFTEEN (15) DAYS from the date of this Order.